Can the GOP take the White House in 2016? by Jack Marlowe

Remember that 1/3rd of the GOP constituency that stayed home the last two elections because they wouldn’t vote for moderates like John McCain or Mitt Romney? Well, there was a new poll released Thursday (8/14) from McClatchy-Marist showing that Hillary Clinton would lose if the election was held today against any of Chris Christie, Jeb Bush or Rand Paul, the three toppers for the GOP, according to the poll.

In my opinion, only Rand Paul has a shot at getting that 1/3rd to come out and vote for him. This 1/3rd – call them Christian fundamentalists, call them Tea Partiers, call them what you will, these labels don’t fully identify this group – will stay at home again if Chris Christie or Jeb Bush is the GOP nominee for the presidency. Christie is the favorite of the Establishment press, which will turn on Christie in favor of the Dem just as soon as they get Christie nominated. He appears to be the most liberal of the three. The 1/3rd will stay home if Christie is the nominee. They will not see him as much different than Hillary. Two fat people with different baggage, but both with fat baggage.

The 1/3rd that came out to vote for George W Bush on the exhaustive media reports that he was a conservative and a Christian believed by the end of eight years that they were sorely betrayed. No Child Left Behind, Tri-Care for Life, an expanded Medicare drug benefit, two needless exercises in nation building abroad convinced this constituency that Bush was just another big government moderate. What did conservatives get for their Bush votes: Sam Alito on the Supreme Court. That’s it. John Roberts as Chief Justice is a train wreck for conservatives. And remember when Bush tried to appoint Harriet Myers to the Supreme Court? Conservatives went into angry overdrive to make sure that didn’t happen. Bush destroyed the confidence that conservatives had in him. His father wasn’t too good either. Bush senior is the guy that appointed David Souter to the court, a judge that turned out very liberal. The 1/3rd will not go to the polls to vote for Jeb Bush. They will stay home. No more Bushes. Bush is a tarnished brand. Any Bush is not to be trusted.

Rand Paul must get that 1/3rd to win the GOP nomination. He’s likely to make a good showing in Iowa, but almost certain to lose New Hampshire to both Christie and Bush. He can win in the small states of the south, but will have trouble in Florida and Texas, where Jeb Bush has more and powerful connections.

With Governor Perry’s indictment on felonies (abuse of power) in Texas, he may be hobbled by legal problems that take him out of competition. It may be difficult for him to make his problems go away by primary time. The legal system churns slowly. But if Perry somehow manages to put this behind him quickly, he will attract more support than either Christie or Bush. He will likely win Texas, but lose Florida to Bush. In any case, a viable Perry would be problematic for all three of the other top contenders. But his indictment makes him a long shot at the present moment.

Christie and Bush are men without important convictions, except that each believes he should be the president. They each fall in the category of a Bob Dole or Bill Clinton: one hand outstretched to shake yours and the other in the air, finger up to ascertain direction of political winds and the latest poll results. Neither man is likely to make the “moral argument” as Dennis Prager calls it. Prager states that the candidate that makes this argument always wins the election. Obama did that in each of the last two elections. His opponents did not. But few voters understood that McCain and Romney each failed to rebut Obama by showcasing an opposing view of morality. And so Obama’s pitch for socialism cloaked in tag lines of making others pay their fair share and castigating fat cat bankers – forget that government induced banks to misbehave by pushing very questionable lending practices and failed to make prudent regulatory decisions about capital cushions for investment banks – carried the day, every day of the campaign season, and then election day. Unopposed.

Though a fiery and opinionated man, Christie is not likely capable of making a moral argument. Time will tell, but he appears to be first and only a fiscal conservative, with nothing else to offer. Bush might try, but he is not to be trusted. The public has learned about the Bushes. Most of the public will be more forgetful after a long season of political advertising. But to the 1/3rd, any Bush is beyond redemption. Only Jesus himself could sway the 1/3rd to back another Bush.

