Back in February, the government said that its $787 billion stimulus bill would create 3.5 million new jobs. This was at the very highest end of the Congressional Budget Office's (CBO) estimate of 1.2 to 3.6 million new jobs.
But even this high-end estimate of U.S. job creation is penny ante, when compared to a leaked memo from Gordon Brown, the British prime minister. He proposed a $2 trillion European stimulus plan that was supposedly going to create 19 million jobs. In other words, Europe can create a new job with just $105,000 of government spending per job, while the U.S. needs $219,000.
... The new massive government spending plans are especially frightening with the U.S. now facing $1 trillion deficits. President Obama says that this is all OK, and that he is cutting the deficit in half (to $533 billion using administration math, or $672 billion according to the CBO) in just four years. What he doesn't say, and what no one seems willing to say, is that without his new budget the deficit would have been cut by 75% in four years to about $250 billion. The budget deficit and the size of the government are exploding and no one seems to care.
JUDGE WILL DISMISS MURDER CHARGES IF VICTIM IS RESURRECTED!
A US judge has agreed to drop murder charges against a woman accused of starving her one-year-old son to death if the little boy is resurrected, a lawyer for the accused said Tuesday.
Ria Ramkissoon, now 22, was accused with four other members of a small cult called One Mind Ministries of starving her infant son Javon Thompson to death in 2007.
According to prosecutors, the leader of the sect, a Baltimore woman who goes by the name of Queen Antoinette, had ordered Ramkissoon and other sect members to stop feeding Javon after he didn't say "amen" at breakfast.
In a hearing Monday before the Baltimore Circuit Court, Judge Timothy Doory accepted Ramkissoon's guilty plea and agreed to let her testify against Queen Antoinette and the other defendants.
But if Ramkissoon's son "is resurrected, as you still hold some hope he will be, you may withdraw the plea and the charges against you will be withdrawn," Doory said.
When Don Boudreaux is "on," not many can match him. His post today on the cosmopolitan and tolerant values of true/classical liberalism is not only dead spot on, it is beautifully written. It is one of the finest statements of liberal values I've read in a long time. I'll give you an excerpt below, but you really need to read the whole thing.
Liberalism recognizes that people are part of families and friendships and a variety of different kinds of associations. Liberals encourage, or at least tolerate, any and all forms of voluntary associations, from marital ones to religious ones to trading ones. Liberals reject the romantic nonsense that demands that each person "love" or "care for" everyone in the same way that that person loves and cares for himself, his family, and his friends.
But liberalism rejects the notion that there is anything much special or compelling about political relationships. It is tribalistic, atavistic, to regard those who look more like you to be more worthy of your regard than are those who look less like you. It is tribalistic, atavistic, to regard those who speak your native tongue to be more worthy of your affection and concern than are those whose native tongues differ from yours.
For the true liberal, the human race is the human race. The struggle is to cast off as much as possible primitive sentiments about "us" being different from "them."
BAILOUTS, GIVEAWAYS NEAR AMERICA'S GROSS DOMESTIC PRODUCT!
SPENT, LENT AND GUARANTEED! $12.8 TRILLION!
March 31 (Bloomberg) -- The U.S. government and the Federal Reserve have spent, lent or guaranteed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.
New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.
President Barack Obama and Treasury Secretary Timothy Geithner met with the chief executives of the nation’s 12 biggest banks on March 27 at the White House to enlist their support to thaw a 20-month freeze in bank lending.
“The president and Treasury Secretary Geithner have said they will do what it takes,” Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said after the meeting. “If it is enough, that will be great. If it is not enough, they will have to do more.”
During the Great Depression of the 1930s, Americans desperately needed bargains. But President Franklin Delano Roosevelt signed laws that forced businesses to charge above-market prices for everything. He made discounting a crime!
FDR did this even though antitrust laws provided penalties for private individuals who acted in restraint of trade and charged above-market prices. These laws were passed by “progressives” – his ideological brethren.
First came FDR’s National Industrial Recovery Act, considered the flagship of the New Deal. FDR signed that in June 1933, climaxing his heroic Hundred Days of legislative mania. Back then, the economic situation was considered so urgent that members of Congress didn’t have time to seriously debate FDR’s proposals. The members probably didn’t have time to read the bills, either, before the voting began. Possibly, the Hundred Days began the American tradition of having members of Congress vote on bills they haven’t read. In any case, The National Industrial Recovery Act authorized the president to establish cartels via executive orders. He established some 500 cartels, and one of the things they did was fix prices above market levels.
The Agricultural Adjustment Act (1933), another triumph of the Hundred Days, aimed to raise prices of agricultural commodities above market levels, in an effort to raise farm incomes. Apparently the authors of the Agricultural Adjustment Act weren’t particularly concerned about the three-quarters of the U.S. population who weren’t farmers and had to pay more for food. Jim Powell, LewRockwell.com
In a recent debate, prominent Keynesian professor and blogger Brad DeLong claimed that the Austrian explanation of the business cycle "does not work as an intellectual enterprise."
DeLong quotes Paul Krugman who, back in December, apparently dealt the Austrian diagnosis a crushing defeat on both theoretical and empirical grounds.
In the present article, I will set the record straight. Krugman's theoretical criticism of (what he dismissively calls) the "hangover theory" of recessions is silly, and his empirical test is also a poor one. Once we set up a more appropriate test, the "hangover" theory – i.e., the Mises-Hayek explanation – passes with flying colors... Bob Murphy, LewRockwell.com
Pentagon war spending hits $685.7 billion! That's just part of what Nobel prize winner Joseph Stiglitz told me could end up being a $5 trillion war!
WASHINGTON, March 30 (Reuters) - Pentagon spending on the wars in Iraq and Afghanistan and to fight terrorism elsewhere has reached $685.7 billion since 2001, a U.S. government watchdog agency said on Monday.
The Government Accountability Office, or GAO, said the Iraq war accounted for $533.5 billion in Defense Department spending obligations through last December, while spending on operations in Afghanistan, the Horn of Africa and the Philippines totaled $124.1 billion.
The remaining $28.1 billion was for operations to defend the U.S. mainland, the GAO said in a letter to Congress dated March 30.
The spending total equals about 85 percent of the $808 billion that Congress has appropriated for military operations in the global war on terrorism since the Sept. 11 attacks on New York and Washington, the GAO said.
The $122.3 billion difference reflects multiyear contracts for procurement, military construction, research, development and other programs, the watchdog agency said.
NYTimes: Nearly 70 percent of the Pentagon’s 96 largest weapons programs were over budget last year, for a combined total of $296 billion more than the original estimates, a Congressional auditing agency reported Monday.
The findings, compiled by the Government Accountability Office, seemed likely to add to the pressure on officials to make sizable cuts in the most troubled programs as they work out the details of a proposed $664 billion defense budget for fiscal 2010.
Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.
Telegraph.co.uk - Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.
Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.
Mr Dvorkevich said it was "logical" that the new currency should include the rouble and the yuan, adding that "we could also think about more effective use of gold in this system".
It is said to be the most impregnable vault on Earth: built out of granite, sealed behind a 22-tonne door, located on a US military base and watched over day and night by army units with tanks, heavy artillery and Apache helicopter gunships at their disposal. Since its construction in 1937 the treasures locked inside Fort Knox have included the US Declaration of Independence, the Gettysburg Address, three volumes of the Gutenberg Bible and Magna Carta.
For several prominent investors and at least one senior US congressman it is not the security of the facility in Kentucky that is a cause of concern: it is the matter of how much gold remains stored there - and who owns it.
They are worried that no independent auditors appear to have had access to the reported $137 billion (£96 billion) stockpile of brick-shaped gold bars in Fort Knox since the era of President Eisenhower. After the risky trading activities at supposedly safe institutions such as AIG they want to be reassured that the gold reserves are still the exclusive property of the US and have not been used to fund risky transactions.
IN AFGHANISTAN: THE BUSH-CHENEY CHICKENS ARE COMING HOME TO ROOST...
... AND OBAMA LIVES IN THE CHICKEN COOP!
Ray McGovern: I was wrong. I had been saying that it would be naïve to take too seriously presidential candidate Barack Obama’s rhetoric regarding the need to escalate the war in Afghanistan. I kept thinking to myself that when he got briefed on the history of Afghanistan and the oft-proven ability of Afghan "militants" to drive out foreign invaders – from Alexander the Great to the Persians, the Mongolians, the Indians, the British, and the Russians – he would be sure to understand why they call mountainous Afghanistan the "graveyard of empires."
And surely he would be fully briefed on the stupidity and deceit that left 58,000 U.S. troops – not to mention 2 to 3 million Vietnamese – dead in Vietnam.
For a few fleeting, horrifying moments this past week the fault lines that underlie the global economic crisis erupted into plain view. With deft and quick effort leaders in Washington, Europe and Asia papered over the fissures and fears largely subsided. But the shock of plain truths which resulted in violent currency movements are the latest reminder that the 21st century economic order will bear little resemblance to the world we now know.
The tremors began in Beijing, where an essay from the governor of the People’s Bank of China seemed to favor the creation of an IMF currency to replace the U.S. dollar as the world’s reserve. In Europe, the rotating president of the European Union, outgoing Czech Prime Minister Mirek Topolanek, characterized America’s plan to combat the widening global recession as the “road to hell.” At same time, British Member of the European Parliament Daniel Hannan made headlines the world over with his stinging rebuke of the inflationary and debt-focused policies of the current UK government.
As a result of these clearly voiced frustrations, the U.S. dollar suffered a drubbing. However, Treasury secretary Geithner and his ministerial counterparts in Berlin, Paris and London did their best to convince everyone that the world is pulling together as one to combat the economic crisis. The charm offensive was effective in restoring calm...
Washington is telling us that our problems result from a lack of consumer spending. Therefore, the solution is for government spending to pick up the slack. However, if Americans are too broke to spend, then how can our government spend for us? The only money they have is taken from us through taxation. To postpone immediate tax hikes (adding interest for good measure), Washington plans to borrow more from abroad. However, if our foreign creditors refuse to pony up, much of the money will simply be printed instead.
Printing money is merely taxation in another form. Rather than robbing citizens of their money, government robs their money of its purchasing power. Many people assume that if government provides the funds we can spend our way back to prosperity. However, it’s not money we lack but production. If the government simply prints money and doles it out, we will not be able to buy more stuff; we will simply pay higher prices. The only way to buy more is to produce more. It is production that creates purchasing power, not the printing press! Peter Schiff LRC
On Wednesday, March 25, an F-22 crashed near Edwards Air Force Base, CA. Very sadly, the pilot was killed. The news articles surrounding this event contained some strange assertions about the cost of the F-22. The tragic event was apparently used to disseminate some booster-baloney.
Possibly based on the price asserted in the Air Force’s "fact" sheet on the F-22 that was linked to a Pentagon "news" story on the crash, the cost per aircraft was typically described in many media articles as about $140 million.
A new Senate bill that would give government funding to struggling newspapers could result in complete state control of the press, critics say.
Democratic Sen. Benjamin Cardin of Maryland proposed a bill this week that would allow newspapers to operate as tax-exempt nonprofits in order to keep the sinking industry afloat. The government funding could make participating papers less likely to criticize the administration in power - a problem for a democracy that's founded on the freedom of the press, those who oppose the bill say.
"It would de-claw participating newspapers, which couldn't endorse candidates or freely question the party in power," Ken McIntyre, a media and public policy fellow at the conservative Heritage Foundation, told Fox News.
"Reporters and editors are supposed to be wary skeptics of politicians and bureaucrats on behalf of readers -- not beholden to the government's favor," he said.
The new legislation would prohibit the papers from making official endorsements of any political candidates. This could cause a problem for the outlets' editorial pages, which frequently make explicit reference to which candidate or cause the paper supports.
"PROFILES IN POWER" OR "HOW TO USE POWER TO INTIMIDATE"
JEFFERSON CITY | The Missouri Highway Patrol this week retracted a controversial report on militia activity and will change how such reports are reviewed before being distributed to law enforcement agencies.
The Highway Patrol also will open an investigation into the origin of the report, which linked conservative groups with domestic terrorism and named former presidential candidates Ron Paul, Bob Barr and Chuck Baldwin.
The Highway Patrol’s announcement followed a news conference in which Lt. Gov. Peter Kinder, a Republican, suggested putting the director of public safety on administrative leave and investigating how the report was produced.
The uproar revolves around a report released last month by the Missouri Information Analysis Center, a “fusion center” for local, state and federal law enforcement agencies to collaborate on domestic security issues. The report concerned militia movements in Missouri and across the U.S., and described how they had evolved over the last several years.
But it suggested that domestic militias often subscribed to radical ideologies rooted in Christian views and opposition to immigration, abortion or federal taxes. The report also stated that it was “not uncommon” for militia members to support third-party political candidates. Kansas City.com
BETRAYED BY EVERYBODY: COUMO, THE FEDERAL GOVERNMENT, AND LIDDY, CEO OF AIG!
Sent to London on a 2 to 3 year commitment, half a house left in storage in CT, we have been here 'indefinitely' for 11 years pushing 12. We were unable to press for anything more than the ex-pat package we were given at the beginning and lost even housing support after the first 5 years.
Our housing costs rose to 5 times what we paid in Connecticut. The salary did not.
Raises were only given in the 'bonus'. So imagine having to pay 5 times your mortgage or rent on your current salary with the promise of the rest of your compensation to come once a year, in December. How do you leave that job? Do you leave in December and disrupt your children's education? Well, not without a very good reason. Do you leave at the end of the school year and essentially throw away 6 months of under compensated work? Not likely.
