Five Heroes (and Friends of Liberty) To Acknowledge
Posted by Karen DeCoster at April 29, 2009 09:59 PM
I've been thinking about the people who are so important to the patriot-liberty movement in the current times. I want to take the time to acknowledge them. First, I think one of the most important individuals who we need to acknowledge and thank is the heroic Judge Andrew Napolitano. Besides my being hooked (!!) on Freedom Watch, I believe that this man is one of the most passionate and brilliant forces for liberty in our time. He's a former state Superior Court Judge, a scholar of the Constitution, and a prolific commentator, analyst, columnist, and author. In addition, his background and position gains him tremendous respect, even within the mainstream media. But he is completely radical - very vocal on natural law, pro-secession, and inflexible on questions of property rights and contract law. By the way - his publicist has arranged for me to interview him, hopefully for Taki Radio, and hopefully by next week if I can get the technology all set and ready to go.
In addition, I put Gerald Celente up near the top of the list. He's very respected and established, he's an avowed "political atheist," and he's completely objective on all issues. He comes down on the libertarian side, time and time again, because it offers the only rational and workable solutions -- not because he's declared that he's a libertarian. In his podcast with Lew Rockwell, he has stated that the government's propaganda and wordplay (such as "car czar") to be "juvenile" and "childish." In spite of that very accurate assessment, no one else has addressed it as well as he has. He is amazingly articulate, vocal, and principled.
Peter Schiff. Another visible, hardcore, principled Austro-libertarian. No need to to go on and on about Schiff - his virtues for liberty are well known. He just keeps on keeping on.
Ron Paul is on this list, of course. For all he does to shed insider views on Washington and its antics, we owe him much respect and thanks. In addition, he appears everywhere and has become a YouTube celebrity regular, providing great insights and hardcore, relentless nonconformity.
Last but not least is the greatest intellectual entrepreneur of our time, Lew Rockwell. Lew is the glue that keeps everything stuck together and firing on all cylinders. His knowledge, experience, connections, and the respect he commands makes his website the center of the pro-liberty universe. We are all honored for being associated with him.
Additionally, is it interesting that all of the above individuals appear on many of Judge Napolitano's Freedom Watch shows on Wednesday on FOX? That speaks volumes to The Judge's principled views and commitment to the truth. He even had Alex Jones on his show, which I think was a welcome move.
To all of you gentlemen mentioned above - Thank You. If you have not donated to LewRockwell.com, please do so today.
Taking his most urgent action to date since cases of swine flu were first reported, President Barack Obama today ordered an emergency quarantine of Vice President Joe Biden.
Mr. Biden was in the middle of giving a wide-ranging television interview on swine flu preparedness when he was seized by representatives of the Department of Homeland Security and placed in quarantine.
"I'll tell you this, if I thought I might catch swine flu by going to work or a movie or the mall or something like that, I sure as heck wouldn't -" Mr. Biden was saying when he was abruptly yanked away from the microphone.
According to President Obama, the vice president will be kept in a sealed box away from television cameras and microphones "until we are certain that the danger is passed."
"There is no clear scientific proof that swine flu can be spread by television cameras or microphones," Mr. Obama said. "But it's better to be safe than sorry."
Kenyan Women Withhold Sex over Political Fighting!
Women's activist groups across Kenya have placed a weeklong sex embargo on their partners in protest over political infighting.
The groups are also paying off prostitutes to walk off the job, so fuhgeddaboudit, guys.
This is like a real-life version of Aristophanes' Lysistrata, in which the eponymous heroine seeks to end the Peloponnesian War by putting the ixnay on nookie throughout Athens, pointing out the nuances of power balance in a male-dominated society.
Aristophanes brought out the serious lowbrow for this one, presenting his fellow ancient Greeks with the equivalent of Two and a Half Men.
The campaigners are asking the wives of the Kenyan president and the prime minister to join in the embargo.
They say they want to avoid a repeat of the violence which convulsed the country after the late-2007 elections.
PEOPLE HAVE SOME PRETTY BIZARRE IDEAS ABOUT A FREE ECONOMY!
Since When is Constant Meddling in the Markets a Sign of Libertarianism? GO GET 'EM MISH:
In How libertarian dogma led the Fed astray Henry Kaufman launches into tirade against the "Libertarian Fed" and the "prevailing economic libertarianism". I have a question for Kaufman:
Since When is Constant Meddling in the Markets a Sign of Libertarianism?
The idea that Greenspan or the Fed is Libertarian is absurd.
Greenspan never left the markets alone. At every crisis (real or imaginary) Greenspan slashed interest rates. Here are two prime examples: In 1999 the Fed threw money at non-existent problems such as the Y2K scare. That policy decision helped fuel the Dot-Com bubble. When the Dot-Com bubble burst Greenspan stepped on the gas in 2001-2002 to bail out banks at risk because of poor loans to both Latin America and the internet companies. That policy decision fueled a massive housing bubble not just in the US but worldwide.
Every step of the way, the Greenspan and Bernanke Fed micro-mismanaged interest rates as if they knew better than the free market where rates should be. The reality is the Fed does not know where interest rates should be only the free market knows.
friends and bankers to the palace occupants loot the peoples treasury for everything that is there, with nothing left for the peasants. peasants do nothing but accept this passively.
torture is an accepted function of the secret police of the palace. many peasants even go so far as defending this.
the palace secret police acknowledge wiretapping, and evesdropping on any and all citizens without judiciary proceedings. peasants roll over like beaten seals without as much as a wimper.
secret police of said country look the other way when the palace lords are exposed to have flagrantly broken laws like paying taxes and other such nonsense which only applies to the peasants. peasants accept this and go back to their golf games and espn.
palace police take over major industries like auto manufacturing, insurance, banking and use the peasants money to make sure the friends of the palace occupants are made whole, at the same time millions of lumps are thrown out of work and out of their hovels. peasants accept this as part of the country free market.
the most important. no capital formation has occurred in said banana republic in decades. debt isssuance is staggering. banks are insolvent. the country is financed with printed money and the goodwill of another countries financing. when capital leaves, the currency will follow.
Scientists have detected flecks of undetonated explosives in four samples of dust from the World Trade Center catastrophe. A paper just published in the peer-reviewed Open Chemical Physics Journal describes the findings of nine scientists after 18 months of work.
The paper is titled “Active Thermitic Material Discovered in Dust from the 9/11 World Trade Center Catastrophe”. The primary authors are Niels Harrit, professor of chemistry at the University of Copenhagen, and Jeffrey Farrer, professor of Physics at Brigham Young University (BYU), Provo, Utah.
The research was initiated when Dr. Steven Jones, then also at BYU, observed small red/grey chips in the magnetic fraction of dust he was analyzing from the WTC disaster. The scientists studied four independently collected samples of dust. One sample was collected by a Manhattan resident about ten minutes after the collapse of the second WTC tower, two samples were collected the next day, and a fourth was collected about a week later. The properties of these chips were analyzed using optical microscopy, scanning electron microscopy (SEM), X-ray energy dispersive spectroscopy (XEDS), and differential scanning calorimetry (DSC).
After careful study of the material the scientists concluded that the red component of the bi-layer chips is a high-tech explosive nano-material known as super-thermite. The material is composed of ultra-fine grains of iron oxide intimately mixed with nano-sized aluminum metal in a matrix of silicon and organic compounds. While these chips are very small (typically less than a millimeter) tests show that the material is highly energetic and can be ignited to produce a micro-explosive effect. The observed properties and composition of the thermitic material appears to match the published descriptions of nano-thermite fabricated at the Lawrence Livermore National Laboratory and elsewhere. These high-tech explosives were relatively new at the time of the disaster, with some of the first published descriptions appearing in the literature in the late 1990s.
The scientists begin the paper with an explanation of their motivation for pursuing the research. “The destruction of three skyscrapers (WTC 1, 2 and 7) on September 11, 2001 was an immensely tragic catastrophe that not only impacted thousands of people and families directly, due to injury and loss of life, but also provided the motivation for numerous expensive and radical changes in domestic and foreign policy. For these and other reasons, knowing what really happened that fateful day is of grave importance.” Read the rest...
BOB MURPHY: Answering Scott Sumner's Questions About Austrians
Scott Sumner asks some great questions about the Austrian view of the financial crisis. I'll do my best to balance brevity against comprehensiveness in my answers. Read the rest... Murphy's blog
In the spirit of bipartisanship, my newest book-- "The Housing Boom and Bust"-- shows how both Democrats and Republicans ruined both the housing markets and the financial markets.
Like so many disasters, the current economic crisis grew out of policies based on good intentions and mushy thinking.
For far too long, too many people have regarded home ownership as "a good thing." It is certainly true that home ownership has its benefits. But, like everything else, it also has its costs and its risks.
Weighing such trade-offs is something that each individual and each family can do for themselves. It is when such decisions are made by politicians-- of whatever party-- that trade-offs tend to vanish into thin air, replaced by pursuit of a "good thing."
Beginning in the 1990s, getting a higher proportion of the American population to become homeowners became the political holy grail of government housing policies. Increasing home ownership among minorities and other people of low or moderate incomes was also part of this political crusade. Read the rest...
PENTAGON CAN'T HANDLE THE TRUTH! BLOCKING WEBSITES, INFORMATION!
IT MUST BE THE SECURITY TROLLS!
In recent months, more and more American officers have told me that when they attempt to access the websites they need, they find access is blocked on DOD computers. Is al Qaeda doing this in a dastardly attempt to blind American combat units? Sadly, no. DOD is doing it. Someone in DOD is putting blinders on American troops.
I do not know who is behind this particular bit of idiocy. It may be the security trolls. They always like to restrict access to information, because doing so increases their bureaucratic power. One argument points to them, namely an assertion that the other side may obtain useful information by seeing what we are looking for. That is like arguing that our troops should be given no ammunition lest muzzle flashes give away their positions in a fire-fight.
But the fact that websites of American organizations whose views differ from DOD’s are also blocked points elsewhere. It suggests political involvement. Why, for example, is access to the website of the Center for Defense Information blocked? CDI is located in Washington, not the Hindu Kush. Its work includes the new book on military reform America’s Defense Meltdown, which has garnered quite a bit of attention at Quantico.
The goal of the website blockers, it seems, is to cut American military men off from any views except those of DOD itself. In other words, the blockaders want to create a closed system. John Boyd had quite a bit to say about closed systems, and it wasn’t favorable.
Intel officers supposedly can go all the way to the top of their chain of command with a request to view a blocked website; their petition may or may not be granted. But this just intensifies the problem, because it gives the intel community a monopoly on information. In 4GW, it is essential that everyone do intel, not just a few specialists. Every private has to understand the environment he is operating in. Many websites can help him do that. But if he tries to access them on a DOD computer, he finds them blocked. He is thrown back to pure kinetics, which leads to our defeat.
Rigid control of information through a compartmented, stovepiped process is characteristic of the Second Generation. Once again we see why Second Generation militaries cannot win Fourth Generation wars. Our defeats are less a product of what our enemy does to us than of what we do to ourselves.
TRUTH COMMISSION? GOOD. RECONCILIATON? NOT SO FAST!
NOTE: A investigation of detention and interrogations is inadequate to the scope of the suffering and destruction of the elective war and the the crimes, moral and legal, of the Bush era.
The blood of the dead cries out from the ground for the truth: an independent commission must be charged with vigorously assessing all the pretexts and representations for the war itself, of which the detentions and interrogations are only a foreseeable consequence.
- Charles
Senate Judiciary Chairman Patrick Leahy (D-VT) plans to proceed with a special commission to investigate alleged Bush administration abuses of power, despite lacking President Barack Obama’s support, according to a report Tuesday.
Sen. Leahy called for a “Truth Commission” in February to probe Bush administration policies on torture, interrogation and surveillance and to — as he puts it — “get to the bottom of what went wrong.” Such an idea would be modeled around truth commissions established in South Africa and Chile, which offered immunity to officials who committed abuses in exchange for the truth.
“Many Americans feel we need to get to the bottom of what went wrong,” Leahy said when announcing his idea in February. “I agree. We need to be able to read the page before we turn the page.”
President Obama, meanwhile, has expressed disinterest in investigating the activities of his predecessor, saying it’s time for the country to move on. Senate Majority Leader Harry Reid (D-NV), says he doesn’t want the commission to begin until an inquiry headed by Senate Intelligence Chairwoman Dianne Feinstein (D-CA) examines the Bush administration’s legal defenses of torture techniques.
But Leahy plans to proceed despite lacking the approval of party leaders, sources familiar with the proposal told Politico’s John Bresnahan Tuesday.
“Leahy plans to move ahead with his proposal anyway,” Bresnahan writes. “While he has not found a GOP co-sponsor for legislation creating a truth commission, Leahy is expected to begin circulating a draft soon.”
THANK GOODNESS THIS ISN'T ZIMBABWE, RIGHT? IT'S NOT, YOU KNOW. RIGHT?
ZIMBABWE GOVERNMENT HELPS ITSELF TO PRIVATE BANK ACCOUNTS!
HARARE, Zimbabwe (AP) — Zimbabwe's central bank governor admitted Monday that he took hard currency from the bank accounts of private businesses and foreign aid groups without permission, saying he was trying to keep his country's cash-strapped ministries running. In a statement that would be unthinkable coming from most central banks, Reserve Bank Governor Gideon Gono appeared to be issuing a plea to keep his job in the face of growing criticism.
Gono said it was time "to let bygones be bygones" now that Zimbabwe has a new coalition government dedicated to reversing its economic decline.
The central banker said gave the money he took from the hard currency accounts as loans to various ministries, and those private accounts would be reimbursed when the ministries repaid the loans. He said the bank's efforts "sustained the country" in its hour of need.
Gono's statement showed the practice was widespread. It was first hinted at last year, when the international aid agency Global Fund threatened to cut off funds to Zimbabwe for fighting AIDS, tuberculosis and malaria unless money taken from its account was returned. The central bank returned $7.3 million to Global Fund.
The raiding of foreign currency accounts is just one of the highly questionable actions for which Gono has been sharply criticized.
In the past two years, Gono slashed 25 zeros from the local currency, printed more local money without backup reserves or assets and distributed agricultural equipment to many in President Robert Mugabe's party who were given farms seized from whites.
Gono declared Monday that the criticism of his office had reached "ridiculous dimensions ... in the name of trying to show how evil, unworthy and incompetent the governor is."
