Wired: Bitcoin’s Fate Is in the Hands of Clueless Regulators

Robert McMillan writes for Wired:

The problem is our financial regulators don’t understand bitcoin well enough to regulate it. That became increasingly obvious during the hearings, and it’s not at all surprising. The five-year-old cryptocurrency is an unprecedented experiment in the power of peer-to-peer networking, open source software, and a certain kind of financial anarchy.

The crystallizing moment came Wednesday when Richard Zabel, a seemingly well-informed deputy U.S. attorney, testified before the New York Department of Financial Services, which has been looking into regulating bitcoin businesses. At one point, the Manhattan prosecutor started talking about bitcoin-mixing services, called tumblers. Bitcoin includes a public ledger that openly displays all financial transactions on its vast computer network; tumblers provide a means of hiding your transactions from the rest of the world — something Zabel doesn’t like.

“There may be, out there, legitimate uses for those, but in the cases that I’ve seen, they serve no other purpose to be automated money laundering and identity concealers,” said Zabel, whose office has brought money laundering charges against bitcoin advocate and Bitinstant CEO Charles Shrem — charges filed the day before New York’s hearings began.

The man holding the hearings, New York State’s Superintendent of Financial Services Benjamin Lawsky, seemed intrigued. “If it turns out that technologies like tumblers are being used for no other purpose than to enhance anonymity and to thwart law enforcement, that may be something as we do our regulatory work we want to make sure the companies that we’re reviewing aren’t using those kinds of things.”

You could almost hear a collective groan from the bitcoin community. If services that merely “enhance anonymity” are banned by New York financial regulators, then it will actually scare away legitimate businesses, and maybe an entire industry.[...]Some bitcoin true believers think any government regulation is an intrusion and a mistake, but others simply hope the government doesn’t make a huge error in judgment. “A misunderstanding by policymakers today could be a major setback to U.S.-led innovation in digital currency,” said Nicholas Carey, CEO of bitcoin wallet-maker Blockchain.info.

McMillan also comments about tumblers and anonymity:

As we reported in June, there are indeed legitimate reasons why companies, or even individuals, might want to obscure the flow of money. For example, a company using bitcoin may not want its competitors tracking its sales growth via the public ledger. Make it impossible to hide this information with a tumbler and many legitimate businesses simply won’t use bitcoin.

What McMillan doesn't seem to understand is that government regulators are concerned about the anonymity feature, which would make it difficult for them to track whatever transactions they want to track. Regulators don't care about other "legitimate" uses for tumblers. They know that transactions can be tracked via debit cards, credit cards and bank statements, there is no chance they are going to allow a move back,for individuals, into a world where they can conduct financial transactions with greater anonymity. As warned here at EPJ long ago, heavy regulations, if not an outright ban on tumblers is coming.

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Bloomberg Scurries Into The Climate Change Game

By, Chris Rossini

No one should be shocked with this one:

Congrats @MikeBloomberg on joining UN to fight global warming & help cities make global impact as Special Envoy for Cities & Climate Change.
— Samantha Power (@AmbassadorPower) January 31, 2014

Mayor @MikeBloomberg knows how to get things done. We need more leaders like him here at the @UN.
— Samantha Power (@AmbassadorPower) January 31, 2014

This is such a no-brainer. "Climate Change" is a hotbed for people who lust to dominate others with force. What a perfect place for Nanny Bloomberg.

Could you imagine if Bloomberg had the power to ban something worldwide?

What a rush!!

---

Chris Rossini is on Twitter, Facebook & Google+

Lifetime Ban for Bernanke?

Outgoing Fed Chairman Ben Bernanke is a big baseball fan, so someone created a Bernanke "baseball card."

I say we continue the metaphor and ban him for career long abuse of green ink,thus, keeping money supply growth on steroids.

Money supply growth under Bernanke:

Full Text of Letter Alleging Christie Knew About The Lane Closures as They Were Going on

[My highlight-RW]

Law Offices of Alan L. Zegas
552 Main Street
Chatham, New Jersey 07928

phone:
fax:

973-701-7080
973-701-7081

website: www.zeoaslaw.com

Alan L. Zegas (NJ and NY Bars)
Judson L Hand (Nl, E.D.N.Y. and S.O.N.Y. Bars)
Stephanie G. Forbes (NJ and PA Bars)

january 31,2014

By Email and Regular Mail

Darrell Buchbinder
General Counsel
The Port Authority of New York and New jersey
225 Park Avenue South
1Slh Floor
New York, NY 10003



Re: David Wildstein

Dear Mr. But:hbinder:

I am writing in response to your email of january 24, 2014, in which you deny the December 13, 2013, request of Mr. Wildstein for the Port Authority to pay for his legal representation in connection with legislative proceedings where Mr.Wildstein was subpoenaed to appear and provide documents and testimony. You state that "[Based on the current facts and circumstances, it is apparent that the Port Authority's provision of legal representation .... would not be warranted under the Port Authority's By-Laws. Copied on your email were Scott Rechler, Patrick Foye, and Deborah Gramicclonf.

You had previously written to Mr. Wildstein on December 27, 2013, and, in addition to the foregoing persons who had been copied, was David Samson, whose
name does not appear on your January 21, 2011, correspondence.

I would request that you kindly reconsider the Port Authority's decision to deny Mr. Wildstein payment of his legal fees and indemnification. I would also request that the Port Authority pay for the legal fees of Mr. Wildsteln and Indemnify him for any civil lawsuits that are Instituted against the Port Authority where Mr.Wildstein is named or any proceedings In which Mr. Wild stein is a party or a person under investigation as a result of conduct occurring while he was employed by the Port Authority.

The By-Laws specifically provide for the indemnification of Port Authority employees. Although you state that it is •apparent" that Mr. Wildstein is not entitled to indemnification or payment of his legal fees, you do not offer one single reason why your statement is apparent. Mr. Wild stein submitted his request for Indemnification and payment of his legal fees after now-resigned Port Authority Commissioner, William Baront had submitted a similar request According to press reports, Mr. Baroni's request is still "under consideration·. What about Mr. Wildstein's circumstances is so "apparent""? He refused to answer substantive questions put to him by the Transportation Committee on Constitutional grounds, yet Mr. Baront, who responded to questions of the same committee, albeit not under oath, stated that the George Washington Bridge Lanes had been closed because of a traffic study, answers directly at variance with the testimony of Mr. Foye, who, as noted above, was copied on your correspondence to Mr. Wildstein, as well as to others who appeared before the TransportationCommittee when Mr. r:oye did.

The person counseling Mr. Baroni for the appearance before the Transportation Committee was an attorney working under you at the Port Authority. At the time, it was not known whether Mr. Baroni wou ld be sworn on the day of his appearance. The counseling, as I understand it, was conducted over a period of four to five days, and Mr. Wildstein was present for much of it Indeed, it was his understanding that the same attorney representing Mr. Baroni was representing him. I have to assume you are fully aware of all this. Subsequent to Mr. Wildstein testifying. There have been reports that certain Commissioners of the Port Authority have been connected directly or indirectly to land deals involving the Port Authority, that Port Authority funds were allocated to projects connected to persons who supported the administration of Governor Chris Christie or whose political support he sought, with some of the projects having no relationship to the business of the Port Authority, and that Port Authority funds were held back from those who refused to support the Governor.

