Friday, September 26, 2008

NOT PC's week, to 26/09

It's been a busy week here at NOT PC, and in politics in general, and while other blogs and most politicians are content to rake muck and monger scandal, this one has been focused on fundamentals -- and rocketing reader numbers suggest to me you appreciate that.  Anyway, here's what you, the readers, ranked most highly over the last seven days or so:

  1. "Lock up the bloggers!"
    In Europe MPs are trying to silence recalcitrant bloggers; in Malaysia they're locking them up; while in NZ politicians are simply "reviewing broadcasting and web rules."  Whatever happened to free speech?
  2. Is the phenomenenal disconnected from the noumenal ... ?
    Who knew that the world's most destructive philosopher appears to be alive and well and apparently flourishing ... in Fiji?
  3. Who's for a poke in the eye, then?
    The only wasted vote is a vote for someone who's going to do you over.
  4. Avoid these dairy products
    A link to an "unqualified list" of Chinese dairy and related products you might like to avoid.
  5. Borrowed time - the anatomy of recession
    There are too many parallels to the Crash of 1929 for comfort -- including almost complete ignorance of the reasons for economic collapse.
  6. Stop the bailouts!
    The same so called "experts" responsible for the all the counterfeit capital that caused all the trouble now want to inject more of the same  rocket fuel that caused the problem in the first place!
  7. Sensing Bullshit!
    The worst TV show in a very poor schedule just won awards for excellence, when what its makers really deserve is opprobrium and a punch in the face.

Lots of good reading then, including this script for John Clarke poking fun at John Key's wriggling (which IMHO drew tool little attention), and still more good reading at this week's Objectivist blog roundup over at Rational Jenn's.

Enjoy your weekend, and Go the Cats!rfso_sep08

Beer O'Clock: Beervana!

Beerly commentary this week from Stu of SOBA, whose contribution of his own Yeastie Boys Pot Kettle Black to my fridge played no part at all in my decision to run his post ...

Carl-Vasta-at-Tuatara BrewNZ has come and gone again. This year, as well as the judging and awards, we saw a welcome return to the public side of the event with the “Beervana” festival. While not quite taking over the whole of Wellington like the ‘host bar’ concept used to do, I’ve heard an overwhelming majority of fantastic reports of the festival (I was in craft-beer-barren Queenlsand at the time, so can only rely on reports from the field).

There was a new aspect to the awards side of things too, with a Champion New Zealand Brewery being awarded to the brewery with the best overall results. Did you know that the Tuatara Brewery in the hills of Waikanae, near Wellington, was named New Zealand’s best brewery? If not, then you haven’t been paying attention on Friday afternoons.

Tuatara and brewer Carl Vasta (pictured right checking out his brew) picked up gold medals and best-in-class trophies for their Belgian-style Ardennes and their hoppy India Pale Ale, as well as an extra gold medal for Hefe, their delicious German-style wheat beer. Tuatara is about the only NZ brewery without a website … is there a correlation there? Rather than build a website, Tuatara recently tripled their batch size – I wonder if they knew something was coming their way? It’s the perfect timing to take advantage of such a fantastic (and well-deserved award) award. Hopefully this will lead to a greater availability of these splendid beers.

Nipping on the heels of Carl Vasta and his Tuatara team was Steve Nally, from Invercargill Brewery in the Deep South, who picked up two best-in-class trophies for the second year running – and this included the highly-coveted Classic New Zealand styles (which, for the first time, included the hugely popular ‘NZ Pilsner’ style). Interestingly, I’ve found that Steve’s award-winning Biman lager has been one of the most talked about beers in the Wellington beer scene this year, and it is still not on tap anywhere in town. I don’t expect the drought to last much longer!

You couldn’t meet two more down to earth beer loving brewers than Carl Vasta and Steve Nally. These awards prove that head-down hard work really does pay off (and a little bit of luck and timing surely helps).

The full beer awards results are here at the official BrewNZ site, while beer judge and scribe Geoff Griggs sums up the weeks events in this Marlborough Express article.

Interestingly, the awards do not always reflect the public affection for beer. I've done an unscientific survey of people (read: I “googled” everything I could find about BrewNZ and Beervana) and picked up this list of “crowd favourites” that I have listed for you below, of which Epic Pale Ale is the only award winner amongst them!

How many of these beers have you heard of? Did you know about BrewNZ and Beervana? Did you attend? And, if so, what did you think?

Anyway, tonight I’m drinking Emerson’s Bookbinder - the beer that pulled me over from casual drinker of good beer to bona-fide beer geek. At only 3.7% abv, and absolutely packed full of flavour, it is a near perfect end-of-week tipple for a thirsty guy like myself. And isn’t it great to be able to fill-your-own flagon at the excellent Regional Wines and Spirits (if only there was a prize for best bottle store).

Many of these beers, if not already in your local beer retailers or pub, are available through the new online Beerstore or via mail order at Regional Wines and Spirits.

Slainte mhath, Stu

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Time to make a stand!

What does it take for New Zealanders to rise up and demand their government forego all the nonsense they shouldn't be bothering with, all the bossy-boot bullshit about baubles and bureaucracy and scampi and scandals, and focus instead on the one thing they're legitimately supposed to be doing, which is protecting New Zealanders from violence?

What does it take?

Will the random, violent, bloodthirsty stabbing of a man in central Auckland last night be the final straw? Is that enough, finally, to make you sit up and say "No more!"

Will it make you speak out to demand that government start doing its real job? That it starts protecting you and me from every nutter who'd like to raise a hand against us in violence, instead of doing us over themselves? That it begins to realise the primary focus of law and order is protection from criminals, not protection for criminals.

It's time -- right now -- to put victims first, not criminals, and to make damn sure the number of victims takes a rapid and benevolent dive.

What are you going to do about demanding a change?

UPDATE 1: I just heard Labour's Mark Gosche and National's Chester Borrows discussing the the murder on Radio Live, and their "solutions" to the rising tide of violent crime. "We both agree on the solutions," said Tweedlum's Chester Borrow's. Yes we do, agreed Tweedledumber's Mark Gosche.

Did their so-called solutions entail a greater police focus on protection from criminals, and less on giving violent criminals an easy ride and an early exit from prison (if they ever get there)? An end to the failed system of paying no-hopers to breed? Legalising the right to self-defence and to the means thereof? Any of that? No, what they both insisted is the urgent and necessary solution to the rising ride of violence, especially around Auckland, is "stronger communities." "Targeted welfare." More "stay-at-home parents."

No wonder we're inundated with savagery.

Even if they were right, the policies they're following are only destructive of stronger communities. Whether delivered by muck sprayer or fire hose, the result in South Auckland of several generations of taxpayer funded largesse is several generations of people who think they're entitled to live at someone else's expense. The Socialist Samaritan has not been a success. Welfarism is a certified killer.