A US major reveals the inside story of military interrogation in Iraq.
By Patrick Cockburn, winner of the 2009 Orwell Prize for journalism
"The reason why foreign fighters joined al-Qa'ida in Iraq was overwhelmingly because of abuses at Guantanamo and Abu Ghraib and not Islamic ideology," says Major Matthew Alexander, who personally conducted 300 interrogations of prisoners in Iraq. It was the team led by Major Alexander [a named assumed for security reasons] that obtained the information that led to the US military being able to locate Abu Musab al-Zarqawi, the head of al-Qa'ida in Iraq. Zarqawi was then killed by bombs dropped by two US aircraft on the farm where he was hiding outside Baghdad on 7 June 2006. Major Alexander said that he learnt where Zarqawi was during a six-hour interrogation of a prisoner with whom he established relations of trust.
Major Alexander's attitude to torture by the US is a combination of moral outrage and professional contempt. "It plays into the hands of al-Qa'ida in Iraq because it shows us up as hypocrites when we talk about human rights," he says. An eloquent and highly intelligent man with experience as a criminal investigator within the US military, he says that torture is ineffective, as well as counter-productive. "People will only tell you the minimum to make the pain stop," he says. "They might tell you the location of a house used by insurgents but not that it is booby-trapped."
In his compelling book How to Break a Terrorist, Major Alexander explains that prisoners subjected to abuse usually clam up, say nothing, or provide misleading information. In an interview he was particularly dismissive of the "ticking bomb" argument often used in the justification of torture. This supposes that there is a bomb timed to explode on a bus or in the street which will kill many civilians. The authorities hold a prisoner who knows where the bomb is. Should they not torture him to find out in time where the bomb is before it explodes? Major Alexander says he faced the "ticking time bomb" every day in Iraq because "we held people who knew about future suicide bombings". Leaving aside the moral arguments, he says torture simply does not work. "It hardens their resolve. They shut up." He points out that the FBI uses normal methods of interrogation to build up trust even when they are investigating a kidnapping and time is of the essence. He would do the same, he says, "even if my mother was on a bus" with a hypothetical ticking bomb on board. It is quite untrue to imagine that torture is the fastest way of obtaining information, he says. Read the rest...
"But we are not asked to judge the President's character flaws. We are asked to judge whether the President, who swore an oath to faithfully execute his office, deliberately subverted--for whatever purpose--the rule of law."
- John McCain arguing for the impeachment of Bill Clinton for perjury in a civil suit, Feb. 1999
"Anyone who knows what waterboarding is could not be unsure. It is a horrible torture technique used by Pol Pot."
- John McCain, October 2007
"We've got to move on."
- John McCain, April 26, 2009, reacting to incontrovertible proof that George W. Bush ordered the waterboarding of a prisoner 183 times, as well as broader treatment that the Red Cross has called "unequivocally torture."
GARY NORTH: I have a lot of irons in the fire. I would have to take a bunch of them out of the fire if my physician told me that I was terminal.
I have a lot of projects in mind that I can finish if my mind remains alert, I discipline myself, I stick to a tight budget, and I live for 15 more years. If I live for 20, all the better. If I match Jacques Barzun and Peter Drucker in age and productivity, I can achieve a whole lot. But it's all dependent on my survival. It's the compounding effect that will make the difference. These are all long-term projects.
I have short-term projects, too, such as writing four articles a day, six days a week, for this website.
So many projects, so little time. Are you in a similar situation? You should be. I highly recommend it.
You need several long-term projects that might make a difference. These will constitute your primary legacy. They are projects that no one else is likely to do. They will be the things you are remembered for. They take lots of time.
Sure, if you're an inventor, and you stumble across The Big One, and you raise capital for it, and a government regulatory agency does not bankrupt your company, and a competitor does not steal it, maybe you can leave a legacy in just five years. How likely is that? How many inventions ever pan out commercially? Optimists say 20%. Pessimists say a tenth of one percent.
I suspect that the pessimists are closer to the truth. The odds are against you.
So, you need time. You need persistence. This assumes that your projects are really good.
TECHNOLOGICAL GROWTH AND THE PRICE DEFLATION THAT ATTENDS IT
Malignant deflationary spiral
Tim Swanson:One Keynesian doomsday scenario forewarned by technocrats of all political stripes is an environment in which customers avoid products whose prices continually fall. In theory, customers would delay purchases indefinitely, leading to a downward spiral: a decrease in prices leads to lower production, which leads to lower wages and lower demand, which leads to lower prices. Ad infinitum.
However, as an economy grows and becomes more efficient, it should ultimately cost less to produce the same units of goods and service. Price deflation caused by scientific progress and economic efficiencies (e.g., mass production, automation) is actually a beneficial side effect and should be embraced.
Thus, in practice, even with the expected knowledge that their purchased products will become outdated and cheaper within a few months, customers did not shun but rather flocked to computer retailers rain or shine. And the numbers reflect this.
A scant 40,000 PCs were sold in 1976. By 1984, the number had risen to 2 million. At the close of 1986 this number had tripled to 6 million shipments worldwide. By 1990, PC sales had reached 16 million a year. By 1994 worldwide sales had more than doubled to 36 million. At the peak of the dotcom bubble more than 135 million PCs were sold each year. Following the 2001 recession, growth resumed upward, hitting 170 million by 2004.
And while there will be a big dip this year, in 2008 more than 295 million computers were sold worldwide. This figure does not include smartphones, which in 2008, more than 139 million devices were sold globally; up from 37 million in 2005.
All told, more than 1 billion computers were actively in use at the end of 2008 – and that number is expected to double by 2014–2015.
In contrast to Keynesian theory, despite the fact that dozens of large multinational companies compete in an environment where prices have persistently decreased throughout the last three decades, this has not led to lower production or lower wages. In fact, the opposite has occurred.
In fact on top of competitive pressures, between 2004 and 2008 prices of commodities commonly used in PC components more than doubled. Some such as copper and silicon tripled. Yet PC manufactures across the globe not only cut product costs and upgraded machines, but profited handsomely. And without trillion dollar subsidies or bailouts!
However these deflationary benefits may be thwarted in the coming years as government policies worldwide redistribute capital.
What impact will this have on the funding of semiconductor foundries, clean rooms, lithographic lasers, die-testing equipment and automated manufacturing as a whole? What happens when productive capital is diverted to the government bond market to fund deficits? LewRockwell.com
Well, there he goes again. Newt Gingrich wants us to believe a “sword of Damocles hangs over our heads.” Has wanted us to believe that since at least 2004, when he first decided to seek the Presidency, and when the Commission to Assess the Threat to the United States from Electromagnetic Pulse [EMP] Attack made its first “final report” to Congress.
Who’s holding that sword over our heads?
For years it was alleged by Newt to be the Iranians, whom the Neo-Crazies and their media sycophants have insisted have a secret – so secret that not even Israeli spies or inspectors for the International Atomic Energy Agency, all of them on the ground in Iran for years, have any idea where it might be – deep underground nuclear weapons program.
But now, with Obama in the White House by a landslide, Candidate Newt is alleging it is the North Koreans holding that sword. After all, without doubt – as a direct result of Bush-Cheney-Bolton unilaterally abrogating the Agreed Framework back in the fall of 2002 – the North Koreans now have at least a half-dozen Plutonium-based nukes in their stockpile.
So what?
Well according to Newt;
“One to three missiles tipped with nuclear weapons and armed to detonate at a high altitude – to achieve the strongest EMP over the greatest area of the United States – would create an EMP “overlay” that triggers a continent-wide collapse of our entire electrical, transportation, and communications infrastructure.
“Within weeks after such an attack, tens of millions of Americans would perish. The impact has been likened to a nationwide Hurricane Katrina. Some studies estimate that 90 percent of all Americans might very well die in the year after such an attack as our transportation, food distribution, communications, public safety, law enforcement, and medical infrastructures collapse.”
Great Zot! Where did Newt ever get such an idea? Gordon Prather antiwar.com
Alan Abelson, Barron's: How come, if the stock market is telling us everything is coming up roses -- the Dow has shot up 23% since March 9, the S&P 500 28% and dear old Nasdaq 34% -- corporate insiders are selling like there's no tomorrow?
Much as anything, we suspect, what has given legs to this rather improbable but undeniably impressive rally is the rally itself. Let us assure you that we haven't gone mystical (we've enough sins to atone for without adding still another).
Let's put it this way: As a stimulus for equities, come rain or come shine, just about nothing beats higher prices. They entice risk-shy investors, including or especially (hard to decide) those who have been mauled by the bear market, to edge off the sidelines and get their feet wet.
Higher stock prices (as Ken Lewis might say) escalate expectations and earnings estimates of analysts, most of whom are, in any case, reflexively bullish. They give the yak-yaks on Tout TV something to crow over and excite their innocent viewers.
In other words, they serve to inject a dose of euphoria into the investment atmosphere, particularly after a long and morose stretch of gloomy markets, like last year's.
Of course, rising equity prices also inspire less chimerical reasons for the quickened interest in the stock market. They are widely taken by institutions, individuals and kibitzers as a welcome harbinger of economic recovery, and there's been a lot of that lately. Our own feeling, as you may have gleaned, is that such hopes are heavily laced with wishful thinking.
Leading us to the question with which we began these musings: If those now infamous shoots of recovery are popping up all over, why would insiders be so aggressively dumping stocks? Yet, they indisputably are. According to a study prepared for Bloomberg by Washington Service, a research outfit, directors, officers and the like have sold $353 million worth of stock in this fading month, or 8.3 times the total bought. As a matter of fact, according to the firm, insider purchases of $42.5 million are on track to make April the skimpiest month for such buying since July 1992.
The pace of selling in the first three weeks of this month, incidentally, was the swiftest since the market peaked and the bear came out of hibernation with a vengeance in October '07. We're quite aware that insiders are not infallible. But they are, after all, in the front lines of commerce and industry and so presumably have a better fix on the economy and the prospects for recovery than analysts and economists, whether of macro or micro persuasion.
And just as they wouldn't be laying off people in such extraordinary numbers if they thought their business was about to rebound soon, they'd be loath to liquidate their holdings in such an emphatic way if they espied a turnaround in the offing.
It all boils down to this: Nobody ever sold a stock because they thought it would go up. And as a group, corporate insiders obviously are scarcely enthusiastic about the prospects for a genuine bull market.
Is the whole TARP plan a criminal enterprise? Sounds farfetched, I suppose. But after reading about Special Inspector General Neil Barofsky’s report, it may well be that TARP is just one big criminal problem.
I know, let's play a game! I'm going to give you two quotations from economic analysts from last year, before the TARP had been approved. One of them is Kudlow, and the other is some other guy. Can you guess (a) which is Kudlow and (b) who the other guy is?
The Paulson bailout failed in the House. If it isn't a death blow to the plan, it should be. This is not an economic plan: it is a heist....The economics behind it are nonsense, but we are naïve if we spend much time even considering the "arguments" for it. This is a money and power grab, pure and simple....Because of all the mumbo jumbo thrown around to show why the plan is necessary, some very sharp academic economists are in a tizzy trying to treat this as an extra-credit question, rather than a crime scene.
The single-biggest mistake in the Paulson bank-rescue-plan marketing effort has been the failure to explain clearly how taxpayers are going to recoup $700 billion used to buy toxic assets at auction in order to unfreeze the banking system. In other words, folks don’t understand how taxpayers will be paid back, and may actually make profits, which will enable the new government debt to be erased after the Treasury bank-rescue is completed.
Here’s the key point: Any loan package bought by the Treasury will be 100 percent taxpayer owned. Period.
I always thought it was funny when people would use that phrase; e.g. I have a book called Toward a History of Game Theory. I think it means, "If I weren't so lazy I would write..." For sure, that's what it means in this blog post.
Flat out, Tom's book Meltdown is freakin' sweet. I had trouble getting through the first chapter or two, not because of anything Tom did, but just because I am so sick of talking about Paulson, MBS, Greenspan's rate cuts, etc.
But after getting through that necessary drudgery, the book was (is) awesome. I am in amazement at how much great economics and obscure history Tom was able to weave into this thing. E.g. he very quickly but elegantly dispatches with typical objections such as, "Well if it was all the Fed's fault, what about the panics before 1913?" and "Doesn't the depression of 1937/38 vindicate Krugman?"
But beyond all that, Tom is just a wonderful writer. I periodically put the book down and just imagine hundreds of thousands of people reading the paragraph I just read, and I think, "Wow, that is so great that Tom just shot that into so many minds. Awesome."
Not that this is even the best passage I've come across, but it's where I am in the book and it illustrates what I mean:
If we want a repeat of [the Depression] years, or if we'd like to share the fate of Japan for the past 18 years, we should listen to Paul Krugman and implement exactly the same policies that gave the world these two disasters. On the other hand, we might for once permit ourselves a heretical deviation from the Official Version of History (TM), cease waving incense before the Great Presidents we are taught to admire, and consider the possibility that the government's efforts to fight depressions may in fact have lengthened them. Let's spare ourselves the ordeal of a ten-year depression--and the added indignity of being told ten years from now that it was the government's brilliant plan that eventually rescued us.
In short, if you have been on the fence about ordering Tom's book--maybe you think that his buddies at LRC are exaggerating its quality--let me go on the record and say believe the hype. If you have a leftist friend who thinks deregulation caused our woes, and your friend is willing to read one book on the matter just to humor you, go ahead and give him Meltdown. (Just make sure it's Tom'sMeltdown, since there is some liberal collection of essays with the same title!) Bob Murphy's blog
With each new revelation on U.S. torture in Iraq, Afghanistan and Gitmo (and who, knows, probably elsewhere), I am reminded of the chilling story of Alyssa Peterson, who I have written about numerous times in the past three years but now with especially sad relevance. Appalled when ordered to take part in interrogations that, no doubt, involved what we would call torture, she refused, then killed herself a few days later, in September 2003.Of course, we now know from the torture memos and the U.S. Senate committee probe and various new press reports, that the "Gitmo-izing" of Iraq was happening just at the time Alyssa got swept up in it.
Alyssa Peterson was one of the first female soldiers killed in Iraq.
A cover-up, naturally, followed.
Peterson, 27, a Flagstaff, Ariz., native, was an Arabic-speaking interrogator assigned to the prison at our air base in troubled Tal Afar in northwestern Iraq. According to official records, she died on Sept. 15, 2003, from a "non-hostile weapons discharge."A "non-hostile weapons discharge" leading to death is not unusual in Iraq, often quite accidental, so this one apparently raised few eyebrows.