It has also come to light that a person within the Christie administration communicated the Christie adminislration's order that certain lanes on the George Washington Oridge were to be closed, and evidence exists as well tying Mr. Christie of having knowledge of the lane closures, during the period when the lanes were closed, contrary to what the Governor stated publicly in a two-hour press conference he gave immediately before Mr. Wildstein was scheduled to appear before the Transportation Committee. Mr. Wildstein contests the accuracy of various statements that the Governor made about him and he can prove the inaccuracy of some. Deborah Gramiccioni, now the Depuly Director of the Port Authority, who is copied on your January 24, 2014, correspondence, had held a high level position within the Christie Administration. The Governor's current Counsel comes from the same firm that is now representing Mr. Baroni. In light of the foregoing. There are palpable conflicts at every level of the Port Authority's hierarchy, which demand that the Port Authority pay for Mr. Wildstein's legal representation and indemnify him with respect to all matters that are pendingg or that may arise, which relate to the period when Mr. Wildstcln had been employed by the Port Authority.

Thank you for your kind consideration.

Alan L. Zegas

(Letter via NYT)

BREAKING: Christie Knew About Lane Closures on Bridge

A former appointee of New Jersey Gov. Chris Christie is alleging that the Republican knew about the politically motivated lane closures on the George Washington Bridge, according to The New York Times.

A letter by the attorney for David Wildstein, who was Christie's appointee on the Port Authority of New York and New Jersey, says the governor knew about the lane closures, which are at the heart of a political scandal threatening the governor's political future.

The letter by Alan Zegas describes "the Christie administration order" and said "evidence exists as well tying Mr. Christie to having knowledge of the lane closures, during the period when the lanes were closed, contrary to what the governor stated publicly in a two-hour press conference."

"Mr. Wildstein contests the accuracy of various statements that the governor made about him and he can prove the inaccuracy of some," the letter says.

(Via USA Today)

.

Former TSA Agent: Dear America, I Saw You Naked (And, Yes We Were Laughing)

Dear America, I Saw You Naked
And yes, we were laughing. Confessions of an ex-TSA agent
By Jason Edward Harrington

On Jan. 4, 2010, when my boss saw my letter to the editor in the New York Times, we had a little chat.

It was rare for the federal security director at Chicago O’Hare to sit down with her floor-level Transportation Security Administration officers—it usually presaged a termination—and so I was nervous as I settled in across the desk from her. She was a woman in her forties with sharp blue eyes that seemed to size you up for placement in a spreadsheet. She held up a copy of the newspaper, open to the letters page. My contribution, under the headline “To Stop a Terrorist: No Lack of Ideas,” was circled in blue pen.

One week earlier, on Christmas Day 2009, a man named Umar Farouk Abdulmutallab had tried to detonate 80 grams of a highly explosive powder while on Northwest Airlines Flight 253. He had smuggled the bomb aboard the plane in a pouch sewn into his underwear. It was a masterpiece of post-9/11 tragicomedy: Passengers tackled and restrained Abdulmutallab for the remainder of the flight, and he succeeded in burning nothing besides his own genitals.

The TSA saw the near-miss as proof that aviation security could not be ensured without the installation of full-body scanners in every U.S. airport. But the agency’s many critics called its decision just another knee-jerk response to an attempted terrorist attack. I agreed, and wrote to the Times saying as much. My boss wasn’t happy about it.

“The problem we have here is that you identified yourself as a TSA employee,” she said.

Read the rest here.

Goldman Sachs Backlash in Denmark; Six Ministers Walk Out

Now, if we only could get Americans as riled up when Lloyd Blankfein and his lieutenant cronies visit the White House.

Bloomberg reports:

As night turned to day on Jan. 30, Denmark’s biggest newspapers were predicting Prime Minister Helle Thorning-Schmidt’s coalition would survive a dispute over letting Goldman Sachs Group Inc. (GS) buy part of Dong Energy A/S.

By 10 a.m., the Socialist People’s Party had quit her minority coalition and Danes were trying to understand how a Wall Street bank could have shaken the political landscape in their Scandinavian haven. Thorning-Schmidt said she will appoint a new Cabinet “soon” to replace the six ministers who walked out over the dispute.

The 48-year-old Social Democrat watched her coalition fall apart yesterday after pushing a $1.5 billion sale of an 18 percent stake in Dong to Goldman. The deal, opposed by 68 percent of Danish voters in a Megafon poll for TV2, dominated headlines after it emerged Goldman would get some veto powers in exchange for its investment. Goldman has said it views the stake as a long-term holding and will support the strategy of the current management.

Scary

Paul Krugman writes:

 I have 200 students registered for my course on the Great Recession

I wonder if he will start off with his confused and dishonest rendition of the babysitting coupon tale?

Can we get an Austrian in the class, so that he/she can ask incisive questions at key moments, to expose this fraud?

Anheuser-Busch to Salute Government Trained Killers in Super Bowl Ad

The Houston Chronicle reports:

Lt. Chuck Nadd knew something was up when Anheuser-Busch's private jet flew him from Fort Drum in New York to his hometown in central Florida within hours of his return from a tour in Afghanistan in early January.

The 24-year-old Army helicopter pilot and operations officer had been told he was on a public affairs assignment to give a speech to a Veterans of Foreign Wars group in his hometown. But when he got to downtown Winter Park, hundreds of residents, relatives, teachers and friends greeted him with a surprise parade complete with tickertape and Anheuser-Busch's Clydesdale horses.

The brewer, which played a central role in putting the parade together, has fashioned an ad around the event. It will run during Sunday's Super Bowl, and Nadd says he hopes it gets people talking about honoring returning soldiers.

"I hope the visibility it gets starts a conversation about recognizing those who have served and served in a greater capacity than I have," Nadd said Thursday. "I would hope this commercial helps people look for those heroes in their communities."[...]

In Winter Park, a well-heeled city of 30,000 known for its boutique shops and high-end restaurants along tony Park Avenue, city officials were contacted by the local film commission with a question: Could they put together a parade in two weeks? They were told the parade was for a local soldier and sponsored by Anheuser-Busch, working with the Defense Department.

Here's some of the work of  "those who have served":

BREAKING: Suspicious White Powder Found at 7 Hotels Near Super Bowl

Developing...

Return to this post for updates.

UPDATE 1

FBI investigating after white powder was delivered to former NYC mayor Rudy Giuliani's office & 7 hotels near the Super Bowl.

UPDATE 2

Via NyPo:

Bomb squads and hazardous material teams fanned out across New Jersey on Friday after packages containing a suspicious white powder were delivered to as many as seven hotels near the site of the Super Bowl on Friday, according to multiple reports.

 Authorities also were testing white powder contained in oa letter sent to the Manhattan office of former Mayor Rudy Giuliani, law enforcement officials told CNN. The letter opened in the mail room, contained white powder, according to law enforcement officials.
 No injuries were reported in either case, and NBC 4 reported that none of the New Jersey hotels were hosting the athletes who will be playing at MetLife.

 WABC 7 reported the packages went to an Econo Lodge on Washington Avenue in Carlstadt, the Renaissance Meadowlands Hotel on Rutherford Avenue in Rutherford, the Homewood Suites by Hilton on Route 17 in East Rutherford and the Hilton Hasbrouck Heights Meadowlands on Terrace Avenue in Hasbrouck Heights.

UPDATE 3

Via NYT

Carlstadt Police Det. John Cleary says someone at an Econo Lodge found the substance in an envelope on Friday.

