So argues Dallas Fed president Richard Fisher in today's WSJ. Apparently the Chinese have been reading my blog (though from my traffic reports, presumably only 0.00001% of them), because the WSJ reports: [Fisher] has just returned from a trip to China, where "senior officials of the Chinese government grill[ed] me about whether or not we are going to monetize the actions of our legislature." He adds, "I must have been asked about that a hundred times in China." Although Fisher is pretty cool for a Fed official, this part cracked me up:
He surprises me by siding with the deflation hawks. "I don't think that's the risk right now." Why? One factor influencing his view is the Dallas Fed's "trim mean calculation," which looks at price changes of more than 180 items and excludes the extremes. Dallas researchers have found that "the price increases are less and less. Ex-energy, ex-food, ex-tobacco you've got some mild deflation here and no inflation in the [broader] headline index."
I love how Fed officials take out energy and food prices and then talk about what a great job they're doing in stabilizing "the price level." Bob Murphy's blog
Bruce Bartlett Rips Bush, then Turns Turret Towards Ron Paul
Peter Klein notifies us of this Bruce Bartlett column taking libertarians to task for their narrow focus on economic issues. (I note with irony that Bartlett's two books listed in his bio are Reaganomics: Supply-Side Economics in Action and Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. I haven't read either of them, but I'm guessing they don't deal too much with police brutality or childhood literacy.)
Now fine, maybe there are a lot of libertarians who focus too much on low taxes, and don't worry enough about civil liberties and especially interventionist foreign policy. In fact, I can think of many prominent libertarians who do just this. I won't name names, but a lot of them work for "small government" think tanks.
Yet instead of going after these groups by name, Bartlett decides to target the Campaign for Liberty, the group spawned by the Ron Paul campaign. Now if you wanted to come up with the one libertarian who couldn't be accused of selling out on foreign policy in order to "fit in" with hawkish supply-siders, I would think Ron Paul is probably the name that would come to most people's minds...
Bartlett apparently suffers from the same problem as Andrew Samwick, who demanded that the "Tea Party" protesters come up with specific budget cuts. What Bartlett and Samwick don't realize, is that when someone says, "I'm against government bailouts," that person means, "The government should stop doing that." Or when someone says, "We should bring the troops home," the person means, "We should bring the troops home."... Bob Murphy's blog
George Will, Washington Post: Epiphanies are a dime a dozen among congressional Democrats as they discover urgent new reasons to experience the almost erotic pleasure of commandeering other people's money. For example, freshman Rep. Alan Grayson, a Florida Democrat whose district includes Disney World, was recently there and was inspired.
The world, he realized, would be a sweeter place if Congress mandated that all companies with 100 or more employees provide a week of paid vacation to those who work at least 25 hours a week. After three years, they would be entitled to two weeks, and companies with more than 50 employees would have to start providing a paid vacation week. Grayson would not mandate that paid vacations be spent at Disney World.
With the welfare state approaching insolvency and businesses sagging, this is an odd time to augment Americans' entitlement mentality. But the travel and tourism industries think that Grayson's idea is neat.
Wasn't it Walter Wriston, former chairman of Citibank, who famously said that sovereign nations don't go broke?
"Ireland set to go bust, claims economic historian!"
A dire warning that the Republic is a prime candidate to go bust has come from one of the world's leading economic historians.
"The idea that countries don't go bust is a joke," said Niall Ferguson, Harvard professor and author of The Ascent of Money.
"The debt trap may be about to spring" he said, "for countries that have created large stimulus packages in order to stimulate their economies."
His chosen prime candidate to go bust is "Ireland, followed by Italy and Belgium, and UK is not too far behind".
Argentina is top of his list of shaky countries but "the argument that it can't happen in major western economies is nonsense".
Professor Ferguson believes the economists are ill qualified to analyse the current economic situation since they lack the overview of historians such as himself.
"There are economic professors in American universities who think they are masters of the universe, but they don't have any historical knowledge. I have never believed that markets are self correcting. No historian could."
Taxpayers are on the hook for an extra $55,000 a household to cover rising federal commitments made just in the past year for retirement benefits, the national debt and other government promises, a USA TODAY analysis shows.
The 12% rise in red ink in 2008 stems from an explosion of federal borrowing during the recession, plus an aging population driving up the costs of Medicare and Social Security. That's the biggest leap in the long-term burden on taxpayers since a Medicare prescription drug benefit was added in 2003.
The latest increase raises federal obligations to a record $546,668 per household in 2008, according to the USA TODAY analysis. That's quadruple what the average U.S. household owes for all mortgages, car loans, credit cards and other debt combined.
"We have a huge implicit mortgage on every household in America — except, unlike a real mortgage, it's not backed up by a house," says David Walker, former U.S. comptroller general, the government's top auditor.
"THERE IS NO WAY TO FINANCIALLY ENGINEER OUR WAY OUT OF THE CRISIS..."
Economists love the idea that the Fed is all powerful, that it has some magic wand to wave which can rescue Americans from debt deflation.
I suspect this is because, deep down, they harbor ambitions to be Fed Chairman themselves. For most economists, the Fed’s printing press is the ultimate toy….one they’ve always wanted to play with.
And it is a powerful one. Most recessions are easily “solved” because the Fed can always use that printing press to inflate a credit bubble, to inflate demand artificially. This works great until it doesn’t. Eventually the credit bubble becomes so big it’s simply impossible to sustain with more printing.
I suspect this is why Keynesians never bothered asking how we’d pay for stimulus. The answer—”we can’t”—shatters their economic theories.
PRAVDA: "AMERICAN DESCENT INTO MARXISM HAPPENING WITH BREATHTAKING SPEED!"
English.Pravda.ru:It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people....
These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?
MISH: Yesterday 10 year treasury yields went soaring and the mortgage market literally seized up....
Mortgage banks are going to be flooded with calls from people wanting to lock at 4.75. Sorry folks, those rates are gone.
Mortgage banks that made unhedged commitments at 4.25-4.75% are now in a position to lose substantial sums of money.
Bernanke thought it would be an easy task to keep down mortgage rates. So much for a $1.2 trillion commitment. What's next? A $2.4 trillion commitment? Fannie Mae, Freddie Mac, and the FHA are the lenders of only resort yet the Fed is still struggling to rig the market.
Earlier this week Paul Krugman's NYT column discussed the sorry state of California finances. According to Krugman, the reason the Golden State is in such a hole these last few years, is because of a tax revolt in 1978:
The seeds of California’s current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13, a ballot measure that placed the state’s budget in a straitjacket. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.
The result was a tax system that is both inequitable and unstable. It’s inequitable because older homeowners often pay far less property tax than their younger neighbors. It’s unstable because limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions.
For those who don't know about it, Prop. 13 was awesome. (I am well aware of its details because of my time spent working for Arthur Laffer, who at the time was one of its biggest proponents.) By limiting real estate taxes to 1 percent of the assessed value, it overnight cut property taxes by more than half. (!) The ballot initiative's authors were also smart to add in a provision that the assessed value could rise at most by 2 percent per year, unless there were a transfer of ownership. So for people who stayed in their homes, the most their property taxes could rise was 2 percent a year. Read the rest...Bob Murphy's blog
Paul Craig Roberts, Counterpunch.org: We now know that the reason the Bush regime tortured its captives was to coerce false testimony that linked Iraq and Saddam Hussein to al Qaeda and September 11. Without this “evidence,” the US invasion of Iraq remains a war crime under the Nuremberg standard.
Torture, then, was a second Bush regime crime used to produce an alibi for the illegal and unprovoked US invasion of Iraq.
U.S. Representative Ron Paul (R,Tx) understands the danger to Americans of permitting government to violate the law. In “Torturing the Rule of Law”, he said that the US government’s use of torture to produce excuses for illegal actions is the most radicalizing force at work today. “The fact that our government engages in evil behavior under the auspices of the American people is what poses the greatest threat to the American people, and it must not be allowed to stand.”
One might think that the American public’s toleration of torture reflects the breakdown of the country’s Christian faith. Alas, a recent poll released by the Pew Forum reveals that most white Christian evangelicals and white Catholics condone torture. In contrast, only a minority of those who seldom or never attend church services condone torture.
There is no indication in Congress that there will be any organized resistance against budget deficits. But the earthquake in Britain has sent a message to American politicians. The public is spooked by this recession. Any attempt to hike taxes may backfire in 2010 if the recession accelerates.
They also saw what happened in California last week. So did Krugman, and it worries him.
The easy way to tax is by the printing press. This pleases Wall Street. It pleases the banks. It does not produce organized resistance.
The deficits must be funded. Bernanke still has a free ride. Congress will do nothing to rein in the Federal Reserve. Together, Congress, the Treasury, and the FED will continue to produce the one thing that government does well: fiat money.
Photographs of alleged prisoner abuse which Barack Obama is attempting to censor include images of apparent rape and sexual abuse!
At least one picture shows an American soldier apparently raping a female prisoner while another is said to show a male translator raping a male detainee.
Further photographs are said to depict sexual assaults on prisoners with objects including a truncheon, wire and a phosphorescent tube.
Another apparently shows a female prisoner having her clothing forcibly removed to expose her breasts.
Detail of the content emerged from Major General Antonio Taguba, the former army officer who conducted an inquiry into the Abu Ghraib jail in Iraq.
Allegations of rape and abuse were included in his 2004 report but the fact there were photographs was never revealed. He has now confirmed their existence in an interview with the Daily Telegraph.
This is a critique of sorts of the ABCT (Austrian Business Cycle Theory).
It's written by John Quiggin who, I take it, is some kind of Keynesian from Australia. The article is Here. Read it.
The really interesting and fun thing here is the comments section underneath the article. At this point there are about 350 comments on the article. We've got a wild collection of Marxists, Anarchists, Austrians, Keynesians, Monetarists; informed laymen, academics, students, wonderers, cranks, wildmen, Learners, and other miscreants.
We've got people coming onto the stage hurling soundbites and platitudes at each other. And people hurling "principles" at each other. And people who are genuinely trying to understand the "others" positions. Sometimes we even get real arguments. Fantastic!!!
All kudos to Quiggin for providing this forum. I'm not sure if he knew what he was starting, but good for him for starting it and letting it run (it's not over yet). And kudos to all the people that have participated.
Brad DeLong take note: this is what can happen if you don't delete comments you dislike and close down discussions that take directions you don't approve of.
China has warned a top member of the US Federal Reserve that it is increasingly disturbed by the Fed's direct purchase of US Treasury bonds.
Ambrose Evans-Pritchard, Telegraph.uk.co: Richard Fisher, president of the Dallas Federal Reserve Bank, said: "Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature."
"I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States," he told the Wall Street Journal.
His recent trip to the Far East appears to have been a stark reminder that Asia's "Confucian" culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.
Mr Fisher, the Fed's leading hawk, was a fierce opponent of the original decision to buy Treasury debt, fearing that it would lead to a blurring of the line between fiscal and monetary policy – and could all too easily degenerate into Argentine-style financing of uncontrolled spending. However, he agreed that the Fed was forced to take emergency action after the financial system "literally fell apart".
... The economy is in the grip of deflation. Commercial banks are stockpiling excess reserves (more than $850 billion in less than a year) to prepare for future downgrades, write-offs, defaults and foreclosures. That's deflation. Consumers are cutting back on discretionary spending; driving, eating out, shopping, vacations, hotels, air travel. More deflation. Businesses are laying off employees, slashing inventory, abandoning plans for expansion or reinvestment. More deflation. Banks are trimming credit lines, calling in loans and raising standards for mortgages, credit cards and commercial real estate. Still more deflation. Bernanke has opened the liquidity valves to full-blast, but consumers are backing off; they're too mired in debt to borrow, so the money sits idle in bank vaults while the economy continues to slump.
In an environment where businesses and consumers are rebuilding their balance sheets and paying off debt, there's only one option; inflation. Bernanke will keep interest rates will stay low while increasing monetary and fiscal stimulus. The ocean of red ink will continue to rise. Still, the systemwide contraction will persist despite the Fed's multi-trillion dollar lending programs, quantitative easing (QE) and Treasury buybacks. The "Great Unwind" is irreversible; the era of limitless credit expansion is over....
$100 BILLION IN BONDS SCHEDULED TO BE SOLD THIS WEEK!
The US Treasury is facing an ordeal by fire this week as it tries to sell $100bn (£62bn) of bonds to a deeply sceptical market amid growing fears of a sovereign bond crisis in the Anglo-Saxon world.
The interest yield on 10-year US Treasuries – the benchmark price of long-term credit for the global system – jumped 33 basis points last week to 3.45pc week on contagion effects after Standard & Poor's issued a warning on Britain's "AAA" credit rating.
The yield has risen over 90 basis points since March when the US Federal Reserve first announced its controversial plan to buy Treasury bonds directly, a move designed to force down the borrowing costs and help stabilise the housing market.
The yield-spike may be nearing the point where it threatens to short-circuit economic recovery.
While lower spreads on mortgage rates have kept a lid on home loan costs so far, mortgage rates have nevertheless crept back up to 5pc.
The Obama administration needs to raise $2 trillion this year to cover the fiscal stimulus plan and the bank bail-outs. It has to fund $900bn by September.
