Liberalism, the ideology (what we now call Libertarianism), came of age in the Eighteenth and Nineteenth Century. It was about a lot of things, but we can, I think, characterize it by saying it was about Free Minds and Free Markets. Free minds: exploring the world around us without interference from the age-old enemy- AUTHORITY. It allowed saying and doing what you will, within a framework of just laws. Reason would become an Authority that would advise in conflicts between religion, tradition, or ideology and New Ideas. Liberalism thought it wrong for Authority to substitute its judgment for that of the individual and said so, repeatedly and eloquently.
Free markets were championed by this new Liberalism. John Locke, Adam Smith, David Hume, David Ricardo, John Stuart Mill, the French Physiocrats and others– these men saw that Governments caused more trouble than benefit when they interfered with the economic actions of free men.
Men were born free-that is: they were not pawns to be moved about a chessboard by the privileged, or those who thought themselves superior . And freedom to act, to make mistakes, to learn, and to prosper, these were necessary conditions for the development of man’s spirit. And these conditions were best achieved by the promotion of individual freedom and individual responsibility for one’s acts.
Where the ideas of these men were adopted and advanced, freedom and prosperity flowered, where struggle and strife had ruled before.
But all was not well in this new world, for this new world had produced wealth. The production of wealth is noisy, and this noise woke Procrustes from his slumbers.
As he strolled through the marketplace he was amazed and awed by the things he saw. And he wondered how he could fuel the people to revolt against such wealth that was so common. “Surely they won’t listen to me now,” he said to himself, “after having achieved all this.”.
But he was wrong.
He became Marx in Germany, the Webb’s in England, and a thousand other names and faces around the globe. In the U.S. he couldn't call himself a socialist because many of the common people didn't trust Socialism. He looked around and decided to call himself a Liberal, because people liked the term, because they (rightly) associated the great gains the common man had made with the liberal philosophy. So a man who stood against everything the Liberal stood for stole his name and derided the real Liberal as someone “old fashioned”, “out of touch”, "not compassionate". And he gained fame by telling people they had a right to a lot more things than they had now. He gained fame not by comparing how people lived now with how they lived before, but by comparing how they lived now with how they could live if they stole their (richer) neighbors goods. He gained fame by convincing people that by giving up their independence and having faith in and love for their rulers, that they would prosper. “Follow me, and I will lead you to a heaven on earth” he said to the people. He became very popular.
Everything was to be done for the common good. We’re-all-in-this-together-no-man-is-an-island-we-should-all-live-for-each-other-from-each-according-to-his-abilities-to-each-according-to-his-needs.
Thus the stage is set.
Collectivism
The Bad Century– my century, the 20th century– started off with expressions of great contempt for Liberalism (“old”Liberalism). In the West, MALiberalism (Modern American Liberalism) was gaining ground fast (the phony liberalism that Procrustes promoted). More radical versions of the same thing: Fascism, Communism, and Nazism expressed open contempt for the philosophies, the economics, and the institutions of Liberalism. Liberalism had made people weak and small, it was the last gasp of an old order, it stole the production of workers. It was INJUSTICE WRIT LARGE. It could in no way compete with a society in which the government managed all of man’s affairs. We, the anti-liberals, would create a variety of Eden’s where the people, in exchange for ceding their liberties to their governments, would (somehow) derive great benefits that would flow to the obedient. There would be great prosperity, of course, and there would be no fear or anxiety that were the constant companions of people in the Liberal communities, where people had to assume responsibility for themselves. You would be taken care of if you didn’t make any waves and did what you were told. And don’t ask too many questions.We’re doing all this for you!
You have one life. It’s yours to do with what you will. What if you didn’t want to go along with all this? What if you didn’t agree to give up your freedoms? Well, then you are an “Enemy of the State”, but we will still provide you with a home: GULAG. Welcome!
And the people liked it. It apparently made them feel warm. Made them feel good. So they ceded their liberties to their governments, in exchange for the genius of planning, and security from the hardships of assuming responsibilities for their own lives. And the people prospered. Uh... well... kind of... not exactly.
Blood. That’s what the 20th century was about. Socialism. The total state. Blood. They smelled it. They wallowed in it. They bled it. Some of them rejoiced in it, until even those who loved it became sick of the stench.
Blood. Let the government take care of you. You will fight our many wars. Blood. Let the government take care of you. You will obey our commands or you will bleed. Blood. Let the government take care of you. We will take your children and do with them what we will. Blood. Let the government take care of you. If you challenge us we take your families’ blood, until we can get to you.
So, as you can see, it all worked out well for everyone.
So the next time you hear someone complaining about losing their freedoms, just think: Enemy of the State!
Undeniably, a powerful tide is running for the Democratic Party, with one week left to Election Day.
Bush’s approval rating is 27 percent, just above Richard Nixon’s Watergate nadir and almost down to Carter-Truman lows. After each of those presidents reached their floors — in 1952, 1974, 1980 — the opposition party captured the White House...
Rep. Barney Frank is calling for new tax hikes on the most successful and a 25 percent across-the-board slash in national defense. Sen. John Kerry is talking up new and massive federal spending, a la FDR’s New Deal. Specifically, we can almost surely expect:
– Swift amnesty for 12 million to 20 million illegal aliens and a drive to make them citizens and register them, as in the Bill Clinton years. This will mean that Nevada, Colorado, New Mexico and Arizona will soon move out of reach for GOP presidential candidates, as has California.
– Border security will go on the backburner, and America will have a virtual open border with a Mexico of 110 million.
– Taxes will be raised on the top 5 percent of wage-earners, who now carry 60 percent of the U.S. income tax burden, and tens of millions of checks will be sent out to the 40 percent of wage-earners who pay no federal income tax. Like the man said, redistribute the wealth, spread it around. Read the article-Pat Buchanan
The central characteristic of sixties liberalism (at least in the remembered national indictment) was one of moral superiority. A liberal would chat you up on civil rights, Vietnam and soybean recipes in a manner aimed less at honest proselytizing and (judged by exasperate liberal segues like The point you can’t seem to understand is… ) more at sending one away with a new sense of self as a racist, warmongering junk food addict. The common people didn’t respond well to such labels...
Liberalism, here, is not to be mixed up with Classical Liberalism, that nineteenth-century philosophy that stressed the dignity of the individual, and scolded, in the process, the depredations of state control. We examine, instead, the liberalism perceived by a working-class population (still smarting from those unkind cracks about racism and soybeans and all) as the value-system of federal buttinskies, idealism and day-glo peace signs...
So, even as Nixon and his posse were run out of town, the people discovered that they hated "the liberals," more than they hated conservatives, who, at morning’s first whiff of such lagniappe, poked their heads, prairie-dog style from the foxholes, rolled their eyes skyward and gave tearful thanks to the gods of authoritarianism...
"Liberals…," archbully Rush Limbaugh was heard to say on the radio some years ago. Here Rush stalled, vexed clearly at putting essential words to existential evil. "Liberals," he finally allowed, "are against humanity." The l-incantation was pixie dust; it could make folks forget that Rush was a mean, ignorant son-of-a-bitch who, to give the measure of the man, once ridiculed a thirteen-year-old Chelsea Clinton for her then-awkward looks, labeling her as the White House dog, and leaving those who could still think to wonder why a grown man would viciously attack a thirteen-year-old girl in public. But Rush hated liberals, didn’t he, so he couldn’t have been all bad. The nation had a mean streak and right-wing hate radio was bringing it to the surface. Michael Nolan
The US government’s budget deficit is large and growing, adding hundreds of billions of dollars more to an already large national debt. As investors flee equities into US government bills, the market for US Treasuries will temporarily depend less on foreign governments. Nevertheless, the burden on foreigners and on world savings of having to finance American consumption, the US government’s wars and military budget, and the US financial bailout is increasingly resented.
This resentment, combined with the harm done to America’s reputation by the financial crisis, has led to numerous calls for a new financial order in which the US plays a substantially lesser role. “Overcoming the financial crisis” are code words for the rest of the world’s intent to overthrow US financial hegemony.
Brazil, Russia, India and China have formed a new group (BRIC) to coordinate their interests at the November financial summit in Washington, D.C.
Despite stiff and unexpected Iraqi resistance, the U.S. invasion of Iraq is likely to succeed in toppling Saddam Hussein—and British Prime Minister Tony Blair, President Bush, the Republican Party, and American neoconservatives.
Blair is gone, the Neocons are looking for new hosts, and a week from tonight, the Republican Party will be decimated and most likely will be irrelevant for at least my lifetime and may never hold either the White House or a majority in either house of Congress again. It seems that it took a while for everything to come to pass, but Roberts got it correct.
Posted by Karen DeCoster [at lew rockwell's blog] at October 29, 2008 04:16 AM
This article in Slate is amateurish, and it reminds me of why Slate is becoming less interesting over time. I'll start off by quoting his opener:
A source of mild entertainment amid the financial carnage has been watching libertarians scurrying to explain how the global financial crisis is the result of too much government intervention rather than too little. One line of argument casts as villain the Community Reinvestment Act, which prevents banks from "redlining" minority neighborhoods as not creditworthy. Another theory blames Fannie Mae and Freddie Mac for causing the trouble by subsidizing and securitizing mortgages with an implicit government guarantee. An alternative thesis is that past bailouts encouraged investors to behave recklessly in anticipation of a taxpayer rescue.
And? Does he really believe these things are not a cause of the "financial carnage?" He draws a blank on Freddie and Fannie, in spite of the fact that they both had to be taken over by the government or face shutdown. A little bit later, he says, "Had the advocates of prudent regulation been more effective, there's an excellent chance that the subprime debacle would not have turned into a runaway financial inferno." Knowing the very definition of "subprime," how does he think these billions in loans ended up with people who were not financially able to make the payments? Perhaps that is a worthy point for investigation? Is it a creation of our imaginations that America is teeming with foreclosures? And this might possibly be because borrowers are not making their mortgage payments? Weisberg ignores the trail of bread crumbs because he thinks he smells libertarian blood. More... LewRockwell.com/blog
"Day by day, the dreams of hundreds of millions of people around the world are being smashed. It is a terrible thing to see from the sidelines. It is far worse to be a participant.