Cleary says similar mailings arrived at the Homestead Inn in East Rutherford and a Renaissance Inn in Rutherford. He says investigators intercepted additional envelopes from a mail truck before it reached a Holiday Inn Express and Hampton Inn in Carlstadt.

UPDATE 4

 Preliminary field tests indicate suspicious letters contain non-toxic material, Further tests underway.

CNBC's John Carney Moves To The Wall Street Journal

John Carney is headed to the Wall Street Journal to write for "Heard On The Street."

Carney was the editor of CNBC's "NetNet" blog.

I think the "Heard" column is one of the most powerful on Wall Street.

Good luck, John!

The Changing of the Money Printers

Today is Ben Bernanke's last day as Chairman of the Federal Reserve. Janet Yellen will be sworn in as Chairman on Monday. The money printing, no doubt, will continue.

Crony Businessmen in NYC Support the Mayor's Plan for a Hike in Taxes

WSJ explains:

Mayor Bill de Blasio has lately been rolling out endorsements from New York City business execs for his plan to raise taxes on the wealthy to pay for universal pre-school. These putative leaders of industry cite the need to provide equal opportunity for the city's poor, but we suspect many are motivated mostly by self-interest.

Mr. de Blasio in recent weeks has extracted, er, garnered endorsements from such real estate mavens as Jed Walentas, principal of Two Trees Management; David Kramer, principal of the Hudson Companies; Mitch Draizin, owner of Longview Capital Advisers; Charlene Gayle, owner of the Macon Realty; Leonard Litwin, principal of Glenwood Management; and Don Peebles, CEO of Peebles Corp.

Few industries are at the mercy of city hall as much as real estate, whose growth depends on city zoning rules and building permits. Mr. de Blasio has made clear that he intends to expand the city's stock of affordable housing, which could be a business opportunity or killer. Any surprise that the developers are trying to make nice with the new mayor?

Also backing the tax hike is Matthew Daus, former chairman of New York's taxi and limousine commission and president of the International Association of Transportation Regulators. The association, which has a friendly relationship with local car-service companies, has proposed guidelines that would effectively regulate the start-up Uber out of business.

Then there's Jim Walden, an attorney at the white-shoe law firm Gibson Dunn & Crutcher who defends "corporate and individual in high-stakes governmental investigations, regulatory actions, and civil disputes." Mr. Walden hosted four fundraisers for Mr. de Blasio's mayoral bid, and Gibson Dunn even represented the former public advocate last year in a pro bono lawsuit to block the closures of two Brooklyn hospitals. That would seem to make Messrs. Walden and de Blasio good buds.

For Mr. Walden and the others, supporting the tax hike is an essentially free way to buy the mayor's good will and head off shakedowns. The endorsements are also unlikely to influence the political machinations in Albany, which must sign off on any tax hike.

Mr. de Blasio will point to the endorsements to suggest that his tax hike enjoys broad-based support, even among the city's well-to-do

Yellen Congressional Testimony Set

Incoming Fed Chair Janet Yellen has been scheduled to appear at a House hearing on February 11.

Who Is the Pope Talking To All Day Long?

Rolling Stone magazine has a 7,700 word cover story out on the Pope, written by Mark Benelli.

Part of the story fills in some blanks about the Pope and how he got to be the Pope, while other parts of the story add new mystery.

We learn from the story that the Pope was something of a compromise candidate when chosen to be Pope:

Going into the conclave, there were three acknowledged front-runners, says Father Reese, who covered the event for the National Catholic Reporter. Bergoglio was not among them. Nearly every Vatican watcher assumed that even though he'd been runner-up to Ratzinger in the 2005 conclave, he'd aged out of any serious consideration. "If they had been united around one candidate, it would have been all over," Reese says. "The problem was, it looked like each group hated the other two groups." Because of the infighting, in Reese's estimation, none of the three front-runners would throw their votes to their rivals, so they wound up backing the dark horse.

But, somehow, conservatives Cardinals who voted for the new Pope are now surprised by his socialist-leaning positions. They thought he would not make any waves:

By all accounts, the papal conclave that elevated Bergoglio assumed it was electing a fairly anodyne compromise candidate. Cardinals liked the idea of a pope from Latin America, one of the Church's leading growth markets. They also responded well to a stirring three-minute speech Bergoglio gave during the conclave, in which he said the Church, in order to survive, must stop "living within herself, of herself, for herself."

But he gave no other indication that he'd be any kind of change agent. In the days after his election, most newspapers described him as a safe, conservative choice. Bergoglio himself had already picked out a retirement spot back home in Argentina, where he fully expected to return after participating in the conclave as a voter.

The conservative Cardinals should have taken much more seriously the warning of the important economist Sir Peter Bauer, when he said:

By the year 2050 there will be only two True Believer Marxists left on planet Earth and they will be two nuns in Brazil.

South America is a hot bed of Catholic-socialist thinking. And make no mistake, Pope Francis is a socialist. The RS cover story provides us with more damning quotes from the Pope's recent  Evangelii Gaudium:

[The Pope] in Evangelii Gaudium, lashes out at "ideologies which defend the absolute autonomy of the marketplace . . . reject[ing] the right of states . . . to exercise any form of control" and calls the deification of the free market "a new tyranny . . . which unilaterally and relentlessly imposes its own laws and rules."

RS informs:

Whatever his true feelings back then, as pope, Francis has made his sympathies clear: Last September, he invited the Peruvian founder of the [Liberation Theology] movement, Father Gustavo Gutiérrez, to visit him at the Vatican.

Murray Rothbard called  liberation theology a flirtation between Marxism and the Church:

Marxism is a religious creed. This statement has been common among critics of Marx, and since Marxism is an explicit enemy of religion, such a seeming paradox would offend many Marxists, since it clearly challenged the allegedly hard-headed scientific materialism on which Marxism rested. In the present day, oddly enough, an age of liberation theology and other flirtations between Marxism and the Church, Marxists themselves are often quick to make this same proclamation.

 RS also tells us:

Now, while Francis' days in some ways follow an expected papal itinerary – early rising and prayer, morning Mass, visits with dignitaries and heads of state, the occasional off-site trip to a hospital or a church – the space he's carved out for himself has allowed for an unprecedented degree of independence. While past popes maintained detailed public schedules, Francis handwrites his own agenda in a private datebook. "This is unheard of," a senior Vaticanisti who wishes to remain anonymous tells me. "Aides who'd ordinarily know what's going on have to piece things together by talking to other people." Confirms Father Lombardi, the Vatican press secretary, with the hint of a sigh, "Before, I was in contact with the Curia and could ask them what the daily agenda is. Now, we have to discover what the agenda is. He is very free in organizing it."

By most accounts, Francis is constantly on the telephone (landline; he's never owned a mobile phone or a computer), consulting with trusted friends and colleagues. "John Paul II and Benedict both had an inner circle, so this is very disconcerting to people on the inside," the Vaticanisti says. "Does Francis have a war room? No, probably not. But who is he talking to back there? No one really knows."

(ht  Jay Stephenson)

10 Minute Sundance Movie Gaining Libertarian Fans

Chris Vognar writes for the Dallas Morning News:

Dallas’ Toby Halbrooks just got from the Sundance Film Festival, where he showed his new short film “Dig.” What’s it about? a guy (Dallas’ Jonny Mars) digs a hole in his backyard. He draws attention. Kids watch him. A permit is demanded. He doesn’t have one. The police arrive. And that’s about it.

