Friday, November 30, 2012

The "Fiscal Cliff" Show Is Not the Only Government Financial Show in Town

President Barack Obama will not sign any agreement that does not contain a debt limit hike, Senate Majority Leader Harry Reid of Nevada told reporters after meeting with Treasury Secretary Timothy Geithner.

Further, what the President really wants is to be permitted to unilaterally raise the debt ceiling unless Congress affirmatively votes to stop him.

This should tell you a lot about the "Fiscal Cliff" debate and its impact. Taxes will be raised regardless of how the Fiscal Cliff is resolved, but that won't mean an end to government deficit spending. That's why there is so much focus on the debt ceiling by the President, he wants in the future  to blow through debt ceilings without having to go through Congress to do so.

Weekend Safety Tip: What To Do If You Encounter a Mountain Lion

Via Bachus & Schanker, LLC

It’s rare, but it does happen. People in Colorado sometimes encounter mountain lions, also known as cougars, pumas, and panthers. Most escape unharmed, some end up injured, and unfortunately, a few people have been killed. Humans are not preferred prey for mountain lions. They usually hunt deer. But when conditions are right, mountain lions will sometimes attack people. It occurs most often when people are camping or hiking in areas populated by mountain lions, but as cities continue to encroach on the animals’ habitat, the possibility of mountain lion-human encounters increases. Whether it’s in the wild or in your neighborhood, there are a few things you can do to keep yourself safe if you ever find yourself facing down a hungry cougar.


That may sound easier said than done, but it can save your life. Most people’s instinct when confronted by a mountain lion will be to turn and run. That is the worst possible reaction. Cougars stalk their prey silently, but will give chase if the creature they consider to be their prey runs. A mountain lion can reach speeds of 35 to 40 miles an hour, easily outrunning the average human. If you discover you’re being stalked by a mountain lion, the first thing to do is back away slowly — don’t run.


Mountain lions’ usual prey is deer. A hunt and kill situation between the cat and a deer is usually going to be silent, with neither animal making much noise, the panther because it’s a silent stalker, and the deer because it’s usually killed so quickly, it doesn’t have time to verbalize. When facing a stalking mountain lion, talk to it in a firm, but calm voice. Don’t yell or scream. A panic reaction may provoke it to attack. It doesn’t really matter what you say, just speak in an authoritative voice as you’re backing away.


If a mountain lion begins stalking you, it’s because it thinks you look like prey it can conquer. Try dissuading it by appearing larger than you are. If you’re wearing a jacket, hold it open, away from your body. If you’re not wearing a jacket, raise your arms over your head. If you can’t appear larger, you can try to look taller. You can also try lifting nearby objects such as large rocks or branches, but only if they’re easily within reach. Don’t bend down to pick anything up. That’s practically an invitation to the mountain lion to pounce on you.


If the lion continues to behave aggressively, and doesn’t show signs of backing down or leaving, throw anything you may have handy at it. This may be rocks or sticks, but don’t hesitate to throw personal belongings such as a cell phone, binoculars, water bottle, or anything else you can easily lob at the cat. A cell phone or binoculars can always be replaced — you can’t. If you’re hiking and carrying a backpack, try to hold onto that for a couple of reasons. First, it will make you appear larger than you are, and second, if you’re actually wearing it on your back, it can offer you some protection if the cat does come after your despite your best efforts to deter it.

Read the rest here.

An Elitist Gets Grilled and Doesn't Like It

In the clip below, some masterful questioning by Jan Helfeld of elitist David Gergen. Gergen is not happy and at one point looks as though he is going to pounce on Helfeld.

Note well that Gergen equates opportunity with apparently having some base amount of money (which must be taken from the others by government and then doled out to the poor) to give everyone an "equal" chance.

This is why Israel Kirzner's insight about entrepreneurship being about recognizing opportunity, and not about having capital of one's own, is so important. It shuts down Gergen's argument right at the start. A poor person is not at a disadvantage when it comes to entrepreneurship. He can be just as skilled at recognizing opportunity as a person of wealth. If that's entrepreneurship, and I believe it is, then the poor are not at a disadvantage.

Only government regulations which stifle new entrants in an industry can prevent the poor and newcomers from entering a business sector.

(ht Tom Woods)

A Huge Pay Cut For Doctors Is Hiding In The Fiscal Cliff

NPR reports:
Included in the fiscal cliff is a 30 percent pay cut to doctors who treat Medicare patients. It's set to kick in on Jan. 1. Lawmakers from both parties say they want to prevent the cut. But the cut is part of a plan Congress put in place 15 years ago to contain healthcare costs, then proceeded to postpone again and again...back in 1997, Congress said that if doctors' bills per patient increase beyond a certain rate, then Medicare would start paying a little less for each bill. There's a whole formula to figure it out. In 2002, the formula said fees for each procedure should be cut by 4 percent.
And then, the next year, 2003, same thing: The formula said cut doctor fees another 4 percent. People in Congress got very nervous about how their senior citizen constituents would react. 
So instead, Congress passed a bill to ignore the formula that year. Instead, they raised doctors' fees. And then for the next year. And the next...The formula is cumulative. So if you ignore a 4 percent cut two years in a row, the following year the formula will call for an 8 percent cut. And so on. The formula now says doctors' pay should be cut by 30 percent next year...Congress is very likely override the formula once again, and prevent doctors' pay from being cut next year. But Congress is much less likely to get rid of the formula altogether.
That's partly because projections of the long-term budget deficit assume that the formula will kick in eventually, and the federal government will spend less money paying doctors. Those projections — clearly based on a fiction — make the long-term deficit picture look brighter than it really is.
As NPR says, Congress is likely to override the formula, but doctors have a target on their back, at some point it isn't going to pay for many doctors to treat medicare patients, at that point medical socialism will shift into high gear and justification will be made to force all physicians to handle medicare patients. Many will quit and at that point, we will all be sitting in long lines waiting to visit doctors with attitudes.

Stay healthy, my friends.

Why Insane Deficits and Insane Money Printing Will Continue

Ed Yardeni explains with a chart and some commentary.

Yardeni then writes:
Under Fed Chairman Ben Bernanke, the Fed has been the great enabler of Washington’s fiscal excesses of the past few years. The Fed’s quantitative easing blurs the line between fiscal and monetary policies. The Fed may still be politically independent, but fiscal policy has become very dependent on the willingness of the Fed to purchase lots of government securities. A consolidated statement of the US Treasury and the Fed would show that $1.7 trillion of US government debt, which is held at the Fed, is costing the government only 0.25%.

In yesterday’s WSJ, Jon Hilsenrath reported that the FOMC is likely to vote for QE4 when the committee meets on December 11-12. In September, the FOMC implemented QE3, i.e., an open-ended commitment to purchase mortgage-backed securities at the rate of $40 billion per month. The Fed’s Operation Twist is scheduled to terminate at the end of the year. Under this program, the Fed purchased $45 billion a month in long-term Treasuries, paying for them with the proceeds from its holdings of short-term debt.
Now some members of the FOMC are pushing for more purchases of Treasury bonds. However, the Fed is running out of short-term securities to sell. Hence, QE4! As Hilsenrath observes:
“The Fed has run down its stockpile of the short-term Treasurys to sell to fund long-term purchases. To keep buying the long-term bonds it would need to fund the purchases by creating new bank reserves, which in effect is printing money. That is how the Fed has funded previous Treasury purchase programs and how it is funding the mortgage-bond buying. Though critics say this could be especially inflationary, many Fed officials believe they can manage the reserves without risking inflation.”
Even more generous than the Fed have been foreign central banks. Their holdings of US Treasuries rose to a record $2.9 trillion during the week of November 7. 
Let’s face it: A deal to fix the fiscal cliff won’t fix our structural deficit problem. Washington will probably avert the cliff, but continue to run insane deficits. The Fed and other central banks will continue to enable this insanity by purchasing lots of US Treasuries.