The parents encouraged to stay at home by the gobs of welfare doled out to nearly three-hundred thousand New Zealanders are hardly hold the solution to anything, even to their own damned lives. And the good parents? Hell, they're both going out to work, and they need to -- and when they tot up their take-home pay at the end of each year, they probably notice that at the present level of fiscal rapacity one of them is going out to work just to pay their tax bill -- just to pay for stay-at-home no-hopers and political beneficiaries like Gosche and Borrows, and for their political masters for whom the welfare bill is little more than a sophisticated election bribe.

What does it take for the time-servers to realise it's time for more than just hand-wringing? What will it take for you to demand that they do?

UPDATE 2: Susan the Libertarian tells Leighton Smith, "There is a proverbial last straw, eh." Listen to Susie here explaining why this should be the last straw for every thinking person. She starts fourteen minutes in. "Is this enough to pierce your apathy?"

UPDATE 3: Russell Brown thinks I've lost my marbles: this post you're now reading is apparently an ideologically-motivated rant that enjoys all the internal consistency of your average tantrum. Oh dear.

UPDATE 4:  I respond to Russell's post here: Murder? It's not OK!

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Caption Contest

PC-Rubbers
What is PC up to, and why?

"For the naive mind there is something miraculous in the issuance of fiat money..."

holbert20080924 As if he too were writing yesterday, economist Ludwig von Mises has advice for those contemplating the imminent nationalisation of Wall St's debts via one trillion dollars of printed money.

It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments...
From time immemorial inflation [i.e., printing money] has been recommended as a means to alleviate the burdens of poor worthy debtors at the expense of rich harsh creditors.
However, under capitalism the typical debtors are not the poor but the well-to-do owners of real estate, of firms, and of common stock, people who have borrowed from banks, savings banks, insurance companies, and bondholders.
The typical creditors are not the rich but people of modest means how own bonds and savings accounts or have taken out insurance policies... The idea that millionaires are the victims of an easy-money policy is an atavistic remnant.

And the idea that people of modest means must bail out the pirates in neck ties is equally atavistic. Moreover, the illusion that the money for the bailout will come from somewhere else [Where? Somewhere?] is the illusion of 'fiat money,' i.e., of money printed by central banks that has nothing backing it other than the good wishes and the power to tax of the government.

For the naive mind there is something miraculous in the issuance of fiat money. A magic word spoken by the government creates out of nothing a thing which can be exchanged against any merchandise a man would like to get. How pale is the art of sorcerers, witches, and conjurors when compared with that of the government's Treasury Department! The government, professors tell us, "can raise all the money it needs by printing it."[4]

Such is the method by which Henry Paulson's Treasury Department proposes to "increase liquidity," to "raise" the money by which the government's bailout of failure will be achieved -- $1200 per US taxpayer -- more of the same artificially-created inflationary rocket fuel that has already burned the fingers of capital markets, and cost taxpayers a chance at genuine prosperity: little more than smoke and mirrors.

It is enough to stress the point that such a policy of deceit is self-defeating. Here the famous dictum of Lincoln holds true: You can't fool all of the people all of the time. Eventually the masses come to understand the schemes of their rulers. Then the cleverly concocted plans of inflation collapse. Whatever compliant government economists may have said, inflationism is not a monetary policy that can be considered as an alternative to a sound-money policy. It is at best a temporary expedient.

In the long term, the bill will have to be paid. It will be you and I who will be paying it.
[Quote from Ludwig von Mises' Theory of Money & Credit, excerpted here.]

UPDATE 1: To get an idea of the scale of the bailout, it will cost around $1200 per US taxpayer, taken not from their tax payments but -- like all inflationary expansions -- taken from their savings by a backdoor form of theft, and in addition to what they see taken from their pay packets.

This will be a US$700 billion addition to the money supply, adding a huge spike to the graph below. The last big thranche of printed money to hit the markets was over 2001-2004, and as Frank Shostak explained the other day, it was that very rocket fuel that's been blowing out the markets ever since. The world economy was subjected by its central bankers to the largest credit bubble in history, and says Don Rich, the results should have been obvious.

Not only residential real estate, but also corporate, developing market, and nonsecured debt security and loans have been priced at absurd valuations because the central banks of the world kept interest rates at absurdly low levels during the early part of the decade.

The consequence of this "open the floodgates" monetary-policy-induced credit bubble was to induce the entire financial services industry to distort the process assessing risk and reward in the allocation of capital on a system-threatening scale — hence the events of earlier this week. Basically, the central banks of the world pushed interest rates so low as to lure the finance industry into the trap of chasing yields irrespective of risk...

makegraph.php

And now their pyramid is collapsing, they want more of the same!

This $700,000,000,000,000 of counterfeit capital (with more to come whenever Henry Paulson, Ben Bernanke and their successors feel like it) is welfare for Wall Street to be paid out of the pool of real savings that would otherwise go into real investment. As Michael West said on Monday, Henry Paulson and the Senate's Banking Committee "want American taxpayers to hand a cool $US700 billion ($840 billion) to his pals on Wall Street in return for a gigantic bundle of their delinquent assets ... without his pals taking a pay cut. Could there be a finer reward for failure? Could there be a worse deal for taxpayers?"

And the dumbarses on Wall St are too dumb to even see that what they're applauding is their own demise.

The federal government is now admitting that the entire credit-generation process in the United States has collapsed. Going forward, that is bad news for the real economy — for the claims on the profit-generating capacity of the economy upon which the stock market constitutes claims. This is all bad news, not good news, for Wall Street.
More formally, there is a gap between the nominal and real value of debt instruments that across the entire credit spectrum easily exceeds $5 trillion, the risk of which the federal government [i.e., the taxpayer] has assumed.

As J. Boyd Page says in the Atlanta Journal-Constitution, just say no.

UPDATE 2: I liked this comment at the Mises Blog from someone 'supporting' the bailout:

At this point, I don't see much reason to oppose the Wall Street bailout. You see, what the government should do to solve this problem is kill the Federal Reserve, kill the income tax, and cut back the size of government by 90%. But, since there is not a snowball's chance in hell that they are going to do that .... this bailout is just another path to the same eventual outcome.
In fact, if we're lucky, using taxpayer money to bail out Wall Street might suck funding away from all the other useless government departments...

If only it were more than just wishful thinking.