The film gained an immediate following, with one fan base is particular: The Ron Paul Website dailypaul.com has adopted it as a sort of libertarian manifesto. So there’s that.

(ht Jay Stephenson)

Cass Sunstein Warns about "Paranoid Libertarians"

He doesn't refute any of the concerns that libertarians have about, chiefly, the growth of the state. What he pretty much does is say trust the government that not much will get out of hand. That's it. He says this as the NSA monitors all our electronic communications, US drones fly in distant lands blowing up people, the New Jersey governor gets pissed of at someone and blocks traffic for days, local police are becoming more militarized, the TSA requires us to participate in its security theatre of the absurd at airport, Obamacare is about to destroy the health care system, the Federal Reserve prints and prints more money, and on and on and on, but,hey, nothing to be concerned about. You are paranoid if you are concerned, says the evil Sunstein.

Sunstein writes:

[P]aranoid libertarianism, [...] the general category is worth some investigation.

It can be found on the political right, in familiar objections to gun control, progressive taxation, environmental protection and health-care reform. It can also be found on the left, in familiar objections to religious displays at public institutions and to efforts to reduce the risk of terrorism. Whether on the right or the left, paranoid libertarianism (which should of course be distinguished from libertarianism as such) is marked by five defining characteristics.

The first is a wildly exaggerated sense of risks -- a belief that if government is engaging in certain action (such as surveillance or gun control), it will inevitably use its authority so as to jeopardize civil liberties and perhaps democracy itself. In practice, of course, the risk might be real. But paranoid libertarians are convinced of its reality whether or not they have good reason for their conviction.

The second characteristic is a presumption of bad faith on the part of government officials -- a belief that their motivations must be distrusted. If, for example, officials at a state university sponsor a Christian prayer at a graduation ceremony, the problem is that they don’t believe in religious liberty at all (and thus seek to eliminate it). If officials are seeking to impose new restrictions on those who seek to purchase guns, the “real” reason is that they seek to ban gun ownership (and thus to disarm the citizenry).

The third characteristic is a sense of past, present or future victimization. Paranoid libertarians tend to believe that as individuals or as members of specified groups, they are being targeted by the government, or will be targeted imminently, or will be targeted as soon as officials have the opportunity to target them. Any evidence of victimization, however speculative or remote, is taken as vindication, and is sometimes even welcome. (Of course, some people, such as Snowden, are being targeted, because they appear to have committed crimes.)

The fourth characteristic is an indifference to trade-offs -- a belief that liberty, as paranoid libertarians understand it, is the overriding if not the only value, and that it is unreasonable and weak to see relevant considerations on both sides. Wilentz emphasizes what he regards as the national-security benefits of some forms of surveillance; paranoid libertarians tend to see such arguments as a sham. Similarly, paranoid libertarians tend to dismiss the benefits of other measures that they despise, including gun control and environmental regulation.

The fifth and final characteristic is passionate enthusiasm for slippery-slope arguments. The fear is that if government is allowed to take an apparently modest step today, it will take far less modest steps tomorrow, and on the next day, freedom itself will be in terrible trouble. Modest and apparently reasonable steps must be resisted as if they were the incarnation of tyranny itself.

In some times and places, the threats are real, and paranoid libertarians turn out to be right. As Joseph Heller wrote in “Catch-22,” “Just because you’re paranoid doesn’t mean they aren’t after you.”

Societies can benefit a lot from paranoid libertarians. Even if their apocalyptic warnings are wildly overstated, they might draw attention to genuine risks, or at least improve public discussion. But as a general rule, paranoia isn’t a good foundation for public policy, even if it operates in freedom’s name.

Got that? A concern for freedom is paranoia. This guy is a piece of work.

(ht Ash Navabi)

Please Say It Won't Be So, Ron

Ron Paul’s leftover campaign million could end up supporting a Rand Paul 2016 presidential race.

Roll Call reports:

A former presidential candidate is sitting on almost a million dollars that could help his son in a 2016 presidential race.

The Ron Paul 2012 Presidential Campaign Committee of former Rep. Ron Paul, R-Texas, reported it has $972,450 cash on hand as of December 31st.  During the fourth quarter of 2013, the committee raised $10 and spent $33,464, including $24,220 paid to Arent Fox LLP and LeClair Ryan for legal consulting.

Although a federal candidate may not use left over funds for personal use, and the campaign committee could only contribute $2,000 to another candidate per election, there may be nothing to prohibit a candidate from contributing all the left over funds to a super PAC. The super PAC could then make independent expenditures supporting or opposing a federal candidate. The PAC might even make independent expenditures encouraging a candidate to run, such as Ron Paul’s son, Sen. Rand Paul, R-Ky.

The Federal Election Commission (FEC) regulations relating to excess funds do not specifically prohibit left over funds going to a super PAC, but the FEC often handles issues relating to excess funds on a case by case basis.

Peter Schiff: The Backstory to My Appearance on the 'Daily Show'

'The Daily Show': Intellectually Dishonest about the Intellectually Disabled
By Peter Schiff

When I accepted “The Daily Show”’s invitation to be interviewed about my opposition to a minimum wage increase, I knew that I was walking into a trap. But given how counterproductive I know that such an increase would be to those the law proposes to help, I took the risk anyway.

Of the more than four hours of taped discussion I conducted, the producers chose to only use about 75 seconds of my comments. Of those, my use of the words “mentally retarded” (when Samantha Bee asked who might be willing to work for $2 per hour – a figure she suggested) has come to define the entire interview.

I'm now receiving hundreds of angry e-mails and am being described in the media as a hateful bigot.

The irony is: I'm not a hateful bigot. And there's something I discovered while taping my interview: If anyone's insensitive toward the intellectually disabled, it's "The Daily Show" itself.

For the full story, please read my latest column below:

How to Get a Job on Wall Street (Or anywhere else)

This post discusses getting a job on Wall Street, but the basic principles apply to whatever your area of interest is.

An EPJ reader sent this email to me earlier today:

Tomorrow morning I plan to go knocking on doors at different PE firms in the Houston Area. Those firms do not have a career section on their website, so I have decided to go the old fashion way and knock at their door. Basically, I want to get an entre level analyst position and start from there. Today, I am starting an online MSc. in Corporate Finance, so I hope that could help me.

My question to you is, what tips would you suggest me when I go tomorrow morning? would that strategy work?

I receive many emails like this. Early in my career, at one point, I actually went door to door and managed to get a job on Wall Street that way, but it is extremely difficult. You have to be prepared for lots of rejection, you have to know, going in, everything about the job and firm that you are attempting to get an interview at. You have to be clever, pushy and lucky to get past the receptionist and you then have to make your points, powerfully and succinctly, as to why you would be a good fit for the firm. Then you have to be prepared and have answers to any objections. Did I mention accomplishing all this is not easy?

An alternative might be to contact smaller firms by email or phone, contact the partners, and tell them you are willing to work for free for 6 months to prove yourself. Be a pest.

I also like the idea of working for a temp agency. Befriend someone at a agency and tell them that you are willing to work as a temp in the PE industry, hedge fund industry etc., whatever it is you are interested in, because you want to get in the door. Once you are in the door, you can be judged on your skills. Be a pest at the temp agency, so that you are on their mind.

