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Thursday, October 08, 2009

How to stop the Senate healthcare plan

My inclination is to say: let this healthcare program happen. The only real check will be the bankruptcy of the welfare state. Trouble is that many good people will get hurt.
-- from "Delusions of Healthcare Policy" by Mario Rizzo

Cognitive dissonance

Reviewing the Sunday news shows and newspapers creates the most intense cognitive dissonance:  a nation crippled by staggering debt, exploding unemployment, an ever-expanding rich-poor gap, and dependence on foreign government financing can't stop debating how much more resources we should devote to our various military occupations, which countries we should bomb next, which parts of the world we should bring into compliance with our dictates using threats of military force.  It's like listening to an individual about to declare personal bankruptcy talking about all the new houses and jewels he plans on buying next week and all the extravagant trips he's planning, in between lamenting how important it is that he stop spending so much.  That would sound insane.  And that's exactly how our political discourse sounds.

-- from "The sources used by the Liberal Media" by Glenn Greenwald

Monday, September 28, 2009

Marc Faber on the U. S. dollar

[Marc] Faber, is, to put it mildly, a pessimist. “You can’t find anyone more negative about the world than I am,” he said. “But stocks can still go up,” thanks to continued printing of money. He actually expects stocks overall to rise around 7% a year over the next decade, though in places like the U.S., much of that return will be eroded by inflation, brought on by the increase in the money supply

The last few years saw the world economy in a synchronized boom, and then bust, a rare thing in economic history. Going back 200 years, capital flowed to some sectors or geographic areas, stoking bubbles, yet other places saw deflation as capital fled.
This latest bubble was different.

“You have to give credit to [Ben] Bernanke and [Alan] Greenspan. They have achieved something no central bankers have achieved in history. They created a bubble in everything…The only asset that went down from 2002 to 2007 was the U.S. dollar.”

There was one place he said that didn’t grow in the final years of the latest bubble. That was Zimbabwe, which suffered hyperinflation and economic collapse at the hands of dictator Robert Mugabe. The African country was “run by a money printer, Mr. Mugabe, a mentor of Mr. Bernanke,” Mr. Faber said.

The crowd chuckled.

Mr. Faber told the audience to put money in Asian equities and commodities. He said gold is important, but buy real gold, not derivatives, and keep the gold outside the U.S. The U.S. confiscated gold during the Great Depression, he noted.

He, like Warren Buffett, Nouriel Roubini and others, thinks the dollar is destined to erode, though Mr. Faber said it could rebound over the next few months as signs of deflation stick around. “The dollar in the long run is a doomed currency,” he said. “This is the short of the century…The government’s policy is to make it worthless.”
--from "Marc Faber Takes on Krugman, Links Bernanke and Mugabe" by WSJ Staff

Doug Casey on the Greater Depression

In the episode from 1929 to 1933, it didn’t go straight down. In 1930 and 1931, people thought they saw signs of recovery along the way. I think it’s going to be very much the same way this time.

One thing to remember is that while the depression that started in 1929 may have come to a bottom in 1933, it took a long time to recover. There was a cyclical recovery in 1937, and why was that? Roosevelt had the good luck to have been elected dead flat at the bottom. So it wasn’t his policies that cured the last depression, it was luck and good timing, combined with the fact that they were creating a lot of money after Roosevelt took the dollar off the gold standard. That resulted in a false recovery, from 1933 to 1937, and it went downhill again.

People say that World War II cured the depression, but in fact, it made it worse. As bad as things were in the ’30s, they were worse during the war in the ’40s. You couldn’t get shoes. You couldn’t get gasoline. You couldn’t get tires. You couldn’t get just about anything that was being used for the war. The war prolonged and deepened the depression. The thing that ended the depression was not the war but the fact that since people could not consume, they were forced to save. That delayed consumption resulted in a huge amount of savings, and that’s what caused the recovery in the late 1940s.

The point I’m making is this: You’ve heard the old saying that history doesn’t repeat, but it rhymes? I’m afraid that for many reasons, the government is doing just about everything possible to push the economy over the edge. First of all, the government is much more powerful than in the 1930s. People are much more used to thinking of the government as being the solution to the problem, instead of being the cause. They are going to make exactly the same mistakes – but bigger this time.

They are going to wind up destroying the currency.

It’s probable that American will end up in a war, for a number of reasons.

