"Yesterday was one of the worst days in decades for the power elite. It was one of the best for liberty."

--Lew Rockwell.

I gotta watch

this video. It comes highly recommended by David R. Henderson.

SAVE THE FATCATS!! copyright Alan Erkkila 2008

Make that into a bumper sticker by copying and pasting it into a word processing program and blowing it up as big as you want, print it out and tape it on with box sealing tape.

That's the cheapest and quickest way. Or you can print it out on label stock.

Here it is again:

SAVE THE FATCATS!!

BTW: add this article and the comments to the Reader.

Here you go

The Mises.org Bailout Reader. Read up.

This is the worst.

The worst.

I know a relative. She was pretty incensed at the insensitive, ignorant comments some people were making here.

Too bad all the kind things to say are cliches. It seems. I never know what to say.

God bless you, mom.

How about that Abel Upsher!

I've taken this from the intorduction to A BRIEF ENQUIRY INTO THE TRUE NATURE AND CHARACTER OF OUR FEDERAL GOVERNMENT: BEING A REVIEW OF JUDGE STORY'S COMMENTARIES ON THE CONSTITUTION OF THE UNITED STATES:

This review of Judge Story's Commentaries on the Constitution of the United States is perhaps the ablest analysis of the nature and character of the Federal Government that has ever been published. It has remained unanswered. Indeed, we are not aware that any attempt has been made to invalidate the soundness of its reasoning. As a law writer, Judge Story has been regarded as one of the ablest of his school, which was that of the straightest type of "Federalists" of the elder Adams's party. His commentaries are a good deal marred with the peculiar partisan doctrines of that school of politicians; indeed, they may be looked upon as a plea for the severe political principles which ruled the administration of President John Adams. The Alien and Sedition Laws, which have long since passed into a by-word of reproach, will still find abundant support in Judge Story's Commentaries. He perpetually insisted on construing the Constitution from the standpoint of that small and defeated party in the Federal Convention which wanted to form a government on the model of the English monarchy in everything but the name.

The interesting thing is that, for the first half century of our independence, the Federalist interpretation of the Constitution didn't have much sway. The Anti-Federalists lost the battle against the Constitution, but won the war over its interpretation.

I got that info from FEE's Sheldon Richman in one of his recent TGIF articles, and one he cited; either Richman's Was the Constitution Really Meant to Constrain the Government or The Constitution or Liberty, I forget which. Oh, it was the first article, last link. You'll know it when you see it.

How about those "non-economic factors"?

Walter Williams says:

A completely ignored aspect of restricting private property rights is the restriction on the right to profits. Pretend you own a firm and you can hire one of two equally capable secretaries. The pretty secretary demands $300 a week, while the homely secretary is willing to work for $200. If you hired the homely secretary, your profits would be $100 greater. But what if there were a 50 percent profit tax? The tax would reduce your profit, thereby reducing your cost of discriminating against the homely secretary. Before the profit tax, the cost of discriminating against the homely secretary would be $100. After the profit tax, that discrimination would cost you only $50. Discriminating against the homely secretary would be consistent with the predictions of the law of demand: the lower the cost of doing something, the more people will do it. Hiring the pretty secretary would put the profits in a non monetary and hence nontaxable form. Wherever private property rights to profits are attenuated, we expect more choices to be made on the basis of non-economic factors, such as race and other physical attributes. That’s especially the case where there is no profit motive at all, such as nonprofit entities like government and universities.

How government makes discrimination affordable.

Apropos of nothing, fifty bucks goes pretty damn quick if you spend it to look at pretty women.

Note for later

I gotta check this out. It's a Weird Al song.

Whattaya think?

Left Libertarianism?

Although the state capitalism of the twentieth century (as opposed to the earlier misnamed "laissez faire" variant, in which the statist character of the system was largely disguised as a "neutral" legal framework) had its roots in the mid-nineteenth century, it received great impetus as an elite ideology during the depression of the 1890s. From that time on, the problems of overproduction and surplus capital, the danger of domestic class warfare, and the need for the state to solve them, figured large in the perception of the corporate elite. The shift in elite consensus in the 1890s (toward corporate liberalism and foreign expansion) was as profound as that of the 1970s, when reaction to wildcat strikes, the "crisis of governability," and the looming "capital shortage" led the power elite to abandon corporate liberalism in favor of neo-liberalism.

That's as close as I want to get to a conspiracy theory. This is Terry Arthur, but I got the article via Kevin Carson.

Kevin's gone and gotten famous around here.

Get out your Equinox costumes!

Sol crosses the Equator at 3:44 this afternoon - you want to be ready to celebrate!

How do you celebrate the Equinox?

