Friday, December 10, 2010

FRIDAY MORNING RAMBLE: The WikiLeaks Edition

It’s been a WikiLeaks week.  From secrets to soap opera, the WikiLeaks story has had everything a news organisation needs to make good copy. Quarter of a million documents to sift through and expose. And then there’s Assange, The Movie

  • Does the leaking make WikiLeaker Assange “a terrorist”? Judge Andrew Napolitano says …


 

Econogeek Thought for the Day [hat tip Will Wilkinson]:
”Salma Hayek was put on earth by socialists to make us forget
what we're doing when searching for Friedrich photo references.”

  • While Bernanke continues to dissemble, Jon Stewart laughs in the face of disaster. Literally:
  • Obama says he and the GOP must find “common ground.” But what if there is none. And when does compromise just become sacrifice?
    No compromise possible with evil – Charlotte Cushman, T I M B E R J A Y
  • Lou Reed’s response to Jesse Jackson’s request for “common ground” a generation ago might be a model for the correct response now.
  • So, um, who is this Sarah Palin then?
    Who is Sarah Palin? - PJTV
  • It seems like a long time since he was “The One.” A rapidly-aging Obama’s now taken to lashing his own supporters. Poor baseless bloke…


  • Why is he lashing his own? Sinclair Davidson explains that it all goes back to George Bush…
    Read my Lips – C A T A L L A X Y  F I L E S
  • You want to know what the global warming lobby really want? “It’s seldom that it’s spelt out so clearly…”
    What the AGW lobby want – C A T A L L A X Y  F I L E S
  • When Andrew Bolt’s good, he’s very good: “THE great global warming scare is dying not with a bang, or even a whimper. Try a great horse laugh.
       Right now, 20,000 activists, politicians and carpetbaggers are meeting in the Mexican resort city of Cancun.
        They are there for the latest United Nations conference on how to make everyone else cut the emissions caused by, for instance, flying a population the size of a small city to a Mexican beach.
        These are the emissions we’re told are heating the world so dangerously that Europe is now gripped by one of the coldest winters of a generation.
        Indeed, it’s so bad that Vicky Pope, a warming pundit from Britain’s Met Office, was trapped in London by the snow that the Met’s climate models failed to predict, and so couldn’t fly to Cancun to explain how very hot the world in fact was…”
    The great warming scare turns into a greater joke – A N D R E W  B O L T
  • And over 1000 international scientists are happy to have their names recorded as dissenters on the myth of man-made global warming.
    Shredding the “climate consensus” myth – W A T T S  U P  W I T H  T H A T
  • The Cancun coterie fall for the old "dihydrogen monoxide" petition as well as signing up to cripple the U.S. economy.
    UN climate kooks want to cripple US economy and ban H2O - W A T T S  U P  W I T H  T H A T
  • Basic economics rebut flatulent science: “If Pacific islands are being washed away due to climate change-induced floods, how come land prices are stable?”
    Cancun: islands in the climate storm – Eero Iloniemi, S P I K E D
  • “At a time of great doubt about climate change, policymakers must magic up more ‘evidence’ of manmade mayhem.”
    Cancun: scavenging around for scientific fact – Ben Pile, S P I K E D

Quote of the week? [hat tip Kate]
"Give me your tired, your poor, Your
huddled masses yearning to watch Glee"
*

  • This new online NZ tax calculator reveals where your tax goes, dept by dept. Although it strangely decides that we’re all being taxed at only 16% (we wish!) interesting to see which govt department comes in as the fourth most hungry for your cash
    Tax Calculator, 2010 – S O U T H G A T E  L A B S
  • What the calculator doesn’t show is how much of your money goes to lobbyists. Betcha didn’t know the govt is giving around 100 different organisations millions of dollars to lobby the government on alcohol policies. Nice scam. So if politics is the art of the possible, what does it mean when governments pay lobbyists to lobby them?
    Anti-smoking spending  - K I W I B L O G
  • Here’s how all take-home Intro Philosophy exams should look. See how you do.
    Introduction to Philosophy Exam [PDF] - Stephen Hicks
  • Speaking of which, I enjoyed this short account of one of the most exciting (but rarely told) stories in all history—told in an unlikely venue.
     The Rediscovery of Aristotle – T H E  C H R I S T I A N  R E A D E R
  • If the Soviet Union hadn’t existed, we wouldn’t have stories like this one exposing the lunacy and the waste of central planning.
    The Absurdity of Central Planning – Bill Bonner
  • The waste continues, even in so-called “free trade” deals!
    China Free Trade Mess – Daniel Silva, I M P O R T E R’ S  I N S T I T U T E
  • Things are changing in Britain—and, goddamit, don’t they need to!
    Grant your own planning permission, government tells homeowners – T E L E G R A P H
  • Jim Rogers: "All Of You Who Have MBAs Have Made Mistakes" And You Should Be Farmers Instead http://bit.ly/etulAE
  • Congratulations to Auckland-based motivational designer and publisher Inspirationz Inc., who the American CBS network reckon produced one of the six most motivational videos released to the internet in 2010.
    “Produced by Wellington filmmaker Shahir Daud whose film Double Happy was screened at the Montreal Film Festival earlier this year, and written and directed by Inspirationz’s managing director Terry Verhoeven, IGNITE YOUR SOUL was released as part of a catalogue launch to showcase Inspirationz’s inaugural wall-art and print designs.”
    The Best Motivational Videos of 2010 – Geoffrey James, C B S  B-Net
    IGNITE YOUR SOUL! – i n s p i r a t i o n z !
  • And speaking of motivational, check out @gazal Dhaliwal's neat video for the Atlas Shrugged Video Contest.
  • Thought about what you’re going to buy your nieces, nephews and friends’ kids this year?
    Celebrate a rational holiday with the Atheist Christmas Coloring Book – M I N D  P O S T S
  • Art Carden explains the Grinch who had a Coasean Christmas.
    How Economics Saved Christmas – Art Carden, F O R B E S
  • How many opportunities have you missed out on because you spent too long tying your shoes? Don’t do it again. [Hat tip GeekPress]