Oh and, a percentage of your paycheck you will be forced to 're-invest' in the company for 5 years before you will see it.
In 1989, the Wall fell. Germany was reunited. The Captive Nations cast off communism. The Red Army went home. The USSR broke apart into 15 nations. But, having triumphed in the Cold War, it seems the United States could not bear giving up its role as Defender of the West, could not accept that the curtain had fallen and the play was closing after a 40-year run.
So, what did we do? In a spirit of "triumphalism," NATO "nearly doubled its size and rolled itself right up to Russia's door," writes Richard Betts in The National Interest.
Breaking our word to Mikhail Gorbachev, we invited into NATO six former member states of the Warsaw Pact and three former republics of the Soviet Union. George W. Bush was disconsolate he could not bring in Georgia and Ukraine.
Why did we expand NATO to within a few miles of St. Petersburg when NATO is not a social club but a military alliance? At its heart is Article V, a declaration that an armed attack on any one member is an attack on all.
Taleb is seething with rage about the financial establishment's role in bringing the about credit crash. "Nobody saw the crisis coming," he says. "Bernanke, all these guys, I want them out. They proved incompetent, they crashed the plane."
First, he says, we have to unmask the charlatans of risk like Myron Scholes. To Taleb, Scholes is the Great Oz in this Emerald City because his work on options and derivatives allowed the whole of the financial system to adopt poorly understood products-like the ones that brought AIG down-that hide risk. To Taleb, Scholes' academic work, which enabled the widespread use of complex derivatives, was like "giving children dynamite."
"This guy should be in a retirement home doing Sudoku," Taleb says. "His funds have blown up twice. He shouldn't be allowed in Washington to lecture anyone on risk."
SUPPOSE THEY HAD A TREASURY AUCTION AND NOBODY CAME: PART 2
Poor Treasury Auction Results Rattle Investors!
Thanks to SeekingAlpha: On the heels of Britain’s failed debt auction yesterday, our Treasury had its own trouble selling bonds. WSJ:
The indirect bid — demand from domestic and foreign institutions, including foreign central banks — for the $34 billion five-year Treasury note auction was 30%, compared to 48.9% from the previous auction in February and an average of 30.1% for the last 10 auctions. The 10-year note declined 18/32, pushing its yield back up to 2.77%. The yield had fallen to around 2.50% last week after the Federal Reserve unveiled its plan to buy longer-term government debt.
HOW RAHM EMANUEL MADE $320,000 FROM FREDDIE MAC FOR DOING ESSENTIALLY NOTHING!
Before its portfolio of bad loans helped trigger the current housing crisis, mortgage giant Freddie Mac was the focus of a major accounting scandal that led to a management shake-up, huge fines and scalding condemnation of passive directors by a top federal regulator.
One of those allegedly asleep-at-the-switch board members was Chicago's Rahm Emanuel—now chief of staff to President Barack Obama—who made at least $320,000 for a 14-month stint at Freddie Mac that required little effort.
As gatekeeper to Obama, Emanuel now plays a critical role in addressing the nation's mortgage woes and fulfilling the administration's pledge to impose responsibility on the financial world.
Emanuel's Freddie Mac involvement has been a prominent point on his political résumé, and his healthy payday from the firm has been no secret either. What is less known, however, is how little he apparently did for his money and how he benefited from the kind of cozy ties between Washington and Wall Street that have fueled the nation's current economic mess....
On Emanuel's watch, the board was told by executives of a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass.
Plus ça change, plus c'est la même chose! Tip of the hat to the Chicago Tribune for the story. More HERE
CLUSTERSTOCK CALLS IT THE PERFECT METAPHOR FOR OUR TIMES!
That’s right. This is the Karl Marx’s “Das Kapital” Money Bank! There is a 1 ½” slot at the very top of the faux livre for folded bills or coins. If you’ve got something bigger to store like a passport or a birth certificate, you can click the number lock into place and open the book as though it were a safe!
WHAT IF THEY HAD A TREASURY AUCTION AND NOBODY CAME?
Washington Times:
Mr. Geithner appeared to lend his support to a proposal by China's central bank governor to replace the dollar as the world's reserve currency with a basket of currencies that would be managed by the International Monetary Fund. In an appearance before the Council on Foreign Relations in New York on Wednesday morning, Mr. Geithner raised eyebrows by saying that "we're actually quite open to that...."
... By afternoon, a poor showing of buyers at a Treasury bond auction sent interest rates sharply higher, raising fears about the U.S. ability to sell a massive load of $2.5 trillion of debt this year. Buyers may have been spooked not only by the Treasury secretary's remarks but also by the unveiling of budget plans on Capitol Hill that would double the amount of debt the Treasury has to sell in the next five years to nearly $12 trillion.
"They are opening the spigots and flooding the market, and there is no end in sight to the deluge of supply" of Treasury bonds, said Louise Purtle, analyst at CreditSights.
"The poor communication from the Treasury Department has complicated the market for Treasuries," said Jeffrey Caughron, chief market analyst at the Baker Group investment firm.
"US Treasury Secretary Tim Geithner shocked global markets by revealing that Washington is 'quite open' to Chinese proposals for the gradual development of a global reserve currency run by the International Monetary Fund."
The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance.
"The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation," he said.
Mr Geithner later qualified his remarks, insisting that the dollar would remain the "world's dominant reserve currency ... for a long period of time" but the seeds of doubt have been sown.
The Congress should simply assess those senators and representatives who voted for the legislation a pro rata share of the $165 million in questionable bonuses. This actually would cause little hurt to many of those members of Congress who voted in favor of AIG, since they rank among the richest members. For example, by Sen. John Kerry’s own estimates, his net worth is around $231 million (Forbes magazine puts his wealth a bit higher — at $1 billion). He is considered the wealthiest member of the Congress and is a champion of “fairness,” so paying perhaps an even larger share of the bonuses than whatever his pro rata share would be ($165 million divided by 306, which is the total number of representatives and senators voting for the measure) should sit well with him. And even though Sen. Dodd is not among the wealthiest of the senators, his recent financial disclosure forms include a large number of assets he values in excess of $100,000, and several worth as much as $250,000 each.
Such a self-effacing move by the Congress might spur former Treasury Secretary Henry Paulson — whose net worth was estimated at $700 million when he became the top dog at the Treasury in 2006 — to kick in a fair share. Even his successor, the hapless Geithner, whose net worth pales in comparison (topping out at just $1.7 million), might thus be shamed into contributing his fair share. Perhaps President Barack Obama who, like Sen. Dodd, was “shocked and amazed” when the AIG bonuses came to light, and who has reaped millions from the sales of his books, would feel moved to pay his fair share.
Editor, The Wall Street Journal 200 Liberty Street New York, NY 10281
To the Editor:
Paul Ingrassia asks many relevant questions about the planned government bailout of auto-parts producers ("Now for the Car-Parts Bailout," March 25). But he fails to ask the most obvious one - namely, if Uncle Sam’s bailout of the Detroit automakers works as advertised to keep these companies going, why do their parts suppliers need a bailout?
One of the selling points back in December for the auto-maker bailout is that it would help to keep afloat the many parts suppliers throughout the country. Was that a lie? Or perhaps the auto-maker bailout isn’t really expected to work as advertised? Either way, the case of bailout out parts makers is a sham.
Sincerely, Donald J. Boudreaux Chairman, Department of Economics George Mason University Fairfax, VA 22030
In 'Eisenhower’s Death Camps': A U.S. Prison Guard Remembers
Martin Brech
In October 1944, at age eighteen, I was drafted into the U.S. army. Largely because of the “Battle of the Bulge,” my training was cut short, my furlough was halved, and I was sent overseas immediately. Upon arrival in Le Havre, France, we were quickly loaded into box cars and shipped to the front. When we got there, I was suffering increasingly severe symptoms of mononucleosis, and was sent to a hospital in Belgium. Since mononucleosis was then known as the "kissing disease," I mailed a letter of thanks to my girlfriend.
By the time I left the hospital, the outfit I had trained with in Spartanburg, South Carolina, was deep inside Germany, so, despite my protests, I was placed in a “repo depot” (replacement depot). I lost interest in the units to which I was assigned, and don't recall all of them: non-combat units were ridiculed at that time. My separation qualification record states I was mostly with Company C, 14th Infantry Regiment, during my seventeen-month stay in Germany, but I remember being transferred to other outfits also.
In late March or early April 1945, I was sent to guard a POW camp near Andernach along the Rhine. I had four years of high school German, so I was able to talk to the prisoners, although this was forbidden. Gradually, however, I was used as an interpreter and asked to ferret out members of the S.S. (I found none.)
In Andernach about 50,000 prisoners of all ages were held in an open field surrounded by barbed wire. The women were kept in a separate enclosure that I did not see until later. The men I guarded had no shelter and no blankets. Many had no coats. They slept in the mud, wet and cold, with inadequate slit trenches for excrement. It was a cold, wet spring, and their misery from exposure alone was evident...
When I threw this food over the barbed wire to the prisoners, I was caught and threatened with imprisonment. I repeated the “offense,” and one officer angrily threatened to shoot me. I assumed this was a bluff until I encountered a captain on a hill above the Rhine shooting down at a group of German civilian women with his .45 caliber pistol. When I asked, “Why?,” he mumbled, “Target practice," and fired until his pistol was empty. I saw the women running for cover, but, at that distance, couldn't tell if any had been hit...
These prisoners, I found out, were mostly farmers and workingmen, as simple and ignorant as many of our own troops. As time went on, more of them lapsed into a zombie-like state of listlessness, while others tried to escape in a demented or suicidal fashion, running through open fields in broad daylight towards the Rhine to quench their thirst. They were mowed down... AntiWar.com
If there’s one thing worse than urban elites at the New York Times, LA Times or the Washington Post who sneer at the mere hint of grassroots conservatism or populism, it’s Midwestern and Southern “fly over country” journalists who strive to emulate them. In a column entitled “New states’ rights fight emerges,” Brian Hicks of Charleston, South Carolina’s the Post & Courier wrote:
For a bunch of guys obsessed with 19th century history, our esteemed state lawmakers sure haven’t learned much from it.
Because the last time they got all uppity and started mouthing off about states’ rights, we got our butts kicked.
Right now, the General Assembly is considering a resolution to warn the federal government not to overstep its bounds by imposing too many laws on the state. They quote the U.S. Constitution and their new favorite amendment, the 10th, to remind President Barack Obama that ‘powers not delegated to the United States by the Constitution, nor prohibited to it by the States, are reserved to the States respectively, or to the people.’
Here we go again. Next thing you know, they’ll be shooting at the Park Service guys out at Fort Sumter.
Ah yes. How silly.
Pace Hicks, after our most recent Republican president took unprecedented liberties with the executive branch, and after the current Democratic president has promised something close to central planning, some state lawmakers have decided to take their stand. And their critics bray, “How dare any silly second or third-tier bureaucrats champion the Constitution!”
... THE ELLIOTT WAVE THEORIST. Prechter studies broad social moods and their corelation with market conditions. Here are a few among 100 predictions he made in 2003 for the bear market that is upon us. See what you think...
Finance
- The demographic argument for a continued boom fueled by baby boomer spending and retirement savings will be transformed (somewhere near the bottom of the decline) into an argument that the same portion of the population will be responsible for a continued bust.
- Many of the governments and corporate entities that have been bailed out by the U.S. government and the IMF over the course of the last 34 years will fail again, along with new ones. The IMF, World Bank, the Fed and other financing entities will not bail them out.
- The IMF, World Bank and the United Nations will be shut down.
- Existing high-yield “junk” bonds will fall to zero, and new ones will no longer be issued.
The Economy
- Affordable housing will become difficult to come by. Family members will move in with each other. Homelessness will increase.
- China will have a severe economic setback along with the rest of the world, but it will be a “wave 2,” from which the country will emerge as the economic leader of the world.
Politics
- Suspicion or hatred of foreigners will increase around the globe.
- Nations will tend away from liberal, representative governments and toward dictatorships.
- The Drug War will turn more violent. Eventually, possession and sale of recreational drugs will be decriminalized.
- Government will ration goods and services in which it is or becomes involved (such as gasoline, vaccines, medical care, electricity, water, food, etc.).
- International travel will be restricted, whether by statute or dangerous conditions.
- The U.S. and state governments will finish their takeover and demolition of the medical industry.
Other Social Trends
- Areas of cities will become dangerous places in which street gangs “rule” some neighborhoods.
- Well-off people will adopt fashions that conceal rather than accentuate their wealth.
- Gangsters, pirates and other outlaws will become popular folk heroes.
- Entertainment media will feature fewer heroes and more anti-heroes.
- Per capita consumption of alcohol and other depressants will increase.
- Public art, such as sculptures and murals, will become ponderous and ugly.
IS THAT MARLENE DIETRICH I HEAR IN THE BACKGROUND?...
The Weimar Way
Pat Buchanan
“The best way to destroy the capitalist system is to debauch the currency,” said Lord Keynes.
Ben Bernanke disagrees. A student of the Depression, the Fed chair appears far more fearful of deflation — a vicious cycle of falling prices, debt defaults, home foreclosures and rising unemployment.