I usually dress like a fairy and dance around a Maypole.

Sorry, I lost my camera. (Whew!)

Here's FEE's In Brief for today:

The Freeman: The Recurring Crisis

9/18/2008

Recently the governor of the Bank of England announced that the nice times had come to an end. (In the Bank's lexicon, NICE = Non-Inflationary Constant Expansion). This news will not come as any shock to the many Americans who have had their homes repossessed recently, but it does appear to have startled many of the scribblers who make their living from the financial pages on my side of the Pond. One of the two most striking features of the current financial contretemps is the way it has seemingly come as a complete surprise to most financial commentators and economists. (The other is the way that financiers and bankers who have spent the last few years presenting themselves as buccaneering entrepreneurs have suddenly discovered a fondness for taxpayer bailouts.) As recently as a year ago, most commentators in the financial press were convinced there was no real prospect of a major correction to the real-estate market, much less a serious financial crisis. There were dissenting Jeremiahs who warned that things could not go on as they had been, but they were in the minority. (They included the most successful investor in America, Warren Buffett.) With no sense of satisfaction I report that I was, in my own small way, one of the Jeremiahs. I did not foresee all that has happened -- neither did anybody else -- but the broad outline was clear. Why did the majority miss it? The answer is a combination of common sense and a historical perspective informed by a certain approach to economics. More . . .

A NEW article by Stephen Davies


Central Banks Pump Money into Markets

9/18/2008

"The Federal Reserve, the European Central Bank and other central banks massively escalated the assistance offered to global money markets on Thursday, coordinating efforts to ease funding constraints stemming from the financial turmoil emanating from Wall Street." (New York Times, Thursday)

If one inept central bank can't handle things, the obvious answer is a consortium of inept central banks.

FEE Timely Classic
"Banking Before the Federal Reserve: The U.S. and Canada Compared" by Donald R. Wells



GM Wants Government Loans for High-Tech Cars

9/18/2008

"General Motors chief executive Rick Wagoner yesterday offered no guarantee that the auto giant would use American-made batteries in its new electric-powered car, the Chevrolet Volt, even as Detroit automakers pressed for $25 billion in U.S. government loans to support the development of advanced-technology vehicles in this country." (Washington Post, Thursday)

If you think business favors free markets, read some history.

FEE Timely Classic
"Atlas Shrugged and the Corporate State" by Sheldon Richman

Does anybody know what

"Seeking transcendence one relationship at a time" means?

It makes me think of the song "Margaritaville" for some reason.

Hey! It's Constitution Day!

We the People of the United States, in Order to form a more perfect Union, establish Justice, secure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution of the United States of America.

I won't quote the whole thing, just section 1 of each article.

Article I, section 1: All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.

Section 8 holds the enumerated powers of the government. Well worth your time to study.

Article II, section 1: The executive Power shall be vested in a President of the United States of America. He shall hold his Office during the term of four Years, and, together with the Vice President, chosen for the same Term, be elected, as follows.

The rest of that thought is completed in the next article. Good thing none of my English teachers never saw that.

Article III, section 1: The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The judges, both of the supreme and inferior Courts, shall hold their Offices during good Behavior, and shall, at stated Times, receive for their Services a Compensation, which shall not be diminished during their Continuance in Office.

Article IV, section 1: Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State; And the Congress may by general Laws prescribe the manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.

Article V: The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as Part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate.

Article VI, section 1: All debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.

Article VII: The Ratification of the Conventions of nine States, shall be sufficient for the Establishment of this Constitution between the States so ratifying the Same.

Done in Convention by the unanimous consent of the States present the seventeenth day of September in the year of our Lord one thousand seven hundred and eighty seven and of the Independence of the United States of America the Twelfth.

Next up, Bill of Rights Day on the 15th of December.

In case you don't read this all the way to the bottom, here's the conclusion

From The Fed Should Inflate to End the Financial Crisis? It Just Ain't So!
By Ivan Pongracic, Jr.

It's not surprising that Wall Street wants to be bailed out through inflation. They would receive the benefits of the increased liquidity while the rest of us would bear the costs. Their profits would remain private while their losses would be socialized and spread out among the rest of the society through inflation. It is exactly this kind of policy that contributed to the current mess. In 1998 the Long-Term Capital Management hedge fund was deemed “too big to fail” and was bailed out. In the process, the Fed created a severe moral hazard: by protecting some people from the downside of their risky actions, the central bank encouraged such actions. The Fed's bailout policy is at least partly responsible for the Wall Street excesses; the hedge funds came to expect that the Fed would not chance a failure of the financial system. The so-called “Greenspan put” is now clearly the “Bernanke put.”