The dreams of easy retirement are disappearing. So are the dreams of automatic wealth. Americans, more than any other people, bought into the dream of automatic wealth. "Just buy a larger home with 5% down and wait. You will get rich." The dream of leveraged money trapped homeowners. It also trapped hedge fund investors.
This dream has yet to play itself out in a wave of bankruptcies. It will. Hedge funds, leveraged 30 to 1, have few reserves apart from stocks in their portfolios. When the stock market falls, they receive margin calls. They must sell more stocks. This depresses the stock market, which triggers more margin calls.
Getting rich looked easy when stocks were rising. Going bankrupt looks easy now. Leverage is a two-way street." Gary North
But Obama himself acknowledges that he was drawn to socialists and even Marxists as a college student. He continued to associate with Marxists later in life, even choosing to launch his political career in the living room of a self-described Marxist, William Ayers, in 1995, when Obama was 34.
Obama's affinity for Marxists began when he attended Occidental College in Los Angeles.
"To avoid being mistaken for a sellout, I chose my friends carefully," the Democratic presidential candidate wrote in his memoir, "Dreams From My Father." "The more politically active black students. The foreign students. The Chicanos. The Marxist professors and structural feminists."
"The most serious financial problem for the Nazi State is not the danger of a breakdown of the currency and banking system, but the growing illiquidity of banks, insurance companies, saving institutions, etc. . . . Germany's financial organizations are again in a situation where their assets which should be kept liquid have become 'frozen'. . . . But the totalitarian State can tighten its control over the whole financial system and appropriate for itself all private funds which are essential for the further existence of a private economy. Yet the institutions which still exist as private enterprises are not allowed to go bankrupt. For an artificial belief in credits and financial obligations has to be maintained in open conflict with realities."
From Gunter Reimann, The Vampire Economy: Doing Business Under Fascism (1939), p. 174, about German economic policy under Hitler.
Talk about great timing. Rothbard's extraordinary book unravels the mystery of banking: what is legitimate enterprise and what is a government-backed shell game that can't last. His explanation is clear enough for anyone to follow and yet precise and rigorous enough to be the best textbook for college classes on the topic. This is because its expositional clarity--in its history and theory--is essentially unrivaled.
Most notably, he uses the T account method of explaining the relationship between deposits and loans, showing the inherent instability of fractional reserve banking and how it sets the stage for centralization, inflation, and the boost-bust cycle.
"The Mystery of Banking is perhaps the least appreciated work among Murray Rothbard’s prodigious body of output. This is a shame because it is a model of how to apply sound economic theory, dispassionately and objectively, to the origins and development of real-world institutions and to assess their consequences. It is “institutional economics” at its best. In this book, the institution under scrutiny is central banking as historically embodied in the Federal Reserve System—the “Fed” for short—the central bank of the United States.
"Rothbard’s presentation of the basic principles of money-and-banking theory in the first eleven chapters of the book guides the reader in unraveling the mystery of how the central bank operates to create money through the fractional-reserve banking system and how this leads to inflation of the money supply and a rise in overall prices in the economy. But he does not stop there. In the subsequent five chapters he resolves the historical mystery of how an inherently inflationary institution like central banking, which is destructive of the value of money and, in the extreme case of hyperinflation, of money itself, came into being and was accepted as essential to the operation of the market economy." Mises.orgBuy the book here.
Someone once remarked that the best indicator of a recession is the number of times "Mises" "Hayek" or "Austrian" appear in the newspapers. During the boom, no one wants to listen to the lessons of the Austrian economists. No one wants to hear that we need to live within our means – that the Federal Reserve does not have the power to print us into prosperity by artificially creating credit.So while the writers of LewRockwell.com were warning against the housing bubble and the inflationary nature of the Fed, the mainstream was touting the economic wisdom of Bernanke and Greenspan. When this recession hit, it seems everyone except the Austrians was caught off guard. Commentators, bureaucrats, and politicians began panicking, "Something must be done! This is Something…therefore it must be done!"
Instead of looking to the mainstream for answers to this crisis, why not look to those who saw it coming?
For those new to Austrian economics, this reader will offer an introduction to this unique school of thought. It is unlike any other school of economics you have likely come across. Instead of focusing on unrealistic mathematical models, the writers here build their thinking on human action and observations of how the economy actually runs.
What’s important is not necessarily the specific political opposition to this bailout, but rather educating people about the dangers of nationalization, central banking, and government regulation. Only when people recognize the dangers of the government’s "socialism for the rich" will we be able to get back on the road to prosperity. Unfortunately, a correction is necessary. There is no such thing as a free house. The more the government intervenes, the longer and more painful it will be. But this crisis gives the country a chance to rethink its previous assumptions about the economy and the government’s role in it. Hopefully, this reader will be a first step for many into an exciting, growing branch of economic thought.
"As the economic debacle facing Americans continues to materialize, those responsible are running for cover with ten Republican senators refusing to attend their own national convention. Four years ago we observed that the so-called "Republican philosophy" of small government, sound money, and balanced budgets was illusory in terms of the history and then-current policies of the Republican Party.[1] However, even we would never have guessed how awful the Republican Party economic policy would become. From mere mercantilism, the Republican Party is now flirting with comprehensive socialist economic policy and another Great Depression.
The Republican Party was founded on big government and economic intervention with roots in the economic platforms of Federalist icon Alexander Hamilton and Whig leader Henry Clay. Indeed, the term "New Deal" was coined in 1865 to characterize Lincoln and his Republican Party economic platform. Republicans became the "mercantile" party of big business, big government, external protection, centralized monetary control, strong restrictions on immigration, and aggressive foreign policy." Mises.org
"Macroeconomic model builders have finally realized what Henry Hazlitt and John T. Flynn (among others) knew in the 1930s: FDR's New Deal made the Great Depression longer and deeper. It is a myth that Franklin D. Roosevelt "got us out of the Depression" and "saved capitalism from itself," as generations of Americans have been taught by the state's educational establishment.
This realization on the part of macroeconomists comes in the form of an article in the August 2004 Journal of Political Economy entitled "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," by UCLA economists Harold L. Cole and Lee E. Ohanian. This is a big deal, since the JPE is arguably the top academic economics journal in the world." DiLorenzo
"As a left-winger I might be expected to be supporting Barack Obama. And indeed, in these last days I've been scraping around, trying to muster a single positive reason to encourage a vote for Obama. Please note my accent on the positive, since the candidate himself has couched his appeal in this idiom. Why vote for Obama-Biden, as opposed to against the McCain-Palin ticket?
Obama invokes change. Yet never has the dead hand of the past had a "reform" candidate so firmly by the windpipe. Is it possible to confront America's problems without talking about the arms budget? The Pentagon is spending more than at any point since the end of the Second World War. In "real dollars" – an optimistic concept these days – the $635bn (£400bn) appropriated in fiscal 2007 is 5 per cent above the previous all-time high, reached in 1952. Obama wants to enlarge the armed services by 90,000. He pledges to escalate the US war in Afghanistan; to attack Pakistan's territory if it obstructs any unilateral US mission to kill Osama bin Laden; and to wage a war against terror in a hundred countries, creating a new international intelligence and law enforcement "infrastructure" to take down terrorist networks. A fresh start? Where does this differ from Bush's commitment on 20 September 2001, to an ongoing 'war on terror' against 'every terrorist group of global reach' and 'any nation that continues to harbour or support terrorism'?..." Alexander Cockburn
Part I of "Boom and Bust" described the Austrian Theory of the Trade Cycle, or Austrian Business Cycle (ABC) theory, in order to pave the way for discussing the theory in the light of entrepreneurial expectations. If you are unfamiliar with the theory, a look at Part I, which includes links to many other resources, should prove helpful. Here, we shall examine the foremost objection to Austrian cycle theory, and see if the theory or the objection survives. Gene Callahan
Imagine that you are a bus driver at the edge of a desert, about to take a busload of passengers across it. You have left all gas stations behind, and are now faced with a decision. There are a number of towns on the other side of the wasteland before you, each a different distance away. The farthest away of these towns also happens to be the closest to your final destination. You can try to reach any of them, but there is a trade-off: the farther away the town, the less the passengers can use the air-conditioning to alleviate the desert heat, as running the AC will use up the gas more quickly.
In order to make your decision, you look at your fuel gauge and determine how much gas you have. You tell the passengers that they must now make a trade off between comfort on the way and distance traveled, as the more air conditioning they choose to use, the faster the bus will consume fuel. Then you collect votes from the passengers on what temperature to keep the bus. You perform some calculations on mileage, speed, and fuel consumption, and pick the farthest city you can reach given the amount of gas you have and the passengers' vote on the use of air conditioning.
The passengers had to decide whether to cross the desert in greater comfort but arrive farther from their final destination, or in less comfort but with a closer arrival. The science of economics has nothing to say about the combination that they picked, other than that it seemed preferable to them at that moment.
However, also imagine that, before you began your calculations, someone had sneaked up to the bus and replaced the passengers' real votes with a fake set that choose a higher temperature, in other words, less fuel consumption. You made your choice as if the passengers would tolerate a temperature of, say, 80 degrees, whereas in reality they will demand to have the bus cooled to 70. Obviously, your calculations will prove to have been incorrect, and the trip will not come out as you had planned. Your plans will be overly ambitious. You will begin by driving as if you had available more resources than you really do, and end by phoning for help when the deception is revealed by the sputtering of your engine.