What we’re looking at is something that’s going to be long, dismal, and really unpleasant – much worse than what happened in the ’30s and ’40s.
--from "Doug Casey on the Greater Depression" (interview by Louis James, Editor, "International Speculator")

Tuesday, September 22, 2009

The way capitalism works

Americans aren’t so stupid after all. When they need to stop spending, they stop spending. When they need to save, they save. Too bad about the economy.

Yes, what is good for individuals seems to be bad for the economy. When people save instead of spend, the consumer economy stalls. And then economists think there is something wrong. They think an economy needs to expand constantly. And so, they try to find ‘solutions’ to the ‘problem.’

Actually, there is no problem at all. It’s just the way capitalism works. There are booms. And there are busts. Periods of growth…and periods when the mistakes made during the boom are corrected. There’s a time for every purpose under heaven. That’s the way it works. The economy breathes in and it breathes out.

And there’s always some dumb economist trying to smother it with a pillow!
-- from "There’s No Flu Shot for the Thrift Bug" by Bill Bonner

Strategic defaults

Even solvent homeowners who aren’t forced into foreclosure still find it beneficial to walk away from their houses. “Strategic defaults,’ says The Los Angeles Times, are becoming a problem for mortgage lenders.

We didn’t read the article. Instead, we began to think. What if we owned a house worth $200,000 with a $300,000 mortgage? What would be the smart thing to do? Easy…walk away from it. Then, buy it back at auction!

Desperate consumers do what they have to do. Canny consumers do what’s smart. And now it’s smart to walk away from any debt that you don’t actually have to pay.
-- from "There’s No Flu Shot for the Thrift Bug" by Bill Bonner

Do we need a separation of history and state?

I wonder what is included in the American history being taught in our high schools. Is it an honest history, from which students could draw the lesson that intervention is not only morally wrong, but practically harmful, or is it a history that is molding the next generation to be interventionists?

Do we need a separation of history and state?

The Causes, Aftermath and Lessons of 9/11

The U.S. has been an interventionist empire under both parties for the better part of a century. September 11 occurred after years of such interventions. The current administration is virtually identical to the last administration in clinging to this counterproductive and unconstitutional foreign policy. At the core of this continuity is a philosophical problem, a dedication to intervention in our national culture that must be questioned and confronted. Our true hope for security and freedom lies in restoring the constitutional limits on presidential power, bringing the troops home from around the world, and restoring the republic.
--from "The Causes, Aftermath and Lessons of 9/11" By Anthony Gregory

Fiat Money: How Else You Gonna Kill 600,000 Americans?

Printing green pieces of paper doesn't make an economy richer. If done without restraint, it leads to runaway price inflation. As an added downside, it also allows governments to slaughter millions of people. (The world wars could not have been waged if the belligerents had stuck to the gold standard.) Those who adore the all-powerful state should obviously be enchanted with fiat money. Decent people should loathe it.
--from "Fiat Money: How Else You Gonna Kill 600,000 Americans?" by Robert P. Murphy

The politicians are not going to cut war spending to finance healthcare

The telltale part of Obama's speech was the applause in response to his pledge that "I will not sign a plan that adds one dime to our deficits." Yet, Obama and his fellow politicians have no hesitation to add trillions of dollars to the deficit in order to fund wars.The profits of military/security companies are partly recycled into campaign contributions. To cut war spending in order to finance a public health care system would cost politicians campaign contributions from both the insurance industry and the military/security industry. Politicians are not going to allow that to happen.It was the war in Afghanistan, not health care, that President Obama declared to be a "necessity."
--from "The Health Care Deceit" by Paul Craig Roberts

A key step on the Path to Peace

[Congressman Ron Paul] has led the struggle against an interventionist and imperialist foreign policy. But the fight for liberty is seamless, and he shows that an aggressive foreign policy depends on government control of the money supply: "it is no coincidence that the century of total war coincided with the century of central banking. When governments had to fund their own wars without a paper money machine to rely upon, they economized on resources. They found diplomatic solutions to prevent war, and after they started a war they ended it as soon as possible."
-- from David Gordon's review of Ron Paul's new book, "End the Fed".

