Why Hayek Won The Nobel

clipped from www.lewrockwell.com Now anyone at CPAC knows who Ludwig von Mises and F.A. Hayek were. Hayek won the Nobel Prize for showing how the central bank’s manipulation of interest rates – in other words, its intervention into the free market – leads to the boom-bust business cycle with which we are sadly familiar. Even those who claim to support the free market see nothing amiss in a monopoly central bank with the monopoly power to create money out of thin air.  They spend their time talking about what our Soviet commissar in charge of money and interest rates should do, instead of asking whether we need central planning of money and interest rates in the first place. The housing bubble could not have arisen without the Federal Reserve.  Had people started buying houses at unusually high rates, banks’ loanable funds would have begun to deplete, interest rates would have shot up, and that would have been the end of it.

Pie In The Face

clipped from pajamasmedia.com “Have you released Iranian assets?” the ayatollah asked. “Have you lifted oppressive sanctions? Have you given up mudslinging and making accusations against the great Iranian nation and its officials? Have you given up your unconditional support for the Zionist regime [Israel]?” Khamenei nonetheless left the door open for future discussion when he added: “You change, our behaviour will change . . . We will watch, and we will judge (the new US administration).” Iran has stated its conditions. Lift the sanctions. Make nice. Stop supporting Israel. By publicly offering to speak to Teheran without knowing what that regime’s response would be, President Obama gave it a chance to throw pie in his face, which it did; and it implicitly left the Ayatollah’s with the power to determine when its suitor in the White House would be sufficiently shaved, barbered and bathed to be worthy of speech. The President will have his dialogue in due time. But only after he has paid the price.

The Cosmic Scam

clipped from www.powerlineblog.com Due to the efforts of Heartland and others, the public is beginning to catch on to the cosmic scam that Al Gore, James Hansen and others--mostly not scientists--have been perpetrating. Meanwhile, the Obama administration, seemingly determined to inflict the maximum possible damage on the economy in the shortest time, is trying to ram a cap-and-trade carbon tax through Congress before opposition can be mobilized. It's easier to do that, of course, when you know that Congressmen won't read the statute before they vote on it. So our only hope is an informed citizenry.

Why I Call Him Ogabe

clipped from mjperry.blogspot.com Inflation levels in Zimbabwe are running at 13.2 billion percent a month and could reach an all-time world record within weeks. The latest figures put the country's annual rate at 516 quintillion per cent – 516 followed by 18 zeros – overtaking Yugoslavia in 1994 and putting it behind only Hungary in 1946. In post Second World War Hungary monthly inflation reached 12,950,000,000,000,000 per cent, with prices doubling every 15.6 hours – Zimbabwean prices are currently doubling every 1.3 days. The most famous hyperinflation, Weimar Germany in 1923, is in a distant fourth place, at 29,525 per cent a month with prices doubling every 3.7 days. Supermarkets in Harare are accepting only US dollars and South African rands, leaving those Zimbabweans without access to foreign currency in dire straits.

He has Mugabe as his role model, not the piddling Weimar.

They Knew All About It

clipped from pajamasmedia.com John Kass: Chicago Way extension runs right through D.C. “These days, the Washington Way is looking just like the Chicago Way. Those of us from Illinois can see it, what with City Hall guys pulling White House strings. . . . What they’re trying to drown out with all their screaming is that the Democrats knew all about the $165 million to the AIG suits. And the Obama White House knew all about it too.”

Made To Stick

clipped from patterico.com The other day, Michelle Malkin urged readers against being distracted by the $165 million in taxpayer-backed bonuses for AIG employees, in light of the trillions in ongoing bailout costs, as well as the $1.5 trillion the Fed announced it is printing this week and dumping from helicopters. Left unasked in all of this is how stories like the AIG bonuses catch fire in the public imagination. One answer is that the AIG bonus story is “made to stick” — simple, surprising, emotional etc. (okay, maybe not simple, but simple to sell).  Storytelling is an effective method of getting messages to stick, one to which the Left frequently resorts. Conversely, it is there in the Alinsky-ite formula of “Pick the target, Freeze it, Personalize it and Polarize it.”  It is there in Joe Stalin’s observation that “a single death is a tragedy; a million deaths is a statistic.”