"The dynamic is just getting overwhelming," said RBC Capital Markets.
The US Treasury is selling $40bn of two-year notes on Tuesday, $35bn of five-year bonds on Wednesday, and $25bn of seven-year debt on Thursday. While the US has not yet suffered the indignity of a failed auction – unlike Britain and Germany – traders are watching closely to see what share is being purchased by US government itself in pure "monetisation" of the deficit. Don Kohn, the Fed's vice-chair, said over the weekend that Fed actions would add $1 trillion of stimulus to the US economy over time and had already prevented "fire sales" of assets. "The preliminary evidence suggest that our programme has worked," he said.
The US is not alone in facing a deficit crisis. Governments worldwide have to raise some $6 trillion in debt this year, with huge demands in Japan and Europe. Kyle Bass from the US fund Hayman Advisors said the markets were choking on debt.
"There isn't enough capital in the world to buy the new sovereign issuance required to finance the giant fiscal deficits that countries are so intent on running. There is simply not enough money out there," he said. "If the US loses control of long rates, they will not be able to arrest asset price declines. If they print too much money, they will debase the dollar and cause stagflation.
"The bottom line is that there is no global 'get out of jail free' card for anyone", he said. The US is acutely vulnerable because it relies heavily on foreign goodwill. China and Japan alone hold 23pc of America's $6,369bn federal debt. Suspicions that Washington is trying to engineer a stealth default by letting the dollar slide could cause patience to snap, even if Asian exporters would themselves suffer if they harmed their chief market.
"While it is imperative that libertarians continue focusing on the fundamental immorality of U.S. foreign policy — that is, the assassinations, invasions, occupations, bombings, torture, indefinite imprisonments, denial of due process, denial of trial by jury, cancellation of habeas corpus, and other infringements on civil liberties — it is also imperative that we continue reminding our fellow Americans what these people are doing to the financial and economic well-being of our country. Empires bankrupt nations. And that’s precisely what the U.S. Empire is doing to America. "
Despite current economic woes, a new study based on global survey data finds optimism to be universal. Sunny outlooks are most prevalent in Ireland, Brazil, Denmark, and New Zealand.
The United States ranks No. 10.
Nearly 90 percent of people around the globe expect the next five years to be as good or better than life today, the study found. And 95 percent expect their life in five years to be as good or better than it was five years ago.
The study, from the University of Kansas and Gallup, suggests humans are optimistic by nature, the researchers conclude.
Optimism is good for you. A decade-long study published in 2004 found that those with brighter outlooks had a 55 percent lower risk of death during the study period.
Optimism is lowest in Zimbabwe, Egypt, Haiti and Bulgaria, the new survey found.
As the Federal Reserve throws more and more money at the economic crisis and holds interest rates down at historic lows, it could be inflating a devastating ‘bailout bubble,’ Gerald Celente, director of Trends Research Institute, told CNBC.
“We’re looking at a bailout bubble that’s way bigger than the dotcom bubble before it and the real-estate bubble that we’re now getting out of, or attempting to,” Celente said.
“This is unprecedented; the economic system is being restructured,” he said.
The real-estate bubble was born out of the aftermath of the dotcom bubble because the Fed slashed interest rates and made more funds available, according to Celente.
But because the US government now has a vast equity position in financial institutions, it could mean that there is no bouncing back if a bailout-induced bubble bursts, Celente said.
“When this bubble bursts, there’s no reinflating it because of the government intervention into it so deeply,” he said.
“As you look through history, it seems like governments become emboldened by their failures,” he added.
Celente pointed out that according to the Italian fascist leader Benito Mussolini, the merger of state and corporate powers was called fascism.
“We could call this fascism lite,” he said, referring to the government involvement in free enterprise. “After these kind of catastrophic collapses, sometimes they’re followed by war.” CNBC
How long does it take a mild-mannered, antiwar, black professor of constitutional law, trained as a community organizer on the South Side of Chicago, to become an enthusiastic sponsor of targeted assassinations, “decapitation” strategies and remote-control bombing of mud houses the far end of the globe?
There’s nothing surprising here. As far back as President Woodrow Wilson in the early twentieth century, American liberalism has been swift to flex imperial muscle, to whistle up the Marines. High explosive has always been in the hormone shot.
The nearest parallel to Obama in eager deference to the bloodthirsty counsels of his counter-insurgency advisors is John F. Kennedy. It is not surprising that bright young presidents relish quick-fix, “outside the box” scenarios for victory.
Whether in Vietnam or Afghanistan the counsels of regular Army generals tends to be drear and unappetizing: vast, costly deployments of troops by the hundreds of thousand, mounting casualties, uncertain prospects for any long-term success – all adding up to dismaying political costs on the home front.
Amid Camelot’s dawn in 1961, Kennedy swiftly bent an ear to the counsels of men like Ed Lansdale, a special ops man who wore rakishly the halo of victory over the Communist guerillas in the Philippines and who promised results in Vietnam.
Another Democrat who strode into the White House with the word “peace” springing from his lips was Jimmy Carter. It was he who first decreed that “freedom” and the war of terror required a $3.5 billion investment in a secret CIA-led war in Afghanistan, plus the deployment of Argentinian torturers to advise US military teams in counter-insurgency ops in El Salvador and Nicaragua.
Peter Schiff is loud--a decibel or 12 above everybody else. And it's hard to get him to stop talking. Ask the man a simple question and you get a 10-minute harangue in response. This harangue is likely to feature libertarian political opinions that are by Schiff's own admission pretty extreme--inherited as they were from a father currently in prison (at age 81!) for refusing to pay income tax.
Yet Schiff, 46, is not just some opinionated boor. He possesses a self-awareness that renders him a bit less obnoxious than I've described, and he happens to have done a better job than just about anyone else of forecasting in 2006 and early 2007 what was about to happen in U.S. financial markets. This wasn't a broken-clock-is-right-twice-a-day thing: Schiff appeared on the national scene just as the credit bubble was reaching maximum inflation and offered a critique of the nation's unsustainably debt-fueled economic trajectory that is now--after the fact--widely accepted.
As markets collapsed late last year, Schiff, who runs the Connecticut-based brokerage firm Euro Pacific Capital, briefly got to bask in the glory of his spectacular call. He ran a victory lap of sorts on the cable news networks. A fan put together a 10-minute YouTube clip of his precrash predictions on CNBC and Fox News--complete with smirking and dead-wrong rebuttals from the likes of Arthur Laffer and Ben Stein--that has been watched more than 1.3 million times. ("What makes that clip so good is not so much me as everybody else," Schiff says. "People like laughing at people.") Read the rest...
“Osama bin Laden is the world’s best-known terrorist, but how much of what we think we know about him is real?
David Griffin examines this question in greater depth than any previous author. Based on the evidence, he suggests that bin Laden may have been dead for some time. If so, this means that some covert operators have been fabricating tapes to keep Osama bin Laden alive in the public's imagination.”---Terrell E. Arnold, former deputy director of the US State Department Office of Counterterrorism
The US’s political discourse and foreign policy in recent years has been based on the assumption that Osama bin Laden is still alive. George W. Bush promised as president that he would get Osama bin Laden “dead or alive” and has been widely criticized for failing to do so. The US’s present military escalation in Afghanistan is said to be necessary to “get Osama bin Laden.” The news media regularly announce the appearance of new “messages from bin Laden.” But what if Osama bin Laden died in December 2001—which is the last time a message to or from him was intercepted?
In this book, David Ray Griffin examines the evidence for the claim—made by everyone from former CIA agent Robert Baer to Oliver North—that bin Laden is surely no longer with us. He analyzes the purported messages from bin Laden and finds that, as many have suspected, they do not provide evidence of bin Laden’s existence after 2001. This leads naturally to the question: if Osama bin Laden did indeed die in 2001, how and why have dozens of “messages from bin Laden” appeared since then?
David Ray Griffin, Osama bin Laden: Dead or Alive?
The Effects of Government Spending in a Village By Edward Gonzalez
I spent seven months as an advisor to the Iraqi Army in the Al Anbar Province of Iraq from July of 2007 to January of 2008. The nature of my particular mission placed me inside Iraqi farming and fishing villages along the Euphrates River. Within the villages there were the farmers, fisherman and their families, the local sheiks and village elders, an Iraqi Army Company, and an Iraqi Police Station.
Each village had different amounts of insurgent activity and attacks. The two villages that I spent the majority of my time in were not in good shape. As a result of the war and attacks by insurgent groups, the market places had minimal business and farmers and fisherman had very few people to trade with.
My first month in one of these villages was a wake up call. Americans and Iraqis were attacked by insurgent cells operating in the area. Most villagers were scared to speak with us for fear of reprisal. The insurgents that we did capture resembled nothing like I was told to expect in a religious zealot willing to die for a cause. While I knew the religious extremists were the ones organizing the insurgency, the insurgents I captured were all young men, angry, out of work, and uneducated. When questioned they certainly spouted a lot of jihad jargon, but when questioned further, most were recruited with promises of pay and better quality of life once the Americans were thrown out. I came to the realization that I could go on fighting insurgent cells forever and never accomplish anything as long as they were able to recruit. It was not until the economy was functioning that insurgent groups would no longer be able to attract young men as their foot soldiers.
I also found that the majority of Iraqis did not care about American or Al Quaeda ideals. They wanted a functioning society where they could have a job and their children would be safe and have a better life than they themselves have had. The most telling quote was from an Iraqi farmer. When asked what he needed he replied, “I want a safe place for my children to go to school, a good price for my crops, and for the government to leave me alone.”... Bob Murphy's blog
May 21 (Bloomberg) -- Treasury Secretary Timothy Geithner said the Obama administration is committed to reducing the federal budget deficit after concerns rose that the U.S. debt rating may eventually be threatened with a downgrade.
“It’s very important that this Congress and this president put in place policies that will bring those deficits down to a sustainable level over the medium term,” Geithner said in an interview with Bloomberg Television. He added that the target is reducing the gap to 3 percent of gross domestic product or smaller, from a projected 12.9 percent this year.
The dollar, Treasuries and American stocks slumped today on concern about the U.S. government’s debt rating. Bill Gross, the co-chief investment officer of Pacific Investment Management Co., said the U.S. “eventually” will lose its AAA grade.
"The change that we are witnessing is in Obama, not in policies."
Paul Craig Roberts, Counterpunch.org: A despairing country elected a president who promised change. Americans arrived from every state to witness in bitter cold Obama’s swearing-in ceremony. The mall was packed in a way that it has never been for any other president. The people’s good will toward Obama and the expectations they had for him were sufficient for Obama to end the gratuitous wars and enact major reforms. But Obama has deserted the people for the interests. He is relying on his non-threatening demeanor and rhetoric to convince the people that change is underway.
Just the other day, President Barack Obama said this:
"I've been very clear that I don't take any options off the table with respect to Iran. I don't take options off the table when it comes to U.S. security, period. What I have said is that we want to offer Iran an opportunity to align itself with international norms and international rules. … Now, will it work? We don't know. And I assure you, I'm not naive about the difficulties of a process like this. If it doesn't work, the fact that we have tried will strengthen our position in mobilizing the international community."
Mobilize them for what?
Obama promises to talk to Tehran, yet to issue threats as a prelude to negotiations is to guarantee failure – and war.
The War Party is determined to take on Iran, and they aren't letting a change of administrations stand in their way. The only way to fight them is to keep the antiwar movement alive and thriving – and that means keeping Antiwar.com around to tell the people what their government is doing. We've been exposing the War Party and its various schemes since 1995, but we won't be around much longer if our readers and supporters don't come through.
Bush didn't have the political capital to attack Iran, as much as he no doubt wanted to in his waning days in office. But a president as popular as Obama could possibly get away with it. Please help us fight the War Party.
TIME TO CHANGE THAT OLD EXPRESSION, "I'LL PAY YOU WHEN I GET MY PENSION" TO...
"I'LL PAY YOU IF I GET MY PENSION!"
Pension Benefit Guaranty Corp.’s deficit tripled to $33.5 billion in the past six months as more companies canceled retirement plans amid the U.S. recession, according to the head of the government-owned corporation.
The PBGC, set up to protect the employee pensions of bankrupt companies, will tell Congress that its financial condition may worsen amid the likelihood for more pension plan failures. In the first half of the fiscal year that began in October, the PBGC took on almost four times the number of participants as it did in all of 2008.
The potential for General Motors Corp. and Chrysler LLC to end their plans has left the PBGC facing the prospect of adding 900,000 current and future beneficiaries. The PBGC, which pays retirement income to almost 44 million Americans, estimates that $77 billion of the automotive industry’s pensions are underfunded, with about $42 billion of that not funded at all.