The Arizona Republic, three days after her death, reported that Army officials "said that a number of possible scenarios are being considered, including Peterson's own weapon discharging, the weapon of another soldier discharging, or the accidental shooting of Peterson by an Iraqi civilian." And that might have ended it right there.
But in this case, a longtime radio and newspaper reporter named Kevin Elston, not satisfied with the public story, decided to probe deeper in 2005, "just on a hunch," he told me in late 2006 (there's a chapter about it in my book on Iraq and the media, "So Wrong for So Long"). He made "hundreds of phone calls" to the military and couldn't get anywhere, so he filed a Freedom of Information Act [FOIA] request. When the documents of the official investigation of her death arrived, they contained bombshell revelations. Here's what the Flagstaff public radio station, KNAU, where Elston then worked, reported:"Peterson objected to the interrogation techniques used on prisoners. She refused to participate after only two nights working in the unit known as the cage. Army spokespersons for her unit have refused to describe the interrogation techniques Alyssa objected to. They say all records of those techniques have now been destroyed."According to the official report on her death released the following year, she had earlier been "reprimanded" for showing "empathy" for the prisoners.
That was the consistent point in the testimonies, that she objected to the interrogation techniques, without describing what those techniques were."Elston said that the documents also refer to a suicide note found on her body, which suggested that she found it ironic that suicide prevention training had taught her how to commit suicide. He filed another FOIA request for a copy of the actual note.Peterson, a devout Mormon, had graduated from Flagstaff High School and earned a psychology degree from Northern Arizona University on a military scholarship. She was trained in interrogation techniques at Fort Huachuca in Arizona, and was sent to the Middle East in 2003.
A report in The Arizona Daily Sun of Flagstaff -- three years after Alyssa's death -- revealed that Spc. Peterson's mother, Bobbi Peterson, reached at her home in northern Arizona, said that neither she nor her husband Richard had received any official documents that contained information outlined in Elston's report.
In other words:
Like the press and the public, even the parents had been kept in the dark.
THE SCANDAL OF THE WAR-MONGERING NETWORK TV "INDEPENDENT ANALYSTS"
The Pulitzer-winning investigation that dare not be uttered on TV!
The Pulitzer Committee Announcement:"Awarded to David Barstow of The New York Times for his tenacious reporting that revealed how some retired generals, working as radio and television analysts, had been co-opted by the Pentagon to make its case for the war in Iraq, and how many of them also had undisclosed ties to companies that benefited from policies they defended."
The Pentagon's secret collaboration with these "independent analysts" shaped multiple news stories from each of these outlets on a variety of critical topics. Most amazingly, many of them continue to employ as so-called "independent analysts" the very retired generals at the heart of Barstow's story, yet still refuse to inform their viewers about any part of this story.
At issue is Lewis's decision to back away from the merger deal with Merrill Lynch on a MAC (material adverse change) clause because of rapidly deteriorating conditions at Merrill Lynch.
Here are a few pertinent snips from Cuomo's letter:
Immediately after learning on December 14, 2008 of what Lewis described as the "staggering amount of deterioration" at Merrill Lynch, Lewis conferred with counsel to determine if Bank of America had grounds to rescind the merger agreement by using a clause that allowed Bank of America to exit the deal if a material adverse event ("MAC") occurred.
After a series of internal consultations and consultations with counsel, on December 17, 2008, Lewis informed then-Treasury Secretary Henry Paulson that Bank of America was seriously considering invoking the MAC clause. Paulson asked Lewis to come to Washington that evening to discuss the matter.
At a meeting that evening Secretary Paulson, Federal Reserve Chairman Ben Bernanke, Lewis, Bank of America's CFO, and other officials discussed the issues surrounding invocation of the MAC clause by Bank of America. The Federal officials asked Bank of America not to invoke the MAC until there was further consultation. There were follow-up calls with various Treasury and Federal Reserve officials, including with Treasury Secretary Paulson and Chairman Bernanke. During those meetings, the federal government officials pressured Bank of America not to seek to rescind the merger agreement. We do not yet have a complete picture of the Federal Reserve's role in these matters because the Federal Reserve has invoked the bank examination privilege.
Bank of America's attempt to exit the merger came to a halt on December 21, 2008. That day, Lewis informed Secretary Paulson that Bank of America still wanted to exit the merger agreement. According to Lewis, Secretary Paulson then advised Lewis that, if Bank of America invoked the MAC, its management and Board would be replaced.
In an interview with this Office, Secretary Paulson largely corroborated Lewis's account. On the issue of terminating management and the Board, Secretary Paulson indicated that he told Lewis that if Bank of America were to back out of the Merrill Lynch deal, the government either could or would remove the Board and management.
From Amazon.com: Ron Paul, an eleven-term congressman from Texas, is the leading advocate of freedom in our nation's capital. He has devoted his political career to the defense of individual liberty, sound money, and a non-interventionist foreign policy. Judge Andrew Napolitano calls him "the Thomas Jefferson of our day."
After serving as a flight surgeon in the U.S. Air Force in the 1960s, Dr. Paul moved to Texas to begin a civilian medical practice, delivering over four thousand babies in his career as an obstetrician. He served in Congress from 1976 to 1984, and again from 1996 to the present. He and Carol Paul, his wife of fifty-one years, have five children, eighteen grandchildren, and one great-grandchild.
Ron Paul, the New York Post once wrote, is a politician who "cannot be bought by special interests."
"There are few people in public life who, through thick and thin, rain or shine, stick to their principles," added a congressional colleague. "Ron Paul is one of those few."
Lew Rockwell from LRC blog: Thanks (I think) to Roger McCaffrey for reminding me (as he is reminded, he says, by every End the Fed rally) of the Committee To Abolish the Fed, which Ron Paul and I set up almost 25 years ago. "Lew, you were slightly ahead of your time on that one," says Roger.
But now, look for Ron's forthcoming book to cause an earthquake under the central bank, and to ignite a prairie fire in the minds of the American people against the biggest rip-off in the history of the world, the Fed. Ron is building, of course, on what he achieved in his campaign. Now he is taking the anti-Fed movement to an even-higher level. And you can pre-orderEnd the Fed for just $14.28 in depreciating Fed dough. Bernanke and Greenspan, prepare for some sleepless nights. End the Fed at Amazon.com. Pre-order your copy today!
In his testimony Wednesday, Bernanke said he did not believe the central bank would lose money on the deal and said it could make money. He said he did not consider the transaction a bailout because of the losses sustained by Bear Stearns shareholders.
So what is it now Ben? Wanton and intentional destruction of money?
And by the way, The Federal Reserve Act of 1913, as I have repeatedly noted, permits The Fed to make loans to literally anyone under "unusual and exigent circumstances" (so long as they are fully collateralized) but does not permit, under any circumstances, the acquisition of ownership interest in other than securities guaranteed by the full faith and credit of The United States.
THE AMERICAN PRESS HAS NOT ACQUITED ITSELF WELL IN RECENT YEARS...
MISSING IN ACTION ON WMD AND THE ELECTIVE WAR IN IRAQ, AND NOW...
How the Wall Street Journal and the New York Times Buried the Madoff Scandal for at Least Four Years!
What is not in dispute is that, to the Journal’s eternal shame, the story eventually came out only after an avalanche of redemptions left Bernie with nowhere to hide and he turned himself in. In the interim, by remaining silent, the Journal played a devastatingly ignominious role in one of the biggest and most brazen scams in history.
If the Journal’s shame is particularly acute, virtually no one in the wider American financial journalism profession emerges from this fiasco with much credit.
One dog that snoozed in its kennel was the New York Times. The Madoff scam was, of course, a local story for the Times, not least because Times editors undoubtedly knew many of Madoff’s victims socially. It is surprising, to say the least, that no Times person ever seems to have sensed there was something fishy going on in the Lipstick building. The Upper East Side was buzzing with rumors about his apparently sensational investment returns. Many a New York socialite either had money invested with him – and boasted of it in a loud stage whisper – or at least wanted to do so.
Yet it was only on the day of Madoff’s arrest that the Times condescended to inform its readers that many of his more alert peers had sensed he was a fake all along. For years, he had been pegged as an outright Ponzi artist by Goldman Sachs and Credit Suisse, for instance, and he was blacklisted also at Deutsche Bank, Merrill Lynch, and UBS. Indeed, as far back as 1991, CounterPunch contributor Pam Martens, in her capacity as a Wall Street broker, had told him she was on to his game and had so advised a client. For thousands of aggrieved Times readers, who lost their life savings in Bernie’s financial Bates Motel, the question is why they were the last to know.
"If fiscal policy is a disaster, monetary policy is even worse."
It’s true that there are forces tending to shrink the money supply, but Bernanke has more than overwhelmed them. All of the standard measures of the money stock went way up during 2008, even though prices (as measured by the CPI) fell in some months. For example, the monetary aggregate M1 consists of very liquid items such as actual currency held by the public, and checking account deposits. It does not include the monetary base (which we know has exploded through the roof). Even so, look at the annual percentage graph of M1 recently; it’s grown at almost a record rate:
Now the reason prices haven’t exploded is that the demand to hold U.S. dollars has also increased dramatically. (That’s also what happened in the 1980s: the Reagan tax cuts and Volcker’s squelching of severe price inflation made it much more attractive to hold dollars, and so the Fed got away with printing a bunch even though the CPI didn’t increase wildly.)
Once people get over the shock of the financial crisis, the new money Bernanke has pumped into the system will begin pushing up prices. Others have used this analogy before me, but it’s still apt: The U.S. economy right now is like Wile E. Coyote right after he runs off a cliff but hasn’t yet looked down. Once the spell of a “deflationary spiral” is broken by a full quarter of significant price hikes, there will be an avalanche as people come to their senses.
Sorry Bernanke and Paulson, we need more than an off-the-record statement through Steve Liesman on Ken Lewis's claim that he was told to clam up about troubles at Merrill Lynch.
So far, all we have is the Bank of America (BAC) CEO's story, but if Attorney General Andrew Cuomo is actually serious about figuring out what happened, then he has to get both Ben Bernanke and Hank Paulson under oath. And if there are serious disagreements between what they say and what Lewis is saying, then someone's committing perjury.
Hank Paulson admitted to Andrew Cuomo that he threatened to oust Ken Lewis and the Bank of America board if Bank of America invoked a Material Adverse Change (MAC) clause to block the deal, Cuomo says. Paulson also added, however, that he made this threat at the request of Ben Bernanke.
This contradicts Bernanke, who earlier denied (through a Fed spokesman) that he did not threaten Ken Lewis.
PAULSON AND BERNANKE ACCUSED OF SEEKING TO DUPE SHAREHOLDERS!
SHOULD BANK OF AMERICA'S LEWIS BE INDICTED ALONG WITH PAULSON AND BERNANKE? AN S.E.C. INVESTIGATION IS IN ORDER!
WSJ: BofA CEO Lewis testifies to NY AG that Bernanke, Paulson wanted Merrill losses kept quiet!
NEW YORK (AP) -- Bank of America Chief Executive Kenneth Lewis told the New York attorney general he believed former Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke wanted him to keep quiet about the worsening terms of the bank's acquisition of Merrill Lynch, according to testimony reviewed by The Wall Street Journal.
The New York AG's office plans to release the testimony on Thursday to federal regulators and overseers of bailout funds and banks, the newspaper reported after reviewing a transcript. "We believe we acted legally and appropriately with regard to the Merrill Lynch transaction," Bank of America spokesman Scott Silvestri told The Associated Press Thursday.
He declined further comment about the report.
Lewis testified in February to New York Attorney General Andrew Cuomo's office, which has been trying to determine if Merrill and Charlotte, N.C.-based Bank of America failed to provide adequate disclosures to shareholders about the more than $15 billion in losses Merrill incurred in the 2008 fourth quarter and hefty bonus payments. Had they had that information, BofA shareholders might have voted down the deal.
The Journal said in Thursday's edition that Lewis doesn't say in the transcript that he was told specifically to remain silent about Merrill's burgeoning losses. But the paper quotes Lewis as testifying that disclosing that information "wasn't up to me," and that he was warned by Paulson and Bernanke that failing to complete Merrill's takeover would "impose a big risk to the financial system."
Fascism will come at the hands of perfectly authentic Americans who have been working to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing billions every year and spending them on all sorts of projects through which such a government can paralyse opposition and command public support; marshalling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our nation’s greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination – all to be done under the authority of a powerfully centralised government in which the executive will hold in effect all the powers, with Congress reduced to the role of a debating society.
While Archimedes is rightly revered for his many imperishable contributions to science, he could also be considered the first recorded victim of lethal police brutality.
A native of Syracuse, Archimedes did his considerable best in the doomed but worthy effort to repel Roman invaders. Following the conquest, Roman soldiers were dispatched to "pacify" the restive streets of the newly conquered city.
One afternoon, so the story goes, Archimedes was sitting inoffensively at the side of a street drawing geometric equations in the sand when some mouth-breather in Roman military garb trod heedlessly on the improvised tablet, ruining the elderly scientist's calculations.
By this time, the venerable physicist was in his ninth decade, and he saw no point in enduring this act of thoughtless vandalism by an armored imbecile to pass without protest.
"Please don't disturb my circles," Archimedes insisted in what was probably a direct but polite tone of voice.
Like law enforcement officers who would follow in his footsteps – albeit in jackboots rather than sandals – the Roman soldier took offense that a mere civilian, and an elderly one at that, would demand deference from someone wearing the uniform and insignia of authority.
If the technology had been available, the Roman quite likely would have given Archimedes a "ride on the Taser." Instead, the thug withdrew his sword and summarily killed him.
From LRC blog: The Recipe for "Instant Fascist " ... Posted by William Grigg at April 22, 2009 03:10 PM
... just take one self-enraptured jerk, and add a badge:
Notice how the visibly deranged and physically unremarkable tax-feeder, one "Sgt. Ramirez," justified his attack on journalists Darren Hunt and Ric DuPont by snarling, "I'm giving you an order!" This is a product of the Martial Law Mind-set, in which mundanes (ordinary citizens) are required to render instant, unquestioning obedience to any demand that dribbles down the tax-fattened chin of someone wearing a state-issued costume.