UPDATE 3: Commenter "Terry" corrects me:

The fractional reserve system is best described not as an economic pyramid, but an inverse-pyramid. It is top heavy and built on a comparatively small base of capital.
An objective monetary standard would be representative of a pyramid with a base layer (or layers) of capital which widens -and thus strengthens - as the total economic structure grows.
With an inverse pyramid by comparison, as more layers of credit are piled one ontop of the other, the capital base becomes an ever weaker point compared to the whole. As the weight of yet another layer of credit (i.e. debt) is lumped on top it adds to the instability of the whole structure, with its total weight surpassing that which the (capital) base can support. The inevitable is that the structure falters, crushing and destroying the bottom supportive layer/s - i.e. capital.
This is what we are witnessing now.
The only logical solution to prevent a total catastrophe is to deleverage - dismantle the inverse pyramid, starting at the top, so that the base may preserved, and hopefully a better engineering design adopted (i.e. turn the bloody thing back up the right way around and stop trying to defy the laws of physics!).
What the Fed is proposing now as the solution to the present crisis - a crisis where the giant upside down triangle of debt which is the entire US financial system is dangerously balanced on a small apex of capital - is to make the whole thing even MORE top heavy.
This truly is madness.
If the $1 trillion bailout proceeds, as it seems it will, we will all have but one option left: reach for our hardhats.

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'A System of Architectural Ornament' - Louis Sullivan

       gilesp_guaranty_1m

"In these little masterpieces of poetic imagination,' said Frank Lloyd Wright in 1949 of Louis Sullivan's ornamental drawings produced around half-a-lifetime before, "the poet in him shines forth on the record as a free, independent spirit characteristic of the free of all time."

'Wright,' he would say [when Wright worked under Sullivan] concerning details which I was trying (as yet by instinct) to work with T-square and triangle ... 'bring it alive, man!  Make it live!'  He would sit down at my board for a moment, take the HB pencil from my hand and, sure enough, there it would be.  Alive!
    ... He did "make it live." 
    ...Say this greatest feature of his work was esoteric.  Is it any the less precious for that?
    Do you realize that here, in his own way, is no body of culture evolving through centuries of time but a scheme and "style" of plastic expression which an individual working away in this poetry-crushing environment ... had made out of himself?  Here was a sentient individual who evoked the goddess whole civilizations strove in vain for centuries to win, and wooed her with this charming interior smile -- all on his own, in one lifetime too brief.
    ... Although seeming at time a nature-ism (his danger), the idea is there: of the thing not on it; and therefore Sullivanian self-expression contained the elements and prophesied organic architecture.  To look down on such efflorescence as mere "ornament" is disgraceful ignorance.  We do so because we have only known ornament as self-indulgent excrescence ignorantly applied to some surface as a mere prettification.  But with the master [Sullivan], "ornament" was like music; a matter of the soul...

The ornament shown here comes from Sullivan's 1924 book, A System of Architectural Ornament, According with a Philosophy of Man's Powers.  Giles Phillips from MIT has a complete collection of the book's twenty plates, and a Flash presentation of the System based on a study of Sullivan's Guaranty Building (above) here at his website.

sullivan-plate-06 sullivan-plate-10 sullivan-plate-17

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Thursday, September 25, 2008

Avoid these dairy products

Blogger Lady Lavender, whom I consider a reliable source, has an "unqualified list" of Chinese dairy and related products you might like to avoid.

Oh McCain, you've done it again

How revealing is John McCain's unilateral call to "suspend campaigning" in the face of America's financial meltdown.

What does he think this is -- a popularity contest? A presidential dog and pony show whose result has no relevance to the way the mess is cleaned up?

If McCain has policies to introduce that will clean up the mess, that he really thinks will clean it up better than those of his opponent, then wouldn't that make him all the more motivated to have them introduced, rather than those of his opponent? Wouldn't the financial meltdown make it more urgent rather than less to have those policies introduced? Wouldn't it? If you were convinced you knew what was going on, and you knew your opponent's solutions were destructive, wouldn't you be champing at the bit to keep him from the levers of power?

That would be the case, of course, if McCain was really convinced he had some idea of how to clean up the mess -- if he knew what caused the meltdown and what to do to address it -- if he had a fundamentally different approach to the "regulate them until they bleed" call that's already been articulated by his opponent -- or if he had anything to add to the "American workers" schtick he's been waving around bathetically -- or if he even gave any sign at all that he knows what's going on, fundamentally.

That he himself is apparently convinced he hasn't is all the admission the rest of us need to believe he's right. He doesn't.

The only reasons for any candidate to unilaterally suspend campaigning in the face of such a serious calamity would be the conviction that the winner of the dog and pony show will have no way to solve it anyway, that the result is unimportant to the future direction of the country -- that it really is just a popularity contest with no relevance to the fundamental direction of the country -- a conviction in short that the fundamental attitudes of both candidates are so similar and so impotent that it doesn't matter who's elected anyway.

In which case we must take McCain's admission for what it is, and recognise that he has thereby disqualified himself as any sort of serious candidate.

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'Freedom' - Danielle Anjou

                        freedom-large

Visit Danielle's website for many more inspirational bronzes.

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Wednesday, September 24, 2008

It was a mistake

After seeing John Key hand wringing all over the TV channels about his "mistake," I can see John Clarke and Brian Dawe making a meal of it all.

BRIAN DAWE: Good evening Mr Key.
JOHN KEY: Good evening, Brian.
DAWE: Don't you think it was wrong to lie to TVNZ reporter Fran Mold about your Tranz Rail shares.
KEY: No Brian, I didn't lie, it was a mistake.
DAWE: But surely ...
KEY: Yes, it was a mistake. She caught me unprepared.  I was out campaigning, and what she wanted was details.  Details!  Just imagine!  Anyway, I made a mistake.
DAWE: A mistake? 
KEY: Yes, I should have told the public earlier about the full extent of my shareholding, and I should never have held the stock for as long as I did.  That was another mistake.
DAWE: A mistake?
KEY: Yes, a bad mistake.  Damn thing lost me money.
DAWE: But you lied about the number of shares.
KEY: No Brian, that was a mistake.
DAWE: A mistake?
KEY: Yes, it was a mistake to lie.
DAWE: Thank you, Mr Key.
KEY: Thank you, Brian.

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"Lock up the bloggers"

Further to yesterday's post about Euro MPs looking to ban troublesome Eurobloggers, vocal Malaysian blogger Raja Petra Kamarudin was locked up this morning for two years in a high security prison as, according to the Malaysian Home Minister "police had found concrete evidence that his postings in the Malaysia Today blogsite were prejudicial to the security of the country." Malaysian blogger Rocky Bru has background [hat tip Lady Lavender, who points out even Malaysia's draconian Internal Security Act (which allows detention without trial) does not deter blogcitizens from lambasting the ruling Malay party - "once a sacred subject no one is allowed to criticise."]

Don't be complacent. Politicians really dislike criticism, and if they can close it down, they will. Or try to.

The Hive asks what the New Zealand government is doing about this. Whale Oil answers: "They are reviewing broadcasting and web rules."

NB: Sign the petition to free Raja Petra Kamaruddin, Teresa Kok and Others Held Under Malaysia's Internal Security Act.

UPDATE 1: Since so many worldwide appear wholly unfamiliar with the concept of free speech, except in the breach, might I humbly suggest they begin their understanding of this basic pillar of freedom with this post on Some Propositions on Free Speech, which lays out the legitimate moral parameters of free speech.