Tim Swanson sent me this review of what appears to be a very insightful (or "inciteful" as the person at the link humorously misspelled it) book. Some excerpts:
Japan’s total reserves minus gold rose from around $5bn in 1970 to $100bn in 1989. Its money supply (including M2 and CDs) grew from 50 trillion yen to 450 trillion yen by 1989. Without the gold standard, Japan’s trade surplus persisted, leading to massive reserve buildups and huge credit creation. All this newfound credit had to find a home, and it went into the Japanese stock market and property markets. The Japanese stock market went up by more than 12 times from 1970 to 1989, with the Nikkei index trading at more than 60x PE before it crashed (today, it’s under 10x PE). Domestic credit as % of GDP went from 140% to more than 250%. Ultimately, incomes could not rise fast enough to catch up with the tremendous asset inflation that was occurring. In 1989, the Japanese stock market and property bubbles popped as debtors couldn’t pay their creditors; the Japanese banking system became flush with bad loans; and a painfully long recession ensued. ... During World War I, governments dropped the gold standard in order to print enough money to finance the wars. The result: huge trade imbalances resulted, leading to credit creation in the US. Specifically, the United States was the producing the goods that the Allies were using to fight the war. US gold reserves rose 64% from 1914 to 1917 as Europe exchanged its gold for American goods. The US also began accepting government debt from the Europeans. The Europeans had to drop the gold standard, because Europe couldn’t afford to suffer the recession and credit contraction that would result from their fast-depleting gold reserves. In the US, the increase in reserves led to a doubling of the credit base from 1914 to 1920, which led to a boom in industrial production. When the real economy was no longer able to profitably invest the available liquidity in new plant and equipment due to overcapacity and falling prices, increasing amounts of money were shifted into the stock market. Ultimately, the bubble popped, share prices plunged, credit contracted and a banking crisis developed. Duncan’s thesis: it wasn’t infectious greed that caused the Roaring 20s and subsequent Great Depression. It was excessive credit creation that resulted from trade balances during and after World War I, which in turn resulted from the gold standard being temporarily dropped during World War I.
"IF IT IS UNTRUTHFUL INFORMATION YOU ARE AFTER, TORTURE CAN WORK JUST FINE!"
As the distinguished Senator from South Carolina, Lindsey Graham put it...
... during a Senate hearing on May 13—with a hat-tip to the Inquisition—“One of the reasons these techniques have been used for about 500 years is that they work.”
All you really need to know is what you want the victims to “confess” to and then torture them, or render them abroad to “friendly” intelligence services toward the same end.
Reading what follows may not make you quite as ill as reading the Department of Justice torture memos, but it may well sicken—and anger—you just the same....
We Americans are lucky! President Obama, although having zero experience as an entrepreneur or in the automotive industry, has designed fuel-efficiency standards that (he assures us) will save the average car buyer $2,800 over the life of his or her vehicle ("Obama touts plan for cleaner, more efficient cars," May 19). What a deal!
No one in Detroit, in the U.K., in Japan, in Germany, in Sweden, in Korea - no one anywhere, not even persons with decades of experience producing and selling automobiles - has figured out how to devise a vehicle that is so obviously attractive to American consumers and, therefore, so rich in profit-earning potential for manufacturers. But our President (he assures us) has done so.
And we can admire not only Mr. Obama's industrial genius, but also his magnanimity in offering to the public, free of charge, his money-saving idea. He could have earned billions of dollars in profit by putting his idea to the test in the market. But no: by simply forcing us to use his idea without charge, he'll forego this profit. We Americans are lucky indeed.
Sincerely, Donald J. Boudreaux Chairman, Department of Economics George Mason University Fairfax, VA 22030db
MEMBERS OF THE BRITISH PARLIAMENT'S TEN WEIRDEST EXPENSE CLAIMS:
BRITISH POLITICIANS RIVAL AMERICANS IN HANDING COSTS OFF TO THE TAXPAYERS... BUT THIS GIVES THEM THE TEMPORARY ADVANTAGE:
1. Glitter toilet seat Who: John Reid, former Home Secretary Reid's Glasgow flat must be quite something - he claimed for a DFS sofa, which comes with instructions to 'plump cushions daily', a £199 'pouffe' and a toilet seat that would make Lawrence Llewelyn-Bowen blush.
2. Three Kit Kat Chunkies Who: Hazel Blears, Secretary of State for Communities and Local Government.
According to The Sun newspaper Blears bought the late night snacks while staying at the City Inn hotel. A ‘friend’ of Blears said she had been “feeling lonely” and had “wanted something to cheer her up.”
3. Moles removed from country estate Who: John Gummer, former Tory Cabinet minister The former Environment Minister claimed £9,000 a year in gardening expenses over a four-year period including £100 to rid his lawn of moles and bills to remove jackdaw nests, combat insect infestations and an annual 'rodent service' contract.
4. Light bulb installation Who: David Willetts, Shadow Innovations, Universities and Skills Secretary We can't decide whether it's more embarrassing to pay someone to install 25 lightbulbs in your home, or to admit to such a thing by submitting receipts for the workman's bill?
5. Horse manure Who: David Heathcoat-Amory, Tory MP The former Foreign Office Minister claimed for 550 bags of manure, as well as £5 to repair a wheelbarrow puncture and £6 for use of a chainsaw. Frightening.
6. Moat cleaning Who: Douglas Hogg, Tory MP Mr Hogg has agreed to repay the £2,200 it cost taxpayers to clear the moat on his country estate, Kettlethorpe Hall. His neighbour, Frank Barton, 69, remains unimpressed though, telling the Daily Mirror: "I've met [Mr Hogg] and he's very arrogant. It's like he's Lord of the Manor. I've been trying to get him to sort out the vandals on my street but it seems he was too busy filling out his expenses."
7. Jellied Eels Who: Andrew Rosindell, Tory MP It is good to see that the MP for Romford, Essex, is supporting local business by sampling his constituency's traditional snack but, surely, he could have found the £1.31 from his own pocket?
8. Fluffy dusters Who: Steve Webb, Lib Dem Work and Pensions Spokesman No flies on Mr Webb who managed to get us to pick up the bill for stamp duty on his Westminster pad, and none trapped in cobwebs either, it seems. Wonder if he donned a pinny and did the dusting himself?
9. Sit-and-ride lawnmower Who: Geoff Hoon, Transport Secretary Mr Hoon lived rent free for three and a half years in Admiralty House, London, when he was Defence Secretary meanwhile earning money from a London property he called his main home and claiming for the upkeep of his consituency home in Derby. What's more he gets a ride-on lawnmower while the rest of us have to make do with a Flymo.
10. Ice cube tray Who: John "disco bathroom" Reid, (again) former Home Secretary The former Home Secretary makes our list twice, for claiming for two ice cube trays at £1.50 each. We bet he had Llewelyn-Bowen over for Mojitos. By Laura Whateley
A VIETNAM TALE: “How many dying boys have you held in your arms, crying for their mother?”
AN IRAQ TALE: "How many nine year old boys have you held in your arms, crying for their father? How about a boy clinging to his lifeless father that you just killed?"
Rehder was first deployed to Kirkuk, Iraq in 2003 where he served in the 4th Infantry Division, 1-12 Infantry Battalion for 13 months. In 2005 he was redeployed to Iraq for an additional 400 days despite being classified as 50% disabled by the Veteran's Administration Hospital in Minnesota for severe PTSD, hearing loss and bad knees. He now lives in Montana.
A LOSE-LOSE SITUATION WITH LONG TERM US TREASURIES!
Stephen Yu, Seeking Alpha: In March, I wrote about the win-win situation for commodities. In the article, I argued that commodities were going to rise whether the economy turns up or down. This time, I am writing about an opposite asset class – long-term U.S. Treasuries. No matter what the economy does, I believe that long-term Treasuries are in a lose-lose situation.
As the latest Barron’s points out, the 30-year Treasury has fallen 20% year-to-date. Despite this sharp fall, however, the long-dated Treasury is still yielding 4.1%, or about 50% below its average yield between 1977 and the present. Therefore, if the economy shows the slightest sign of recovery, long-term yields are almost guaranteed to rise from the recent lows toward more normal levels. When yields rise, Treasuries fall! No rocket science there!
But then again, with so many structural problems in the world’s economy, who really believes that the economy will heal any time soon? So suppose we stay in this trough for a while longer, and suppose the Keynesians continue to rule the world, a likely scenario, the government will spend, spend, and spend even more to get things going again. With dwindling tax revenues, the government will then have to issue more Treasuries to finance new spending. The liability side of the government’s balance sheet will then bloat; and debt ratios will deteriorate. Naturally credit ratings, and hence prices, of U.S. Treasuries will plummet!
Is that how it will end? Not necessarily. There is an alternative, but similarly tragic, ending. The Fed may emerge to make a desperate rescue attempt. But we already know this rescue will be in vain, because we have already seen this movie before. Back in March, the Fed announced that it was going to buy $300 billion worth of long-dated Treasuries. Treasuries jumped for a day or two after the announcement, but then they have resumed falling since. And even if the Fed succeeds at propping up Treasuries, it will only be because Gutenberg had invented the printing press. And if Gutenberg had not invented this magical contraption, Bernanke would have. In the end, Treasuries will be repaid, but with paper that, may not exactly be worthless, but will definitely be worth less. Treasuries buyers, choose your poison!
The chairman of the George Mason Econ department has gone back to re-read the classic works of Hayek and Keynes from the 30s and 40s, and reflection on the writings of the two top economists of the last 100 years has inspired some killer op-eds in the popular press.
Keynesian economists also fail to understand what the great Austrian economist F.A. Hayek understood; namely, that markets allocate resources by relative prices. For example, suppose consumers’ taste for fish intensifies while their taste for beef weakens. Consumers will then spend more money buying fish and less buying beef. The resulting higher price of fish relative to the price of beef will signal to entrepreneurs, investors and resource owners to produce more fish and to produce less beef. This change in production patterns is precisely what should happen.
Specialized beef producers, though, aren’t so keen on this little piece of economic change. Some workers in the beef industry will lose their jobs. Would it be a sound economic diagnosis to attribute these job losses to a reduction in total consumer demand? Of course not. Would it be sound economic policy for government to save those jobs by entering the beef market and buying more beef? Of course not, for to do so would divert scarce resources from other uses more valuable to consumers... Read the rest... HayekCenter.org
An easy-money policy can be veiled by many factors, which include the impact upon unit costs of new technologies and falling commodity and energy prices. Given microeconomic variations in unit costs supply and in the responsiveness of demand to subsequent price adjustments, attempts to use monetary policy, even to prevent the general level of prices from falling, have a potential to disturb real economic activity: ‘it is not changes in the value of money which should be at issue, but disturbances of the intertemporal price system which are without any economic function’ Hayek, 1928, p. 98 .. When interest rates are held down by easy money, investment is stimulated generally, but with the greatest impact upon longer-term projects. From that basis, and in looking beneath the general price level, Hayek traced the microeconomic sequences by which monetary expansion sets a business cycle in motion. In emphasising the diversity of capital investments, Hayek showed how an easy-money policy causes a mismatch between consumers’ demands and investors’ plans. Once underway, inappropriate expenditures carry the seeds of their own demise by their support of investment structures that without prior saving are unsustainable.
"With the S&P up 23% from March 2009 lows, gold up 23% from October 2008 lows, and oil up 42% from December 2008 lows, we bid farewell to the “deflation” that barely was. We’d make the farewell fond but it wasn’t around long enough for us to get intimate." - Eric Janszen, iTulip.com
"Post bubble disinflation: dollar rises, inflation falls, but not for long. The lastest disinflation has ended. Now comes inflation. But what kind? The kind produced by the kind of re-inflation the government is pursuing. This latest financial system crash had the Bernanke Fed stomping both feet on the monetary gas pedal to rev up the sputtering credit-financed engine of the FIRE Economy, breaking age old barriers by cutting short term interest rates to zero, then pouring nitro and oxygen directly down the FIRE Economy’s intake manifold via “non traditional monetary tools.” The Fed took trillions of dollars in unmarketable commercial and investment bank assets, in simpler and more honest times called “bad debts,” onto its balance sheet, lent hundreds of billions through the discount window to banks run by hacks and miscreants, and launched a program of quantitative easing, the policy of issuing new fiat money without so much as a whiff of hope of redemption in debt issued by a bankrupt government. Post bubble disinflation: dollar rises, inflation falls, but not for long. The lastest disinflation has ended. Now comes inflation. But what kind? The kind produced by the kind of re-inflation the government is pursuing.
This latest financial system crash had the Bernanke Fed stomping both feet on the monetary gas pedal to rev up the sputtering credit-financed engine of the FIRE Economy, breaking age old barriers by cutting short term interest rates to zero, then pouring nitro and oxygen directly down the FIRE Economy’s intake manifold via “non traditional monetary tools.” The Fed took trillions of dollars in unmarketable commercial and investment bank assets, in simpler and more honest times called “bad debts,” onto its balance sheet, lent hundreds of billions through the discount window to banks run by hacks and miscreants, and launched a program of quantitative easing, the policy of issuing new fiat money without so much as a whiff of hope of redemption in debt issued by a bankrupt government."
... But presiding over policies so saturnine that they ended up putting the liberal speaker from San Francisco on the hot seat about torture may be one of his proudest achievements."
Maureen Dowd, NYTimes: The more telling news last week was yet another suggestion about Cheney’s reverse-engineering the Iraq war. Robert Windrem, a former NBC News investigative producer, reported on The Daily Beast that in April 2003, after the invasion of Baghdad, the U.S. arrested a top officer in Saddam’s security force. Even though this man was an old-fashioned P.O.W., someone in Vice’s orbit reportedly suggested that the interrogations were too gentle and that waterboarding might elicit information about the fantasized connection between Osama and Saddam....