I offer the above as a metaphor for the Austrian theory of the trade cycle, which offers an explanation of why the economy swings through boom times and recessions. You, the driver, represent the entrepreneurs. The gas is the stock of capital goods. The trip across the desert is the next "round" of production. The passengers represent the consumers, and their choice on how much to use the air conditioning is analogous to how much consumers are willing to put off consumption today in order to save for the future -- their time preference for current consumption over future consumption. The ultimate destination is the satisfaction of as many wants as possible. And it is the central bank -- in America, the Federal Reserve -- that has sneaked up and tampered with the consumers' votes...
AND DON'T EVEN THINK ABOUT ASKING THE EMPTY ONE...
State and local officials are investigating if state and law-enforcement computer systems were illegally accessed when they were tapped for personal information about "Joe the Plumber."
Samuel Joseph Wurzelbacher became part of the national political lexicon Oct. 15 when Republican presidential candidate John McCain mentioned him frequently during his final debate with Democrat Barack Obama.
The 34-year-old from the Toledo suburb of Holland is held out by McCain as an example of an American who would be harmed by Obama's tax proposals.
Public records requested by The Dispatch disclose that information on Wurzelbacher's driver's license or his sport-utility vehicle was pulled from the Ohio Bureau of Motor Vehicles database three times shortly after the debate.
Information on Wurzelbacher was accessed by accounts assigned to the office of Ohio Attorney General Nancy H. Rogers, the Cuyahoga County Child Support Enforcement Agency and the Toledo Police Department.
It has not been determined who checked on Wurzelbacher, or why. Direct access to driver's license and vehicle registration information from BMV computers is restricted to legitimate law enforcement and government business.
Paul Lindsay, Ohio spokesman for the McCain campaign, attempted to portray the inquiries as politically motivated. "It's outrageous to see how quickly Barack Obama's allies would abuse government power in an attempt to smear a private citizen who dared to ask a legitimate question," he said. Columbus Dispatch
Of course there will be no resolution of this. Don't mess with us! is the message. And it could have come from either camp. If you vote for one of these guys you are responsible for what happens next.
"This will go down in the history books as one of the greatest fiascos of banking in 100 years. There need to be some scapegoats, and the regulators are going to go hunt people. That will be good in the long run."
Emmanuel Roman, of GLG Partners, said 25pc-30pc of the world’s 8,000 hedge funds would disappear "in a Darwinian process", either going bust or deciding meagre profits are not worth their efforts.
His views were echoed by Professor Nouriel Roubini, a former US Treasury and presidential adviser known for his accurate prediction of financial crises, who estimated that up to 500 hedge funds would fail within months.
Both men were speaking at the same hedge fund conference in London yesterday, and Prof Roubini said he would not be surprised if the US and other countries soon had to close their stock markets for more than a week to halt descent into "sheer panic".
The economist warned that the world is heading for a protracted recession that will end the US’s financial dominance.
"It’s the beginning of the decline of the US financial empire. The Great Depression ended in a massive war. I hope that’s not going to happen but it’s pretty ugly now," Prof Roubini said.
Twenty-five years down the line, what this administration and Congress have done will be viewed in much the same light as what Herbert Hoover did in the years 1929 through 1932. Whenever people make decisions when they are panicked, the consequences are rarely pretty. We are now witnessing the end of prosperity.
The stock market is obviously no fan of second-term George W. Bush, Nancy Pelosi, Harry Reid, Ben Bernanke, Barack Obama or John McCain, and again for good reasons.
These issues aren't Republican or Democrat, left or right, liberal or conservative. They are simply economics, and wish as you might, bad economics will sink any economy no matter how much they believe this time things are different. They aren't.
There are plenty of legal institutes -- leftist, neocon, and "libertarian." But now, finally, there is one worth supporting: the Jefferson Legal Foundation. The founder and president is Joseph Becker, attorney and economist. Indeed, he got his MA in economics under Murray Rothbard. Joe was also a congressional aide to Ron Paul, where I first met him, and general counsel to Ron's 2008 presidential campaign.
Here is Jefferson Legal's educational and litigation focus: freedom of speech, association, and religion, gun ownership; property rights; privacy in persons, papers, and effects; limited government and due process; and sound money. As Thomas Jefferson said, "It behooves every man who values liberty...for himself, to resist invasions of it in the case of others: or their case may, by change of circumstances, become his own."
Forget Joe the plumber; I'm backing Joe the lawyer.
"For anyone who believes the principal cause of the Great Depression was stock speculation on Wall Street, Garet Garrett’s “A Bubble That Broke the World” (1932) should be an eye-opener. There was, of course, a bubble that broke on Wall Street in October 1929. This book, reprinted by the Mises Institute, which has also reprinted Garrett's novels, is about a second disaster, the foreign payments crisis of 1931, which complicated the situation considerably.
The 1920s had begun with Britain and France owing billions to America in debts from World War I, and Germany owing billions to Britain and France in war reparations. After trying to inflate their way out, the Germans borrowed their way out. They borrowed from the U.S. Treasury and by selling bonds in New York, whose bond houses resold them to small-town banks across America. The money went in a great circle: from American savers to Germany, then to Britain and France as reparations, and back to the Treasury as British and French debt repayments. Around and around — until it froze, and everyone was relieved of an obligation except the United States, which was stuck with bad loans.
Billions were also lent to South American borrowers who did not repay. And that was a disastrous..." LibertyUnbound
Former Fed Chairman Alan Greenspan declared today that he had made a mistake (see the New York Timesarticle). One would expect Greenspan to admit that his monetary policy following the 2000 dotcom bubble had been way too expansive and that the housing market suffered from it as a result.
Well, no. According to the NYT, Greenspan declared that the mistake he made was to trust that “free markets could regulate themselves without government oversight.” Greenspan admitted that he was “partially wrong in not having tried to regulate the market for credit-default swaps.” He has found a flaw in the “free market ideology” as the NYT put it, and is now in “a state of shocked disbelief.”
We also are in a state of shocked disbelief. Or perhaps not. Instead of blaming himself for his monetary policy and admitting once and for all that central banking is not the best monetary system available (he actually admitted that the economy is too complex to be forecasted by Fed experts), he blamed it on the free market. Greenspan true mistake is to absolve himself from all responsibility by saying that he had faith in the free market system and that that system abandoned him (i.e. it had a flaw).
But the more fundamental mistake Greenspan made was 50 years ago when he abandoned his position on the role of the gold standard. We shouldn’t be surprised that Greenspan is trying to deflect criticism by minimizing his errors and poor judgments as the Fed Chairman. The scholars who will write the second edition of “A Monetary History of the United-States 1961-2040” will surely find a different story.
Addendum:
As Pete Boettke mentioned it in the comment section, read Murray Rothbard's comments upon the nomination of Alan Greenspan at the Fed in 1987. Rothbard saw all this coming a long time ago. He had it right.
In case you haven’t seen it, the Washington Post ran a surprising and unexpected editorial yesterday. It basically explained that politicians, policy makers, and others shouldn’t get too much ahead of themselves but should instead consider that perhaps it was because capitalism was too regulated and monetary policy was too expansive that we are in the mess we’re in.
“…government interventions of all kinds, from the defense budget to farm supports, shaped the business environment. No subsidy would prove more fateful than the massive federal commitment to residential real estate -- from the mortgage interest tax deduction to Fannie Mae and Freddie Mac to the Federal Reserve's low interest rates under Mr. Greenspan. Unregulated derivatives known as credit-default swaps did accentuate the boom in mortgage-based investments, by allowing investors to transfer risk rather than setting aside cash reserves. But government helped make mortgages a purportedly sure thing in the first place. Home prices seemed to stand on a solid floor built by Washington.”
Strong economic upheavals such as the current crisis can bring unexpected fruits... What's next? Ben Bernanke and Paul Krugman understanding ABCT?
"Greenspan's real qualification is that he can be trusted never to rock the establishment's boat. He has long positioned himself in the very middle of the economic spectrum. He is, like most other long-time Republican economists, a conservative Keynesian, which in these days is almost indistinguishable from the liberal Keynesians in the Democratic camp. In fact, his views are virtually the same as Paul Volcker, also a conservative Keynesian. Which means that he wants moderate deficits and tax increases, and will loudly worry about inflation as he pours on increases in the money supply." Murray Rothbard
Are you concerned that the government's warrantless surveillance, detainee policies, and other post-9/11 laws and policies undermine our basic civil rights and liberties and make our country less safe? Join the Bill of Rights Defense Committee's national network of people who are taking meaningful action to restore protections guaranteed under the Bill of Rights and the U.S. Constitution.
Most Americans don’t think of their government as an empire, but in fact the United States has been steadily expanding its control of overseas territories since the turn of the twentieth century. Now, through political intimidation and more than 700 military bases worldwide, the U.S. holds sway over an area that dwarfs the great empires of world history.
Eland shows that the concept of empire is wholly contrary to the principles of both liberals and conservatives and that it makes a mockery of the Founding Fathers’ vision for a free republic. Eland also warns that in recent years, “blowback” and the enormous expansion of domestic federal power resulting from this overextended empire have begun to threaten the American homeland itself and curtail the very liberties these interventions were meant to protect.
The author delivers a penetrating argument which exposes the imperial motives behind interventionist U.S. policy and questions the historical assumptions on which it is based. Independent Institute
"Two months after the 9/11 attacks, 25 teachers, retirees, lawyers, doctors, students, and nurses—none of them professional civil libertarians—formed the Bill of Rights Defense Committee in Northampton, Massachusetts. They knew the Bush-Cheney war on the Constitution had begun.
That October 25, the White House had terrified Congress into rushing the Patriot Act into law. In the Senate, only Democrat Russ Feingold—accurately predicting the continuous rape of the Bill of Rights—voted against it, disobeying Democratic leader Tom Daschle, who desperately wanted to avoid the Republicans tarring the Democrats as unpatriotic...