Today I interview James Ostrowski, libertarian extraordinaire, lawyer, writer, and tea party organizer. Mr. Ostrowski is the founder of Free Buffalo (2005), and author of the tea party manifesto, "How We Can Win the Second American Revolution Without Firing a Shot." He's been fighting the political machine for 35 years.
ILANA: The tea party protests across the country are all fueled by that indomitable America spirit. And that's good. However, most tea protesters have yet to arrive at the principles that undergirded the American Revolution. Explain.
OSTROWSKI: What we have now in America is so far from the original idea that it would be unrecognizable to the Founders. The old Republic slipped away long ago and while it's not possible to pinpoint the date, I like to say 1917. That year we entered World War I. War leads to higher taxes and the level of federal spending has never returned to pre-World War I levels. Domestically, the twin evils of the income tax and the Federal Reserve started to kick in around then too. So, forget Obama, we need to clear away the dead wood of the Progressive Era to even begin to see what a true Republic would look like. I don't think most tea protesters are there yet but perhaps they can be persuaded. In any event, we need to go far beyond simply bashing Obama and pork.
ILANA: I was coming to that. You've warned of tea parties that focus their attack on Obama and the 'Democrats"; whose "own positive agenda is rather thin and focuses on Pavlovian rank and file buzz words like 'pork.'" Or tax tweaks to the exclusion of slashing government. You've cautioned of phonies who aim, in your words, "to return power to the same set of degenerate creeps who set the stage for the God Obama's final sacking of America"─Newt Gingrich, Mitt Romney, John McCain, Tom DeLay, Dick Armey, Lindsey Graham. What sort of agenda will help restore the republic and ward off the Republicans?
OSTROWSKI: I lay out a bold but simple plan, which starts with bringing the troops home and using the savings to begin to liquidate the federal welfare state by buying out Socialism Security recipients with lump sum payments. That paves the way for repeal of the 16th Amendment. Of course, we need to end the Fed and allow the market to determine the forms of money. The market usually chooses gold and silver. Now, establishment Republicans will not go along with that but I am convinced the rank and file will. We kill two birds with one stone. Read the rest...
In a move signaling his most direct involvement in the U.S. auto industry to date, President Barack Obama announced today that he was opening a Chevrolet dealership on the White House lawn.
As car-carriers dumped hundreds of unsold 2009 Malibus, Silverados and Cobalts onto the grass in front of the President's historic residence, workmen draped a banner in front of the White House portico reading "Buy a Chevrolet from the USA."
Another crew of workers were busy erecting a new sign in front of the White House reading "Barry's Auto City," the name of Mr. Obama's dealership.
In a new TV ad broadcast nationwide, the president was seen wearing an Uncle Sam costume and telling the American people, "We are slashing prices on 2009 Chevys to make room for the 2010s, if there still are Chevys by then."
Chief of Staff Rahm Emanuel said that all Cabinet members were taking turns running the dealership, and that Vice-President Joe Biden was manning the customer service hotline.
THE CONCLUSION IS UNAVOIDABLE: Bush Pushed Torture in Desperate Attempt to Find Political Cover for War!
Report: Abusive tactics used to seek Iraq-al Qaida link!
McCLATCHY NEWSPAPERS, WASHINGTON — The Bush administration applied relentless pressure on interrogators to use harsh methods on detainees in part to find evidence of cooperation between al Qaida and the late Iraqi dictator Saddam Hussein's regime, according to a former senior U.S. intelligence official and a former Army psychiatrist.
Such information would've provided a foundation for one of former President George W. Bush's main arguments for invading Iraq in 2003. In fact, no evidence has ever been found of operational ties between Osama bin Laden's terrorist network and Saddam's regime.
The use of abusive interrogation — widely considered torture — as part of Bush's quest for a rationale to invade Iraq came to light as the Senate issued a major report tracing the origin of the abuses and President Barack Obama opened the door to prosecuting former U.S. officials for approving them.
Former Vice President Dick Cheney and others who advocated the use of sleep deprivation, isolation and stress positions and waterboarding, which simulates drowning, insist that they were legal.
A former senior U.S. intelligence official familiar with the interrogation issue said that Cheney and former Defense Secretary Donald H. Rumsfeld demanded that the interrogators find evidence of al Qaida-Iraq collaboration.
In Adam Smith, the idea is that each individual pursuing his own self-interest is led, as if by an invisible hand, to promote the interest of society. The idea of the invisible hook is that pirates, though they’re criminals, are still driven by their self-interest. So they were driven to build systems of government and social structures that allowed them to better pursue their criminal ends. They’re connected, but the big difference is that, for Adam Smith, self-interest results in cooperation that generates wealth and makes other people better off. For pirates, self-interest results in cooperation that destroys wealth by allowing pirates to plunder more effectively.
... The sailors had more freedom and better pay as pirates than as merchantmen. But perhaps the most important thing was freedom from the arbitrariness of captains and the malicious abuses of power that merchant captains were known to inflict on their crews. In a pirate democracy, a crew could, and routinely did, depose their captain if he was abusing his power or was incompetent.
Myths about the Great Depression were once a mere annoyance. Now they have become a source for tyranny. The Bush-Obama response to the meltdown proves that one thing is certain: until we get the history of the 1930s right, liberty will be under threat of those trying to repeat the drama.
Thank goodness Robert Murphy has come along to straighten out the mess in a way that everyone can understand. In this hard-hitting book, we find the most accessible and most truth-telling book about the Great Depression and the New Deal that has ever been written.
Free-market economists have been working for decades to make the record of the calamity clear. This book may just be the magic bullet we've been looking for to kill off the myths before they kill us.
He puts together in one easy package the research of hundreds of scholars, showing that the it was not capitalism that failed in 1929 but the boom times created by Fed credit expansion. Murphy takes aim at the Chicago School economists and the Keynesians who continued to be in denial on this central point. Read the rest... Jeff Tucker, Mises.org
And while you're at it: if you want to find out how we got into the current mess, look here.
And if you want to find out about a whole bunch of other stuff relating to economics, look here.
The 'Newspaper of Record' Is Going the Way of the Record
The New York Times is losing even more money. The newspaper that has been for so long the mouthpiece for the establishment is going broke. The inky pulp that has propagandized every war, every tax, every eavesdropping, and every other expansion of government that benefited the power elite, will be no more. The smear sheeet that has demonized every opponent of the state will be history. They don't call it a correction for nothing. Lew Rockwell on LRC blog
JIM ROGERS ISN'T BUYING STOCK MARKET "RECOVERY"...
"I am skeptical about the rally, and the world economy for the next year or two or three," he says. "But if stocks go down, I can make money with commodities."
He's about to release his latest book, A Gift to My Children: A Father's Lessons for Life and Investing (Random House).
Q: Now despite the recent stock-market rally that started in March, many U.S. stocks are trading well off their 2007 highs. How come you see no value to this market?
A: I am not buying U.S. companies mainly because I think we may have seen a bottom but I don't think we have seen the bottom. I am skeptical about the rally, the world economy for the next year or two or three. But if stocks go down, I can make money with commodities. In the 1970s, commodities went through the roof even though stocks were a disaster. In the 1930s, commodities rallied first and went up the most long before stocks pulled it together.
Q: What do you think of bonds?
A: I am anticipating shorting bonds -- the U.S. long bond. It's about the only real bubble around that I can see right now -- other than the U.S. dollar. I am not shorting bonds at this moment because I've shorted plenty of bubbles in my day, and I have learned that you better wait because they go up higher than any rational person can anticipate. But my plan is to short the long bond in the U.S. sometime in the foreseeable future.
I think many readers will get the wrong impression from the blog back and forth between Joe Salerno and myself. So let me be clear about something. I respect greatly the work that Lew Rockwell and Jeff Tucker have done over the years at the Ludwig von Mises Institute even if I pursue my professional activities in a different direction and in a different contest.
The Mises Institute is the world's leading web-based resource for Austrian economics. Students interested in Austrian economics benefit greatly from the books and articles made available on their website. Also, the Mises Institute sponsors conferences that bring students in from throughout the world to learn about the teachings of Mises. And the scholars associated with the Mises Institute publish widely and have a broad audience. Boettke's blog
FBI SEARCHES FOR TERRORISTS IN DRESSING ROOMS OF YOUNG GIRLS
MORGANTOWN, W.Va. — Two FBI workers are accused of using surveillance equipment to spy on teenage girls as they undressed and tried on prom gowns at a charity event at a West Virginia mall.
The FBI employees have been charged with conspiracy and committing criminal invasion of privacy. They were working in an FBI satellite control room at the mall when they positioned a camera on temporary changing rooms and zoomed in for at least 90 minutes on girls dressing for the Cinderella Project fashion show, Marion County Prosecutor Pat Wilson said Monday.
Gary Sutton Jr., 40, of New Milton and Charles Hommema of Buckhannon have been charged with the misdemeanors and face fines and up to a year in jail on each charge if convicted. Sutton has been released on bond, Wilson said, and Hommema is to be arraigned later this week. Wilson did not know Hommema's age. ComcastNews
You report that President Obama today "challenged" his cabinet to "cut the budget by $100 million" ("Obama to Cabinet: Cut $100 Million from Budget," April 20).
What courage. A President who proclaims the importance of making "hard choices" calls upon his government to trim away a whopping one thirty-six-thousandth of its projected expenditures for the year - or, alternatively reckoned, one twelve-thousandth of it projected budget deficit.
To put this budget "cut" in perspective, suppose that the typical American family, earning $50,000 annually, plans this year to run a budget deficit similar in proportion to its income as the deficit that Uncle Sam will run in proportion to his tax take. Such a family would plan to spend $75,000. Now suppose that this family, seeking to signal its commitment to financial prudence, promises spending cuts equal in proportion to its budget to the cuts that Mr. Obama announced today.
This family would declare – surely with much fanfare - that it will reduce its planned expenditures by $2.09! Perhaps it might promise to survive the year with one less gallon of gasoline or with one less cup of coffee.
Who would take such a gesture to be anything other than audacious sarcasm by the chronically irresponsible?
Sincerely,
Donald J. Boudreaux Chairman, Department of Economics George Mason University Fairfax, VA 22030
HOUSING BUST, WORSE THAN EVER, COMES ROARING BACK!
In March, housing prices fell faster than anytime in the last two years. Trend-lines are now steeper than ever before, nearly perpendicular. Housing prices are not falling, they're crashing and crashing hard. Now that the foreclosure moratorium has ended, Notices of Default (NOD) have spiked to an all-time high. These Notices will turn into foreclosures in 4 to 5 months time creating another cascade of foreclosures. Market analysts predict there will be 5 million more foreclosures between now and 2011. Soaring unemployment and rising foreclosures ensure that hundreds of banks and financial institutions will be forced into bankruptcy. 40 percent of delinquent homeowners have already vacated their homes. There's nothing Obama can do to make them stay. Worse still, only 30 per cent of foreclosures have been relisted for sale suggesting major hanky-panky at the banks....
The Fed's $12.8 trillion of monetary stimulus has triggered a six week-long surge in the stock market. Think of it as Bernanke's Bear Market Rally, a torrent of capital gushing from every leaky valve and rusty pipe in the financial system. The Fed's so-called "lending facilities" are a joke; stocks rocket into the stratosphere while the broader economy is stretched out corpse-like on a cold marble slab.
POLITICAL MEDDLING IN THE MORTGAGE MARKET BEARS MORE ROTTEN FRUIT!
On the company's conference call, Bank of America CFO Joe Price said the Community Reinvestment Act book accounts for 7% of the total in residential mortgages, but 24% of the losses.
Congress designed Fannie (Mae)and Freddie (Mac) to serve both their investors and the political class. Demanding that Fannie and Freddie do more to increase home ownership among poor people allowed Congress and the White House to subsidize low-income housing outside of the budget, at least in the short run. It was a political free lunch.
The Community Reinvestment Act (CRA) did the same thing with traditional banks. It encouraged banks to serve two masters -- their bottom line and the so-called common good. First passed in 1977, the CRA was "strengthened" in 1995, causing an increase of 80% in the number of bank loans going to low- and moderate-income families.
Fannie and Freddie were part of the CRA story, too. In 1997, Bear Stearns did the first securitization of CRA loans, a $384 million offering guaranteed by Freddie Mac. Over the next 10 months, Bear Stearns issued $1.9 billion of CRA mortgages backed by Fannie or Freddie. Between 2000 and 2002 Fannie Mae securitized $394 billion in CRA loans with $20 billion going to securitized mortgages.
By pressuring banks to serve poor borrowers and poor regions of the country, politicians could push for increases in home ownership and urban development without having to commit budgetary dollars. Another political free lunch.
Beware of trying to do good with other people's money. Unfortunately, that strategy remains at the heart of the political process, and of proposed solutions to this crisis.
Below I’ve posted a conversation between Friedrich Hayek and Leo Rosen from 1978 in which Hayek presents some of his conclusions about the relationships between statistics, probability theory, and macroeconomic explanation.
Note well when reading the following that Friedrich Hayek’s first job as an economist had Hayek up to his eyeballs in the collection and statistical analysis of economic data. And ditto Hayek’s second job as lead economist for the Austrian Institute of Trade Cycle Research. So statistics analysis and economic data collection were a central part of Hayek’s early life as a working economist. Read the rest...
This requires a full-length Mises.org treatment, especially the "clever" idea of randomly destroying 10% of the currency. ("Huh? What kind of straw man argument is that, Murphy?!" Check it out, my friend.)
For now, let me just complain about our culture's utter inability to believe that government officials--and yes Bernanke is a government official--might be wrong or lying.
Consider this: Mankiw is saying that Bernanke ought to commit to inflation in order to fix the economy. Well what the HECK do you call this, Prof. Mankiw?!?!?!
Does Bernanke have to actually utter the words, "We will have massive CPI increases" in order for it to be true? Does he need to preface it with "Simon says"? Murphy's blog
Since late 2007, more and more commentators have drawn parallels between our current financial crisis and the Great Depression. Nobel laureates and presidential advisorsconfidently proclaim that it was Herbert Hoover’s laissez-faire penny pinching that exacerbated the Depression, and that the American economy was saved only when FDR boldly ran up enormous deficits to fight the Nazis. But as I document in my new book, The Politically Incorrect Guide to the Great Depression and the New Deal, this official history is utterly false.
Let’s first set the record straight on Herbert Hoover’s fiscal policies. Contrary to what you have heard and read over the last year, Hoover behaved as a textbook Keynesian after the stock market crash. He immediately cut income tax rates by one percentage point (applicable to the 1929 tax year) and began ratcheting up federal spending, increasing it 42 percent from fiscal year (FY) 1930 to FY 1932.