In The Washington Note, a political and foreign policy blog, Col. Lawrence Wilkerson, Colin Powell’s former chief of staff at State, wrote that the “harsh interrogation in April and May of 2002 ... was not aimed at pre-empting another terrorist attack on the U.S. but discovering a smoking gun linking Iraq and Al Qaeda.”
More and more the timeline is raising the question of why, if the torture was to prevent terrorist attacks, it seemed to happen mainly during the period when the Bush crowd was looking for what was essentially political information to justify the invasion of Iraq.
More and more the timeline is raising the question of why, if the torture was to prevent terrorist attacks, it seemed to happen mainly during the period when the Bush crowd was looking for what was essentially political information to justify the invasion of Iraq.
I used to agree with President Obama, that it was better to keep moving and focus on our myriad problems than wallow in the darkness of the past. But now I want a full accounting. I want to know every awful act committed in the name of self-defense and patriotism.
Richard Daughty, the Mogambo Guru: I looked around the barroom and said, “The gold exchange on the Comex is a den of lying, thieving, corrupt bastards who are in cahoots with the lying, thieving, corrupt banks and the lying, thieving, corrupt government!”
Instead of the expected rousing response of, “You’re right, Mighty, Mighty Mogambo (MMM)! This is an outrage!” all I got was a few, “Shut the hell up!” replies and one wag saying, “Tell us something we don’t already know! Hahaha!”
Undaunted, I continued on with an appeal to their greedy natures by saying, “Well, GoldForecaster.com reported the interesting news that ‘With a hefty increase in long positions of nearly 28 tonnes and the trimming of some short positions, COMEX turned around again and went long last week.’ This means that although the gold exchange is full of lying, thieving, corrupt bastards, they are not stupid! They are buying gold! These are the insiders! And they’re buying! Gold is going up! They know it! I know it! Now you know it!”
There was a sickly silence in the room until the bartender came over and bent down low and said, “Why don’t you go someplace else with your Stupid Mogambo Crap (SMC), because we are all really sick of hearing you run your loud mouth.”LRC
HOW RUMSNAMARA PLAYED TO BUSH'S FEEBLE-MINDED "CRUSADE" MILLENARIANISM
Here's an example of the triumphal Iraq war messages Rummy delivered as cover sheets with his Defense Secretary's briefing to Bush:
Joshua 1:9: “Have I not commanded you? Be strong and courageous. Do not be terrified; do not be discouraged, for the LORD your God will be with you wherever you go.”
More from Frank Rich, NYTimes on the Rumsnamara memos that were revealed by Texas journalist Robert Draper: What’s up with that? As Draper writes, Rumsfeld is not known for ostentatious displays of piety. He was cynically playing the religious angle to seduce and manipulate a president who frequently quoted the Bible. But the secretary’s actions were not just oily; he was also taking a risk with national security. If these official daily collages of Crusade-like messaging and war imagery had been leaked, they would have reinforced the Muslim world’s apocalyptic fear that America was waging a religious war....
It will soon be every man for himself. “Did President Bush know everything you knew?” Bob Schieffer asked Cheney on “Face the Nation” last Sunday. The former vice president’s uncharacteristically stumbling and qualified answer — “I certainly, yeah, have every reason to believe he knew...” — suggests that the Bush White House’s once-united front is starting to crack under pressure.
the spectacle of [Chrysler] creditors being stripped of their legal rights in favor of a labor union with which the president is politically aligned does little to attract private capital at a time when the government and many companies need these investors the most.
All sorts of commentators — Todd Zywicki, George Will, Lee Cary, Robert Robb — are pointing to President Obama’s contravention of the rule of law in the Chrysler bailout as a sign we are not dealing with a man much concerned with the bounds of classic liberal governance. While others — ThomasSowell, Steven Calabresi — are pointing with concern to Obama’s advocacy of personal feelings and personal perceptions of redistributive “justice” as a basis for deciding court cases. Every one of these analysts is well familiar with Friedrich Hayek’s classic writings on the incompatibility of the rule of law with the vision of arbitrarily imposed “fairness” and “social justice” advocated by leftists like President Obama. Hayek takes up this theme in several of his works, but none is more famous than is the original exposition in his perennial bestsellerThe Road to Serfom. Brian Caplan Taking Hayek Seriously
One reason that action to limit growing income inequality in the United States is difficult is that the growth in inequality is not a simple picture. Old-line leftists, if there are any left, would like to make it a single story--the rich becoming richer by exploiting the poor. But that's just not a reasonable picture of America in the 1980s. For one thing, most of our very poor don't work, which makes it hard to exploit them. For another, the poor had so little to start with that the dollar value of the gains of the rich dwarfs that of the losses of the poor. (In constant dollars, the increase in per family income among the top tenth of the population in the 1980s was about a dozen times as large as the decline among the bottom tenth.)
--Paul Krugman The Age of Diminished Expectations, 1990, p. 22.
Here's part of what I wrote after Krugman won the Nobel prize in economics:
Indeed, he has even gone the opposite way, blaming the top one percent of the income distribution for how badly (in his estimation) the bottom 90 percent are doing. Only twelve years ago, he thought that pretty much everyone was doing pretty well. In a 1996 Slate column, "The CPI and the Rat Race," Krugman wrote, "[M]ost families in 1950 had a material standard of living no better than that of today's poor and near-poor." He confirmed this with direct measures of how people's living standards had improved: indoor plumbing, telephones, cars, and TVs. If we were to use the Krugman methodology today, as economist Michael Cox and economic journalist Richard Alm have done, we would point to wide-screen televisions and cell phones.
Unfortunately, although his writing in the 1990s was highly educational, Krugman's columns in the New York Times have often been the opposite. He often heaps scorn on and challenges the motives of those who disagree with him. For example, in a September 14, 2003, article titled "The Tax-Cut Con," Krugman took a lot of space to attack the motives of those who advocated tax cuts, but very little to actually analyze the 2001 tax cut. The closest he came was to point out that most of the benefits of the tax cut went to the highest-income people. But he didn't mention two other relevant facts: (1) almost everyone got about the same percent tax cut; and (2) high-income people pay a disproportionate share of taxes. Those two facts together mean, mathematically, that the highest-income people will get a large percent of the benefits of the tax cut. This is the kind of simple arithmetic point that the Krugman of the 1990s would have made. I miss him. Econlog
SACRAMENTO, California (Reuters) - California Gov. Arnold Schwarzenegger on Thursday proposed harsh measures to tackle a budget shortfall of at least $15.4 billion, including deep spending cuts for schools and health programs and the elimination of 5,000 state jobs.
Schwarzenegger warned the budget gap for the state's next fiscal year could grow to $21.3 billion if voters reject budget-related ballot measures in a May 19 special election. And he said California also will need to sell a $6 billion revenue anticipation warrant to help balance its books.
"Our revenues are coming in way below projections," Schwarzenegger said, adding that California, the most populous U.S. state, has no choice but to cut spending -- even after deep cuts in a February budget agreement with lawmakers that closed a budget gap of more than $40 billion for the current and next fiscal year... Reuters
(Bloomberg) -- President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.
“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”
Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”
For reasons I don't entirely understand, conservatives bitterly attacked the movie Reds when it came out in 1981. After all these years, the movie holds up as one of the most intellectually interesting and visually powerful portrayals of lost history that I've seen.
The movie stars Warren Beatty playing John Reed, the great communist journalist who wrote Ten Days that Shook the World, a journalistic account of the Bolshevik revolution that whipped up a great deal of sympathy for the Bolsheviks in the United States. Diane Keaton plays his girlfriend and eventual wife, Louise Bryant.
The film is unforgettable in so many ways. It includes some of the best romantic fight scenes I've ever seen, not least because they paralleled the actual off-screen lives of Beatty and Keaton. The portrayals of legends like Max Eastman, Eugene O'Neill, and Emma Goldman are very convincing.
In terms of culture and politics, the film provides a richer education than you can get from 50 books on the topic of the Progressive Era, the Great War, the Russian Revolution, and the heady brew of interwoven cultural issues like women's suffrage, birth control, abortion, free love, and the beginnings of the organized socialist movement in the United States.
The account of the many splits on the American Left in those days helps people understand why the history of the I.W.W. (Wobblies) is something that needs to be understood.
I've never been sympathetic to the Bolsheviks as versus the old regime in Russia, but the scenes here from the revolution are completely inspired and touch the heart of anyone who agrees with Jefferson on the positive need for revolution from time to time. The portrayals of both Lenin and Trotsky seem authentic and thrillingly so. Jeff Tucker Mises.org
Caplan on Rothbard- the real fun here is in the many comments below the article:
In 1973, when the first edition of For a New Libertywas published, Keynesians were still sitting pretty. Five years later, the Keynesians had so much egg on their faces that Rothbard was inspired to add this entirely new chapter on "Inflation and the Business Cycle: The Collapse of the Keynesian Paradigm" to his revised edition. Rothbard begins by pointing to the rise of stagflation, and the three big questions that it raises:
(1) Why the chronic and accelerating inflation? (2) Why an inflation even during deep depressions? And while we are at it, it would be important to explain, if we could, (3) Why the business cycle at all? Why the seemingly unending round of boom and bust?
He then assures readers that Keynesianism can't explain answer these questions, but the neglected the Austrian theory of the business cycle (henceforth ABC) can.
Rothbard begins with a lucid analysis of inflation: The favorite explanation of inflation is that greedy businessmen persist in putting up prices in order to increase their profits. But surely the quotient of business "greed" has not suddenly taken a great leap forward since World War II. Weren't businesses equally "greedy" in the nine teenth century and up to 1941? So why was there no inflation trend then? Moreover, if businessmen are so avaricious as to jack up prices 10% per year, why do they stop there? Why do they wait; why don't they raise prices by 50%, or double or triple them immediately? What holds them back? Econlog
In 1946 Observer editor David Astor lent George Orwell a remote Scottish farmhouse in which to write his new book, Nineteen Eighty-Four. It became one of the most significant novels of the 20th century. Here, Robert McCrum tells the compelling story of Orwell's torturous stay on the island where the author, close to death and beset by creative demons, was engaged in a feverish race to finish the book... Guardian.co.uk
The Bush Administration engaged in torture to provide political cover for the war Bush wanted before 9/11 and even before he was elected president!
RawStory.com: The chief of staff to former Secretary of State Colin Powell says that the Bush Administration authorized torture of detainees before even rendering a legal opinion on the practice — and that they sought to torture detainees in an effort to produce intelligence tying Iraq to al Qaeda.
“What I have learned is that as the administration authorized harsh interrogation in April and May of 2002–well before the Justice Department had rendered any legal opinion–its principal priority for intelligence was not aimed at pre-empting another terrorist attack on the U.S. but discovering a smoking gun linking Iraq and al-Qa’ida,” former Powell chief of staff Lawrence Wilkerson wrote Wednesday evening.
“So furious was this effort that on one particular detainee, even when the interrogation team had reported to Cheney’s office that their detainee “was compliant” (meaning the team recommended no more torture), the VP’s office ordered them to continue the enhanced methods,” Wilkerson added. “The detainee had not revealed any al-Qa’ida-Baghdad contacts yet. This ceased only after Ibn al-Shaykh al-Libi, under waterboarding in Egypt, “revealed” such contacts. Of course later we learned that al-Libi revealed these contacts only to get the torture to stop.”
“There in fact were no such contacts,” he continued.
The author provides an analysis of the financial market's degeneration from a conservative [Libertarian] perspective. That analysis includes the assertion that the media has created a myth of a crisis so complicated that people should not question government's response to it, and that capitalism and deregulation are the reasons for the "crisis". Ultimately, Mr. Woods says a new financial system is needed. Watch it here.
The experts say the company is going broke. “Chapter 11 looms,” says a Bloomberg report. Investors sold the stock down to $1.15 – a price GM hasn’t seen in more than 70 years. At that price you can buy the whole company for $700 million. Peanuts. Some fund managers earn that much in a single year...
Meanwhile, the USA follows the same downward slide as GM. Both are dogged by high debts, high costs and low management. The Financial Times reports:
“America’s Triple A rating at risk.”
Moody’s has issued a warning. Either the US cleans up its ledgers or it will be downgraded like a bad company. The US was first awarded a Triple-A credit rating in 1917. Not even a century later, it looks like it will lose it...
Now, it is the US that wears the purple. It has its fingers in every pie, its ships in every port, and its red ink running over everywhere. Even at the very peak of its authority – in the ’90s – it was already relying on the savings of poor people in Asia in order to continue its big-spending ways. And now, confronted with the challenge of a worldwide financial meltdown…the obvious consequence of too much spending and too much borrowing for too many years…what does it do? Does it cut back? Does it bring the troops home and the deficit down?
DO YOU REMEMBER WHEN CIA VETERAN RAY McGOVERN DRANK DEFENSE SECRETARY RUMSNAMARA'S MILKSHAKE THREE YEARS AGO?
WE'LL DIG THAT OUT OF THE ARCHIVES IN A MOMENT! BUT FIRST...
Ray McGovern does it again! ‘Impolite’ Questions for Gen. Myers! Tuesday evening offered an unusual opportunity to question the former chairman of the Joint Chiefs of Staff (2001-2005), Air Force Gen. Richard Myers, at an alumni club dinner.