"As additional Massachusetts towns and the city councils of Ann Arbor and Denver took Northampton's lead and passed similar resolutions, BORDC founder and director Nancy Talanian put together a masterful website to synchronize a growing national movement—bordc.org (on which I click every morning to find out the cities, towns, and states creating new committees)—and news stories from around the country on further administration raids on the Constitution. By now, more than 400 cities and towns—and eight states—have passed BORDC resolutions and continue to monitor local and state police and their congressional representatives.
"This truly grassroots movement is a 21st-century revival of the Committees of Correspondence started in Boston by Samuel Adams and the Sons of Liberty in 1767, which became a news network throughout the colonies. Those committees reported the growing abuses by the King's transplanted governors, customs officials, and troops of the Colonists' individual rights, which were rooted deep in English history. In a 1773 secret meeting in Virginia, Thomas Jefferson, Patrick Henry, and other rebels committed a hanging offense by starting such a committee in their state." Read more-- Nat Hentoff
The Importance of Keeping One's Head When Everyone Else is Losing Theirs
The recent debate on the "crisis" is an important illustration of this principle. The simple economics behind Leeson's demand for keeping our heads is that we have yet to see US policy shut down our export and import markets, and we have yet to see US policy curtail technological innovation. There is a lot to be concerned about, but as long as Smithian gains from trade, and Schumpeterian gains from innovation out pace government Stupidity in the economic horse race tomorrow's trough will be higher than today's peak.
As a counter-factual thought experiment we will be poorer than we otherwise could have been, but we will still be better off tomorrow than we are today.
I am VERY concerned about the current level of interventionism in the US and the future of the dollar. But I also believe strongly in the "endogenous public choice theorist" and I believe we will eventually address these issues head on, and even more importantly that individuals will find "bottom-up" strategies to cope with government stupidity.
When I read the great work of Bob Higgs I learn about the ratchet effect and I learn of how regime uncertainty can destroy the exchange envrionment. This is what FDR's policies did and it explains the deepth and length of the Great Depression. Monetary forces caused disturbances, but it was microeconomic meddling that prevented market forces for correcting those distortions and getting the economy on the right path. It is all about Smithian gains from trade, and Schumpeterian gains from innovation in my mind.
The sort of extreme pessimistic position is justified when monetary disturbances are followed up by microeconomic restrictions. We have gone down a path that is dangerously close to this, but we haven't completely squashed the market economy yet. In short, we haven't yet gone the way of Robert Mugabe in Zimbabwe. The Europeanization of the US economy is something to be lamented and to be met wtih outrage by economists, but it will NOT put us back to the stone age. We will be poorer than we could be, we will be less free than what would be appropriate, but we will be richer than we are now, and freer in our economic, political and social life than we are now. At least that is my prediction for my kids and their kids. My grandchildren will look back at our lifestyle and wonder how we ever did it, just as we look back to 1900 and our grandparents and great grandparents and wonder how they survived when work and life was so hard.
Let's just remember the 20th century was one of WWI, WWII, Korean War, Vietnam War, Cold War, and turmoil in the Middle East, etc. It was also a century of the panic of 1907, the Great Depression, the stagflation of the 1970s, the 1987 crash, and the 1997 Asian contagion. A century of full of regulations, mismanaged money, and irresponsible fiscal policy. A century of protectionist legislation and pork-barrell politics. Yet it was also a century of amazing technological innovations that saw us start with horse and buggy and end not only with automobiles, but having developed the ability to fly around the world, and rocket a man to the moon, and a machine to mars. During the 20th century, the costs of domestic trade fell swiftly as train, truck and plane enabled coast to coast transactions of goods, and international trade reached from the US to the remotest corners of the world.
Let me be clear, I am VERY disturbed by the latest policy choices and disgusted at the behavior of our political leadership in this time of crisis. I am very concerned. But my concern is about the counterfactual --- what could have been had we allowed the free market to correct the distortions and get us back on track.
Posted by Peter Boettke on October 24, 2008 at 11:34 PM | Permalink | Comments (23) | TrackBack (0)
I guess Bush and Cheney are too busy working on the pardons to have time for anything else like an attack on Iran. . But don’t fret. Joe Biden hints that he and Obama are working on it, though they may declare war on Russia first. Or Venezuela. So much to do in those first 100 days. An empire in October will still be an Empire next January. We’ll have continuity....
"I can give you at least four or five scenarios from where it might originate," Biden went on. He mentioned the Middle East and Russia. "And he's gonna need help. And the kind of help he's gonna need is, he's gonna need you - not financially to help him - we're gonna need you to use your influence, your influence within the community, to stand with him. Because it's not gonna be apparent initially, it's not gonna be apparent that we're right.”
What exactly is Biden hinting at in that last sentence? From the context of that whole paragraph it’s clear enough to me he’s suggesting that despite hopes nourished by the sort of people at that Seattle fundraiser that post-Bush/Cheney America might backpeddle from hasty military confrontations, President Obama will stand tall and lose no time in going eyeball to eyeball with those who would test his resolve.
"Perhaps the only institution in America whose approval rating is beneath that of Congress is the media.
"Both have won their reputations the hard way. They earned them...
"Is Joe’s record of having been wrong on Vietnam, wrong in the Cold War, wrong on the Iraq War, less important than whether Sarah Palin tried to get fired a rogue-cop brother-in-law who Tasered her 10-year old nephew to “teach him a lesson”?
“I’ve forgotten more about foreign policy than most of my colleagues know,” says Joe humbly. Given his record, it is understandable Joe has forgotten so much of it." Buchanan
What is the one thing you can do, in a political sense, if you are a very small fish in a very big sea?
Don't allow yourself to be easily manipulated. This is within everyone's power. YOU HAVE POWER!
"Then you look up one day and realize how profoundly that fear has changed your world. People are imprisoned without charges or access to attorneys, and it’s routine. People are surveilled, their reading habits studied, their telephone usage logged, and it’s commonplace. People, including children, end up on a secret list of those who are not allowed to fly, nobody will tell you why, there is no appeal, and it’s ordinary. We swallow lies like candy, nod sagely at babblespeak, and it’s unexceptional.
Torture is inflicted with White House approval, the president lies about it and it’s just another Tuesday"
"Pitts is describing here the latest episode of a recurrent phenomenon that I have been studying and writing about for almost thirty years: the ideological transformation that follows the government’s sustained conduct of extraordinary policies during a crisis, real or imaginary. Living for years on end without previous freedoms, many people lose their awareness of the loss. They become accustomed to the new normality."
“...None are more hopelessly enslaved than those who falsely believe they are free.”
Higgs doesn't ask, but does anyone think that either of the two primary mandarins running for power will repeal any of the assaults on our liberties? Do either of them even care?
Some call it "Capitalist fiction", and it's not off the mark. It's also very good fiction, esp. for a cold winters' night.
"In 2007, the Ludwig von Mises Institute reprinted the four novels written by Garet Garrett (1878–1954), one of America’s leading financial journalists and a libertarian. Garrett, who for unknown reasons had renamed himself so that both parts sounded alike, was a writer of distinctive ideas and a forcefully distinctive style. I have edited three volumes of his essays published by Caxton: “Salvos Against the New Deal” (2002), “Defend America First” (2003), and “Insatiable Government” (2008). But none of his novels had been reprinted since the 1920s, and they have been difficult to find on the used-book market.
As I write, abebooks.com is offering only two Garrett novels from those years: one copy of “Harangue” (1927) at a bookstore in Vancouver, Wash., at $124.99, and one copy of “The Cinder Buggy” (1923) at a bookstore in England, at $530. No original copies of “Satan’s Bushel” (1924) or “The Driver” (1922) are available at all. A determined reader can find these stories in bound copies of the Saturday Evening Post, or in the case of “Satan’s Bushel,” in another old magazine, called Country Gentleman. But then you have to photocopy them on 11x17 paper or read them at the library.
I’m an admirer of Garrett, and have long wanted his work to be easier to obtain. The Mises Institute reprints — photocopies of the original E.P. Dutton editions, bound in new paper covers and offered at $20–$25 — now make his novels available once more." LibertyUnbound
You know, that subject that most Americans know almost nothing about. This is for the NeoKooks, whose drive for global hegemony reflects such high-mindedness. This is what it's like down low, on the ground, where they never seem to be found.
"Most histories of war are written by the victors — generals, statesmen, or historians. And most deal with strategy, diplomacy, heroics, and victories. Few are written from the viewpoint of the victims, most of whom leave behind no written record of their experiences.
The books discussed here are all works about World War II. They are based on notes, letters, or diaries written at the time, by people who suffered behind the lines or were killed at the front. They reflect an immediacy that few books researched and written later can possess. These are all, however, recent books. They were published long after the battles ended, because (as in the case of “The Diary of Anne Frank”) the written materials were discovered much later. It took time to organize them, translate them, edit them, and turn them into proper books. Proper — and of immense human interest." LibertyUnbound.com
IS LAISSEZ FAIRE RESPONSIBLE FOR THE FINANCIAL CRISIS?
THE PRESS SAYS IT'S ALL BECAUSE OF LAISSEZ FAIRE CAPITALISM?
LAISSEZ FAIRE? LAISSEZ FAIR? WHAT LAISSEZ FAIRE?
1. Government spending in the United States currently equals more than forty percent of national income, i.e., the sum of all wages and salaries and profits and interest earned in the country. This is without counting any of the massive off-budget spending such as that on account of the government enterprises Fannie Mae and Freddie Mac. Nor does it count any of the recent spending on assorted "bailouts."...