Another strategy is to start a blog, not an opinion and policy blog like mine, but a blog that shows your skills in the field you would like to enter. If you want to get into the PE industry, write one or two analytical posts per month that analyze sectors of the economy and why it may make sense for the PE industry to get involved in those sectors (or why they should be avoided). If you consider yourself, say, a good stock analyst, then start a blog where you post one or two detailed stock research reports each month. Email links to your posts to the people you would like to work for. I know of two analysts that got their starts this way.

When all is said and done, it's about being clever and focused and knowing well the person/firms you want to work for, so that you can show them the skills you have that can help them.

I found the profile of Tracy Britt Cool in BusinessWeek fascinating. She clearly had been thinking about working for Warren Buffett for a long time and she went about in a methodical way attempting to get a job with Buffett. And, got it! BusinessWeek writes:

When Warren Buffett bought half of a commercial mortgage finance company in 2009, he hired a 25-year-old fresh out of business school to keep tabs on the investment[...]Now 29, Cool is one of Buffett’s most-trusted advisers, traveling the country to assist a constellation of companies too small to command her boss’s direct attention[...]

“When I first met her I thought, ‘Oh my gosh, this girl’s scaring me, she’s so professional,’” said Teresa Hsiao, a classmate at Harvard College. “Her idea of fun may not be what we consider fun, like looking at 10-Ks,” the annual reports filed with securities regulators.

Cool, who declined to be interviewed for this article, met Buffett through Smart Woman Securities, the group she and Hsiao founded while Harvard undergraduates. SWS aims to educate members about everything from compound interest to preparing a pitch to prospective investors.

Cool and Tiffany Niver, a Harvard classmate from Nebraska, wrote to Buffett and asked if members could visit. He agreed. The pilgrimage has become an annual event for the group, which has expanded to 17 chapters[...]Cool was inspired by Buffett’s value-investing principles when she built SWS, Horne said. “I don’t think that was unconscious,” she said. “She clearly had Warren in her sights.”

While at Harvard Business School, Cool wrote in an essay: “My goal is to work with a great investor, who even more importantly is a wonderful teacher and mentor.”

Think about this. She set her sights on working for Warren Buffett and accomplished that! How many people would kill to get a job next to Buffett? A lot. But she did it. Why?  Because she did many things that others don't do. She had a methodical plan. She developed her skills that would make her valuable to Buffett and then she developed a plan to get in front of Buffett so that she could demonstrate her skills.

Go forth and do likewise.

The Squeeze Begins: Prosecutors Say Bitcoin Needs TIGHTER Regulations Than Banks

Bloomberg reports:

Virtual-currency firms should face regulations that are tougher than those for established financial-services providers because of their ability to hide criminal activity, according to law enforcement officials.

“Without stronger government oversight, we are allowing cybercriminals, identity thieves, traffickers of child pornography, and other malevolent actors to operate in a digital Wild West,” Cyrus Vance Jr., the district attorney for Manhattan, said at a hearing yesterday about possible state regulation of digital currencies[...]

“One aspiration with Bitcoin is for it to be a main artery of the commercial world,” Zabel said. “Its intrinsic qualities mean it needs to be treated differently.”

The prosecutors cited illegal activity linked to digital currencies, the potential for tax evasion and technologies that can be used to obscure transactions as dangers for law enforcement. They dismissed industry arguments that their successful investigation of several criminal networks demonstrates that criminal activity is under control[...]

Vance endorsed the idea of requiring digital currency firms to obtain state money-transmitter licenses, while warning that such “action in and of itself may not be enough.” He said businesses that swap Bitcoin for traditional currency, for example, should have to conduct “enhanced due diligence” on customers.

As a first step, as I predicted, expect tumblers to be outlawed. From Bloomberg:

Vance and Zabel harshly criticized the use of Bitcoin “tumblers,” which accept a Bitcoin payment, and return the same amount with a new digital trail, obscuring its source. The process, which some virtual-currency enthusiasts embrace for privacy reasons, is sometimes called a “Bitcoin laundry.”

“In the cases I have seen they serve no other purpose than automated money laundering and identity concealers,” Zabel said.

Zabel also raised the possibility that Bitcoin could promote tax evasion as people use it to conceal dollars.

“The currency itself could become a form of tax haven, both for businesses and individuals,” he said.

Both Vance and Zabel dismissed objections raised by investors at the previous day of the hearing that recent prosecutions of alleged money-laundering efforts involving digital currency demonstrate law enforcement can handle the industry’s emergence. “It proves the opposite: this is a problem,” Vance said.

RomneyCare Result: It Takes More Than Two Months to See a Specialist Physician in Boston

Well, surprise, surprise. The city at the heart of the most government interventionist healthcare system has the highest wait times to see a specialist than any other place in the country.

 A survey of physicians nationwide found the average wait time for a new patient is nearly 19 days, according to FOX DC. But the longest wait time is in Boston, Massachusetts at 72 days.

Massachusetts is the home of RomneyCare, which is the precursor to ObamaCare. If ObamaCare is fully implemented, expect medical service shortages and wait times to soar. At some point, life expectancy in the United States is going to fall dramatically. That's the nature of government intervention poorer service at a higher price.

The Lincoln Cult Smears Against Me

Thomas DiLorenzo writes at LewRockwell.com:

How to Become a “Neo-Confederate”

After my book, The Real Lincoln, was first published in 2002 the Lincoln cult became very frustrated over the fact that every time they attacked me personally, lied about the contents of the book, denied plain, well-documented historical facts, and I responded to them on LewRockwell.com, my Amazon.com sales ranking skyrocketed.  It was #2 in sales on Amazon at one point.  So their Plan B was to simply engage in even more name calling by labeling me (and others associated with the Mises Institute) a “Neo-confederate.”  Of course, what they were attempting to do was to call us “slavery defenders” without saying so explicitly.  The New York Times happily continued this practice, as have the lying libertine losers who call themselves “cosmopolitan” libertarians.

So I thought it would be useful to review just exactly what I wrote about the Confederacy inThe Real Lincoln.  As can be determined by looking at the index, it is mentioned on exactly four pages of my 333-page book:

1.  On page 8 of the Introduction I wrote that “the Confederate Constitution outlawed both protectionist tariffs and internal improvement subsidies . . .”

2. On page 240 I covered the same ground by writing that “protectionist tariffs were outlawed by the Confederate Constitution,” and then I quoted the relevant passage from that document.

3. On page 251 I wrote that “The Confederate Constitution was incompatible with Lincoln’s (and the Republicans’) economic policy objectives.”

4.  The final mention is on page 273 where I once again mentioned tariffs and internal improvement subsidies, and added that “the Confederate Constitution . . . eliminated the General Welfare Clause of the U.S. Constitution.”

So there you have it.  That is the sum total of my “defense of the Confederacy” in The Real Lincoln.  Two pages after entry #4, at the top of page 275, I wrote:  “The one unequivocal good that came of Lincoln’s war was the abolition of slavery.”  But don’t expect the Lincoln cult, the totalitarians in the media, or the phony “cosmopolitan” libertines to ever mention such facts.

The Real Lincoln has now been in print for almost exactly twelve years.  To my knowledgenone of my critics has ever mentioned that the great Walter E. Williams wrote the foreword to the book.

WARNING Protect Your Savings: Stay Away from Obama's New MyRA Program

It's a trap. It will make your savings highly visible to the government, very vulnerable to future special taxes and it drives investments in the direction of financing the government with your savings, rather than the productive private sector. That's what myRA is all about.