UPDATE 2: Welcome Rocky's Bru readers. Feel free to stick around and, in particular, to check out all the posts here ast NOT PC on Free Speech and Sedition. Perhaps I could invite you to begin with this 'Cue Card Libertarianism' post on Persuasion versus Force.

UPDATE 3:  Contemplate these thoughts:

Forcing people to bite their tongues produces only a "veneer of tolerance concealing a snakepit of unaired and unchallenged views."
- Rowan Atkinson

It's now very common to hear people say, "I'm rather offended by that", as if that gives them certain rights. It's no more than a whine. It has no meaning, it has no purpose, it has no reason to be respected as a phrase. "I'm offended by that." Well, so fucking what?
- Stephen Fry

What is freedom of expression? Without the freedom to offend, it ceases to exist.
- Salman Rushdie

UPDATE 4:  How often when the rubber hits the road do we discover who really has the courage of their convictions.  'The People's Parliament' wonders whether RPK was emboldened by reading too much into all thee declarations of support from his readers -- support that seems to be withering on the vine now he's in detention.

    And reading too much, he asked of the millions of MT readers for 150,000 signatures for the petition to the Agong in relation to the judiciary, and got 25,700++*?
   
What could we all possibly have meant by these declarations of solidarity and support if the petition demanding his release from ISA detention, now four days old, has garnered 20,463 signatures?
   
Just what do we mean [by "support"]?

What sort of "support" is it that people demonstrate when even something as simple as signing an online petition is too much!  Let them hear the words of liberated American slave, Frederick Douglass:

    The whole history of progress of human liberty shows that all concessions yet made to her august claims have been born of earnest struggle. If there is no struggle there is no progress. Those who profess to favor freedom, and yet depreciate agitation, are men who want crops without plowing up the ground. They want rain without thunder and lightning. They want the ocean without the awful roar of its many waters.
    This struggle may be a moral one; or it may be a physical one; or it may be both moral and physical; but it must be a struggle. Power concedes nothing without demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress.
--Frederick Douglass (1818-1895)

* As of 10pm Friday morning 26/6/08 NZ time, the petition stands at 29,112 signatures.

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We can see your house from here, Helen

 herald-24-september

Helen Elizabeth Clark, of 4 Cromwell St, Mt Eden, introduced a law last year requiring all political speech to be regulated one year in three, including the rule that all such speech must include the name and address of the person who "authorises" it.  So the Libertarianz party has followed the law with our billboards, and as the Herald has just noticed we've included on with it not just the name and address of the fine chap who authorised them, and also the name and address of the woman who mandated that we must.

After all, if she's going to write laws placing at risk the homes of people who criticise her, people whose homes don't come complete with  police protection...

NB: Interesting, don't you think, that the Herald in the picture above chose to blank out Helen's home address, but not the one above it.
Herald picture by Brett Phibbs.

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Trade is good

From "Steve Pierson" in yesterday's Standard:

In principle, a free trade deal between the US and the P4 countries (NZ, Chile, Singapore, and Brunei) is a good thing.

If we want our world’s limited resources to be used efficiently, we should not place artificial barriers in the way of trade without good reason blah, blah, blah...

With every "free trade" deal these days, the devil is in the details (just as The Standard's weasel words are in the "blah, blah, blah") but it's good to be see such rare rationality from the red trenches.  Bravo!

The  invisible hand of trade is sustainability.

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Borrowed time - the anatomy of recession

stabilization (1) When the stock market crashed in 1929, it brought on the world's worst disaster since the First World War. In the US, it was the worst calamity to face the nation since the Civil War. 
By the end of 1930, one in four wage earners was out of work. In one day in Mississippi, one quarter of the entire state was auctioned off. Prices of wheat and corn were so low, crops were left to rot in the fields. "Somebody had blundered," wrote F. Scott Fitzgerald, "and the most expensive orgy in history was over."
    It was borrowed time anyhow -- the whole upper tenth of a nation living with the insouciance of grand ducs and the casualness of chorus girls.  Even when you were broke you didn't worry about money, because it was in such profusion around you.  Toward the end one had to struggle to pay one's share...
    Now once more the belt is tight and we summon the proper expression of horror as we look back at out wasted youth ... when we drank wood alcohol and every day in every way we grew better and better and people you didn't want to know said "Yes, we have no bananas" -- and it all seems so rosy and romantic to us who were young then, because we will never feel quite so intensely about our surroundings any more.
Wars and depressions.  Recessions, booms and busts.  They're written about afterwards as if they're natural events over which man has no more control than we do over hurricanes and earthquakes, when they are in every way as man-made as a Monday morning hangover -- which is perhaps the very best metaphor for economic depression. 
Somebody has blundered, and we're paying for it again.
With every depression, with every hangover, if we have any insight we must look back and ask ourselves, "wha' happened?" and make sure we don't do it again.  What happens instead however is we wake up saying something like "Ooh, never again!" -- and within the week we're back on the turps and gibbering again about bananas, whether we have them or not.
History repeats itself, but only if we're too dumb to learn. The pattern of the twenties was replicated over the last decade; the collapse is almost a repeat of the consequent disaster; and the bailouts intended to prolong our own orgy of the last few years replicates the bailouts of Herbert Hoover's abysmal administration. 
They didn't work either.
But what caused the collapse of 1929?  Like every monumental hangover, the collapse was inherent in the orgy. And like that one, those responsible for the monumental blunder are shucking off the blame, and seeking even more power to do it all over again.
Financially speaking, the twenties in the US were characterised by three things: the rise of the central bank to prominence and the idea that there was a "new era of prosperity" in the air; an era of easy credit, which helped to foster the idea that a "new era of prosperity" was in the air; and the single-minded pursuit of "price stability," which led to the pumping of the money supply and all that easy credit.
Sound familiar?
For almost the entire decade of the twenties, the Federal Reserve vigorously pursued a policy of "price stability." The grandaddy of all Fed Governors, Benjamin Strong -- the predecessor to Greenspan and Bernanke -- wrote in 1925,
that it was my belief, and I thought it was shared by all others in the Federal Reserve System, that our whole policy in the future, as in the past, would be directed toward the stability of prices so far as it was possible for us to influence prices.
And again in 1927, when asked in that years "Stabilization Hearings," whether the Fed could "stabilize the price level" through open-market operations and other control devices:
I personally think that the administration of the Federal Reserve System since the reaction of 1921 has been just as nearly directed as reasonable human wisdom could direct it toward that very object.
Sound familiar?
They aimed for "price stability," and they succeeded: Consumer prices and wholesale prices were stable for most of the decade.  But they shouldn't have been.  They should have fallen.  Increased mechanisation, increases in scale and increasing productivity should have made prices fall.  To keep prices up -- to keep them 'stable' -- The Fed had to inflate, and inflate and inflate again.  In 1921, before their inflation of the currency began, the total American money supply was $45.3 billion.  By July 1929, when the stock market first started to crack after a year-on-year expansion of the money supply (which in 1924 was as high as 11.6% !), it had exploded to $73.29 billion.
As economists CA Philips, TF McManus and RW Nelson said in 1937, "the end-result of what was probably the greatest price-level stabilization experiment in history proved to be, simply, the greatest depression."
That $28 billion, created out of thin air, had to go somewhere.  Where it went, for the most destructive part, was into capital goods.  Consumer prices and wholesale prices were stable, but the General Price Level (which included housing, commercial property, foods and farm products) rose considerably.
Sound familiar?
Just as in the twenties, so too over the last decade, where in order to keep consumer prices "stable," the money supply had to be inflated year-on-year to conceal by inflation the productivity effects of the internet age and and of the flood of cheaper consumer goods from Asia -- and the monetary inflation blew out first in the housing market. Just as in the twenties, so too in the 'Noughties,' the expansion of the money supply squandered real wealth and led to economic destruction.  And so it has been every time the expansion of the money supply has been substituted for genuine prosperity, in the US and NZ just as surely as in Zimbabwe -- as this graph so clearly demonstrates:
 
