Tuesday, August 14, 2018

The Walter Lippmann Colloquium and the Meaning of Liberalism



Richard Ebeling emails:
Dear Bob,

I have a new article on the website of the American Institute for Economic Research (AIER) on, "The Walter Lippmann Colloquium and the Meaning of Liberalism.”

The media has been full with concerns about “the crisis of liberalism.” “The Economist” magazine is having a series of articles on how liberal ideas can remain relevant. Yet, what is “liberalism,” and has it failed? It all depends. If you mean

Former Treasury Secretary Robert Rubin: A Debt Crisis is on the Edge of Exploding


Former Treasury Secretary Robert Rubin is out with an op-ed in the Washington PostAmerica’s debt has exploded. Why does no one care?

He uses somewhat measured words but he is essentially saying a debt crisis could explode at any time

Here are the important takeaways from his essay:

The Great Potential in Artificial Intelligence (And the Evil)



By Robert Wenzel

Although it is easy to conjure up images of how artificial intelligence will result in robots that can take over the world, such a possibility in the near future is remote. And if robots get that smart, with super robot physical capabilities and their own, or programmed, value scales, then we would have something very serious to worry about. But, mini-robots with narrow bad actor artificial intelligence could be a problem at even an earlier date.

It would be kind of an alien invasion from within. The likeliest place for such dangerous

Monday, August 13, 2018

Robert Wenzel and the Federal Government Agree About Something

Robert Wenzel and the Government finally agree.
By Bill Bergman
In a blog post on t Economic Policy Journal Sunday (“Buckle Your Seat Belts: US Spending on Interest Hits All-Time High”), Robert Wenzel highlighted recent acceleration in federal government interest expense. He warned that

Another Joe Weisenthal Bombing Raid Today on Crypto-Currencies


First, we had this: The Collapsing Turkish Lira as a Safe Haven Against Bitcoin.

Now, this:
-RW


UPDATE 

Wow, Bill Maher Understands That Overseas Sweatshops are a Positive

Steven Pinker visits the Bill Maher Show to discuss the many ways the global standard of living has climbed. Although, it is odd that he doesn't emphasize the role that free markets have played in this advance.

The clip is below and remarkably the lefty Bill Maher comments and seems to understand that overseas sweatshops are a positive. Unfortunately, the segment ends on a down note with Maher and Pinker calling for carbon taxes.



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The Horror of Tyranny: What is Really Going on in Zimbabwe

Revolution without a demand for true freedom, that simply replaces one despotic ruler with another, is always a mistake.



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The Collapsing Turkish Lira as a Safe Haven Against Bitcoin

An interesting observation from Joe Weisenthal:

If someone in Turkey had bought Bitcoin at the beginning of the year, instead of holding their money in Lira... they'd have lost even more.


The lira has lost more than 40 per cent of its value against the dollar this year. Bitcoin is down more than 50%.


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Sorry, Supply-Siders! Tax Cuts Do Not Pay For Themselves

David Stockman has a great post out with a chart showing how withholding tax
revenues are falling:

Sorry, Republicans! Tax Cuts Do Not Pay For Themselves, Never Have


I put out a video last year explaining exactly why this could happen.

Sunday, August 12, 2018

Buckle Your Seat Belts: US Spending On Interest Hits All Time High

The U.S. government financial situation is getting precarious.

The amount the government is paying in interest on its debt is exploding.

The latest data released by the Treasury shows

Demonizing Uber is a Public Transit Protection Racket


By Randal O'Toole

Last week, a transportation consultant named Bruce Schaller published a reportclaiming that ride hailing was increasing traffic congestion. Since then, we’ve been innundated with wild claims Uber and Lyft were increasing traffic by 180 percent, and these claims are used to support arguments that that cities should tax companies like Uber and Lyft and use the revenues to compensate transit agencies for the riders lost to ride sharing.
Yet the congestion claims are completely inaccurate.

Are Americans Already Socialists?


A poll was recently conducted for a Koch brothers-funded organization. In Pursuit Of, the marketing wing of the Koch-backed Seminar Network, ordered up the poll.

The results were shocking.