I see no one better equipped to make the moral arguments for economic and political liberty than Rand Paul. His challenge will be one of personal decision. Will he take the low road of all politicians when facing the gay lobby? Or will he take the high road and make the moral argument as he does elsewhere? His answer will determine whether he gets the 1/3rd to back him. If he takes the high road, he will take a tremendous barrage of media criticism and attacks from the gay lobby that may shake his soul. He may wish he’d never entered public life. Death threats and threats against his family will occur. Not may. It is certain. This is how the gay lobby works. Threats and intimidation. They will go after his backers, too. Anyone on his list of donors will become a target of the gay lobby. They are vicious and relentless. If your name is on the donor list, the gay lobby will contact your employer seeking to have you fired for your bigoted, hateful, discriminatory views. So be ready for it. But if Rand faces the gay lobby head on and does not cower, he will win he nomination and the general election. He will be on his way to becoming not just president, but the greatest president of the still new 21st century. No group knows this better than the gay lobby.

If he decides to take the low road of all politicians, he will fade into likeness of Christie, Bush, perhaps Perry, and other candidates, who have only this singular conviction: “I should be president.” These men represent the worst in American political tradition, i.e., the ideology of political pragmatism, first given voice by William James, a philosopher and psychologist, who was educated and later served on the faculty at Harvard, and whose brother was the famous Henry James, an American novelist. William James was a man of great mind and little soul. His pragmatism, still an important part of the fabric on both sides of he political aisle, rules America more and more with each ebb in our religious life, our fidelity to principle, our faith in the judeo-christian god, the nuclear family, self-respect, and more. In pragmatism, all things are open to negotiation. Anything is available at the right price.

Will Rand Paul will make he right choice? If he does, he can win and become a great leader, but not without great cost, at least initially. If he chooses otherwise, he seems likely to lose the 1/3rd and the election, assuming he can win the GOP nomination, which will be in great doubt in the absence of some distinction in public policy that will separate him from the better funded competition. Facing down the intimidation of the powerful gay lobby is that distinction. His courage will be be a beacon to his natural constituency: small government conservatives and Christians that believe the government is too powerful and has become tyrannical with its moralizing on the wrong side of issues (abortion, gay marriage, no fault divorce, idolatry of poverty, race relations, and more). These same Americans are near the verge of no hope.  Paul appears to be the only candidate with potential to revive that spirit of hope. But if he does, it will be because he permitted himself to be more informed by the judeo-christian standard of morality than by libertarian doctrine. Both appear to be critical aspects of his view of the world. Which will dominate? And what emphasis is most needed to win the White House?


A Father Resigns Fatherhood


by Jack Marlowe


I was raised in a home with a lot of conflict. I didn’t like that experience. I decided as a young adult that if I ever became a husband and father that I would have peace in my house. Your mom and I agreed very much about that and were mostly successful at creating home as a place that was emotionally and physically safe and peaceful for our children.

Recently, you and I have had a lot of conflict. I don’t like it, but have been unable to solve the problem. As a father, I’ve had certain expectations of you and you’ve grown resentful about that. So, effective immediately, I am quitting as your father. This means that we can be friends without expectations or responsibilities.

So, I will no longer police your media time or food or bedtime or homework, because friends just don’t do those things. Also, you don’t have to call me “Dad” anymore. That’s just weird between friends. You can call me Jack or Jimface or whatever.

You can watch all the TV and play all the video games you want, because I’m not your dad anymore and friends just let friends be. There will always be food in the refrigerator and pantry (I think) because I have to eat too. But I’ll just buy stuff I like because you are your own man now and can eat whatever you want. They probably have what you want at the corner convenience mart, which is close enough for your to walk to or ride your bike to.

Also, I’m not checking your homework anymore or making you see the tutor, Friends don’t do that. In fact, that is just weird between friends. I’m looking forward to our new friendship free of conflict about such things. If you don’t do well enough in school to remain at Christ Academy, that’s ok, you can go to public school which most people do anyway, and we can still be friends. We sure don’t need CA getting in the way of our friendship!