Israel's Ludicrous Tale About the Attack on the USS Liberty

John R. Schindler, professor of national security affairs at the U.S. Naval War College, writes:
It began on June 8, 1967, when USS LIBERTY (AGTR-5), a Navy technical research spy ship, was attacked by Israeli aircraft and torpedo boats in international waters off Sinai during the height of the Six Day War. This devastating assault made casualties of nearly the entire LIBERTY crew – 34 killed and 171 wounded – and the ship was only saved by the heroic actions of her skipper, Commander William McGonagle, who later received the Medal of Honor for his actions that day. For the Naval Security Group (NAVSECGRU), the Navy’s cryptologic – i.e. codebreaking – arm, the LIBERTY was a true catastrophe, as the Israeli torpedo which nearly sank LIBERTY struck the ship’s super-classified NAVSECGRU area, buried below decks, taking out almost all the “secret sailors” who were listening to Soviet and Egyptian communications on behalf of the National Security Agency when disaster struck. The LIBERTY case remains officially unresolved, though recent evidence makes the official Israeli account that it was all a misunderstanding appear more ludicrous than ever.

Hillary's Latest "Blueprint"

By, Chris Rossini
Email | Twitter

Whenever I hear of a central planner talking about "blueprints", I always think of FDR's Chief Economic Advisor Rexford Tugwell, who said:

I have gathered my tools and my charts,
My plans are finished and practical.
I shall roll up my sleeves - make America over…

Hillary has rolled up her sleaves, and is going after AIDS (with your money).

CNN says
U.S. Secretary of State Hillary Clinton on Thursday unveiled what she described as a "blueprint" to guide global efforts in wiping out the AIDS virus, focusing on improving treatment and prevention practices to "get ahead of the pandemic."

The initiative is part of a plan to "usher in an AIDS-free generation," said Clinton, who hailed a 200% increase in U.S.-funded antiretroviral drug treatments since 2008.
There's also the usual Clintonian twist:
The program is also expected to address gender inequities that she said puts women and girls at a higher risk of contracting the virus.
See, it's not just those white-collar CEO's that have gender biases....AIDS discriminates unequally too.

Bottom line?

Does AIDS need to be cured? Of course!

Are government humanitarians, swimming in taxpayer dollars, going to do it? Chances are about as close to nil as you can get.

Picture the DMV...the Post Office...The TSA....

Then picture them curing AIDS.

Some Facts About Gold

Tax Raising Propaganda Will Be Spread Far and Wide This Sunday

Treasury Secretary Geithner will be on Meet the Press, Face The Nation, This Week on ABC, Fox News Sunday and CNN's State of the Union this Sunday.

Looks like they really want to keep the masses confused and in line for the big grab.

The 5 Richest Cities in America

According to MarketWatch:

No. 1: Bridgeport, Conn.

Per-capita personal income in the area, which also includes Stamford and Norwalk, reached $78,504

No. 2: Midland, Texas

Midland, population 113,000, is at the heart of the oil- and natural-gas-producing region known as the Permian Basin.

The Permian Basin is the U.S.’s largest area in proven reserves of crude oil, accounting for a quarter of the nation’s supply, and the ninth in natural-gas proven reserves.
The unemployment rate in Midland is 3.3%.

No. 3: San Francisco

San Francisco’s per-capita personal income was $61,395 in 2011.

No. 4: San Jose, Calif.

San Jose’s per-capita personal income was $61,028 in 2011.

No. 5: Washington D.C.

Washington’s per-capital personal income was $59,345 in 2011. As government takes and takes, the takers live well.

Iran's Swiss Loophole

Turkish gold exports to Switzerland surged 4-fold in October to $500 million. Switzerland isn't signatory to EU sanctions on gold trading with Iran.

Turkey has been buying oil and gas from Iran and paying in gold, since sanctions have made it impossible to pay cash via the banking system.

Bitcoins Surface in Iran

Max Raskin writes at Bloomberg-BusinessWeek:
Under sanctions imposed by the U.S. and its allies, dollars are hard to come by in Iran. The rial fell from 20,160 against the greenback on the street market in August to 36,500 rials to the dollar in October. It’s settled, for now, around 27,000. The central bank’s fixed official rate is 12,260. Yet there’s one currency in Iran that has kept its value and can be used to purchase goods from abroad: bitcoins, the online-only currency... 
The advantage for Iranians is that bitcoins can be swapped for dollars that can then be kept outside the country. Another plus: Regulators can’t easily track the transactions, since bitcoins aren’t issued from a central server. Bitcoin users can conduct business on virtual private networks, which hide customers’ identities. 
At online store, shoppers can use bitcoins to buy Beyond Matter, the latest album from Iranian artist Mohammad Rafigh. Anyone in the U.S. downloading songs, which fetch .039 bitcoins or 45¢ each, risks violating U.S. sanctions. That doesn’t bother Rafigh, who’s studying computer engineering as well as playing music. “Bitcoin is so interesting for me,” Rafigh wrote in an e-mail. “I wish the culture of using digital money spreads all over the world, because it does not have any dependency on anything like politics.” Rafigh has translated some bitcoin software into Farsi for his friends. “I love Iran, and if bitcoin is good for me, it can be good for more Iranians like me.”
Read the full article here. 

Fed Economist Disses the Gold Standard (and what would happen to him under a gold standard)

Here we go again. St Louis Fed economist David Andolfatto explains to a reader of the St. Louis Fed web site the problems he sees with the gold standard. My comments are in italics.

Q. Why doesn't the U.S. return to the gold standard so that the Fed can't "create money out of thin air"?

A.The phrase "create money out of thin air" refers to the Fed's ability to create money at virtually zero resource cost. It is frequently asserted that such an ability necessarily leads to "too much" price inflation.

The problem is not only price inflation, though that is serious, but the distortions in the capital structure of the economy caused by the Fed money printing. This is what causes the boom-bust cycle, even if there isn't price inflation. Money goes first to the banksters and they spend it on their projects.The rest of us get it, most of the time, only after prices have gone up.

Under a gold standard, the temptation to overinflate is allegedly absent, that is, gold cannot be "created out of thin air." It would follow that a return to a gold standard would be the only way to guarantee price-level stability.

The goal of "price-stability" is not something that should be aimed at, as implied by the above. Under a true gold standard, where dollars would be convertible into gold at a fixed rate and the Fed didn't print money beyond the gold it had on hand, the economy would be in even better shape than a world of price-stability. Prices of goods would be dropping across the board as productivity increased. It would be heaven for consumers. Because the Fed prints so much money now, prices now fall only on products in sectors where productivity gains are very high, e.g. cellphones, personal computers, large scale televisions. With a gold standard economy this would  happen across the economy.