Letters to the Editor



Goodbye comments to posts. Hello "Letters to the Editor."

In an attempt to rejuvenate the quality comments of the past, effective immediately I am changing the method by which commentary can be made at Target Liberty and EconomicPolicyJournal.com.

The blogger comments section has been removed. In its place will be a "Letters to the Editor" section.

To comment on any post, send a "Letter to the Editor" to

LetterToTheEditor@EconomicPolicyJournal.com

You must include your first name and last name and city and state of your residence (If outside the U.S. also your country) to have your letter considered for posting and please reference the post you are emailing about.

Below is a general guide on how to write a letter to the editor. Note although the clip below states that your full name and address must be provided. That is not required here, just your first name last initial and city and state (If outside the U.S. also your country) of residence.

Your full name and city state it will be published along with your letter if your submission is chosen for publication. Note: I don't mind a nom de plume if it is used consistently with all of your letters.




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Saturday, August 11, 2018

About The Woman Who Could Be Entering Congress in 2019 Who Holds Even More Extreme Socialist Views Than Alexandria Ocasio-Cortez

Ilhan Omar
By Robert Wenzel

While all eyes have been focused on the socialist democrat out of the Bronx, Alexandria Ocasio-Cortez, who will with high certainty be a part of the 116th Congress that begins on January 3, 2019, close attention should be paid to Minnesota's 5th District House seat being vacated by Rep. Keith Ellison (D).

Close observers of Minnesota politics believe that the August 14 primary could result in the election of Ilhan Omar (36) as the Democratic nominee. If she gets the nomination, like Ocasio-Cortez, she will be considered a shoe-in to gain her House seat at the November mid-term elections since there would be no significant challenger out of the Republican Party.

Omar, a hajib wearing Muslim entered the United States as a Somali child refugee and appears to be an establishment favorite. Ocasio-Cortez has experienced some friction with establishment Democrats. Not so with Omar. Indeed, the broader establishment appears to be welcoming her with open arms.

Friday, August 10, 2018

James Altucher Spent $2.7 Million Promoting His Cryptocurrency Tip Sheet

James "Crypto Genius" Altucher 
Remember those James "Crypto Genius" Altucher ads that were popping all over your websites?

The Baltimore-based Choose Yourself Financial, affiliated with (or owned by) Altucher, has spent an estimated $2.7 million in advertising over the past 12 months, according to data from Buzzfeed reporter Jane Lytvynenko

It is estimated that the ads generated 793 million impressions!

As mentioned above, Altucher is promoted as a crypto-genius in the ads. I, however, would classify him as a marketing genius. No one is spending that kind of money on direct advertising unless the ads are working big time.

The advertising only stopped after social media sites stopped accepting cryptocurrency related ads

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Forget Watergate, Trump is Acting Like a Modern Day Nixon When It Comes to the Fed