  • Enthusiastic Maths Kid is back. This time, he wants to teach you how to to differential calculus. True story. See:

  • Now, I warn you, this is insidious…

  • Popular at our house round dinner times, this week… and (unlike David Cross) he can play, this chap …

  • Must be about time for brunch…

Have a great weekend!
PC

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Thursday, December 09, 2010

“Lunch Break,” by Quent Cordair

Lunch

Try that for a lunch break. What a feeling!

More paintings by Quent Cordair here.

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Wide-ranging constitutional concern

I should be excited about this government's announcement of a "wide-ranging constitutional review."

It should be a great opportunity.

We need governments like we need a guard dog: to protect our rights from those who might do us over.

And we need a written constitution for the same reason we need a leash on our guard dogs: to chain the bastards up. To make sure they do that job of protecting us, instead of getting off the leash and doing us over.

The record of the American constitution shows that a properly-written constitution can do that job--and we can learn from the flaws of the American constitution to write for ourselves a colour-blind constitution that does it even better (which is precisely what this one is designed to do).

Except we won't be writing that sort of constitution, will we.

Not at a constitutional convention promoted, organised and hosted by this government.

The fear, after seeing two years of this big-government-loving government in action--of Steven Joyce's nannying; of Simon Power-Lust annulling one-by-one our long-held legal protections; of John Key with his hand out to the Maori Party, and his hands in his ears over protests about smacking; of them all reintroducing the very Electoral Finance Outrage they campaigned so hard against—is that instead of promoting a constitution to tie them up, what will emerge instead will be one designed to tie us up.

That's certainly my fear.

Am I wrong?

Constitutional law is superior to every other law. This superiority is both a good thing and a bad thing. What’s good is that once a watertight constitution properly protecting individual rights is in place, it acts to chain up the guard dog and to keep it on its leash for good. What’s bad is that once in place, a poor or anti-freedom constitution is very difficult to get rid of.

As history demonstrates -- and the constitutional conference of 2000 and the 2005 Select Committee review of NZ’s constitutional arrangements foreshadow – a bad constitution poorly written can give the erstwhile guard dog control of the back yard and the house, and rather than protecting us it then has no impediment to doing us over.

Liberty, as Thomas Jefferson suggested, requires eternal vigilance.

So too will this government’s "wide-ranging constitutional review."

RELATED POSTS:

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NOT PJ: Olden Caprice

_BernardDarnton This week Bernard Darnton conjures up social policy with a simple jerk of the knee.

I have come up with a great new plan to look as if I’m doing something about the road toll. Something must be done. This is something and therefore this must be done.

The legal aged-driving limit should be cut to 50. Drivers already have to pass a special driving test if they want to continue driving over 80 but people are still dying on the roads. Last year 116 people over 50 were killed on the roads.

Age has a profound effect on driving skills. Effects include slower reaction times, blurry vision and poor night vision, poor concentration, drowsiness, and worsening hand-eye coordination. All of these contribute to reduced driving ability and an increased chance of a fatal accident.

Another common problem with older drivers is lack of knowledge about how to use their cell phones. Sending texts requires their hands to be off the steering wheel much longer than it does for a young person.

While my plan only suggests cutting the aged-driving limit to 50, the School of Public Health at the Wellington School of Medicine has recently published research that shows there’s no safe age limit for driving. Due to a global conspiracy of journal editors, Zimmer frame manufacturers, and the people who make large-print playing cards the research hasn’t been published in a recognised journal - even though it was conducted in full accordance with the scientastic method.

Once my limit of 50 has been introduced I’ll be able to use the public health research to argue for a limit of 30 as a reasonable compromise.

In Australia, Victoria has cut the driving age limit to 20 with fantastic success at cutting the roll toll to almost nothing. National Manager of Road Policing, Superintendent Paula Rose, was asked whether she’d like that limit introduced here but she couldn’t speak because she was sucking on a lemon.

Critics of the plan to cut the legal aged-driving limit have pointed out the the number of over-fifties involved in accidents is no higher than you’d expect given the numbers on the roads, that cutting the limit would rob oldies of the chance to go out in the evening to enjoy a couple of slices of birthday cake, and that further research on the effects of reducing the limit is needed.