Unfortunately, a gold standard is not a guarantee of price stability. It is simply a promise made "out of thin air" to keep the supply of money anchored to the supply of gold. To consider how tenuous such a promise can be, consider the following example. On April 5, 1933, President Franklin D. Roosevelt ordered all gold coins and certificates of denominations in excess of $100 turned in for other money by May 1 at a set price of $20.67 per ounce. Two months later, a joint resolution of Congress abrogated the gold clauses in many public and private obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed. In 1934, the government price of gold was increased to $35 per ounce, effectively increasing the dollar value of gold on the Federal Reserve's balance sheet by almost 70 percent. This action allowed the Federal Reserve to increase the money supply by a corresponding amount and, subsequently, led to significant price inflation.

This historical example demonstrates that the gold standard is no guarantee of price stability.

This is a one helluva an argument. As far as I can tell, the argument boils down to this: "If you go off the gold standard, the gold standard won't work." True and if you stop drinking prune juice, prune juice will no longer help you with your bowel movements.

 Moreover, the fact that price inflation in the U.S. has remained low and stable over the past 30 years demonstrates that the gold standard is not necessary for price stability.

Here are prices over the last 30 years, as measured by the CPI:

Oh yeah, that looks low and stable to me, especially if you take out the first 140% increase in prices over the period. If you break the data down even further, the annual rate of change is anywhere between 6.0% and below zero for the period,with 15 significant changes in direction. Some stability.

 Price stability evidently depends less on whether money is "created out of thin air" and more on the credibility of the monetary authority to manage the economy's money supply in a responsible manner.

In one sense this is true. The problem is that no monetary authority has ever managed money supply in a responsible fashion. It's print, print print---and cart the newly printed money over to the banksters. Recent dramatic results of out of control Fed printing include: The printing before the stock market crash of 1929 that led to the Great Depression and the  recent financial crisis caused by Alan Greenspan driving interest rates down. Since the start of the Fed, there have been 18 recessions. These downturns  have resulted in stock market crashes, tens of  millions of unemployed and untold business bankruptcies. It's hard to understand how this is credible management.Under a true gold standard, the Federal Reserve would not be able to print money at the beck and call of the banksters. If the banksters called the Fed,when the country was truly on the gold standard, the janitor/nightwatchman, that is the only one in the building most of the time, would answer the phone and tell the banksters, "There's no one here to print any money. We might get a small gold shipment in six months but then we would have to give the new dollars in exchange for the gold received to the miners who brought in the gold. But again this is a very limited amount, you know how hard it is to get gold out of the ground." And that's one way the price inflation and money printing distortions of the capital structure of  the economy would end. No need for Fed economists answering questions about paper money by spreading anti-gold propaganda.

Bottom line: Under a gold standard, David Andolfatto would be fired and the country would be much better of because of it.

Strauss-Kahn to Pay Maid $6 Million

Nafissatou Diallo to Settle with DSK
Dominique Strauss-Kahn, former head of the International Monetary Fund, will pay the maid who accused him of attempted rape $6 million to resolve her civil lawsuit, Le Monde said today.

DSK will need to borrow $3 million from his wife, Anne Sinclair, and the rest from a bank, according to the French daily. Strauss-Kahn and Sinclair, editor of the French version of the Huffington Post, separated earlier this year.

About Rand Paul as a Guest on the Robert Wenzel Show

I occasionally get readers emailing me and suggesting I get Rand Paul on the Robert Wenzel Show.

That isn't progressing too well. Although people like Oliver Stone and Steve Forbes, whom I disagree with on a number of issues, have been kind enough to agree to appear on the show  (Forbes even tweeted the RWS interview link out to his followers.), it isn't going so well with Rand.

In fact, Chris Rossini, the executive producer of the Robert Wenzel Show tells me that Rand's people have stopped returning his emails. So that's where that stands. We would love to have Rand on any time.

Two Former Peter Schiff Brokers Arrested

Two former brokers at Euro Pacific Capital Inc were arrested on Thursday for the non-crime of insider trading. The two are accused of trading ahead of a $1.2 billion acquisition by IBM Corp based on a tip from one broker's roommate, allegedly referring to the deal among a circle of friends as "our horse."

WSJ has the details:
In a criminal indictment unsealed Thursday, federal prosecutors in Manhattan alleged that law-school classmates Thomas C. Conradt, 34 years old, and David Weishaus, 32, were among a group of friends who allegedly bought shares of analytics software firm SPSS Inc. ahead of its acquisition by IBM in 2009. Mr. Conradt's roommate at the time allegedly learned of the acquisition from a lawyer working on the deal at a brunch in Manhattan in May 2009, according to the indictment.

In July 2009, Mr. Conradt allegedly urged Mr. Weishaus to keep the deal quiet, saying in an instant message "we gotta keep this in the family," prosecutors said. Mr. Weishaus allegedly responded "i don't want to go to jail" and referred to insider-trading investigations involving homemaking maven Martha Stewart and Dallas Mavericks owner Mark Cuban, according to the indictment. Mr. Weishaus later allegedly wrote, "we need spss to run up i need that lexus."

The Securities and Exchange Commission in a separate but related civil lawsuit alleged Messrs. Conradt and Weishaus and three other brokers made more than $1 million trading shares and options of SPSS ahead of the public announcement in late July 2009.

Mr. Conradt, of Denver, and Mr. Weishaus, of Baltimore, were arrested Thursday, said a spokesman for the Federal Bureau of Investigation's New York office.

Why I Am a Raging Optimist

By Mark Thornton 

This beautifully written letter is being sent out by the Mises Institute. It speaks for itself and should be spread far and wide.-RW

I have been working at the Ludwig von Mises Institute as a senior fellow for the last ten years. I answer economic questions from students, Mises Institute members, and the media. I also work in all the Institute education and scholarly programs and do research. It is probably the best job in the world.

We have teaching programs that benefit high-school students, homeschool students, college students, graduate students, instructors, and professors, as well as the general public. These programs are effective because they are well crafted, time tested, and the staff is incredibly efficient and frugal in terms of execution.

My job is to lecture and sometimes to serve as master of ceremonies, so each and every one of these events is a real nail-biter for me. They are all so important. However, they always seem to turn out fantastically. The key is that we have the best speakers talking about the most important issues of the day to people, mostly students, who see that learning Austrian economics is vitally important to them.

That was not always the case. When I came to Auburn University to go to graduate school in 1982, I was told that there were probably only eight to ten graduate students interested in Austrian economics in the entire world. One of my professors even told me that there was no longer an Austrian School, there were only a couple of Austrians teaching in universities that offered a PhD, and that the Austrian School was just a fact of history, with no future.

Things were pretty miserable that first year. I entertained thoughts of dropping out and getting a job. Then toward the end of my second semester Professor Roger Garrison invited me into his office. He told me that Lew Rockwell was moving the Ludwig von Mises Institute to Auburn University. He said that Lew was going to publish newsletters, journals, and books and that he was going to invite all the leading Austrian economists to come to Auburn to lecture.