We might write it as a general rule: Monetary expansion always cometh before a fall.
The flood of easy credit always has to blow out somewhere.  Where it first blew out this time was the housing and mortage sector, and Jeff Perren starts a series today tracing the course of that particular sector of the disaster.  (The first two parts are here and here.)  But if you think, as George Bush and Ben Bernanke and Henry Paulson seem to think, that the blow-out will be contained to the housing and mortage sector, then you are even more deluded than we already have good reason to think they are.
As Frank Shostak pointed out yesterday,
    The Bush administration is asking Congress to let the government buy $700 billion in bad mortgages as part of the largest financial bailout since the Great Depression. The plan would give the government broad power to buy the bad debt of any US financial institutions for the next two years. It would also raise the statutory limit on the national debt from $10.6 trillion to $11.3 trillion.
tms-9-11 (1)     At the root of the problem are not mortgage-backed assets as such but the Fed's boom-bust policies. It is the extremely loose monetary policy between January 2001 and June 2004 that set in motion the massive housing bubble (the federal-funds-rate target was lowered from 6% to 1%). It is the tighter stance between June 2004 and September 2007 that burst the housing bubble (the federal-funds-rate target was lifted from 1% to 5.25%).
    Can the "rescue plan" fix the US economy, or will it plunge us into the mother of all recessions?
    On account of the time lag, we suggest that the tighter interest stance of the Fed between June 2004 and September 2007 has so far only hit the real-estate market and financial institutions.
    Various bubble activities that sprang up on the back of loose monetary policy between January 2001 and June 2004 are not only in the real-estate and financial sectors; they are also in the other parts of the economy.
    Consequently, there is a growing likelihood that these activities will come under pressure in the month ahead regardless of the rescue package. Since these activities are the product of loose monetary policy, obviously the banks that supported them are going to incur more bad assets, which will put more pressure on banks' net worth.
    Contrary to popular belief, the rescue package cannot help the economy; it will only severely weaken wealth generators. (The larger the package, the more misery it will inflict.) Hence, once the massive rescue plan is implemented, it will not prevent an economic slump but, rather, runs the risk of plunging the economy into the mother of all recessions.
Shostak is not alone in his analysis.  The whole capital structure is contaminated, not just the housing and mortage sector. The easy credit has worked its way all through the capital structure like termites through your new home -- adding more weight to that structure when what producers need is to be left alone to restructure stick by stick will only extend the misery, and delay the necessary recovery.
And as for calls to regulate the "deregulated" capital markets, only a myopic drone could even take such calls seriously.  As Michael Hurd points out in today's Washington Times:
    I don't understand why the lesson of the recent financial meltdown is that we must return to regulation. The regulatory infrastructure we have today has been in place since the 1930s New Deal - and before.
    This infrastructure was supposed to prevent such a meltdown from happening. The federal government guarantees everything. This transformed capitalism from a system in which all financial institutions are privately run - and financially responsible for their mistakes.
     Deep down, business executives always knew they could appeal to the government if they made foolish decisions that cost untold billions - and that's exactly what happened.
    Our mixed economy - neither capitalism nor all-out socialism since the 1930s - performed exactly as it's supposed to perform in the context of a heavily regulated market.
    We could basically respond in one of two ways. One way would be to acknowledge the experiment in the mixed economy as a failure, refuse to bail out those who counted on the government to rescue them from their mistakes and evasions, and start clean with a private marketplace.
    It would be painful, but there's no escaping pain after a mistake of this kind. The other alternative is what's happening now: to bail out most if not all of the failing institutions; to require American taxpayers to foot the bill; to nationalize and even further regulate what's left of the industry, where possible; and to remove still more - maybe even most, at this point - of the capital out of capitalism.
    Sens. John McCain and Barack Obama don't fight over which direction in which to move. Fundamentally, they agree: We need more regulation, more government and less capitalism.
    Fine. Will one of them please explain, then, how more of the system that brought us to this point is to rescue us suddenly?
Even if either was economically literate, it would be impossible.  And neither of them are.
UPDATE 1: Via Anti Dismal, Don Boudreaux wonders why, since the government's money supply policy is obviously so crash hot, we don't we have the same policy for steel supply.  Good reading.
UPDATE 2: I am in receipt of an excellent letter to the editor of the NZ Herald, in response to their appalling editorial yesterday:
Dear Sir,
In your editorial of 23 September you refer to the US government’s bailout of the financial system as “rewarding the guilty” and then note that “… when markets fail, government is the only solution.” The only truly guilty party is the party to which you are now turning to for “solutions”.
Since the creation of the Federal Reserve in 1913, there has been a significant debasement in the value of the US dollar due to the unrestrained increase in the money supply by the Federal Reserve, i.e they have been printing money. Since 2001, this has manifested itself in a housing bubble, the recent bursting of which is a healthy recognition by the market that the real value of these assets is much lower.
    The seeds of the current crisis were therefore laid many decades earlier with government intervention in the market. It is they who are guilty and they should not be rewarded with additional powers to intervene, actions that will lead to the further destruction of economic wealth.
J. Darby
Auckland

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Dance - Alphonse Mucha

                                              mucha_dance

Alphonse Mucha was a Czech designer who largely "invented" the style now known as Art Nouveau, and was known then simply as “Le Style Mucha" -- of marrying of flowing ornamental design with simple figurative images.

This decorative panel, 'Dance,' is from 1898.

You can find out more about Alphonse Mucha, including his celebrated theatre posters, at the Mucha Museum site.

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Tuesday, September 23, 2008

Euro blog bans

Unable to stomach online criticism of the European Parliament, which their own research tells them is "overwhelmingly negative," some Euro MPs are running scared of the Euro-blogosphere and are seeking to muzzle it -- they aim to "regulate" blogs to  counter the "dangerous and unregulated blogosphere," and bans of anonymous bloggers aren't being ruled out.  Story here in the Telegraph.