But to truly appreciate Hoover’s Keynesian bona fides, we must realize that this enormous jump in spending occurred amidst a collapse in tax receipts, due both to the decline in economic activity as well as the price deflation of the early 1930s. This combination led to unprecedented peacetime deficits under the Hoover Administration – something FDR railed against during the 1932 campaign!
How big were Hoover’s deficits? Well, his predecessor Calvin Coolidge had run a budget surplus every single year of his own presidency, and he held the federal budget roughly constant despite the roaring prosperity (and surging tax receipts) of the 1920s. In contrast to Coolidge – who was a true small-government president – Herbert Hoover managed to turn his initial $700 million surplus into a $2.6 billion deficit by 1932. Read the rest...Bob Murphy LRC
The merger of corporate and government powers in modern America is plain and simple fascism, believes Gerald Celente, the founder of the Trends Research Institute and publisher of Trends Journal.
Celente takes an in-depth look at what AIG and Goldman Sachs really are and the people behind them; explains the policies of the Obama’s administration, and the moral basis for a forthcoming new American Revolution.
RT: I’d like to begin by talking about the Treasury department. They’ve decided to extend bailout funds to a number of struggling life insurance policies. This is in addition to the auto industry and the banks. Do you think Americans are aware of what’s going on?
G.C.: They know about it, it’s a new trend. America is going from what used to be the major capitalistic country in the world of free market – a crusader – into what Mussolini would have called fascism: the merger of state and corporate powers. So it is not socialism as people believe, it is socialism’s egalitarianism. It’s not communism where the state controls monopolies – it’s fascism, plain and simple. The merger of corporate and government powers. State-controlled capitalism is called fascism, and fascism has come to America in broad daylight. But they’re feeding them it in little bits and pieces. First AIG was too big to fail. Mortgage companies Fannie Mae and Freddie Mac were too big to fail. Banks too big to fail and auto companies. And now we give money to the people that make the auto parts. And now there’s talk about the technology companies, wanting their piece of the action. The merger of state and government is called fascism. Take it from Mussolini; he knew a thing or two about it. Gerald Celente in Russia Today
NOW THIS IS THE RECEPTION ALL THE BAILOUT SUPPORTING CONGRESSMEN SHOULD HAVE GOTTEN...
... BUT THEY DIDN'T! Most of them go about their business of plundering the people in Washington and then expressing solidarity with their hapless and clueless victims back home by speaking at their protests!
US President Barack Obama's decision not to prosecute CIA agents who used torture tactics is a violation of international law...
Mr Obama on Thursday said he would not prosecute under anti-torture laws CIA personnel who relied in good faith on Bush administration legal opinions issued after the 11 September attacks.
Mr Nowak - who is due to travel to Washington to meet with officials - said that could be a mitigating factor, but does not absolve those involved.
"The fact that you carried out an order doesn't relieve you of your responsibility," he was quoted as saying by AP news agency.
SOCIAL SECURITY AND MEDICARE WILL COST MORE THAN...
... THE VALUE OF EVERYTHING IN THE UNITED STATES!
Social Security and Medicare won't require higher taxes. Now here's the bad news: the reason these programs won't require higher taxes is that they'll be so expensive that there's no possible way to pay for them through taxes. Everything in the US (not counting people) is worth about $50 trillion and those two programs will cost $80 trillion, unless they are reformed. - Clusterstock.com
Amid an “inflationary depression” in the U.S., Peter Schiff, president and chief global strategist of Euro Pacific Capital, sees opportunities in the maelstrom. Facing a massive redistribution of wealth, he advises investors to act quickly and “divest U.S. dollar assets into physical precious metals, other currencies and equities outside the United States.” In this exclusive interview with The Gold Report, the widely-quoted expert on money, economic theory and international investing discusses what led up to our current “phony economy” and how investors can actually profit from the crisis.
The Gold Report: Peter, you were one of few people to predict financial crisis that the U.S. and the world is now in the midst of. At a recent conference, you called the conditions that we’re facing “an inflationary depression.” Can you describe what you mean by that?
Peter Schiff: Well, basically, that is the condition that the government is creating here in the United States, and an inflationary depression is going to be a protracted period of economic decline accompanied by rapid increases in consumer prices. So, it’s going to be something like the stagflation of the 1970s, only much more stagnation, or outright contraction of the economy, with the cost of living increasing even more rapidly than it did then. Stockhouse.com
Posted by Anthony Gregory at April 17, 2009 06:17 PM
The grassroots spirit at the tea parties was great, but it seems many were hijacked by organized conservatives, Republican partisans, and Fox News-style corporate interests. I hear that at many the speakers were exclusively of the red-state fascist persuasion, thanks to the sectarian organizers.
This reminds me of an analog in the antiwar movement. At peace protests, often the organizers, especially such Marxist groups like A.N.S.W.E.R., do their best to keep non-socialist speakers out of the fray. They thus water down the appeal of the peace message, while packaging it with calls for domestic state power. Similarly, the Tea Party Bushies want to control the message and keep it in line with their own statist agenda. Rush Limbaugh warns, for example, not to let the Tea Parties encourage any effort in third parties -- the GOP plantation is where all resentful of Obama belong.
There is a difference, however, between the antiwar sectarian commies and the anti-tax sectarian neocons – the latter has had more than a chance with power in this country, and we already know what their program brings: endless wars, lies, torture, inflation, and the world's biggest bubble. LRC blog
Obama’s lucky to have succeeded a terrible president.
Retail sales crashed again in March, nowhere worse than in the car market, though electronics and building materials were way off too. They now reckon there’ll be just over two million housing foreclosures in 2009, up 400,000 from 2008. Industrial output is going through the floor at an annual rate of 20 per cent, the biggest quarterly drop since the end of the Second World War. US industry is now running at only 70 per cent of capacity, the worst number since they started tracking this stat in 1967. Job losses are currently running at 650,000 a month.
He gets out a lot and talks a great game. His problem is the same as the country’s. The economic ice is cracking under his feet, and the “stimulus” is going to be about as efficacious as those cushions under the seats the flight attendants assure us are going to come in handy when the plane goes down in the North Atlantic.
Today marks the centenary of Ayn Rand's birth. Born Alisa Rosenbaum in St. Petersburg, Russia, on February 2nd, 1905, Rand would go on to become one of the 20th century's foremost voices for human freedom.
After living through the Russian Revolution, and the economic chaos and political repression that came in its wake—events she would later dramatize in her novel We the Living—Rand fled the Soviet Union for the United States in 1926 to begin her career as screenwriter, playwright, and novelist. Dividing her time between Hollywood and New York, the fiercely anticommunist Rand began to develop a philosophy of ethical and political individualism, and to make the acquaintance of such leaders of the libertarian "Old Right" as John Flynn, Henry Hazlitt, Rose Wilder Lane, H.L. Mencken, Isabel Paterson, Leonard Read, and a fellow refugee from European totalitarianism, Austrian economist Ludwig von Mises.
Rand's chief popular success came from The Fountainhead (1943) and Atlas Shrugged (1957), two epic philosophical novels on the model of Dostoyevksy that quickly established her as one of the century's most controversial authors. The enthusiastic audience these works brought her enabled Rand to build a politico-philosophical movement based on the system of thought she would call "Objectivism," and Rand's attention accordingly turned thereafter to nonfiction; she would devote the remainder of her career to editing a series of Objectivist periodicals and to penning philosophical essays, political commentary, and cultural criticism.
Rand always stressed the importance of placing political arguments in a wider philosophical context, insisting that she was "not primarily an advocate of capitalism, but of egoism," and "not primarily an advocate of egoism, but of reason."
Rand's influence on the libertarian movement is incalculable; despite her own frequent antipathy toward that movement and even toward the word "libertarian," Rand played a crucial role in helping both to create new advocates of laissez-faire and to radicalize existing ones; Rand encouraged libertarians to view their standpoint as an alternative to, rather than a branch of, conservatism, and to base the case for liberty on moral principle and not on pragmatic economic benefits alone. Rand's influence on popular culture is likewise enormous; an oft-cited Library of Congress survey of "most influential books" placed Atlas Shrugged second only to the Bible. Read the rest
BUSH ADMINISTRATION APPROVED THE USE OF INSECTS IN INTERROGATIONS!
The Bush Administration Office of Legal Counsel authorized the Central Intelligence Agency to put insects inside a confinement box as part of the Administration's "harsh interrogation" practice, as well as throwing detainees into walls, according to memos released by President Barack Obama on Thursday.
"You would like to place Zubadayah in a cramped confinement box with an insect. You have informed us he has a fear of insects," the Bush White House said.
Forget the fact that we are all going to be taxed to the mizax* because of Obama's Bush Squared spending. This really annoyed me:
President Obama seized the opportunity on tax-filing day to assert that his administration is easing the tax burden of working people.
At the same time, protesters are expected to mark April 15 with demonstrations in hundreds of U.S. cities, including so-called "tea parties" to criticize Obama's tax policies.
"We have delivered real and tangible progress for the American people. I am proud to announce that my administration has lessened the tax burden on working families while also restoring some balance to the tax code," Obama said in remarks prepared for delivery Wednesday at a White House event.
Sure, there are some super rich people who don't work. But to refer to those making under $200k as "working families"--implying that, say, a hedge fund husband and corporate attorney wife living in NYC and pulling in a household income of $350k aren't a "working family"?!?! Are you kidding me?
In a different context, liberals would be criticizing this same couple for their materialism and dumping their kids off in child care so that they could "chase the Joneses" and work 70-hour weeks to get that yacht.
A priceless — and timeless — quotation from Friedrich Hayek:
It is a curious fact that the general disinclination to explain the past boom by monetary factors has been quickly replaced by an even greater readiness to hold the present working of our monetary organization exclusively responsible for our present plight. And the same stabilizers who believed that nothing was wrong with the boom and that it might last indefinitely because prices did not rise, now believe that everything could be set right again if only we would use the weapons of monetary policy to prevent prices from falling.The same superficial view, which sees no other harmful effect of a credit expansion but the rise of the price level, now believes that our only difficulty is a fall in the price level, caused by credit contraction.
Nobel Prize winner Edmond Phelps channels Friedrich Hayek and re-introduces Frank Knight in a brutal take-down of a failed generation botching up the works because they are fatally ignorant of how a capitalist economy actually works. What Phelps is too delicate to say is that the elite have been well schooled in their ignorance by professors of economics who have drilled them in mathematical constructions which can do nothing else but create a deep misunderstand of the market process and the inherent economic uncertainty which exists within that process.
In this section, Phelps contrast the inadequate economic vision of Joseph Schumpeter with the deeper insights of Friedrich Hayek:
Well into the 20th century, scholars viewed economic advances as resulting from commercial innovations enabled by the discoveries of scientists – discoveries that come from outside the economy and out of the blue. Why then did capitalist economies benefit more than others? Joseph Schumpeter’s early theory proposed that a capitalist economy is quicker to seize sudden opportunities and thus has higher productivity, thanks to capitalist culture: the zeal of capable entrepreneurs and diligence of expert bankers. But the idea of all-knowing bankers and unerring entrepreneurs is laughable. Scholars now find that most growth in knowledge is not science-driven. Schumpeterian economics – Adam Smith plus sociology – captures very little.
Friedrich Hayek offered another view in the 1930s. Any modern economy, capitalist or state-run, is a great soup of private “know-how” dispersed among the specialised participants. No one, he said, not even a state agency, could amass all the knowledge that each participant “on the spot” inevitably acquires. The state would have no idea where to invest. Only capitalism solves this “knowledge problem”.
Later, Hayek fleshed out a theory of how capitalism makes “discoveries” on its own. He had no problem with the concept of an innovative idea, for he understood that, even among experts, knowledge is incomplete about most things not yet tried. So he felt free to suppose that, thanks to the specialised insights each acquires, a manager or employee may one day “imagine” (as Hayek’s hero, David Hume, would have put it) a commercial departure – one that could not be inferred or envisioned by people outside the individual’s line of work. Then he portrays a well-functioning capitalist system as a broad-based, bottom-up organism that gives diverse new ideas opportunities to compete for development and, with luck, adoption in the marketplace. That “discovery procedure” makes it far more innovative than the top-down systems of socialism or corporatism. The latter are too bureaucratic to learn about ideas from below and unlikely to obtain approval from all the social partners of the ideas that do get through ... Greg Ransom
Veteran investor and world traveler Jim Rogers' new book, A Gift to My Children: A Father's Lessons for Life and Investing, will be published by Random House on Apr. 28.
BusinessWeek investing reporter David Bogoslaw spoke by telephone with Rogers, who now lives in Singapore with his wife and two young daughters (ages five and one). Here's what he had to say about investing, the financial crisis, and lessons learned....
WHY THE INFLATION GENIE, ONCE UNCORKED, WON'T BE REBOTTLED!
Ben Bernanke would like you to believe inflation will be quiescent and he can vanquish it if it ever becomes a problem. Just make sure you don't invest as though you believe him.
The economy is cratering, so the Fed is printing money. When the Fed prints money, this eventually produces inflation (more dollars, same amount of goods).
Ben Bernanke assured us yesterday that, this time, the Fed's money-printing won't eventually lead to inflation because the moment the economy begins to recover, the Fed will stop printing money and start burning it. Specifically, the Fed will start selling assets instead of buying them and thus shrink the money supply.
Unfortunately, Ben is unlikely to keep this promise.
IF THE GOVERNMENT IS GOING TO SET INTEREST RATES...
WHY EVEN BOTHER HAVING A CREDIT MARKET?
John McCain was widely lambasted for once saying in a debate: "I'm glad whenever they cut interest rates, I wish interest rates were zero."
McCain's view, clearly, was conventional wisdom. His mistake, really, was just exposing the clownish simplicity of the way government likes to think of things.
That one line exposed him as being totally ignorant on economics. What a buffoon.
Except that when you take a (slightly) closer look, this attitude is generally in keeping with the way a lot of politicians think. Interest rates are fiercely politicized, and the general thinking among politicians is: the lower the better.