You can have your phone and iPod back immediately, But you know, I’ve been thinking that you should get your own account with Verizon Wireless. I mean, you know, friends don’t pay for each other’s phone. That’s just too weird. As for the iPod, I might trade it in at the Apple store for a better otter box. Since its actually mine and I’ve just loaned it to you for awhile, I’m sure you’ll understand. After all, we’re friends, right?

I’m feeling so much better about our relationship knowing that we don’t have to be burdened with all this father son junk any more. It is so great to be out of conflict and at peace with my housemate!

Also, you don’t have to go to church anymore. Hey, we’re friends and we should do what we want. Live and let live. So, on Sundays, I’m going to church and you can do whatever you want to do. Isn’t that great?!

You know, we really need to drop this Wednesday Bible study, too. It’s father-son and that’s just weird now that we’re friends.

Also, no more chores or lawn mowing. Now that we’re friends I just can’t see “making” you do these things. Thats a relic of father-son relationships and we don’t need it anymore. But it would be helpful if you could pay a little rent. It would help out with the bills. You know, friends do it all the time. I’ll charge you a rental rate much lower than the market, let’s say, $50 each month. I figure a room with meals like this would would easily fetch $400 to $600 on the market, maybe more. So, you can see what a great deal I’m giving you, because you are my friend.

As for laundry, I’ll do mine and you do yours. Friends don’t do each other’s laundry. That is weird between friends!

Will, I’m really looking forward to our new friendship and freedom from all this parent child-conflict we’ve had recently. I don’t know what we were thinking?! Why didn’t we think of this sooner?!

Your Friend,


A Letter to My Niece

Dear Olivia,

Marriage is about much more than romance. Romance is very important and it is the beginning place of a relationship between a man and a woman. But it is far from sufficient to keep you together. Marriage is also, importantly, perhaps even most importantly, an economic transaction. You are hitching your wagon to his horse, and he, likewise, is hitching his wagon to your horse. Your physical and emotional well-being will in many, many ways be determined by his ability to prosper himself and advance in the professional and business world, thereby bringing economic value to himself and in turn your marriage. His success will influence your opportunity for material, physical, and perhaps even emotional health.

And your success of all kinds, whether career or household, will likewise directly affect his well-being. The gifts you bring to the marriage will be an economic help or hindrance to him and to your children. Together, the quality of the economic union you form will not only affect you both in enormous ways, but also your children, and their children, and so on. What you together are forming today will have ripple effect for generations to come. Consider wisely what you do today and be very intentional about your choice in a mate, and afterward, the family culture the two of you choose to create.

Family culture is a choice. And making no choice is still a choice, which is to be buffeted and shaped by the winds of the world’s culture, a poor choice indeed. Marriage/Family is the most basic unit of economic and social formation of any society. Form and manage your economic enterprise wisely and you greatly enhance the prospects for a happy and productive union. Choose unwisely and you may wreck your union upon the rocks of economic or other challenges. And such will surely come. And so, if your horse or his horse is lame or weakened, it will be difficult for all in the cart, including spouse and children, perhaps for generations. Literally, this would mean that if he is, or you are, not strongly committed to the hard work of vocation, of loving God, loving your partner in marriage, and loving the offspring of your union, he or you would be a poor choice to be a partner for such a difficult undertaking. And such choice cannot help but compound your difficulty ahead. I say “compound”, because even the wisest of choices will bring difficulty at times. The two of you will eventually, sooner or later, hit a bump in the road that you cannot, on your own strength, climb over. That is, a problem you cannot solve on your own, no matter the strength of your desire to do so. You will need help, from God, from family, perhaps even parents, and likely from wise professional counselors that come well recommended. To fail at resolving the present and temporary difficulty is to risk making it permanent, thereby assuring for your union an economic and otherwise calamity from which you and your children will likely suffer for the remainder of your lives.