By Doug French
“I’m not thrilled,” President Trump told CNBC's Joe Kernen in an interview that aired on Squawk Box last month. “Because we go up and every time you go up they want to raise rates again. I don't really — I am not happy about it. But at the same time I’m letting them do what they feel is best.”
Since becoming POTUS, Trump has changed his tune about rates. When Janet Yellen was running the Fed, Trump said she should be “ashamed” for holding down rates. He endeared himself to libertarians at the time by saying the low rates created a “false stock market.”
Then after his election he mentioned the stock market constantly. "It would be really nice if the Fake News Media would report the virtually unprecedented stock market growth since the election," Trump tweeted in October 2017. A year before Trump had warned America to beware of a "big fat bubble" in stocks.
Today, he tweeted,
The United States should not be penalized because we are doing so well. Tightening now hurts all that we have done. The U.S. should be allowed to recapture what was lost due to illegal currency manipulation and BAD Trade Deals. Debt coming due & we are raising rates — Really?
There’s plenty of blather that Trump is breaking with presidential norms by criticizing Jerome Powell’s rate hikes, but, the Donald is merely channeling Richard Nixon. When Nixon appointed Arthur Burns to be Fed chair in October of 1969, Burns was soaking up the applause during the announcement of his appointment when Nixon broke in, saying, “You see, Dr. Burns, that is a standing vote of appreciation in advance for lower interest rates and more money.” Later, in private, Nixon told his new Fed chair, “You see to it: no recession”
In a chapter for the book The Fed at One Hundred entitled “Arthur Burns: The Ph.D. Standard Begins and the End of Independence” I wrote,
The president didn’t trust the central bank, but with Burns he would have one of his own in charge. At the same time, when Burns took the oath of office in January 1970, Nixon said, “I have some very strong views on some of these economic matters and I can assure you that I will convey them privately and strongly to Dr. Burns. ... I respect his independence. However, I hope that independently he will conclude that my views are the ones that should be followed.”
Trump’s communication style is different in that he hopes Chairman Powell will be reading his tweets and watching CNBC. However, Trump believes himself an imperial leader just as Nixon did.
Burns may have been a friend [of Nixon’s], but “he was still the emperor and I should therefore toe the mark — as should every good citizen, especially those that professed to be his friends.” Burns concluded his diary entry with, “now I knew that I would be accepted in the future only if I suppressed my will and yielded completely — even though it was wrong at law and morally — to his authority.”
Perhaps one day Powell will see Trump as Burns viewed his friend the president — as having
“uncontrolled cruelty,” and that he [Burns] “was seized suddenly with fear for the safety of our country which depended so heavily on this insecure man (the thought flashed through my mind of an earlier conversation, when he asked me to inform him when I thought it would be a good time to bring on an international monetary crisis and added, winking privately as he spoke, ‘I don’t mind crisis’ — the I being heavily underlined).”
Former Fed governor Kevin Warsh, a candidate for the Fed chair appointment, said on a Politico podcast this year that during his interview, Trump made clear his opinions on interest rate policy.
“If you think it was a subject upon which he delicately danced around, then you’d be mistaken. It was certainly top of mind to the president,” Mr. Warsh said. Later, he added: “In some sense the broader notion of an independent agency, that’s probably not an obvious feature to the president.”
As Rob Crilly described the Trump administration in The Telegraph, “Each day brings fresh chaos and an escalating sense of crisis.”
Today, Fed policy is the chaos.
Douglas French is former president of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply , and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master's degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe.

The above originally appeared at Mises.org.

Trump Weaponizes Tariffs Against Turkey!

President Donald Trump has announced that he has authorized doubling tariffs on imports of Turkish steel and aluminum.

Trump tweeted:
It should be noted that Trump is not doing this for economic reasons but for political reasons.

Benn Steil correctly observes:


-RW  

CRISIS: Turkish Lira Down More Than 11%; The Start of Contagion Reaction in Europe



The Turkish lira has fallen as much as 11% overnight against the U.S. dollar.

By early European trading hours Friday, the lira had pared some of its losses, but still stood 6% lower. The dollar reached highs of 6.21 lira, a fresh record low for the Turkish currency.

The Turkish lira had dropped by as much as 20% during the week, as international markets soured on the country’s capacity to repay its foreign-currency debts.

Turkey’s limited stash of foreign exchange reserves could prompt it to seek a bailout from the International Monetary Fund—provided the government is ready to meet the typically strict demands of the IMF.

Turkey’s local-currency bond yield has climbed over 20%.

Click on chart for larger view.


Just after trading opened in Istanbul, the benchmark 10-year yield shot up 84 basis points (0.84 percentage points) to 20.58 percent, according to Bloomberg data.

In another sign of investor angst, the price to hedge against a default on Turkish debt by using instruments called credit default swaps (CDS) rose to its highest level since 2009. The 5-year CDS spread reached 400 bps, according to Bloomberg data.

There was some spillover into Europe. The euro dropped 0.6% to $1.145, its weakest since July 2017.

The euro’s weakness followed a Financial Times report that the European Central Bank is examining the Turkish exposure of several European banks. Three banks named in the piece tumbled, with Spain’s Banco Bilbao Vizcaya Argentaria SA falling 3.5%, Italy’s UniCredit SpA down 3.2% and France’s BNP Paribas SA down 3.8%.