2. There are presently fifteen federal cabinet departments, nine of which exist for the very purpose of respectively interfering with housing, transportation, healthcare, education, energy, mining, agriculture, labor, and commerce, and virtually all of which nowadays routinely ride roughshod over one or more important aspects of the economic freedom of the individual. Under laissez-faire capitalism, eleven of the fifteen cabinet departments would cease to exist and only the departments of justice, defense, state, and treasury would remain.
3. The economic interference of today's cabinet departments is reinforced and amplified by more than one hundred federal agencies and commissions, the most well known of which include, besides the IRS, the FRB and FDIC, the FBI and CIA, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA. Under laissez-faire capitalism, all such agencies and commissions would be done away with, with the exception of the FBI, which would be reduced to the legitimate functions of counterespionage and combating crimes against person or property that take place across state lines.
4. To complete this catalog of government interference and its trampling of any vestige of laissez faire, as of the end of 2007, the last full year for which data are available, the Federal Register contained fully seventy-three thousand pages of detailed government regulations. This is an increase of more than ten thousand pages since 1978...
The collapse of the Bush administration's ambitious plan for a long-term US presence in Iraq highlights the degree of unreality that has prevailed among top US officials in both Washington and Baghdad on Iraqi politics. They continued to see the Maliki regime as a client which would cooperate with US aims even after it was clear that Maliki's agenda was sharply at odds with that of the United States.
They also refused to take seriously the opposition to such a presence even among the Shiite clerics who had tolerated it in order to obtain Shiite control over state power. Gareth Porter
"God grant, that not only the love of liberty, but a thorough knowledge of the rights of man, may pervade all the nations of the earth, so that a philosopher may set his foot anywhere on its surface, and say, This is my country." Benjamin Franklin
By now, everyone is familiar with the advertising slogan "What happens in Vegas, stays in Vegas" (although the actual Las Vegas Convention and Visitors Slogan is "What happens here, stays here"). The phrase is also the inspiration for a movie starring Cameron Diaz and Ashton Kutcher. Apparently, it's also how the Maryland State Police have decided to handle the files of 53 antiwar and anti-death-penalty activists who were part of a covert surveillance effort that inappropriately identified them as suspected terrorists. The 53 people have been notified that they can review their files before they are destroyed, but they cannot do so with legal counsel and they cannot make a copy for their records. According to Maryland State Police spokesman Greg Shipley, "It was inappropriate that they are in there, and we are fixing that. It is a matter that is between the state police and that person. No one else is to see the information." That sounds more like something you'd expect to hear in a police state, not a democratic society...
"President Bush once declared that "we will not allow this enemy to win the war by changing our way of life or restricting our freedoms." Yet that is exactly what we are doing to ourselves. And so we will pay the price that Benjamin Franklin once warned us about: 'They who would give up an essential liberty for temporary security, deserve neither liberty or security.' " Charles Pena
I’ve just heard McMussolini say that the American dream of home ownership should not be crushed under the weight of a bad mortgage. What about that fundament of the American founding: self-reliance and responsibility?
McMussolin went on to promise to buy up bad home mortgages, which is what I thought the Sell-Out Bill did indirectly. These idiots don’t really understand the bill they just signed. As Ron Paul cautioned, Warren Buffet confessed to not understanding the derivatives market. Do we really think the buffoons in Congress get it?
The trashing of “Joe the Plumber” by the Left is uncanny. The defense Republicans offer of Joe is hopeless (like the defense offered up by the woman with the worst voice on TV and radio: Laura Ingraham.) When you have no first principles you are powerless to coherently defend a man’s right to his property.
Of course, proponents of natural rights suffer no such debilities. Ilana Mercer
"The news media are in the process of creating a great new historical myth. This is the myth that our present financial crisis is the result of economic freedom and laissez-faire capitalism...
"The mentality displayed in these statements is so completely and utterly at odds with the actual meaning of laissez faire that it would be capable of describing the economic policy of the old Soviet Union as one of laissez faire in its last decades...
"Laissez-faire capitalism is a politico-economic system based on private ownership of the means of production and in which the powers of the state are limited to the protection of the individual’s rights against the initiation of physical force. This protection applies to the initiation of physical force by other private individuals, by foreign governments, and, most importantly, by the individual’s own government..." George Reisman
Justin Raimondo, Antiwar.com:In the midst of a softball interview with Georgian President Mikheil Saakashvili, New York Times reporter Deborah Solomon hurls this zinger:
"For all your lofty talk about democracy, last November you shut down the opposition television station in Tbilisi."
To the oily Saakashvili, however, this is water off a duck's back:
"The interference with Imedi TV was an exception, not a rule. This action was taken during mass riots when Imedi TV started to incite overthrow of the democratically elected government. It should be noted that the government did pay damages."
Do you suppose it would be okay if the FBI barged into the offices of, say, MSNBC, wrecked the place, hauled Keith Olbermann and Rachel Maddow out of the studio bodily, and shut down the station – as long as "damages" were paid?
The station, by the way, which was the only televised platform for the Georgian opposition, has since been handed over to a regime-friendly front man, who just happens to be an American citizen. Damages were paid, indeed…
...Obama is telling us we must pour more troops, more money, and more of our hopes into the Afghan front, which has supposedly been "neglected" by the Bushies.
No wonder he's been endorsed by none other than Ken "Cakewalk" Adelman, and given support (albeit indirectly) by any number of neocons, such as Charles Krauthammer – who, after pummeling Obama for weeks, has suddenly discovered the Democratic candidate is possessed of a "first-class intellect and a first-class temperament," which "will likely be enough to make him president."
...IF GREED WAS THE CAUSE OF THE MORTGAGE MELTDOWN:
WHY WAS GREED ISOLATED TO THE REAL ESTATE SECTOR?
WHY WASN'T GREED IN THE AGRICULTURE SECTOR OR IN MANUFACTURING OR IN THE EDUCATION INDUSTRY THE SOURCE OF THE PANIC?
WHY WAS GREED THE CAUSE OF FINANCIAL RUIN NOW AND NOT BEFORE?
Were real estate buyers, sellers, financiers somehow genetically prone to greed, while people in food and industry and education were from a different human gene pool? Was greed not a human vice during stable periods in the real estate market? Or could there have been objective conditions, a change in the market environment that created the debacle?
"Greed, or at least self-interest, is always present to some degree in the economy. Why has greed suddenly produced so much harm, and why only in one sector of the economy? Firms are profit seekers, but they will seek it where the institutional incentives signal profit is available. In a free market, firms profit by satisfying their customers, investing wisely, and making prudent loans. Regulations, policies, and political rhetoric can change those incentives. When the law either poorly defines the rules of the game or tries to override them through regulation, the invisible hand that makes self-interested behavior mutually beneficial may become more of a fist. In such cases, "greed" can lead to problems, not caused by greed but by the institutional context channeling self-interest in socially unproductive ways.
To call the housing and credit crisis a failure of the free market or the product of unregulated greed is to overlook the myriad government regulations, policies, and political pronouncements that have both reduced the freedom of this market and led self-interested actors to produce disastrous consequences, often unintentionally."
On the brief occasions when the president now appears in the Rose Garden to "comfort" or "reassure" a shock-and-awed nation, you can almost hear those legions of ducks quacking lamely in the background. Once upon a time, George W. Bush, along with his top officials and advisers, hoped to preside over a global Pax Americana and a domestic Pax Republicana – a legacy for the generations. More recently, their highest hope seems to have been to slip out of town in January before the you-know-what hits the fan. No such luck.
Of course, what they feared most was that the you-know-what would hit in Iraq, and so put their efforts into sweeping that disaster out of sight. Once again, however, as in September 2001 and August 2005, they were caught predictably flatfooted by a domestic disaster. In this case, they were ambushed by an insurgent stock market heading into chaos, killer squads of credit default swaps, and a hurricane of financial collapse. Tom Engelhardt
The present U.S. policy in Afghanistan of using air strikes to target local Taliban leaders was rejected by the top U.S. commander in Afghanistan in early 2004 as certain to turn the broader population against the U.S. presence.
Lt. Gen. David Barno, the three-star general who commanded the Combined Forces Command-Afghanistan, the overall U.S. and coalition command for Afghanistan from October 2003 to mid-2005, recalled in an interview that he had ordered that such air strikes be halted in Afghanistan in early 2004. He said the decision did not prohibit air strikes for close support of U.S. troops in contact with the Taliban.
Gen. Barno, now retired from the Army and director of the Near East South Asia Center for Strategic Studies at the National Defense University, said he decided to stop the use of pre-targeted air strikes in early 2004 because the civilian casualties they caused were eroding the tolerance of the Afghan population for the U.S. military presence in the country.
"I felt that civilian casualties were strategically decoupling us from our objective," said Barno. "It caused blowback that undermined our cause." Gareth Porter
IS THE LOVELY LITTLE NEOCON WAR WITH IRAN OFF THE TABLE?
CHARLES SAYS DON'T LET YOUR GUARD DOWN, BUT JUST MAYBE.....
If it is, says Ray McGovern, it may be more than the bear market; it may be because of the Russian Bear, too!
... the Russian reaction to Georgia was not merely one of pique. It became a well-planned strategic move to disabuse Israel and the United States of the notion that Russia would sit still for an attack on Iran, a very important country in Russia's general neighborhood. After Georgia, the Russians were bent on sweeping such plans "off the table," so to speak, and seem to have succeeded....
It is a curious twist, but to their great credit, senior military officers Adm. William Fallon, who quit rather than let himself be on the receiving end of an order to attack Iran, and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, fought and continue to fight a rearguard action against the dreams and plans of "the crazies" in the White House to attack Iran. Fallon famously declared that the U.S. military was not going to "do Iran on my watch" as commander of Centcom.