In the end, love is a decision. You choose to give your heart and you choose not to take it away. You choose to maintain your economic and romantic union despite the present dearth of economic and romantic benefit, wagering that time and investment will bring reward. You will not always like your spouse, but by remaining beside your spouse, you clearly signal that you choose to stay and to love for better or worse, for richer or poorer, in sickness and in health, to love and to cherish, till death do you part. This is a very strong signal indeed. And a comforting one to your spouse though he is unlikely to affirm your commitment during the uncomfortable moment. He will in time. Unfettered from the anxiety of an uncommitted spouse, he is better able to focus on success in work, thereby bringing home those good things that serve the economic prosperity of your union, including your children, and perhaps their children. Take the long view. Then yours will be a God honoring commitment of the most prosperous kind.

Business partners do not always like each other, but they have a common interest which is toward their mutual well-being and prosperity. Their decisions are rational, made for the good of the union and for oneself. The prudent partner will put his partnership ahead of his individual interest knowing that by doing so he will ultimately serve his greater need and that of his offspring. He sacrifices his preferences in the near term for the gain of the long term. He cannot do this without patience, discipline and humility, all gifts from God.

Scott Peck opens his multi-decade best seller, The Road Less Traveled, with these words: “Life is difficult.” As subset, we could add, marriage is difficult, or raising children is difficult, or finding fulfillment in work is difficult, or making ends meet is difficult, etc. Marriage, like the economy, will bring periods of growth followed by periods of stagnation or commonly, contraction, which is known in economic terms as recession or depression. The committed partner will suffer the contraction in the assurance that time and effort will bring future fortune, followed again by contraction, which again yields to growth, followed again by recession. Again and again, the cycle repeats. Peck concisely states the challenge ahead. In economic terms, we might say, “buyer beware” or “invest for the long term” or much else. A clear-eyed assessment of the road ahead is essential to the success of both the prudent investor and the candidate for marriage. Form your union wisely and it will serve you well, but also your spouse, your children, their children, and the community at-large, yielding an abundance of every kind of riches, pleasing God and giving you a satisfaction that is impossible to anticipate during courtship or at the altar, or perhaps even years into your union. In marriage, as in investment, time is on your side. The longer you remain invested, the richer you grow, but not without anxiety from time to time.

Much Love,
Uncle John

Monday, September 23, 2013

From Ignatius Piazza, M.D. of Front Sight Firearms Training Institute:

The headline in the newspaper today quoted our Liar in Chief as saying, “We’re going to have to change.”

Obama made his “change” statement to Navy Yard mourners. He says the US cannot accept mass shootings.

Well here is a shocker for Obama: WE don’t need to change anything!

It is Obama who needs to change!

It is Obama’s murderous support of Gun Free Zones which he knows do nothing but create Helpless Victim Zones that needs to change.

It is Obama’s murderous support of legislation to disarm responsible Americans when he knows every scholarly study demonstrates gun control does not reduce violent crime (it increases it) that needs to change.

It is Obama’s blatant, self-serving use of mass shootings as a platform to further disarm Americans when he know that more gun control WILL NOT lead to a drop in these mass shootings, that needs to change.

Obama is a liar.

To get elected, Obama told Americans he would not go after their guns. The Republicans and Libertarians read right through Obama’s socialist, anti-gun, anti-American agenda and tried to stop him from being elected, but enough gun owning Democrats were fooled by Obama’s outright lies and false promises.

Now all responsible gun owners are being targeted for the actions of a few, psych drug induced murderers and our Liar in Chief is using yet another Gun Fee Zone failure as a reason to reactivate his socialist agenda to disarm Americans and further weaken our country.

It is now time for Republicans, Libertarians, and gun owning Democrats to UNITE under a common cause to CHANGE Obama.