Some other emerging-market currencies also weakened, with the South African rand and the Hungarian forint both tumbling. The Russian ruble hit a two-year low of 67.1518 per dollar.

-RW 

(Sources:The Wall Street Journal, The Financial Times, Bloomberg)

Fact-Checking Alexandria Ocasio-Cortez’s Media Blitz



By Glenn Kessler

Alexandria Ocasio-Cortez, the 28-year-old self-described “democratic socialist” who unexpectedly toppled a top Democratic incumbent in the primary for New York’s 14th Congressional District, is a sudden media star even though she has not been elected to Congress. (She has no real competition in the general election.)

With celebrity comes scrutiny. Ocasio-Cortez has come under fire for dismissing concerns about the anticipated costs of her proposals and offering too-glib answers.

For instance, in an appearance on CNN Aug. 8, when challenged on the costs of government-financed health care, she answered: “Why aren’t we incorporating the cost of all the funeral expenses of those who died because they can’t afford access to health care? That is part of the cost of our system.”

Huh?

Several readers have asked us to vet some of her claims, and because of summer vacation schedules, we’ve been a bit slower to follow up than our fact-checking colleagues. So here’s a quick round-up of some of her recent eyebrow-raising claims, though to be fair to Ocasio-Cortez, the average member of Congress might easily make many bloopers over the course of so many live interviews.

Read the rest here.

Jack Tapper Fact Checks Trump Economic "Facts," Yes, Jack Tapper

Trump is so off-the-wall with his economic comments that the usually economically challenged Jack Tapper, of CNN, can rely on verifiable facts to push his own agenda--which right now is to get Trump.



-RW  

Thursday, August 9, 2018

A Bargain at $345,000...

...thank you Federal Reserve.



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Does Setting Minimum Wages Regionally Make Any Sense?

A Don Boudreaux letter to the Wall Street Journal:

Terri Sewell and Jim Kessler correctly argue that a one-size-fits-all national minimum wage makes no sense because different workers face different economic conditions depending on where they live (“A Better Minimum Wage,” August 9). But in calling for Uncle Sam to set minimum wages regionally rather than nationally, these authors fail to follow fully the sound logic of their argument.
Worker conditions vary not just regionally; they vary individually – from worker to worker and from job to job. While it is indeed absurd to suppose that there is a single optimal minimum wage for all low-skilled workers in both Boston and Biloxi, it is no less absurd to suppose that there is a single optimal minimum wage for all low-skilled workers in Boston and another such wage for all low-skilled workers in Biloxi. Even low-skilled workers in the same city block differ amongst themselves in their talents, experience, interests, attitudes, constraints, energy, and plans. Likewise, jobs for low-skilled workers differ in their demands, fringe benefits, and employment amenities.
The notion that politicians can set an ‘optimal’ minimum wage even for a tiny group of workers turns out to be no less fanciful than is the notion that politicians can set an ‘optimal’ minimum wage for an entire nation. Therefore, compared to having no mandated minimum wages whatsoever, even minimum wages set regionally would inevitably reduce and worsen the employment options available to low-skilled workers.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
.

The above originally appeared at Cafe Hayek.

New Tyler Cowen Book Coming



The full title of the book is Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals.

Tyler writes:
 I have been working on this book for about twenty years, and I recommend it to you all.
From the book blurb:
Growth is good. Through history, economic growth, in particular, has alleviated human misery, improved human happiness and opportunity, and lengthened human lives. Wealthier societies are more stable, offer better living standards, produce better medicines, and ensure greater autonomy, greater fulfillment, and more sources of fun. If we want to continue on our trends of growth, and the overwhelmingly positive outcomes for societies that come with it, every individual must become more concerned with the welfare of those around us and in the world at large and most of all our descendants in the future. So, how do we proceed?
I find Cowen books very uneven. The more he moves in the direction of policy the less I find his books interesting. His book, An Economist Gets Lunch: New Rules for Everyday Foodies, on the other hand, is great. I have adopted some of his tips to find good eating places.