The fact is that we don’t have time for fancy-pants “numbers” and “statistics” and “research” while the carnage continues unabated.

* * Read the ongoing results of Bernard Darnton’s ground-breaking public policy research
programme every Thursday here at NOT PC * *

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Wednesday, December 08, 2010

‘Hypar Pavilion’ at NY’s Lincoln Center, by Diller Scofidio + Renfro Architects

16DSR-Lincoln-10-10-8466

hypar-figs10A “hypar” is a doubly-curved “saddle” surface that can be built entirely from straight lines, of which  Spanish-Mexican architect Felix Candela was the undoubted master.

This new hypar pavilion by Diller Scofidio + Renfro Architects perches in the centre of the arts capital of New York using the curvature to bring the roof down to the ground so that folk can get up on the grassy roof and hang out.

02DSR-Lincoln-10-06-2232 Brilliant!

08DSR-Lincoln-10-10-8129

More photos here.

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DOWN TO THE DOCTOR’S: Bollocks, tax reclamation and vote-wasting

_richardmcgrath Libz leader Dr Richard McGrath ransacks the newspapers for headline and stories on issues affecting our freedom.

This week:  Bollocks, tax reclamation and vote-wasting

  • NZ HERALD  “‘Bollocks’ Groser tells climate change criticsClimate Change Negotiations Minister Tim Groser spurns accusations by critics on the socialist left that he is siding with the governments of big “polluter” nations at the Cancun talkfest…

    THE DOCTOR SAYS: Tim Groser deserves a slapping for several reasons, but not for the one suggested by Russel Norman and Charles Chauvel.
        For a start, Groser deserves our opprobrium in the first place for buying into the fatuous concept of man'-made global warming.
        Second, he should never have dignified this mass meeting of the deluded by his attendance, but having done so should have paid for it with his own money, as apparently Labour and the Greens did.
        Third, he should stop slagging off people for being motivated by ideology. Being ideologically-driven, i.e. motivated by principle, is infinitely better than being poll-driven, i.e., motivated by power-lust. His spurning is however further evidence that the Nationalisation Party long ago abandoned the concept of acting on principle, though it still has this sham page on its website.
        Perhaps the Herald’s headline is, in fact, a not-so-subtle swipe at Mr Groser. I note the lack of a comma after the word ‘bollocks,’ and the use of single inverted commas (which tend to denote nicknames) rather than double inverted commas (which tend to denote quoted speech), both of which imply the Herald’s sub-editors at least have a less than fulsome opinion of poor Timothy.
        I had hoped from the headline that Mr Groser was telling Norman, Chauvel, et al, that the whole man-made global warming fraud was a load of bollocks – which it is. But no, he’s happy to use the myth of human induced weather changes as an excuse to further restrict human liberty and to make certain individuals hugely wealthy by taxing everyone while lowering living standards for people in developing countries.
        I have a more apt nickname for Tim, recognizing that he and the anti-industrial lobby are not really enemies at heart, they just differ in outward appearance: ‘Green’ Groser, Minister of Climate Hysteria.
  • DOM POST: “Wealthy families claim payoutsA family uses perfectly legal loopholes to milk the Working for Families benefit. Bill English and Peter Dunne now want to effectively neuter LAQC tax claims…

    THE DOCTOR SAYS:  A family whose company earned over $700k has claimed $12k in benefits from the Welfare for Working Families slush fund, Helen Clark’s vehicle for buying middle class votes. And why not? Peter Dunne-Nothing and Bill ‘Twenty Percent’ English have conspired between them to tax the family hundreds of thousands of dollars in the past year alone.
        What about Jim Bolger, who I seem to recall arranged his mother’s financial affairs by way of a family trust so that she would get subsidized rest home care. Will Dunne-Nothing and Twenty Percent close that loophole too? Or will they sort out their own family trusts first?
        And has Bill English managed to sort out where he lives yet?  Or is that one loophole he plans to keep open for ever?
  • DOM POST: “Electoral bill fails to cast off free speech shacklesSimon Power aims to replace the Electoral Finance Act with... a different version of the same formula, that massively disadvantages anyone that dares to challenge the major political parties…

    THE DOCTOR SAYS: When the Nationalization Party were in Opposition two years ago, one of their big campaign policies was overturning the sinister Electoral Finance Act.
       So what did we get once they got once Power-Lust got into power? Some tinkering around the fringes of the Act. Some ineffective window-dressing. Wouldn’t want to spoil a good thing, now that the boot’s on other foot, eh Simon?
       The spending threshold for political parties has been raised from 120k to 300k. Big deal. That’s still a limit on free speech, if the same odious rules apply (e.g. denoting voluntary private activity as though it was being charged out at commercial rates). With a Simian Power-Lust, our Justice Minister retains the theft of taxpayer money for the big parties to spend on TV advertising.
        The Libertarianz Party has always believed forcing a taxpayer to fund the advertising of political parties whose policies make his bile rise is outrageous. We believe politicians should be self-funding. Personally, I believe MPs should be paid by the members of their own political party, and should arrange their own superannuation and subsidized travel perks. That would obviate the need for the sort of expensive farce being played out investigating the business affairs of Pansy Wong’s husband.
        I will be asking the following question repeatedly, right up until election day next year: “Are you any better off than you were three years ago?” If not, why not?
        And this: “Just what radical changes has the Key government made to reduce the overbearing nanny statism that we endured for nine years under Clark and Cullen?” Name them if you can. If you can’t, and you voted BlueLabour last time, why waste your votes on these hobos when there is a political party that stands for free markets, free speech, low taxation and less government?        