He was eager to talk about his just-published memoir, Eyes on the Horizon (and I was able to scan through a copy during the cocktail hour). Myers’s presentation, like his book, was thin gruel.
After his brief talk, he seemed intent on filibustering during a meandering Q&A session. He finally called on me since no other hands were up. Some were yawning, but it was too early to simply leave.
I introduced myself as a former Army intelligence officer and CIA analyst with combined service of almost 30 years.
I thanked him for his stated opposition to interrogation techniques that go beyond "our interrogation manual"; and his conviction that "the Geneva Conventions were a fundamental part of our military culture" — both viewpoints emphasized in his book.
I then noted that the recently published Senate Armed Services Committee report, "Inquiry Into the Treatment of Detainees in U.S. Custody," sowed some doubt regarding the strength of his convictions.
Why, I asked, did Gen. Myers go along when then-Defense Secretary Donald Rumsfeld authorized harsh interrogation techniques and, earlier, when President George W. Bush himself issued an executive order arbitrarily denying Geneva protections to al-Qaeda and Taliban detainees?
I referred Gen. Myers to the Senate committee’s finding that he had nipped in the bud an in-depth legal review of interrogation techniques, when all interested parties were eager for an authoritative ruling on their lawfulness.
PRICES BEGIN RISING AGAIN... WHILE UNEMPLOYMENT CONTINUES TO CLIMB!
SQUEEZED!
NYTIMES: Wholesale prices in the United States rose slightly in April, the government reported on Thursday, as falling oil and gasoline prices leveled off and food prices rose the most in a year. The Labor Department reported that prices received by producers of finished goods rose 0.3 percent last month, further blunting the prospect that the economy was veering into a vicious cycle of lower prices and lower wages known as deflation.
But for some economists, the prospect of rising energy and food prices at a time of deep unemployment and shrinking wages raised concerns that strapped consumers could see their cost of living inflate even as the job market continues to get worse...
“There’s this squeeze going on,” John E. Silvia, chief economist at Wachovia Corporation, said. “We still have job losses. We still have a lot of pressure. And now you’re going to tell me that a lot of these basic commodities are rising? People’s real income is going to get squeezed.”
The price index for intermediate goods fell 0.5 percent while the price for crude goods rose 3 percent because of rising food and energy prices....
Much of the increase in producer prices in April was the result of a 1.5 percent jump in food prices. Egg prices rose sharply while prices for beef, coffee, vegetables and fresh fruit also increased.
Gasoline prices rose 2.6 percent, reflecting how a plunge in crude oil prices has largely ended after rounds of production cuts by the OPEC cartel and a plateau in demand for oil and gasoline. Crude prices have risen from their recent lows of $33 a barrel to almost $60, and gasoline prices have ticked up to nearly $2.30 a gallon, according to AAA, the automobile club.
JUDICIAL WATCH FORCES RELEASE OF DOUCMENTS!The story from Clusterstock.com:
Judicial Watch has uncovered secret documents from that meeting via the Freedom of Information Act. A few of them are really quite stunning.
The first 1-pager is Paulson's talking points for the bank. It basically confirms that he put a gun to all their heads. It says they must agree to take their cash, and that if they protested, then each bank's regulator would force them to take it anyway.
The next document is perhaps even more mindblowing. It's the one-page agreement whereby each CEO agreed to let the government make its preferred stock injeciton.... both the amounts of the injection and the name of the bank are just handwritten scrawl.
(Includes heart-wrenching news videos from the Katrina debacle)
1. We will NOT obey orders to disarm the American people. 2. We will NOT obey orders to conduct warrantless searches of the American people 3. We will NOT obey orders to detain American citizens as “unlawful enemy combatants” or to subject them to military tribunal. 4. We will NOT obey orders to impose martial law or a “state of emergency” on a state. 5. We will NOT obey orders to invade and subjugate any state that asserts its sovereignty. 6. We will NOT obey any order to blockade American cities, thus turning them into giant concentration camps. 7. We will NOT obey any order to force American citizens into any form of detention camps under any pretext. 8. We will NOT obey orders to assist or support the use of any foreign troops on U.S. soil against the American people to “keep the peace” or to “maintain control.” 9. We will NOT obey any orders to confiscate the property of the American people, including food and other essential supplies. 10.We will NOT obey any orders which infringe on the right of the people to free speech, to peaceably assemble, and to petition their government for a redress of grievances.
More from David Walker, former U.S. Comptroller General
Long before the current financial crisis, nearly two years ago, a little-noticed cloud darkened the horizon for the US government. It was ignored. But now that shadow, in the form of a warning from a top credit rating agency that the nation risked losing its triple A rating if it did not start putting its finances in order, is coming back to haunt us.
That warning from Moody’s focused on the exploding healthcare and Social Security costs that threaten to engulf the federal government in debt over coming decades. The facts show we’re in even worse shape now, and there are signs that confidence in America’s ability to control its finances is eroding.
Prices have risen on credit default insurance on US government bonds, meaning it costs investors more to protect their investment in Treasury bonds against default than before the crisis hit. It even, briefly, cost more to buy protection on US government debt than on debt issued by McDonald’s. Another warning sign has come from across the Pacific, where the Chinese premier and the head of the People’s Bank of China have expressed concern about America’s longer-term credit worthiness and the value of the dollar.
MORE AND MORE AMERICANS ARE GETTING KICKED OUT OF THEIR HOMES!
Clusterstock.com: According to RealtyTrac, a record 342,000 homes were given notices of default, 1% more than in March, and 32% higher than last year.
The big number is due, in part, to pent up volume from the foreclosure moratorium at the beginning of the year. But that was the reason given for March numbers, which were seen as horrible.
A spokesperson for RealtyTrac called the numbers a "shocker", especially given how bad March already was.
WASHINGTON -- The parents of slain NFL star Pat Tillman say senators should scrutinize a general's role in mischaracterizing their son's death before putting him in charge of military operations in Afghanistan.
In an interview Tuesday with the Associated Press, Pat Tillman Sr. accused Lt. Gen. Stanley McChrystal of helping falsify the homicide investigation.
Separately, Mary Tillman called it "imperative" that McChrystal's record be carefully considered before he is confirmed.
Pat Tillman was an Army Ranger when he was killed in a friendly fire shooting in Afghanistan in 2004.
McChrystal approved paperwork awarding Tillman the Silver Star and reporting that he had died by enemy fire.
Pentagon testimony later showed that the general suspected even then that Tillman had died by fratricide.
So far the response to my book Meltdown, a free-market look at the financial crisis, has been almost eerily favorable. That’s very gratifying, to be sure, but criticism is what gets debate going and pushes a given subject matter beyond its typical confines.
Until now, it’s been hard to come by. Even though it spent ten weeks on the New York Times bestseller list, the paper refuses to review it. When the Times last reviewed one of my books – a review that consisted of a breathless list of forbidden things I had said, as if they refuted themselves – all it managed to do was give the book more notoriety and more sales.
Now comes a shot from left-wing blogger Matthew Yglesias, who is honest enough not to pretend to have read the book. His attack on it comes in the context of a discussion of conservatives’ increasing interest in something called Austrian business cycle theory. (He notes that staffers for Rep. Michele Bachmann, R-MN, confirm that she has been reading the book, which contains a foreword by another congressman, Rep. Ron Paul.)
Woods, Yglesias declares, is "pushing a fringe economic doctrine that tells the right what it wants to hear so he’s gaining popularity."
Um, Matthew, what right-wing circles have you traveled in over the years that have "wanted to hear" scathing criticism of the Federal Reserve? How many "right-wing" politicians can you name that have even mentioned the Fed as a political issue over the past, oh, ninety-six years? Tom Woods LRC
Gary North: The P/E ratio for the S&P 500 is now just under 59. The S&P uses trailing earnings, meaning an average of earnings over the most recent 12 months. Earnings have been so bad that they were negative in the fourth quarter. The ratio goes up as the index goes up and earnings decline. This decline is unlikely to stop in this quarter or next. The P/E ratio is likely to test the 206 figure of the NASDAQ in December 1999, unless it falls rapidly.
Usually, a P/E ratio of 10 is considered a buy. Anything over 20 is not: overvalued. The ratio is three times higher than "overvalued" today, and it likely to triple over the next quarter. Fund managers don't seem to care. They see the ratio as irrelevant. The complete collapse of earnings in the fourth quarter is unlikely to be repeated, fund managers believe.
We are delivering massive, sophisticated forms of industrial slaughter!
Chris Hedges, Truthdig.com: The bodies of dozens, perhaps well over a hundred, women, children and men, their corpses blown into bits of human flesh by iron fragmentation bombs dropped by U.S. warplanes in a village in the western province of Farah, illustrates the futility of the Afghan war. We are not delivering democracy or liberation or development. We are delivering massive, sophisticated forms of industrial slaughter. And because we have employed the blunt and horrible instrument of war in a land we know little about and are incapable of reading, we embody the barbarism we claim to be seeking to defeat.
We are morally no different from the psychopaths within the Taliban, who Afghans remember we empowered, funded and armed during the 10-year war with the Soviet Union. Acid thrown into a girl’s face or beheadings? Death delivered from the air or fields of shiny cluster bombs? This is the language of war. It is what we speak. It is what those we fight speak.
Afghan survivors carted some two dozen corpses from their villages to the provincial capital in trucks this week to publicly denounce the carnage. Some 2,000 angry Afghans in the streets of the capital chanted “Death to America!” But the grief, fear and finally rage of the bereaved do not touch those who use high-minded virtues to justify slaughter. The death of innocents, they assure us, is the tragic cost of war. It is regrettable, but it happens. It is the price that must be paid. And so, guided by a president who once again has no experience of war and defers to the bull-necked generals and militarists whose careers, power and profits depend on expanded war, we are transformed into monsters.
There will soon be 21,000 additional U.S. soldiers and Marines in Afghanistan in time for the expected surge in summer fighting. There will be more clashes, more airstrikes, more deaths and more despair and anger from those forced to bury their parents, sisters, brothers and children. The grim report of the killings in the airstrike, issued by the International Committee of the Red Cross, which stated that bombs hit civilian houses and noted that an ICRC counterpart in the Red Crescent was among the dead, will become familiar reading in the weeks and months ahead.
THE PARADE OF "EXPERTS" - NO MATTER HOW BADLY THEY SCREW THINGS UP...
... WE ARE EXPECTED TO KEEP THEM IN CHARGE!
...if you hated the Project for a New American Century you’re going to despise the Center for a New American Security (CNAS), the freshly minted Washington think-tank that seems to have been granted the foreign policy franchise by the Obama administration.
The whole concept of expertise, of a class of professional know-it-alls whose collective wisdom could be mined and used to rebuild the socio-economic structure, was taken up by the Roosevelt administration. FDR and his advisers happily went along with the media’s characterization of the president’s "Brain Trust," whose braininess would save the nation. Ever since that time we have been infested with a plague of "experts," all of them self-appointed, who are trotted out whenever the Powers That Be want to pull the wool over the eyes of the American people.
Furthermore, they had solid "evidence" of his links to al-Qaeda, and they knew – they just knew – that unless we stopped him the entire region would be drawn into a general conflagration.
A tiny moon called Epimetheus is seen above Saturn's rings and in front of the larger moon Titan, in this picture captured by NASA's robotic Cassini spacecraft.
In 1969, Friedrich Hayek taught at UCLA; he was Flint Professor of Philosophy, a visiting position of great prestige which had in past years been held by Bertrand Russell and Alfred Tarski. I was then a senior and enrolled in his only undergraduate class, Philosophy of the Social Sciences. He also taught a graduate seminar that covered the manuscript of his then forthcoming Law, Legislation, and Liberty. I was too shy to ask Hayek whether I could attend this also; but memories of what I was fortunate enough to hear have stayed with me in the forty years since that time.
Most of the students — I think there were about thirty-five in the class — hadn't previously heard of Hayek; but it was at once obvious to everyone that their professor was someone of extraordinary intelligence. (One student who already admired Hayek was David Glasner, who went on to become a well-known economist.)
At the first session, Hayek told us that in order to understand the philosophy of the social sciences, one needed to know something about the philosophy of science in general. Because he would not be lecturing on this subject, he asked everyone to read a book on the topic, such as his friend Karl Popper's The Logic of Scientific Discovery. He did not just tell us this but went around the room, asking each person to promise to read a book on the philosophy of science. After a number of people had promised, someone asked Hayek why it was necessary for each person to promise individually. Hayek replied that he wanted to make sure everyone had made a commitment. He did not refer to this requirement again, except once to wonder whether those who had chosen Popper's book had quit when they got to the sections on probability theory.
Mention of Popper's book brings to mind another time he mentioned it. When he called the book The Logic of Research, a student raised his hand. "Isn't the title The Logic of Scientific Discovery?" he asked. Hayek smiled and responded, "You are quite right that when the book appeared in English translation in 1959, it was under the title The Logic of Scientific Discovery. But you see, when the book was published in Vienna in 1935, it was under the title Logik der Forschung, which translates, "The Logic of Research." It was very hard to catch Hayek out on a factual inaccuracy, although I recall he once erred on the date of Julius Caesar's assassination. David Gordon Mises.org
"HOW MANY TIMES ARE YOU GOING TO BELIEVE PEOPLE WHO LIE TO YOU?" "It's in the interest of the financial community to send this propaganda out," William Black says. "It's remarkable not that they do it but that it still works."