And a good point in the comments that Reagan was a master story teller and that was part of his success.

Tanks? What Tanks?

clipped from gatewaypundit.blogspot.com Major media outlets refused to report on the thousands of "tea party" protesters who gathered again this weekend at several events across the nation to protest the Democrat's historic binge spending. But, the 40 anti-AIG protesters made headlines. Glenn Reynolds has the graphic:

Until Their Children Wake Up Homeless (Bumped)

clipped from www.gold-prices.biz It even appears that one of the most important and most respected figures in American history disagrees with the Federal Reserve saying, “If the American people ever allow private banks to control the issue of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” Jefferson also said, “I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies”

Check Out "NoCo Surrounds Them"!

I'm now doing some posting over at "NoCo Surrounds Them" to help out Glenn Beck's The912Project.com. Go take a look...

Unqualified Proof

clipped from www.davidwarrenonline.com How to explain this apparent contradiction? I'm afraid it is easy. As I mentioned during the presidential campaign, Mr. Obama was seriously unqualified for the job of president. He had no practical experience in running anything, except political campaigns; but worse, his background was one-dimensional. He is a free soul, but he is also the product of environments in which even moderately conservative ideas are never considered; but where people on the further reaches of the left are automatically welcomed as "avant-garde." His whole idea of where the middle might be, is well to the left of where the average American might think it is. To a man like Obama, as he has let slip on too many occasions when away from his teleprompter, "Middle America" is not something to be compromised with, but rather, something that must be manipulated, because it is stupid. And the proof that it can be manipulated, is that he is the president today.

Disaster For Bond Holders

clipped from financialtruth0.blogspot.com

Eleni

clipped from neoneocon.com It is my observation that the ranks of garden-variety liberals are composed in large part of sketchily-informed idealists. The ranks of radicals on the Left (which is a very different thing) are composed of some idealists mixed with a goodly proportion of manipulative, angry, ruthless, power-hungry tyrants. All of this is in the service of a better world, of course. I’ve written previously about the message of the Nicholas Gage book Eleni. It tells the sobering tale of what can—and often does—-happen when political idealists meet up with the roadblocks of reality and yet remain stubbornly dedicated to their plans rather than abandoning them. Those mushy idealists can turn into manipulative, angry, ruthless, power-hungry tyrants quite easily, and do so with depressing regularity: The book delineates, step by careful step, how over the course of time these people compromised and hardened until they were all but unrecognizable

Everybody's Asleep

clipped from drsanity.blogspot.com

Outraged

clipped from article.nationalreview.com furrow your brow and fume. No, not like a camp waiter when you send back the arugula salad drizzled in an aubergine coulis. We’re looking for primal, righteous anger: You’re outraged, OUTRAGED that bonuses are being handed out at companies the American taxpayer is bailing out. Yes, to be sure, the bonuses were specifically provided for in the legislation, but, like all busy senators and congressmen, you don’t have time to read every footling trillion-dollar bill before you vote in favor of it. And yes, true, the specific passage addressing these particular bonuses was, in fact, added to the bill in your name, but that was nothing to do with you — you just did that because the White House asked you to, and just because their people called your people and some intern in your office drafted some boilerplate with your name on it is no reason for you to be denied ten minutes of grandstanding on MSNBC. It’s an outrage to suggest you’re anything other than outrageously outraged!

Mobocracy: ACORN Edition

clipped from hotair.com Just in case people didn’t figure out what the end result of all this faux outrage over AIG bonuses would be, New York Magazine reports on the latest in liberal-populist tourism.  Community organizers for Connecticut Working Families Party want to send busloads of outrageously outraged people to the doorsteps of AIG executives’ homes … and claim that they don’t want to put them at risk.  Riiiiiiiiiiiiiiiiight: The Connecticut Working Families Party this weekend has organized a bus store that will make stops at Wilton, Connecticut, AIG office as well as the security-patrolled homes of AIG execs who are fearing for their lives. Remember when Bill Clinton accused conservative talk radio of fomenting hate?  What does he have to say about his colleagues in the Obama administration and the Democratic Party?  (via King Banaian) Update: What a shock — CWFP is an arm of ACORN. (h/t: Instapundit)