The blurb to his new book leaves me less than excited. This line, in particular, makes the Randian remnants left in me want to vomit:
 If we want to continue on our trends of growth, and the overwhelmingly positive outcomes for societies that come with it, every individual must become more concerned with the welfare of those around us and in the world at large and most of all our descendants in the future.
The release date is October 16 but it is ready for pre-order.

.    

-RW  

Is the Economy Really Different This Time?

A negative yield curve spread where short-term interest rates are higher than long rates has been a very good early indicator of a recession ahead.

Click on chart for larger view.
In the chart above, red dashed lines indicate the yield curve spread turning negative. The letter "R" indicates a recession.

The current yield curve spread (10-Year Treasury interest rate minus the 2-Year Treasury) is a positive 0.30. But the steady decline does not seem to worry the Fed. Fed members think "it is different this time."

The Keynesian Brad DeLong is correct on the point that it is not different this time:
The Fed today has a “habitat theory” about why this time is different – that is, why the preferences of investors for particular maturity lengths imply that a yield-curve inversion would not mean what it has always meant. But 2006, just before the financial crisis hit, was supposed to be different, too. (And there were plenty of times before then that were supposed to be different, too.) History suggests that this time is highly unlikely to be different – and that it will not end well if the Fed continues to believe and behave otherwise.
He wants more Fed printing to keep the yield curve spread positive. That is, he wants the Fed to stay in the interest rate manipulation game when the Fed should really close its open market operation desk but he is correct that Fed operations that invert the yield curve will not produce a result different from the past and that a recession is very likely to follow a negative yield curve spread.

-RW 

Also see: A Major Economic Indicator Looks Like It May Start Flashing Danger Soon

DEAD WRONG: Rent Control in the City



-RW  

A Further Comment: Should There Be a Truce in the War Between the Austrian School and the Chicago School?


Walter Block is out with a great exchange on the battle between the Austrian and Chicago schools. (See it here.)

I want to advance Block's position even further using the thinking on libertarian strategy that Murray Rothbard outlined in an unpublished paper. What he said about libertarian strategy also works for the advancement of Austrian economics. In the remainder of this commentary, I will refer to Rothbardian "Austrian strategy" when he was actually technically in his paper discussing libertarian strategy.

The key part of the paper that applies here is

Wednesday, August 8, 2018

New York City Crony Central Planners Hit Uber and Lyft With Cap on Operating Vehicles


 The New York City Council just passed a cap on Uber and Lyft vehicles. What sense does this make?

You can bet there is some crony operator behind this.  Yellow cabs perhaps?

-RW

UPDATE

The Austrian School Versus The Chicago School: Should We End the War?



Walter Block writes:

As a result of this interchange (https://www.lewrockwell.com/lrc-blog/a-correspondence-with-a-professor-from-a-very-prestigious-university/), I received the following missive from W (there are 6 letters in this conversation):
Letter 1
From: W
Sent: Sunday, August 05, 2018 9:30 PM
To: Walter Block
Subject: Re:
Walter,
L said this: “I am unaware of Stigler clarifying his change of heart regarding anti-trust legislation in his later writings.” That does not mean that it does not exist. Stigler was surely never bashful about expressing his views. Since he came to believe that long-term market forces worked better than anti-trust legislation to mitigate against monopoly, I strongly suspect that it can be found among his writings.
Finally, I have always been the optimist — SR pessimist, LR optimist! I have given several talks to graduates and university audiences to that effect. Given my faith in the persistence, efficiency, and rewards of our market system compared to any current political regime, I have consistently argued that at worst we would “muddle through” and at best experience incredible growth and rising standards of living. On the other hand, it is currently my sense that never in my 50-year career has freedom, the market, and our Republican government been under greater threat. Progressives are coming out from under every rock. Socialism rather than being found only in historic dustbins is something openly espoused by major political figures and the young.
If I am correct, I strongly believe the 60-year-old battle between the Austrians and the Chicago School is a battle we can ill afford to continue waging against each other. Combined, at this time we likely do not represent more than 10 percent of the economics profession. We have a terrible important battle to fight; for the first time, I have my doubts that we can win. Fighting among ourselves will only weaken our cause. Yours truly, W
Letter 2
On Mon, Aug 6, 2018 at 1:09 AM, Walter Block wrote

Ludwig von Mises Makes Tyler Cowen's List of His 'Favorite Things Ukraine'

Ludwig von Mises

Ahem, Tyler Cowen is on another foreign trip. This time to Ukraine.