Here's how Treasury Secretary Jack Lew explains myRA:

You will be able to start saving with an initial deposit of as little as $25 and contribute as little as $5 each payday.  If an employer chooses to participate, contributions are made through automatic payroll deductions, making them hassle-free.

There are no fees—100% of any contribution goes into the account and is invested in a Treasury security.  That means it will be backed by the full faith and credit of the United States, will earn the same interest rate that is available to federal employees for their retirement savings, and the balance will never go down.

The interest rate on myRA is going to be the same as the one paid by the Thrift Savings Plan Government Securities Investment Fund. The TSP itself admits about this interest rate:

The G Fund is subject to inflation risk, or the possibility that your G Fund investment will not grow enough to offset the reduction in purchasing power that results from inflation

In other words, it's a terrible investment. The US is on the edge of bankruptcy and the only way they can avoid bankruptcy is to print more money. Thus, a loan to the government (which is what this is), and without major protection against inflation, is a terrible idea. And it is going to be run by a crony Wall Street firm. A private-sector money management firm is going to be chosen by the Treasury to run the program.

Think about this.

Do you really want to place your money in the hands of an Obama-Lloyd Blankfein type money management team?

The President signs the presidential memorandum directing the Treasury to create myRA.

Bernanke's Highlight Reel

• The Federal Reserve jumped in and bailed out "too big to fail" banks that made bad business decisions.
• The Fed continued to buy Treasury bonds in order to keep interest rates down.
• The Fed openly acknowledged that their policies force seniors to put their life savings at risk.
• Around 25% more baby boomers and Generation Xers will not have enough money because of Fed policies.
• The Fed is creating a stock market bubble that will eventually burst.
• Bankers are making record profits and paid out record bonuses for 2013.
• Bernanke left behind a 100-year money supply that is continuing to double annually.

(From Miller's Money)

Just What I Feared: Republicans Have an Obamacare Replacement

Republicans aren't about free markets, they are about central planning that favors their cronies over Democrat cronies.

Here are highlights from a WaPo report:

Republican Sens. Richard Burr (R-N.C.), Tom Coburn (R-Okla.) and Orrin Hatch (R-Utah) released Thursday what is arguably the most complete Obamacare replacement plan offered by their party to date.
---
The replacement plan has structural similarities to Obamacare.
---
Both Obamacare and the replacement plan include tax subsidies for low- to middle-income Americans, although they're structured a bit differently. The Republican replacement plan would let Americans use tax credits to purchase insurance coverage if they earned less than 300 percent of the poverty line (about $36,000 for an individual). Subsidies in Obamacare go up to 400 percent of the poverty line. The Republican plan envisions anyone below 300 percent of the poverty line qualifying for these subsidies, whereas Obamacare has those who earn less than 133 percent of the poverty line (about $15,000) become eligible for Medicaid.
---
 The biggest, most significant difference between Obamacare and the replacement plan is about financing -- how you pay for all those insurance subsidies. The replacement plan repeals a whole slew of industry taxes that had the insurance companies, hospitals and medical device makers all helping to foot the bill. Those are gone. In their place is a limit on the the tax exclusion for employer-sponsored insurance.

Right now, the federal government does not tax health insurance when it is provided to an employee by an employer. The Republican plan would limit the tax exclusion to 65 percent of the average health insurance plan. Any amount of a premium beyond that amount would need to be paid with post-tax dollars. There's no estimate on how many people this would effect and how much more they would pay for premiums, but Republican Senate aides do say it's true that people who receive more robust policies from their employers would pay more for premiums.
---
People -- especially the 56 percent of Americans under 65 who get their insurance through their employer -- tend to hate the idea of ending this health insurance tax exclusion because it means the same exact health benefit package they get right now could get a whole lot more expensive.

The full report is here.

What The Hell Is Going On With Germany's Gold Held by the NY Fed?

Rick Rule tells it like it is with regard to the multi-year delay before Germany will be able to get all its gold back to its home country that is now being "stored" in the United States at the Federal Reserve Bank of New York.

During an interview with King World News Rick Rule asked the big question and made some very important points:

 “Every time I see something about gold in the mainstream media I’m afraid we haven’t hit a capitulation point yet.  But the questions they are asking about the gold market are good questions.  I can’t help but wonder why it takes them seven years to get delivery when the Germans want 1,200 tons of gold that they’ve already paid for....

“When the Chinese go into the market and buy gold, they get delivery of 1,120 tons of gold in one year.  This doesn’t make any sense to me.

The most obvious explanation is that the gold  stored for the Germans has been hypothecated or lent (and already sold into the market).  So the US Fed has to receive it back from its loans before they (the Fed) can give it back to the Germans.

It is interesting to me as an American citizen, and by the way a substantial taxpayer, that the government doesn’t think I have a right to know this.  They don’t think that I have a right to understand anything with regard to the gold that is allegedly stored in Fort Knox on my behalf as a US citizen.

I would prefer to know that and I’m sure German citizens would prefer to know that.  But for some reason the Fed has chosen not to make that information available to us.  I think questions like that are big enough questions and obvious enough questions that they are even of interest to the readers of major metropolitan dailies.”

Read more here.

Listen to my recent in-depth interview with Rick Rule here.

A New Even Messier Ending to Paul Krugman's Babysitting Co-Op Theory of Economics

I have discussed several times the misinterpretation by Paul Krugman of the babysitting co-op story, a story which is, according to him, at the foundation of his understanding of how economies work,

See:

 Now Krugman on Mises Monetary Mental Disorder

The Krugman Economic View Built on a House of Babysitting Coupons

In Review: Paul Krugman's New Book

But, it turns out there is even more damaging news about his co-op story. Tim Harford in his new book, The Under Cover Economist Strikes Back, hunted down the original telling of the story, which ends differently than the way Krugman leaves off the story and shows what a sneak Krugman is. I'll let Harford tell the story:

Ahem.Well, it's time for that twist in the tale I promised you. Unfortunately, this parable is a little bit messier than Professor Krugman's most recent telling suggests. In his book End This Depression Now! he neglects to mention how the story ends. Alas, the ending is not a happy one. The co-op botched their monetary reform.They lurched from a situation where the scrip was too small and shrinking, to a situation where the stock of script was just perfect--but growing. As the Sweeneys put it in their original article, "After a while, it naturally followed there was too much scrip and more people wanted to go out than to sit." 

When once nobody had been willing to go out, now nobody was willing to stay in. The end result was the same: a babysitting recession, in which fewer evenings of babysitting were exchanged than co-op members would have wanted. Burned by their botched experiment with printing more scrip, the co-op committee refused to countenance further monetary approaches to the problem, and turned to crude legalistic tactics. As the Sweeneys dryly commented in 1977, "A truth squad is envisaged to find out why indivividuals aren't sitting enough."

I point out in my earlier posts that the babysitting coupons aren't money, but, there is another lesson here in Harford's expanded telling of the story, centrally planned coupon printing goes on to lead to more interventions.

In others, what occurred in the babysitting coupon adventure is what Ludwig von Mises warned about with regard to all interventions, when he wrote: "It is indeed one of the principal drawbacks of every kind of interventionism that it is so difficult to reverse the process." One intervention begets another. The co-op goes from a botched centrally planned coupon printing scheme to resorting to legalistic tactics, i.e., more interventionism. Curiously, Krugman, the sneak, leaves this part of the story out, so it becomes difficult to understand how great a mess the coupon printing escapade was from start to finish.