Moral OHazard

clipped from econlog.econlib.org The above segment is interesting in so many ways. First, as noted, in the first paragraph, Obama seems to be advocating federal usury laws. It was usury laws in California in the early 1970s that prevented me from getting a credit card with a limit of even $250. Second, Obama seems to be saying that high interest rates are the problem. Most people have thought that the bubble was due to low interest rates. Third, Obama seems not to understand, or maybe care about, moral hazard, as his toaster analogy shows. If your getting overextended on your credit cards means that you're not protected, you're less likely to get overextended on your credit cards. Consistent with that lack of understanding of moral hazard, in laying out, fairly well, actually, how AIG got in a heap of trouble, Obama never said a word about the fact one reason AIG could take such risks is that politicians like Obama and McCain would bail them out if things went bad.

Medicine Redux

clipped from pajamasmedia.com In 1998, Geithner was the Under-Secretary of the Treasury, Larry Summers, who is now President Barack Obama’s head of the National Economic Council, was the Deputy Secretary of the Treasury and I, who now work for the UN, Adelaide University and a consultancy firm, was the Minister of Foreign Affairs of Australia. That year we all met in Washington. I was worried. Indonesia’s economy was tanking and the country sought help from the International Monetary Fund. The trouble was, the IMF’s medicine was so drastic I feared it would cause total collapse of Indonesia’s economy and cause political and social chaos on our doorstep. Downer says the same men are now in Washington. He continues: Today, Geithner’s the economic boss man in Washington and Summer’s once more calling many of the shots. But this time I’m a spectator. If I wasn’t, I’d fly to Washington again and this time tell them they’re endangering not just Indonesia but the U.S. itself.

OZombies

clipped from www.qando.net Paul Krugman has seen the new Treasury plan (the “Geithner plan” as he calls it) that addresses the problem with the banks and he finds it wanting: The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won. This plan will produce big gains for banks that didn’t actually need any help; it will, however, do little to reassure the public about banks that are seriously undercapitalized. And I fear that when the plan fails, as it almost surely will, the administration will have shot its bolt: it won’t be able to come back to Congress for a plan that might actually work. What an awful mess. Indeed. And an amazing admission by Krugman who was as sure as anyone in the tank for Obama that he’d be “the answer” to all of our problems. Instead he’s discovering what a lot of Obama supporters are discovering - Obama’s an empty suit who is more interested in the perks and rewards of the office

When Krugman isn't in the tank for Ogabe anymore then that's pretty much the final warning klaxon. Hang on to your seat...

If You Can Keep It

clipped from www.youtube.com

This is a must see 10 minutes on what you would have slept through in civics if it had been taught properly. Time to make up for it. Now.

Bananas Update: El OJefe

clipped from www.forbes.com "But you don't understand," the Colombian said. "We've seen this before." "He's right, my good friend," the Cuban said. "We Latin Americans know the pattern. Believe me we do." The American tried to shrug off the Latin Americans' warning. To his consternation, he found that he couldn't. Peron, Fidel, now Chavez, they insisted. The emergence of misrule, corruption and economic stagnation in Latin American nations follows a particular sequence or progression. Now the sequence was unfolding in the United States. "It starts with a cult of personality," the Cuban explained. "One man declares himself the jefe, the caudillo, the big leader." "After the cult of personality," the Colombian explained, "what comes next is nationalization." "The last step?" asked the Cuban. "Censorship. A cult of personality, nationalization and censorship.

And we're about to have the currency to match.

What's The Holdup?

clipped from prudentbear.com It was understood at the time that our fledgling central bank had played an activist role in fueling and prolonging the twenties boom - that presaged The Great Unwind.  Along the way, this critical analysis was killed and buried without a headstone.  I believe the Bernanke Fed committed a historic mistake this week – compounding ongoing errors made by the Activist Greenspan/Bernanke Federal Reserve for more than 20 years now.  I find it rather incredible that Discretionary Activist Central Banking is not held accountable – and that it is, instead, viewed critical for the solution.  Apparently, the inflation of Federal Reserve Credit to $2.0 TN was judged to have had too short of a half-life.  So the Fed is now to balloon its liabilities to $3.0 TN, as it implements unprecedented market purchases of Treasuries, mortgage-backed securities, agency and corporate debt securities.  And what if $3.0 TN doesn’t go the trick?  Well, why not the $5 or $6 TN Bill Gross is advocating?  What’s the holdup?