That’s all for this week,
Catch you again next Wednesday!
Dr Richard McGrath
LIBZ LEADER

When the people fear the government, there is tyranny - when the
government fears the people, there is liberty.
- attributed to Thomas Jefferson

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Perks [updated]

No wonder all the country’s MPs are so eager to get behind the Law Commission’s recommendation for an “independent Remuneration Authority” to set MPs’ perks (reported, for some reason, as “losing control” of them).

MPs across the spectrum have been quick to jump on board this recommendation because they know that it will do nothing to stop their troughing—that instead, it will only legitimise it.

What a sweet ruse.

And they know too that even if, by some outside chance, the Authority did cut their perks, that the same Authority would still grant them a salary increase to compensate for the loss of this “entitlement”—instead of the salary cut that the economic situation and their performance suggests they actually deserve. And the MPs can then say that said increase is nothing to with them.

What a rort.

So this is nothing at all to get excited about. Just more of the same, only worse.

And no surprise either that while all MPs without exception are happy to take up this ruse rort recommendation, they’re united almost across the board in opposing the recommendation that they face exposure of their troughing through Official Information Authority requests—which was the only decent thing the Law Commission recommended, and quite possibly they only thing that won’t be taken up.

On no account do they want to the brief window on their perks that opened up this year to remain open.

So the troughing of our masters will continue without public scrutiny.

And those who pick up the tab for it will once again be kept in the dark.

No wonder all the MPs are so happy about it.

UPDATEMark Hubbard makes an associated point:

_Quote 1) This group of people are either so incompetent, or so dishonest, or, a mixture of the two, that they can't even be relied upon to manage a simple system of reimbursements…

And at the same time…

_Quote2) This same group of individuals are responsible for a government spend that makes up almost half the … spending in our entire economy.

Does that situation make any sense at all?   Does it?

Tuku’s trough could fill a whole coastline

Those of us who remember Tukuroirangi Morgan's time in parliament, and at Aotearoa Television, remember with some enthusiasm for the entertainment it gave us all what a glutton he was for a perk. His sense of entitlement was so tangible it was something we mere mortals can only wonder at. (Q: Why did the chick cross the road? A: The chicken's mana entitled it to cross the road whenever  and wherever it wanted.) 

Those of you too young to remember it all need only a ribald sense of humour and the ability to Google Tuku+Morgan+underpants to catch up. And you should, because everyone but Tuku had a blast.

_Tuku These trough-snout proclivities of the Tuku are so clearly innate with him that it's very easy to believe recent stories that he and the rest of the Tainui top table which he chairs are paying themselves an awful lot for doing very little—a revelation for which the woman who revealed it has just been sacked by the very head honcho of the trough, by the Tainui “king” himself. (A sacking that looks as petulant as it is irregular.)

This, ladies and gentlemen, is what a Browntable looks like—a table of top troughers who don’t give a fig either for the people who pay their way, or the people in whose name they they claim to speak.

It’s to scum like this, and to the rest of their similarly-placed Browntable brethren around the country, that the National Party now wants to make a gift of nearly two-thirds of the coastline—not to individual Maori, or to individual non-Maori, either of whom might be able to prove some sort of common-law property right in what is presently un-owned, but who will now have no forum win which to make a case; not even as some under-the-table kind of privatisation, which will pass these parcels of foreshore and seabed into individualised titles that could end up in the hands of those who value them the most.

No, the National Party just wants to put it all straight into the trough and (after a few short  pas des deux in Chris Finalyson’s office) to give it straight to tribal “leaders” like Tuku and his ilk, so these self-serving scum can keep themselves in pork and clover until such time as they come back to the taxpayer saying “More!”

This is what has many people feeling very aggrieved about National’s compromise arrangement on the Foreshore & Seabed Act: because it will simply add more coastline to the already overfull Browntable trough, without delivering even a schnapper’s worth of justice for anyone.

_HoneHarawira_4But this is not to say the opponents of National’s planned handover are correct in their own criticism.

Hone Harawira, for example, seems to think the whole coastline should simply be handed over as is where is to the Browntable, simply because they are who they are. (The Browntable’s mana entitles it to whatever and wherever it wants. So there.)

_Muriel And the ACT Party & the Muriel Newman-led Coastal Coalition have been running an even more bizarre line. Instead of opposing crown ownership and arguing for real property rights—i.e., upholding the common law right for people’s day in court to argue for their rights in these areas to be recognised, which was precisely what the original Court of Appeal decision allowed—or arguing for a simple privatisation of coastline by the granting of individualised, transferable titles—they’re arguing instead that two-thirds of the country’s coastline should remain nationalised in perpetuity.