I suspect the Ninth Floor will be watching this trial balloon to see how well it flies.

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What's in back of Barry Obama?

I was curious to read Alexandra Starr's New York Times piece about Barack Obama's time at Chicago University, especially after reading Russell Brown's review which introduced it thus:

    With the brief, alarming season of Republican Idol on hiatus owing to a financial meltdown, the US press has been producing some serious -- and sometimes seriously good -- work. The Obama campaign presumably won't be upset with the story that appeared in yesterday's New York Times magazine under the byline of Alexandra Starr.
   Starr examines a side of Barack Obama that is surely rich with clues to his way of thinking and character, but which has been studiously underplayed by his campaign ... his decade-long career as a law professor at the University of Chicago.
   Through conversations with former colleagues and students, she depicts the professor as open-minded, inscrutable and thrilled by the contest of ideas. In a White House era characterised by tunnel vision, nonsensical proclamation and intolerance of debate (let alone dissent), Obama's traits might not seem optimum for the task of actually winning an election, but I'm quite tickled by the idea of the hold of the most powerful job in the world being able to countenance ambiguity.

"Ambiguity."  How very "post-modern." 

This is one of two pieces praised by Brown as "seriously good work," so I was keen to examine its insights.  What would Starr's piece reveal, I wondered, about Obama the Lecturer.  What might I find out about the nature of this ability to "countenance ambiguity."  Turns out Starr's examination of Obama's time as a Chicago law professor was more interesting for what it didn't say, and what it underplayed, then for what it could say. 

First of all, it seems he took just three classes -- Racism & Public Law, Constitutional Law and Voting Rights -- and this just was a part-time lectureship of about two sessions a week while he kept up his day job in the state senate.  So calling him a "former law professor" rather overstates his case.  Second, just look at the nature of the praise his students give him:

  • "Escuder was impressed by his teacher’s ability to see both sides of an argument."
  • “You never would have known he was going to be a liberal senator based on what he said in his courses."
  • “Based on what I saw in the classroom, my guess is an Obama administration could be summarized in two words. Ruthless pragmatism.”
  • “He wanted us to be aware of our biases so we could better avoid the pitfalls they can bring.”
  • “I don’t think he’s wedded to any particular ideology.  If he has an impatience about anything, it’s the idea that some proposals aren’t worthy of consideration.”
  • “I’ve read that he’s good at poker, and that doesn’t surprise me. He is good at not wearing his opinions on his sleeve.”

Can you see it too?  Can you see the common thread?  They all praise his intelligence, and there's clearly no question about that.   But all of the students quoted praise him for something else:  for rarely if ever showing his own opinions.    To them, this is the fundamental attribute about which they wish to give their former lecturer praise, and on which point of praise both Brown and Starr concur.

Now, it's certainly a good thing if a lecturer doesn't use his class as a soapbox for his own opinions, and the likes of Jane Kelsey, Susan St John and most of NZ's Association of University Staff should take note, but there is however more than one reason for not showing one's own opinions in class.  One reason is to be scrupulously non-partisan as a teacher.  The other is because one has no opinions*. 

So is Campaigning Obama any different to Lecturing Obama?  Well, not really.  Aside from "change" and "more regulation of Wall Street" --- something now that both presidential candidates agree on --  we're really no closer to being sure of what he really stands for.  Notes blogger Myrhaf:

He has shown an astonishing ability to flip-flop on his positions. On issue after issue, he has changed his mind, as if his principles and positions are of secondary importance to what the voters want to hear.

The surge won't work, he says one month, and he's against it.  And now he says it has worked, and he's for it.  Drilling won't work, he says one month, and he's against it.  And now he says it might work, and he's sort of for it.  This might impress us not just with his ability to see both sides of an argument and to "countenance ambiguity," but also to hold both sides at any one time and to countenance almost anything.

So what's the explanation?  Myrhaf has one, that he's a "blank screen president":

He has described himself variously as a "rorschach test" and a "blank screen" on which people project what they want to see...  Barack Obama's habitual way of thinking does not focus first on the facts, but on other people's emotional reaction to what he is saying... Always with Obama his primary focus is on what other people think. The reactions of other people guide him as he speaks -- and facts are malleable things that can be made to fit the needs of the moment... 

Based on what we've heard of Obama in the classroom and on the campaign trail, we'd have to agree that an Obama administration really could be summarized in two words. Ruthless pragmatism. 

obama_messiah So why are people looking for Obama's principles, then?  Obama is the perfect product of modern, progressive education. He has none. As Ayn Rand observed, "[The Pragmatists] declared that philosophy must be practical and that practicality consists of dispensing with all absolute principles and standards."  So why look for either principles or standards or positions that last longer than the range of the moment?  What takes the place of principles for Obama is the rapt adoration of crowds. "Look at the way he soaks up adoration when he speaks before large crowds," notes Mryhaf. For someone like Obama, in which fundamental importance lies "not primarily in the facts of reality but in what other people think, the adoration of the masses must be something like a peak experience. It doesn't get better than that."  What moves Campaigning Obama is not facts or ideas, but the emotional vibrations of his audiences. 

So what about all the conspiracy theories then?  Says Myrhaf:

Obama is greatly feared on the right as a crypto-socialist who is acting moderate to gain power. This is possible, but I don't think it is the fundamental explanation of his character. His radicalism in the past has been the result of being surrounded by radicals. In liberal Chicago, he did what was needed to rise in the Chicago political machine. He reflects back to people what they want to see. If anything, Obama's far-left positions show how far the Democrats in general have moved to the left.

So if this anlysis is true, then what's the greatest irony about Obama, the empty sponge and apostle of "change you can believe in"?  I'll leave the last word to Myrhaf: "Here is the greatest irony about Obama. If he were elected, his administration would change nothing...  Obama would be a servant, enacting policies others tell him to do."

* * * * * *

* The only "position" Obama ever actually revealed to students according to Starr, impossible to avoid given the nature of his classes, was on racism: "In his mind," said one student, "the real problem wasn’t racist attitudes some people may hold, but the fact that some minorities were starting at such a huge disadvantage. Issues like poor public education and the lack of access to credit seemed more glaring to him.” I can't help but note that it was legislative moves to address this "minority disadvantage" in the mortgage markets that kicked off the sub-prime crisis in the first place!  See Stephen Hick's flow chart for the simple illustration of how affirmative action led inexorably to capital destruction.

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Thank you

09-22-brillantememe My thanks to Dave Gee and Home Paddock for my award (given here and here) which I appreciate.

Thank you.

My own nominations for the award appear down the side of this blog under the heading 'Regular Reads.'  :-)

Urgent advice for the People's Republic of Wall Street

As Republican Treasury Secretary Henry Paulson seeks to Sovietize the American financial sector just as fast as his levers of power will move, broadcaster Lindsay Perigo offers cogent advice backed with brilliant historical analysis, and economist Frank Shostak offers the same cogent advice, backed with brilliant technical analysis.