This then is the bloodstained hand that Barack Obama has clasped so warmly, so triumphantly, on his march to power. As for Powell, he has proven himself once more the ultimate courtier. In the latest intramural tussle in the imperial court, his keen and practiced eye has picked out the coming man – and so he has jettisoned the faction he has served for so long, and latched on to the winning side yet again. (As he did previously for a while with Bill Clinton.) And why not? Powell has always been a faithful servant of America's militarist empire – no matter who its temporary manager might be. Chris Floyd
Wake up and smell the fascist roses, my fellow Americans. The so-called free-market fundamentalists the people elected in 2000 and 2004, are now moving quickly to eliminate any remaining vestiges of capitalism from this country, and from other leading industrial countries, as well. (The moves are being coordinated by the governments of the G-7 countries, among others.) As the Bush administration proceeds with its takeover of the financial commanding heights of America’s pseudo-capitalist system, any resemblance between the system they are creating and a free-market system, either living or dead, will become purely coincidental. Robert Higgs
Who can forget the end of "Planet of the Apes" when Charlton Heston, kneeling before the half-buried remains of the Statue of Liberty, slams his fists into the sand and cries, "You maniacs! You blew it up! Ah, damn you ... damn you all to hell!"
Now imagine the same scene, but with a half-buried Morgan Stanley building standing in for Miss Liberty and a time-traveling Walter Bagehot playing the lead, and you've got the perfect Hollywood dramatization of the real-life tragedy that, with luck, is having its denouement on Wall Street.
Bagehot? The great Victorian man of letters, best remembered today as the second and most celebrated editor of the British magazine, The Economist, wasn't exactly a hunk. But he certainly could have delivered those futile last lines with real conviction, for he was among the first to recognize the vast destructive potential of that newfangled weapon of Victorian finance: the modern central bank. George Selgin
"At the core of the Paulson-Bernanke plan is a futile resistance to falling prices."
"It is uncomfortably reminiscent of the Depression of the 1930’s, when what should have been a short excess-adjusting recession was dragged out into more than a decade of depression, in part by the insistence that artificial price levels be enforced. A madness resulted during the FDR administration in which “piggy sows” and sucklings were ordered slaughtered and crops plowed under, even in the presence of widespread hunger and deprivation among people who desperately needed low prices. In that respect, the New Deal wasn’t so new after all; Hoover had insisted on artificially high wage rates for which he was rewarded with the highest unemployment rates in American history."
WASHINGTON — A growing al Qaida-backed insurgency, combined with the Pakistani army's reluctance to launch an all-out crackdown, political infighting and energy and food shortages are plunging America's key ally in the war on terror deeper into turmoil and violence, says a soon-to-be completed U.S. intelligence assessment.
A U.S. official who participated in drafting the top secret National Intelligence Estimate said it portrays the situation in Pakistan as "very bad." Another official called the draft "very bleak," and said it describes Pakistan as being "on the edge."
The government is also facing an accelerating economic crisis that includes food and energy shortages, escalating fuel costs, a sinking currency and a massive flight of foreign capital accelerated by the escalating insurgency, the NIE warns.
The Pakistani public is clamoring for relief as the crisis pushes millions more into poverty, giving insurgent groups more opportunities to recruit young Pakistanis.
The explanation that has been given for the financial crisis does not match up with the solution that has been devised. Moreover, the windows into the crisis offered by the authorities are opaque rather than transparent.
The only clarity we have is that the crisis is resulting in financial concentration and that the bailout constitutes a massive raid by financial crooks on both taxpayers and central bank reserves in the US and Europe....
The authorities have blamed subprime mortgages for the crisis. Why then does their solution fail to address the problem of the mortgages? Instead, the solution directs public money into an increasingly concentrated private financial sector, the management of which is not only vastly overpaid, but also has escaped accountability for the financial chicanery that, allegedly, threatens systemic financial meltdown unless bailed out by the taxpayers.
Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A libertarian, he was one of 166 academic economists who signed a letter to congressional leaders opposing the government bailout plan.
Economist Jeffrey Miron says the government bailouts of banks will hide problems and spread inefficiency.
CAMBRIDGE, Massachusetts (CNN) -- Ten days after passage of its $700 billion bailout of the financial sector, the U.S. Treasury has announced that it will implement this program, in part, by giving banks $250 billion in return for shares of their stock.
In other words, the U.S. government will acquire a significant ownership stake in the banking sector.
The goal of this stock purchase is to "inject liquidity." This will, in principle, improve bank solvency and increase bank lending, thereby minimizing the chance of a recession.
This approach appears to be favored by the Treasury over the previously announced strategy of buying "troubled assets" from banks. The Treasury is also planning to guarantee new bank debt and expand insurance of bank deposits.
Alas, the new approach is no better than the first. Here's why. More...
Bush says, "These measures are not intended to take over the free market, but to preserve it."
Vietnam era: "Destroy the village to save it!" Waco era: "Kill the children to save them!" Bush era: "If it moves, kick it. If it doesn't move, kick it 'til it does!"
"Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out."
~ President Andrew Jackson, 1832
President Jackson was at war with the bankers who had taken undue risks and caused much pain in the country. He was willing to allow short-term pain on American families, rather than let these bankers inflict much more damage in the future. President Bush and his cohorts at the Federal Reserve and Treasury have attempted to reverse the natural capitalist cycle of boom and bust during his entire eight-year administration. The reduction of interest rates to 1%, tax rebates, excessive deregulation, and encouragement by the President and Federal Reserve to speculate and spend have led to our financial crisis today. A President with a backbone and moral compass would be telling the American people that our bankers have ruined this country and have caused the coming deep recession. He would explain that it is a painful lesson that must be faced now so that future generations would not have to pay for the sins of today. Instead, he urged the American people to support an $820 billion banker bailout which will attempt to push off pain far into the future. He has clearly failed the test of leadership and doesn’t deserve to be in the same company as "Old Hickory"...
Ben Strong died in October 1928. Therefore, he did not witness the terrible pain inflicted upon Americans by his reckless policies. Alan Greenspan has not been so fortunate. He is able to witness how his reckless interest rate reductions have resulted in a worldwide financial collapse. He continues to defend his actions, but his legacy will forever be linked to this disaster. These low rates caused a speculative frenzy in stocks and then housing." Jim Quinn
And, so an intellectual event matched only by the sacking of Constantinople in 1453, the Swedish central bank has announced that Krugman will take his place alongside F.A. Hayek and others as the Nobel laureate. Now, the bank announced that the prize was for Krugman’s semi-discombobulated trade theories, not his incoherent, Keynesian columns that he writes for the Democratic Party, er, the editorial page of the New York Times. Bill Anderson
"THE PEOPLE WHO ARE RUNNING THE PLACE - BERNANKE AND PAULSON - WERE PARTLY THE CAUSE OF THIS CRISIS!"
FOR SOME FITTING MODESTY ABOUT WHAT WE CAN KNOW AND NOT KNOW, CHARLES HIGHLY RECOMMENDS "THE BLACK SWAN - THE IMPACT OF THE HIGHLY IMPROBABLE" BY NASSIM NICHOLAS TALEB.
"The banking system for 12 years has been building risks on things we don't understand based on bogus economic models, financial economic risk management tools..."
I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations...
~ President Franklin D. Roosevelt, April 5, 1933
Well, they went and did it.
Proving that they have learned nothing from history, Congress passed the massive $700 billion "bailout" bill that is allegedly going to save our insolvent banking system. I was hoping against hope that a populist rebellion might somehow stop the oligarchy from helping itself to the taxpayers’ wallets, but it was not to be. In the end, the plutocrats got their money.
Frankly, the logic behind the House of Representative’s final vote was incomprehensible. When the bill was a straightforward handout to the banks, they rejected it. But after the bill went through the Senate – which added dozens of pork-barrel spending projects and granted new Orwellian powers to the IRS – the House approved it. Steven LaTulippe
THE BEST ARTICLE ON THE MECHANICS OF CENTRAL BANKING AND OUR CURRENT CRISIS
"A credit crisis has been spreading through the economic system. It began with the collapse of the housing bubble, which was the result of years of Federal Reserve–sponsored credit expansion. This credit expansion poured hundreds of billions of dollars into the purchase of homes largely by subprime borrowers who never had a realistic capability of repaying their mortgage debts in the first place. And, not surprisingly, large numbers of them in fact stopped making the payments required by their mortgages.
At first apparently confined to the market for subprime mortgages, the credit crisis has spread to other portions of the mortgage market, to the usually staid municipal bond market, and within the last week or so has led to a run against a major investment bank (Bear Stearns). Along the way, triple-A rated securities have overnight turned into junk bonds, multibillion-dollar hedge funds have collapsed, and major commercial banks have lost tens of billions of dollars of capital. All this, despite massive infusions of funds into the market by the Federal Reserve System and other central banks and a reduction in the federal funds rate from 5.25 percent in September of 2007 to 2.25 percent currently." George Reisman
Why Economic Interventionism is destructive by nature, and why this doctrine is inconsistent with a free society. Free download (pdf) of Mises' book.
"It is the purpose of this essay to analyze the problems of government interference in business from the economic standpoint. The political and social consequences of the policy of interventionism can only be understood and judged on the basis of an understanding of its economic implications and effects. Ever since the European governments in the last decades of the nineteenth century embarked on this policy which today frequently is called "progressive" but which actually represents a return to the mercantilist policy of the seventeenth and early eighteenth centuries [and therefore should properly be called Regressive], economists have persistently pointed out the inconsistency and futility of these measures and have predicted their political and social consequences. Governments, political parties, and public opinion have just as persistently ignored their warnings. They ridiculed the alleged doctrinarism of "orthodox" economics and boasted of their "victories" over economic theory. But these were Pyrrhic victories...