Yeah, I never heard it called that before either.

If the Fed continues to inflate, as Makin recommends, it would simply postpone the day of reckoning. Rather than letting the bad investments be cleared out now, reflation would further distort relative prices, likely leading to significant errors down the road and more bubbles in other sectors (as may already be happening in the commodities markets). This is how one crisis begets a bigger one. We must allow the distortions introduced by the activist Fed to be discovered and corrected. The odds that the government will eventually nationalize the mortgage markets will be much higher if the current crisis is treated by planting the seeds for a much bigger one in the future.

Pongracic also wrote a review of Mark Skousen's Vienna & Chicago: Friends or Foes?, A Tale of Two Schools of Free-Market Economics which he titled Methodenstreit Comix

Just so that we are clear here — readers, please forgive the tedium — praxeology does not mean that the economist does no historical research. It means that theory itself is not generated and proven by means of historical studies. Theory is employed to understand history, and history to illuminate theory. (See Mises's Theory and History.) Doing history without theory answers no questions about causation, and ends in intellectual chaos. And although Skousen himself admits that empirical evidence can go awry, he proclaims at the end of the chapter that Chicago is the winner of the methodological dispute.

...

Worth mentioning is the chapter on gold and fiat money. After a rather thorough discussion about the pluses and minuses of the fractional reserve system, after declaring gold and silver "as honest money," Skousen seemed like he was going to pronounce the Austrians as winners. I became suspicious, however, when Skousen attacked Rothbard's The Case Against the Fed as too radical. The Fed, according to Skousen, cannot be that bad. After all, the Fed is a part of a serious system. "And most importantly, Fed actions are graded every day in the stock, bond and foreign currency market."

Is Skousen really that naïve? The Fed under the Greenspan leadership has been anything but graded in the financial market. It has been behaving like there is no tomorrow. There is now an increasing number of financial experts calling Greenspan the worst Fed chief ever. According to these individuals, Greenspan intentionally created a bubble over the last decade — several bubbles — that can only end in catastrophe. Preaching deregulation, he created a mountain of bad debt that will create a mountain of bankruptcies and a runaway inflation, with a high possibility of a deep recession, or even worse.

This review was written in 2005, not yesterday. Read the whole thing.

The Truth Laid Bear must be glitching again.

He's calling me a large mammal today. Either a bunch of people have decided they hate him and dropped out, or he's got some fixin' to do.

Oop. Update: I'm back down to "Flappy Bird." Which is better than what I've been the past few months.

Update II: Ah crap, back to normal.

Hey! Cool!

Look at this! Thanks, Mr. Pt!

Who is your favorite Whig?
	Thomas Jefferson
	John Locke
	Abe Lincoln
	Thomas Macauley
	Lord Acton
	Lord Shaftesbury
	Henry Clay
	Edmund Burke
	Me
	Other
pollcode.com free polls

Arthur Silber, whom I read fairly often,

but I doubt if I've ever quoted, says (and I'm quoting the same section FNN quoted):

A major part (perhaps the major part) of the U.S. economy has treated debts as assets for a long time. The best and brightest made it appear sophisticated and smart: they took debts and securitized them, chopped them up, repackaged them, recombined them, splintered them some more, repackaged and sold those, and on and on it went. This process doesn't turn nothing into something: it spreads the nothing among more and more institutions and makes the entire system increasingly vulnerable. Everyone pretends that the nothing is backed by something, but it isn't. To be more precise, as in the case of Fannie and Freddie, for example, there is $1 of something for every $80 of nothing. In fact, there's much more nothing, when you add in the repackaging, recombining, splintering, selling and reselling. That's a lot of nothing, and almost no something.

This is how con games work. Your parents probably explained this to you, many years ago. You forgot, or you didn't believe it. Believe it now.

There's more there about where we're at. Go read it.

I get a lot of stock advisory emails from people I generally,

sort of, trust, in a way.

I'll probably get myself excommunicated from a bunch of lists for telling you about this guy, The Stock Gumshoe, who goes over the copy of these things and tells you what they're all about. Transparency is the watchword in investing, and this guy gives it to you.

I've never invested a nickel in any of these newsletters, I just take the free ones and wonder "Which idea can I invest my pittance in. What can I really believe?" The Gumshoe separates the bs from the truth for you.

Mark Thornton says

If we want to avoid the next great depression, all such government interventions should cease. [That's all the housing stuff he's talking about. -Al] The Treasury Department should revise their recent action and turn their proposed conservatorship of Fannie and Freddie into a bankruptcy receivership that would ultimately liquidate the corporation and their liabilities. Meanwhile the Fed should announce its intent to stop Term Auction Facilities and close the discount window to all but its traditional customers. To reduce the negative impact of the recession, government should cease foreign hostilities, reduce military spending, balance the budget, and cut taxes and regulations.