But since many of them also believe that “before Maori arrived in New Zealand settlements had already been established … by Chinese miners, and by the Celts,” it’s clear that logic plays no part in their campaigning.

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Tuesday, December 07, 2010

‘Project for a Buddhist Monk Cell,' by Suriya Umpansiriratana

mon01 I can hear the cat-calls already, just from you having read the title. "What the hell is Cresswell doing posting this sort of stuff!”  Buddhism, yet!

Well, my first answer would be to say, “Look at it before you complain.” Go on, take a closer look.mon03 What Thai architect Suriya Umpansiriratana has done here is to give perfect concrete form to the daily routine of a Buddhist monk, to his daily round of peripatetic meditation in nature, and in doing so he’s given real meaning to the monk’s existence. As the DesignBoom website explains (from whence these pictures derive),

_Quoteit is designed to create an atmosphere conducive to the monk’s practice of noble conduct.
The circular form allows for continuous walking meditation, but also functions as a symbol
of the 24-hour cycle of the practice schedule:
- the first period, from 04:00 to 12:00: after waking up, during chanting, meditation,
and the daily meal, a single wall to the east shields the monk from the morning sun.
- the second period, from 12:00 to 20:00: during the time for studying the Buddha's teachings,
the simple roof overhead shields the monk from the daytime sun.
- third period, from 20:00 to 04:00: chanting and meditation takes place in a space exposed
to the elements, and the monk then sleeps under the hanging mosquito net umbrella.
    The daily routine is expressed naturally by the design of the building. the circular form allows for precise directional siting of the building [see picture below].
    The primary structural material is steel, and the color follows that of the monk’s robes.

The beauty here comes not from any great ornamentation, because in that respect it’s as plain as a barn door, but in the meaning that this structure builds in. You might even say that it's very simplicity makes as plain as can be the very poverty (or stripped-down simplicity) of the Buddhist project, which calls essentially for the annihilation of all personality—something almost beautifully achieved here.

And that’s why this apparently simple building is worth examining: because it demonstrates once again what architecture is able to do. Said Frank Lloyd Wright, "Architecture is the scientific art of making structure express ideas," and that’s equally as true whether those ideas are false as hell, or as false as heaven.

_Quote Since remote times [explains Christian Norberg-Schulz] architecture has helped man
in making his existence meaningful.
With the aid of architecture he has gained
a foothold in space and time.
Architecture is therefore concerned with something more
than practical needs and economy.
It is concerned with existential meanings.
Existential meanings are derived
from natural, human and spiritual phenomena,
and are experienced as order and character.
Architecture translates these meanings
into spatial forms…

You might say that we humans develop rituals that help us handle, understand and enjoy life (i.e., the natural, human and spiritual phenomena that make up each of our lives). Rituals that give meaning to our lives. We develop these rituals, and then architecture builds them in.

And in doing so, architecture does more than just keep the rain off our stuff: it gives real meaning to our existence.  Even (ironically) to an existence we seek to escape from.

mon04

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You too?

Over the weekend, I was talking to someone who for some unfathomable reason went along to Mt Smart last week and stood in front of Bono for three hours. And then they asked me why I didn't.

I commented that apart from not liking anything they've ever recorded, if I wanted to be harangued by the sort of patronising smugness that sounds like the product of reading too many greeting cards, I'd much prefer to go along and see the Dalai Lama, thanks very much.

At which point another friend suggested I might like comedian Bill Bailey's pisstake of U2 guitarist Dave Evans.  And he's right. I did. And you might too.

Looks like Dave liked it.

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GUEST POST: “The Popular Delusions of Crowds”

Guest post by David Galland from Casey Research, which looks very briefly at how the whole world got here, and where “here” really is.

Dear Readers,

Today is one of those days where the sheer volume of possible topics overwhelms.
    Do we talk about Fed Chairman Ben Bernanke’s appearance on last night’s 60 Minutes in the U.S., during which he confirmed that the Fed’s latest $600 billion Treasury purchase program was unlikely to be the last – that the Fed is unswerving in its decision to debase the dollar “however much it takes” in an attempt to stimulate growth. Just as we have been saying it would for lo these many years. Related to that topic, it’s notable that the dollar actually strengthened on the news – though not against the far sounder monies of gold and silver, both of which are up again today.
    A related story, sent to me by steady correspondent Jack A., might be worth discussing – that the Republican leadership, kowtowing to its friends in high places in the big banks, may try to keep Ron Paul from taking the helm at the congressional subcommittee charged with overseeing the Fed.    Here’s the story.
    Do we talk about the vote in Ireland tomorrow? Will the Irish Parliament approve the deeply unpopular austerity budget the EU is demanding as part of the bailout it crammed down the throats of the country’s equally unpopular government? As that budget was a condition of the rescue plan, if it is rejected, will that put Ireland back in play as the first European nation to default?
    Since we’re in Europe, we could discuss the report out on Friday that Germany’s Chancellor Angela Merkel recently threatened to lead her country out of the eurozone – an act that would leave the experiment in extra-sovereign meddling a gigantic smoking hole in the ground. This is a topic that Bud Conrad spends considerable time on in this month’s edition of The Casey Report, out within the next day or so. (And you can receive it, risk-free.)
    Or perhaps we could talk about the reason for Bernanke’s admission that the gloves are off on monetization – that past and present governments of these United States have led the country into the very dangerous neighborhood shown in this chart. 