In other words, this isn't the first time we've been told "the crisis is over" and that "banks are well capitalized" - and probably won't be the last.
The professor and former financial regulator foresees another wave of foreclosures and future bank losses of more than $2.5 trillion vs. the government's $599 billion estimate.
Simply put, the stress tests weren't strong enough to be considered "wimpy," Black says. Furthermore, Fannie Mae, Freddie Mac, AIG and IndyMac were deemed to have "passed" much more stringent government stress tests before their respective failures, he notes,
Jeffrey A. Tucker: Despite having written some tough criticisms of Jack Kemp over the years, having even called him a socialist when he was running the Department of Housing and Urban Development (1989–1993) under the first Bush administration, I've always had a soft spot for him. His death is really a tragedy and all the more so that it was not even widely remarked upon in Republican ranks. He was a major intellectual force in his day, and his sympathies with genuine liberalism of the old school made him attractive, at some level, to libertarians, if only because we understood each others' language.
My impression is that the party machine decided to eat him after being a VP on a losing presidential ticket in 1996 and then coming out against the Iraq war in 2002. The way it works with these people is that you are deemed a rising star and courted insofar as you say the right things and can be useful in bringing power to the party, but once you lose an election or say something contrary to the party line, your ideas and your person are forgotten. It is a live-by-the-sword/die-by-the-sword situation, so in a political-party sense Jack Kemp was long gone. Mises blog
(CBS) Not only is our current recession unusually deep and severe, but it's about to become the longest since the Great Depression. Housing prices are crashing, stocks have fallen into a deep bear market, and the only things up besides unemployment are the sale of ammunition and AR-15 rifles.
Figuring out how we've reached this point is not easy. One choice is to blame laissez-faire policies, an argument that's been invoked by everyone from notoriously pessimistic economist Nouriel Roubini and reporters at the New York Times to French President Nicolas Sarkozy.
On the other hand, the number of pages of federal regulations has swelled, not shrunk, over the last decade. The number of employees at the relevant agencies (SEC, FDIC, FINRA, OCC, NCUA, FFIEC, OTS, FHRA, and the FRB) has continued to grow. It was regulatory failure, not market failure, that gave us the spectacles of Darrel Dochow, Bernie Madoff, and taxpayer-funded bonuses at AIG.
Another explanation is that unfettered greed, especially on the part of Wall Street and mortgage lenders, is the culprit. But human greed and avarice are not unique to the last decade, when housing prices skyrocketed beyond what fundamentals permit, making that explanation less satisfying than it should be.
A new book by Thomas Woods called Meltdown (Regnery Publishing, 2009) provides a more fulfilling account of what went wrong, why it happened, and who's to blame. Woods holds a doctorate in history from Columbia University and is the author of the bestselling, iconoclastic The Politically Incorrect Guide to American History.
Woods' latest book makes a strong argument for laying the blame squarely on the shoulders of Washington politicians and regulators. One chapter is titled "How Government Created the Housing Bubble," and points to special privileges granted to Fannie Mae and Freddie Mac, a federal law allowing tax-free capital gains, and the Community Reinvestment Act's incentives for banks to make bad loans.
The ultimate culprit, in Woods' view, is the Federal Reserve. In 2001, he writes, "Fed chairman Alan Greenspan sought to reignite the economy through a series of rate cuts... the new money and credit overwhelmingly found its way into the housing market, where artificially lax lending standards made excessive home purchases and speculation in homes seem to many Americans like good financial moves." Declan McCullagh CBS News
Having lost both houses of Congress and the White House in two straight elections, Republicans are going through an identity crisis, its leaders holding town hall meetings to “listen” to the people.
“What should we focus on? Should we drop the social issues? How do we get the young people back?”
Such angst and soul-searching is not the mark of the leader, but the mark of a man suffering from doubt and despair.
Why is the party in trouble? Simple. Dubya got a hold of the keys, got high on neocon hooch, and crashed and rolled the family SUV.
He launched an unnecessary war against a country that had not attacked us. With his utopian No Child Left Behind scheme and his Medicare drug plan, he did his passable imitation of LBJ, and blew a hole in the budget.
Touting globalism, he presided over the loss of one in every four U.S. manufacturing jobs and ran up $5 trillion in trade deficits. He refused to defend the Mexican border against an invasion, then pushed an amnesty for the invaders.
This was no Reaganite. This was the neocons’ apprentice. Pat Buchanan
It seems the national commentariat is obsessed with the subject of torture, and there is talk of a “truth commission” to investigate and hold the Bushies accountable, up to and including The Decider himself. This is nothing but a lot of posturing on the part of liberals who know nothing will come of it: it was clear from the beginning that holding anyone accountable, never mind prosecutions, would never happen, and that the revelations of “enhanced interrogation techniques” are merely the occasion for the release of large quantities of hot air. That’s because both parties knew about the “EIT”s (that’s government acronym-ese for enhanced interrogation techniques, i.e. waterboarding, beatings, sexual humiliation, etc. ad nauseum.) As I wrote in my “Behind the Headlines” column on April 20:
“The whole thing was hidden from the public–but not from congressional leaders, who were informed of the harsh interrogation methods and never objected or revealed what they knew.
“This last is key to understanding one good reason why no one is being prosecuted, and why the top Obamaites (although not their rank-and-file followers) are generously declaring it’s time to “move on.” Going after the torturers, we’re told, would be too divisive. Well, yes, it would divide the Democratic Party, first and foremost, as the complicity of Pelosi & Co. is made all too clear and it turns out that torture is a bipartisan sport.”
Just about two weeks later, in Friday’s [May 8] edition of the Wall Street Journal, we read: “Congressional leaders were briefed in detail about techniques used in the Central Intelligence Agency’s interrogation program, according to a new intelligence document.
The document appears to conflict with recent statements from House Speaker Nancy Pelosi, who was then the top Democrat on the House intelligence committee. Ms. Pelosi has said she hadn’t been told that the CIA was using the technique known as waterboarding, or simulated drowning. According to the document, Ms. Pelosi was one of the first lawmakers briefed on the interrogations in 2002….
“The document lists 40 briefings provided to lawmakers on intelligence, judiciary and other panels, the first of which was provided to then-House intelligence committee chairman Porter Goss, a Florida Republican, and Ms. Pelosi of California on Sept. 4, 2002. That briefing is described as covering ‘enhanced interrogation techniques.’ It included the use of the techniques on detainee Abu Zubaydah, background on legal authority, and “a description of the particular [enhanced interrogation techniques] that had been employed.’
“A recently declassified Justice Department memo on the CIA program dated May 30, 2005, states the CIA used waterboarding to interrogate Mr. Zubaydah ‘at least 83 times during August 2002.’”
What did Pelosi know and when did she know it suddenly becomes an important issue: will she be a victim of the Democratic-run “truth commission”? Like the French Revolution, will the Obama-ites wind up turning on their own leaders (except, of course, for the Dear Leader)? Raimondo in Taki's mag
Sibel Edmonds, founder of the National Security Whistleblowers Coalition, discusses the hypocrisy of free speech invocations in defense of Rosen/Weissman while whistle-blowers endure gag orders, the numerous cover-ups of unspecified Congressional misdeeds caught on wiretaps, the dedication of rank-and-file FBI agents to investigate crimes despite political implications and how she is ready to tell her story to a publisher willing to fight government censorship.
Sibel Edmonds is a former FBI-contract language specialist turned whistleblower against government incompetence and corruption. The ACLU has described her as the most gagged person in U.S. history. Antiwar.com
PENTAGON BLACK BUDGET GROWS TO MORE THAN $50 BILLION!
SECRET OPERATIONS BUDGET ROUGHLY EQUAL TO ENTIRE DEFENSE BUDGETS OF THE UK, FRANCE, OR JAPAN!
Wired.Com: The Pentagon wants to spend just over $50 billion on classified programs next year, newly-released Defense Department budget documents reveal. “That’s the largest-ever sum,” according to Aviation Week’s Bill Sweetman, a longtime black-budget seer — a three percent increase over last year’s total.
It makes the Pentagon’s secret operations, including the intelligence budgets nested inside, “roughly equal in magnitude to the entire defense budgets of the UK, France or Japan,” Sweetman adds. All in all, about seven and a half percent of the Defense Department’s total spending is now classified.
Black-world weapons-buying “remains dominated by the single line item,” according to Sweetman. (You can find it under the Air Force’s “other procurement” section, on page F-21 here.) “This year’s number stands just above $16 billion. In inflation-adjusted terms, that’s 240 per cent more than it was ten years ago.”
Many of the secret budgets still remain clandestine, however. In the research budget, the line item for a “Special Program”of the super-secret National Security Agency is a string of zeros. Same goes for an NSA “Cyber Security Initiative” kitty. And don’t even ask about NSA’s “Intelligence Support to Information Operations” account. That’s a blank slate, too.
How bad are baby boomers at financial planning? Extremely bad, according to Annamaria Lusardi and Olivia Mitchell of the National Bureau of Economic Research. They found that more than one-quarter of boomer households thought "hardly at all" about retirement and that financial literacy among boomers was "alarmingly low." Half could not do a simple math calculation (divide $2 million by five) and fewer than 20 percent could calculate compound interest. The NBER researchers also found that, as of 2004, the typical boomer household was holding nearly half its wealth in the form of housing equity. Uh-oh.
For a closer look at the retirement squeeze, consider a study released last month by the Congressional Research Service. Patrick Purcell analyzed the most recent data on consumer finances gathered by the Federal Reserve. He found that for the 53 percent of households that hold at least one retirement account, the median combined balance was a mere $45,000.
Hold on, you say, that figure includes some younger workers who haven't started saving in earnest yet. Okay, for households headed by persons between the ages of 55 and 64, the median value of all retirement accounts was just $100,000. Purcell noted that for a 65-year-old man retiring last month, that $100,000 would buy an annuity that would pay a paltry $700 a month for life, based on current interest rates.
And here's an extra bit of bad news: The Fed data used in Purcell's study were gathered in 2007. With stock market declines since then, the median account balances are probably even lower now.
What's going to happen? Certainly, people will try to save more. But my guess, knowing my generational cohort, is that we'll want a government bailout to supplement our too-meager retirement savings. Unfortunately, the Treasury won't have enough money to fund our Medicare benefits, let alone a top-up in Social Security.
Justin Raimondo: I was a bit surprised, albeit pleasantly, to see Jon Stewart nail Harry Truman as a war criminal. After all, Stewart is a typical Hollywood liberal, whose politics are by now a staple of the corporate, anodyne culture that permeates the airwaves, and this naturally excludes everything that might challenge the liberal groupthink that constitutes the conventional wisdom in the Age of Obama.
Certainly, in "respectable" quarters, criticism of anything or anyone connected to the great liberal "anti-fascist" crusade, the "Good War," is strictly verboten, and surely an intelligent guy like Stewart knows this. Yet – contrary to what he said later – this wasn’t an argument that arose in the heat of the moment, in the context of a robust discussion with obnoxious neocon Clifford May on the alleged merits of torture.
No, Stewart had apparently thought this one out, at least to some extent, because when May asked him if he thought Truman was a war criminal for nuking two Japanese cities, he didn’t just say "Yes" – he went into a whole riff about how, if we had first demonstrated the power of this new weapon on an uninhabited atoll somewhere, and then informed the Japanese government that they’d better surrender, or else that would happen in Japan, then and only then would it be okay to drop the Big One. The audience cheered him on, as he took apart the frenetically hysterical May, whose ferret-like features and organizational affiliations make him the perfect spokesman for a policy described by Stewart as "temporary insanity." Yet, a few days later, Stewart was back to the same subject, minus the rabid ferret, this time reversing his stance – and apologizing for calling the little haberdasher a war criminal.
TALEB: GLOBAL MONEY CRISIS "VASTLY WORSE" THAN 1930's!
GOLD AND COPPER MAY "RALLY MASSIVELY"!
(Bloomberg) -- The current global crisis is “vastly worse” than the 1930s because financial systems and economies worldwide have become more interdependent, “Black Swan” author Nassim Nicholas Taleb said.
“This is the most difficult period of humanity that we’re going through today because governments have no control,” Taleb, 49, told a conference in Singapore today. “Navigating the world is much harder than in the 1930s.”
The International Monetary Fund last month slashed its world economic growth forecasts and said the global recession will be deeper than previously predicted as financial markets take longer to stabilize. Nouriel Roubini, 51, the New York University professor who predicted the crisis, told Bloomberg News yesterday that analysts expecting the U.S. economy to rebound in the third and fourth quarter were “too optimistic.”
“Certainly the rate of economic contraction is slowing down from the freefall of the last two quarters,” Roubini said. “We are going to have negative growth to the end of the year and next year the recovery is going to be weak.”
Federal Reserve Chairman Ben S. Bernanke told lawmakers May 5 that the central bank expects U.S. economic activity “to bottom out, then to turn up later this year.” Another shock to the financial system would undercut that forecast, he added.
The global economy is facing “big deflation,” though the risks of inflation are also increasing as governments print more money, Taleb told the conference organized by Bank of America- Merrill Lynch. Gold and copper may “rally massively” as a result, he added.