As a rule, capitalism is blamed for the undesired effects of a policy directed at its elimination. The man who sips his morning coffee does not say, 'Capitalism has brought this beverage to my breakfast table.' But when he reads in the papers that the government of Brazil has ordered part of the coffee crop destroyed, he does not say, 'That is government for you'; he exclaims, 'That is capitalism for you.' " Ludwig von Mises (pronounced meezis)
Of course this could NEVER happen here. Uh-huh. Let's see, how do we pay the upcoming 70 trillion dollar bills for SS and Medicaid/Medicare? GERMANY'S EXPERIMENT WITH 'STIMULATING THE ECONOMY' for the sake of satisfying the 'compassionate' yearnings of the educated classes.
"By the end of the war the amount of money in circulation had risen fourfold and prices some 140 percent. Yet the German mark had suffered no more than the British pound, was somewhat weaker than the American dollar but stronger than the French franc. Five years later, in December 1923, the Reichsbank had issued 496.5 quintillion marks [that's a lot], each of which had fallen to one-trillionth of its 1914 gold value.[1]
How stupendous! Practically every economic good and service was costing trillions of marks. The American dollar was quoted at 4.2 trillion marks, the American penny at 42 billion marks. How could a European nation that prided itself on its high levels of education and scholarly knowledge suffer such a thorough destruction of its money? Who would inflict on a great nation such evil which had ominous economic, social, and political ramifications not only for Germany but for the whole world? Was it the victors of World War I who, in diabolical revenge, devastated the vanquished country through ruinous financial manipulation and plunder? Every mark was printed by Germans and issued by a central bank that was governed by Germans under a government that was purely German. It was German political parties, such as the Socialists, the Catholic Centre Party, and the Democrats, forming various coalition governments, that were solely responsible for the policies they conducted. Of course, admission of responsibility for any calamity cannot be expected from any political party." Hans Sennholz
There will come a time, someday in the future, when Larry-The-Uber-Bull (Kudlow) will be legitimately able to utter his very most favorite line: "I THINK THIS IS A BUYING OPPORTUNITY". Nobody can be wrong all of the time.
"Obama’s campaign would have us believe that he’s the anti-corporate candidate, a populist “man of the people” whose race for the White House is being funded by tens and twenties sent in by ordinary folks who can’t wait to see him crack down on Wall Street abuses. What they don’t want you to know is that, out of the two and a half million donors to the Obama campaign, around 180,000 top dogs account for almost 60% of his campaign treasury. Who are these people? Let’s take a closer look….
Obama is going around the country, trying to maintain his populist image, and descrying the greed and corruption of Wall Street whilst crying crocodile tears for the little old ladies being thrown out on the street by sinister banksters. He’s particularly hot under the collar about some of those golden parachutes, whereby the financial wizards behind the sub-prime disaster managed to get away with multi-million-dollar pay-outs. Yet some of the biggest figures in the sub-prime mortgage market have been some of his biggest fans, if monetary contributions are any measure...
The idea is that by supporting Obama they can avoid social revolution—appeasing both the gods of political correctness and the Fortune 500. Riding into the fray on a white charger, his banner emblazoned with the “Deflation—Never!” slogan that is the battle-cry of finance capital in a state capitalist society, Obama is the Establishment’s trump card, the elite’s last hope of salvaging its power, prestige, and wealth from the coming implosion. It is a remarkable marketing operation—to create a populist and even a revolutionary persona out of someone who is, essentially, a creation of his corporate overlords—but it looks like they’re going to pull it off." Raimondo
Water is pouring everywhere. The bursting of the dam is a fitting tribute to Paulson's and Bush's $700 billion boondoggle to add liquidity to banks....
The public was overwhelmingly against the plan (and rightly so) as were close to 200 economists. Paulson, Bush, Trichet, and Brown all goaded Congress to waste $700 billion of taxpayer money on grounds there would be a global meltdown if the plan was not passed.
Congress had it right the first time. The $700 billion bailout helped bust the dam. Neither the Bush administration nor the fools in Congress voting for the bailout bothered to figure out you cannot patch a failing dam by adding water. Liquidity measures cannot and will not work, when the disease is the Fed, reckless Congressional spending, and fractional reserve lending carried to extreme.
"As the hysteria has grown in the discussion of financial markets and related government policies, I have been puzzled by the discrepancy between the best available data and the descriptions quoted in the press – statements by financial gurus, traders, and professors, as well as by government officials. To hear these spokesmen tell the story, you’d think that the world will soon go to hell in a hand basket, if it hasn’t gone there already. Yet every time I look for data to check these claims, I find nothing solid to back them up." Robert Higgs
No one in Latin America has been making more hay of Bush's turnabout than Venezuela's President Hugo Chavez, a self-proclaimed socialist who is the U.S.'s biggest headache in the region.
"If the Venezuelan government, for example, approves a law to protect consumers, they say, 'Take notice, Chavez is a tyrant!'" Chavez said in one of his recent weekly television shows.
"Or they say, 'Chavez is regulating prices. He is violating the laws of the marketplace.' How many times have they criticized me for nationalizing the phone company? They say, 'The state shouldn't get involved in that.' But now they don't criticize Bush for having nationalize . . . the biggest banks in the world. Comrade Bush, how are you?"
WHAT TIME IS IT WHEN THE CLOCK STRIKES TEN TRILLION?
TIME TO GET A NEW CLOCK!
The counter on the National Debt Clock has whirled past $10 trillion. The famous 13 digit clock installed in Times Square in 1989 couldn't properly accomodate the higher numbers when the national debt broke into 14 digit territory on September 30.
Expecting more of the same kind of government we've been getting, the clocks operators will install a 15 digit clock later this year!
(Washington Post) - Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000.
"Situated high on a bluff overlooking the majestic Pacific Ocean, stands a landmark resort of legendary proportions. Located midway between Los Angeles and San Diego, the Tuscan-inspired St. Regis Resort, Monarch Beach is devoted to the pursuit of service and elegance with a seamless blend of comfort and technology"
"They said that Sen. Obama was hanging out with weathermen," she said. "Do we really want to elect someone who has been palling around with meteorologists?"
"What does it say about our opponent that he thinks this nation's weather is so imperfect that he needs to be allied with The Weather Channel?" she asked a crowd in Tampa, Florida. "There's a fine line between hating America's weather and hating America herself."
"The issue of John McCain's health has been somewhat muted thus far in the presidential campaign, possibly because no mainstream media talking head wants to appear to be picking on someone who is old and sick, not to mention frequently querulous. If McCain were to be elected and then die or become incapacitated, Alaska's Gov. Sarah Palin would become president. There has been considerable criticism of her lack of experience, but, as many of the critics are actually opposed to her in-your-face religiosity and conservative social values but afraid to be open about it, it is not quite that simple. Harry Truman knew almost nothing about running a government and a world war when he became president upon the death of Franklin Delano Roosevelt, but he was frequently able to overcome his lack of experience by exercising good judgment and listening to key advisers such as George Marshall whose judgment he trusted. Similarly, it might be argued that Palin could be a candidate who has no experience but who has plenty of common sense combined with homespun virtue that will lead her to make the right decisions...
She also has a clear view of the enemy as 'Islamic extremism, terrorists who are hell bent on destroying our nation," and she is willing to use force when necessary, insisting that "We must do whatever it takes, and we must not blink.'..
In short, based on what Palin has actually said, her foreign policy would be like that of George W. Bush, only worse. She would extend NATO up to the border of Russia and be prepared to fight Moscow if it objects; she would refuse to negotiate with any country that hates "what we stand for"; she would let Israel attack Iran; she would continue and expand attacks by U.S. forces inside Pakistan; she would move the U.S. embassy in Israel to Jerusalem, making peace with the Palestinians impossible; she would stay in Iraq indefinitely and expand the war in Afghanistan; she would support democracy promotion; she would base all American foreign policy in the Middle East on Israel's interests; and she would target "Islamic extremists" worldwide. She also believes that terrorists and other "bad guys" are out to get us because they hate our freedom, and she just might believe that a war that would end the world could be God's will. If a lot of it sounds like something we've heard before, it should." Antiwar.com
"The severe financial crisis and resulting worldwide economic recession we have been forecasting for years are finally unleashing their fury. In fact, the reckless policy of artificial credit expansion that central banks (led by the American Federal Reserve) have permitted and orchestrated over the last fifteen years could not have ended in any other way.
The expansionary cycle that has now come to a close was set in motion when the American economy emerged from its last recession in 1992 and the Federal Reserve embarked on a major artificial expansion of credit and investment, an expansion unbacked by a parallel increase in voluntary household saving. For many years, the money supply in the form of banknotes and deposits (M3) has grown at an average rate of over ten percent per year (which means that every six or seven years the total volume of money circulating in the world has doubled). The media of exchange originating from this severe fiduciary inflation have been placed on the market by the banking system as newly created loans granted at extremely low (and even negative in real terms) interest rates. The above fueled a speculative bubble in the shape of a substantial rise in the prices of capital goods, real-estate assets, and the securities that represent them and are exchanged on the stock market, where indexes soared." Huerta De Soto
Millions have been awed by the famous Chris Bliss "Abbey Road" juggling video. (If you haven't seen it, CLICK HERE). Now Chris, who also founded MyBillofRights.org, has a new and timely video.
“Goodbye Liberty”, with an original soundtrack by Patrick Leonard, is a clear and concise video montage detailing how far down this slippery slope we’ve slid.
FINALLY SOMEBODY IN THE MEDIA ESTABLISHMENT LOOKS A LITTLE BEYOND THE ROMANTIC IMAGE OF THE ROUGH RIDER!
George Will:TR invested the materialist doctrine of evolutionary struggle with moral significance for the most manly "races." He wanted the state to rescue America from the danger, as he saw it, that a commercial republic breeds effeminacy. Government as moral tutor would pull chaotic individualists up from private preoccupations and put them in harness for redemptive collective action.
Such as war....