If Obama really wants to stop mass shootings, here is the REAL “change” that needs to occur…

  1. Outlaw Gun Free Zones. Stop creating Helpless Victim Zones by disarming people in public places. Such policies only encourage attack because the perpetrators know there will be no armed resistance.
  2. Pass National Concealed Carry and encourage responsible citizens, law enforcement, and military personnel to carry a concealed weapon with them at all times and to train regularly to use their concealed weapon to defend themselves and others around them.
  3. Immediately stop tax payer support of the psychiatric industry and their allies in the pharmaceutical industry who have falsely advertised their way into hooking 1 out of 5 Americans on psychiatric drugs, many of them children. Psychiatry and the drugs they push are the common denominator responsible for the epidemic rise in military suicides, teen suicides, depression and violence we are seeing in America today. EVERY toxicology report of every mass shooter, including the most recent Navy yard shooter reveal psych drugs as the culprit. Psychiatry does not work! Psych drugs pose much greater risk than benefit! Because psychiatry causes more harm than good, it NEEDS government funding in the form of Medicare and Medicaid to keeps it alive. Remove all tax payer supported, government funding of psychiatry with the drugs they push and you will see psychiatry quickly experience a well-deserved death.

With these three steps, taken aggressively and immediately, America will become stronger and healthier.

Of course, Obama knows all this.

Yet Obama continues to promote the creation of more Gun Free Zones, more legislation to disarm responsible Americans, and more tax payer support of the psychiatric industry.

This makes Obama worse than a liar. Much worse! All the families of those murdered deserve better. America deserves better.

It is time for Obama to change and start telling the truth about everything.

Here are people who are telling the truth…

What can you do to help yourself and help America?

Be part of the solution for a more sane America and forward this in its entirety to everyone you know and encourage them to do the same.

Obamacare Will Increase Health Spending

Obamacare Will Increase Health Spending By $7,450 For A Typical Family of Four, by Chris Conover

It was one of candidate Obamas most vivid and concrete campaign promises. Forget about high minded (some might say high sounding) but gauzy promises of hope and change. This candidate solemnly pledged on June 5, 2008: In an Obama administration, well lower premiums by up to $2,500 for a typical family per year.. Well do it by the end of my first term as President of the United States. Unfortunately, the experts working for Medicares actuary have (yet again[1]) reported that in its first 10 years, Obamacare will boost health spending by roughly $621 billion above the amounts Americans would have spent without this misguided law.

What this means for a typical family of four

$621 billion is a pretty eye-glazing number. Most readers will find it easier to think about how this number translates to a typical American familythe very family candidate Obama promised would see $2,500 in annual savings as far as the eye could see. So I have taken the latest year-by-year projections, divided by the projected population and multiplied the result by 4.

Interactive Guide: What Will Obamacare Cost You?

Simplistic? Maybe, but so too was the Presidents campaign promise. And this approach allows us to see just how badly that promise fell short of the mark. Between 2014 and 2022, the increase in national health spending (which the Medicare actuaries specifically attribute to the law) amounts to $7,450 per family of 4.

Let us hope this family hasnt already spent or borrowed the $22,500 in savings they might have expected over this same period had they taken candidate Obamas promise at face value. In truth, no well-informed American ever should have believed this absurd promise. At the time, charitably deemed this claim as overly optimistic, misleading and, to some extent, contradicted by one of his own advisers. The Washington Post less charitably awarded it Two Pinocchios (Significant omissions or exaggerations). Yet rather than learn from his mistakes, President Obama on July 16, 2012 essentially doubled-down on his promise, assuring small business owners your premiums will go down. He made this assertion notwithstanding the fact that in three separate reports between April 2010 and June 2012, the Medicare actuaries had demonstrated that the ACA would increase health spending. To its credit, the Washington Post dutifully awarded the 2012 claim Three Pinocchios (Significant factual error and/or obvious contradictions.)

The past is not prologue: The burden increases ten-fold in 2014

As it turns out, the average family of 4 has only had to face a relatively modest burden from Obamacare over the past four yearsa little over $125. Unfortunately, this years average burden ($66) will be 10 times as large in 2014 when Obamacare kicks in for earnest. And it will rise for two years after that, after which it hit a steady-state level of just under $800 a year. Of course, all these figures are in nominal dollars. In terms of todays purchasing power, this annual amount will rise steadily.

But what happened to the spending slowdown?