Millionaire Asked Ex-Wife to Stay on as Housekeeper

A businessman asked his ex-wife, after their divorce, if she would stay on as his housekeeper when he installed another woman in the home, a High Court judge was told, reports the UK's Telegraph.

The man could not understand why his former wife became “so aggressive” when he informed her of the new arrangements, the court heard.

On Wednesday Mr Justice Bodey ruled that she was entitled to nearly half of her former husband’s £13.6 million fortune.

The Telegraph did not name the businessman and only reported that the man is in his 70's and that it is understood he has "interests in a portfolio of property in London."

Is It Time for Paul Krugman to Start Reading Serious Austrian Economics Literature?

Joe Salerno says, "Yes," here.

Murray Sabrin Considering Run for US Senate

Occasional EPJ Contributor, Murray Sabrin emails:

I am considering seeking the GOP nomination  to take on Cory Booker [in New Jersey].  I will make a decision in the next couple of weeks.  

 http://www.nj.com/politics/index.ssf/2014/01/ramapo_college_professor_murray_sabrin_considering_us_senate_run.html#incart_river

[...]  If I do it, I want to create the grand coalition, Rs, conservatives, libertarians, independents and pissed off Ds.  The platform would be free enterprise, not cronyism, uncompromising support for the Bill of Rights, a noninterventionist foreign policy and no more legal counterfeiting.  

I replied:

 Murray,

This is a great idea, if you are considering using such a platform to advance hardcore principled libertarianism. If you go Rand Paulian on us and hedge your views in the hope of getting elected, it is a terrible idea.

Best,
Bob

For my take on running for office, see: How to Run for Office Like Ron Paul

UPDATE

Murray responds to my email:

Thanks Bob.  I am going to let it rip if I enter the race.  Antiwar sentiment is high in NJ as is support for civil liberties.  Unfortunately, there is too much support for economic intervention even among Rs.  I will lay down my conditions with GOP party leaders in the next few days.  

Regards,Murra

Bezos Launching Major Expansion at the Washington Post

WaPo reports on itself:

The Washington Post has significantly increased its budget and plans to make dozens of newsroom hires under its new owner, the Amazon founder Jeffrey P. Bezos, the paper’s executive editor, Marty Baron, said in an interview on Wednesday.

Mr. Bezos has closely consulted with The Post’s leadership in plotting its growth strategy and the moves represent Mr. Bezos’s “first mark on the paper,” Mr. Baron said.

The Post will introduce several initiatives this year, Mr. Baron said in a memo to his staff on Wednesday. There will be five new politics reporters as well as photo editors, data visualization specialists, news desk staff and web designers. It will add a breaking news desk and a Sunday style and arts section, as well as a revamped Sunday magazine that will be “bigger in dimension and in the number of pages, with a new design and a range of new features.”

RELATED COVERAGE

The Media Equation: As I Was Saying About Web Journalism ... a Bubble, or a Lasting Business?JAN. 29, 2014
The plan will be executed quickly — interviews for new hires began weeks ago — and represents “a substantial expansion of the budget,” Mr. Baron said, though he declined to provide precise figures.

Shortly after Mr. Bezos bought the paper, Mr. Baron and other senior staff were “asked to come up with ideas for what we wanted to do,” Mr. Baron said. In late October, he and several colleagues flew to Bellevue, Wash., to meet with Mr. Bezos and present the plan. There were also conference calls and email exchanges, as well as in-person meetings at The Post’s offices in Washington.

Mr. Bezos would “just challenge our assumptions, cause us to rethink things,” he said. “He’s spent his entire life and his entire career thinking about where the consumer will be in the long run, and where the technology will be in the long run.”

The crucial question, and the one that preoccupies Mr. Bezos, Mr. Baron said, is, “How do we produce growth?”

“And obviously our growth,” said Mr. Baron, “as well as the growth of institutions like The New York Times is likely to come from the digital arena.”

There has been fervent speculation about Mr. Bezos’s intentions since August when he announced that he was paying $250 million in cash to acquire The Post. Many hoped he would try to reinvent the ailing newspaper business just as he had revolutionized retail at Amazon.com.

Mr. Baron said he believed that Mr. Bezos “was purchasing The Post in order to make more of it, rather than make less of it.” That became clear in their discussions about the paper’s initiatives. “His entire business history is oriented around growth,” Mr. Baron said.

Mr. Bezos has not weighed in on individual hires, Mr. Baron said, but his involvement has been more at a strategic level, discussing the paper’s priorities and goals.

“He hasn’t been passive,” Mr. Baron said. “He’s heavily engaged, keenly interested in what our ideas are. He offered his own thoughts and expressed a willingness to invest.”

The key here will be who WaPo hires for the new reporting slots? Will it be more of the same, establishment mouthpieces?

Walter Block: How NYT Mischaracterized My Views on Slavery (And What I Tried To Do About It)

Reply to the Scurrilous, Libelous, Venomous, Scandalous New York Times Smear Campaign
By Walter Block

The “Rand Paul problem” from the point of view of the New York Times and other such “progressives” is that he is far too clean. He does not shut down traffic lanes leading to the George Washington Bridge. He has no mistresses nor any love children. He has not stolen vast amounts of money; heck no money at all. He has not put his foot in his mouth regarding witches or rape or “read my lips” or anything else for that matter.

These people greatly fear a Rand versus Hillary confrontation in 2015. The former could “out-left” the latter on war, imperialism, victimless crimes, and “out-right” her on economic liberty, the second amendment and private property rights. Rand has a better shot at beating Hillary than any other plausible Republican candidate, and, it would appear, the time to grease the skids is now upon us.

What is to be done, then? Why, defame Rand directly of course, but also besmirch him not for anything he has done, but line up a bunch of people who could in any way be associated with him, attack them, and imply that Rand is somehow responsible for their actions. The not so hidden agenda here is that, really, Rand agrees with all of them, although he is too sneaky to come out and say this. The candidates for this operation? Ludwig von Mises, Murray Rothbard, Lysander Spooner, Hans Sennholz, Ayn Rand, Karl Hess, Ron Paul, Lew Rockwell, Tom Woods, Jack Hunter, Gary North, Alex Jones, and me. My only surprise is that Tanenhaus and Rutenberg, the authors of this disgraceful hit piece did not dig deeper. I am sure that if they had, they could have come up with some dirt on Rand’s plumber, or baby sitter, or gardener, or grocer, etc. Surely, one of them, or a family member or a friend of theirs, did something reprehensible that can be pinned on Rand, with just a little body English, for which the New York Times is justly famous.

Tanenhaus and Rutenberg have delivered themselves of an outrageousattack on Rand Paul, the Mises Institute, and several Austro-libertarian scholars associated with both. In this response, I shall focus only on the injustice perpetrated on me; the other (living) targets are fully able to reply, if they wish to do so, on their own. (For Lew Rockwell’s incisive response in behalf of the Mises Institute, go here. Bob Wenzel’s responseis also excellent.)

If I had to summarize their essay in the form of a syllogism, at least as it refers to my small part in it, it would be this:

a. Rand Paul is a libertarian

b. Walter Block is a libertarian

c. Walter Block says that slavery was “not so bad.”

Therefore

d. Rand Paul believes that slavery was “not so bad.”