Deflation is what America underwent in the 1930s. A Fed-created bubble burst, causing margin calls to go out to stockholders, who ran to their banks that, besieged, collapsed, wiping out a third of our money. As Milton Friedman, who won a Nobel for his thesis that the Federal Reserve caused the Great Depression, told PBS in 2000:
“For every $100 in paper money, in deposits, in cash, in currency, in existence in 1929, by the time you got to 1933 there was only about $65, $66 left. And that extraordinary collapse in the banking system, with about a third of the banks failing … with millions of people having their savings essentially washed out, that decline was utterly unnecessary.
“(T)he Federal Reserve had the power and the knowledge to have stopped that. And there were people at the time who were … urging them to do that. So it was … clearly a mistake of policy that led to the Great Depression.”
Is Bernanke fighting the war of 1929 in 2009? Surely, today, with the explosion in M1, the basic money supply, there is no shortage of dollars out there, even if they are not circulating fast enough.
To end our recession, Bernanke may be running an even greater risk: hyper-inflation. This has destroyed more nations than deflation or even depression.
Recall: It was French military intervention in the Ruhr in 1923, to force payment of war reparations, and Weimar’s decision to let the currency fall and pay the French in cheap marks that led to the wipeout of the German middle class, the discrediting of that democratic republic and the Munich beer-hall putsch of Adolf Hitler.
“The first panacea for a mismanaged nation,” said Ernest Hemingway, “is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
Which brings us to last week’s shocker.
The Fed will buy up $300 billion in long-term Treasury bonds and spend $750 billion more buying sub-prime mortgages to remove them from the balance sheets of ailing big banks, to get the banks lending again.
Bernanke is printing money to buy U.S. bonds.
This new gusher from the Fed, after the $700 billion TARP bailout, comes on top of a Congressional Budget Office estimate that this year’s deficit will be $1.85 trillion, 13.1 percent of gross domestic product, more than twice the share of the U.S. economy of the largest previous postwar deficit.
Concluding the dollar is being abandoned in a frantic Fed effort to stop the recession, markets reacted instantly. The dollar plunge was the steepest since the Plaza Agreement of 1985. Gold shot up to $950 an ounce. Silver had a 12 percent run-up, the sharpest ever. Oil prices surged above $50 a barrel. Commodity markets advanced.
The Fed seems to have confirmed the fears of Premier Wen Jiabao, who said that China is “definitely a little worried” about the value of the U.S. bonds Beijing has purchased with the dollars piled up from her trade surpluses with the United States.
Can one blame the Chinese? They have already been burned on their U.S. investments. And if the defense of the dollar against its ancient enemy inflation is being abandoned, and protecting the dollar is to take a back seat to the Fed’s fight to avoid deflation, than it is indeed time to get out of the dollar and dollar-denominated assets.
For inflation is theft. It make liars and cheats of governments. By eroding the value of a currency, inflation punishes savers and creditors and rewards debtors. And what nation is the biggest debtor of them all? The United States of America.
Insidiously, inflation consumes the value of cash, savings, municipal bonds, corporate bonds, Treasury bonds, and T-bills. Friends who lent America money, who bought our debt in good faith, are robbed and made fools of, while speculators who bet against America by shorting the dollar in the currency markets are vastly rewarded.
Given the $3.6 trillion budget Obama plans, the $1.8 trillion in red ink he will run by Oct. 1 and the trillions the Fed is pumping into the economy, gross domestic product should spike, as it did after the far smaller stimulus package of 2008
We will feel a healthy glow, and folks will begin to sing, “Happy Days Are Here Again.”
Yet one senses that we are doing again exactly what we have done before in this generation. Rather than endure the pain and accept the sacrifices to cure us of our addiction, we are going back to the heroin. And this time, with Dr. Bernanke handling the needle, we may just overdose. Pat Buchanan TAC
Two quite different books on the economic crisis share the same one-word title: Meltdown. The first is a collection of articles from The Nation -- "America's leading progressive weekly." The second was written by Ludwig von Mises Institute senior fellow Thomas E. Woods Jr., and includes a foreword by libertarian Rep. Ron Paul of Texas.
I found Meltdown II a must-read. Writing with remarkable clarity and occasional mordant humor, Thomas Woods makes a compelling argument for a radical turn to the free market as the only way to prevent meltdowns from recurring. Not that The Nation reporters don't contribute a few nuggets. For example, their general feeling that something radical should be done about the way the Federal Reserve operates -- that we should no longer be "subservient to the Fed mystique" -- is surely progressive in spirit. But when they go on to urge that the Fed make itself subservient to "democratic discourse," we have to remind ourselves that the term "progressive" is a code word for greater government control of the economy, which generally leads to retrogression.
As Woods says, in creating the housing bubble, the Fed was already far too subservient to pressure from Democratic congressmen like Barney Frank, mentioned favorably in Meltdown I. At the same time Frank was disavowing "any kind of financial crisis," Ron Paul was warning of "the long-term damage" from "the government's interference in the housing market."
What Paul understood, and The Nation reporters clearly don't, is that the Fed isn't a product, as they declare, of "market ideology," but of a very different way of thinking. "Instead of planning the production of steel and concrete," writes Woods, the central bank "plans money and interest rates, with consequences that necessarily reverberate throughout the economy."
According to Austrian business-cycle theory, boom-and-bust is caused by the feckless expansion of money and credit that can come only from government intervention. By beginning his story with the Panic of 1819, nearly a century before the Fed was created, Woods makes it clear that government-initiated credit expansion can also occur without the Fed.
But the central bank does help systematize the process. The Fed operates in the dark, in precisely the way any planning agency would that sets prices in the absence of a market. When the interest rate is set too low, "malinvestment" results, eventually leading to bust. One key difference in the case of malinvestment in housing was that the credit mania was actively supported by government-sponsored enterprises, most notably Fannie Mae and Freddie Mac, underwritten by the central bank.
Some now see more regulation as the ultimate solution. And in the abstract, certain forms of regulation might have helped. But, Woods asks rhetorically, with George W. Bush in league with Democrats to push the "ownership society," what regulator "would have...dared tell the regime something other than what it obviously wanted to hear?"
Besides, more regulation won't prevent boom-and-bust; only true free- market banking can accomplish that. Woods again: "If you believe in the free market, you cannot support the Fed, one of the most intrusive interventions into the market." Now, there is a truly progressive idea. Barrons
CHINA'S TOP BANKER WANTS OUT OF DOLLAR RESERVE CURRENCY GAME..
WANTS IMF SUPER-CURRENCY
RawStory: In an essay published Monday, the head of China's central bank proposed a plan to displace the American dollar as the world's standard and replace it with a global reserve currency operated from the International Monetary Fund."
Zhou Xiaochuan, governor of the People’s Bank of China, argued that what he called a super-sovereign reserve currency would not only eliminate the risks inherent in currencies such as the dollar, which are backed only by the credit of the issuing country and not by gold or silver, but would also make it possible to manage global liquidity," reported the Times Online.
IN NEW TERROR VIDEO, AIG DEMANDS HUGE RANSOM FROM U.S.
Shadowy Group Seeks Bonuses, Golf Retreats
American intelligence experts are analyzing a new terror video from the American International Group (AIG) in which the leader of the shadowy organization demands billions of dollars from the United States.
In the four-minute tape, which surfaced over the weekend and caused deep concern among U.S. officials, a man believed to be the chairman of AIG says that if his organization is not paid its ransom, "chaos and destruction will rain down on the American economy."
"If we are not paid billions more in bonuses and corporate golf retreats, America will be made to suffer," the man threatens.
IT'S NOT JUST THE GEITHNER PLAN; DON'T FORGET THE FED PLAN!
Pat Buchanan: The Fed will buy up $300 billion in long-term Treasury bonds and spend $750 billion more buying sub-prime mortgages to remove them from the balance sheets of ailing big banks, to get the banks lending again.
Bernanke is printing money to buy U.S. bonds.
This new gusher from the Fed, after the $700 billion TARP bailout, comes on top of a Congressional Budget Office estimate that this year’s deficit will be $1.85 trillion, 13.1 percent of gross domestic product, more than twice the share of the U.S. economy of the largest previous postwar deficit.
Rather than endure the pain and accept the sacrifices to cure us of our addiction, we are going back to the heroin. And this time, with Dr. Bernanke handling the needle, we may just overdose.
...the main objective of the Public-Private Partnership and TALF is to provide inflated prices for garbage assets that investors refuse to buy. It's just a way of transferring losses from the banks to the taxpayer by using a middleman who looks like a partner but only has a 5 percent stake in the game.
By providing loan guarantees rather than capital, Geithner can (in the words of the Wall Street Journal's David Wessel) "rely on the Federal Reserve's amazing ability to come up with unlimited sums without congressional consent." This means that Geithner has moved on to Plan B which makes good use of Bernanke's deep pockets and well-oiled printing press.
Geithner's strategy is nothing more than a trillion dollar stealth bailout of the country's biggest banks. The funding from the TALF and PPP are just the first part of a one-two knockout punch. Treasury will try to show that it paid less for the assets than their current book-value (which, of course, is grossly inflated) and then follow up with generous capital injections from the TARP program to make up the difference. That way, the banks will be "made whole" again while the public gets the double whammy.
The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.
The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.
The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.
To understand the government’s dilemma, one must realize that the great majority of the not-yet-recognized losses in our financial system are not short-term, mark-to-market losses that will someday be reversed, but permanent losses. This is a huge misunderstanding that many people, especially those in Washington , seem to be suffering from.
To understand why the losses are real, consider this simple example: imagine a bank that lent someone $750,000 via an Option ARM mortgage to buy a McMansion in California at the peak of the bubble less than two years ago. Virtually all homeowners with this type of loan will default, thanks to declining home prices, the structure of the loan, and the fact that 70-80% of Option ARMs were liar’s loans. If we assume the house is only worth $400,000 today, then there’s been an actual loss of $350,000. That money will never be recovered. If one considers the millions of toxic loans made during the bubble – subprime, Alt-A, Option ARM and second mortgages, home equity lines of credit, commercial real estate, leveraged loans, credit cards, etc. – it easily adds up to at least $1 trillion in additional, unrecognized very real losses.
Imagine that New RTC buys this loan for $400,000. In this case, it might not lose money, but then the bank (or the structured finance pool) holding the loan has to immediately realize the loss of $350,000 – and it is certain that the U.S. (and world) financial system has not even come close to marking these assets to what they’re really worth, which explains why they won’t lend, even when given new money. Thus, if New RTC buys these assets at fair value, then the financial institutions suffer the losses – but this would bankrupt many of them. Yet if New RTC pays the inflated prices they’re marked at today, then it (and taxpayers) will suffer huge losses.
Who Should Bear the Losses?
To save our financial system, somebody’s going to have bear these losses – the only question is, who?
This is similar in nature to fraudulent schemes that promise "what's inside the bag is worth $1 million, unless you open the bag".
In this case there may be a few "good bags" similar in nature to salting the mine schemes, but for the most part everyone knows what's in the bag is toxic garbage. What really makes no sense whatsoever is why the government would risk 97% with shared "upside" instead of just buying it all.
Somehow, Geithner (and Obama by implication) believes that igniting a bidding war between hedge funds and private equity over a bag of cow manure will inspire confidence that there's gold in the bag. Such insanity cannot possibly work, which means it won't.
The Israeli army has been forced to open an investigation into the conduct of its troops in Gaza after damning testimony from its own front line soldiers revealed the killing of civilians and rules of engagement so lax that one combatant said that they amounted on occasion to “cold-blooded murder”.
The revelations, compiled by the head of an Israel military academy who declared that he was “shocked” at the findings, come as international rights groups are calling for independent inquiries into the conduct of both sides in the three-week Israeli offensive against Palestinian Islamists.
The soldiers’ testimonies include accounts of an unarmed old woman being shot at a distance of 100 yards, a woman and her two children being killed after Israeli soldiers ordered them from their house into the line of fire of a sniper and soldiers clearing houses by shooting anyone they encountered on sight.
“That’s the beauty of Gaza. You see a man walking, he doesn’t have to have a weapon, and you can shoot him,” one soldier told Danny Zamir, the head of the Rabin pre-military academy, who asked him why a company commander ordered an elderly woman to be shot. TimesOnline.com
"THEM FREE MARKET GUYS, WHAT A BUNCH OF KOOKS" SAYS HARVARD
Last weekend, Harvard University sponsored a conference called (I am not making this up) "The Free Market Mindset: History, Psychology, and Consequences." Its purpose was to try to figure out why, since everyone knows the current crisis amounts to a failure of the market economy, the stupid rubes continue to believe in it. The promotional literature for the conference opened with That Quotation from Alan Greenspan — the one in which he suggested that there was, after all, a "flaw" in the free market he hadn't noticed before.
Well, that does it, then! If our Soviet commissar in charge of money and interest rates says the free market doesn't work, who are you to disagree?
The promotional material continues:
If the current state of the U.S. economy makes clear that former Federal Reserve Chairman Alan Greenspan's faith in free markets was misplaced, the question remains: what was it about free markets that proved — and still continues to prove — so alluring to economists, scholars, and policy-makers alike?
Because, of course, if there's one guiding principle behind the largest government in world history, it's free markets. Ahem.
This conference, we were told,
brings together leading scholars in law, economics, social psychology, and social cognition to present and discuss their research regarding the historical origins, psychological antecedents, and policy consequences of the free market mindset. Their work illustrates that the magic of the marketplace is partially an illusion based on faulty assumptions and outmoded approaches.
The speakers then spent the day, I am sure, laying out their own faulty assumptions and outmoded approaches, and studiously ignoring the Austrian School of economics.