How to Avoid Another Depression.

I recommend reading this alongside The Nation's article on the Freddie and Fannie takeover, State Capitalism Comes to America.

I made fun of the Birchers a while back, but

I can't find a thing wrong with this video series though.

Watch it and we'll talk.

The only reason it's "impossible" to re-establish the Free Enterprise System

is political will: the people's and those who should be working to persuade them. Benjamin Rogge explained what's up in "The Case for Economic Freedom". Here's that section of the article:

The Moral Case

You will note as I develop my case that I attach relatively little importance to the demonstrated efficiency of the free-market system in promoting economic growth, in raising levels of living. In fact, my central thesis is that the most important part of the case for economic freedom is not its vaunted efficiency as a system for organizing resources, not its dramatic success in promoting economic growth, but rather its consistency with certain fundamental moral principles of life itself.

I say, the most important part of the case for two reasons. First, the significance I attach to those moral principles would lead me to prefer the free enterprise system even if it were demonstrably less efficient than alternative systems, even if it were to produce a slower rate of economic growth than systems of central direction and control. Second, the great mass of the people of any country is never really going to understand the purely economic workings of any economic system, be it free enterprise or socialism. Hence, most people are going to judge an economic system by its consistency with their moral principles rather than by its purely scientific operating characteristics. If economic freedom survives in the years ahead, it will be only because a majority of the people accept its basic morality. The success of the system in bringing ever higher levels of living will be no more persuasive in the future than it has been in the past. Let me illustrate.

The doctrine of man held in general in nineteenth-century America argued that each man was ultimately responsible for what happened to him, for his own salvation, both in the here and now and in the hereafter. Thus, whether a man prospered or failed in economic life was each man’s individual responsibility: Each man had a right to the rewards for success and, in the same sense, deserved the punishment that came with failure. It followed as well that it is explicitly immoral to use the power of government to take from one man to give to another, to legalize Robin Hood. This doctrine of man found its economic counterpart in the system of free enterprise and, hence, the system of free enterprise was accepted and respected by many who had no real understanding of its subtleties as a technique for organizing resource use.

As this doctrine of man was replaced by one which made of man a helpless victim of his subconscious and his environment—responsible for neither his successes nor his failures—the free enterprise system came to be rejected by many who still had no real understanding of its actual operating characteristics.

And Rogge kindly describes the Libertarian Vision for me:

The vulgar calculus of the marketplace, as its critics have described it, is still the most humane way man has yet found for solving those questions of economic allocation and division which are ubiquitous in human society. By what must seem fortunate coincidence, it is also the system most likely to produce the affluent society, to move mankind above an existence in which life is mean, nasty, brutish, and short. But, of course, this is not just coincidence. Under economic freedom, only man’s destructive instincts are curbed by law. All of his creative instincts are released and freed to work those wonders of which free men are capable. In the controlled society only the creativity of the few at the top can be utilized, and much of this creativity must be expended in maintaining control and in fending off rivals. In the free society, the creativity of every man can be expressed—and surely by now we know that we cannot predict who will prove to be the most creative.

And all it takes is the Zero Aggression Principle. [I was going to link El Neil, but I thought a little more explanation might be in order. This guy does a pretty good job too. He's not as dry.]

Speaking of Mr. Smith, whattaya think of this version of American History? To Smith: You know... I'm trying to find reasons to like McCain, here!

Somebody just sent me that "Ship High in Transit" story.

Snopes isn't letting me cut and paste from there, but they handle it beautifully. Basically, Old English words don't come from acronyms. Not even f---.

What's the scoop on crap?

Snopes doesn't have it, but I here you go:

crap
"defecate" 1846 (v.), 1898 (n.), from one of a cluster of words generally applied to things cast off or discarded (e.g. "weeds growing among corn" (1425), "residue from renderings" (1490s), 18c. underworld slang for "money," and in Shropshire, "dregs of beer or ale"), all probably from M.E. crappe "grain that was trodden underfoot in a barn, chaff" (c.1440), from M.Fr. crape "siftings," from O.Fr. crappe, from M.L. crappa, crapinum "chaff." Sense of "rubbish, nonsense" also first recorded 1898. Despite folk etymology insistence, not from Thomas Crapper (1837-1910) who was, however, a busy plumber and may have had some minor role in the development of modern toilets. The name Crapper is a northern form of Cropper (attested from 1221), an occupational surname, obviously, but the exact reference is unclear.

Wags welcome.

I believe I might just let myself be swayed

by the pretty face of Sarah Palin.