He has this on his favorite things Ukraine:
Economist: Ludwig von Mises.  He was born on territory near current-day Lviv, part of Ukraine.
-RW  

Emergency Alert



Readers of my EPJ Daily Alert know I like to think about possible different down-the-road future financial and economic scenarios and prepare for them in advance.

It's part of my personality.

The current attack on Alex Jones is triggering my ALERT genes.

The attack on Jones is severe. See:

They Are Nuking Alex Jones: Now MailChimp Bans Alex Jones

and

The Banning of Alex Jones: It's Complicated.

What really troubles me is that during this attack, Twitter suspensions of Daniel McAdams and Scott Horton occurred and the permanent banning by Twitter of the 24 year State Department employee Peter Van Buren occurred.

This suggests the takedown operation, over time, could go well beyond Jones and there could be little time to react when a takedown is directed at a given player.

I am not waiting around. I am preparing now.

I have set up different methods to contact my readers if things get really bad.

Please email to me at EPJprepared@economicpolicyjournal.com, your email address and your postal address.

I will not use this contact information for any reason other than if I need to contact you and alert you as to how you can find the continuation of my Economic Policy Journal coverage.

-RW 

BATTLE US-China Exchange 25% Tariffs on $16 Billion Worth of Goods



The dumb trade battle continues to escalate.

The Chinese Ministry of Commerce has just announced a 25 percent charge on 333 U.S. goods, worth $16 billion in total.

The goods being targeted by China include vehicles such as large passenger cars and motorcycles. Various fuels are on the list, as well as fiber optical cables, as well as, coal, grease, Vaseline, asphalt and plastic products, and recyclables.

China's announcement comes after the U.S. Trade Representative's office released a finalized list of $16 billion worth in Chinese goods that will be hit with tariffs.

The 25 percent U.S, tariffs will apply to a broad range of Chinese goods including basic semiconductors, electronics, plastics, chemicals and railway equipment.

The U.S. charges will take effect on Aug. 23. The latest U.S. list brings the total worth of Chinese goods facing a 25 percent tariff to $50 billion.

This is, of course, asinine on both sides. It will lower the standard of living in both countries. Even if one side chooses to be a protectionist, it makes sense for the other side to maintain open trade.

-RW  

(via Reuters and CNBC)


Inside Trump's Dinner With Business Leaders



President Donald Trump hosted a dinner with business CEOs last night at his club in Bedminster, New Jersey. It appears he spent most of the evening boasting of all the great economic news as though we are in the boom phase of the Federal Reserve-created boom-bust cycle because of his policies.

The president’s economic advisor, Larry Kudlow, was there and predicted: “four percent growth, sir, as far as the eye can see.”

“Four? Larry!” Trump jokingly chided Kudlow, reports Breitbart. “We’re gonna do better than four.”

There was no indication he plans to take the blame when the inevitable downturn occurs.

He also spent a significant amount of time boasting about his mercantilist trade policies, especially his tariffs.

“Some of you probably love them and a couple of you probably don’t because you’re on the wrong side of the border,” Trump said. “But if you’re from this country, you’re loving what’s happening.”

And that was pretty much his public talking points. No doubt there were private crony discussions with his long-time pals Harold Hamm and Richard LeFrak.

Hamm's stock has done quite well under Trump.



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Jordan Peterson Destroys the Notion That the Norwegian Social Engineering Requirement, That 40% of Board Members Be Female, is Successful



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OMG Federal Reserve Vice-Chairman Nominee Thinks He Can Sing In Addition to Managing the Economy

Richard Clarida is President Donald Trump’s nominee for Federal Reserve vice chairman.

In addition to being nominated to join the group that maintains the fatal conceit that they can manage the nation's economy, Clarida has the delusional perspective that he can sing and has launched an album to prove his delusion.



-RW