Some readers may recall that a few months ago, there were widespread reports of a slow-down in health spending. Not surprisingly, the White House has been quick to claim credit for the slowdown in health spending documented in the health spending projections report, arguing that it is good for families, jobs and the budget.

On this blog, Avik Roy pointed out that a) since passage of Obamacare, U.S. health spending actually had risen faster than in OECD countries, whereas prior to the law, the opposite was true. Moreover, to the degree that U.S. health spending was slowing down relative to its own recent past, greater cost-sharing was likely to be the principal explanation. Medicares actuarial experts confirm that the lions share of the slowdown in health spending could be chalked up to slow growth in the economy and greater cost-sharing. As AEI scholar Jim Capretta pithily puts it:

An important takeaway from these new projections is that the CMS Office of the Actuary finds no evidence to link the 2010 health care law to the recent slowdown in health care cost escalation. Indeed, the authors of the projections make it clear that the slowdown is not out of line with the historical link between health spending growth and economic conditions (emphasis added).

In the interests of fair and honest reporting, perhaps it is time the mainstream media begin using Affordable Care Act whenever reference is made to this terribly misguided law. Anyone obviously is welcome to quarrel with the Medicare actuary about their numbers. I myself am hard-put to challenge their central conclusion: Obamacare will not save Americans one penny now or in the future. Perhaps the next time voters encounter a politician making such grandiose claims, they will learn to watch their wallet. Until then, lets spare strapped Americans from having to find $657 in spare change between their couch cushions next year. Lets delay this law for a year so that policymakers have time to fix the poorly designed Rube Goldberg device known as Obamacare. For a nation with the most complicated and expensive health system on the planet, making it even more complicated and even more expensive never was a good idea.


[1] The Medicare actuary first issued a report carefully estimating the cost impact of Obamacare on April 22, 2010. Its annual national health expenditure projections reports for 2010, 2011 and 2012 all have contained tabulations showing that Obamacare will increase health spending over the next 10 years compared to a counterfactual scenario in which the law was never enacted.

The Need for a New Economics

The Need for a New Economics

By George Gilder

Why is it that so many Americans seem to believe that government spending, fueled by debt or taxes, can drive economic growth and wealth creation? Why do they believe that low interest rates, enforced by the Federal Reserve, can somehow spur business and investment? Why do they imagine that money and consumer demand impel the economy forward?

The reasons, I believe, are rooted in an economic confusion between knowledge and power. Many economists believe that growth is impelled by the exercise of power, represented by money creation and by government spending and guarantees. By manipulating the so-called levers of the economic machine, government power can enlarge demand, inducing businesses to invest and consumers to spend. This process is seen to generate the demand that fuels economic growth.

These images of the economy of power are part of the very creation story of economics in an era of new machines and sources of energy. The first economic models were explicitly based on the dynamics of the steam engine then impelling the industrial revolution. Isaac Newtons physical system of the world became Adam Smiths great machine of the economy, an equilibrium engine transforming coal and steam into economic growth and progress.

Exploring technology investments over recent decades, however, I found myself preoccupied less with sources of power than with webs of knowledge in a field of study called Information Theory. On one level this theory was merely a science of networks and computers. Its implications, however, would change our deepest concepts of the nature of wealth. It would show that wealth is not money or power or demand. It is essentially the accumulation of knowledge.

Information theory effectively began with Kurt Godels demonstration in 1930 that all logical systems, including mathematics, are intrinsically incomplete and depend on axioms that they cannot prove. This epochal finding is often obscured by elaborate explanations of the intricate mathematics he used to prove it. But as John Von Neumann in his audience was first to recognize, Godels proof put an end to the idea of the universe, or the economy, as a mechanism. Godels proof, as he himself understood, implied the existence of autonomous creation.

Godels proof led directly to the invention by Alan Turing of a universal generic computer, a so-called Turing machine. By this abstract conception, which became the foundation for all computer science, Turing showed that no mechanistic computer system could be complete and consistent. Turing concluded that all logical systems were intrinsically oracular.