This attempt to smear Rand Paul’s possible campaign for the presidency of the U.S., to say the least, is an invalid form of argument. It is worse than silly, no? And, yet, it would appear, that is the conclusion the New York Times is attempting to draw. To see the invalidity of this mode of argument, try this one on for size:

a. Rand Paul is a libertarian

b. Walter Block is a libertarian

c. Walter Block says that Mozart was the best music composer and Ayn Rand the best novelist.

Therefore

d. Rand Paul believes that Mozart was the best music composer and Ayn Rand the best novelist.

While I have no problem with premises (a) and (b) above, here is what I actually published about slavery not being “so bad,” and precisely what I was trying to convey to Mr. Tanenhaus in the several hours of interviews I did with him in an effort to explain libertarianism to him:

The Top Ten Ron Paul #SOTU Tweets

The terrorists want to attack us because we are still killing civilians with drones… - RP
— Ron Paul (@RonPaul) January 29, 2014

Sanctions are an act of war and is a dangerous policy. -RP #Iran #SOTU
— Ron Paul (@RonPaul) January 29, 2014

Education is not a responsibility of the Fed. govt. It is a responsibility of parents. -RP
— Ron Paul (@RonPaul) January 29, 2014

He sure can't accomplish peace by propping up Al Qaeda in Syria… - RP #SOTU
— Ron Paul (@RonPaul) January 29, 2014

Looks like the global war on terror will continue w/ troops remaining in over 100 countries - this is where our problem is. - RP #SOTU
— Ron Paul (@RonPaul) January 29, 2014

Price controls always lead to shortages and rationing - it has already started and will only get worse. - RP
— Ron Paul (@RonPaul) January 29, 2014

The applause on foreign policy is bipartisan and that is not a good thing… - RP
— Ron Paul (@RonPaul) January 29, 2014

The only real solution is to get rid of the income tax and repeal the 16th amendment. - RP #SOTU
— Ron Paul (@RonPaul) January 29, 2014

But how many millions have lost their insurance since Obamacare went into effect?? - RP
— Ron Paul (@RonPaul) January 29, 2014

There is no oppritunity without liberty! - RP
— Ron Paul (@RonPaul) January 29, 2014

Bitcoin Civil War: Moneyed Interests Are Taking Over the E-Currency and Dumping the Libertarians

The result will be government regulation of Bitcoin.

Rob Wile at Business Insider has the important story. It seems that Even Fred Ehrens of CoinBase is throwing the libertarians under the bus. To the degree Bitcoin survives, it is going to be a government regulated instrument. Here's Wile:

A civil war is emerging between Bitcoin's earliest and most libertarian adopters, and a more moneyed wing seeking to embrace regulation as a means of legitimizing Bitcoin commerce.

The divide came into focus this week with two key events events. One was a hearing on Bitcoin regulation by the New York Department Of Financial Services. The other was the arrest of BitInstant CEO Charlie Shrem on money laundering charges.

Until the moment of his arrest, Shrem, 24 had been something of a darling in the Bitcoin venture capital community — the Winklevoss brothers were one of BitInstant's earliest investors, and Shrem was scheduled to co-headline a Bitcoin conference in Miami this past weekend. 

But on the first day of hearings about the future of Bitcoin regulation convened this week by the New York Department of Financial Services, a panel of VCs were quick to disavow Shrem as an example of a more immature wing of Bitcoin. The Winklevoss twins said they were gratified the Department was discussing ways to help legitimize Bitcoin commerce. Their Bitcoin ETF is awaiting regulatory approval from the SEC.

Bitcoin was founded as a "currency" free from any central authority, and quickly gained popularity among internet idealists and anti-government types, many of whom were the digital version of goldbugs. 

Perhaps it is not surprising that this ultra-libertarian faction was not represented at this week's hearings.

But it could be seen at the NYC Bitcoin Center on Broad Street in Manhattan — where a follow-up cocktail party was held Tuesday to discuss "fallout" from the first day's hearing — and online, where this faction railed from afar against regulators.

  

These individuals may seem extreme, but, until recently, they represented the core of Bitcoin evangelism.

But their influence seems to be fading. The division may come down to those whose businesses run on Bitcoin, and those looking merely to advance its decentralized spirit.

Fred Wilson — whose Union Square Ventures spearheaded a $5 million investment round in Bitcoin wallet firm Coinbase — comes the closet to straddling both worlds.

On Tuesday, Wilson warned against anything but the lightest-touch regulations, comparing the dangers Bitcoin startups would face to what happened to early-stage music streaming platforms, which were inundated with lawsuits from record labels. Should Bitcoin startups be subject to similar legal scrutiny from financial regulators, he said, they would be snuffed out before they even had a chance to bloom.

Wilson's views were countered by no less than Fred Ehrens, Coinbase's co-founder, who told  DFS regulators Wednesday, "Although I love Fred Wilson, there's probably some minimal requirements and procedures that should be put in place if you're facilitating that kind of exchange." 

Barry Silbert's Bitcoin Investment Trust is now worth 10s of millions of dollars. In an email Wednesday, he said he agreed the crypto-anarchists who dominated the digital currencies earliest incarnations were getting left behind.

"There are certainly a handful of folks that are hardcore libertarians (some anarchists) that believe that bitcoin should be completely unregulated, but I believe they are in the minority and, as a percentage of bitcoin believers, is shrinking very quickly.  I respect their viewpoint, but unfortunately, don’t see how there vision is viable in today’s society."

More here.

“Other Perverts”

By Laurence M. Vance

The Mises quote from Human Action that Tom DiLorenzo brought to our attention is a fine one for discussing the nature of libertarianism. Mises referred to “fetishists, homosexuals, and sadists” as “other perverts.” Libertarianism, in the words of Murray Rothbard,

is not and does not pretend to be a complete moral, or aesthetic theory; it is only apolitical theory, that is, the important subset of moral theory that deals with the proper role of violence in social life. . . . Libertarianism holds that the only proper role of violence is to defend person and property against violence, that any use of violence that goes beyond such just defense is itself aggressive, unjust, and criminal. Libertarianism, therefore, is a theory which states that everyone should be free of violent invasion, should be free to do as he sees fit except invade the person or property of another. What a person does with his or her life is vital and important, but is simply irrelevant to libertarianism. It should not be surprising, therefore, that there are libertarians who are indeed hedonists and devotees of alternative lifestyles, and that there are also libertarians who are firm adherents of “bourgeois” conventional or religious morality. There are libertarian libertines and there are libertarians who cleave firmly to the disciplines of natural or religious law. There are other libertarians who have no moral theory at all apart from the imperative of non-violation of rights. That is because libertarianism per se has no general or personal moral theory.

This is a point lost on some libertarians. They broaden libertarianism to mean acceptance of alternative lifestyles and rejection of moral absolutes. Thus, if you say something negative about same-sex marriage, homosexuality, gay pride parades, evolution, abortion, paganism, Islam, black crime and illegitimacy rates, the Union, hedonism, feminism, rap music, etc., then you are accused by some broadminded, cosmopolitan libertarians of being a fascist who is aggressing or wants to aggress against the persons who favor these things. Of course, nothing could be further from the truth. One can despise any or all of these things and be perfectly tolerant and peaceful toward them. Libertarianism is not a lifestyle. And as my Jewish atheist friend Walter Block has written, libertarianism is not libertinism.

The above originally appeared at LewRockwell.com.