In short, the conference was about this: Why do people still think the interaction of free individuals is a superior economic system to one directed by Harvard Ph.D.s like us? I mean, apart from the failure of central planning in every case in which it's been tried, a failure so staggering that only a blockhead could miss it, why would people cling to the idea that being herded into a collective run by the experts isn't the best way to live? Tom woods Mises.org
Most of what goes today under the label of the social sciences is poorly disguised apologetics for the policies of governments. What the philosopher George Santayana (1863–1952) once said about a teacher of philosophy of the, then Royal Prussian, University of Berlin, that it seemed to this man "that a professor's business was to trudge along a governmental towpath with a legal cargo," is today everywhere true for the majority of those appointed to teach economics. As these doctors see it, all the evils that plague mankind are caused by the acquisitiveness of greedy exploiters, speculators, and monopolists, who are supreme in the conduct of affairs in the market economy. The foremost task of good government is to curb these scoundrels by suppressing their "economic freedom" and subjecting all affairs to the decisions of the central authority. Full government control of everybody's activities — whether called planning, socialism, communism, or any other name — is praised as the panacea. To make these ideas plausible one had to proscribe as orthodox, classical, neoclassical, and reactionary all that economics had brought forward before the emergence of the New Deal, the Fair Deal, and the New Frontier. Any acquaintance with pre-Keynesian economics is considered as rather unsuitable and unseemly for an up-to-date economist. It could easily raise in his mind some critical thoughts. It could encourage him to reflect, instead of meekly endorsing the empty slogans of governments and powerful pressure groups. There is, in fact, in the writings and teaching of those who nowadays call themselves "economists," no longer any comprehension of the operation of the economic system as such. Mises reviews Rothbard. Read the rest
Click here to listen to Bob Murphy's talk about his study guide to Mises' Human Action. It will take a minute to download it to Media Player, depending on what browser you're using. Worth listening to.
The Federal Reserve says that its purchase of $1 trillion in existing bonds is part of its plan to revive the economy. Another way to view the Fed’s announcement is to see it as a preemptive rescue. Is the Fed rescuing banks from their bond portfolios prior to the destruction of bond prices by inflation?
The answer to this question probably lies in the answer to the unanswered question of how the unprecedented sizes of the FY 2009 and FY 2010 federal budget deficits will be financed. Neither the US savings rate nor the trade surpluses of our major foreign lenders are sufficient....
It will be interesting to see how the currency markets view the problem. The New York Times reported that “the dollar plunged about 3 percent against other major currencies” in response to the Fed’s announcement.
If the exchange value of the dollar works its way down, it will complicate the financing of the trade deficit and impact the decisions of foreigners who hold large stocks of US dollar debt. The premier of China recently expressed his concern about the safety of his country’s large investment in US dollar debt.
If the US government is forced to print money to cover the high costs of its wars and bailouts, things could fall apart very quickly.
Jack Magid was arrested for pressing a man's pair of pants for 35 cents. This was in violation of the "Tailor's Code" which mandated a charge of 40 cents.
The results of a bevy of surveys found a growing number of consumers are only a couple paychecks away from a household collapse even as many scramble to shore up savings. Rainy-day funds appear to be a distant memory as households burn cash to cover food and energy bills as well as mortgage and car payments.
A large number of households say that even one missed paycheck would spell financial ruin. And even in households that remain well off, the surveys show a festering fear that financial problems are lurking.
"This is flashing so bright red," said Paul Ballew, senior vice president of Nationwide Insurance Co. "Roughly 60% of the population was ill-prepared (financially) before the meltdown."
Mish says: Spending is not returning to levels we saw in recent years. I am still expecting 500,000 or more jobs lost in each of the next two months. Some months of 750,000 losses or more are not out of the question.
"Already sold Korean and Chinese rights. Have inquiries from Japanese and Taiwanese publishers. The East wants the Austrian point of view!" (A UK version, with British examples sprinkled in, is in the works, btw, and we just got an inquiry from Brazil.)
FEDS CRITICIZE SOLVENT BANK! Not high enough loan to deposit ratio! Needs to improve!
SCOLDS BANK WITH NO BAD LOANS FOR BEING "TOO CAUTIOUS"!
A Massachusetts bank that has defied the odds and remained free of bad loans amid the economic crisis is now being criticized by the Federal Deposit Insurance Corp. for the cautious business practices that caused its rare success.
The secret behind East Bridgewater Savings Bank's accomplishments is the careful approach of 62-year-old chief executive Joseph Petrucelli.
"We’re paranoid about credit quality," he told the Boston Business Journal.
That paranoia has allowed East Bridgewater Savings Bank to stand out among a flurry a failing banks, with no delinquent loans or foreclosures on its books, the Journal reported. East Bridgewater Savings didn’t even need to set aside in money in 2008 for anticipated loan losses. But rather than reward Petrucelli's tactics, the FDIC recently criticized his bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Journal reported.
The problem, according to FDIC data, was that from late 2003 through mid-2008, East Bridgewater Savings made an average of 28 cents in loans for every dollar in deposit — a sharp contrast to the 90 percent average loan-to-deposit ratio among similar banks, the paper reported.
"There are no apparent financial or legal impediments that would limit the bank’s ability to help meet the credit needs of its assessment area," the FDIC wrote in the CRA evaluation. The agency also faulted the bank, which does not have a Web site, for not promoting its loan products enough, the Journal reported.
Wartime Confessions of a Talk-Radio Heretic Phoenix, Arizona on March 19, 2003.
I left my radio studio this evening to be here just as President Bush’s ultimatum to Saddam Hussein expired. The bombing of Iraq, which has been going on more or less continuously since 1991, at this hour assumes a new intensity, joined by helicopter gunship attacks, and a ground invasion. A headline in the foreign press—I have after all become accustomed to getting my news from foreign press—screams, “Expecting Iraqi Mothers Rush to Give Birth Before War! Baghdad: The sound of screaming filled the maternity ward at the Elwiyah Hospital on Tuesday, as women rushed to give birth ahead of an impending U.S. invasion. Many pregnant women demanded to have Cesareans rather than risk delivering their babies during war, even though they were sometimes well short of their natural due date.”
Under the circumstances, there is little reason for me to yet again marshal the arguments against war as I have been doing on my daily radio talk show. In any event, the rationale for the war that America wants has shifted so many times that one can hardly know which to refute: Is this war, in defiance of the wishes of the United Nations, a war to uphold the sacred honor of UN resolutions? But that seems logically inconsistent. Is it a war against Al Qaeda and Osama bin Laden? Or was that last year? Well, it could hardly be about 9/11 since the architects of this war had the blueprints finished years before the attack on America, even the election of President Bush. Perhaps we need the war for the good of the stock market as we’ve been told by some analysts. So far that hasn’t worked out too well and the long-term impact of this policy on the American economy and the dollar may hold some very unpleasant surprises. Any significance that Iraq’s oil riches can have for this war has been so vehemently denied, that one almost feels foolish believing there actually is oil beneath the ground of Iraq.
(Although I should say parenthetically that since oil certainly has nothing to do with it, I hardly know what to make of the 1998 letter to President Clinton urging America to war alone against Iraq because Saddam Hussein is a “hazard” to “a significant portion of the world’s supply of oil.” Those who signed that letter more than five years ago include current U.S. Secretary of Defense Donald Rumsfeld; Deputy Secretary of Defense Paul Wolfowitz; a current Pentagon adviser, Richard Perle; Richard Armitage, Deputy Secretary of State; John Bolton and Paula Dobriansky, Under Secretaries of State; Elliott Abrams, the presidential adviser for the Middle East and a member of the National Security Council; and Peter W. Rodman, Assistant Secretary of Defense for International Security Affairs. That’s a mighty impressive list of officials to have all been deluded about the presence of oil in Iraq.) Perhaps the best reason for this war, or if not the best at least the latest reason for this war, is to liberate the Iraqi people. Yeah, liberation, that’s the ticket! We’ve been so very busy liberating people in the Middle East these many years, liberating these people from the difficulty of finding their own way by propping their shahs, sheiks, and sultans. Liberate Iraq, the way we liberated them in the Gulf War Part One when we encouraged them to revolt, incited revolution with broadcasts from our CIA posts in Cyprus.
Be sure to read the discussion after the article. Fascinating stuff. -flynn
The conventional wisdom on China is dead wrong. Specifically, there is a widespread belief, as expressed by Goldman Sachs, that "China will keep the yuan trading within a narrow range in 2009 due concerns about exporters." Worse still, others are even predicting that China will devalue its currency! The sheer wishful thinking is astounding! The idea that "China will keep the dollar peg to help its exporters" ranks all the way up there with "Housing prices always go up" and "You can spend your way to prosperity".
THERE ARE NO FREE LUNCHES
If you have learned nothing else in the last year and a half, you should have learned that if something sounds too good to be true, that is because it IS too good to be true. The media overwhelmingly presents China's dollar peg as a win-win situation: Americans get cheap imports and low interest rates while China gets a strong manufacturing sector. While commentators do sometimes debates whether China will keep lending us money forever, they never talk about the REAL problem with the dollar peg.
Below is a chart which shows how China's dollar peg works. See if you can spot the downside that the media never seems to mention.
LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.
Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.
Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.
"It is a good moment to move to a shared reserve currency," he said.
Central banks hold their reserves in a variety of currencies and gold, but the dollar has dominated as the most convincing store of value -- though its rate has wavered in recent years as the United States ran up huge twin budget and external deficits.
This is an important piece for investors on the monetary debacle and bond market crash ahead by Michael Pollaro from the Mises Daily:
Goldman Sachs projects the federal deficit for this fiscal year to be as high as $2.5 trillion. That's 5.5 times the fiscal 2007 federal deficit and 1.5 times gross US savings.
The impact on US Treasury rates in the future? In the final analysis, it will depend on how this spending extravaganza is funded.
Funding can come from only three places:
1. Higher government taxes 2. More government borrowing 3. More, freshly printed Federal Reserve notes, if that borrowing is monetized by the Federal Reserve
Don't do it Mr. President. Pakistan is on the razor's edge already. This won't help!
WASHINGTON, NYTimes — President Obama and his national security advisers are considering expanding the American covert war in Pakistan far beyond the unruly tribal areas to strike at a different center of Taliban power in Baluchistan, where top Taliban leaders are orchestrating attacks into southern Afghanistan.
The Taliban have found a haven in and around Quetta. According to senior administration officials, two of the high-level reports on Pakistan and Afghanistan that have been forwarded to the White House in recent weeks have called for broadening the target area to include a major insurgent sanctuary in and around the city of Quetta.
“It is fair to say that there is wide agreement to sustain and continue these covert programs,” said one senior administration official. “One of the foundations on which the recommendations to the president will be based is that we’ve got to sustain the disruption of the safe havens.”
Secret Whitehall emails released yesterday provide damning new evidence that the notorious dossier making the case for invading Iraq was "sexed up".
They disclose that the intelligence services were sceptical over the "iffy drafting" of government claims that Saddam Hussein could mount a missile strike on his neighbours within 45 minutes of ordering an attack.
Officials privately mocked assertions that the Iraqi president was covertly trying to develop a nuclear capability and wisecracked that perhaps he had recruited "Dr Frankenstein" to his supposed crack team of nuclear scientists.
The release of a series of confidential memos and emails, following a protracted Freedom of Information battle, reignited the controversy over accusations that Tony Blair's government "spun" Britain into war.
Last night both the Tories and the Liberal Democrats renewed their demands for a full public inquiry into the decision to join the US-led invasion of Iraq.
The 45-minute claim – presented to MPs in a notorious dossier on 24 September 2002, six months before military action began – was central to the Blair government's justification for war. afterdowningstreet.org
"I guess my general sense of where we are with respect to Iraq and at the end of now, what, nearly six years, is that we've accomplished nearly everything we set out to do..."
BILLIONS AND BILLIONS AND BILLIONS (of new dollars)!
HERE IT COMES!
The International Monetary Fund is poised to embark on what analysts have described as "global quantitative easing" by printing billions of dollars worth of a global "super-currency" in an unprecedented new effort to address the economic crisis.
Alistair Darling and senior figures in the US Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression. Should the move, which is up for discussion by the summit of G20 finance ministers this weekend, be adopted, it will represent a global equivalent of the Bank of England's plan to pump extra cash into the UK economy.
However, economists warned that the scheme could cause a major swell of inflation around the world as the newly-created money filters through the system.
In my mind’s eye, I envision a street fair – one of those happy community gatherings at which sellers of handcrafted ceramics, funky clothing, herbal remedies, fresh vegetables, and edible delicacies congregate to display their wares for the strolling customers, who chat amiably with the stall-keepers and with one another. Suddenly, amid horrified shrieks and the roar of a giant engine, a truck plows through this placid setting, scattering twisted debris and broken bodies in its wake. Finally, after wreaking a hundred-yard swath of death and devastation, the truck stops, and the driver, Ben Bernanke, climbs down from the cab.
“People, people,” he exhorts them in a calm, world-weary voice, “do not panic. I am here to assess the damage and make recommendations for reforms that will prevent a recurrence of this unfortunate and wholly unforeseen act of God.” Whereupon he proceeds to lay out his assessment and recommendations, always speaking in the same quiet, unemotional voice.
The stunned and wounded survivors gaze at him in astonishment. “He’s a madman,” one cries out.
SUNSPOT CYCLES, THE EARTH'S MAGNETIC FIELD, AND GLOBAL WARMING...
New scientific discoveries are indicating that this next solar flare cycle could potentially be powerful enough to distrupt our planet's entire electric grid.