    (More charts on a similar theme here.)
    A word or two might also be in order for the massive war games the U.S. is now running off the coast of South Korea, involving 44,000 personnel, 60 war ships, and 400 or so aircraft. With the South Korean defense minister, who resigned over the tepid response to the North’s latest aggression, having been replaced by a hardened and hawkish military commander, the situation has arrived at one of those “interesting” crossroads in history where a miscalculation by the North could lead to a map change.
    Not to be cavalier, but things could get wild if the North so much as pops a cork. Even if nuclear weapons didn’t subsequently come into play, the massive metal-throwing capabilities of the North and the close proximity of those capabilities to South Korea’s heavily populated capital zone (consisting of 23 million souls) could lead to a disaster in the proverbial blink of the eye.
    Or we could talk about lighter topics, for instance a fun and interesting Christmas party I attended over the weekend. At the party, one of the area’s leading architects told me that in his long career, the business has never been this bad. A point of view echoed by a friend in the home furnishings business who told me they are stopping spending money on advertising because it does no good: no one is buying anything, no matter what the offer. I may share some additional observations gained from the party, but not today as I’m running late and am a bit worn down by long hours of wiring and editing The Casey Report over the weekend.
    Instead, I will step back to what the corporate types like to call the “50,000-foot view” and note that the totality of what’s hitting the newswires these days falls almost frighteningly within the scope of the intractable crisis we have been so ardently warning you about.
    As a refresher, or as fresh information for those of you new to these musings, though the storyline of this crisis stretches back many years, it is still pretty straightforward. The kernel of the crisis was planted decades ago when Americans first began to look to the government to solve every problem, large and then even small. 
    As this attitude that government was all-powerful served the interests of the politicians, they took every opportunity to encourage it. For example, while in campaign mode, aspiring politicians energetically position themselves as being the best qualified to solve what ails, then layering on the cream and cherries of new benefits to be dredged from the public trough so that they can be delivered to voters.
    As the election records make clear, the myth of an all-powerful government works even more to the favor of entrenched politicians – with each new year served giving the incumbent added firepower come election time. Not so much because their constituents actually like their representatives – but rather because they have been made to understand that the longer a politician serves, the higher their rank within their party and on the committees that dole out the goodies. It is for this reason that the career politicians invariably build their advertising campaigns about their special ability to deliver the pork, and voters keep returning them to office in order to take advantage of that fact.
    Over time, this attitude of looking first to the government for what might be termed a better life gave rise to any number of fictions. For instance that money could endlessly be created out of thin air as needed to deliver on political promises… but especially in situations that might be considered an “emergency.” 
    The problem is that there’s always an emergency – and ironically, over time, those emergencies have emanated from the past deeds of the politicians themselves. 
    For its part, the government has a range of tools it can bring to bear as problem-solvers – coercion, taxation, regulation, directed spending, monetary policy, drone-fired bombs, cheap loans, and so on, and so forth. When the dot-com bubble began to pop, the tools used by the government included ratcheting interest rates lower and actively encouraging loose credit.
    The flood of cheap money and loose credit set the stage for the housing bubble, which is best seen as part and parcel of a bubble in private debt. Of course, the government was not shy about increasing its own spending… because of the 9/11 emergency, and because there is always another election right around the corner.
    With the prices of housing soaring and everyone feeling like the party could go on indefinitely – mostly because the lower cost of interest allowed them to more easily service a higher level of debt – the total amount of debt in the economy began accelerating.