Read them!

In the inflation-induced collapse of the American economy of the 1930s, two presidents took the opportunity to begin the process of Sovietization -- one Republican, one Democrat -- which included many measures, including the creation of Fannie Mae, whose toxic presence helped to create the latest disaster.  Can we please ensure the same opportunity is not taken again in the 2010s.

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Bullshit, bad news and really, really good news

Local political news this morning includes real news, no real news, and no news at all, really.

It's no news that politicians lie.  John Key lied about his ownership of Tranz Rail shares (and you can see him do it here - just click the 'Related Video' link).  Winston Peters lied about his knowledge of Owen Glenn's donation, (and about pretty much everything else over the last twenty years).  And Helen Clark lied about when she knew of Owen Glenn's donation to Winston Peters (and about pretty much everything else related to the subject of party donations). So they're all doing it, aren't they.

Q: So how do you know when a politicians lying?
A: Their lips move.

WinstonPetersNo Is it news that politicians lie?  No, it's not.  It's not news that politicians lie, or that as weapon of mass distraction they release news of each others' lies when their own are about to be exposed.

It's no real news that Winston Peters is to be "censured" for lying.  While he's still suspended from office, he's not to be stripped of the baubles thereof.  While he can't really bestride the hustings with the aura of a foreign minister in office, he will still have all the taxpaid resources available to him to campaign (and he still hasn't paid back his overspending from 2005).  So of what does his "punishment" consist?  As Newstalk ZB has been saying, it has all the force of a wet bus ticket.

No real news then.

So where's the real political news then?  There's one story from Auckland, one from Wellington, and one from Washington. 

The story from Auckland is related to John Key's lying. His family trust bought and sold Tranz Rail shares, from which he made a substantial loss on the whole position, even after he tried to talk them up. For a man whose political reputation is based almost solely on competence in the financial markets, that's genuinely embarrassing.

The story from Wellington is related to Winston's lying.  Watch Russel Norman, Helen Clark and Uncle Tom Cobley and all use the news to push (again) for taxpayer funding of all the anointed political parties.  Expect it to become an election issue both as a means of distraction, and a means to dig themselves out of the whole they've all dug for themselves by demonising the few remaining businessmen who want to throw money at them.

And the real, real story is from Washington.  The United States is rewarding Trade Minister Phil Goff's heroic efforts promoting free trade in the Asia-Pacific region by joining New Zealand in talks to achieve a free trade between the US and NZ a four other Asia-Pacific 'partners.'

In amongst the bullshit and the bad news, that's some really, really good news.  For us, and for the US.

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Absinthe! - Henri Privat-Livemont

                                      Absinthe-Robette-73KB

According to the Absinthe Poster site (crikey, you can find anything on the internet), "the height of the absinthe boom in the late 19th century coincided with the rise of the large lithographic advertising
poster as a powerful commercial and artistic medium," and with the rise of Art Nouveau.

Lucky us, to enjoy such confections as these, by Belgian 'poster artist' Henri Privat-Livemont -- from 1894, the height of La Belle Epoque.

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Monday, September 22, 2008

Sensing Bullshit

I hadn't realised that the worst programme in a very poor telly schedule was so popular that it would win "Best Format/Reality Series" at the latest bullshit telly awards.  The award demeans everybody up for an award that night -- the charlatans who put the fraudulent show together deserve not an award, but to be run out of town on a rail, not to mention what Detective Senior Sergeant Ross Levy of the New Zealand Police Force deserves for promoting psychics as "just another tool" in the investigative policing toolbox.

This pillock is clearly not the sharpest tool in the investigative toolbox himself, but he's only an idiot -- as this analysis of his foolishness makes clear -- albeit an idiot with powers of arrest.  But the makers of the show are worse: they're cynically exploiting the families of murdered victims just to make a buck.  Says Vicki Hyde from NZ's Skeptics Association, it's disturbing to think "that the very people we expect to protect us from fraud or false accusations are touting this industry. It doesn't give you any confidence in the police force if they think this is a reasonable approach to take in solving serious crimes."

"Sensing Murder is simply a marketing vehicle for the psychics and a money-spinner for a television company keen to exploit vulnerable families in the name of shoddy entertainment," she says.  And she's right.

To the producer of this show, David Baldock, those who scheduled it, and to those who chose to give it an award, I bestow my deepest contempt. Not to mention all of you who tune in every week.

NB: Check out a clip from Eating Media Lunch's exposé of the gormless fraud Deb Wells at YouTube, and for real entertainment-with-a-point-to-it, the Bullshit! team of Penn & Teller exposing the methods by which frauds tell us they can "speak to the dead."  YouTube has all three parts of that show.

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Come in number seven!

Oops!  I've dropped a spot in Tumeke's latest ranking of NZ's political blogosphere, but don't let that stop you checking out the other blogs in the top twenty to see what you might have been missing out on -- or to check out the reigning number one blog for videos like this one of Sarah Palin "appearing" with Hillary Clinton on Saturday Night Live.  Hilarious.

But do come back now.  :-)

With leaders like these, South Africa hardly needs enemies

South Africa has replaced a "stupid, palpably ignorant, gutless friend of evil" with "a serial polygamist ... who thinks having a shower after sex protects from HIV."

Liberty Scott has all the background.

Stop the bailouts! [updated]

US financial "experts" are talking about "a trillion dollar bailout" of the troubled financial system -- "the mother of all bailouts" -- yet note that these are the same "experts" largely responsible for the explosion of artificial central-bank-created credit that caused those troubles, and this is more of their same rocket fuel that caused the problem in the first place!

As if he were just speaking yesterday, Nobel Prize-winning economist Frederick Hayek has some advice for those "experts" -- and for all those who are giving them their head:
Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. ... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection--a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end. ...It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.We must not forget that, for the last six or eight years, monetary policy all over the world has followed the advice of the stabilizers. It is high time that their influence, which has already done harm enough, should be overthrown.

Time to abandon the illusion that inflating the currency to effect price stability can lead to anything but disaster; and time, now urgent, to stop propping up failure so the recovery itself can get going.

"America is more communist than China right now," declares maverick investor Jim Rogers. "This is welfare for the rich."

He's right you know, and it will work just as well as every welfare programme, won't it.  Trouble is, failure on this front means failure of the very financial system on which we all rely for our prosperity.

UPDATE 1Notes Mark Thornton, former Assistant Superintendent of Banking in the state of Alabama,
The financial panic that has engulfed the planet is considered by politicians, bureaucrats, journalists and mainstream economists to be a problem of regulation. I find myself in the uncomfortable position of having to agree with this gang of opinion makers, but it is not a problem of insufficient regulation, inadequate regulation, unenforced regulation, out-dated regulation, or anything of the kind.