The magnetosphere is a bubble of magnetism that surrounds Earth and protects us from solar wind. Fortunately, our planet's magnetic field diverts most particles into a circular path around the Earth. Like weather patterns found on Earth, solar wind patterns can change rapidly.
Strange things are happening in both outer and inner space. The Earth's magnetic field has been decreasing. This decrease actually began 2000 years ago, but the rate of decrease suddenly became much more rapid 500 years ago. Now, in the last 20 years or so, the magnetic field has become erratic. Aeronautical maps of the world — which are used to allow airplanes to land using automatic pilot systems — have had to be revised worldwide in order for the automatic pilot systems to work.
Dr. Mike Lockwood from Rutherford Appleton National Laboratories in California has been investigating the Sun activity for the last hundred years. He reports that since 1901 the overall magnetic field of the Sun has become stronger by 230 percent. Scientists do not understand what that means for us.
Some of the sunspot activity in this last cycle was greater than anything ever recorded before in history. But scientists claim that they don't understand what means either.
Public Worked Up Over Millions in Bonuses While Billions Disappear!
WASHINGTON — The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Obama’s agenda.
The administration’s sharp rebuke of the American International Group on Sunday for handing out $165 million in executive bonuses — Lawrence H. Summers, director of the president’s National Economic Council, described it as “outrageous” on “This Week” on ABC — marks the latest effort by the White House to distance itself from abuses that could feed potentially disruptive public anger.
$100 BILLION MORE THAN ALL OF RUSSIA'S MILTARY SPENDING!
Would you like to know who is getting your money by way of AIG?
Goldman Sach is the big winner! Well, fancy that!
All the winners were big, sophisticated financial firms. They are all capable of reading a prospectus and assessing risk. No government guarantees were explicit or implied.
"In his new book, Meltdown, Thomas E. Woods Jr. suggests that the American dream became the American Nightmare through the reckless, self-serving actions of government institutions. And at once, Woods puts his finger on the unmistakable “elephant in the living room”—the Federal Reserve System. Sad to say, other than a few assorted rumblings, there has been almost no discussion in the mainstream media of the Federal Reserve’s role in launching the crisis. But as Woods details, the Fed, which centrally plans monetary policy and interest rates, sowed the seeds of destruction by drastically reducing interest rates beyond levels that would otherwise have been set by a free market. “Making cheap credit available for the asking does encourage excessive leverage, speculation, and indebtedness,” Mr. Woods writes. He adds, “Manipulating interest rates and thereby misleading investors about real economic conditions does in fact misdirect capital into unsustainable lines of production and discombobulate the market.” This begins the authors’ explanation of the boom-bust phenomenon and how an artificial boom, and the financial holocaust it leaves behind, can be perfectly clarified and understood in terms of the Austrian theory of the business cycle..." Karen DeCoster Takimag.com
The figure who emerges from Leuchtenburg's brief but boldly sketched biography (published as part of the American Presidents Series begun by the late Kennedy hagiographer Arthur Schlesinger Jr.) is a career autocrat with a strong authoritarian streak and a "Progressive's" bigoted contempt for market forces.
As most students of the period recall, Hoover's first experience in the criminal racket called "public service" came as Woodrow Wilson's "food czar" in World War I, in which role he dictated flour rations to bakers and hectored the public about economizing at the dinner table. After the war, he gained an unearned reputation as "the Great Humanitarian" for supervising the distribution of government-provided food aid to various European countries.
During his term as Commerce Secretary in the 1920s, Hoover took what was a small and vulnerable department and built it into a formidable appendage of the Leviathan state. "Governing by fiat, he imposed his will on virtually every nook and cranny of American industry," writes Lowenstein, summarizing Leuchtenberg's portrayal. "Without clear legal authority, he commanded firms to reduce their varieties of products from bedsprings to milk bottles."
Rigid centralization was the hallmark of Hoover's approach to administration, explains Lowenstein, who describes him as "inflexible and autocratic." As president, he treated Congress with regal contempt. And, far from eschewing an "activist" approach to the Depression, Hoover "intervened in the economy more than any prior chief executive had, though it was mainly to provide loans to banks and corporations."
That is to say, Hoover initially followed the same approach to his Depression that both Bush the Dimmer and Obama the Blessed have taken to the present one: Make a list of powerful, failing institutions and feed them money in any amount they request.
The economic crisis has contributed to a glut of bees in California. That raises questions about whether a supposed global pollination crisis is real.
ECONOMIST.COM -- At the end of February, the orchards of California’s Central Valley are dusted with pink and white blossom, as millions of almond trees make their annual bid for reproduction. The delicate flowers attract pollinators, mostly honeybees, to visit and collect nectar and pollen. By offering fly-through hospitality, the trees win the prize of a brush with a pollen-covered bee and the chance of cross-pollination with another tree. In recent years, however, there has been alarm over possible shortages of honeybees and scary stories of beekeepers finding that 30-50% of their charges have vanished over the winter. It is called colony collapse disorder (CCD), and its cause remains a mystery.
Add to this worries about long-term falls in the populations of other pollinators, such as butterflies and bats, and the result is a growing impression of a threat to nature’s ability to supply enough nectar-loving animals to service mankind’s crops. This year, however, the story has developed a twist. In California the shortage of bees has been replaced by a glut.
This is actually good. Stewart vs. Cramer. Stewart asks good and tough questions that make Jim Cramer nervous and very disingenuous. Cramer talks in response to the questions but pretty much doesn't answer them. Bout goes to Stewart.
THE AMERICAN ROME IS BURNING... SO LET'S ATTACK IRAN!
And a bombshell from Margolis - pardon the pun - about a new nuclear power:
SWITZERLAND!
Eric Margolis: I also believe - though cannot prove - that Switzerland may have produced a few nuclear warheads in the early 1960s and currently keeps them in one of its secret mountain forts as a sort of doomsday device.
CHINESE PREMIER WORRIED ABOUT SAFETY OF US TREASURIES...
... AS R's AND D's SUCCEED IN TURNING AMERICA INTO AN ECONOMIC BANANA REPUBLIC!
March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.
“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today after the annual meeting of the legislature. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
U.S. President Barack Obama is relying on China to sustain buying of Treasuries as his administration sells record amounts of debt to fund a $787 billion economic-stimulus package. Chinese investors have lost money on the securities so far this year, after increasing their holdings 46 percent to $696 billion in 2008, according to Treasury Department data.
“Of course we are concerned about the safety of our assets,” said Wen. “To be honest, I am a little bit worried.”
Wen’s comments come as U.S. Treasury Secretary Timothy Geithner prepares to defend his spending plans at the Group of 20 meeting near London this weekend.
“China is worried that the U.S. may solve its problems by printing money, which will stoke inflation,” said Zhao Qingming, a Beijing-based analyst at China Construction Bank Corp., the country’s second-biggest lender. “If the U.S. can make sure this won’t happen, then China will continue to invest.”
In the previous post I was rendered without speech by Krugman's analysis. However, I tried to deal with several problems that I perceived, and thus may have given readers the wrong impression. His last confusion of the post had nothing to do with politics. In this post, I want to isolate that particular absurdity to make sure everyone here sees just how bad it was.
Recall that Krugman said:
Plus, who is “the government”? It’s basically us, you know — the government spends money providing services to the public. Demanding that the government tighten its belt means demanding that we, the taxpayers, get less of those services. Why is this a good thing, even aside from the state of the economy?
His mistake here is so bad and so basic that we shouldn't even worry about the political naivete. Suppose someone had said that there were too many houses built during the boom years, and so that sector needs to shrink. Now Krugman might say, "I disagree with that analysis"--and in fact he has. But suppose the way he disagreed was to write:
[Satirical Krugman quote:] Plus, who are these "homebuilders”? It’s basically us, you know — the homebuilders spend money on lumber, nails, and workers providing houses to the public. Demanding that the homebuilders scale back their operations means demanding that we, the consumers, get fewer houses. Why is this a good thing, even aside from the state of the economy?
Do you folks see it now? Back when I was teaching, if a business major had put this down on a short-answer for an Intro to Macro exam I would have read it to my wife so she could chuckle. ("Laugh" is a strong word; my wife is not the geek I am.)
And this guy won the Nobel (Memorial) Prize in economics. Oh my gosh.
This couldn't have happened to a more deserving bunch of Meatheads. Is anybody else almost always wrong? CNBC counterattacks, and the counterattack inspires another counterattack. See for yourself...
Forbes says there are now 793 billionaires, down 30% from last year, and the first drop since 2003. The average billionaire's net worth dropped 23%.
Despite losing $18 billion in the past year, Microsoft Corp. co-founder Bill Gates reclaimed the title of richest man in the world, with a total net worth of $40 billion.
Warren Buffett is No. 2, with $37 billion. He lost $25 billion in the past year as shares in his company, Berkshire Hathaway Inc., dropped nearly a third in value. Mexican telecom titan Carlos Slim Helu, who lost $25 billion, is third, and Oracle Corp. Chief Executive Larry Ellison is No. 4.
Meanwhile, Facebook CEO Mark Zuckerberg -- last year's youngest billionaire -- dropped off the list as the value of his Facebook stock dropped.
INVESTIGATIVE REPORTING GREAT SEYMOUR HERSH ON THE CASE!
SECRET EXECUTIVE ASSASSINATION RING REPORTED DIRECTLY TO CHENEY!
Investigative reporter Seymour Hersh dropped a bombshell on Tuesday when he told an audience at the University of Minnesota that the military was running an "executive assassination ring" throughout the Bush years which reported directly to former Vice President Dick Cheney.
The remark came out seemingly inadvertently when Hersh was asked by the moderator of a public discussion of "America's Constitutional Crisis" whether abuses of executive power, like those which occurred under Richard Nixon, continue to this day.
Hersh replied, "After 9/11, I haven’t written about this yet, but the Central Intelligence Agency was very deeply involved in domestic activities against people they thought to be enemies of the state. Without any legal authority for it. They haven’t been called on it yet."
Hersh then went on to describe a second area of extra-legal operations. the Joint Special Operations Command. "It is a special wing of our special operations community that is set up independently," he explained. "They do not report to anybody, except in the Bush-Cheney days, they reported directly to the Cheney office. ... Congress has no oversight of it."
"It’s an executive assassination ring essentially, and it’s been going on and on and on," Hersh stated. "Under President Bush’s authority, they’ve been going into countries, not talking to the ambassador or the CIA station chief, and finding people on a list and executing them and leaving. That’s been going on, in the name of all of us."
NOTE TO HELICOPTER BEN, CHAIRMAN OF BOOM/BUST CENTRAL:
YOU MUST BE KIDDING!
March 10 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke urged a sweeping overhaul of U.S. financial regulations in an effort to smooth out the boom-and-bust cycles in financial markets.
“We should review regulatory policies and accounting rules to ensure that they do not induce excessive” swings in the financial system and economy, the central bank chief said today in remarks prepared for an address to the Council on Foreign Relations in Washington.
Meet Richard Maybury: I coined the term Chaostan in 1992, predicting that the area from the Arctic Ocean to the Indian Ocean and Poland to the Pacific, plus North Africa, would erupt into a huge economic crisis, and a war that would eventually be known as the next world war.
How did I come up with the name Chaostan?
In Central Asia, the suffix "stan" means "the land of." Afghanistan is the land of the Afghans. Kazakhstan is the land of the Kazakhs.
The “New Economics” referred to by the esteemed Mr. Hazlitt – who replaced H.L. Mencken as editor of The American Mercury in 1933 and joined the New York Times in 1934, writing financial and economic editorials there and later a bylined weekly financial column well into the 1960s – is Keynesianism, the economic doctrines of the Briton John Maynard Keynes which are still widely taught in American college economics courses.
The top blurb on the back dust jacket panel caught my eye:
“A great book, the best and most thorough exercise in economic demolition since Boehm-Bawerk exploded Marx’s labor theory of value,” wrote my late friend Murray Rothbard, in the National Review. “It is no exaggeration to say that this is by far the best book on economics published since Mises’ great ‘Human Action’ ten years ago … It will be read, and it will destroy the Keynesian system.”
“This book is the final, total, irrefutable dissection and destruction of Keynesianism,” added Melchior Palyi in The Chicago Tribune.
And finally, writing in the Christian Science Monitor, Ludwig von Mises himself said of this book “Hazlitt has entirely demolished the Keynesian misconceptions.”
These reviewers’ summations of the effectiveness of Hazlitt’s demolition of Keynesianism are not overstated. The book does precisely what they say it does.
In brief, Keynesianism – as set forth by John Maynard Keynes 73 years ago in his General Theory of Employment, Interest and Money – holds that the twin answers to unemployment and economic downturns are massive government deficit spending and “cheap money” – the artificial driving down of interest rates to “free up more credit.”
This is relevant because this precisely describes the massive and inherently inflationary market interventions that have been brewed up in Washington since the middle of last year, sponsored as enthusiastically by Republicrats as Demopublicans – despite the fact that Mr. Hazlitt, way back in 1959, demonstrated not only that these Keynesian remedies did not work, but that they often had precisely the OPPOSITE effect of that intended!
To “remedy” high unemployment, business failures and other symptoms of economic maladjustment, Keynes prescribed massive government deficit spending designed to keep wages and prices high, and the propping up of enterprises that would otherwise collapse in a heap of dust.