THE FEDERAL RESERVE INSPECTOR GENERAL IN CONGRESSIONAL TESTIMONY!
She does not appear to know what losses the Fed has suffered; she does not appear to know what kind of off-balance sheet exchanges the Fed engages in; she does not appear to know anything at all about a little ol' $2 trillion item!
China has given its clearest warning to date that emergency monetary stimulus by Western governments risks setting off worldwide inflation and undermining global bond markets!
"A policy mistake made by some major central bank may bring inflation risks to the whole world," said the People's Central Bank in its quarterly report.
"As more and more economies are adopting unconventional monetary policies, such as quantitative easing (QE), major currencies' devaluation risks may rise," it said. The bank fears a "big consolidation" in the bond markets, clearly anxious that interest yields will surge as western states try to exit their QE experiment.
Simon Derrick, currency chief at the Bank of New York Mellon, said the report is the latest sign that China is losing patience with the US and aims to diversify part its $1.95 trillion (£1.3 trillion) foreign reserves away from US Treasuries and other dollar securities....
Hans Redeker, head of currencies at BNP Paribas, said China is switching into hard assets. "They want to buy production rights to raw materials and gain access to resources such as oil, water, and metals. They know they can't keep buying bonds," he said.
Premier Wen Jiabao left no doubt at the Communist Party summit in March that China is irked by Washington's response to the credit crunch, suspecting that the US is engaging in a stealth default on its debt by driving down the dollar. "We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries," he said.
JUSTICE DEPT. DROPS ITS CASE AGAINST WAR RESISTER!
CONGRATULATIONS TO THE COURAGEOUS LT. EHREN WATADA!
“I could never conceive of our leader betraying the trust we had in him. As I read about the level of deception the Bush administration used to initiate and process this war, I was shocked. I became ashamed of wearing the uniform. If the president can betray my trust, it’s time for me to evaluate what he’s telling me to do.”
The Department of Justice has dropped its case against 1st Lt. Ehren Watada, a war resister who refused Iraq deployment in June 2006 and denounced President George W. Bush’s decision to invade as illegal and immoral.
In Feb. 2007, military judge Lieutenant Colonel John Head halted Watada’s case following possible inconsistencies concerning a “stipulation of fact” agreed before the hearing. The decision led to a mistrial, ending Watada’s court martial. The Army appealed, but a judge said Watada could not be tried again on the same charges, as it would violate his right to be free of double jeopardy.
The Justice Department is dropping its appeal of that judge’s decision. “Because there are no longer any criminal charges pending against Lt. Watada, and because (his) military service has been extended far beyond his normal release date, he anticipates that he will soon be released from active duty,” Watada’s attorney, James Lobsenz, said in a media advisory published Wednesday. “He plans to return to civilian life and to attend law school.”
(Charles says to understand the growth of the Taliban it would pay to look at the inflation and price controls of the Karzai government, just as Chiang Kai-shek's price controls drove the Chinese peasantry into the arms of Mao Tse-Tung.)
Patrick Cockburn, Countepunch:Karzai’s seven years in power since the overthrow of the Taliban in 2001 have been notable for his failure to prevent their resurgence. Suppose the president’s motorcade this week had taken a different route and headed, not for the airport, but for the southern outskirts of Kabul, he would soon have experienced the limits of his government’s authority. It ends at a beleaguered police post within a few minutes’ drive of the capital. Drivers heading for the southern provincial capitals of Ghazni, Qalat and Kandahar nervously check their pockets to make sure that they are carrying no documents linking them to the government.
They do so because they know that they will not have travelled far down the road before they are stopped and their identity checked by black turbaned Taliban fighters. Moving swiftly on their motorcycles, squads of six to eight men set up temporary checkpoints along the road. Sometimes they even take a traveller’s mobile phone and redial numbers recently called. If the call is answered by a government ministry or, still worse, a foreigner, then the phone’s owner may be executed on the spot. The jibe that Mr Karzai is only “mayor of Kabul” has some truth to it. It is not only when travelling south that the Taliban is in control. I wanted to go to Bamyan, the province in central Afghanistan which is inhabited by the Hazara, a minority ethnic group who are central-Asian in appearance and Shia by religion, and who were savagely persecuted and massacred by the Sunni fundamentalist Taliban during their years in power.
OFFICIALS BEHIND SELF-DEALING PROGRAMS HAD REFUSED TO TALK TO I.G. INVESTIGATORS!
Bogus report erroneously listed many military analysts as having no ties whatsoever to defense contractors!
NYTimes: In a highly unusual reversal, the Defense Department’s inspector general’s office has withdrawn a report it issued in January exonerating a Pentagon public relations program that made extensive use of retired officers who worked as military analysts for television and radio networks.
Donald M. Horstman, the Pentagon’s deputy inspector general for policy and oversight, said in a memorandum released on Tuesday that the report was so riddled with flaws and inaccuracies that none of its conclusions could be relied upon. In addition to repudiating its own report, the inspector general’s office took the additional step of removing the report from its Web site.
The inspector general’s office began investigating the public relations program last year, in response to articles in The New York Times that exposed an extensive and largely hidden Pentagon campaign to transform network military analysts into “surrogates” and “message force multipliers” for the Bush administration. The articles also showed how military analysts with ties to defense contractors sometimes used their special access to seek advantage in the competition for contracts related to Iraq and Afghanistan.
The report released in January took issue with the articles. It said investigators could not find any instance where an analyst used special access “to achieve a competitive advantage for their company.” It also said there was “insufficient basis” to conclude that the program violated laws prohibiting propaganda...
THE OBAMUNNISTS WILL CREATE MILLIONS OF GREEN JOBS... UH-HUH
At what expense?
Robert Murphy and other economists discuss the wild claims being made about the benefits of "green" technology. Specifically, the case of Spain is discussed. Obama recently has referred to Spain as a leader in green tech and a model to be followed by the US. See if you agree.
CNN WARNS SWINE FLU COULD CONTINUE RIGHT THROUGH SWEEPS!
SCARY REPORTING SPREADS TO MSNBC!
BorowitzReport.com: CNN reported today that its reporting of the swine flu story could spread significantly in the days and weeks ahead and might continue throughout the all-important May sweeps rating period.
CNN said that its early reporting of the swine flu story had been contained to one or two hours a day but had recently increased to all twenty-four hours.
"This is an alarming spread in the reporting of this story," said Carol Foyler, a CNN spokesperson. "We have seen swine flu spread from primetime to all the other day parts." Ms. Foyler said that in recent days CNN had identified several cases of "increasingly scary graphics and fonts" about swine flu during its news programs.
"These scary graphics are popping up everywhere in greater and greater numbers," she said. "These are signs that the swine flu coverage is growing more intense and virulent."
The CNN spokesperson said that news host Lou Dobbs had even taken time out from fear-mongering about immigration to fear-monger about swine flu: "This is an unprecedented development."
Even as CNN reported that its broadcasting of the swine flu story was on the rise, there was evidence that intense cases of swine flu reporting had spread from CNN to MSNBC.
"We have also seen several cases of panic-inducing graphics and terrifying fonts," said MSNBC spokesman Terry McTate. "I don't want to frighten people, but we haven't seen a story this scary since Y2K."
"Insiders are overwhelmingly bearish on this market and have become even more so in recent weeks."
More from The Pragmatic Capitalist:I recently wrote about reports that insider selling was at record highs and buying was practically non-existent. The selling has become even more alarming in the last week and the buying has slowed to an absolute trickle. Below you’ll find the list of latest insider buys and sells. The sells are staggering with the amounts ranging from $3MM to $63MM (and I was only able to copy one page). The buys, on the other hand, are meager and range from $100K to $635K (the $800K purchase is a few months old and shouldn’t be in the data).
OUTRAGE OF THE DAY: Taxpayers Won't Get Chrysler "Loan" Back!
...lawyers representing Chrysler said in court yesterday that the government would not be getting its $8 billion of loans back, including about $4 billion in debtor-in-possession financing. Well that news was so stunning -- so obviously an admission that the bankruptcy itself is a bailout to the union -- that we had a hard time believing it. But it's totally true.
Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy.
An Obama administration official confirmed Tuesday that Chrysler won't be repaying the loans. A portion of the bridge loan may be recovered by Treasury from the assets of Chrysler Financial, the former credit arm of the automaker which is essentially going out of business as part of the reorganization.
Three New Deals: Reflections on Roosevelt's America, Mussolini's Italy, and Hitler's Germany, 1933-1939. By Wolfgang Schivelbusch. Metropolitan Books, 2006. 242 pgs.
Critics of Roosevelt's New Deal often liken it to fascism. Roosevelt's numerous defenders dismiss this charge as reactionary propaganda; but as Wolfgang Schivelbusch makes clear, it is perfectly true. Moreover, it was recognized to be true during the 1930s, by the New Deal's supporters as well as its opponents.
When Roosevelt took office in March 1933, he received from Congress an extraordinary delegation of powers to cope with the Depression. "The broad-ranging powers granted to Roosevelt by Congress, before that body went into recess, were unprecedented in times of peace. Through this 'delegation of powers,' Congress had, in effect, temporarily done away with itself as the legislative branch of government. The only remaining check on the executive was the Supreme Court. In Germany, a similar process allowed Hitler to assume legislative power after the Reichstag burned down in a suspected case of arson on February 28, 1933."(p.18)
The Nazi press enthusiastically hailed the early New Deal measures: America, like the Reich, had decisively broken with the "uninhibited frenzy of market speculation." The Nazi Party newspaper, the Völkischer Beobachter, "stressed 'Roosevelt's adoption of National Socialist strains of thought in his economic and social policies,' praising the president's style of leadership as being compatible Hitler's own dictatorial Führerprinzip." (p.190)
Nor was Hitler himself lacking in praise for his American counterpart. He "told American ambassador William Dodd that he was 'in accord with the President in the view that the virtue of duty, readiness for sacrifice, and discipline should dominate the entire people. These moral demands which the President places before every individual citizen of the United States are also the quintessence of the German state philosophy, which finds its expression in the slogan "The Public Weal Transcends the Interest of the Individual." (pp.19-20) A New Order in both countries had replaced an antiquated emphasis on rights. David Gordon Mises.org
The Economist recently reported that Ayn Rand’s novel Atlas Shrugged, first published in 1957, is back on the bestseller lists. A week before the president’s inauguration, more people were buying it than Obama’s Audacity of Hope.
For the uninitiated, Atlas explores a future world in which the nation’s economy is collapsing because of government interference. The theme developed out of Rand’s own era: she started planning her novel in 1943, in the midst of Franklin Roosevelt’s New Deal. But it’s no wonder that it seems relevant today. New Deal activism, which was principally responsible for prolonging the Great Depression, guides our current economic stimulators.
Rand’s disciples are a devoted lot. A recent issue of the New Yorker profiled one local group—the dentist with “John Galt,” the hero of Atlas Shrugged, on his license plate; the wealth manager who piously intones, “I’ve been a follower of Ayn Rand for five years”; the helpful fellow who suggests, “When civilization collapses, we’ll just have to organize an Objectivist gang.”
Mention the name Isabel Paterson in such a gathering, and you’re likely to draw blank looks. For all the fervor that Rand inspires, little notice is paid to the woman who most inspired her.
Paterson (1886-1961) was a novelist and literary critic. She was slight, just over five feet tall, with a delicate taste in food and drink, a deep love of nature, and a nationally famous sense of humor. Stubborn and sharp-witted, she was also one of the New Deal’s fiercest foes.
Paterson grew up in poverty on the Western frontier. She had only two years of formal schooling. But she learned from her own experience, as well as her encyclopedic knowledge of history, that economic success results from individual initiative, not federal management. As an author, she also knew what makes a plausible story and could see that there could not possibly be a happy ending to the government’s efforts to fix everything that was broken in the 1930s.
Both Roosevelt and his hapless predecessor, Herbert Hoover, tried to inspire confidence by keeping unsuccessful enterprises afloat at the expense of successful ones. Strangely, prudent investors declined to be stimulated, no matter how fervently they were exhorted to trust the government’s programs. For Paterson, that result was tediously predictable. She told readers she was “tired of being told that ‘credit depends on confidence.’ Fudge. Credit depends on real assets, sound money and a clean record. … When any one asks us to have confidence we are glad to inform him that the request of itself would shatter any remaining confidence in our mind.” Steven Cox AmConMag
In a letter to James Madison, Thomas Jefferson asked how, "one generation of men has a right to bind another." He concluded by saying, "No generation can contract debts greater than may be paid during the course of its own existence."- Lew Rockwell Blog
YOU DIDN'T THINK ALL THIS BAILOUT, GUARANTEE, AND BOONDOGGLE BUSINESS WAS FREE, DID YOU?
Back then (1970s), as now, the members of the Fed were well aware of the harmful effects of inflation. In private, they vowed not to let it get out of hand and several times even started to do something about it. But when their anti-inflationary moves caused the unemployment rate to rise to 6.5 percent or 7 percent, they forgot their promises and again began expanding the money supply and reducing interest rates.