Computers could not be Smithian great machines or Newtonian systems of the world. They inexorably relied upon human programmers or oracles and could not transcend their creators. As Turing wrote, he could not specify what these oracles would do. All he could say was that they could not be machines. In a computer, they are programmers. In an economy, they are entrepreneurs.

In 1948 a rambunctiously creative engineer, Claude Shannon, from Bell Labs and MIT, translated Godels and Turings findings into a set of technical concepts for gauging the capacity of communications channels to bear information.

Shannon resolved that all information is most essentially surprise. Unless messages are unexpected they do not convey new information. An orderly and predictable mechanism, such as a Newtonian system of the world or Smithian great machine, embodies or generates no new information.

Studying information theory for decades in my exploration of technology, I finally found the resolution to the enigmas that currently afflict most economic thought. A capitalist economy is chiefly an information system, not a mechanistic incentive system. Wealth is the accumulation of knowledge. As Thomas Sowell declared in 1971: All economic transactions are exchanges of differential knowledge, which is dispersed in human minds around the globe. Knowledge is processed information, which is gauged by its news or surprise.

Surprise is also a measure of freedom and criterion of creativity. It is gauged by the freedom of choice of the sender of a message, which Shannon termed entropy. The more numerous the possible messages that can be sent, the more uncertainty at the other end about what message was sent and thus the more information there is in the actual message when it is received.

In Knowledge and Power, I sum up information theory as the treatment of human communications or creations as transmissions down a channel, whether a wire or the world, in the presence of the power of noise, with the outcome measured by its news or surprise, defined as entropy and consummated as knowledge.

Since these communications or creations can be business plans or experiments, information theory supplies the foundation for an economics driven not by equilibrium and order but by surprises of enterprise that yield knowledge and wealth.

Information theory requires that such a process be experimental and its results be falsifiable. The businesses conducting entrepreneurial experiments must be allowed to fail or go bankrupt. Otherwise there is no yield of knowledge and thus no production of wealth. Wealth does not consist in material capital that can be appropriated by the greedy or the government but in learning processes and knowledge creations that can only thrive in freedom.

After all, the Neanderthal in his cave had all the material resources and physical appetites that we have today. The difference between our own wealth and Stone Age poverty is not an efflorescence of self-interest but the progress of learning, accomplished by entrepreneurs conducting falsifiable experiments of enterprise.

The enabling theory of telecommunications and the internet, information theory offered me a path to a new economics that could place the surprising creations of entrepreneurs and innovators at the very center of the system rather than patching them in from the outside as exogenous inputs. It also showed that knowledge is not merely a source of wealth; it is wealth.

Summing up the new economics of information are ten key insights:

1) The economy is not chiefly an incentive system. It is an information system.
2) Information is the opposite of order or equilibrium. Capitalist economies are not equilibrium systems but dynamic domains of entrepreneurial experiment yielding practical and falsifiable knowledge.
3) Material is conserved, as physics declares. Only knowledge accumulates. All economic wealth and progress is based on the expansion of knowledge.
4) Knowledge is centrifugal, dispersed in peoples heads. Economic advance depends on a similar dispersal of the power of capital, overcoming the centripetal forces of government.
5) Creativity, the source of new knowledge, always comes as a surprise to us. If it didnt, socialism would work. Mimicking physics, economists seek determinism and thus erroneously banish surprise.
6) Interference between the conduit and the contents of a communications system is called noise. Noise makes it impossible to differentiate the signal from the channel and thus reduces the transmission of information and the growth of knowledge.
7) To bear high entropy (surprising) creations takes a low entropy carrier (no surprises) whether the electromagnetic spectrum, guaranteed by the speed of light, or property rights and the rule of law enforced by constitutional government.
8) Money should be a low entropy carrier for creative ventures. A volatile market of gyrating currencies and grasping governments shrinks the horizons of the economy and reduces it to high frequency trading and arbitrage in a hypertrophy of finance.
9) Wall Street wants volatility for rapid trading, with the downsides protected by government. Main Street and Silicon Valley want monetary stability so they can make long term commitments with the upsides protected by law.
10) GDP growth is fraudulent when it is mostly government spending valued retrospectively at cost and thus shielded from the knowledgeable judgments of consumers oriented toward the future. Whether fueled by debt or seized by taxation, government spending in economic stimulus packages necessarily substitutes state power for knowledge and thus destroys information and slows economic growth.
11) Analogous to average temperature in thermodynamics, the real interest rate represents the average returns expected across an economy. Analogous to entropy, profit or loss represent the surprising or unexpected outcomes. Manipulated interest rates obfuscate the signals of real entrepreneurial opportunity and drive the economy toward meaningless trading and arbitrage.
12) Knowledge is the aim of enterprise and the source of wealth. It transcends the motivations of its own pursuit. Separate the knowledge from the power to apply it and the economy fails.