Is there any doubt this is what the Bush administration started in the past several years, and what Barack Obama and the Reid-Pelosi Congress are now continuing? Read the rest... Vin Suprynowicz LRC
Charles Freeman, Roger Cohen and the changing Israel debate
(updated below - Update II)
Anyone who doubts that there has been a substantial -- and very positive -- change in the rules for discussing American policy towards Israel should consider two recent episodes: (1) the last three New York Times columns by Roger Cohen; and (2) the very strong pushback from a diverse range of sources against the neoconservative lynch mob trying, in typical fashion, to smear and destroy Charles Freeman due to his critical (in all senses of the word) views of American policy towards Israel. One positive aspect of the wreckage left by the Bush presidency is that many of the most sacred Beltway pieties stand exposed as intolerable failures, prominently including our self-destructively blind enabling of virtually all Israeli actions.
First, the Cohen columns: Two weeks ago, Cohen -- writing from Iran -- mocked the war-seeking cartoon caricature of that nation as The New Nazi Germany craving a Second Holocaust. To do so, Cohen reported on the relatively free and content Iranian Jewish community (25,000 strong). When that column prompted all sorts of predictable attacks on Cohen from the standard cast of Israel-centric thought enforcers (Jeffrey Goldberg, National Review, right-wing blogs, etc. etc.), Cohen wrote a second column breezily dismissing those smears and then bolstering his arguments further by pointing out that "significant margins of liberty, even democracy, exist" in Iran; that "Iran has not waged an expansionary war in more than two centuries"; and that "hateful, ultranationalist rhetoric is no Iranian preserve" given the ascension of Avigdor Lieberman in Benjamin Netanyahu's new Israeli government... Glenn Greenwald
As America struggles with its debt-ravaged economy and surging unemployment, Iran and its alleged nuclear weapons program have again become an issue of major contention.
In recent weeks, Obama administration officials and the media issued a blizzard of contradictory claims over Iran’s alleged nuclear threat, leaving one wondering who is really charge of US foreign policy?
This awkward question was underlined during British Prime Minister Gordon Brown’s state visit to Washington. Britain is supposed to be America’s most important ally and partner in their "special relationship."
Brown’s reception was dismal and Obama’s obvious lack of interest in Britain’s leader quite embarrassing. The British media slammed America’s cold reception as an "insult," and claimed Brown had been treated like the leader of a "minor African state." White House aides excused the huge diplomatic faux pas by claiming President Obama was worn out from dealing with the financial and economic crisis. I’m sure he is worn out, but this still does not bode well for the conduct of US foreign policy.
Much of the uproar over Iran’s so-far nonexistent nuclear weapons must be seen as part of efforts by neocons to thwart President Obama’s proposed opening to Tehran, and to keep up the pressure for an American attack on Iran.
Israel’s American supporters and Israel’s government insist Iran has secret nuclear weapons program that the West has not yet detected. We heard the same claims from the same source about Iraq before 2003. Israel certainly knows about covert nuclear programs, having run one of the world’s largest and most productive ones. Eric Margolis
History never repeats itself exactly. But Barack Obama is making the same mistakes today that LBJ made in 1965.
He has ordered 17,000 more U.S. troops into Afghanistan, as the situation deteriorates and the NATO allies pull out. He has no exit strategy. He has read a repudiation of George Bush as a mandate for a government seizure of wealth and power that exceeds anything attempted in the Great Society.
Fully half of the $3.55 trillion in spending Obama will preside over this year will not be covered by tax revenue but by red ink. The money will have to be borrowed from abroad or printed by the Fed.
Not only is Barack running a deficit four times as large as Bush's largest, he has called for $1 trillion in new taxes on America's most successful, who have already seen their savings and pensions ravaged.
He wants a cap-and-trade system to deal with a global-warming or climate-change crisis many scientists believe is a hoax. He is going to provide health care for all, including immigrants, millions of whom arrive uninsured every year. He is going to plunge scores of billions more into education, though education has eaten up the wealth of an empire, as SAT scores sink further and further below the apogee of 1964, before LBJ and the feds barged in. He is going to ask Congress for authority to spend another $750 billion rescuing the banks.
He is going to find the cure for cancer. He is going to ensure every kid gets a college education. He is going to drop half of all wage-earners off the tax rolls, while the top 2 percent, who already pay 40 percent of all income taxes, are forced to cough up more.
RUSSIAN ADVICE: More troops won't help in Afghanistan
The French Tried to Warn JFK about Vietnam; Now Russians Have Some Advice for Obama
MOSCOW — The old diplomat sighed as he recalled his years in Afghanistan, and then leaned forward and said in a booming voice that no escalation of troops would bring lasting peace.
As the Soviet ambassador to Afghanistan from 1979 to 1986, Fikryat Tabeyev saw the numbers rise to more than 100,000 troops without any possibility of victory against a growing insurgency.
... Among the experts, there was gloating that the U.S. military is battling some of the same insurgents whom the CIA once funded to fight Moscow. All skated over the details of the brutal Soviet campaign to stomp out the Afghan resistance.
However, they also seemed to voice genuine concern about the U.S. troop buildup.
The Soviets also were convinced that superior numbers, firepower and training would make it possible to avoid the mistakes that the British and others had committed stretching back to Alexander the Great, former Ambassador Tabeyev said.
If Harvard MBAs are all so clever, how come so many are now in disgrace?
The Masters of Business Administration, that swollen class of jargon-spewing, value-destroying financiers and consultants have done more than any other group of people to create the economic misery we find ourselves in.
From Royal Bank of Scotland to Merrill Lynch, from HBOS to Lehman Brothers, the Masters of Disaster have their fingerprints on every recent financial fiasco. Harvard Business School alumni include Stan O’Neal and John Thain, the last two heads of Merrill Lynch, plus Andy Hornby, former chief executive of HBOS, who graduated top of his class. And then of course, there’s George W Bush, Hank Paulson, the former US Treasury secretary, and Christopher Cox, the former chairman of the Securities and Exchange Commission, a remarkable trinity who more than fulfilled the mission of their alma mater: “To educate leaders who make a difference in the world.”
It just wasn’t the difference the school had hoped for.
Is there a pattern here? Go back to the 1980s, and you find that Harvard MBAs played a big enough role in the insider trading scandals that washed through Wall Street for a former chairman of the SEC to consider it a good move to donate millions of dollars for the teaching of ethics at the school.
Time after time, and scandal after scandal, it seems that a school that graduates just 900 students a year finds itself in the thick of it. Yet there is remarkably little contrition.
US will enter a recession: Confirmed by NBER. Check.
Unemployment will rise north of 5%. Check (bigtime)
Housing will not turn in 2008. Major check.
The story in 2008 will be defaults on prime mortgages. Check.
Consumer lending practice stupidity exposed. Check.
Recreational sector (boats, etc) smashed. Check.
Government will meddle. Biggest check of all!
Buffett will win on munis. Miss - a clean miss.
Equity prices will at least touch 1220, target of 1070, no surprise on a three-digit handle for the SPX. Major check.
Return of capital is the dominant theme. Check; 0% IRX anyone?
No "hyperinflation". Check.
Debt to be paid down and/or defaulted. Half a check. The hiding continues, and so far, there's no indication that the end of that rope has been reached.
CRE will collapse. GGP anyone? Check.
Business CapEx will go to hell. Check.
Dollar will strengthen. Check.
Market callers coming to the public "hat in hand". Nope; clean miss. Where's Cramer committing Seppuku on national TV? Oh well; hubris knows no boundaries.
16 predictions, two clean misses and one half-miss, the rest either panned out or were proved tremendously conservative.
That's not bad. Anyone else got a public scorecard? Cramer? Kudlow? How about Dickey Bove? "Generational buy eh? Hmmm.... MarketTicker.org
Beijing, Christian Science Monitor - Half a century after the Dalai Lama fled Tibet after a failed uprising against the Chinese, the question of whether he will ever return is growing increasingly urgent.
In Tibet itself, "strong pressure is building, more than at any time previously, for him to be allowed to come back," says Robbie Barnett, a Tibet expert at Columbia University in New York. Either way, on Monday, the day before Tibetans worldwide mark the anniversary of his flight, Tibetan monks in the Indian town of Dharamsala, home of the Tibetan "government-in-exile," led "long life prayers" for the Dalai Lama, who turns 74 in July.
In a bid to forestall protests marking the anniversary, the Chinese government has blanketed Tibet and neighboring Tibetan-inhabited areas with Army and police forces, according to reports by local residents. The authorities say they are determined to prevent a repetition of the unrest that spread widely across the Tibetan plateau a year ago this week.
FORMER US president Ronald Reagan tried to convert Soviet leader Mikhail Gorbachev to Christianity in an effort to end the Cold War.
The claim appears in a new biography of Reagan, The Rebellion of Ronald Reagan: A History of the Cold War by James Mann, an extract from which appeared in The Wall Street Journal yesterday.
Mann says Reagan met Mr Gorbachev several times in the company of senior aides before he tried, during his first "one on one" with the then Soviet leader, to convince him of the existence of God. The Reagan-Gorbachev summits, designed to bring an end to the Cold War, took place between 1985 and 1988. According to Mann, Reagan noted Mr Gorbachev's use of the words "God bless" and wondered whether they were an expression of religious faith.
Mann says that when Reagan raised the issue of God with Mr Gorbachev, he promised the Soviet leader he would never admit that the conversation took place.
According to the notes, Mr Gorbachev told Reagan that "he, himself, had been baptised, but he was not now a believer, and that reflected a certain evolution of Soviet society".
Well, after lavishing praise on Obama a week ago, our latest Nobel Laureate Paul Krugman once again is in a snit: Obama is not spending enough to launch the economy back to prosperity:
...many economists, myself included, actually argued that the plan was too small and too cautious. The latest data confirm those worries — and suggest that the Obama administration’s economic policies are already falling behind the curve.
You just can't make up this stuff. Krugman -- the MIT-trained economist who has spent his career at the world's most elite institutions of higher education -- now appeals to public opinion:
Republicans are now firmly committed to the view that we should do nothing to respond to the economic crisis, except cut taxes — which they always want to do regardless of circumstances. If Mr. Obama comes back for a second round of stimulus, they’ll respond not by being helpful, but by claiming that his policies have failed.
The broader public, by contrast, favors strong action. According to a recent Newsweek poll, a majority of voters supports the stimulus, and, more surprisingly, a plurality believes that additional spending will be necessary. But will that support still be there, say, six months from now?
Also, an overwhelming majority believes that the government is spending too much to help large financial institutions. This suggests that the administration’s money-for-nothing financial policy will eventually deplete its political capital.
Yeah, yeah. Those "unhelpful" Republicans. If they question anything, then they are not "helping." And, yes, all those armchair economists in the "broader public" want action, action, action.
Now, I happen to agree with the "broader public" that bailing out the banks is ludicrous, although Krugman's demand that Obama nationalize them also is ridiculous and harmful.
Krugman worries that by the time unemployment has passed 9 percent, Obama will not have the political capital to push through yet another huge spending bill. Of course, when that time comes, I am sure that Obama, Krugman, and others will blame Goldstein, er, the few Republicans left in Congress for not being "helpful."
For the first time in more than a decade, Republicans actually are doing something to reverse the harm they caused when they were in the majority. However, anything that smacks of fiscal sanity is not going to earn praise when the Nobel Laureate speaks.
Just think. The upshot of an economics doctorate at that prestigious university, MIT, is this: print, print, print, borrow, borrow, borrow, spend, spend, spend. Yeah, I knew all that math was good for something. Bill Anderson LRC blog
A POINTLESS TRANSFER OF WEALTH FROM THE AMERICAN PEOPLE TO THE COMPANIES THAT CAUSED THE MESS!
TIM, LARRY, BARACK: The reason people are not buying cars is not that there is no financing!
People are not buying cars because they are worried about having a job to enable them to pay back the loan. It’s the same reason people aren’t buying houses. It’s not that you cannot get a mortgage. There are plenty of smaller banks that would be happy to lend money to buy a house these days. But who’s going to go out and buy a house in this economy? First of all, to buy a house, unless you are a first-time buyer, you have to sell your current house, but that would mean taking a huge loss. Indeed, one in five homes in America today is technically “underwater”—that is, it is worth less than the outstanding mortgage on the property. Probably another one in five are worth little more than the outstanding mortgage. No one would sell a house under either such circumstance.
The point here is that if people aren’t willing to spend money, then what good is it to give more money to banks and their shareholders, in hopes that they will start lending it? The lending business has two sides—those offering to make a loan, and those wanting to borrow. If there’s no borrower, no amount of money available for lending is going to change the fact that there will be no loans written.
THE CASE OF KARL ROVE: ANOTHER STUNNING EXAMPLE OF WHAT A COMPLETELY LAWLESS STATE THE USA EMPIRE HAS BECOME...
... at least for those in the bosom of imperial power.
Think of it: a legally binding subpoena from the Congress of the United States is blithely ignored -- a clear act of criminal contempt. But the scofflaw suffers not the slightest penalty. Instead, he is serviced by the most powerful institution in the land, which intervenes to make sure his appearance before Congress holds no dangers for him. He is to appear in private, will not have to answer any questions about the most important point at issue -- George Bush's involvement in the Justice Department scandal -- and he will not be required to testify under oath.
It is all very much like the remarkable conditions under which his former boss "testified" to the 9/11 Commission.
"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
The guy absolutely refuses to post any comments that provide any evidence whatsoever that he does not know what he's talking about. See this post of DeLong's that is a "reply" to an earlier Bob Murphy post about Hoover and "liquidationism". First, DeLong cuts off the part of Murphy's post where he provides the evidence that Hoover rejected that view and that it did not dominate his administration. Brutally dishonest. Bob replies in the comments, and I follow up. DeLong then truncates the part of MY comment where I point to Larry White's JMCB paper that demonstrated that even MELLON was not a "liquidationist" and neither were the Austrians. DeLong can wave his hands all he wants, but it doesn't make him right on this one.