The Department of Homeland Security released a report warning of the potential rise of right wing extremism due to the slumping economy. There are no specific threats discussed in the report, just a general warning to local and state authorities to be on the look out for "right wing extremist" groups to take advantage of the current economic situation to recruit new members and engage in threatening actions (among the groups lumped together btw include not only neo-nazi groups, but anti-BIG government, anti-abortion, and gun ownership advocates). Not sure but I imagine that Austro-libertarian types like me would be considered harmless and egg-headed quacks.
The question I have doesn't relate to the list or to what constitutes a "dangerous threat" but a more basic empirical point -- is there any evidence to suggest that economic slumps breed right wing extremism any more than left wing extremist groups? Moreover, is there evidence that right right groups are more dangerous than left wing groups?
(For those perplexed by the title, I am alluding to the coolest palindrome ever.) I met this guy at my talk in Boston to Suffolk Law students. He told me that Panama had no central bank, and its macroeconomic performance has been just fine, thank you very much. In fact the Panamanian constitution says:
"There will be no forced fiat paper currency in the Republic. Thus, any individual can reject any note that he may deem untrustworthy."
Let me very briefly explain why all the people talking about "credit unwinding" etc.--and making comparisons to the Great Depression--are missing a big point. From 1929-1933, the quantity of money (let's say M1) declined by about one-third. During 2008, M1 increased by 17%. OK, everyone got that? Not only did Bernanke prevent the quantity of money held by the public from falling, he boosted it at one of the highest annual rates in history. I'm not talking about bank reserves or the Fed's balance sheet--which Bernanke of course has exploded--I'm talking about cash in circulation and checking account balances.
It’s wonderful that rightwingers are making noise all around America through the Tea Party tax protests. We must remember, however, that this April 15th we are still suffering the burden of Bush’s leviathan government. We are filing for 2008, the last year of Republican rule. We are still and will long be enduring the cost of Bush’s wars, spending and bailouts. We should be wary of letting the Republican establishment co-opt the grassroots, anti-government spirit of these protests and turn them into a platform to shill for GOP statism.
For eight years, Republican protest of income taxation was scant. Some conservatives complained quietly about Bush’s domestic welfare spending, but all in all they were apologists for the regime we are still paying for. They certainly did not talk about the state as their enemy, as many of them do today. The quickness of their transition to opposition rhetoric has been staggering.
"Tyranny vs. liberty," "the collective vs. the individual," "the state vs. you" – this is suddenly the language of the conservative movement. Well, that is not quite right: The conservatives have still maintained their excitement about national greatness and war...
Conservatives complain about government listing them as potential violent agitators due to their anti-tax, pro-gun politics, but mostly defended the Bush government as it spied on antiwar activists and created the fusion centers that now associate conservative ideas with dangerous militias. The conservatives worry about Obama putting the UN above the American system of government, yet they thought a UN mandate was plenty good reason to go to war with Iraq, regardless of having no official Congressional declaration of war. The conservatives fear national service, but for much of the last decade, serving the nation-state and especially its enforcement agencies was considered the height of patriotism. They now say Obama’s social planning will fail in America; for years they championed U.S. economic planning and public works projects in Iraq... Read the rest LRC
THE DEPT. OF FATHERLAND SECURITY WANTS TO WARN YOU...
Says this Department of Homeland Insecurity report: "rightwing extremists may be gaining new recruits by playing on their fears about several emergent issues. The economic downturn and the election of the first African American president present unique drivers for rightwing radicalization and recruitment."
I've said time and time again that the government (think Eric Holder's hate speech) is trying to fan the flames of a race war in this country. And they are trying to set it up so that they can blame peoples' rebellion on the fact that Obama is (half) black and not the fact that the government, under Bush and now Obama, has stepped up its totalitarian, Communist, Fascist, Socialist agenda faster than ever. DeCoster LRC blog
Regarding Gordon Crovitz's "Wikipedia's Old-Fashioned Revolution" (Information Age, April 6): The genesis of Wikipedia was an economics class that Jimmy Wales took when he was a student at Auburn University. Taught by Mark Thornton, much of the discussion centered around the 1945 paper by Nobel-winner F.A. Hayek titled "The Use of Knowledge in Society."
That paper argued that socialism with its central planning simply could not keep up with the real knowledge in society because the kind of knowledge needed to power an economy is dispersed in society and cannot be brought together with central planning, with its political arrogance. Instead, it is brought together via a price system and private property, the key ingredients of a market economy.
Mr. Wales brought that concept to Wikipedia, and that is why it has flourished. The founding truth of Wikipedia also is the truth behind the reason that President Barack Obama's attempt at a "planned economy" will fail, as all socialist or quasi-socialist "experiments" always do.
AMERICANS THOUGHT IT WELL AND GOOD TO TAX THE RICH...
THE POLITICS OF ENVY... IT ALWAYS BACKFIRES!
The 16th Amendment to the Constitution was ratified because the income tax was only for the rich. Some states ratified the amendment because no one in the state had an income high enough to be subject to the tax.
According to the US Department of the Treasury’s history of the income tax, less than one percent of the US population was subject to the income tax. A progressive structure was applied to this less than one percent of rich Americans, with rates ranging from 1 percent to 7 percent on incomes over $500,000, a great sum of money in those days.
In the first year of the income tax, the world’s richest person, John D. Rockefeller, paid $2 million in income tax, almost 3 percent of the total income tax collected.
People were happy. They had finally gotten the rich.
And themselves as well. Exemptions were reduced and tax rates were raised in rapid succession in 1916, 1917, and 1918. Within five years the tax rates ranged from 6 percent to 77 percent, and people whose incomes were initially exempt now paid tax at more than double the initial top rate that had applied to John D. Rockefeller.
In "free" America today, despite the Kennedy, Reagan, and Bush tax rate reductions, ordinary Americans have no more claim to their own labor than a medieval serf. Most are content, however, with handing over 30 percent of their income as long as they can hope to tax the rich at 50 percent, the tax rate on 19th-century slaves.
Monday afternoon, Goldman Sachs reported much larger than expected first quarter profits, and this comes on the heels of Wells Fargo’s strong earnings reported last week.
No one should be surprised.
The Federal Reserve has provided the banks with lots of cheap funds through its various emergency lending facilities and quantitative easing.
The Federal Reserve has permitted the banks and financial houses to park vast sums of unmarketable paper on its books—securities made nearly worthless by the misjudgment and avarice of bankers. In return, the Fed has provided these scions of finance with fresh funds, cheaply, that they may lend at healthy rates on credit cards, auto loans and even mortgages.
While the Fed cuts the banks slack, the bankers are busy turning the screws on their debtors by raising credit card rates and fees, and harassing distressed borrowers with all the zeal of the Roman army sacking Palestine.
Increasing the spread for banks is like subsidizing parts purchases for car companies. The folks at GM would look like wizards if the Fed had been similarly generous with them.
The Obama administration can no longer dodge the bullet of the war crimes committed while George W. Bush was in office. It is clear that the president is reluctant to act, fearing that this can of worms, if opened, could afflict Republicans and Democrats alike. He prefers, as he puts it, "looking forward" instead of "looking back."
... the principle of establishing some kind of accountability that is both politically and morally acceptable without creating the perception of a witch hunt is a good one.
A tribunal empowered to look at the evidence, classified and unclassified, would be able to set the record straight... It would also establish the principle that there must be accountability for war crimes, even when they are ordered by the president of the United States.
NYTIMES, HONG KONG — Reversing its role as the world’s fastest-growing buyer of United States Treasuries and other foreign bonds, the Chinese government actually sold bonds heavily in January and February before resuming purchases in March, according to data released during the weekend by China’s central bank.
China’s foreign reserves grew in the first quarter of this year at the slowest pace in nearly eight years, edging up $7.7 billion, compared with a record increase of $153.9 billion in the same quarter last year.
China has lent vast sums to the United States — roughly two-thirds of the central bank’s $1.95 trillion in foreign reserves are believed to be in American securities. But the Chinese government now finances a dwindling percentage of new American mortgages and government borrowing.
In the last two months, Premier Wen Jiabao and other Chinese officials have expressed growing nervousness about their country’s huge exposure to America’s financial well-being.
Navy Seal snipers on the fantail of a destroyer cut down three Somali pirates in a lifeboat and rescued an American sea captain on Easter Sunday. The surprise nighttime assault in choppy seas ended a five-day standoff between a team of rogue gunmen and the world's most powerful military.
Cities, states, and municipalities have a huge budget problem. That problem is caused by too much spending. The sensible thing to do would be to reduce expenditures.
"Taxpayer Resentment Is GrowingResentment towards unjustified property taxes, sales taxes, income taxes, and fees is building. At some point, I just do not know when, there is going to be a massive taxpayer revolt to throw the bums out, privatize services, and end the powerful grip public unions have over our lives.Private pension plans have gone the way of the dinosaur, it's long overdue that public sponsored pension plans and public unions follow suit."
32 MILLION FERAL MALES FOR WHOM THERE ARE NO FEMALES...
... WHAT GOOD CAN COME OF THAT?
USE YOUR IMAGINATION!
According to a new study, sex selection in China will create an excess 32 million boys of reproductive age in China over the coming generation.
NYT: This disparity seems to surpass that of any other country, they said — a finding, they wrote, that was perhaps unsurprising in light of China’s one-child policy.
They attributed the imbalance almost entirely to couples’ decisions to abort female fetuses.
The trend toward more male than female children intensified steadily after 1986, they said, as ultrasound tests and abortion became more available. “Sex-selective abortion accounts for almost all the excess males,” the paper said.
But this huge male-female gap has scary geopolitical implications. Let's face it, a nation full of single males is bound to be dangerous and volatile, with a voracious desire to sublimate sexual frustration into bigger and bigger toys: guns and missiles. That's what single males the world over gravitate towards, and our best hope is that virtual reality and internet cafes full of first-person shooting games does the trick. But we doubt it will. Many will hope to graduate towards the real thing.
From a budget-busting perspective, last year where the US government had a $73 billion Social Security surplus to spend, this year it will be a paltry $16 billion and next year it will be a number indistinguishable from zero. It is hard to overstate the importance of this shift.
This means several things. Instead of $703 billion coming in over the next 10 years, the current (overly optimistic) projection calls for only $83 billion. This means at least another $620 billion in fresh borrowing will have to occur.
More importantly, this means that the United States eventual date with bankruptcy has been moved forward by about 8 years or so. It also means that instead of being some future problem, a few administrations down the road, it is a near certainty that the current administration will have to confront some very difficult funding decisions that will be forced by the inability to borrow enough to pay for everything.
As you know, the government is unfortunately at it again, this time with the biggest spending and money printing blitz in US history. In his April 3rd Interest Rate Observer, James Grant reports that the combined Federal Reserve and US Government response to this economic crisis, defined as the change in the Fed’s balance sheet plus the US Government’s fiscal deficit as a % of GDP, is some 30% of GDP. To put that number into perspective, that’s 10 times the postwar recession average of 2.9% and 3.5 times the previous record of 8.3% seen in you guessed it, the Great Depression.
The next, even bigger crisis awaits, with this one looking like the mother of all crises.
... introduced by Senate Intelligence Committee chairman Jay Rockefeller, D-WV, and cosponsor Olympia Snowe, R-ME - bypasses all existing privacy laws and allows White House political operatives to tap into any online communication without a warrant, including banking, medical, and business records and personal e-mail conversations. This amounts to warrantless wiretaps on steroids, directed at U.S. citizens instead of foreign terrorists.
The bill gives the Secretary of Commerce and a new national cybersecurity czar power to shut down all Internet transmissions in the event of a yet-to-be defined “cyber emergency.”
This is a dangerous power, even for a president who in a 2008 campaign appearance at Dartmouth College harshly criticized Bush for anti-terrorist “wiretaps without warrants,” and promised that if elected he would leave such policies behind.
Are you all for Obama's economic plans? Do you think that bailing out failing companies, and throwing trillions into the national money pit, is just the ticket for stimulating the economy back to recovery?
Then you might get the chance to put your money where your ideological convictions are. The Obama administration is cajoling investment companies to create bailout bonds. These would be similar to the bonds that wartime presidents created to find sucker-investors for their wars. Americans were browbeaten into buying them as a patriotic duty. So too those who say "yes, we can" to the bailouts will be asked to do their patriotic duty, and buy the debt of loser companies.
It's all part of the war on depression, which is destined to be as successful as the war on drugs. But, hey, if it is a good investment, why not buy bailout bonds? Well, there's a problem. The bonds represent credit extended to companies and projects that are proven market failures. Creating these bonds is a way of institutionalizing the principle of buying low and selling lower. Lew Rockwell
Who killed our economy -- "foreigners," or Washington, Wall Street, and the War Party?
Justin Raimondo, AntiWar.com:The story in Politico deadpanned this hilarious news: “The Pentagon sponsored a first-of-its-kind war game last month focused not on bullets and bombs — but on how hostile nations might seek to cripple the U.S. economy, a scenario made all the more real by the global financial crisis.”
Why should these “hostile nations” bother with a campaign to cripple our economy when we’re doing such a good job of it ourselves?
The whole premise of this dubious exercise is that our problems aren’t caused by anything or anyone here on the home front — no, no, it’s those horribleforeigners, with their cheap labor costs and spicy foods, who are responsible for the economic plight of our nation!
Pat Buchanan:Because Europe sees no threat from Afghanistan and no vital interest in a faraway country where NATO Europeans have not fought since the British Empire folded its tent long ago.
While NATO provides Europe with a security blanket, it provides America with what she cannot live without: a mission, a cause, a meaning to life.
Were the United States, in exasperation, to tell Europe, "We are pulling out of NATO, shutting down our bases and bringing our troops home because we are weary of doing all the heavy lifting, all the fighting and dying for freedom," what would we do after we had departed and come home?
What would our foreign policy be?
What would be the need for our vaunted military-industrial complex, all those carriers, subs, tanks, and thousands of fighter planes and scores of bombers? What would happen to all the transatlantic conferences on NATO, all the think tanks here and in Europe devoted to allied security issues?
"It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. . . . Another effect of public instability is the unreasonable advantage it gives to the sagacious, the enterprising, and the moneyed few over the industrious and uniformed mass of the people. Every new regulation concerning commerce or revenue, or in any way affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow-citizens. This is a state of things in which it may be said with some truth that laws are made for the FEW, not for the MANY." Madison- Federalist no.62
Mises Daily by Roderick T. Long | Posted on 11/25/2005 12:00:00 AM
Fascism differs from its close cousins, Communism and aristocratic conservatism, in several important ways. To understand these differences is to see how classical liberalism offers a completely different view of social and economic organization, a perspective that departs radically from the views of both right and left, as those terms are understood in contemporary political language.