I had never heard of Lew Rockwell or the Mises Institute before that point in time, but I realized right away that things would be better. Next Professor Garrison told me that I would probably receive funding for my studies at Auburn University from the Mises Institute. Given Garrison's reputation for pulling people's legs, I naturally started to get suspicious, but he assured me that it was all true.

After leaving his office I was a bit dumbfounded, but I soon realized that I might be as close as I ever would be to an event that might change history. Back then, learning anything about Austrian economics was incredibly difficult, but I was convinced that Austrian economics was the solution to our problems. Having grown up in the 1970s, the list of problems was long.

Nixon had taken us off the gold standard and imposed wage and price controls. Our economy was experiencing high unemployment and high inflation. There had been waiting lines for gasoline. The country was decaying, and we were told that the Soviet Union was the wave of the future. My last two years in college could best be described as an economic depression.

With all that bad experience and with the country at its lowest point, I suddenly found myself magically turned into a raging optimist by Lew Rockwell. I have always sided with the underdog, and this was the biggest underdog situation since David and Goliath. Lew, Mardi, and Pat were stationed in small quarters with nothing to assist them but an electric typewriter and two graduate students to stuff envelopes. It did not appear that the entire Keynesian-socialist state had much to worry about.

Indeed, it's been nothing but a steep uphill battle. The distance yet to travel seems enormous. There have been difficult times and the state is bigger than ever. However, my optimism has never wavered and has indeed only increased. Austrian economics is a message that the establishment now has to deal with.

We are still the smallest school of economics, but we are the fastest growing. We are one of the oldest schools of economics, but the average age of Austrian economists continues to decrease. We still work on the fringe of the profession, but our work is having an ever-bigger impact in the real world. We have the growth, the youth, and the impact. Much of this success is the result of Lew Rockwell building an institutional foundation for Austrian economics to thrive.

Individual professors can do fine work, but putting together large instructional conferences is beyond their means. Lew has also made it possible to publish or to bring back into publication books that were too radical for other publication outlets. Generally put, the Mises Institute is the hub network through which the Austrian School grows in size and impact. More than 20 other Mises Institute–like organizations have been established in various countries, most of which are modeled after and inspired by Lew's design.

As an economist, many people ask me where they should invest their money. My response is that if you care about the future, if you care about the free society, then the best place for your money is the Ludwig von Mises Institute. We have had 30 years of growth and increasing impact thanks to Lew, the ideas of Mises and Rothbard, and to you, the members of the Mises Institute.

Frankly, there are few people who could have anticipated this success. I remember talking to fellow graduate students in the 1980s at the Mises University conference. Someone wondered aloud, "How many more years do you think they will hold the Mises University before everyone who wants to has already attended one?" Well, it doesn't look like we are stopping anytime soon. Last summer we were at full capacity, with four times as many people watching live on the Internet.

Having seen programs like Mises University and the Summer Fellows Program in person, I can tell you that they change people's lives. Of course these programs instill knowledge, but more importantly attendees gain a better grasp of reality that only Austrian economics can provide.
 In addition, with the state fouling up everything it touches, creating chaos everywhere, attendees come away from our programs with a newfound optimism and new zeal to learn as much as they can.

As a donor, the Ludwig von Mises Institute has always been my biggest charity. I know it is easy to feel helpless against expanding evils of the state, but I can tell you that knowing that my money is going to the Mises Institute programs has always provided me with a great deal of satisfaction. We share the right ideas, and the history of man has shown that the power of ideas is all that really matters.
Help us take down Goliath. Be David. Donate today.

Justin Amash on the Rand Paul Amendment

Dan Cotter emails:

Do you think Rand Paul supporter's heads will explode when one of their own, Justin Amash, is calling out the Rand sponsored amendment for allowing indefinite detention of American citizens? 

'The heart of the Feinstein amendment:

"An authorization to use military force, a declaration of war, or any similar authority shall not authorize the detention without charge or trial of a citizen or lawful permanent resident of the United States apprehended in the United States, UNLESS AN ACT OF CONGRESS EXPRESSLY AUTHORIZES SUCH DETENTION."

Well, that Act of Congress is the 2012 NDAA, which renders the rest of the Feinstein amendment meaningless.' 

Either Rand Paul is so ignorant of politics he doesn't realize that the amendment he sponsored 
will be used to authorize indefinite detention, or he is lying through his teeth like a typical 
politician. Amash and Rand can't both be right.

Mercantilism in England by Murray N. Rothbard

Detroit on the Edge of Bankruptcy

Here's WSJ:
DETROIT—This city is back on the brink of insolvency, just months after signing an agreement with state officials designed to shore up its shaky finances.

Some city and state leaders believe Detroit has now reached a breaking point, where it must decide whether to accept a state-appointed emergency manager to run the government or file for bankruptcy to prevent a default on more than $8 billion in bonds.

For years, Detroit has borrowed millions to fund its operations, unable to find ways to boost revenues. Financial mismanagement stemming from political corruption, a hard-hit housing market and a massive loss in population—25% of all city residents left from 2000 to 2010—were all factors in its fiscal woes.
Detroit is only the beginning.

Some other cities and states have perhaps a couple of years of breathing room, but the numbers show there is no way out for them down the road, unless Bernanke prints so much money that the cities and states will be able to pay off their debts with devalued dollars---i.e. major price inflation that will hurt many across the country.

Thursday, November 29, 2012

Rand's Pretty Good Here

Though this is very limited.

A Suggestion for Rand Paul

Rand Paul is out with an op-ed at WSJ, which curiously quotes Milton Friedman, the man who helped to design the witholding tax and promoted a negative income tax, rather than quoting hardcore libertarian economists on government spending.

As Murray Rothbard put it during the Nixon era:

Mention "free-market economics" to a member of the lay public and chances are that if he has heard the term at all, he identifies it completely with the name Milton Friedman. For several years, Professor Friedman has won continuing honors from the press and the profession alike, and a school of Friedmanites and "monetarists" has arisen in seeming challenge to the Keynesian orthodoxy. 
However, instead of the common response of reverence and awe for "one of our own who has made it," libertarians should greet the whole affair with deep suspicion: "If he’s so devoted a libertarian, how come he’s a favorite of the Establishment?" An advisor of Richard Nixon and a friend and associate of most Administration economists, Friedman has, in fact, made his mark in current policy, and indeed reciprocates as a sort of leading unofficial apologist for Nixonite policy. 
In fact, in this as in other such cases, suspicion is precisely the right response for the libertarian, for Professor Friedman’s particular brand of "free-market economics" is hardly calculated to ruffle the feathers of the powers-that-be. Milton Friedman is the Establishment’s Court Libertarian, and it is high time that libertarians awaken to this fact of life.
I can't imagine Rand doesn't understand this. Is he again talking code to his new friends, Bill Kristol and Jennifer Rubin? They certainly understand the difference between quoting Friedman, and, say, Mises, Rothbard or Walter Block.

Nevertheless, Rand's piece is mostly about lower taxes and less government spending, except, of course, for what seems to now be Rand's mandatory pro-government addendum, in everyone of his comments, that Karl Marx could launch a communist revolution with:
None of this is to say that we don't need government or that government doesn't strive to do good things. It is to say that government doesn't do anything very well, and that government should be limited—confined to those duties that absolutely can't or won't be done by the private sector.
Here's a suggestion for Rand. Maybe in his next op-ed, instead of leaving wide open the necessity for government, he can spell out just how limited the government should be. Is he in favor of the NSA, the CIA, the FBI, the FDA, the SEC, the CFTC, the Fed, HUD, the FAA,. NASA, BATFE? Or are these "keepers" in Rand's view of small government?  Libertarians want to know.