An honest scholar would let his readers decide rather than refusing to post any evidence that might possibly contradict him. And DeLong has the chutzpah to call critics of Obama's stimulus package "ethics-free"? Peter Boettke
"A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects."
Charles Goyette: But even beyond the realization that some American are beginning to have that the retirement money they sent to Washington for a lifetime is not there, that the money has been spent, that they have been lied to, even beyond that shocking reality, no one has yet adequately calculated the negative impact Social Security has had on the behavior of the American people. Perhaps unquantifiable is the impact this deceit has had on Americans' motivation to save for themselves. In the absence of the politicians’ sweet assurances, what present consumption might have been deferred and what mountains of capital might Americans have created in providing for the future for themselves? Unanswerable is what magic such massive capital investment might have created in terms of long-term wealth, prosperity, and opportunity for Americans and for humankind. Such rewards are unknown, but what one can be sure of is that those who have not provided for their future, for old age, for sickness and death, for economic displacements, natural catastrophes, and cultural change are liable, even eager to become serfs of an all-powerful state. As Dostoyevsky's Grand Inquisitor said, “In the end they will lay their freedom at our feet, and say to us: 'Make us your slaves, but feed us.' ”
Talk show host and conservative icon Rush Limbaugh recently ignited a firestorm of criticism for expressing his desire that Barack Obama should fail. Democrats, and even some Republicans, suggested that he had put aside his patriotism to wish for an economic collapse that would result in political advantage for conservatives. However, if you believe as I, and apparently Rush, that Obama's plans will prevent recovery, then wishing that they fail to become actual policy is the right thing to do. The problem is that since Mr. Limbaugh has a history of partisanship, and since he did not forcefully criticize the Bush Administration for similar (if slightly more modest) plans, many cannot see past the messenger to recognize the truth in the message.
I am certain that if Obama and the Pelosi/Reid Congress succeed in fully implementing their agenda, there is no chance the U.S. economy will recover its position as world's leading economy. Instead, America will start down the road that has condemned so many nations to economic mediocrity. By continuing and magnifying the Bush stimulus and bailout policies, the economic rebalancing that is so vital to a sustainable recovery cannot occur.
Limbaugh merely said what members of the loyal opposition would say if they were true to their supposed philosophy. But since so many Republicans supported the Bush bailouts and stimulus packages, it would be too blatantly hypocritical to reverse course now. In truth, for all his talk of change Obama has merely continued and expanded the failed policies of Bush.
The one aspect of Obama's agenda that has galvanized Republican criticism is higher taxes on the rich. While I also abhor tax increases, the spending increases supported by both parties are far more damaging to the economy. In fact, I actually support Obama's decision to eliminate the "carried interest" tax advantages that had so unequally benefitted hedge fund managers. If I had my way the income tax would be abolished completely, but as long as we have one it is not fair for hedge fund managers to pay lower marginal taxes than the guys who shine their thousand dollar shoes. Peter Schiff, LewRockwell.com
"SUBSTANTIAL DOUBT," SAY AUDITORS DELOITTE & TOUCHE...
... They've been studying GMs figures. The numbers make them wonder whether the automaker can continue as a "going concern."
Here at The Daily Reckoning, we've got substantial doubt about a number of things.
As to GM, we share the auditors' concern. The world is full of car factories. Most of them can make cars better, faster, and cheaper than GM. Meanwhile, demand for autos is not growing as quickly as the global growth in auto-making capacity - especially in America. Not that we're trying to pass judgment. Let the Mr. Market do that!
But GM has friends in high places...ready to lean on the scales of Mr. Market's justice. The automaker has already borrowed $13.4 billion. It is asking for another $30 billion. But what kind of a dope would lend $30 billion to a company whose own auditors say they're worried that it might go out of business? Then again, who would lend money to AIG four times in a row...after discovering each time that the company was in worse shape than before?
If you guessed anything but 'the US government,' you are not paying attention.
At every step of the way, the feds have been clueless, hopeless, and defenseless. It was the feds who lent money at negative real interest rates for more than five years. It was the feds who pretended to "regulate" and "control" the marketplace... claiming to protect investors from fraud and malfeasance. It was the feds who licensed the banks... set banking standards... blessed derivatives because they "distributed risk more widely" (Greenspan)... urged people to buy adjustable rate mortgages (Greenspan again)... praised sub-prime lending because it encouraged home ownership...and even told consumers to "go out and buy an SUV" in order to give the economy a boost (Fed governor Robert McTeer).
The feds piled up the tinder...poured on the gasoline...and lit the match. And now, what do you know...they've all joined the fire department!
We accept as a fact of economic life that plush times inevitably give way to lean times. Just as the moon waxes and wanes, the economy goes through booms and busts.
Median home price increased by 150 percent from August 1998 to August 2006. Over the next two years, home prices fell by 23 percent. Foreclosures skyrocketed.
The stock market has followed a similar course. When the New York Stock Exchange closed on Oct. 9, 2007, the Dow was 14,164.53, the highest close ever. Thirteen months later, it closed at 7,552.29, a drop of 46.7 percent. Retirement portfolios have been eviscerated. Unemployment has increased. When the figures are compiled the way government calculated them in the 1970s, the unemployment rate in November 2008 was 16.7 percent.
These personal dimensions of busts are used to justify government intervention, whether creating a safety net or drawing up regulations aimed at smoothing out the cycle supposedly inherent in the free market. But is this inevitable? Is the market economy really prone to sudden, inexplicable episodes of massive business error—or could something outside the market be causing it?
If politicians are honest in seeking a culprit, they will find that it’s not capitalism. It’s not greed. It’s not deregulation. It’s an institution created by government itself.
Bill Anderson, Lew Rockwell.com: These are heady times at the editorial offices of the New York Times and at the Washington, D.C., home of Sojourners. Columnist Thomas Frank of the Wall Street Journal cannot contain his glee, and the editors of The Nation are enraptured. College and university faculty members still are celebrating. Indeed, one would think that "Happy Days are Here Again" is playing over and over wherever there is a music box.
Barack Obama has delivered. He not only has produced a federal budget so profligate that even Paul Krugman has endorsed it, but his actions on the tax-borrow-spend front have earned the praise of none other than God Himself. That’s right, Jim Wallis, the founder and leader of the Marxist organization Sojourners, has studied the highlights of the document and declared them fit for praise from the Almighty. Thus, we finally are seeing the convergence of the atheists and those who say they believe in God: all can worship Obama.
Close to a trillion dollars are being tossed around in a “stimulus” package that no one in his right mind—and I do not here include the mainstream of the economics profession, which has disgraced itself in this crisis—expects to bring about recovery. Economist Robert Wenzel rightly describes the stimulus as “just the insiders raiding the till while there is still money in it.” Trillions of dollars are likewise being thrown at financial institutions that (if we actually believe in the free market) richly deserve to go bankrupt
We are learning what it is like to live in an Orwell novel. Our television screens are filled with people offering choices between idiotic and suicidal option A and idiotic and suicidal option B.
We have a president who tells us we cannot rely on the free market to get us out of this mess because the free market is what got us here, as if the Federal Reserve and its bubble-inducing monetary policy never existed.
WARNING: This is a grim view of what may be forthcoming if the authorities don't stop their madness!
It is bad news for penision funds, annuities, the FDIC, Social Security, Medicare, Medicaid, 401ks, IRAs, employment...
The prospects in this post become increasingly more likely with each passing day, and will become a certainty if the monetary and fiscal authorities keep defying reality, blowing trillions trying to re-inflate the burst bubbles!
"TO ESTABLISH a Truth Commission to investigate detainee interrogation and warrantless wiretapping without a full-bore investigation of the misrepresentations made for a costly and undeclared elective war, would be to strain at a gnat while swallowing a camel."
- Charles Goyette
In a preview of the heated divisions likely be triggered by the formation of a "truth commission" to investigate detainee interrogation, warrantless wiretapping and other alleged violations during the administration of President George W. Bush, witnesses before a Senate committee Wednesday characterized such a body as either a "profoundly bad idea" or "critically important to avoiding the mistakes of the past."
The hearing before the Senate Judiciary Committee was the first held in Congress to explore the truth commission proposal put forth by committee chairman Senator Patrick Leahy, a Democrat of Vermont.
DON'T THINK YOU'VE ESCAPED THE POLICE STATE YET...
IF THE PEOPLE PUT UP WITH THIS ONCE, THEY'RE SURE TO PUT UP WITH IT AGAIN WHEN THE ECONOMY GETS REALLY BAD!
"Seven newly released memos from the Bush Justice Department reveal a concerted strategy to cloak the President with power to override the Constitution. The memos provide “legal” rationales for the President to suspend freedom of speech and press; order warrantless searches and seizures, including wiretaps of U.S. citizens; lock up U.S. citizens indefinitely in the United States without criminal charges; send suspected terrorists to other countries where they will likely be tortured; and unilaterally abrogate treaties. According to the reasoning in the memos, Congress has no role to check and balance the executive. That is the definition of a police state.
Yoo said the Justice Department would not enforce U.S. laws against torture, assault, maiming and stalking, in the detention and interrogation of enemy combatants.
What does the federal maiming statute prohibit? It makes it a crime for someone 'with the intent to torture, maim, or disfigure' to 'cut, bite, or slit the nose, ear or lip, or cut out or disable the tongue, or put out or destroy an eye, or cut off or disable a limb or any member of another person.' It further prohibits individuals from 'throwing or pouring upon another person any scalding water, corrosive acid, or caustic substance' with like intent.' "
These men, "Torture Memo Al" Gonzales, Yoo, Rumsnamara, and Bush should be prosecuted!
PRESIDENT OBAMA TO DECLARE MARTIAL LAW THIS YEAR... SAYS RUSSIAN SCHOLAR!
U.S. TO COLLAPSE NEXT YEAR!
"There is a high probability that the collapse of the United States will occur by 2010," Igor Panarin, dean at the Foreign Ministry's school for future diplomats and a regular on Russia's state-guided TV channels, told dozens of students, professors and diplomats Tuesday at the Diplomatic Academy—a lecture the ministry pointedly invited The Associated Press and other foreign media to attend.
Panarin insisted he didn't wish for a U.S. collapse, but he predicted Russia and China would emerge from the economic turmoil stronger and said the two nations should work together, even to create a new currency to replace the U.S. dollar.
One instructor asked Panarin whether his predictions more accurately describe Russia, which is undergoing its worst economic crisis in a decade as well as a demographic collapse that has led some scholars to predict the country's demise.
Panarin dismissed that idea: "The collapse of Russia will not occur."
Bob [Bob Murphy] asked if it was really true that the Emancipation Proclamation only freed slaves in rebel territory. Here is the proof. ___________________
Whereas, on the twenty-second day of September, in the year of our Lord one thousand eight hundred and sixty-two, a proclamation was issued by the President of the United States, containing, among other things, the following, to wit:
"That on the first day of January, in the year of our Lord one thousand eight hundred and sixty-three, all persons held as slaves within any State or designated part of a State, the people whereof shall then be in rebellion against the United States, shall be then, thenceforward, and forever free [1]; and the Executive Government of the United States, including the military and naval authority thereof, will recognize and maintain the freedom of such persons, and will do no act or acts to repress such persons, or any of them, in any efforts they may make for their actual freedom. [2] Read the rest...
It was during the Civil War that President Abraham Lincoln became known as a "constitutional dictator," said former Nixon White House counsel John Dean during a Monday broadcast of MSNBC's Countdown with Keith Olbermann.
Responding to the recent release of several legal justifications for President Bush's most criticized policies, Dean summarized, "Reading these memos, you've gotta almost conclude we had an unconstitutional dictator. It's pretty deadly and pretty serious, what's in these materials."
The memos, released by Obama's Justice Department on Monday, outline possible methods for the president to ignore treaties and International laws, kidnap and torture American citizens and overrule the First Amendment to the Constitution which ensures freedom of speech and of the press.
All of these things and more could be done exclusively by the president in the name of fighting terrorism.
"Who in this formula was supposed to decide that these were terrorists?" asked Olbermann.
"Well, according to these memos, that was rather limited to the President of the United States and there are no guidelines as to how he might describe who was or was not a terrorist," said Dean.
Dean also said that the repeal of several of these memos just days before the Bush administration left power, was "definitely a bit of C-Y-A," though he did not ascribe "evil intent" to anyone.
"What does this say about what we need to do now in terms of investigating this, John?" asked Olbermann. "Is this the scale-tipper for everybody?"
"It could be," said Dean, "because the public is going to be aware of a lot more than they were. There is an investigation that is ongoing that started late in the Bush administration by the Office of Professional Responsibility.
"I think that investigation, which we've heard very little about, is going to be very hard to suppress now. ... I think the Office of Professional Responsibility may make some very strong recommendations that could include prosecution."
At last weekend’s Conservative Political Action Conference (CPAC), movement activists descended on Washington to lick their wounds and debate the way forward in the Age of Obama.
The sentiment at CPAC was heavily behind what Politico has dubbed the “Retro Strategy,” or unified opposition to big-spending Democratic schemes. That’s good news for those of us who oppose bigger government.