Your Servants Have Become Your Masters

clipped from www.youtube.com

Time to fix it.

And if you want to know just how far we've sunk, you can only mail the string and tab of the teabag to the scumballs or else they'll toss the letter away for fear of hazardous substances. Not environmentally correct you see.

Everything You Have

clipped from www.qando.net “A government big enough to give you everything you want, is strong enough to take everything you have.” - Thomas Jefferson David Boaz has written a great post explaining why selective taxation, like we saw yesterday as the House passed a 90% tax on AIG bonuses, is a form of tyranny: Everybody’s angry. But anger doesn’t make good law. And there are real questions about both the wisdom and the legality of such legislation. Bloggers like Conor Clarke, Megan McArdle, and Eugene Volokh have asked if the bonus tax is legal or constitutional. And thank goodness for bloggers who ask the questions that members of Congress and print journalists seem to ignore!

Bananas

clipped from www.powerlineblog.com If the Pelosi bill is actually enacted into law (which I still think is doubtful) and upheld by the courts, there is no limit to the arbitrary power of Congress. If Congress can appease a howling mob of demagogues by enacting discriminatory tax legislation against a group of people who are, for the moment, politically unpopular, even though the vast majority of them have nothing to do with the supposed problems that have given rise to popular outcry--imagine, say, Congress enacting a surtax on the incomes of all homosexuals in response to a notorious case of homosexual molestation--then the idea that the Constitution affords us any sort of protection against arbitrary government power is an illusion.

The Game That Never Ends

clipped from network.nationalpost.com Helicopter Ben Bernanke’s Federal Reserve is dropping trillions of fresh paper dollars on the world economy, the President of the United States is cracking jokes on late-night comedy shows, his energy minister is threatening a trade war over carbon emissions, his treasury secretary is dithering over a banking reform program amid rising concerns over his competence and a monumentally dysfunctional U.S. Congress is launching another public jihad against corporations and bankers. As an aghast world — from China to Chicago and Chihuahua — watches, the circus-like U.S. political system seems to be declining into near chaos. Through it all, stock and financial markets are paralyzed. The more the policy regime does, the worse the outlook gets. The multi-ringed spectacle raises a disturbing question in many minds: Is this the end of America? We see the system up close, law-making that is riddled with slapdash, incompetence and gamesmanship.

Got Gold?

clipped from articles.moneycentral.msn.com I'd like to take a few moments to talk about the Federal Reserve's latest act of irresponsibility in a continuing series of irresponsible actions (i.e., buying $300 billion in longer-term Treasurys, an additional $750 billion in mortgage-backed securities and -- just for grins -- $100 billion of government-sponsored-enterprise debt). As a friend noted, Wednesday was the functional equivalent of Pearl Harbor for the U.S. dollar and fiat currencies in general. He said -- referencing that people might pay less for their mortgages -- that they'll pay much, much more for everything else. I would certainly agree. I discussed this with my good friend Jim Grant, who is one of the foremost authorities on the history of central banking. Jim pointed out to me that when Nixon closed the gold window in 1971, it was a unilateral ending of the world's currency regime, whereas Wednesday marked the announcement of the intent to destroy the world's reserve currency. Got gold?

It Is Happening

clipped from www.powerlineblog.com In turbulent times, it's good to know some things never change. After a week in which President Obama thanked himself for inviting him to the White House, compared AIG executives to suicide bombers, and did the first Presidential retard joke on national TV, I was impressed to find that Slate is bravely keeping up its Bushism Of The Day feature. Four more years! Yes, a lot of Democrats are saying to themselves, This isn't happening...it can't be happening!

... but doesn't exist for Dems since they never read anything but the first few paragraphs of a NYeT story...

Stuck On Stupid Stimulus

clipped from booksbikesboomsticks.blogspot.com How come when I put my AmEx bill on my Visa, it's stupid, but when the government does it, it's stimulus?