Paul Krugman Displaying Basic Ignorance--That Started When He Was 10 Years Old

Paul Krugman's "Schiff Post" is bountiful with things to comment on. Here is Krugman displaying his total ignorance of basic Austrian economic business cycle theory:
Now, the thing about Schiff and all the other Austrians predicting runaway inflation is that they were right to make this prediction given their model. If you believe that a recession is caused by a failure on the production side of the economy, the result of past malinvestment or something, you should also believe that any attempt to correct this decline by expanding credit will simply result in too much money chasing too few goods, and hence a lot of inflation.
He has Austrian theory confused with the now dead Chicago School/Milton Friedman monetary theory(see my upcoming interview with Casey Mulligan). It was Friedman who throughout the 1980s got egg on his face by thinking there was a direct correlation between increases in money supply and overall price levels.

That has never been the Austrian view. Murray Rothbard specifically addressed this in his 1963 book, America's Great Depression. He separated money printing from it necessarily resulting in an increase in prices at the consumer level:
 One of the reasons that most economists of the 1920s did not recognize the existence of an inflationary  problem [in terms of increasing money supply] was the widespread adoption of a stable price level as the goal and criterion for monetary policy. The extent to which the Federal Reserve authorities were guided by a desire to keep the price level stable has been a matter of considerable controversy. Far less controversial is the fact that more and more economists came to consider a stable price level as the major goal of monetary policy. The fact that general prices were more or less stable during the 1920s told most economists that there was no inflationary threat, and therefore the events of the Great Depression caught them completely unaware.
Actually, bank-credit expansion creates its mischievous effects by distorting price relations and by raising and altering prices compared to what they would have been without the expansion. Statistically, therefore, we can only identify the increase in money supply, a simple fact. We cannot prove [monetary] inflation by pointing to price increases. We can only approximate explanations of complex price movements by engaging in a comprehensive economic history of an era — a task which is beyond the scope of this study. Suffice it to say here that the stability of wholesale prices in the 1920s was the result of monetary inflation offset by increased productivity, which lowered costs of production and increased the supply of goods...
The stability of the price level in the 1920s is demonstrated by the Bureau of Labor Statistics Index of Wholesale Prices, which fell to 93.4 (100 = 1926) in June 1921, rose slightly to a peak of 104.5 in November 1925, and then fell back to 95.2 by June 1929. The price level, in short, rose slightly until 1925 and fell slightly thereafter. Consumer price indices also behaved in a similar manner.[2] On the other hand, the Snyder Index of the General Price Level, which includes all types of prices (real estate, stocks, rents, and wage rates, as well as wholesale prices) rose considerably during the period, from 158 in 1922 (1913 = 100) to 179 in 1929, a rise of 13 percent. Stability was therefore achieved only in consumer and wholesale prices...Federal Reserve credit expansion, then, whether so intended or not, managed to keep the price level stable in the face of an increased productivity that would, in a free and unhampered market, have led to falling prices and a spread of increased living standards to everyone in the population. The [monetary] inflation distorted the production structure and led to the ensuing depression-adjustment period. It also prevented the whole populace from enjoying the fruits of progress in lower prices and insured that only those enjoying higher monetary wages and incomes could benefit from the increased productivity.
There is much evidence for the charge of Phillips, McManus, and Nelson that "the end-result of what was probably the greatest price-level stabilization experiment in history proved to be, simply, the greatest depression."
Clearly, Krugman is thus all wet, creating in his mind an "Austrian model" that calls for hyperinflation every time the Fed prints money. Rothbard flattened this view, when Krugman was 10 years old. It's sad that at 59 Krugman still hasn't been able to grasp what Rothbard wrote.

The Importance Of Shining A Light on Rand Paul

Dan Cotter emails:

I think the analysis you've been constantly giving on Rand Paul is essential. Obviously, there are a lot of people in the liberty movement who are missing the important nuances of your message about him. A lot of people like to point out that he is the only senator who is threatening to filibuster NDAA, that he tried to remove foreign aid to some countries, he wants to "privatize" the TSA, etc. If you only look on the surface these things sound good, but his approach is dangerous to the liberty movement when you look more closely.

The problem with Rand is he softens the libertarian message, even though there is no benefit for doing that. Take NDAA for example, he wants to filibuster it in order to get a vote on an amendment that would guarantee American citizens the right to a trial. I would also like to see Americans guaranteed this right (if the constitution meant anything it would be acknowledged we already have this right!), but the fact remains that even if the amendment is voted on it will go down to defeat. So the problem I have is if you are going to threaten to filibuster until you get a vote on an amendment that will be defeated anyways, why water down the libertarian position? Why not threaten to filibuster until you get a vote on an amendment that strips the NDAA of all it's power? He has been able to garner a good amount of press because of this filibuster threat, but instead of people hearing about an attempt to destroy this evil bill in its entirety, they are getting the message that if Rand got his way on this one bad aspect of the bill that the rest of it we could live with.

If I'm in a situation where a mugger is going to kill me no matter what I do, then I'm not going to just punch him in the arm. I'm going to try to do as much damage to him as I possibly can. Im going to try to poke his eyes out, rip his ears off, etc., so that maybe I can do enough damage that he can't do this again to someone else in the future. I think what Rand is doing is analogous to punching a mugger in the arm while he is in the midst of killing you. While he might be putting up a fight, it is so timid that the State isn't coming away with any serious wounds from it. There is a reason why Bill Kristol hates Ron Paul and tolerates Rand. It is because Rand is punching him in the arm while Ron is poking his eyes out.

If we are to win this struggle for freedom then we need more people who follow the libertarian philosophy. I didn't become a Rothbardian because Ron Paul was the best congressman. I became one because he offered a radical change that was moral, ethical, and logical. It was because he preached the libertarian philosophy without wavering, and without watering it down for political gain. Even when he offered half measures like Audit The Fed, he was clear that the real goal was to End The Fed. When Ron Paul gets a little press and attention, he has used it to spread a radically different message than most people have ever heard before. The effect of his consistent, principled, radical approach was to create more libertarians than anybody who has walked this planet. Yes, he never got any bills passed, but what freedom do I have today because of the activities of Rand Paul? What are his political success stories? With radical approaches coming from Ron Paul, LVMI, LRC, EPJ, Liberty Classroom, etc. I see an explosion in the number of libertarians in this country. With the watered down approach of Rand Paul, Reason, and Cato, I see stagnation.

People can apologize for Rand Paul all they want, but the fact remains his approach divides the liberty movement. His approach pleases Bill Kristol and Sean Hannity. It is the radical approach of Ron Paul that united the libertarian movement, and spread it to millions of people across the globe. It is his approach that elites from all stripes fear. They know they can defeat a man who wants to change DC. They can beat him down during the campaign and pull whatever dirty trick that is necessary to keep him away from the levers. But they can't handle the man that doesn't want control of the levers. They can't defeat a man who simply spreads an idea, and inspires people to educate themselves and others. The can't defeat a nation of people who no longer consent to their rule. We all must come to realize that we can't defeat the State through the apparatus they created. We can only defeat them from outside their system, and with the truth of our ideas. Ideas are bulletproof and that is why TPTB have always feared them.