The problem is with regulation itself. With regard to financial markets, government regulates everything...
Contrary to the "solutions" put forward by McCain, Obama and Uncle Tom Cobley and all, more government regulation is not the solution.
Government regulation is the problem... What the American public needs to be told [and all the "experts" need to be told] is that the crisis is actually the market trying to reestablish some rational order in the economy beset by regulation. It is the market that is tearing down these mega financial firms and disposing of the crazy financial products that they created. It is the market that is punishing those who grew rich on paper money schemes, derivatives, sub prime mortgages, and hedge funds. These are the same people the taxpayer is being asked to bail out--Wall Street fat cats.

What the American public needs to hear [and all the "experts" need to be told] is that regulation is the problem and that the "unfettered market" is the only way to break out of the business cycle.

UPDATE 2Speaking on the bailouts to Time magazine, economist and executive director of the Ayn Rand center Yaron Brook said, "It's a complete disaster. Its a form of national socialism of the financial markets...This is socialism 101."

Brook doesn't blame speculators, traders or financiers for the market's near-collapse, but instead blames government for having overregulated the markets in the first place. The business leaders bailed out by government this week "are victims," he said, "and the government set it up." Washington underreacted to previous crisis, let Fannie Mae and Freddie Mac spin wildly out of control as quasi-government agencies while taxpayers piled up
unsecured debt in their names. The crisis, he added, was "really fed throughout by government policies."

"The unfree market has failed," he says. "It’s time for a truly free market.”

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Red and Blue Teams are both driving people away

Record number of Kiwis head to Aust ... the highest in nineteen years.

Statistics New Zealand said there was a net outflow of 33,300 people to Australia in the year to August. That's the highest figure since the February 1989 year. Some 2900 people packed their bags in August itself, up from 1900 a year ago.

And the Blue Team are still using the departure of some of NZ's best people to damn the present government ... oblivious even now that emigration is a long-term decision, and since National has looked for months like the likely winner come the election, the record number of departures is as  much an indictment of them and of the low expectations of a Key-led administration as it is of the present Clark regime.

Good people are leaving in their droves, and they see nothing from either side of the aisle to keep them here.



That's a real tragedy.

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A woman, for a change

Forget the braindead non-actresses you lot normally lust after, here's a real woman; a swimsuit-modelling chess 'grandmistress' who's just won the world chess championship [hat tip Shaving Leviathan].

And here's her website, "the most visited Grandmaster chess site in the world" -- less to do, I'm sure, with the "semi-naked pictures" of herself on Miami beach, than the highlights videos of her games.

Sunday, September 21, 2008

Is the phenomenenal disconnected from the noumenal ... ?

A little humour here for Objectivists, from a shop we spotted down in the south-west of Fiji:

13090820080913_13092008_0313090820080913_13092008_02

Apparently the world's most destructive philosopher is now at home in Sigotoka, Fiji. To all appearances, he's now the only electrical repairman in the world who works on the premise that the phenomenenal is disconnected from the noumenal.

And I'm sure readers of Leonard Peikoff will appreciate the irony of the swastikas on the door:

Kant-Swastika

NB: If non-Objectivists would care for a brief introduction to Kant, "the single most influential philosopher of modern times," not to say the most destructive, then you might like these articles from the archives on the 'catastrophic spider,' written in response to an anti-Objectivist philosopher: Kant Can't, Kant Couldn't, Kant Didn't, and Kant Really Wasn't -- the first by Lindsay Perigo, and the last three by yours truly.
Or there's always Dagny Taggart's answer to Kant.

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Why you should stop worrying, and learn to love depressions

If there's one very, very good reason that you should stop worrying and learn to love economic depressions, then it's this: that recession, or depression, is an important part of every central-bank created economic cycle -- and it's the bit after all the expensive mistakes when everything is made right again.

If the "boom" is the part where the central bank's rocket fuel sends everyone out on a bender, and the "crisis" is the part when you wake up in the morning and realise you've left your credit card with the hooker and her six cocaine-addled friends, then the "depression" is the part where you ring the credit card company and cancel the card.  The depression is the recovery phase

It's the period when businessmen realise they've been swimming in the central bank's inflated money, and they and everyone else are about to drown in it. 

Things were going seriously awry, and now we've found out! That's a good thing!

People were swimming naked, to use Warren Buffet's phrase, and now that the tide's out, the chickens have come home to roost, and all our metaphors are mixed, we can all see for ourselves who's out there with no clothes on, and where the chickens are roosting. 

What's urgently needed now is not to keep on swimming in all that rocket fuel, but to let those who have been go to the wall, without setting a match to all those who haven't.

Explains Murray Rothbard in America's Great Depression (which you can, and should, read online here in PDF),

    The "boom" ... is actually a period of wasteful misinvestment. It is the time when errors are made, due to bank credit's tampering with the free market. The "crisis" arrives when the consumers come to reestablish their desired proportions. The "depression" is actually the process by which the economy adjusts to the wastes and errors of the boom, and reestablishes efficient service of consumer desires.

The "depression" is a necessary thing.

    The adjustment process consists in rapid liquidation of the wasteful investments. Some of these will be abandoned altogether (like the Western ghost towns constructed in the boom of 1816–1818 and deserted during the Panic of 1819); others will be shifted to other uses.
    Always the principle will be not to mourn past errors, but to make most efficient use of the existing stock of capital. In sum, the free market tends to satisfy voluntarily-expressed consumer desires with maximum efficiency, and this includes the public's relative desires for present and future consumption. The inflationary boom hobbles this efficiency, and distorts the structure of production, which no longer serves consumers properly.
    The crisis signals the end of this inflationary distortion, and the depression is the process by which the economy returns to the efficient service of consumers.
    In short, and this is a highly important point to grasp, the depression is the "recovery" process, and the end of the depression heralds the return to normal, and to optimum efficiency. The depression, then, far from being an evil scourge, is the necessary and beneficial return of the economy to normal after the distortions imposed by the boom. The boom, then, requires a "bust."

Time to stop worrying then, and learn to love the recovery.

But wait, there's more.  There are those who hate recovery.  There are those like the crisis.  There are three groups all set to capitalise, and three major reasons not to love economic depressions.

1) Because politicians and other anti-capitalists nitwits use economic depressions to kill or further hamper free markets.

2) Because politicians and other anti-capitalists nitwits have already put in place handbrakes on recovery like minimum wage laws and meddling regulations on every business who's now vigorously trying to cut costs, and they're never ever going to remove them. It's hard to recover fast when you're driving with a handbrake on.

3) And because if we don't make sure they stop it, politicians are going to keep trying to bail out failed bankers, and failed bankers are going to keep letting them, and you and I and the remaining businesses still making money are going to be made to pick up the tab, and keep on picking up the tab, until there's no one left who's able to pay. And then there'll be no chance of recovery at all.

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