Mobocracy Update

clipped from www.ussc.edu.au "The country's in the very best of hands", Johnny Mercer So the Democrats are encouraging Americans to man the barricades in outrage at protest at bonuses to AIG executives, while the White House frantically rearranges the deckchairs, hanging Chris Dodd and increasingly Tim Geithner out as bait to a public that is staring in disbelief as an administration they elected on the basis of its supposed intellectual and ethical firepower has done more to wreck the economy in eight weeks than the Bush administration did in eight years. Nevermind that the people who crashed AIG are long gone, and it is the workers who have been brought in to clean up the mess who now work under armed guard, fearful for their safety. What was that about the Right always stoking anger and violence in the community again? In short, the events of the last week do not have the hallmarks of democracy, but rather mobocracy. Which is the very thing the Founders worried about. The country's in the very best of hands.

(Just) Words From The OTard In Chief

clipped from iowahawk.typepad.com Dear Barry: Our 12 year old son Tyler is developmentally disabled. Tyler's learning center has a Special Olympics program and we (along with his teachers) have been encouraging him to participate. Every time we bring it up to him, however, Tyler pushes back and becomes very withdrawn. We love Tyler very much and don't want to force him into it, but we think the Special Olympics would be a terrific experience and help him conquer his shyness and introversion. Do you have any suggestions for helping him get past this fear? Jean and Ted in Westmont Dear Jean and Ted: As you know I am a big fan of the Special Olympics program, and all the good things it does for young Mongoloid-Americans like your son. Nothing inspires more than the sight of these heroic young tards hilariously giving it their all in the arena of friendly athletic competition. Extra-chromosome? More like extra-awesome!

RTWT.

Look At My Outrage, Not My Failure

clipped from online.wsj.com Not that this stopped the Obama administration from jumping on the "outrage" bandwagon this week over AIG bonuses. Greed, greed, greed, screamed Washington, hoping nobody would notice its own failure to supervise AIG over the years, its botched intervention, or the administration's refusal to come clean about where the AIG money was going. This spectacle has left the financial community with one impression: Stay away. What healthy bank, what hedge fund, what private equity firm wants to take part in an Obama plan to sell off toxic assets, or to revive consumer lending, with the knowledge that they might be Washington's newest bonfire? Executives are already working to get out of TARP, fearful of political punishment. This despite a recession, falling house prices and growing bank losses.

Pakistan Stops The "Outrages"

clipped from www.davidwarrenonline.com Under pressure both domestic and foreign, the Pakistan government of Asif Ali Zardari has reinstated Chief Justice Iftikhar Muhammad Chaudhry. Having become fully politicized, by "events," the judges are no longer a pillar, and while they remain a symbol, the meaning of that symbol has changed. They have instead become something like the tribal leaders of Pakistan's secular middle class, whose outlook corresponds to that of "liberals" in the West. all the surviving district judges in Swat were sacked, or more precisely, warned that they would be beheaded if they turned up for work. Since many of their colleagues had already been beheaded, it was truly a word to the wise. They may well be beheaded anyway, in due course; but the doomed often prefer tomorrow over today. They are to be replaced entirely with Shariah courts under "qazis" or Islamic religious judges, who will now put a definitive end to such outrages as little girls attending schools.

Heh

clipped from baracksteleprompter.blogspot.com

Schumpeter, "Pay Grades", And The Cycles Of History

clipped from www.realclearmarkets.com In his 1942 book, Capitalism, Socialism and Democracy, Joseph Schumpeter asked the essential question: “Can capitalism survive?” His unsettling answer was, “No. I do not think it can.” Schumpeter’s words were in no way meant to denigrate capitalism, instead he felt “its very success undermines the social institutions which protect it.” History in many ways proved his views prophetic. The success of capitalism means that many are allowed to do things that have nothing to do with productivity. What’s rarely asked is how the very people who achieve stature through something called “pay grades” could ever successfully regulate those who make millions by gaming those same regulations and regulators. Regulations merely tell those eager to cheat or take excessive risks what they’ll have to comply with while cheating and taking excessive risks Schumpeter may have been early in his suggestion that socialism would win out over capitalism, but this in no way detracts from his visionary predictions

More here.