TR's collectivist nationalism became unhinged, polluted by sinister advocacy of eugenics, and by statist sentiments such as: "The woman must bear and rear the children, as her first duty to the state."
McCain's life story is oddly similar to that of the current occupant of the White House. John Sidney McCain III and George Walker Bush both represent the third generation of American dynasties. Both were born into positions of privilege against which they rebelled into mediocrity. Both developed an uncanny social intelligence that allowed them to skate by with a minimum of mental exertion. Both struggled with booze and loutish behavior. At each step, with the aid of their fathers' powerful friends, both failed upward.
"At the smallest provocation," he would hold his breath until he passed out: "I would go off in a mad frenzy, and then, suddenly, crash to the floor unconscious."
Over the years, John McCain has demonstrated a streak of anger so nasty that even his former flacks make no effort to spin it away. "If I tried to convince you he does not have a temper, you should hang up on me and ridicule me in print," says Dan Schnur, who served as McCain's press man during the 2000 campaign. Even McCain admits to an "immature and unprofessional reaction to slights" that is "little changed from the reactions to such provocations I had as a schoolboy."
During his 1992 campaign, at the end of a long day, McCain's wife, Cindy, mussed his receding hair and needled him playfully that he was "getting a little thin up there." McCain reportedly blew his top, cutting his wife down with the kind of language that had gotten him hauled into court as a high schooler: "At least I don't plaster on the makeup like a trollop, you @#*&." Even though the incident was witnessed by three reporters, the McCain campaign denies it took place.
At least three of McCain's GOP colleagues have gone on record to say that they consider him temperamentally unsuited to be commander in chief. Smith, the former senator from New Hampshire, has said that McCain's "temper would place this country at risk in international affairs, and the world perhaps in danger. In my mind, it should disqualify him." Sen. Domenici of New Mexico has said he doesn't "want this guy anywhere near a trigger." And Sen. Thad Cochran of Mississippi weighed in that "the thought of his being president sends a cold chill down my spine. He is erratic. He is hotheaded."
The Greenspan bubble benefited the banks, the real estate moguls, and, most of all, the war profiteers
The $700 billion bailout for the Wall Street poobahs looks ready to sail through the House of Representatives, which earlier – and uncharacteristically – listened to the popular will and voted a resounding "No!" heard ‘round the world. After going back to the drawing boards, and doing what they did with the war funding vote – packing plenty of pork into it – the Democratic-controlled Senate gave its assent, as expected.
The history of this tactic is recent. When left-wing Democrats rebelled and threatened to vote against war funding, Pelosi festooned the "off-budget" appropriations bill with plenty of midnight basketball and similar bridges-to-nowhere: in Washington, a little bribery goes a long way. Same with the bailout bill: it went from 3 pages to novel-size and by the time it gets through the House it may be the legislative equivalent of Atlas Shrugged – although, I fear, our story will have a different ending. The pressure is now on House Republicans – who make up the majority of nay-sayers – to get with the program and vote "aye." One question, however, that is on everyone's mind is: where is all this money going to come from?
The answer is that it is going to be added to the U.S. government's already astronomical debt, which is being financed by foreign creditors – the Chinese, the Saudis, and various and sundry other governments flush with cash and looking to park it someplace. This has worked out, so far, although not without preliminary warnings aplenty of the gathering crisis. There is, however, a point where the credit rating of the U.S. Treasury reaches its limit – and it is about to do so. Past that point, foreigners will pull out their money, seeking safer havens than the increasingly hollow "guarantee" of our government's "good faith and credit."
The events taking place in the financial market offer an illustration of the soundness of the Austrian theory of money, banking, and credit cycles, and Mises.org is your source not only for analysis of these events but also the economic theory that helps explain what is happening and what to do about it. There are many thousands of articles available, and also the full text of thousands of books as well as journal articles. It is impossible to draw attention to the full range of literature one can use to understand the crisis.
However, below we offer a brief look into the topics most discussed in these times, with extended treatments of each in the sidebar. Mises.org also offers both a blog and a community forum for reading and discussing them all.
It's never been more important to spread a sound view of money and banking, not only as a protection against the fallacies of "stabilization" and "reflation" but also as way to see what kind of reforms are essential now. More...
Judge Napolitano has organized his excellent book around a central metaphor. He contrasts sheep, who follow their shepherd with unquestioning devotion, and wolves, who are alert to protect themselves:
There are two kinds of people who stand out in the United States today: sheep and wolves. Sheep stay in their herd and follow their shepherd without questioning where he is leading them. Sheep trust that the shepherd looks out for their safety… Wolves, on the other hand, do not aimlessly follow a shepherd… Wolves question the shepherd and act in a way that forces the shepherd also to question his decisions. Wolves challenge government regulations, reject government assistance, and demand that the government recognize and protect their natural rights. They are rugged individualists (p. 10).
America, Napolitano thinks, consists largely of sheep: we acquiesce in gross violations of our civil liberties, including but by no means confined to, those inflicted on us by the Bush administration, in the course of its "War on Terror." Too often, even those concerned about the current violations of civil liberties will think in this way. Mises.org
"Sarah Palin’s intoxicating performance at the Republican National Convention did wonders to mask John McCain’s toxic presence—and, in particular, the collectivist, fascistic philosophy that permeated his address. When it comes to sacrifice for the state, McCain gives Obama a run for his money.
Recall, Barack’s bride had already cautioned that her husband would not let Americans be complacent. Under an Obama administration, the right to opt out and be left alone—an essential ingredient of American individualism—would be frowned upon. Obama himself has called for “shared sacrifice.” “At $3.5 billion a year,” reported the Washington Post, Obama’s “service plan would “grow the AmeriCorps program… expand the Foreign Service and create an Energy Corps to conduct renewable energy and environmental cleanup projects.”
Pilfering from the people so as to establish brigades that’ll corral them into this or the other service is immoral and unconstitutional. It’s also unnecessary. As a percentage of their aggregate income, Americans give more to charity than citizens of any other country. Their time Americans donate with equal generosity. The extent, the depth, and the consistency of America's private giving negate the need for Obama’s political pelf.
But for focusing enraptured Republicans on the glory rather than the gory details of serving the state, McCain is unparalleled." Illana Mercer
DUSTY FOGGO PLEADS GUILTY IN THAT WHOLE SLEAZY DUKE CUNNINHAM, BRENT WILKES MESS!
Foggo ran the CIA for Porter Goss. Now can we get a closer look at the blood-stained hands of that enabler of war lies and needless deaths, Porter Goss himself?
Goss is a former CIA officer who became a Florida congressman, and served as the Chairman of the House Intelligence Committee. As Chairman, Goss opposed an investigation into the events of 9/11. And he refused to let the American people learn what the president had been briefed before 9/11 about the impending attack. The heroic Ray McGovern says that the Joint House/Senate inquiry Goss eventually co-chaired was "political protection for the president."
Goss was rewarded for his subservience and hackery by being appointed by Bush to replace Tenet at the C.I.A., where he could be counted upon to keep a lid on the truth about Iraq that was finally leaking out.
So Goss had a criminal running the C.I.A. More from Laura Rozen, who had done great reporting on this story:
Porter Goss's decision to appoint Foggo to the CIA's number three spot had been a highly controversial and contentious one at the Agency. Foggo was well known in Agency ranks for philandering, gambling, a security issue dating to his Vienna days, and for generally being something of a sleaze. Suffice it to say, that senior Agency veterans left as a direct and indirect result of Goss's controversial decision to appoint Foggo to the Executive Director position, among them the top two operational officers who have since returned. And under Goss's hands off management style, Foggo wasn't just some CIA executive or bureaucrat. He effectively ran the CIA day to day. So you can see that when the CIA realized it had a Dusty Foggo problem, this was actually a rather big problem, and in particular it was a problem for Porter Goss.
And indeed, when federal investigators closed in and raided Foggo's CIA officers and home in May 2006, Goss abruptly resigned. A source who was in Goss's office that Friday morning that the White House announced Goss was going to retire said his "retirement" came as a complete surprise to Goss. But Goss's tenure was simply no longer tenable when it was now front page news that Foggo was likely to be indicted in the wider Duke Cunningham corruption affair and the issue of who had the misjudgment to put Foggo in that position was likely to emerge.
THE OFFICE OF FINANCIAL STABILITY? ARE YOU KIDDING ME?
The Financial Disappearing Act of 2008
Lila Rajiva: The financial markets are in a crisis of confidence because the US government is debasing its currency and stiffing its creditors. Uncle Sam is a deadbeat and the world knows it. The world is worrying what to do about the useless paper it's holding. That's what the panic is about.
It's a strange day when Barry Goldwater and the Chinese Communists are in agreement ....
And they are both right.
Want to really stabilize the market?
Put the government's financial house in order. Pay down the debt. Let the losers take their losses. Tighten belts. The economy is not in good shape, but it can still be whipped back into it. It will only take financial discipline and some willingness to accept hardship.
Instead, since last summer, Federal Reserve chairman Bernanke has embarked on a series of epic blunders in the opposite direction. Worried about cheap money? Give 'em cheaper money! What does it mean that the banks have a liquidity crisis overlaying a solvency crisis? It means they are broke. The loans are defaulting and no one will lend any more. Why should they? They haven't got back what they lent out before. What did you expect? That is the result of the bankers' own stupidity, recklessness, and arrogance. The remedy for it is not to hold up the rest of the population like gangsters and demand at gunpoint that they hand over their wallets.
" But with the President’s ratings so low, few would let him leave the House with anything more than small change. Congress asked, not unreasonably: 'If you guys know so much about banking, how come we are in such trouble?'"
"There is a conspiracy of bankers and politicians whose self-interest is masquerading as sophisticated policy. They want us to believe that they have the keys to salvation. I have not seen a scrap of evidence to confirm this." By Jeff Randall