The information theory of capitalism answers many questions that afflict established economics. No business guaranteed by the government is capitalist. Guarantees destroy knowledge and wealth by eliminating the precondition of falsifiability. Unless entrepreneurial ideas can fail or businesses go bankrupt, they cannot succeed in creating new knowledge and wealth. Epitomized by heavily subsidized and guaranteed leviathans, such as Goldman Sachs, Archer Daniels Midland, Harvard and Fanny Mae, the crisis of economics today is crony statism.

The message of a knowledge economy is optimistic. As Jude Wanniski wrote, Growth comes not from dollars in peoples pockets but from ideas in their heads. Capitalism is a noosphere, a domain of mind. A capitalist economy can be transformed as rapidly as human minds and knowledge can change.

As experience after World War II when US government spending dropped 61 percent in two years, in Chile in the 1970s when the number of state companies dropped from over 500 to under 25, in Israel and New Zealand in the 1980s when their economies were massively privatized almost over-night, and in Eastern Europe and China in the 1990s, and even in Sweden and Canada in recent years, economic conditions can change overnight when power is dispersed and the surprises of human creativity are released.

Perhaps the most powerful demonstration that wealth is essentially knowledge came in the rapid post world war II revival of the German and Japanese economies. Nearly devoid of material resources, these countries had undergone the nearly complete destruction of their physical plant and equipment. As revealed by decades of experience with unsuccessful ministrations of foreign aid, the mere transfer of financial and political power is impotent to create wealth without the knowledge and creativity of entrepreneurs.

Information Theory is a foundation for revitalizing all the arts and sciences, from physics and biology to mathematics and philosophy. All are transformed by a recognition that information is not order but disorder. The universe is not a great machine that is inexorably grinding down all human pretenses of uniqueness and free will. It is a domain of creativity in the image of a creator.

In the same way, capitalism is not a system of equilibrium; it is an engine of disruption and invention. All economic growth and human civilization stem from the surprises of creativity and the growth of knowledge in a domain of constitutional order.

The great mathematician Gregory Chaitin, inventor of algorithmic information theory, explains that to capture the surprising information in any social, economic, or biological science requires a new mathematics of creativity imported from the world of computers. He writes: Life is plastic, creative! How can we build this out of static, eternal, perfect mathematics? We shall use post-modern math, the mathematics that comes after Godel, 1931, and Turing, 1936, open not closed math, the math of creativity

Entropy is a measure of surprise, disorder, randomness, noise, disequilibrium, and complexity. It is a measure of freedom of choice. Its economic fruits are creativity and profit. Its opposites are predictability, order, low complexity, determinism, equilibrium, and tyranny.

Predictability and order are not spontaneous and cannot be left to an invisible hand. It takes a low-entropy carrier (no surprises) to bear high-entropy information (full of surprisal). In capitalism, the predictable carriers are the rule of law, the maintenance of order, the defense of property rights, the reliability and restraint of regulation, the transparency of accounts, the stability of money, the discipline and futurity of family life, and a level of taxation commensurate with a modest and predictable role of government. These low entropy carriers bear all our bounties of surprising wealth and progress.