Let's begin with its difference from Communism. First, where Communism seeks to substitute the state for private ownership, fascism seeks to incorporate or co-opt private ownership into the state apparatus through public-private partnership. Thus fascism tends to be more tempting than Communism to wealthy interests who may see it as a way to insulate their economic power from competition through forced cartelization and other corporatist stratagems.
Second, where Communist ideology tends to be cosmopolitan and internationalist, fascist ideology tends to be chauvinistically nationalist, stressing a particularist allegiance to one's country, culture, or ethnicity; along with this goes a suspicion of rationalism, a preference for economic autarky, and a view of life as one of inevitable but glorious struggle. Fascism also tends to cultivate a "folksy" or völkisch "man of the people," "pragmatism over principles," "heart over head," "pay no attention to those pointy-headed intellectuals" rhetorical style...
Liberalism
Some of the differences between fascism and the older conservatism may be due to the advances won by their common foes, the liberals. The progress of liberalism and of industry had the effect of shifting wealth, at least in part, from the traditional aristocracy to new private hands, thus creating new private interest groups with the ability to operate as political entrepreneurs; hence, perhaps, the tendency toward the emergence of a plutocratic class nominally outside the traditional state apparatus. Likewise the progress of democracy meant that plutocracy could hope to triumph only by donning populist guise; hence the paradox of an elitist movement marching forward under the banner of anti-elitism—a prime example in U.S. history being antitrust laws and other allegedly anti-big-business legislation being vigorously lobbied for by big business itself. Read the rest...Roderick Long
Christian Science Monitor: Marietta, Ga. - When it came time to name the world's first fifth-generation jet fighter, the mechanics who assemble the F-22A at Lockheed-Martin's Marietta plant got the honors.
Their pick? "The Raptor." "The baddest bird in the sky," says Jeff Goen, a 30-year employee and local machinists union president.
Now that the Pentagon has said it will cap production of America's top-of-the-line fighter at 187 aircraft, plane-builders – many of them unionized and staunch Democrats – are "mad as hell," Mr. Goen says.
To be sure, the looming debate in Congress will be fundamental to the nation's defense: Is a full fleet of what's being touted as the world's premier jet fighter really necessary in a world of low-level insurgent wars and unmanned drones – a world where the Raptor has yet to see combat?
At the core of the opposition to the Pentagon's new marching orders is an argument over whether the military-industrial complex – in the midst of a recession – should be considered part of a job stimulus plan.
NEXT IN LINE FOR BAILOUTS? LIFE INSURANCE COMPANIES!
They're in Good Hands! It Pays!
WASHINGTON — The Treasury Department Wednesday confirmed that life insurers are qualified to join banks and carmakers on the list of industries getting taxpayer bailouts.
In a statement, the agency confirmed that certain life insurers are eligible to receive an unspecified amount of the money that remains from October's $700 billion Wall Street rescue program. The transfer of the money is expected soon.
"There are a number of life insurers who met the requirements for the Capital Purchase Program because of their thrift or bank holding company status. These companies applied within the appropriate deadline," said Andrew Williams, a Treasury spokesman, in a statement. "These are among the hundreds of financial institutions in the pipeline that will be reviewed and funded as appropriate on a rolling basis."
Mish takes a look at deflation's spreading carnage.
Changing consumer attitudes towards debt are one of the huge forces Bernanke is fighting. The other major force is bank attitudes towards lending. Banks simply have few credit worthy borrowers looking to borrow, and businesses in general have no reason to want to expand.
Global wage arbitrage, rampant overcapacity in the entire consumer sector, and a boomer retirement time bomb that has now gone off, seals the deal that this shift to thrift is not a temporary change.
THE BUSH TORTURE MEMOS: WHY HAVEN'T THEY BEEN RELEASED?
If the president releases the Bush torture memos, Republicans are promising to “go nuclear” and filibuster his legal appointments.
Scott Horton reports on a serious threat to Obama’s transparency.... It now appears that Republicans are seeking an Obama commitment to safeguard the Bush administration’s darkest secrets in exchange for letting these nominations go forward.
Barney Frank the powerful Congressman is lashing out at Moody's for putting all muni bonds on negative outlook.
MarketWatch: Saying he was "troubled" by the Moody's action, which could make it "more expensive to borrow funds for infrastructure improvements," the influential congressman said he planned a hearing in early May on treatment for municipalities' general obligation bonds.
What!? A hearing for issuing a downgrade?
And complaining that the downgrade could increase the cost of borrowing. That's, like, kinda the point Barney! Municipalities are less creditworthy than they used to be -- a combination of profligate spending and vanishing revenue -- and lenders would be wise to approach them with a caution.
Da Vinci: The Amusement Park! The artist will be forever associated with Renaissance Italy. But a new attraction will soon open where he ended his days – in France Almost five centuries ago, an Italian artist and jobbing inventor, somewhat down on his luck, made a 500-mile journey on foot and mule across the Alps to a small town by the river Loire. He was accompanied, apart from the mule, by two faithful followers and three paintings. When he died in France in 1519, the artist left the paintings to one of his Italian followers. All three of the works went on to become famous; one of them went on to become the most celebrated painting of all time.
October 11, 2005:A year into his award-winning stint at KXXT 1010 AM, Charles Goyette reviewed highlights of some of the accumulated evidence of the criminal behavior of the Bush administration. It was seditious talk like this that had gotten this truth-seeking gentleman of peace and reason removed from KFYI 550 AM the year before. [Streaming MP3] [MP3]
June 13, 2008: Charles Goyette completed his last day at KFNX 1100 AM, the fourth and final radio station in the Phoenix, Arizona, market to "kick the commie bastard off the air." That was the best description my neighbors could come up with when they heard this internationally acclaimed talk show host reveal the truth about the lying warmonger in the White House and his lying enablers in Washington. In contrast, Cindy Sheehan called to thank him and to bid him farewell. Charles asks once again that we "bring 'em home." [Streaming MP3] [MP3]
Today Americans, Iraqis, Afghans, Brits, and other coalition forces are still fighting and dying, and Americans are paying hundreds of billions of dollars annually for it -- priceless lives, and money we don't have -- spent for nothing.
It's been quite a spectacle for those who have followed Alan Greenspan's career for decades. Gone is the financial rock star or even the statesman testifying before Congress in a measured baritone. Instead, over the past several months, Alan Greenspan has morphed into a totally new person.
The first incarnation was the shaken Greenspan who was stunned that greedy and reckless short-term behavior could overwhelm long-term, rational self-interest. That was rather amazing all by itself. But now, there's a newer Greenspan--a decidedly prickly and whiny one.
I'm talking about Greenspan's recent op-ed in The Wall Street Journal. A 1,500-word attempt to move blame for the financial crisis away from himself and onto ... China.
It was, writes Greenspan, Chinese growth that led to "an excess" of global savings. That growth kept long-term interest rates low, which fueled the housing bubble. As for himself, the lowly chairperson of the Fed, he says he was helpless. He only had control over short-term rates.
Why this recent incarnation as a self-pitying victim of historical forces? Most likely, it's because of John Taylor, a mild-mannered professor at Stanford and former colleague of Greenspan's at the Fed. Forbes.com
In his March 11 Wall Street Journalop-ed, former Federal Reserve Chairman Alan Greenspan tried to exonerate himself from the housing boom and bust. Even though more and more analysts are realizing that Greenspan's low interest rates fueled the bubble, the ex-maestro himself uses statistics to defend his record. On these pages Frank Shostak has already taken on Greenspan's spurious arguments, but in the present article I'll touch on a few more points...
Conclusion: It is bad enough that Alan Greenspan refuses to acknowledge what more and more people are realizing: his ultralow interest rates — which were in turn accomplished through injections of artificial credits into the banking system — fueled the housing boom. The Greenspan Fed was not a sufficient condition to cause the housing and stock bubbles, but it was almost certainly a necessary factor. If the Fed had let the post-9/11 recession run its course, there would have been no absurd boom (and now bust).
But beyond Greenspan's refusal to admit his mistakes is the ludicrous accusation that high savings rates among the world's poorest people — coupled with growing incomes made possible by technological and legal advances — was cause for misery. What a warped view of how the market economy works, to think that savings and foreign investment can cripple an economy. Robert Murphy Mises.org
The Janus-faced American hegemon speaks out of both sides of his mouth, and in two voices: one for the masses, who delight in his soaring idealism and seeming ability to express their deepest aspirations, and one for the elites, who hear a promise of continuity rather than change.
This two-track narrative framed even his Prague declamation of a nuclear-free world. According to a top White House aide, we are not to take this idea all that seriously:
"Gary Samore, a White House adviser on arms control, indicated that Mr. Obama’s call for ridding the world of nuclear weapons should not be taken too literally. ‘In terms of a nuclear-free world, we recognize this is not a near-term possibility,’ he said. Rather, the call was an attempt to ’seize the moral high ground’ in order to increase pressure on countries such as North Korea and Iran."
Obama giveth with one hand, and taketh away with another – smiling that oil-slick grin the whole time. Although I agree with the sentiments of the Czech woman cited above, the Obama method goes way beyond mere hypocrisy. It is a conscious technique of inverting the true meaning and intent of his policies...
The ruling elites of this country, confronted by the specter of a rising populist anger, have found in President Obama a subtle and skillful anger-management expert. For years they’ve been frustrated in Washington, as their efforts to fight a spreading war met increasing resistance from the American people. Divine Providence smiled down on them, however, as Obama suddenly appeared out of nowhere. Here was an "antiwar" candidate who said we’ve been fighting the wrong war all along – and, upon taking office, immediately rectified that by sending 21,000 more troops to the wilds of Central Asia.
What a godsend to the War Party Barack Obama is! As he moves toward confrontations with Iran, Russia, and Pakistan, and continues to unnecessarily irritate China, Asia’s sleeping giant, the media portray him as the Great Peacemaker. As the mask slips, however, and the reality becomes all too apparent, how will his "progressive" supporters react? Will they rise in protest, or sign on to Obama’s war? Raimondo
ROME (Reuters) - An Italian scientist predicted a major earthquake around L'Aquila weeks before disaster struck the city on Monday, killing more than 100 people, but was reported to authorities for spreading panic.
The government on Monday insisted the warning, by seismologist Gioacchino Giuliani, had no scientific foundation but Giuliani said he had been vindicated and wanted an apology.
Vans with loudspeakers drove around the town a month ago telling locals to evacuate their houses after Giuliani, from the National Institute of Astrophysics, predicted a large quake was on the way, prompting the mayor's anger.
Giuliani, who based his forecast on concentrations of radon gas around seismically active areas, was reported to police for "spreading alarm" and was forced to remove his findings from the Internet.
"Now there are people who have to apologize to me and who will have what has happened on their conscience," Giuliani told the website of the daily La Repubblica.
Giuliani, who lives in L'Aquila and developed his findings while working at the National Institute of Nuclear Physics in the surrounding Abruzzo region, said he was helpless to act on Sunday as it became clear to him the quake was imminent.
"I didn't know who to turn to, I had been put under investigation for saying there was going to be an earthquake."
BAILOUT PSYCHOLOGY DESTROYING THE NATION! (Bailout geniuses pictured below left to right: Curly, Larry and Moe)
The administration and the banks keep talking about a credit crisis, but there isn't one. Banks are lending. If you want a mortgage and can afford to pay it back, you can borrow at low rates today. You can finance a car at low rates for seven years.
Imagine you bet $500,000 on a stock and it dropped to $20,000. If you owned Treasury Secretary Tim Geithner, he'd get on TV and explain that if the government didn't buy your shares for $500,000, the economy would suffer because you couldn't invest anymore. He'd say the "free market" isn't pricing the stock "right," and we have to "help" the market with taxpayer money to make sure you get the "right" price.
Bailout psychology is destroying the economy. Banks hold off on foreclosures in the hope of refinancing borrowers into government-backed loans that will almost certainly default - at taxpayer expense. I've talked to ordinary people delinquent on credit cards who put off bankruptcy because they "heard" the president was unhappy with unfair bank practices and "help was coming soon." Millions of homeowners desperate to sell are keeping empty houses off the market waiting for a "rebound," flushing a stream of income down the toilet.
Worsening economic figures are being used to confirm that more bailouts are needed rather than that previous ones might be failing. The logic is much like medieval blood letting: The patient died because we didn't drain enough of his blood.
The promise of more bailouts also keeps everyone from doing what's necessary. Millions of houses sit empty, open to vandalism and destruction, while millions of Americans live in cars or on the street. Our tax money is given to banks and speculators to hold houses empty.
Deroy Murdock, WashingtonTiumes.com: Anyone who doubts that the Bush and Obama administrations collectively transformed America into a socialist state should consider this - for every dollar American citizens generated last year, the federal bailout consumed more than 90 cents in outlays, loans and commitments.
... the Federal Reserve, Treasury, Federal Deposit Insurance Corp. and the Department of Housing and Urban Development have saddled taxpayers with $12.8 trillion so far. America's 2008 gross domestic product was $14.2 trillion. Hence, the federal bailout now equals 90.14 percent of GDP. If that is not socialism, what is?
This $12,798,140,000,000 costs every American man, woman, boy and girl $42,105. A family of four's share of the bailout equals $168,420. Bloomberg reckons this $12.8 trillion invoice is more than 14 times the $899.8 billion in U.S. currency coursing through the economy. This signals inflation ahead.
03/31/09 Paris, France We’re delighted to see Mr. Obama in action…rolling up his sleeves and taking direct action to straighten out the U.S. auto business. In this world of collapsing asset values and depression, we needed a laugh.
Yes, dear reader…here at The Daily Reckoning, we feel positively blessed. We are getting to see things we never thought we’d see: crash, depression, socialism, nationalizations…things that we’d read about in the history books. Things so preposterous, absurd and imbecilic that we never thought they’d be repeated…at least not in our lifetimes. We never imagined we see them in the 21st century…in the United States of America! DailyReckoning.com
HERE'S ANOTHER GREAT IDEA FROM THOSE COMPASSIONATE FOLKS IN CONGRESS
RALEIGH — Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts — including 401(k)s and IRAs — and convert them to accounts managed by the Social Security Administration.
Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly.
The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration. CarolinaJournal Online
57 PERCENT OF VOTERS WANT U.S. MILITARY ACTION AGAINST NORTH
KOREA!