Some of my fellow economists, including many at the Fed, say that the big monetary goal is to avoid deflation. They point to the less than 1 percent decline in the consumer price index for the year ending in March as evidence that deflation is a threat. But this statistic is misleading: unstable food and energy prices may lower the price index for a few months, but deflation (or inflation) refers to the sustained rate of change of prices, not the price level. We should look instead at a less volatile price index, the gross domestic product deflator. In this year’s first quarter, it rose 2.9 percent — a sure sign of inflation.
Besides, no country facing enormous budget deficits, rapid growth in the money supply and the prospect of a sustained currency devaluation as we are has ever experienced deflation. These factors are harbingers of inflation.
The Keynesian fallacies live on and on, and are present twice a week from Paul Krugman. Today, our Hero tells us why falling wages (and, by assertion, all falling prices) are harmful. The Great One writes:
Things get even worse if businesses and consumers expect wages to fall further in the future. John Maynard Keynes put it clearly, more than 70 years ago: "The effect of an expectation that wages are going to sag by, say, 2 percent in the coming year will be roughly equivalent to the effect of a rise of 2 percent in the amount of interest payable for the same period." And a rise in the effective interest rate is the last thing this economy needs.
You see, Krugman believes that there should be no consequences to an unsustainable boom, and that once a bubble bursts, then the spending that occurred during the boom must be continued at all costs. That is not economics, folks. That is nonsense.
The boom was especially pernicious because foreigners were willing to accept U.S. Dollars sight on seen and to buy massive amounts of U.S. Government debt. Thus, Americans could borrow at will, refinance their houses, purchase new cars, take vacations and buy all sorts of things, all based on the imagined "equity" on their houses. This could not continue.
Yet, Krugman now insists that we have to keep borrowing to keep up this frenetic pace of consumer spending. If consumers are maxed out, well, it is up to the government to do it, and if no one accepts U.S. debt, then the Fed needs to print, print, print.
This is utter foolishness. To Krugman, there are no "fundamentals" in an economy. Instead, it is just a Big Blob in which capital magically appears and goods just fly onto our shelves. Furthermore, he cannot even differentiate between nominal and real wages. The guy is hopeless, and it tells us something about the state of "elite" economics in the academic world. Bill Anderson Mises blog
WHITE HOUSE THREATENS TO SIC ITS LAP DOG PRESS CORPS ON OPPONENTS!
THE WATCHDOG PRESS IS A THING OF THE PAST! THE WHITE HOUSE PRESS SERVES POWER... AND THE WHITE HOUSE KNOWS IT:
CLUSTERSTOCK.COM: The Obama administration threatened to use the White House press corps to besmirch the reputation of one of the financial firms that holds Chrysler debt, according to a prominent New York bankruptcy lawyer.
If true, the explosive charge shows that the White House was willing to go much further than is widely known to have its way in the attempt to restructure the Detriot automaker.
"One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight...That was Perella Weinberg," Tom Lauria, the head of the bankrutpcy department for top New York City lawfirm White & Case, told a WJR 760 radio host....
The suggestion that the adminsitration would direct the White House press corps, composed of newspaper reports and other journalists who cover the Whtie House, to ruin the reputation of holdouts is sure to raise the ire of people who prize media independence. It's not clear whether this was an idle threat or whether the White House believes it exercises this level of control over the journalists asigned to cover it. It harkens back to the dirty tricks tactics of past administrations, and suggest a cavalier attitude toward the exercise of political power to control the actions of private citizens.
One test of whether the White House press corps is as compliant as the White House seems to believe will be how they handle Lauria's charge. The story has not yet been picked up by the traditional media. The blog Zero Hedge, a new but well-read financial blog, picked up the story and posted a downloadable excerpt from the radio interview.
... it's important to remember we are in this mess because Greenspan elected to blow another bubble rather than face what would likely have been a short-term recession of limited consequences. Instead, Greenspan elected to bail out his banking buddies who were in deep trouble with loans to dot-com companies and Latin America. The fruits of Greenspan's attempt to bail out banks were worldwide housing and credit bubbles of epic proportion that have now popped, leaving banks much worse off than before.
Compounding Greenspan's errors, the trio of Bernanke, Geithner, and Obama, like the trio of Bernanke, Paulson, and Bush before them, all seem to think the results will be better this time if we just do it again with more force.
I have news for all of them. While we may not be able to predict for certain the consequences of "Stupidity Squared" we can say for certain the result cannot possibly be any good.
The Federal Reserve has been hobbled by at least two major shortcomings that were primarily responsible for the current and several previous credit crises. Its failure to spot the importance of changing financial markets and its commitment to laisser faire economics were big mistakes and justify a fundamental overhaul of the Fed.
Kaufman actually comes close to my own view near the end of his piece:
Ironically, the problem was made worse by the fact that the Fed was inconsistently libertarian. The central bank stuck to its hands-off approach during monetary expansion but abandoned it when constraint was necessary. And that, in turn, projected an unpredictable and inconsistent set of rules of the game.
We should, therefore, fundamentally re-examine the role of the Fed and the supervision of our financial institutions. Are the current arrangements within the Fed structure adequate – from its regional representation to its compensation for chairman and governors to its terms of office for governors? How can the Fed’s decision-making process be improved? If we were to create a new central bank from the ground up, how would it differ? At a minimum, the Fed’s sensitivity to financial excesses must be improved.
That's right Mr. Kaufman, the Fed was entrusted to do all the things you discuss in your article, and the Fed screwed up horribly. But rather than tinkering with it and getting it j-u-u-u-u-st right, let's be consistently libertarian. No central bank with a monopoly on money production, no legal tender laws, no special regulations on banking. And if a bank gets overleveraged and blows up, Go Straight to Bankruptcy Court. Do not pass Paulson, do not collect $700 billion. Bob Murphy's blog
The policies of Franklin Roosevelt kept the country in an unnecessary depression for many years. The lesson one might think is obvious: don't do that kind of thing any more!
So what does the U.S. government do when the housing bubble pops? It repeats all the mistakes of the past, fobbing off its regimentation and robbery as the "solution."
So how do we refute, crush, demolish, and destroy this tendency? First, the intellectual error must be exposed. Toward that end, we have put together the ultimate blast against the myths of 1929 crash, the Great Depression, the New Deal, and FDR. We have cut the price down as low as possible just to get the truth out as widely as possible.
They explain and prove what is generally unknown: the Fed caused the crash, FDR prolonged the depression, the Fed tried to fix its mistake but failed, and the entire New Deal project led to a massive tax revolt that frightened the heck out of the elites.
Talk about repeating history!
But we have to know it well in order to draw attention to it. These four books do the job. It is our secret weapon against the newest attempts to loot the country in the name of fixing the problems caused by government and its central bank.
1 Paperback - America's Great Depression $15.00 1 Politically Incorrect Guide to the Great Depression and the New Deal $17.00 1 Taxpayers in Revolt $12.00 1 Roosevelt Myth, The Paperback with Raico Introduction $17.00
"And this sport and fierce strife of idle men are thought to be worthy of the name of philosophy that, by these devices through so many ages, has grown, to be sure, into a bulk that is enormous, but one of little weight. " - Thomas Reid.
Read an essay on Thomas Reid, contemporary of Hume and Smith.
Ice is expanding in much of Antarctica, contrary to the widespread public belief that global warming is melting the continental ice cap.
The results of ice-core drilling and sea ice monitoring indicate there is no large-scale melting of ice over most of Antarctica, although experts are concerned at ice losses on the continent’s western coast. Read the rest: The Australian
Nations that use torture disgrace themselves. Armed forces and police that torture inevitably become brutalized and corrupted. "Limited" use of torture quickly becomes generalized. "Information" obtained by torture is mostly unreliable.
I learned these truths over fifty years covering dirty "pacification" wars, from Algeria to Indochina, Central and South America, southern Africa, the Mideast, Afghanistan, and Kashmir in which torture was commonly used.
In spite of all the historical evidence that torture is counterproductive, the Bush administration encouraged torture of anti-American militants (aka "terrorists") after the 9/11 attacks. The full story has not yet been revealed, but what we know so far is revolting and shameful. Britain and Canada were also complicit as they used information derived from torture and handed suspects over to be tortured.
Many Americans and human rights groups are now demanding that the Bush administration officials who employed and sanctioned torture face justice. President Barack Obama hinted his new attorney general, Eric Holder, might investigate this whole ugly business. But the Obama White House clearly wants to dodge this issue.
Republicans, who have become America’s champion of war and torture, are fiercely resisting any investigation, and lauding torture’s benefits. Just when it seemed impossible for the dumbed-down Republican redneck party to sink any lower, it has by endorsing torture as the American way.
So, too, some senior intelligence and Pentagon officials including, dismayingly, Obama’s new CIA chief, Leon Panetta. He should know better. Many senior Congressional Democrats who sanctioned torture, or did nothing to stop it, are equally reluctant that the torture scandal be further investigated.
Torture is a crime under US law. It is a crime under the Third Geneva Convention, and the UN’s Anti-Torture Convention, both of which the US signed. Kidnapping and moving suspects to be tortured in third countries is a crime. Torture violates core American values...
Use a power drill (a favorite "investigative" tool of America’s Iraqi Shia allies) on Dick Cheney, and it would take only minutes to get him to admit he’s Osama bin Laden...
When I served in the US Army, I was taught that any illegal order, even from the president, must be refused and that mistreating prisoners was a crime... Eric Margolis, LewRockwell.com
When Barack Obama urged passage of his so-called stimulus measure in February, he claimed that only bold government action would prevent the economy from slipping into a deep depression. In making that argument, he was only repeating the conventional wisdom, according to which markets are not self-correcting—except in the very long run—and state intervention is necessary to revive economic activity.
Economic theory can tell us why these claims are incorrect and why, in fact, even the appearance of prosperity that those measures can produce causes still greater damage and leads to a more severe correction in the long run. But we can also refer to the testimony of history. In particular, the depression of 1920-21, which most people have never heard of, is an example of the resumption of prosperity in the absence of government stimulus, indeed in the face of its very opposite. If economies cannot turn around without these interventions, then what happened in this instance should not have been possible. But it was.
During and after World War I, the Federal Reserve inflated the money supply substantially. Once the Fed finally began to raise the discount rate—the rate at which it lends to banks—the economy slowed as it started readjusting to reality. By the middle of 1920, the downturn had become severe, with production falling by 21 percent over the next 12 months. The number of unemployed people jumped from 2.1 million in 1920 to 4.9 million in 1921.
From 1929 onward, Herbert Hoover and then Franklin Roosevelt tried to fight an economic depression by making labor costlier to hire. Warren G. Harding, on the other hand, said in the 1920 acceptance speech he delivered upon receiving the Republican nomination, “I would be blind to the responsibilities that mark this fateful hour if I did not caution the wage-earners of America that mounting wages and decreased production can lead only to industrial and economic ruin.” Harding elsewhere explained that wages, like prices, would need to come down to reflect post-bubble economic realities.
Few American presidents are less in fashion among historians than Harding, who is routinely portrayed as a bumbling fool who stumbled into the presidency. Yet whatever his intellectual shortcomings—and they have been grotesquely exaggerated, as recent scholars have admitted—and whatever the moral foibles that afflicted him, he understood the fundamentals of boom, bust, and recovery better than any 20th-century president. - Tom Woods, The American Consevative
After eight years of watching conservatives blow trillions of dollars and comport themselves like anti-intellectual, jingoistic blockheads, I found myself ashamed to admit that the Left seemed to have all the genuine intellectuals—people who seemed to possess real curiosity, who refused to accept whatever official line the government was shelling out, and who sought genuine understanding instead of name-calling and pointless vitriol.
With the Left now in power, though, they’ve by and large reverted to form. The very same people who just a year ago prided themselves on evaluating every Pentagon press release with an air of suspicion and hostility now accept without cavil whatever the Federal Reserve chairman or the Treasury secretary tell them. They’ll believe whatever economic superstition, no matter how transparently ludicrous, that happens to be in fashion. Whatever happened to “Question Authority”?
Air America host Thom Hartmann is a perfect example. His article on the economic crisis posted at the Huffington Post gets pretty much everything dead wrong, and yet his point of view is by and large the conventional wisdom.
Let’s start with the economists whose ideas, according to Hartmann, led us to the current crisis. Why, they’re “Ludwig Von Mises, Freidrich [sic] Von Hayeck [sic], Milton Friedman, Alan Greenspan, Tom Freidman [sic], Robert Rubin, Larry Summers, and Ayn Rand.”
Now I’m sporting enough to look past the fact that Hartmann makes two spelling errors in a single economist’s name. Still, color me skeptical that Hartmann knows a blessed thing about the work of F.A. Hayek. (I assume he thinks these people are more or less interchangeable, that Mises = Friedman = Summers = Rubin, that Mises wouldn’t have denounced at least several of these figures, and that the differences between them are probably just trivial and not worth mentioning.)
Quiz time, Thom! Name one book on economic theory (so The Road to Serfdom, if you happen to have heard of it, doesn’t count) Hayek wrote that you’ve read, flipped through, held in your hand, or even heard of. Stumped? How about one article? Stumped again? Then why not do the decent and honorable thing and shut up until you can speak from authority rather than prejudice and ignorance? Sound fair? Tom Woods, TakiMag.com
SCARY REPORTING SPREADS TO MSNBC!