But there’s at least one aspect of conservative doctrine that desperately needs rethinking. That’s the Right’s embrace of the neoconservative approach to foreign affairs, which insists that America is weak, threatened on all sides, and can only be kept safe by an aggressive policy of preventive war and democratization at gunpoint.
Interestingly, CPAC’s lone panel on the subject stacked the deck with advocates of restraint: Two Iraq War opponents versus one hawk. The latter was Frank Gaffney, who has repeatedly warned that China might set off an electromagnetic pulse weapon in America’s upper atmosphere in order to fry our circuits and bring the U.S. economy to a halt (an odd move, you’d think, for the country that holds the largest share of our national debt).
Yet The Washington Examiner’s Byron York reports that there’s no sign of “a major overhaul of national security thinking” on the part of conservatives. York’s probably right, judging by the crowd at CPAC, which gave Gaffney most of the applause, and cheered for every bellicose line in straw-poll winner Mitt Romney’s speech... read the rest dcexaminer.com
Where the U.S. government usually consumes 21 percent of gross domestic product, this Obama budget spends 28 percent in 2009 and runs a deficit of $1.75 trillion, or 12.7 percent of GDP. That is four times the largest deficit of George W. Bush and twice as large a share of the economy as any deficit run since World War II.
Add that 28 percent of GDP spent by the U.S. government to the 12 percent spent by states, counties and cities, and government will consume 40 percent of the economy in 2009.
Markets are not infallible. But the stock market has long been a "lead indicator" of where the economy will be six months from now. What are the markets, the collective decisions of millions of investors, saying?
Having fallen every month since Obama's election, with January and February the worst two months in history, they are telling us the stimulus package will not work, that Tim Geithner is clueless about how to save the banks, that the Obama budget portends disaster for the republic.
And why do we provide private jets to the likes of Dennis Hastert and Nancy Pelosi? Why shouldn't they have to suffer the full-body scans and other indignities at the hands of the TSA that the rest of us have to suffer?
Actually, he trashed it. Did it escape your notice? Here are a couple of his amendments, secret until now, which didn't even have to pass muster with that nasty liberal Supreme Court! (At least Earl Warren had to find four other justices to go along with him).
"Fourth Amendment protections against unwarranted search and seizure, for instance, did not apply in the United States as long as the president was combating terrorism, the Justice Department said in an Oct. 23, 2001, memo. [Note: VP Cheney said the War On Terrorism would go on for fifty years, so we can assume that the original Fourth Amendment will come back into force in 2059].
"First Amendment speech and press rights may also be subordinated to the overriding need to wage war successfully," Deputy Assistant Attorney General John Yoo wrote, adding later: "The current campaign against terrorism may require even broader exercises of federal power domestically." [Note: Bush went to the U.N. for the authorization to go to war, instead of the Congress, as the original Constitution requires -- but who cares?].
The only way to solve this problem is to pass the entire original Bill Of Rights again -- all Ten Amendments -- amending every subsequent amendment, court case, and government malfeasance -- so that the Bill Of Rights will once more be the law of the land, unsullied by two centuries of abuse by the executive, legislative, and judicial branches of government.
"THE MOST IRRESPONSIBLE BUDGET IN U.S. HISTORY!" - ROBERTS
AND THAT'S REALLY SAYING SOMETHING! The bald fact is that the US government is going to have to borrow -- or print -- half of the money it intends to spend in Obama’s first budget.
And Americans are angry that sub-prime borrowers took mortgages they couldn’t afford.
To whom can the US government turn for $1.75 trillion for FY 2010, on top of $1.2 trillion for FY 2009? Not to taxpayers. Obama’s net tax increase comes to $170 billion over 10 years, or $17 billion a year, a drop in the bucket. A supply-side economist could have told him that not even these paltry revenues will be realized.
Not to private savers. Americans are over their heads in debts.
Not to foreigners. Thanks to Clinton/Bush financial deregulation and Wall Street and bankster greed, the rest of the world is in financial turmoil and hasn’t $1.75 trillion in savings to lend. Possibly, the stock market will collapse further, and whatever remaining wealth Americans have will flow into “safe” US Treasuries.
The only other alternative is the printing press. Printing press finance would destroy the dollar as reserve currency and ignite high inflation. The US would be unable to pay for its imports, and Americans whose incomes do not rise with the rate of inflation would be plowed under.
Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan, by Kim Phillips-Fein, New York: W.W. Norton, 368 pages, $26.95
The Conservative Century: From Reaction to Revolution, by Gregory L. Schneider, Lanham, Md.: Rowan & Littlefield, 264 pages, $39.95
In Invisible Hands, the New York University historian Kim Phillips-Fein recounts a group of businessmen’s efforts to push pro-market ideas. At one point she describes a document, the “Powell Memo,” that is now notorious among those who posit a vast, successful right-wing conspiracy to institute rapacious laissez faire: a 1971 Chamber of Commerce report, written by future Supreme Court Justice Lewis Powell, suggesting conservatives launch a concerted attempt to influence the universities, media, and courts in an ostensibly free-market direction. One of the closest of Powell’s friends, a man he especially wished to convert, was the general counsel of General Motors.
Since then, GM has continued to advocate trade barriers. And today,in the era of the “new New Deal,” we see it at the forefront of ensuring that all the rest of us are on the hook to ensure the company can navigate the rough waters of the “free market.”
The lesson, not fully internalized by Phillips-Fein, is that free-market advocacy is not the success that books like hers crack it up to be. For conservatives and activists who have linked their lives, reputations and fortunes to the Republican Party, it’s a time of reappraisal, retrenchment, and recrimination. Just six years ago, their team controlled the executive branch, both houses of Congress, and a majority of gubernatorial seats. Since then the party has fallen dizzily, weighed down by an unpopular war, a deadly hurricane, and a deepening recession. Republicans have lost control of the White House and Capitol Hill, and now hold just 22 governorships... Reason Online
GARDEN OF EDEN FOUND? KURDISH SHEPHERD UNCOVERS MYSTERY!
Carbon-dating shows that the complex is at least 12,000 years old, maybe even 13,000 years old.
That means it was built around 10,000BC. By comparison, Stonehenge was built in 3,000 BC and the pyramids of Giza in 2,500 BC.
Gobekli is thus the oldest such site in the world, by a mind-numbing margin. It is so old that it predates settled human life. It is pre-pottery, pre-writing, pre-everything.
In the Book of Genesis, it is indicated that Eden is west of Assyria. Sure enough, this is where Gobekli is sited.
Likewise, biblical Eden is by four rivers, including the Tigris and Euphrates. And Gobekli lies between both of these.
In ancient Assyrian texts, there is mention of a 'Beth Eden' - a house of Eden. This minor kingdom was 50 miles from Gobekli Tepe.
Another book in the Old Testament talks of 'the children of Eden which were in Thelasar', a town in northern Syria, near Gobekli.
The very word 'Eden' comes from the Sumerian for 'plain'; Gobekli lies on the plains of Harran.
From Jim Taszarek, good friend and great broadcaster,Taz Media.com:
Harvey had a several homes (mansions) one of which was on the grounds of the Arizona Biltmore. Every winter he'd broadcast from KTAR for four or five weeks, getting in the station at 3:00AM to do a live broadcast for the Eastern time zone. He came with a producer and we were required to have a certain kind of yellow paper, grease pencils and a Smith-Corona typewriter. He also liked to have a small audience actually watch him do his newscast. He'd do his newscast like a television commentator, looking up from his copy, looking at our people and actually talking to us. So when you heard him on the radio, he sounded like he was talking to you. So most mornings we'd have a small group of station people and advertisers come in, watch the news and have their picture taken with Harvey.
When the four weeks ended, everyone in the station that had helped him in any way received a gift and a personal note. All the ladies received flowers. He always told me that he was sorry for the intrusion and I constantly assured him that it was our pleasure. One day he did a short bit about the station and told how I was this good broadcaster and all - and did so on entire network noon news. How do you think I felt about My Best Buddy Paul after that?
Why Paul Harvey's Net Worth was Over $100 Million.
One day we had a client reception to meet Paul Harvey. One of our clients was a very nasty buyer who (how do I put this politely) wouldn't rank in the top five finalists of the Miss Universe Contest. Posing for the photographer, she told Harvey that she wanted to move to his left, "to get her Best Side." Harvey said, very formally, "Madam, you don't have a Bad Side." Our sales manager whispered, "That's why that guy's worth $100 million."
So he taught us all kinds of lessons. Talk directly to the other person, always send a personal note of thanks - and nobody has a Bad Side. Nice guy.
Charles Says: With the words "Mr. President, you're wrong," Paul Harvey came out against the Vietnam carnage in 1970. It was a view that was not welcome at the network or at the White House. Hats off to a man of courage.
The United States government today announced that it is changing its national symbol to a CONDOM because it more accurately reflects the governments political stance.
A condom allows for inflation, halts production, destroys the next generation, protects a bunch of pricks, and gives you a sense of security while you're actually being screwed.
To my fellow Americans, it really doesn't get much more accurate than this.
For all the comparisons of Obama to FDR, the latest budget proposal contains at least one really important analogy to a Depression-era President. It's not FDR though, it's Hoover. In 1932, Hoover pushed for and Congress passed the Revenue Act of 1932 that raised taxes significantly as part of Hoover's push to balance the budget. Obama is proposing over a trillion dollars in new taxes over the next decade as part of his budget proposal recently released.
Hoover's Revenue Act of 1932 was, at that point, the largest peacetime tax increase in US history. It revived a number of excise taxes that were in place in World War I, it imposed a variety of sales taxes, and it raised/added a number of taxes on financial market dealings. Of course it raised income taxes significantly: almost doubling the basic income tax rate, reducing personal exemptions, and raising the maximum rate (surtax) from 25% to 63%. It also increased the corporate tax rate as well as estate and gift tax rates.
There's no need to discuss what followed and it was hardly recovery. How much those tax increases contributed to the deepening/lengthening of the Great Depression remains a matter of debate, but there's no doubt that they did not help and the real debate is over how much they undermined the private sector's attempts to recover. Raising taxes during a recession is, shall we say, a dangerous business. And even if the first of Obama's new taxes don't kick in until 2011, the reaction of investors today is what matters and they know those higher taxes mean trouble and that will mean a recovery sooner is that much less likely.
So the next time someone invokes the ghost of Hoover to explain why we must, as the President said the other night, do "whatever proves necessary. Because we cannot consign our nation to an open-ended recession," you can feel free to point to ol' Herbert Clark Hoover as your example of "doing whatever proves necessary" and how the President is imitating that example at his and our peril as he raises taxes $1.3 trillion over the next decade. The ghost of Hoover is alive and well, but not among those of us saying that the economy needs to heal itself. It's walking the halls of the White House and Congress as the new Administration repeats the errors of the past. Steve Horwitz from Boettke's blog
Bob Murphy: Sure, I could justify my recommendation to buy physical gold with all kinds of jargon and thought experiments. But I will spare you. The real reason I think everyone should get his or her little pot of gold (just in time for St. Patty's Day) is this:
You have to ask yourself, "Does Ben Bernanke really have a good plan for dealing with that?"
Then, even if you think so, you have to ask yourself, "Does The Man really let a Princeton economics professor who doesn't know kung fu have control over the world currency?"
AP News: GATES SAYS US MILITARY CAN HELP MEXICO IN DRUG WAR!
Defense secretary says US military can provide assistance to Mexico as it battles drug cartels! "Gates says some of the old biases against cooperation between the U.S. and Mexican militaries are being set aside amid the growing violence."
Does this really need any comment? Okay, how about this...
Soviet Defense Minister Says Sovet Army Can Help Afghanistan Against Rebels!
or
Defense Secretary Says US military Can Provide Assistance to South Vietnam as it Battles VietCong!
Tad DeHaven at Cato gets it right: how can it be that the huge deficits it "inherited" are the cause of our current problems because they lower economic growth yet also be true that more spending and larger deficits are the way to generate the growth that will solve said problems?
Tad asks the multi-trillion dollar question:
And the solution to the economic downturn caused in part by too much spending and debt is to increase deficit spending and further run up the national debt? By the administration’s own logic, shouldn’t we be experiencing economic growth with all the deficit spending it “inherited?”
DON'T THEY UNDERSTAND THERE IS NO MORE MONEY? THEY WILL LEAVE THE ENGLISH SPEAKING WORLD IN RUINS! Brown woos Obama on global deal
GORDON BROWN hopes to forge a partnership with President Barack Obama in Washington this week, to call for a “global new deal” to lift the world out of recession.
The prime minister will borrow from the rhetoric of Franklin Roosevelt, who introduced the government-financed New Deal to tackle the US Depression of the 1930s. He will argue that his 21st century “global new deal” will also require public spending on a huge world-wide scale.
Writing in The Sunday Times today, Brown calls for “universal action to prevent the crisis spreading, to stimulate the global economy and to help reduce the severity and length of the global recession”.
Has anyone noticed Obama's vaunted 16-month withdrawal-from-Iraq plan has already stretched into 19 months?"
RAIMONDO, AntiWar.com: Antiwar voters who cast their ballots for Obama have succeeded in rolling the stone all the way up a rather steep hill, only to see it fall down the other side – and we are right back where we started. The next hill is called Afghanistan, and beyond that is yet another: Pakistan.
... Under Obama, the military budget will rise by 4 percent, and this isn't counting the costs of Iraq and Afghanistan. As Cato Institute research fellow Benjamin H. Friedman puts it: "Many Americans believe that Barack Obama and the Democratic majority in Congress will lower defense spending and restrain the militaristic foreign policy it underwrites. The coming years should destroy that myth."
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