WOULD SOMEBODY PLEASE LOOK AT A MAP!
Wouldn't it be the more immediate concern of South Korea, China, Russia, and Japan? Or do Americans like being bled dry?
HERE is the story from PoliGazette.com: Rasmussen reports that a majority of Americans want the U.S. government to take military action against North Korea after the communist country launched a long range missile (which landed in what was an epic failure in the middle of the Pacific Ocean).
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.'” A Goyette post from July 2008
Or, pieces of the puzzle that have to be put in place before...
"The surveillance system now approved by Congress provides the physical apparatus for the government to collect and store a huge database on virtually the entire population, available for data mining whenever the government wants to target its political opponents at any given moment—all in the hands of an unrestrained executive power. It is the infrastructure for a police state." Wired.comfrom last June
From the family that gave us the "Fed" and the Personal Income Tax Posted by David Kramer at April 4, 2009 06:53 AM
Some excerpts from this latest piece of news in our Brave New World:
Senator John Rockefeller...introduced a bill to establish the Office of the National Cybersecurity Advisor...The Cybersecurity Act of 2009 gives the president the ability to "declare a cybersecurity emergency" and shut down or limit Internet traffic in any "critical" information network "in the interest of national security." The bill does not define a critical information network or a cybersecurity emergency. That definition¹ would be left to the president.
"We must protect our critical infrastructure at all costs²—from our water to our electricity, to banking, traffic lights and electronic health records—the list goes on," Rockefeller said in a statement."
¹I thought a law cannot have any ambiguities, but must be specific in its meaning--or does that concept only apply to a contract? ²I presume that includes the cost of our freedom too?
The demise of fiat-money regimes around the world has become unmistakable. They can only be kept alive by central banks creating ever-greater amounts of base money and governments underwriting commercial banks' liabilities.
The US Federal Reserve, for instance, increased the stock of the monetary base – which includes banks' demand deposits held with the Fed, plus coins and notes in circulation – from $870.9 billion in August 2008 to $1735.3 billion in January 2009.
Banks' "excess reserves" – banks' base-money holdings minus required reserves – rose from $1.9 billion to $798.2 billion. These excess reserves allow the banking sector, which operates under fractional reserves, to increase the credit and money supply manifold.
The monetary base expands when the central bank takes over the troubled assets of commercial banks in order to extend new credit to those banks. This process is gaining momentum: on March 18, 2009, the Federal Open Market Committee (FOMC) announced that it will increase base money by purchasing another $1,150 billion of securities. It is also considering increasing base money by extending credit to private households and small businesses.
I am calling for substantial new price highs in oil no later than the Presidential Election of November 2012. I expect oil to go above 200.00 dollars per barrel, and to consolidate thereafter between the old price high of 150.00 and 200.00. The seeds for this price spike have been sewn all decade, and are furiously at work right now. We are currently at risk of reaching the old price high of 147 by as early as Spring of 2010. If monetary conditions interfere, this could be sooner. If a global depression develops, obviously, this could be later. A simple progression would take oil towards 75 later this year, then 150 in late 2010, 200 in late 2011, and then the spike above 200 in early 2012.
The bottom line is that Washington's neglect of its own, depleted national energy supply in a country that is structurally married to liquid fuel transport is a big part of the reason the coming price spike will be so damaging.
The extreme difficulty the administration presently faces in the financial crisis is a kind of preview of what's to come when oil makes its next ascent well above the previous price high of 150.00. It may appear as ironic, but the North American country that has to import the bulk of its oil supply, the US, is also the least realistic about global oil depletion, and its ability to continue bidding for free market oil.
WHAT INSTITUTION ALLOWS POLITICIANS TO IGNORE THEIR CONSTITUENCIES?
What institution allows the political class to transcend democracy?
What institution allows the political class to do what they will, when they should be doing what you will?
What institution allows the political class to conduct their business in secret, when in fact the political class in a free society is supposed to stand transparent in front of The People?
What institution gives such immense POWER to the political class; POWER of such great reach that NO INDIVIDUAL OR GROUP OF INDIVIDUALS should ever be allowed to have it; POWER that is consistent with, and found only in, Tyrannous Governments?
This is a fascinating essay by the late Roy Childs (written in 1971-- when he was young). Childs examines the role big business has played in establishing our current Leviathan.
If you ever wondered why Modern American Liberalism bears such a striking resemblance to Fascism, this will give you the backstory, and affirm your insight. And if you never thought MALiberalism is very similar to Fascism, then this essay will turn the lights on.
DRAINING AMERICA'S ECONOMIC VITALITY: THE MILITARY-INDUSTRIAL COMPLEX
NOW A WORKABLE PLAN FOR A LEFT-RIGHT ALLIANCE TO TAME THE COMPLEX!
At this moment of economic crisis, Jon Basil Utley, associate publisher of The American Conservative, has a 10 point plan to restore the Republic.
"Military spending is surprisingly off limits to rational debate in Washington," Utley writes. "Both sides of the aisle are reluctant to challenge such a behemoth. Democrats are afraid that curtailing military waste will leave them open to accusations of being ‘soft on terrorism.' Most Republicans, meanwhile, are willing to subsidize the defense industry even as they oppose saving the auto industry.
"Most Americans would now welcome breaking the hold of the military industrial complex and limiting its corruptive links to Congress. ...In the battle against the complex, the economic crisis makes our arguments more acceptable and vital for saving the American republic. We need to create new political alliances and implement new political strategies," Jon Utley concludes.
Read Left and Right Against the Military-Industrial Complex HERE
"For the financial crisis that has wiped out trillions in wealth, many have felt the lash of public outrage.
Fannie and Freddie. The idiot-bankers. The AIG bonus babies. The Bush Republicans and Barney Frank Democrats who bullied banks into making mortgages to minorities who could not afford the houses they were moving into.
But the Big Kahuna has escaped.
The Federal Reserve. . . .
Should not this creature from Jekyll Island, for all its manifold crimes and sins against the republic, also be summarily put to death?"
Banks planning to buy trash paper from one another so taxpayers get stuck holding the bag under the Geithner plan. Instead of money laundering, it'a the laundering of toxic assets, creating strawman buyers so that taxpayer gurantees kick in.
And the worst part is the nation's mainstream journalists won't explain it in clear terms to the people!
Spencer Bachus, the top Republican on the House financial services committee, vowed after being told of the plans by the FT to introduce legislation to stop financial institutions ”gaming the system to reap taxpayer-subsidised windfalls”.
Mr Bachus added it would mark ”a new level of absurdity” if financial institutions were ”colluding to swap assets at inflated prices using taxpayers’ dollars.”
Tim Swanson sends me this article saying hyperinflation is impossible. I'm not convinced. Let's not forget, folks, that during 2008 the narrow M1 money supply rose by 17 percent. The public expanded its demand for cash balances and sopped it up, that's true. But I think Bernanke has more than offset the "second order deflation" that Hayek and others worry about.
I would need to research this more, but off the top of my head I think it's important to note that--if I'm not mistaken--a lot of the base expansion during the last quarter of 2008 was in the form of propping up banks and temporarily holding their "toxic" assets as collateral on short-term loans. If I'm a bank and the Fed keeps me solvent by letting me constantly roll over 28-day repos on my mortgage-backed securities (I am probably slightly off on the lingo), then I'm not going to be keen on lending out the new reserves.
But if instead, the Fed buys those mortgage-backed securities from me at a price that keeps me solvent, then what would stop me from making new loans at that point? So the fact that Bernanke keeps announcing new trillion dollar plans, some of which involve the outright purchase of assets, makes me expect M1 and M2 to start exploding very soon.
Finally, if you need another type of argument to be worried about hyperinflation, consider: Brad DeLong links to another Keynesian who is saying stuff like this:
We need not worry about hyperinflation. Or rather, in a world where hyperinflation is a real possibility, hyperinflation is the last thing we’d be worrying about. There are certainly circumstances under which America could face uncomfortably high inflation down the road, the result of which would most likely be Fed tightening and a painful double-dip recession. But there are two key points to be made about this.
One is that “uncomfortably high” given present conditions is pretty darn high. In the midst of deep recession, inflation isn’t nearly as nasty as it might otherwise be. For one thing, when dollars are getting weaker people don’t want to hold dollars, and so they spend them, which is a good way to make a dent in the shortfall in demand. For another, inflation will help housing markets clear. And for another, a weaker dollar should goose American exports.
The second, and related, point is that inflation is one of many concerns that we face at the moment. Fed independence is a big issue, and 20% annual inflation is something we’d prefer to avoid, but so is, say, a 6% contraction in output. I’d love for Congress to allocate all the necessary funds and then turn around and take the necessary steps to rein in the deficit, but given actual political constraints I’m extremely glad the Fed has done what it’s done — I prefer to see some action appropriate to the scale of the downturn taken and roll the dice with inflation....
Another way to think about this is that maybe all the folks worried about inflation should instead focus their ire on the supermajoritarian rules constraining Senate action.
Yep, every time I read the above I become more convinced that I need to buy more gold and silver.
UPDATE: Here is a Mises Daily making the case "for" hyperinflation. (As in, the case that it will happen--not like someone making the case for handwashing.) Murphy's blog
According to the latest Congressional Budget Office estimate, the Social Security surplus will be only $3 billion in 2010. That number is almost surely too rosy, and the actual realization next year will be a big deficit. In February, according to data from the Social Security Office of the Actuary, the program paid out more in benefits than it collected in taxes and interest combined. There will be many more months like that before we are through.
It’s true that the CBO projects that the program will resume generating near-term surpluses once this recession is behind us, but that projection is excessively optimistic for three reasons. First, the CBO’s economic projections call for growth to resume next year at a healthy pace, something that seems more and more questionable given the persistent financial crisis.
Second, many individuals who retire early or go on disability in this crisis may not return to the workforce once the recession ends, so the higher payments are probably with us forever.
Finally, Social Security just increased everyone’s benefits by 5.8 percent to cover the increase in the cost of living last year, the biggest increase since 1982. That adjustment jacks up benefits payments permanently.
So this year, the “on-budget” side of the government will run the biggest deficit relative to gross domestic product since World War II. And now we at least can envision that U.S. Treasury needing to kick in general revenues to finance the payment of Social Security benefits.
That means benefits payments will be under more stress than they have been in modern times.
Considering both economic theory and the historical record, it is reasonable to believe that if a society tries to abolish the market economy it will find that it abolishes the wealth-generation and long-run growth that only a market system can provide, and, on top of that, it will become more undesirably statist and lead to severe reductions in human freedom. If people cherish rights of speech, assembly, association, dissent, freedom of choice, freedom of religion, and so on, if they cherish that kind of liberty in general, it can only come about by having private property rights in the means of production – in the printing presses, the bookstores, the communications networks, and in most other scarce resources. They won’t get it when the state, the planning board, the party – whatever you want to call it – is in control of those resources. Read the rest... The Economic Way Of Thinking
Tim Swanson sends this alarming article. While (almost) nobody was looking, the Social Security "surplus" disappeared in February. You know, the event that wasn't supposed to happen for another ten years or so?
And also, don't reassure yourself with the existence of the "trust fund" to keep the Social Security deficit from affecting the rest of the government's finances. Up until now, every year Social Security took in more (from payroll withholding etc.) than it paid out in benefits. So in theory, that means there should be a huge stockpile of savings that the SS administrators can draw down, now that they have to pay out more in benefits each month than they are taking in from workers' contributions.
Ah, but there's the rub. Do you know that the Social Security trust fund consists of government IOUs? Yep. So as a taxpayer, don't worry: The feds won't need to cut spending or raise taxes because Social Security is now running deficits--they've got a bunch of claims on the federal government to get out of their hole. Phew! Bob Murphy
"... the more details that emerge, the more it seems Treasury wants to work with only a select few companies. This is no way to conduct a bank clean-up.
... Given the outrage over the lack of transparency that has existed in the federal bailouts to date, the last thing Treasury needs is to be seen as running a program that will benefit a select few."
A. - It's the irresponsibility of the monetary authorities. These [moves to buy up toxic assets and guarantee debt] are not in any rule book you or I have ever read. It's a little surreal.
Q. - What's your sense of the sentiment out there now?
A. - There are two sentiment measures. One is the economy, which has got to be about as bad as it's ever been. And then there are the financial markets, which in some ways are a bit of a game. It's the game of trying to get financial assets to inflate, which may have nothing to do with the economy. The accepted belief in the U.S. is you cannot get an economic recovery without stability in the banking system. That's why all this effort, for the most part, has been dedicated to the financial system and very little to the economy.
Mr. Reich mischaracterizes the agendas of Ronald Reagan and Barack Obama. Mr. Reich also demonstrates what Friedrich Hayek once called the “fatal conceit.”
Mr. Reich argues that the primary philosophical difference between Messrs. Reagan and Obama is that Reagan tried to advance economic growth with “top-down” policies, while Mr. Obama is working through the more egalitarian “bottom-up” approach.
However, Reagan understood, as Hayek pointed out, that it is impossible for central planners to possess the necessary knowledge to efficiently allocate economic resources (high IQs and doctoral degrees notwithstanding).
Reagan knew that with less government the market would send unbiased price signals to every consumer. Individuals would take those signals and use their own specialized knowledge — information about what their needs are, what investments make sense — to make economic decisions. Collectively, these decisions reflect extremely diverse knowledge and allocate resources for the whole economy in the best way possible. What could be more “bottom-up” than that?
In fact, it is Messrs. Obama and Reich who are attempting to manipulate from the top down by taking resources from every American and allocating it as they, the central planners, see fit. It is Messrs. Obama and Reich who are disregarding what we the people want. What could be more conceited than that?
By Matt Sullivan / RCFP
After careful study of the material the scientists concluded that the red component of the bi-layer chips is a high-tech explosive nano-material known as super-thermite. The material is composed of ultra-fine grains of iron oxide intimately mixed with nano-sized aluminum metal in a matrix of silicon and organic compounds. While these chips are very small (typically less than a millimeter) tests show that the material is highly energetic and can be ignited to produce a micro-explosive effect. The observed properties and composition of the thermitic material appears to match the published descriptions of nano-thermite fabricated at the Lawrence Livermore National Laboratory and elsewhere. These high-tech explosives were relatively new at the time of the disaster, with some of the first published descriptions appearing in the literature in the late 1990s.
DON'T KILL THE F-22, GEORGIANS TELL GATES! 