Gene Callahan on Chris Hedges on "Stop Begging Obama and Get Mad"

In "Stop Begging Obama and Get Mad" Chris Hedges writes,
The right-wing accusations against Barack Obama are true. He is a socialist, although he practices socialism for corporations. He is squandering the country's future with deficits that can never be repaid. He has retained and even bolstered our surveillance state to spy on Americans. He is forcing us to buy into a health care system that will enrich corporations and expand the abuse of our for-profit medical care. He will not stanch unemployment. He will not end our wars. He will not rebuild the nation. He is a tool of the corporate state.
Gene Callahan, author of "Economics for Real People / An Introduction to the Austrian School", comments as follows:
This is a surprise?! The corporate state will not allow the election of anyone from off the reservation. The mere fact that Obama could get elected was a guarantee there would be no major change. (I write this as he increases the number of troops in Iraq and Afghanistan and fights to extend the Patriot Act.)
-- from "Well, Duh!" by Gene Callahan

Cindy Sheehan continues working for peace

See "An Evening With Cindy Sheehan" by David R. Henderson

McChrystal Assessment Paints Dire Picture of Afghan War

McChrystal tells Obama that without additional resources, the U.S. could lose in Afghanistan.

After doubling down on Bush's bad bet in Afghanistan, will Obama double down a second time?

WASHINGTON (SEPTEMBER 21, 2009)-- Gen. Stanley McChrystal, the U.S. commander in Afghanistan, told the Obama administration last month that the situation in the country is "deteriorating" and that without additional resources, the U.S.-led coalition could lose the war.

The conclusions, contained in a 66-page assessment, were first reported on the web site of the Washington Post Sunday night and confirmed by a senior administration official.

After weeks of speculation, details of Gen. Stanley McChrystal's report on Afghanistan were released. What's striking about his assessment, WSJ's Peter Spiegel reports, is the urgency of his message.

The declassified version of the assessment paints a dire picture of the war up until this summer, saying that the allied effort is losing support among the Afghan people and that it must regain the initiative in the next 12 months or risk a situation where "defeating the insurgency is no longer possible."

"Additional resources are required, but focusing on force or resource requirements misses the point entirely," Gen. McChrystal wrote in a four-page "commander's summary" at the start of the assessment. "The key take away from this assessment is the urgent need for a significant change to our strategy and the way that we think and operate."
--from "McChrystal Assessment Paints Dire Picture of Afghan War" by PETER SPIEGEL (The Wall Street Journal)

War Is Peace

Good post by Tom Engelhardt: "War Is Peace"

It's pretty depressing, but I think his view is pretty accurate (unfortunately).

The Afghan Disaster

People talk of the need for an exit strategy. A more serious problem for government is the exit motivation. So long as failed programs continue, everyone on the payroll loves it. The bureaucrats have power. The money rolls in. The Congress can pass out the contracts. The corporations in league with the warfare state get contracts and infrastructure development. The state gets to show force and muscle people.

What's not to love? The costs are borne by others, such as Americans who pay in taxes and inflation, and such as average Afghans who live amidst chaos and fear, and who stand little chance of experiencing normal lives so long as their country is used as a pawn in international politics. The resentments that are built up during times of occupation last for many generations, and the US will pay a long and heavy price.
--from "The Afghan Disaster" by Lew Rockwell

Our war-loving Foreign Policy Community hasn't gone anywhere

Sunday, September 20, 2009

Beyond Krugman's Morality Tale

The biggest general problem with the story Krugman tells is that it’s so black and white. There’s the good guys—the Keynesian gang, and bad guys—the Classical/Chicago gang. That, in my view, is seriously wrong. The real story is one of shades of grey, and full of nuances; it is a story in which it is hard to tell who are the good guys and who are the bad guys. The real story is one of systemic failure of the large part of the academic economics profession which led them to pretend, and some of them to actually believe, that they understood a complex system that they did not, and still do not, understand. It’s a story of the economics profession’s failure to express their ideas and arguments with the humility with which they deserve to be told. It’s a story of a profession that has lost the enormous insights of past economists—both Keynesian and Classical.
--from "Beyond Krugman's Morality Tale" by David Colander

This is Colander's response to “How did Economists Get it So Wrong?" by Paul Krugman

Friday, September 18, 2009

Separation of healthcare and state

The health-care crisis is rooted in Medicare and Medicaid, government regulation of the health-care and insurance industries, tax-code incentives for employer-provided medical insurance, and medical licensure.