Until Rand Paul and his followers understand this, I say keep shining a light on him.

A Further Note on Anonymous Commenting

I have received a few emails from readers that indicate that the platform I use, Blogger, is not allowing them to post using a Google account or otherwise--and some just don't want to leave an electronic tag. Thus, I will turn the anonymous commenting capability back on. However, I urge every one to use the tab bar and instead of clicking anonymous, click on name/url, you don't have to add a url, just a name---any name, a nom des comments. Use the name consistently over your comments and you may get a following, and all EPJ readers will get a sense for your thinking over different posts.

What the Treasury and Crony America Should Discuss at Their Damn Meeting

This announcement was just made by the Treasury:
On Friday morning, Deputy Secretary Neal Wolin will give opening remarks at the Finance Data Conference hosted at the U.S. Department of the Treasury.  The conference is a part of Treasury’s Finance Data Initiative and will explore how data sets published by federal agencies can be harnessed by the private sector to help empower consumers to take control of their financial lives.
Well here's my comment to that:

Consumers can empower their financial lives once the government stops poking, collecting and tracking data on all sectors of our lives. Once government stops harassing private sector businesses that we want to deal with (for the latest see InTrade closed to Americans). Once the Treasury stops holding meetings with crony capitalists who want to explore how to mine data collected and published by the government. Discuss this at your damn meeting.

Strauss-Kahn Said to Reach Deal to Settle With Hotel Housekeeper

Dominique Strauss-Kahn, the former head of the IMF, and the NYC Sofitel housekeeper, Nafissatou Diallo, who under curious circumstances, accused him of sexually assaulting her last year have quietly reached an agreement to settle a lawsuit she brought against him, reports NYT.

NYT continues:
Ms. Diallo’s lawsuit sought unspecified damages for what court papers called a “violent and sadistic attack” that humiliated and degraded her, and robbed her “of her dignity as a woman.” Her lawyer indicated that he was prepared to introduce testimony from other women who say they were attacked by Mr. Strauss-Kahn in “hotel rooms around the world” and in apartments specifically used by him “for the purpose of covering up his crimes.”
Bottom line: French intelligence agencies, banksters etc. all had the goods on DSK and could pull the string at anytime to end his IMF career and his run for the French presidency. You show complete unwavering alliance to the elitists in control, or you will be removed. Ask General Petraeus.

BTW: Krugman Did A Nice Bashing of a Skull & Bones Econometrician

In the same post where Paul Krugman made his absurd attack on Peter Schiff, he got serious and honest for a moment and had this to say:
Here’s an example of a ludicrously wrong forecast that didn’t touch the fundamentals: in 1929 the great American economist Irving Fisher famously declared that stocks had reached a permanently high plateau; worse yet, he attributed this rosy future to the productivity gains resulting from Prohibition. He ended up looking like a fool, because, well, in some ways he was.
Fisher was at the beginning of a lot of bad trends. He received the first Ph.D. in economics granted by Yale. He was a member of Skull & Bones. In 1930 he founded, with Ragnar Frisch and Charles F. Roos, the Econometric Society, of which he was the first president.

Of course, there can be no mathematical constants in the field of economics, so an econometric society is absurd. It was probably Fisher's absurd econometric thinking which caused him to be so off in his view of stocks in early 1929, when at the same time the great Austrian economists, Ludwig von Mises and Friedrich Hayek were warning of trouble ahead.

All future economists should keep in mind that buying into econometrics leaves you very vulnerable to an attack, by even Krugman, of being a fool, because in a way you would be.

Neocons Hyping Value Added Tax

Over at David Frum's blog, Justin Green reviews Bruce Bartlett's call for a VAT and concludes:
Bartlett goes on to note, and I must concur, that the odds of a VAT in the near future are quite slim. What might be more feasible would be the introduction of a small VAT (perhaps to supplant part of the payroll tax?) with the understanding that the income tax will gradually be replaced with one based on consumption.
Of course, in the real world taxes aren't replaced they become add ons. A VAT is a very bad idea, it creates a completely new front by which taxes can be raised.

Robert Higgs on the Mises Institute

What's Next for Ron Paul?

Ron Paul aide Daniel McAdams has sent out an email with this teaser:

Dear Friends and Colleagues:

After eleven years on the Hill working for Congressman Paul I am departing with the rest of the team. Most of you know that Dr. Paul is retiring from Congress.

I will remain in the area and will remain engaged with Dr. Paul, promoting his views on foreign policy and civil liberties. Please keep an eye out early next year for an announcement of the next phase of our efforts... 

Daniel McAdams | Foreign Affairs and Defense | Congressman Ron Paul, M.D

The Buffett Tax Explained Using A Hippopotamus And An Oxpecker

From Tyler Durden:
When Warren Buffett claimed that a lot of secretaries pay higher tax rates than the super-wealthy, JPMorgan's Michael Cembalest wanted to take a closer look. As shown in the first chart, Buffett’s assertion is only the case in a minority of situations (like his own).

The vast majority of taxpayers with adjusted gross income over $1 million and over $5 million have effective tax rates in the 22%-35% range, considerably higher than the range of tax rates paid by those with AGI below $100k. As a result, Cembalest notes he was not expecting to see large revenue estimates from an analysis of the fiscal impact of the proposals in the Fair-Share Act of 2012, since if the first chart is correct, there are not that many people that would be impacted by a minimum 30% effective tax rate. Now let’s look at some numbers.
The Congressional Joint Committee on Taxation and the Brookings Tax Policy Center analyzed the proposal, under the assumption that the Bush tax cuts sunset for the top two brackets. If that’s the case, the incremental revenue raised by the Fair-Share Tax Act is around $8 billion per year.
This is real money and may be sound public policy, but in the context of a $1 trillion budget deficit expected for FY2013, it’s a rounding error.

To convey this zoologically, we show two animals whose volume is proportionally the same (125 to 1): a hippopotamus, and its symbiotic companion, the yellow-billed oxpecker.

I would like to think that elected officials and political commentators would avoid grandstanding and not mislead anyone on the fiscal impact of their proposals, but right now, there are some people who need help distinguishing between birds and hippos.

When The Bailout Kings Are Not Around...

By, Chris Rossini
Email | Twitter

...the market takes care of business.

This is what should have happened in the auto and financial industries.

From the NY Times:
A little over a week after Hostess Brands formally announced its plans to wind itself down, the bankrupt maker of Twinkies and Devil Dogs is dealing with more interest from potential buyers than it can handle.

Advisers to Hostess are in active talks with about 110 suitors, including regional bakeries and national supermarket chains, an investment banker for the company said in Federal Bankruptcy Court for the Southern District of New York on Thursday. In perhaps a more reassuring sign, many of these suitors appear ready to spend big amounts of money.
People voluntarily risking their money to pick up the pieces, because they see an opportunity...And paying a mutually agreed upon market price.

Fortunately stories like this still exist in Bailout Nation USA.

Here We Go Again, Rand Paul on Taxes

Below is clip of Rand Paul being interviewed by CNN's Wolf Blitzer.