ODirective 10-289 Update

clipped from www.bloomberg.com In Rand’s magnum opus, the “men of the mind,” as she calls the nation’s producers, quit. Literally. They walk away from the mines, factories and businesses they built as the government tries to deprive them of their wealth through increased regulation and taxation. (Whether financial engineering constitutes production is an issue for another column.) Rand’s men in Washington believe they’re entitled to the output of these minds and the material rewards, enacting an Equalization of Opportunity bill, which is really about equality of outcomes; a Railroad Unification Act, to prop up weak carriers and destroy competition; and ultimately, as the economy collapses, “Directive 10-289,” which makes it a crime to stop working. The “looters,” as Rand calls them, fail to understand that the men of the mind may vote with their feet, refusing to work for the benefit of others. All that’s left for life to imitate art completely is for these CEOs to quit. Let Barney Frank and Chris Dodd run AIG.

Today's Ogabe Bus Report

clipped from pajamasmedia.com INSIDE A.I.G., A SENSE OF BETRAYAL: Who wants to hear a wealthy financier complain? And yet, within those walls off Danbury Road lies a deep sense of betrayal — first by their former colleagues, now by their elected leaders. The handful of souls who championed the firm’s now-infamous credit-default swaps are, by nearly every account, long since departed. Those left behind to clean up the mess, the majority of whom never lost a dime for AIG, now feel they have been sold out by their Congress and their president. “They’ve chosen to throw us under the bus,” said a Financial Products executive, one of several who spoke on condition of anonymity, fearing reprisals. “They have vilified us.” . . .

No Such Thing

clipped from seekingalpha.com There really is no such thing as a free lunch in economics. Countries with massive budget deficits should be cutting expenditure, and not borrowing more. Buying up your own debt is no more useful than swapping one credit card for another. It is nothing close to sound finance. It is the last act of desperation when there is nothing else left to do. You flood an indebted banking system with money, you get inflation and the relative value of fixed debt goes down. But this is not a magic bullet. You get inflation back in the system, and anybody on a fixed income becomes poorer as prices rise. If you are an investor, your dollars become worth less, and eventually worthless. That is why the gold price jumped yesterday. And it is going to go a lot higher as investors reach for a safe haven. Beware being left sat on cash when you should be owning gold and silver as a hedge against desperate actions by the central banks.

Avarice And Ambition

clipped from www.realclearpolitics.com In short, this generation of political and financial elites has proven itself unfit to govern a great nation. What we have is a system failure that is rooted in a societal failure. Behind our disaster lie the greed, stupidity and incompetence of the leadership of a generation. Is Obama willing to speak hard truths? Is he willing to say that home ownership is for those with sound credit and solid jobs? Is he willing to say that credit, whether for auto loans, or student loans, or consumer purchases, should be restricted to those who have shown the maturity to manage debt -- and no others need apply? "Avarice, ambition," warned John Adams, "would break the strongest cords of our Constitution as a whale goes through a net. Our Constitution is made only for a moral and religious people. It is wholly inadequate to the government of any other." In this deepening crisis, what is being tested is not simply the resilience of capitalism, but the character of a people.

I can't remember ever having quoted anything from Buchanan. I have to give him his due on this one though...

Or Whether It's Covered At All

clipped from www.powerlineblog.com But don't forget, folks: Somewhere in Texas a village has been reunited with its idiot, and we now have the whip-smartest administration of David Brooks' lifetime. ONE MORE THING: Can you imagine the Democrats' reaction if the Bush White House had given a European head of state a set of DVDs that can only be played on North American machines? It would have been conclusive proof of Bush's provincialism, lack of sensitivity to our allies' sensibilities, ignorance of the wider world, techno incompetence, failure to appreciate the superiority of European civilization, blah blah blah. That's how it would have been reported and editorialized on in every newspaper. So let's check tomorrow's papers and see whether that's how Obama's gaffe is covered. Or whether it's covered at all.

Baaa-Studs

clipped from theanchoressonline.com

Now that the Fed has made an official announcement of hyperinflation, we all need a good laugh don't we? So here it is. Unfortunately, this is also an allegory for the level of control that Ogabe the special Olympian nonetheless has of Britney world.

French revolution ho!