Thus, there is but one solution to this mess: repeal all of those things. Don’t reform them. Don’t fix them. Just repeal them. Get government entirely out of the health-care business. Separate health care and state as fully and completely as our ancestors separated church and state.
--from "The Epoch Battle of Our Time" by Jacob G. Hornberger

We don't need healthcare reform, we need a healthcare rEVOLution!

Doug Casey on justice

Doug [Casey]: Well, justice is defined as getting what you deserve. And justice is a cardinal virtue to me. We've evolved a long way from a sturdy yeoman republic, in which everyone was responsible for himself, took care of his own business, and minded his own business. Now, everything is everyone's business – which is to say, the government's business. I don't see any way to turn this unfortunate trend around at this point. It's taken on a life of its own, and we'll just have to see where it goes. Although I’ll lay odds it’s going to go badly, and the downtrend is going to accelerate.

L[ouis James]: It will have to go to reductio ad absurdum. People don't have the philosophical foundations necessary to even see the problem, let alone embrace the painful cure.

Doug: There’s little cause for optimism. That's one reason I don't believe the United Sates will still exist in its present form in 100 years – probably not even 50, though I hate making predictions like that. That's because what we're going into now – certainly from an economic point of view, but also from a psychological point of view – is really much more serious, and potentially much more devastating, than what happened in the ’30s and ’40s. What this country will look like when it comes out the other side is an open question.

L: So, looking at this as speculators, what are the implications of mass willful ignorance and entrenched stupidity? As we've discussed already in our conversations on currency controls and living abroad, the most obvious answer is to get your ass and your assets out of harm's way.
-- from "Doug Casey on Political Correctness" (interview by Louis James, Editor, "International Speculator")

Also worthwhile: "Baby Bush: The Worst President in History?" by Doug Casey

Some investment (and moral) advice from Doug Casey

Doug [Casey]: I'll tell you a true story. About 15 years ago, I was at a luncheon group that meets every Friday in Aspen. Bill Bennett, the former "Drug Czar," was the speaker. After he gave his perfectly horrible speech, the guy who was moderating knew my mind, so he called on me to ask some embarrassing questions.

L[ouis James]: I remember seeing Bennett tell a TV reporter that he didn't need drug laws to stop him from abusing drugs, but that "people" did.

Doug: That's him all right. So, of course my question turned into a denunciation, and his lackeys there were booing and hissing at me. Anyway, one thing he said that was very interesting was: "Buy stocks in prison companies – we're going to be building a lot more of them."

L: He actually came out and said that?

Doug: He did. That's a fact. And it was actually good investment advice. Though it also showed me the guy's basic character, which I see as a deformed, criminal personality.

L: Suppose you were convinced that shares in a company in the business of making devices for eavesdropping on people in their homes were about to go to the moon – would you actually invest in such a company? You wouldn't feel any moral qualms about it?

Doug: That's a good question. I certainly wouldn't buy stock in an IPO of such a company, because then I'd be actively capitalizing it. I don't want to be selling the rope they'll use to hang me with – as Lenin, presciently, said the capitalists would do. But if I bought the stock on the open market, my payment would go to a private individual, and I'd be making my money off some other guy that came along later. Although, I admit, that’s just a rationalization…

A good speculator should look at the financial aspects of a deal and not let psychological squeamishness get in the way. That said, I have to admit that there are some deals I just wouldn't touch.

But, hell, you can make a moral argument that you shouldn’t buy T-Bills, because they will be repaid with stolen money – taxes.

-- from "Doug Casey on Political Correctness" (interview by Louis James, Editor, "International Speculator")

The difference between liberals and conservatives

It used to be that you could count on liberals to at least give lip service to free speech, but you knew they hated economic freedom. And in the past you could count on the conservatives to at least give lip service to economic freedom, but you knew they hated free speech. But the fact of the matter is that, as shown by their actions, neither group really likes any kind of freedom at all.

"Liberal" and "Conservative" no longer define philosophical positions – they only designate a variety of psychological aberration. The Republicans used to be the Warfare Party and the Democrats the Welfare Party. They’ve been merged for some time into the Demopublican Party . . . .

-- from "Doug Casey on Political Correctness" (interview by Louis James, Editor, "International Speculator")

Are comedians today's court jesters?

[T]he only people who can say overtly politically incorrect things today are comedians. This is one reason I really enjoy the comedy of George Carlin, in particular. He was a genius. People like Sarah Silverman, Lisa Lampanelli, Dave Chappelle, and Chris Rock have really grown on me for the same reason. These people are capable of saying absolutely anything, and they can get away with it, unlike the non-professional comedian. Their role is roughly analogous to that of the court jester in the Middle Ages, the only ones who could insult the king.
-- from "Doug Casey on Political Correctness" (interview by Louis James, Editor, "International Speculator")

How low can they go?

With second-quarter earnings largely in the books (over 99% of S&P 500 companies have reported for Q2 2009), today's chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates how earnings declined over 92% since peaking in Q3 2007, which makes it easily the largest decline on record (the data goes back to 1936). On the positive side, S&P 500 earnings have moved off their lows – slightly.
-- from Chart of the Day

Thursday, September 17, 2009

Ron Paul's star is rising!

[Wh]at [is] striking [is] the new legitimacy that Rep. Paul (Texas) has gained since Obama’s bailouts have taken hold. Given the high disapproval ratings on both the economy and the war, it could be said today that the country is moving to Paul’s positions by osmosis. Paul opposed the wars in Iraq and Afghanistan. He opposed the bailouts. He opposed the entire Keynesian perspective that the Obama administration has adopted lock, stock and barrel. Morning Joe — no radical libertarian — pulled out an old script to read in amazement how the housing crisis had played out exactly as Paul said it would back in 2003. Paul advocates Austrian economics, and as he gathers continuing respect, Austrian economics gains a new authenticity as well.
--from "Ron Paul and Sarah Palin: The Ross Perot moment" By Bernie Quigley (HT: Lew Rockwell)

Happy Constitution Day!

This year, instead of reciting a long laundry list of all the ways the Federal Government violates its own Constitution (including, but not limited to, the Af-Pak-Raq wars/occupations), I decided I would link to "Twittering the Constitution / All the Founding Fathers go tweet, tweet, tweet" by P.J. O'Rourke. Enjoy!

Eight is enough!

Vigils for peace

Eight years is enough!

End the war in Afghanistan.

On October 7, stand with us to mark the eighth anniversary of the war in Afghanistan. Though it’s been called a “good war,” it’s not. There is no good war.

Whether you join a vigil or another peace event, help AFSC and the United for Peace and Justice coalition bear witness to the human and economic cost of the Afghanistan war.

The latest opinion polls show that 57% of Americans are already against this war. With every soldier and civilian death in Afghanistan, public support lessens — here and in Europe. The United States top three NATO allies — Britain, France, and Germany — want to reassess the mission.

Add your voice to our call for

  • A timeline for withdrawal of U.S./NATO forces
  • No additional troops sent to Afghanistan
  • Talks with all parties to the conflict
  • Generous civilian-led development funds

-- from "Eight years is enough!" by the American Friends Service Committee

"You lie!"? Tell me something new!

It was totally unnecessary for Wilson to shout "You lie!" After all, Obama is a politician and his lips were moving!

House rebukes Joe Wilson for shouting "You lie!" at Obama

When will the House rebuke Obama for continuing Bush's wars? Which is more offensive, lobbing a harmless "You lie!" at Obama or sending drones to murder and maim innocents?

Change? From Obama?

From a angry left-wing blogger:

"The right-wing accusations against Barack Obama are true. He is a socialist, although he practices socialism for corporations. He is squandering the country’s future with deficits that can never be repaid. He has retained and even bolstered our surveillance state to spy on Americans. He is forcing us to buy into a health care system that will enrich corporations and expand the abuse of our for-profit medical care. He will not stanch unemployment. He will not end our wars. He will not rebuild the nation. He is a tool of the corporate state."

This is a surprise?! The corporate state will not allow the election of anyone from off the reservation. The mere fact that Obama could get elected was a guarantee there would be no major change. (I write this as he increases the number of troops in Iraq and Afghanistan and fights to extend the Patriot Act.)
-- from "Well, Duh!" by Gene Callahan, author of "Economics for Real People / An Introduction to the Austrian School"

Tuesday, September 15, 2009

Ignorance (of economics) is not bliss!

Barack Obama may know how to give a speech or win an election, but he doesn’t know economics. Neither did practically every president from William McKinley to George W. Bush. Neither do most of the mainstream media, political pundits, and voting population who expect their government to make a silk purse out of a sow’s ear. As Murray Rothbard wrote, "It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."
--from"Obama Knows…" by Kevin Duffy