Rand at the start talks about cutting government spending and not raising taxes, but Blitzer calls his bluff (at roughly 2:05) and asks him if he is in favor of capping deductions and eliminating loopholes, which is simply another way to increase tax revenue, and Rand answers, "Yes." He goes on to talk gobbledygook about tax reform. But once you are in deep talking tax "reform," it's all about the government coming up with creative ways to raise taxes by calling them something else. And why is Rand willing to close loopholes? Remember, Ludwig von Mises said capitalism breathes through loopholes.

When you talk tax "reform,"  you are talking the language of the deviants in Washington.

Judas Christie Tries Out Soviet Union Economics

By Murray Sabrin

The Christie administration is on the warpath against so-called price gougers. Attorney General Chiesa has filed suit against gas stations and hotels and motels charging them with violating the state’s anti-gouging laws. As the Attorney General stated, “Safe, comfortable lodging is not a luxury when people have been displaced from their homes.” AG Chiesa obviously never took an introductory course in economics.

When a natural disaster occurs and the supply of goods and services is disrupted or costs rise to maintain services in motels and hotels, a rise in prices is not price gouging but reflects the new supply and demand relationship that exists in the marketplace. In other words, the drop in supply cannot fulfill all the demand at previous prices, hence prices rise to balance supply with demand.

For the state to mandate that prices should rise by X percent during an emergency is arbitrary and capricious. No law can dictate the “correct” or “fair” price for any good or service during “normal” times let alone during a natural disaster when there is a supply disruption. To think otherwise is to embrace the economics of the old Soviet Union.

Governor Christie got onto the anti-price gouging bandwagon spirit in the following statement, “The last thing people put out of their homes in a natural disaster should have to confront is price gouging from unscrupulous profiteers. It’s illegal, offensive and completely opposite the spirit of cooperation we saw from just about everywhere else in our state.” And the governor wants to attract businesses to the state. Lots of luck using the most left-wing rhetoric anyone can employ.

The governor and attorney general reflect the sentiment of the public at large that has been taught for generations that grandstanding politicians and their obsequious bureaucrats should— and must—override the laws of economics.

For all the kudos Governor Christie is getting for his performance as chief executive of the state during this difficult times, his true colors are showing when it comes to basic economic principles: to hell with supply and demand, might makes right.

The above originally appeared at

Is Greg Mankiw the Tom DiLorenzo of Harvard?

Well maybe not quite, but for never make waves Greg Mankiw, this is pretty condemning:
Lincoln was okay but a bit disappointing compared to expectations. It is too hagiographic for my taste.

CHART: New Home Sales from the End of the Bubble

Bernanke's money printing is slowly pushing this macro higher, once again. If you are considering buying, now is the time, especially with rates so low. Lock in the current mortgage rates---and talk a banker into giving you an assumable loan. In a few years, you will look like a financial genius.

(Chart via WSJ)

Where's Lloyd Blankfein?

The White House released this picture taken yesterday of corporate cronies meeting with President Obama. From all accounts, Goldman Sachs CEO Lloyd Blankfein attended the meeting, but he is nowhere in the picture.  Is Lloyd getting a bit camera shy? Is the White House shy about releasing a pic showing the bankster in the House?

Multi-Millionaire State Dept. Candidate Susan Rice

Scott Dodd reports on Susan Rice, current US Ambassador to the UN:
...about a third of Rice’s personal net worth is tied up in oil producers, pipeline operators, and related energy industries north of the 49th parallel -- including companies with poor environmental and safety records on both U.S. and Canadian soil. Rice and her husband own at least $1.25 million worth of stock in four...

Rice also has smaller stakes in several other big Canadian energy firms, as well as the country’s transportation companies and coal-fired utilities. Another 20 percent or so of her personal wealth is derived from investments in five Canadian banks...

According to the Center for Responsive Politics, Rice’s net worth sat somewhere between $23.5 million and $43.5 million in 2009, the latest year for which the center has done a full analysis of her finances. That makes her either the wealthiest person currently serving in the executive branch or a close second to Clinton...

According to the reports she filed in May 2012, Rice and her husband have a wide-ranging portfolio that includes more than 100 securities, such as IBM, Monsanto, Apple, BP, and McDonald’s...

It’s unclear when Rice began investing in Canadian energy and banks, but the Stanford University graduate and Rhodes Scholar worked for the prestigious McKinsey & Company consulting firm’s Toronto office from 1990 to 1993, marrying Canadian-born TV producer Ian Cameron in 1992. She then joined the National Security Council under President Bill Clinton.

Republican and Democratic Fiscal Cliff Solution Doublespeak "Solutions"

George Orwell would be proud.

Politico reports:
 Kevin Smith, Boehner’s communications director said: “We have no intention of increasing tax rates. Doing so will hurt small business and destroy jobs.” 
Boehner told his conference in a closed-door meeting Wednesday morning: “We’ve staked out a principled position. It’s important that everyone in this room continue to be clear with our constituents about what that position is: We’re fighting for spending cuts. We’re fighting against increases in tax rates that destroy jobs. And we’re fighting for pro-growth tax reform and entitlement reform, the keys to economic growth.” 
So what does this "fight against increases in tax rates" really mean. The payroll tax will go up and take a 2% bite out of nearly everyones paycheck. On top of payroll tax increase, taxes collected will go up in the area of another $1.2 trillion---at least.

For the most part, these tax increases will not be increases in the nominal tax rate, but will be increases the amount of income that is taxed. Bottom line: It is an increase in the real tax rate disguised in various ways. The reality is that higher taxes on carried interest and probably capital gains and dividends for sure, and either a cap on total deductions for high earners or some form of a minimum tax rate for them will be in the mix.

But don't think these grand taxers aren't also cutting government spending Here's Politico on that:
Democrats want most Medicare and other entitlement savings to kick in between 10 and 20 years from now...Democrats will point to the precedent set by House Budget Chairman Paul Ryan (R-Wis.) of pushing most mandatory savings off until a decade from now.
Yup, you read that correct. Taxes will be increased starting in 2013, and Democrats want cuts to Medicare and other entitlements to start 10 years later.

So there you have it, the headline will read: No Increases in Tax Rates and Trillions in Government Spending Cuts. This translated will mean: The amount of taxes you actually pay will go up AND government spending will go on along its merry way.

The Ultimate Totally Over-the-Top Paul Krugman Attack on Peter Schiff

Paul Krugman has really flipped. He says Peter Schiff didn't warn about the housing bubble:
Some readers may recall the “Peter Schiff was right” campaign of 2009, a sort of public-relations blitz claiming that Schiff, an Austrian-oriented commentator, had foreseen everything correctly. It wasn’t really true even then...
Krugman goes on to discuss Schiff's warning on price inflation---and that we haven't had the expected inflation, yet. It's coming and Schiff will be correct again--exact timing is always difficult in a complex world.

But I really want to focus on Krugman's whopper about Schiff not calling the housing bubble, becasue that's what he is talking about when he refers to the " 'Peter Schiff was right' campaign of 2009."

Here's the clip Krugman is referring to, which appeared in February 2009:

It simply astounding that Krugman would make up such a whopper when the video proof smacks him right in the face, particularly when he is clearly referencing the video. Does he really think his NYT readers are that clueless?