    Unfortunately, the party ended with the crisis that began unfolding in 2007, after which the availability of credit dried up and the housing bubble began to unwind. Thanks to derivatives and other modern financial innovations that allowed leverage, it quickly became apparent that the problems were not just bad but acute.
    Naturally, because it’s what we Americans now know, the populace turned to the government to fix the broken machine of the economy. With barely a moment’s hesitation, all of the king’s horses (asses) and all the king’s men set to the task. The scale of the problems was so big, however, that so had to be the government’s response.
    Viewed even from 50,000 feet, what then followed beggars the imagination. From the Fed lending out $3 trillion or so to pretty much anyone who raised a hand – foreign banks and private corporations included – to the government takeover of entire industries... to sending checks to hundreds of thousands of individuals… to guaranteeing bad loans by the boat load… to allowing the banks to transfer hundreds of billions of dollars in toxic real estate loans onto the balance sheet of the Fed… to dropping interest rates to zero… to providing cash incentives for car buying or installing alternative energy equipment (among others)... to extending unemployment benefits to two years… and on, and on, and on.
    While the consequences of these extraordinary actions are many, with many more to come, the most obvious result has been an annual government spending deficit in excess of $1.4 trillion – with no clear way to reduce that deficit in the years ahead. In fact, with the increasing takeover of the medical system just ahead of the first waves of retiring baby boomers, the deficits are likely to stay at these elevated levels, or even worsen, in the years just ahead. Especially given that the interest rates being paid out on all the debt are at historic lows. Meaning they are an anomaly that can’t last long. And once they start to rise, the deficits will begin to run out of control and the endgame will begin in earnest.
    While woefully inadequate, that’s the big-picture look of how we got here – now a quick look at where we’re headed next.
    And that, as our own Bud Conrad has steadily pointed out, is to a sovereign debt crisis, which in turn leads to a currency crisis.
    What’s going on in Europe, which very much followed the U.S.’s lead in trying to fix everything – versus letting all the malinvestment follow the natural path that a free market would have dictated – is just a preview of what’s going to happen here in the U.S.
    And this is where it gets interesting. You see, when the eurozone was established, there were certain controls put into place to avoid a willy-nilly printing up of new money by the central banks of its constituent economies. Thus, when faced with demands to repay its debt, Ireland can’t just whip up the tens of billions it needs… but rather must accept a bailout from the EU, along with all the attached strings.
    As Bud Conrad explains in his article in this month’s edition of The Casey Report, the eurozone’s problems now revolve around debt that is simply too big to cover. And so, for the reasons you’ll read, the odds are high that the euro will blow up. After which the Irish, the Italians, and the Spanish can get back to the serious business of printing up tons and tons of their own local currencies to meet their oversized obligations.
    In other words, the unbacked fiat currency of the euro will be annihilated and replaced by the unbacked fiat money of a bunch of countries, and the race to the bottom will begin in earnest.
    Meanwhile, back here in the U.S. where there are no restrictions on how much money the Fed can create, Bernanke and friends are already leaning heavily on the monetary levers. Because they can. And, as Ben’s 60 Minutes appearance makes clear, they’ll continue to lean on those levers until Congress decides enough is enough (Ron Paul not being named to head the oversight committee would be a step in the wrong direction) or, more likely, the lever breaks.
    Which is to say, when each new wave in money printing is met by a demand for higher and higher interest rates from prospective buyers of U.S. Treasury instruments. Around the same time, we’ll begin feeling the impact of increasing prices that must follow from the Fed’s monetary inflation.
    At which point the U.S. dollar as currently constituted will follow the euro into the trash bin of history.
    There is, of course, much more to it than that – for instance, the widely accepted notion that the “big countries” of Europe, the United States, Japan, and maybe China are too big to default on their debt will be proven false. That’s because ultimately, the fiction rubs up against the reality that the debt that is a hallmark of this crisis not only hasn’t been resolved, it’s been made worse by all the bailouts. For example, the solution being foisted on woefully indebted Ireland is to layer on another $100 billion or so of debt.
    I guess when you get right down to it, this crisis had it seeds in the madness and popular delusion of crowds. But it’s going to end up on the rocks of the reality that real money doesn’t come from nothing, and that there’s no such thing as a free lunch. Sooner or later the tab comes due.
    The tab is now sitting on the table in front of us all. While the bankrupt governments of the world will continue to pretend they are good for it… it’s becoming increasingly clear to just about everyone that they are not.
    (Where does North Korea fit into this construct? Only as a reminder that Black Swans, while rare, are also real. While we can’t know where the next surprise is going to come from, the way things are lining up, the odds are that it won’t be a pleasant surprise when it comes.)
    And it’s not just the federal governments in trouble… it’s pretty much everyone…

David Galland
Managing Director
Casey Research

Reposted by permission from Casey Research.
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A Hick-up on economic history

The ignorance of so-called financial commentators is legion.

Take this just yesterday from alleged financial commentator Bernard Hickey, showing he’s as poor a historian as he is an economist.

_Quote_Idiot Obama is just like Hoover - US economist Thomas Palley
hits the nail when he compares Obama to President Hoover,
the President before Roosevelt who fiddled* while the economy
slumped into recession…

This is just flat-out ignorant nonsense. Dangerous nonsense, since it is intended to reinforces a myth that encourages more meddling, of which Mr Hickey now approves. I replied at his site roughly as follows:

_QuoteBernard, you said, "Obama is just like Hoover - US economist Thomas Palley hits the nail when he compares Obama to President Hoover, the President before Roosevelt who fiddled* while the economy slumped into recession..."
    There is no polite way to say this: This is just flat out wrong.
    If Palley has hit anything it is only his thumb--and yours. If you are going to talk as some kind of authority, then please learn what you're talking about before you open your mouth.
    The only thing Palley got right is that Obama (and Hoover, and Roosevelt, and Bush) should not have listened to mainstream economists.  But to listen to Palley peddling lies about Hoover’s record (and you spreading them further) makes my stomach turn.
    Because, far from keeping his hands off while the economy tanked, Hoover was precisely as active as you and your new interventionist mates would have liked him to be **
    He intervened to keep prices up.
    He intervened to keep wages up.
    He borrowed to put deficits up.
    He supported and signed the Smoot-Hawley Tariff Act.
    He endorsed the Federal Farm Board, which placed the government into the farm business.
    He introduced the Reconstruction Finance Corporation (RFC), which spent billions on loans (or gifts) to prop up failing banks and industries.
    In short, he did almost exactly what Bush did, and what today’s mainstream economists encourage, with results that were just as dismal. 
    And instead of fixing the crash, he turned it into a full-blown depression.
    He introduced what Benjamin Anderson calls “Hoover’s New Deal,” and with it he delivered what deserves to be called “Hoover's Depression.”
    Virtually everything in Roosevelt’s New Deal was in Hoover’s. Just like Obama did with Bush, And after campaigning against Hoover's "big-spending" and “fiscal irresponsibility,” when elected FDR went right on ahead and did just what Hoover did, only moreso.  Just like Obama did with Bush. 
    And instead of fixing the depression, he made it last for years.
    Between them, Hoover and FDR were a disaster—and their “underconsumptionist” thesis firmly exploded. 
    So if there's any historical comparisons to be made here (and there are) the only one that makes any sense is to say that Obama is playing FDR to Bush's Hoover. 
    And they're both a goddamned disaster.

HOWEVER, if you really do want to learn about an Administration that sat back while the economy slumped into recession, you really should learn more about the “Great Depression of 1920-21”--where the initial slump was even bigger than it was nine years later. 
    But do you want to know why you don't hear more about The Great Depression of 1920-21? It's simple. While the slump was much bigger, because the government sat back, got out of the way, and allowed the economy to recover, in less than two years the US economy had restructured, recovered, and was back on its way to growth again.
    In short, the authorities then did what Hoover (and Bush, and FDR, and Obama, and Greenspan, and Bernanke) should have done.
    Which was to get the hell out of the way.
    And that's why it's been called "The Depression You've Never Heard Of."  Because their fiddling* in 1920-21 while the economy slumped into recession was what allowed the economy to restructure, to recover, to “rebalance,” and to get back on the road again.
    It’s just impossible for an economy to do that when government is doing all it can to meddle.

* * * *

* Just to be clear, so there's no misunderstanding, by fiddling we all mean what Nero did -- which was "fiddling while Rome burned" -- not what Obama/Bush FDR/Hoover did, which was intervene, intervene, intervene.

** "Franklin D. Roosevelt, in large part, merely elaborated the policies laid down by his predecessor. To scoff at Hoover's tragic failure to cure the depression as a typical example of laissez-faire is drastically to misread the historical record. The Hoover rout must be set down as a failure of government planning and not of the free market. To portray the interventionist efforts of the Hoover administration to cure the depression, we may quote Hoover's own summary of his program, during his presidential campaign in the fall of 1932:

        “We might have done nothing. That would have been utter ruin. Instead we met
    the situation with proposals to private business and to Congress of the most gigantic
    program of economic defense and counterattack ever evolved in the history of the
    Republic.’” 
[Quoted in From Murray Rothbard's book America's Great Depression]

*** In the 1932 election Roosevelt attacked Hoover’s meddling, and “promised a free-market approach to economic growth: cut federal spending, reduce taxes, and lower the Smoot-Hawley tariff.  He hit these three points frequently [“… also promising to cut government in size by 25 percent and to balance the budget in each year of his presidency”] , and no doubt won many votes because of that…” [Quoted in Burton Folsom’s New Deal or Raw Deal]

At the time of writing, Hickey hasn’t bothered to respond.

NB: There are two primary reasons an economy needs a hands-off approach in order to restructure.

First, the economy has got out of whack in the boom period, during which much money has been lost and many resources consumed in malinvestments

Pumping newly-printed money back in to make up the loss (which as Von Mises used to say is like backing over a man you’ve just run down in your car, in the hope that the new accident will remedy the last) only leaves everyone uncertain about where and when all that newly-printed money is going.  What businessmen need to be able to do is read the price signals, and fit their price “coats” according to the reduced amount of monetary “cloth” around. Once the new price levels have been found, the economy is ready to be productive once again—but that can’t happen when prices themselves are being meddled with. Businessmen can’t do that when the whole price structure is put out of whack by these gobs of counterfeit capital, .  

Second, because the economy has got out of whack, it does need to restructure. Resources are down, and the best use has to be made of what’s remaining. The best way to ensure that doesn’t happen is to bail out bad positions, making sure those resources can’t be put to better use elsewhere. The second-best way to ensure it doesn’t happen is to announce so many new laws, measures, rules, regulations and bail-outs that no businessman knows from one day to the next what he can plan for. This is what Robert Higgs calls the phenomenon of regime uncertainty, which is arguably more responsible  than anything else for so many businessmen hunkering down and refusing to invest.

Here’s the sort of thing I mean: legislation introduced yesterday to break up what was once NZ's largest company.

Recession means recovery—or should doiff governments get out of the way so businessman can recover.

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

_Quote 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.

_QuoteThe 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.

And to stop treating the likes of Hickey as an economic authority.

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