The Fiscal Cliff Plotting is Intensifying

This morning, Treasury Secretary Geithner will meet with Senate Majority Leader Harry Reid. Also in the morning, the Secretary will meet with Speaker of the House John Boehner.

In the afternoon, Secretary Geithner will meet with Senate Minority Leader Mitch McConnell. Also in the afternoon, the Secretary will meet with House Democratic Leader Nancy Pelosi.

The Mathematics of Living Forever

Samuel Arbesman informs:
Actuarial escape velocity is the idea that at some point average human lifetime will grow by more than a year each year. Right now the rate is only a fraction of a year (thanks to changes in medical science and hygiene) a year. If it exceeds one year per year, people will effectively live for ever, without having to solve the immortality problem.
There's a sneaky step here assuming that growth in human lifetime continues to accelerate and once it hits more than a year (if it ever does) that the growth won't fall back below a year, but still a fascinating perspective.

Under the Rule of the Cardinals by Murray N. Rothbard

This is fascinating stuff, these Cardinals would put top Goldman Sachs banksters to shame.

Wednesday, November 28, 2012

Sounds Like Some Penguin Publishing Lawyers Scared the Hell Out of Joshua Brown

He writes:

Earlier this week I wrote a satirical post in which I attempted to discuss the release of Nassim Nicholas Taleb's new book "Antifragile" in a fun and clever way by parodying some of the excerpts that had appeared elsewhere. I have since been informed that both the author and the publisher had a concern that there may have been people who actually believed these fake passages I wrote were actual quotes from the book.
By making the quotes as ridiculous as possible, I had thought it would have been obvious to anyone that they were fake and meant in jest. In case that was not clear, I would like to explicitly state now that the quotes from my parody were 100% fake and did not come from "Antifragile", which I had not even read yet at the time of posting.
I have removed them from my site after speaking with Penguin, I hope that this satisfies all involved. I do not wish for there to be any further confusion and I'm sorry if there may have been in the first place, it was surely not what was intended. 
I wish Mr. Taleb success with his book.

Ben Swann on the Media's NDAA Problem

Blankfein: Seems Like 'Fiscal Cliff' Deal Could Be 'Reachable'

Watch your wallets. Lloyd Blankfein left the White House in fine spirits.

CNBC reports:
Goldman Sachs CEO Lloyd Blankfein described President Barack Obama's plan for Washington to reach an agreement on the "fiscal cliff" as detailed and "very credible." However, he cautioned that marginal income tax rates may have to rise to seal a deal.

In an interview with CNBC after meetings between the president and several CEOs, Blankfein said, of course, it's hard to tell if a deal will be reached but "if I were involved in a negotiation like this, and everybody was purporting to be where they are, I would say that an agreement was reachable."

Blankfein said he thought concessions on both the revenue and entitlement sides would be necessary...

“I’m certainly not insisting, I don’t even desire higher rates," he said. "I think they will be a drag if revenue goes up and rates goes up. But I think they will be a drag on the American economy if our budget deficit widens out forever, if we’re irresponsible and if government doesn’t work."

When left with these "poor" choices, Blankfein said the compromise has to be in the middle and both sides have to give.

The Growing Burden of Payroll Taxes

All taxes are burdensome, but the payroll tax hits most Americans, pay attention. Congress may debate taxing the rich, but when all is said and done the broad tax, the payroll tax, keeps climbing.

Owen Zidar writes in NYT:
Payroll taxes and corporate income taxes accounted for an equal share of federal tax revenue in 1969. By 2009, payroll taxes generated more than six times as much revenue... 
First, some background. The share of federal tax revenues coming from payroll taxes has doubled since the 1970s, to about two-fifths of revenue. The payroll tax, underwriting social insurance programs, nearly surpassed the individual income tax as the single largest source of federal tax revenue in 2009.

Since payroll taxes finance Social Security and part of Medicare, cost growth in these programs pressures policy makers to raise those taxes. In particular, pressure from the Social Security disability insurance program and Medicare Part A has been intensifying.

The number of disability recipients has increased nearly sixfold since 1970. Disability outlays exceeded revenues by roughly $34 billion in 2011. And costs are likely to continue growing because shrinking labor market opportunities for noncollege-educated workers are likely to continue well past this recession...

Pressure on the payroll tax from Medicare Part A is even worse. Health cost growth has steadily outpaced inflation, and the pattern shows no sign of abating.

And guess what, the payroll tax is the only tax that is certain to go up on January 1. It will impact anyone earning a wage: poor, rich or middle class. Most noteworthy, even though this tax supports Social Security and Medicare, both are headed for bankruptcy even with the tax increase. Your government central planners at work.

Keep those facts in mind, suckers.

Tell Them to Put Bags Over Their Heads

Paul Huebl on filming news stories without a permit:

Politicians learned decades ago that they could tax and regulate certain filmmakers. The problem is that too many bureaucrats and cops don’t know or understand the law.

The First Amendment absolutely protects anyone involved with news or opinion publishing and broadcasting. That of course includes those publishing and posting various forms of media on the web. They cannot regulate home video projects not intended for profit either.

The permit laws can only apply to commercial projects such as entertainment films or commercials.

If you’re gathering news video or B-roll and some officious jerk demands to see your film permit you can tell him it’s at the very top of the Bill of Rights. If he still has questions tell him to visit his local library to read a copy. Of course you should tell him your gathering news material but you need not tell him anything about the news story your working on.

They may even try to bully you to obtain a permit and liability insurance but there is no truth to that unless of course you’re not doing news. Stand tough and be sure to shoot video of any official jerks that you can use in court should a bogus arrest is attempted or made.

The rub here is you cannot gather news with the interruption by ignorant public officials. The ACLU is more than happy to represent you especially if you have proof of the suppression of your rights on video.

Never ever yield to demands that you delete video or surrender media cards or tape. If you gather video of a crime the cops and prosecutors have a right to use legal process to obtain a copy your video.

Nobody has the right to force you to turn off your newsgathering camera. If they don’t want to be seen they can either avoid you or put a bags over their heads.

Read the rest here.

House Price Recovery Chart

As would be expected, the housing recovery on a percentage gain basis is strongest in the areas which saw the greatest collapse. There is fundamental attractiveness to living in warm states such as California, Arizona, Nevada and Florida. It's Fed money manipulation that creates the bumpy, roller-coaster ride.

(Via WaPo)

Coming Up On The Robert Wenzel Show

By, Chris Rossini

This Week's Guest is Casey Mulligan
Casey Mulligan
Casey B. Mulligan is a Professor in the Department of Economics at the University of Chicago. He is affiliated with the National Bureau of Economic Research, the George J. Stigler Center for the Study of the Economy and the State, and the Population Research Center. Find out what University of Chicago economists do and don't know about money supply activity leading up to the Great Recession. Also learn what government measures are extending the Great Recession.

This Sunday - December 2nd

Sunday, December 9th - Oliver Stone
Oliver Stone
Oliver Stone is a legendary filmmaker with a long-list of blockbuster hits. Oliver and his co-auther Peter Kuznick join The Robert Wenzel Show to discuss their new book: "The Untold History of The United States." 

Did You Miss An Episode? 
Catch Up Below: