Rand Paul Calls for Kreuger to Step Down Before He Even Starts as Head of the CEA

Rand Paul has issued the following statement on President Obama's nomination of Alan Kreuger to head the Council of Economic Advisers:

Alan Krueger is nothing more than an extreme government interventionist, cut from the same cloth as those who have failed to correctly predict, diagnose, and manage our economic problem. During his tenure at the Treasury Department, Alan Krueger helped design the ‘Cash for Clunkers’ program and even supported a European style value-added tax that would raise prices on American families.

This repetition of bad economic decisions by the President and his advisers could be described as the epitome of insanity – doing the same thing over and over and expecting a different result each time. Hasn’t the President realized we don’t need more big-government Keynesians in Washington saddling the American taxpayer with trillions in debt? The President’s economic policies have been an abysmal failure. His economic advisers have helped lead to these failures.

I have called for Treasury Secretary Tim Geithner to resign, and I am now calling on Alan Krueger to step down before he even begins his new role, before any more damage can be done to the American economy by this Administration.

Bizarrely, Kreuger has argued, along with David Card, that increases in the minimum wage do not increase unemployment among teenagers and other unskilled workers.

Aside from the entire methodological question of whether empirical studies can be used in the social sciences to discover economic theory (See: The Counter Revolution of Science), the Kreuger-Card study was extremely sloppy.

According to the Employment Policies Institute:

Economists have long believed that raising the minimum wage results in fewer entry-level employment opportunities and displaces the least skilled from the job market. In recent months, proponents of a higher minimum wage have returned to one study which they claim shows the opposite -- that higher minimum wages do not reduce, and may even increase, employment. The New Jersey fast food study, conducted by Princeton economists David Card and Alan Krueger, has been cited by everyone from the Secretary of Labor on national television to key Democrats debating the issue on the floor of the U.S. Senate.

Normally, the fact that politicians refer to an economic study does not make news. But this case is different: the New Jersey fast food study has been proven wrong. It is based on seriously flawed employment data. The data set used in the New Jersey study bears no relation to numbers drawn from the payroll records of the restaurants the New Jersey study claims to cover.

The New Jersey study was wholly discredited more than a year ago when this new information came to light. The media reported on the study using terms such as "snake oil," "dubious numbers," "grossly inaccurate," and "plain wrong." For months, no public figure dared mention the study to support a higher minimum wage. Today, however, leading policymakers are again citing the New Jersey study as fact. These individuals have chosen to ignore reality, intentionally misleading the public and attempting to set public policy on the basis of discredited research.
It is time to set the record straight -- again. The following can be summarized in three simple statements:

1. The New Jersey fast food study has been re-estimated using payroll records rather than the badly flawed telephone surveys used in the original study. The results, compiled by independent economists, are not surprising: there was significant job loss stemming from New Jersey's decision to increase the state's minimum wage in 1992.
2. Since the release of the first edition of this report (April 1995), additional problems have been identified in the Card-Krueger data set -- particularly in their attempts to measure price fluctuations as a response to increases in labor costs.
3. The data base used in the New Jersey fast food study is so bad that no credible conclusions can be drawn from the report.

The truth about the New Jersey fast food study is clear and irrefutable. The data and the conclusions of the study are seriously flawed. It is unconscionable for those who set national minimum wage policy to ignore this evidence and mislead the American people

Given the sloppy research conducted by Kreuger, and the unsupported interventionist beliefs of Kreuger, Rand Paul is fully justified in opposing this man as a top adviser to the President.

Only  misguided leftists and union leaders attempting to block competition from cheaper labor and banksters would be in favor of Kreuger as a key adviser.

Obama Blinks

Following objections from the Ron Paul campaign and a letter from House Speaker John Boehner, President Barack Obama has agreed to move the date of a speech before a joint session of Congress back one day to Thursday, September 8th.

Originally, he planned to deliver the speech on September 7th, which would have conflicted with a debate of Republican presidential candidates.

Conspiracy Theory: The U.S. Muscles Japan

Lew Rockwell has a fascinating theory behind the US harassment of Toyota. He writes at the LRC Blog:

Allen, I am convinced that part of the US scheme to maintain its occupation and control of Japan was the sneak attack on the great Toyota car company. The vicious aggression quickly arose—OMG, runaway Priuses are killing people!—and disappeared just as quickly, once the Pentagram had its way. Of course, it was always a coordinated farrago of lies and humiliation. Just another reason never to believe anything the state-media complex dishes out.

Ron Paul "Weighing his Options" Over Debate-Blocking Presidential Speech

President Obama has scheduled his address to a joint session of Congress to discuss his plans for the economy at the same time as a scheduled Republican debate, September 7.

Salon's David Weigel has reaction from the Ron Paul campaign:

Something to watch, even though it might come to nothing: The Congressional Option that could scuttle President Obama's big speech next week. The president has requested a joint session of Congress in order to give a speech about the economy and jobs. Two current presidential candidates, Michele Bachmann and Ron Paul, are in Congress, and scheduled to appear at a debate at the same time Obama's speaking, on the opposite side of the country. And a member of Congress can object to the president's request.

So, will they? Paul's campaign got back to me first.

"Dr. Paul is weighing his options," says the congressman's campaign spokesman, Jesse Benton. "Our campaign, however, thinks it is undignified that the President of the United States would resort to such transparent tactics to step on our Republican debate. The real losers here are the American People who deserve the opportunity to hear from both the President and the GOP contenders."

The Marxist at UBS and His Confusion

George Magnus, Senior Economic Adviser at UBS is a Marxist. FT has given him space to write an article which includes such gems as:

Marx analysed and explained insightfully how and why capitalism would succumb to recurrent crises, and especially big ones after a credit bust.

Let's be clear about a few things. The current financial crisis was caused by the on again, off again, money printing by central banks, such as the Federal Reserve.

Austrian business cycle theory fully explains the crises. Indeed, if one understood ABCT, you could have seen the current crisis coming in real time. (See here, here, here, here, here, here, here and here.)

Marx theories were a combination of bad economics, mixed with bad political theory, all wrapped with a Hollywood happy ending:

...in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, shepherd or critic.

As far as Marx's so called forecast of the crumbling of capitalism. He saw it first developing by the proletariat taking political control. In the Communist Manifesto, Marx and Frederick Engels wrote (My emphasis):

We have seen above, that the first step in the revolution by the working class, is to raise the proletariat to the position of ruling as to win the battle of democracy. The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralise all instruments of production in the hands of the State, ie, of the proletariat organised as the ruling class, and to increase the total production of forces as rapidly as possible.

Once the proletariat is in charge Marx/Engels see 10 steps the proletariat should generally implement to put the world on the road to bliss, including, as first steps, a graduated income tax and a central bank:

Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.

Thus, the Federal Reserve can be seen as Marxist-lite. The quantity of credit in the economy is controlled by the Fed (via control of the money suuply), but the recipients of the credit are not as directed by the Fed. But it is the contol of the quantity of credit that results in the business cycle, as money supply is first increased and then the money growth is slowed or stopped entirely.

In other words, it is the Marxian notion of a central bank controlling credit activities that is at the heart of the Fed. And these central bank activities are what cause the business cycle. So to Marxists like Magnus who claim capitalism is failing and that "Marx-is-relevant school", the response should be, "Yeah, we know what Marxist central banking is all about. It's not capitalism. It's government control. Further we have been there, done that with the Fed and it sucks."

The Coming Infrastructure Bank as an Off-Balance Sheet Scam

WSJ explains what the Infrastructure Bank scam will be all about:

Here's a novel idea: Have Congress create a "bank" that could borrow huge sums with only a small federal outlay and would be independent of any political interference. If you believe in this miracle, you probably thought Fannie Mae was a private company that wouldn't cost taxpayers a dime.

We're referring to Washington's latest marketing tool to sell spending to a skeptical public, a new federal "infrastructure bank." For the low, low price of $30 billion or so, President Obama says Congress can conjure hundreds of billions in new "grants and loans" to rebuild "roads, bridges, and ports and broadband lines and smart grids."

He says the bank would put "all those construction workers" back to work and "be good for the economy not just for next year or the year after that, but for the next 20 or 30 years." In a cats and dogs living together moment, the Chamber of Commerce and the AFL-CIO are both in favor. Since both unions and construction companies would be beneficiaries, this alone ought to give taxpayers pause.

This is the Fannie Mae model applied to public works. The new bank would be a government-sponsored enterprise, or GSE, whether or not anyone admits it. The bank would have an implicit subsidy for its debt because it is backed by the government. And the debt it issued would be "off-budget," which means it wouldn't show up in annual outlays. When she first proposed the concept in 2008, Connecticut Democrat Rosa DeLauro explicitly described the bank as a "public private partnership like Fannie Mae."

Such an outfit will inevitably be politicized, as similar examples have been all over the world. Japan's postal bank has been used for decades to finance public works. Japan's roads and bridges are grand but its economy has grown little in 20 years. Agribanks, regional development banks, Brazil's BNDES national bank have all become vehicles for the political allocation of credit.

Note the support of  this monstrosity by the Chamber of Commerce. Never mix up the CC with limited government, when the money flows inward to CC members the CC has no problem with government spending and scamming.

Conrad Black: My Life in the Slammer

Via Vanity Fair.

“The myth is that the price war put so much pressure on our profits that I was forced to steal money to maintain my opulent lifestyle,” Conrad Black tells Vanity Fair’s Bryan Burrough. “It’s part of the whole News Corp. mythmaking apparatus,” he explains. “It was Rupert, you know. He originated that one. He certainly parroted it. Rupert always says reasonably nice things about me, but then he throws in something like that for effect. I don’t really blame Rupert. He’s not a non-friend. Rupert is just Darwinian.”

Black opens up to Burrough about every aspect of his experience in jail at Coleman Federal Correction Complex where he served for over two years and where he is likely to return this fall. “I’m not embarrassed in the least bit I was in prison—not the slightest,” he says. “There’s nothing to be embarrassed about. You can’t talk to Martha Stewart about it, or Alfred Taubman. They didn’t see it as I did, as a nightmarish change in careers. I see it as a temporary vocation.”

“I quickly developed alliances with the Mafia people,” Black says, “then the Cubans. I was friendly with the ‘good ol’ boys’ and the African-Americans. They all understood I had fought the system, and I do believe I earned their respect for that. Everyone got along,” he says, “except with the child-molesters. There was the occasional scuffle there, I heard.” He recalls the welcome he received from a senior member of the Genovese crime family: “No one will bother you here. If you catch a cold, we will find out who you got it from. You know, we have much in common .… We are industrialists.”

“The myth, in all the Canadian papers, was that I would not hold up in prison, that I would be physically and sexually abused …. I realized, well, it would be a little tedious, but it wouldn’t be difficult to endure.” He recalls the indignities of anal inspections, telling Burrough: “[I] was slightly mystified at the extent of official curiosity about that generally unremitting aperture.” He describes cleaning prison shower stalls, a form of punishment at Coleman: “It wasn’t terribly exciting work. You just put soap on the wall and focus a hose on it. There was a social component to it, however. All of these guards from all over coming into the shower to watch this millionaire clean the shower. I said, ‘Captain, I get the sense you are watching the Super Bowl here, that this is a spectator sport. I assure you, this is nothing so entertaining.’”

Read the rest here.

Bad Theorizing; Failing to Understand the Broken Window Fallacy

Gene Callahan has crash landed once again at his own site, in an attempt to prove that the Broken Window Fallacy doesn't apply under all circumstances.

He begins with this model construct:

Let us imagine an isolated valley. In that valley live an extremely wealthy loner, in a vast mansion with extensive grounds, and a large number of extremely poor subsitence[sic]farmers. They had been prosperous during the days when the loner had been constructing his estate, but now he is done, and there is no other work around.

Then a hurricane comes:

It causes extensive damage to the loner's estate. Suddenly, he has need to employ all of those other people in the valley again. The economy "picks up."

Callahan's conclusion:

Now, economic science has nothing to say about whether the valley is better off after the hurricane than it was before -- doing so would require interpersonal comparisons of utility. But it is clear that there is now more economic activity than there was before.

The point of this? Bastiat's "broken window fallacy" is not an a priori truth.

The problem with Callahan's theorizing is that he misses the point of the "Broken Window Fallacy". It is not that there is "now more economic activity than there was before." After destruction, there is always likely to be "more economic activity than there was before" in certain sectors. That a window is broken means that the window maker has more activity. But the point of BWF is that there is other activity that does not occur because of the broken window (or hurricane). What needs to be looked at, and what Callahan fails to look at, is what this loner would be doing with his money if he didn't have to pay it out to the local valley farmers to fix the destruction caused by the destruction. Would he be investing the money, which would likely increase the standard of living for himself and others? Would he now not be able to buy some caviar that he had planned on doing before the hurricane struck?

So when Callahan writes:

The point of this? Bastiat's "broken window fallacy" is not an a priori truth. It is more or less true, depending on the amount of crowding out that occurs in repairing the broken window. I have carefully contrived a scenario with 0% crowding out.

Callahan's model does nothing to make his argument. He has no idea what "crowding out" will occur. Nothing in his scenario says anything about 0% crowding out. We don't know, based on his model, what opportunities have been forgone by the rich loner. Destruction may bring more activity for some, in Callahan's model the valley farmers, but BWF is about the unseen activity, which Callahan has missed, as have all those before him who have not understood BWF.

Bottom line: If someone uses money to repair damage, that is money that is not used somewhere else.  A non-100% "crowding out" scenario sounds to me like some type of wacko Keynesian model where wage and other markets don't clear. Clearly, Callahan is going in this direction when he writes:

...100% crowding out...is implausible (at least in a recession), but not impossible.

If money is redirected because of damage, it sure as hell results in less money somewhere else, regardless of the unemployment situation. BWF holds. (Even  if the loner was hoarding the money as part of his cash balance, it means the loner now has a lower cash balance, which presumably would mean he considers himself less wealthy.)

The Attack on Gold Escalates: NYT Columnist Wants to Stop the "Gold Bubble"

They ignored the internet bubble and the housing bubble, but they are now talking about stopping the "gold bubble". In NYT, Steven M. Davidoff writes (my emphasis):

....it is sometimes referred to as the barbarous relic. You can’t eat gold. Its industrial uses are limited. If someone else doesn’t assign the same value to gold that you do, you are out of luck. For those who predict it will be valuable if society completely collapses, guns and canned goods might come in handier...

The commodities regulator, though, could force American exchanges to further raise margin requirements, reducing leverage and the ability of investors to buy more gold. The agency would also have to act to limit the gold acquired individually and by the E.T.F.’s. All of these measures would have to be coordinated and put into effect on a global basis.

...if regulators are going to stop the next bubble, they will need to act aggressively. Of course, they shouldn’t act in every circumstance, but when we see volatility and speculation as is the case of gold, acting to curb these forces through limiting leverage in cooperation with international regulators would be a prudent course. This would ensure that if a crash does come, it does not have aftereffects on banks and other institutions. Even if the Commodity Futures Trading Commission is hesitant to take such steps, it could, as an initial foray, take to the media to try to “talk down” the speculation.

Otherwise, we’re left hoping, without much basis, that people have learned that this time will not be different, something not much in evidence in the case of gold.

Here are a few things Davidoff doesn't get (or doesn't want to publicly admit) about gold. It is an alternative to paper money as a medium of exchange. Given that governments around the world have mismanaged their currencies and debt, it is extremely prudent for people to own gold, as a hedge against further mismanagement. Only a small percentage of investors own gold, but the number is growing. That, plus continued paper money printing, is the main reason it is going up in price. I have argued that these two factors could push gold to $25,000 per ounce. People are damn scared, it is not a boom in the sense that people are flocking to gold to make money. They are flocking to gold to protect themselves financially. The argument that you can't eat gold is an absurd argument. You can't eat paper money either (Though it may have an edge over gold as toilet paper).

If Davidoff was serious about halting the flight into gold, he wouldn't be calling for infringing on the basic right of  the people to own gold. He would be calling for the end to government policies that are creating the flight to gold, namely, deficit spending, excessive taxation and government money printing.

Bottom line: Davidoff is a propagandist for the banksters who benefit from paper money and deficit spending. They know that gold is a check against their irresponsible activities and they are escalating their attack on gold.

Will Assange be "Suicided" in Prison?

Paul Craig Roberts writes:

Bob and Darin were on a panel together discussing banalities in generalities, as is the usual case. If either had said anything meaningful on the subject, the moderator would have cut him off.

Bob didn't know Darin. He was introduced as a former CIA official. Bob had heard back in those days when he was on the Congressional Budget Committee staff that Darin had once had a limited oversight position -- budget Bob seemed to remember it was -- over a black-op CIA group. When the moderator closed the panel, the two looked at one another and raised their eyebrows.  

Bob took advantage of the eyebrow connection to suggest that they have a drink. To his surprise Darin agreed.

Darin was remote and distant at first, but found the conversation to his liking as the two discussed the moderator's skill in avoiding delicate issues. In an abrupt change of subject, Bob asked Darin if the US government would assassinate Julian Assange. 

"Yes," Darin replied.

Bob followed up quickly with a question, which as he was asking it, he realized he should not be asking: "Does the CIA have an in-house assassination group or does the agency contract it out?"

Darin replied, "The CIA doesn't need to physically assassinate Assange. Washington will use the PATRIOT Act to override the First Amendment and bring a spy case against him. Currently, the British are going through their pretense that they have a rule of law, but if in the end law doesn't require that the Brits extradite Assange to Sweden, whose government will sell him to Washington, Washington will bring an extradition case based on charges that are being concocted in a grand jury in Alexandria, Virginia."

Bob asked, "You mean Assange will be tried and condemned to death?" 

"Possibly," Darin replied, " but Washington might be content with discrediting him. Washington would try him in Alexandria, Virginia, which has a high density of military contractors. If Washington concludes that the jury wouldn't convict Assange, then Assange will be "suicided' in prison."

"Is there anywhere Assange can go to escape the frame-up?"

Read the rest here.

An Important Observation from Tyler Cowen

The Federal Open Market Committee was scheduled to have only a one day meeting this month. It has been expanded to a two day meeting, September 20-21. There are perhaps two, maybe three, Fed members who don't want to see further Fed action. They are blocking further Fed action, so to speak

Tyler Cowen, apparently insightful into how bureaucratic gamesmanship is played, tweets:

Two-day Fed meeting is a way of setting up the skeptics to take a tumble, a blocking coalition never wants a longer meeting.

I can't disagree. The Fed is likely to announce some new action that will sound like money printing, though I doubt they really need to since they already have money supply increasing at an annualized 9.0% plus rate.

Israel and Iran Send Warships Near Egyptian Coast

Military sources tell AP that the Israeli Navy has sent additional warships to the maritime border with Egypt following intelligence indicating a viable terror threat.

On Monday, IDF Chief of Staff Lt.-Gen Benny Gantz ordered that deployment across the entire southern sector be bolstered, especially in the area near the Israel-Egypt border, following intelligence indicating an imminent threat.

Meanwhile, Iran is set to send 15th fleet to area ,'to thwart pirate activity'

“The presence of Iran's army in the high seas will convey the message of peace and friendship to all countries,” said Iran's Navy Commander Rear Admiral Habibollah Sayyari told

Louis Farrakhan with a Shout Out to Ron Paul

Check this out, Louis Farrakhan, head of the Nation of Islam, and discusses the founding of the Federal Reserve and mentions Ron Paul at roughly the 3 minute market.

Farrakhan has the Fed down. He has obviously been doing his homework.

Celente 100% in Gold; Rips Roubini

King World News has interviewed forecaster Gerald Celente about gold. Here are the takeaways:

I began trading gold in 1978 and my first buy was at $187.50 an ounce.  What’s not being talked about in this gold boom is what was going on back then that’s so different than today.  So as you hear people saying it’s a bubble (gold) and making comparisons, they really don’t know what they are talking about because they are leaving out a very important element.

Back then it was only the United States that was trading in gold and it was relatively new.  Let’s remember it’s ‘78 I’m talking about and Nixon had taken the US off the final peg of the gold standard in 1971, so the whole game was relatively new.  I remember how difficult it was even to learn how to play the COMEX markets or to buy gold, not many people knew how to do it back then...

One of those summers (back in the ‘70s), I remember when I was new in the game, a young guy, but I remember gold started going up dramatically.  And I also remember a summer of discontent under Jimmy Carter, when he was firing half of his cabinet.  It’s very, very similar to what’s going on now in the summer of 2011, how things mirror in a very strange way what was going on back then...

What did (Nouriel) Roubini say?  Gold would be lucky to go to $1,100 an ounce.  Where is it now?  Flirting between the high $1,780s and $1,900s.  There are a number of people like myself and others that believe it’s going much higher.  You know I used to be in Swiss Francs (along with gold), I am not in Swiss Francs anymore.  I got in (Swiss Francs) about a year and a half ago and did very well, but I’ve transferred everything I own into gold, I’m now totally invested in gold.

Celente is very correct, although the Obama Administration is very similar to the Carter Administration in the malaise around the country. The big difference is that the Fed is pumping much more aggressively, which will result in very strong price inflation, but more people understand the value of gold as a price inflation hedge.

As I pointed out in my post, The Case for $25,000 per Ounce Gold:

...the number of Americans who actually own gold is likely under 10%. The question must be asked, "What happens if price inflation really accelerates at some point, as it is likely to do?" The answer most likely is that many more will flock to gold.

In the old days, if price inflation pushed prices up over a few years by 100%, gold would likely climb by as much. Based on its present conditions under this scenario it could climb to roughly $3,000 area, as gold bugs continue their steady buying. But what if the next massive price inflation brings with it a flight away from the dollar as a reserve currency and causes the number of owners of gold in the United States to climb from under 10% to, say, 50%? This would result in huge new demand for gold. Instead of stopping at $3,000 per ounce, gold would be a multiple of that price. $25,000 per ounce would not be out of the question.

Remarkably, Roubini claims he doesn't believe such a climb inn the gold price will occu,. But it is a very real possibility, especially since Roubini's buddy, Ben Bernanke continues to print and print dollars.

The Unemployed Want Ron Paul as President

Ucubed, a web site for unemployed people is running what they call the Pink Slip Primaries.

According to a tweet from the group:

NEW RESULTS: Paul is winning 17%; Bachmann is at 12.8%; and no other candidate breaks into double digits #PinkSlipPrimary http://ow.ly/6gvTr

On Facial Justice and Eliminating Anti-Ugliness

As a follow up to my post on economist Daniel Hamermesh call in NYT for disability laws for ugly people, Lew Rockwell reminds me that, as per usual, Murray Rothbard was way ahead of all of us in his understanding of where interventionist/egalitarian thinking was going. In the 1991 introduction to his 1970 piece Freedom, Inequality, Privitism and the Division of Labor, Rothbard wrote, under the title, New Areas of Inequality and "Oppression", of the move toward  "group-egalitarianism" and the attack  on superiority:

In his book on Envy, Helmut Schoeck analyzed a chilling dystopian novel by the British writer, L.P. Hartley. In his work, Facial Justice, published in 1960, Hartley, extrapolating from the attitudes he saw in British life after World War II, opens by noting that after the Third World War, "Justice had made great strides." Economic Justice, Social Justice and other forms of justice had been achieved, but there were still areas of life to conquer. In particular, Facial Justice had not yet been attained, since pretty girls had an unfair advantage over ugly ones...

This sort of egalitarian emphasis on noneconomic inequalities has proliferated and intensified in the decades since these men penned their seemingly exaggerated Orwellian dystopias. In academic and literary circles "political correctness" is now enforced with an increasingly iron hand; and the key to being politically correct is never, ever, in any area, to make judgments of difference or superiority...

 "Oppression" is also supposed to consist, not only of discriminating in some way against the unattractive, but even in noticing the difference....

"Oppression" is of course broadly defined so as to indict the very existence of possible superiority – and therefore an occasion for envy – in any realm. The dominant literary theory of deconstructionism fiercely argues that there can be no standards to judge one literary "text" superior to another. At a recent conference, when one political science professor referred correctly to Czeslaw Milosz's book The Captive Mind as a "classic," another female professor declared that the very word classic "makes me feel oppressed." The clear implication is that any reference to someone else's superior product may engender resentment and envy in the rank and file, and that catering to these "feelings of oppression" must be the central focus of scholarship and criticism...

Indeed, one radical change since the writing of this essay has been the rapid and accelerating transformation of old-fashioned egalitarianism, which wanted to make every individual equal, into group-egalitarianism on behalf of groups that are officially designated as "oppressed." In employment, positions, and status generally, oppressed groups are supposed to be guaranteed their quotal share of the well-paid or prestigious positions.

Rothbard's full introduction is here, which includes a discussion of his great satiric call for a short liberation movement to end short oppression.

Price Inflation: High End Bike and Mountain Bike Edition

EPJ reader, Matt sends along this email he received from TrialPads:

Effective September 1, 2011 we will be increasing the prices on many of our products including Trialtech and Inspired brand. For the longest time we tried to avoid price increase in order to offer the best value to our customers. Due to rising costs in manufactured goods, transportation and other areas, the price increase was necessary in order to keep Trials Pads operational. The price will increase by an average of 10%.

Matt added:

search danny macaskill on youtube if you want to see some amazing things on this type of bike. it will blow your mind!!!

So I did. Pretty cool stuff, though my question is how well will Macaskill deal with global inflation? If he is earning endorsement money, he will likely be an early recipient of new money and be ahead on the price inflation curve---unless we get to hyper-inflation which will make it difficult for anyone without gold and other assets to be ahead of the curve. Income at that stage won't do it.

Obama CEA Pick Comes Wearing Bankster and Union Merit Badges

President Obama's pick to head the White House Council of Economic Advisers couldn't have been a pick more friendly to union leadership and banksters. As I have pointed out, Alan Kreuger is pro increases in minimum wage, which makes him a darling of union heads, since high minimum wages keep out low wage non-union competition. He is also is likely to be a major advocate of spending programs that will be routed through the banksters of Wall Street.

A Capitol Hill insider emailed me to make sure I saw this Ezra Klein take on Kreuger:

Alan Krueger, President Barack Obama's pick to head the White House Council of Economic Advisers, will likely serve as an administration advocate for more aggressive government intervention to revive job growth...Mr. Krueger, a Princeton University economics professor and former Obama administration official, has supported both tax cuts and spending programs to help stimulate growth in recent years, including incentives to encourage employers to hire jobless workers. He also backed Build America Bonds, a program that allowed states and localities to sell taxable municipal bonds and receive a federal subsidy. He served as assistant Treasury secretary for economic policy in the first two years of the Obama administration, where he helped design the 'cash for clunkers' program to boost auto purchases.

The insider then commented:

Signs are not encouraging...the Build America Bonds subsidy went to bond buyers and bond dealers. The bond issuers of them -- cities -- were the mules. One of his other credential is Cash for Clunkers? His biggest credential is an academic record? Ugh.

Coming Soon: $650 Billion in Banskter Driven Infrastructure Progams

Sphere Consulting is out with a report detailing the amount of  money that will be directed toward infrastructure programs in coming years. According to the report, there is currently a pool of $250B available globally for infrastructure projects, up 40 percent from 2010.

 In conjunction with the report, a Sphere survey was conducted with companies that have a strong vested interests in seeing the infrastructure projects develop. They were asked to project how much money U.S. will flow into infrastructure projects in the U.S.. The group includes Morgan Stanley, Merrill Lynch, Citi Infrastructure Investors, Carlyle Group, Macquarie Group Ltd., UBS and Credit Suisse. They obviously think it is a big play. The survey results indicate that the amount that could be leveraged into infrastructure will be a total of $650B for U.S. roads, tunnels, schools and bridges.

On September 5, President Obama will address the nation detailing his plan "to get the economy going". It will include mention of infrastructure, since polling indicates that the public likes to hear about infrastructure programs. Obama will mention roads, tunnels, schools and bridges. What he won't mention is that the major beneficiaries will be the banksters of Wall Street, Morgan Stanley, Merrill Lynch, Citi, Carlyle Group, UBS, JPMorgan Chase, Goldman Sachs and Credit Suisse. These banksters  will be squeezing money out of the infrastructure program every way possible. It could get so bad that it might make TARP look like an honest program.

(Thanks 2 PEU Report)

This is All You Need to Know about the Overthrow of Libya's Gaddafi

Eric Margolis writes (my emphasis):

Meanwhile, Libya is literally turning into a gold rush as the big western oil firms pile into Libya and pay court to the new government in Tripoli, the National Transitional Council. Police units and troops from Britain, France and Italy may soon follow – all, naturally, as part of the west’s new "humanitarian intervention"...

Libya is in semi-chaos and its economy devastated by six months of conflict. The food distribution system has broken down. Thousands of heavily armed "rambos" make their own law. There are barely any state institutions aside from the national oil company and central bank...

There are more prizes to be had: Libya’s gold reserves, estimated at $4-5 billion; and its nearly $100 billion of foreign deposits and investments.

Economist Calls for Laws to Protect Ugly People

In NYT, economist Daniel Hamermesh  calls for laws to benefit ugly people:

Ugliness could be protected generally in the United States by small extensions of the Americans With Disabilities Act. Ugly people could be allowed to seek help from the Equal Employment Opportunity Commission and other agencies in overcoming the effects of discrimination. We could even have affirmative-action programs for the ugly.

This is egalitarian micro-management gone mad. The underlying thought here is that ugly people are somehow cheated on life. However, I doubt the success/happiness barrier divides directly between attractive and ugly, as Hamermesh's theory implies. A year doesn't go by without some super attractive model or actress committing suicide. If beauty was the key to the kingdom of happiness, this wouldn't happen.

Further, basic economics teaches that if ugly people are in less demand, their wages would fall, which would cause entrepreneurs to bid their wages up close to that of attractive people, since there would be profit to do so.

The only thing ugly here is Hamermesh's mad call for more government interference in the economy, on the dubious contention that ugly people are getting short-changed and that there is some kind of objective method by which ugly people can be determined.

Roubini on the Great Ideas of Keynes

Nouriel tweets:

Keynes great ideas:financial instability, market failures of free markets, asset/credit boom/bubbles & busts, fiscal stimulus in liq trap..

Henry Hazlitt in The Failure of the New Economics addressed each and everyone of these "great ideas" and showed how they were a combination of using the same words in different contexts, thus confusing the issue, and simply incorrect thinking.

After reading Hazlitt, there is no way Keynes can be taken seriously.

Al Franken Calls for Extension of Payroll Tax Holiday

He has his economics a little wrong, but better economic confusion that leads tax cuts than tax increases.

Franken is calling for an extension of the payroll tax holiday. The law that lowered the payroll tax from six-point-two to four-point-two percent expires in January.

Franken says it benefits mostly middle and low-income working Americans. He says he hopes Congress can come to a bipartisan agreement to keep the payroll tax holiday in place for another year.

This is all correct, but he also says the tax cuts create demand for goods which creates jobs. It is only savings that create jobs. If a tax payer gets the tax cuts and the owner pockets the money from any sale, rather than investing it. There will be fewer jobs.

Keynesian propaganda to the contrary, savings-investment grows an economy not consumers devouring goods until there are none left.

Warren Buffett's Berkshire Hathaway Underpaid Taxes for Years and Years

Berkshire Hathaway in its most recent annual report states that,"We anticipate that we will resolve all adjustments proposed by the US Internal Revenue Service (“IRS”) for the 2002 through 2004 tax years ... within the next 12 months." The report also cites outstanding tax issues for 2005 through 2009.

Bottom line, while Buffett calls for the rich to pay more in taxes, his Berkshire Hathaway plays it close to the edge and waits for the IRS to tell the firm to pay up, before it does so on many items.

Stuart Varney Rips Warren Buffett, Big Time

Stuart Varney brings on to his show convicted felon Sam Antar to discuss Buffett's recent call for higher taxes on the rich and his cozy relationship with President Obama. Major props to Varney, there aren't many in mainstream media that would take on Buffett.

As for Antar, Varney questions Antar a bit on his crimes. Notice Varney's reaction when he learns the size of Antar's crimes and puts that together with the fact that Antar got off with only six-months house arrest. Antar is one shrewd cookie. During a telephone interview, I asked him about the light sentence. He told me, ahem, that he was as surprised as everyone when he only got six-months house arrest. It was only a telephone interview, but I still checked my wallet after the interview was over.

Krueger and Krugman Can't Even Get Their Mail Delivered Correctly

....and these guys want to fix the entire economy.

Krugman explains:

 He’s done excellent work, [Krueger's] a really good guy, whom I know pretty well, since we keep getting each others’ mail...Also, the reason we get each others’ mail is that Princeton relies on the advanced mail-processing technology known as pigeon-holes, and our slots are next to each other in the Woodrow Wilson School set.

This should be one helluva an economy , if Obama pays attention to these two. Krugman will be calling for more money printing and government spending. Krueger will be calling for higher minimum wage laws and a VAT. We might as well just bring in Freddy Kreuger, get him a mail slot at Princeton and let him plan the economy. It couldn't be any worse.

Tyler Cowen on Current Economic Policy Matters

As inflation accelerates and money growth (M2) exceeds 9%, Cowen hints that he might like to see an expanded role for  government fiscal policy:

Fiscal policy with excess capacity deserves a post of its own.  For now I’ll note there is a difference between hiring people to work directly for the government, contracting with firms to use some of their excess capacity, and contracting with the highest quality firms which perhaps do not have much excess capacity at all.

But he hasn't given up on money printing:

I still favor looser monetary policy, but I view myself as lacking in real influence on the world and thus I am ”working through the available variations” rather than propagadizing (sic) for my favorite policy.

President Obama has nominated Alan Kreuger to head the White House Council of Economic Advisers. Kreuger is in favor of a VAT tax and thinks a high minimum wage doesn't cause unemployment. Here's Cowen's take on the serious interventionist Kreuger:

Hat tip goes to Greg Mankiw, and we should all agree with Greg that this [the Kreuger nomination] is good news.

Cheney Disconnects His Hear Pump Batteries on Live Television

The man is a magician.

Lucky Warren Buffett

When he bought his Goldman Sachs stake, within days the government rushed in with more money. Just days after Buffet puts $5 billion into Bank of America, B of A has announced it will raise an additional $8 billion by selling its stake in China Construction Bank. B of A is up nearly 4% on the news.

If I didn't know better, I would say Buffett trades on inside information.

Obama to Nominate Extremist to Head Council of Economic Advisers

Reports are circulating that President Obama will nominate Alan Krueger to head the White House Council of Economic Advisers.

What do you need to know about Krueger? First he thinks that higher minimum wages do not cause unemployment. In fact, he wrote a book saying such. Since wages are set by the dynamics of supply and demand, it is pretty easy to understand that if you raise the minimum wage, fewer people will be hired. For example, if a person is hired at $6.00 an hour, because he only adds just above $6.00 in marginal revenue to a firm, he is going to become unemployed if the minimum wage is raised to $7.00. But not in Krueger's world, in Krueger's world people don't lose jobs under these circumstances, they get pay increases. Got that? Produce marginal revenue of $6.00 per hour and, if you live in Kreuger's world, if the government raises the minimum wage to $7.00, you will get a raise to that level.

Krueger reaches these mad conclusions by using the empirical methods of the natural sciences as his form of scientific inquiriy. This means Kreuger doesn't understand the lesson taught by Friedrich Hayek in his book The Counter Revolution of Science, where Hayek explains in detail why the methodology of the natural sciences is an inappropriate methodology for the social sciences.

So in Kreuger we will have an economist, who denies the basic logic of the cause and effect of minimum wage laws and who uses faulty methodology, as one of the top economic advisers to the President.

If that is not enough, it appears that there isn't a government intervention Kreuger hasn't liked. While at Treasury,  Krueger worked on developing the "cash for clunkers" program and Build America taxable municipal bonds.

The man is an extreme interventionist, who doesn't seem to let reality get in the way of his mad theories.

UPDATE: Thanks to William Anderson, who points out that Kreuger also claimed two years ago that a huge, new value-added tax (VAT) like what they have in Europe would "fix" the U.S. economy

The Truth about Ron Paul as an Extremist

Led by Nouriel Roubini, MSM continues to attack Ron Paul's belief that the country would be much better off on a gold standard. It's radical, they say. Roubini calls it insane. And talking heads say it is taking the Republican Party in a extreme new direction. Ron Paul says he is just trying to bring the country back to its roots.  Indeed, a look back in history shows that at the start of the 20th Century, the Republican Party was all for a gold standard.

The 1900 Republican Platform reads in part:

We renew our allegiance to the principle of the gold standard and declare our confidence in the wisdom of the legislation of the Fifty-sixth Congress, by which the parity of all our money and the stability of our currency upon a gold basis has been secured.

Four years later, the Republican Platform said this about gold:

We believe it to be the duty of the Republican Party to uphold the gold standard and the integrity and value of our national currency.

It seems that those who fail to learn history also fail to realize that what they view as extreme may well have been at one time a cornerstone belief. As Ron Paul has stated many times, he is not an extremist. He simply wants to bring the country back to a period when respect for freedom, sound money and personal property rights were the norm. Returning to a gold standard (or perhaps competing currencies) is simply moving the country back toward a period when it was a  much freer country.


(Thanks 2 Andre Grillon)

Ex-BP CEO Gets Rothschild Money

PEU Report is all over the activities of former BP CEO Tony Hayward.

Hayward  teamed up with financier Nathaniel Rothschild, scion of the banking family, to create Vallares Plc, a shell company that raised 1.33 billion pounds ($2.15 billion) through an initial public offering on the London Stock Exchange on June 17.

Hayward also serves on the board of TNK-BP International Ltd., BP’s fractious Russian joint venture. Glencore International Plc, the mining and commodities-trading company.

It's nice to be an insider. They will take care of you. The full PEU report is here.

The Employment Picture Beyond Silicon Valley

As I have mentioned many times, one beneficiary of current Federal Reserve money supply growth is Silicon Valley. Here are a few others.

1. There's strong demand for truck drivers.

2. Las Vegas casinos are hiring again.

3. Oil drilling is resulting in demand for workers in Oklahoma, Texas and North Dakota. The unemployment rate in Oklahoma City is at 5.7%. The unemployment rate in North Dakota is 3.3%.

4. Tech sector jobs beyond Silicon Valley are also strong from Denver to North Carolina.

All the people employed in these sectors are on the early edge of the coming price inflation, and will in general experience price hikes ahead of the the inflation.

If you are, say, a librarian in California, a grocery store clerk in Florida or a janitor in Chicago, you won't be so lucky. The price increases will come before the wage increases. It will, in other words, mean a decline in your standard of living.

Will Steve Jobs Call His Father?

NyPo talks to the biological father of Jobs and explains a complex story, here.

FOX NEWS: "What is Austrian economics and who were Mises and Hayek?"

Chris Wallace interviewed Ron Paul this morning on FOX News Sunday. Chris Kozlowski sends along the below clip and writes:

I just sat through probably the best interview Ron Paul's ever had. At one point Chris Wallace asked Ron Paul "What is Austrian economics and who were Mises and Hayek?"

I damn near fell out of my chair.

Stiglitz's Attempt to Co-Opt Ron Paul's Anti-Fed Message

How strong an impact is Ron Paul's anti-Fed message having? Complete globalist, and bankster apologist, Joseph Stiglitz is going anti-Fed.

Stiglitz, a former chief economist at the World Bank, during a speech last week said that the very structure of the Federal Reserve system is so fraught with conflicts that it's "corrupt," according to HuffPo.

Stiglitz said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's -- in which regional Feds are partly governed by the very banks they're supposed to police -- it would have raised alarms.

"If we had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure," Stiglitz said during a conference on financial reform in New York held by the Roosevelt Institute. "It's time for us to reflect on our own structure today, and to say there are parts that can be improved."

To get a sense for the globalists and interventionists that attended this conference , keep in mind that other speakers, included Elizabeth Warren and George Soros.

Also keep in mind that recently Stiglitz blamed the recent financial crisis and economic downturn on free markets:

Just a few years ago, a powerful ideology – the belief in free and unfettered markets – brought the world to the brink of ruin.

What's going on with the Stiglitz attack on the Fed structure?

It's a bankster attempt to frame the anti-Fed  position and direct it away from ending the Fed to one of "We only need to restructure the Fed." Banksters certainly hope they never have to go down this route, but they obviously are fearful that Ron Paul's anti-Fed stance is gaining large groups of adherents.

The Stiglitz speech is about attempting to direct any future "reform" in a direction that will keep the banksters firmly in control. Notice that his attack on the Fed structure is largely on the regional Fed banks. To the degree Bernanke gets any flak for his money printing ways, it comes from the regional presidents.

There's nothing New York-banksters and DC power regulators would like to see more than the irritant of the regional presidents eliminated in Federal Reserve restructuring.

In other words, Stiglitz may be in favor of some Fed bank restructuring, but only in a way that will make the core power players stronger in influencing the bank.

Stiglitz's style of Fed restructuring should be as welcome as restructuring designed by the main puppeteer himself, George Soros.

About Gaddafi's 40 Female Lipsticked Virgin Bodyguards

Lauren Frayer reports:

About 40 lipsticked, bejeweled bodyguards surround the Libyan dictator at all times. They wear designer sunglasses and high heels with their military camouflage. But they're purported to be trained killers -- graduates of an elite military academy in Tripoli that's solely for women.

Gadhafi established the Tripoli Women's Military Academy in 1979 as a symbol of women's emancipation. "I promised my mother to improve the situation of women in Libya," he reportedly said at the time. His mother, a Bedouin tribeswoman born when Libya was an Italian colony, was illiterate.

The few foreign visitors who've been granted a glimpse inside the academy describe a spartan cement-block complex where 100 handpicked women drill in elite killing techniques, day and night, for three years. They're awoken by bugle call at 4:30 a.m. and jog for one and a half hours, before branching off into classes. Some train to fly MiG fighter jets, while others learn martial arts or how to fire rocket-propelled grenades.

"The three-year training program involves all aspects of soldiering, from firing artillery and rocket launchers to hand-to-hand combat and communications," said Jane Kokan, a Canadian journalist who was granted rare permission to visit Libya in 1995 for a documentary about Gadhafi's bodyguards.

Doug Sanders, another Canadian journalist who visited the academy, in 2004, wrote on his blog that he believes the elite female bodyguards, known also as "Protectors of the VIP," reveal something about Gadhafi's "idiosyncratic mind, and a revolutionary enigma in a Muslim nation where women are still far from equal in daily life."

The academy's best students are dubbed "revolutionary nuns," and they never marry and dedicate their lives to the idea of Gadhafi's 1969 revolution. They're banned from having sex and swear an oath to protect the Libyan leader until death, if need be. In 1998, a bodyguard named Aisha threw herself on top of Gadhafi when Islamic militants ambushed his motorcade. A barrage of bullets killed her and injured two others, but Gadhafi escaped unharmed.

Who Should Go to Graduate School and Major in Economics

Recently, Gary North and Walter Block debated the value of getting a PhD degree in economics. They both made valid points for their positions. However, I don't think there is a one size fits all answer to the question.

For some, I think a graduate degree makes sense, for others it makes no sense at all.

One of the first problems for students of Austrian economics is that the Austrian school of economics rejects most of the empirical work being done today in economics, so it is a major headache for most to study math that to the Austrian is only used in voodoo economics.. This is, thus, a severe road block for many in obtaining a PhD in economics. If you don't understand the math, you are not going to get the degree.

That said, for those who aren't intimidated by the math, and, indeed, find the math easy, a PhD career path may make sense. But, you better really know the math and find it easy (before you attempt a graduate economics degree, peruse some heavily mathematical economic journals and see if you understand them).

If the math doesn't intimidate you and seems EASY (serious mathematicians think the math economists use is a joke) then a PhD career track should be considered, especially if in addition to a facility with math, you also have a strong personality, have the skills to get around a bureaucracy, have an abundance of charisma and won't be pressured by the mainstream to sellout.

If you have all these characteristics, you should be at Harvard or the London School of Economics, pronto. The Austrian school could surely benefit from such a rock star scholar, eventual professor.

If you have this combination of characteristics, then you need to start plotting your moves now. But don't fool yourself into thinking you have all these characteristics, if you don't. At most, I guess there might be only one or two of you out there that have these traits. That said, the value of someone like this blowing up Keynesian economics from the inside would be Hayekian. And, you would make a lot of money doing it.

The closest to achieving something like this was Robert Nozick, who somehow managed to be a minarchist (at least for awhile) on the philosophy department faculty at Harvard, and rocked some boats there.

For those of you who are not as comfortable with the math, or those of you who have not been exposed to enough of the math, a graduate degree shouldn't be completely ruled out, but other options should be considered first.

During the debate, Block revealed that he makes $170,000 as a professor and has a lot of free time. North did not reveal his income.

My guess is that Block is likely a very shrewd businessman and that if you looked at his balance sheet, it would be very impressive, but I don't think it would come close to North's personal balance sheet.

North, though having a PhD, has always stayed out of traditional academia, has been an entrepreneur for most of his life and has taught what he pleases, through books, newsletters and the internet, without the restrictions of  academia.

North is absolutely correct that you can reach out and teach a lot more people by working  outside the traditional academic career path. And, he is correct that most of the time you can make more money by staying away from the academic career path. I can think of a number of Austrian economists, outside academia, that are likely doing very, very well for themselves. Further, from my vantage point, I see opportunities for Austrian economists who can reach out to students, AEs who can become involved in the financial world, AEs who can become consultants to industry. The more that government hinders an economy, the more and more AEs are needed to explain to the financial world and the industry what is going on, how to deal with what is going on and what to expect next.

But before any of this, you need to have Austrian economics down cold. You need to spend hours and years at mises.org and read especially Mises, Hayek, Hazlitt and Rothbard. If you read all of Rothbard, you will not only gain a perspective on economics but on how the world works from a political and social perspective.

This non-academic method of working as an Austrian economist, I dub the "entrepreneurial approach" because it will take some entrepreneurial skill to recognize the opportunities that exist and the skill and perseverance to execute the opportunities.

For those who don't have the entrepreneurial personality and prefer a more structured career path, we can again turn to the academic route. But please, if you are not entirely comfortable with math, do not take a graduate path in economics. You are much better off choosing economic history, general history or sociology. Block only mentioned sociology in passing, but I recently spent some time at a sociology conference and got the sense that sociology is much more wide open to different kinds of thinking than academic economics and that in studying for a PhD in sociology you could pretty much do Austrian economics.

Bottom line, there are many opportunities for those who would like to have a career in Austrian economics and if you are talented  the money will be very good. Most important, you need to be honest with yourself about your strengths and weaknesses and choose your path from there.

VIDEO: 1959 Interview of Ayn Rand by Mike Wallace

...as fresh as the morning headlines. Be sure to click through to Parts 2 and 3.

Sadly, the move towards collectivism has intensified, but at the same time Rand laments the fact that there are no presidential candidates in favor of freedom. Today, we have Ron Paul.




(ViaNakedCapitalism)

Obama Briefed on the Economy

This past week, while vacationing in Martha's Vineyard, President Barack Obama received an economic briefing from Brian Deese, Deputy Director of the National Economic Council.

Whatever Deese is selling, I don't think Obama is buying.

IMF Chief Lagrade as Global Inflationist and Interventionist

From her speech today in Jackson Hole:

Monetary policy should remain highly accommodative, as risk of recession outweighs risk of inflation. This is particularly true as (i) in most advanced economies inflation expectations are well anchored; and (ii) pressures from energy and food prices are abating. So policymakers should stand ready, as needed, to dive back into unconventional waters.

Lagarde as a supporter of a one world Europe:

Europe needs a common vision for its future. The current economic turmoil has exposed some serious flaws in the architecture of the eurozone, flaws that threaten the sustainability of the entire project. In such an atmosphere, there is no room for ambivalence about its future direction. An unclear or confused message will add to market uncertainty and magnify the eurozone’s economic tensions. So Europe must recommit credibly to a common vision, and it needs to be built on solid foundations—including, for example, fiscal rules that actually work.

Lagarde telling the U.S. government how to intervene:

...the United States needs to move on two specific fronts.

First—the nexus of fiscal consolidation and growth. At first blush, these challenges seem contradictory. But they are actually mutually reinforcing. Credible decisions on future consolidation—involving both revenue and expenditure—create space for policies that support growth and jobs today. At the same time, growth is necessary for fiscal credibility—after all, who will believe that commitments to cut spending can survive a lengthy stagnation with prolonged high unemployment and social dissatisfaction?

Second—halting the downward spiral of foreclosures, falling house prices and deteriorating household spending. This could involve more aggressive principal reduction programs for homeowners, stronger intervention by the government housing finance agencies, or steps to help homeowners take advantage of the low interest rate environment.

Her scary conclusion:

I can assure you that for its part, the IMF will continue to do everything in its power to advocate for this outcome, and to lend its material support wherever it is requested and relevant. 

Report: Gaddafi Spotted in Zimbabwe with His Female Bodyguards

Colonel Muammar Gaddafi has fled Libya to Zimbabwe on a jet provided by Zimbabwe President Robert Mugabe,  sources are claiming, according to the Daily Mail.

President Mugabe's political opponents claim their spies saw Gaddafi arrive in the country on a Zimbabwe Air Force jet in the early hours of Wednesday morning.

They say the Libyan dictator was taken to a mansion in Harare's Gunninghill suburb, where agents from his all-female bodyguard were apparently seen patrolling the grounds.

Mugabe sure could use some of Gaddafi's gold. Nouriel Roubini may prefer spam over gold, but one has to wonder if Gaddafi would have been greeted with such open arms if he was travelling with cans of spam, instead of gold.

John Dean: Cheney a Classic Authoritarian Personality

John Dean, former Nixon White House Counsel who was caught up in Watergate, blasted former Vice President Dick Cheney’s memoir In My Time.

"He is a classic authoritarian personality,” says Dean. “We are seeing it in his book. He certainly demonstrated it as vice president.”

Booming Market for San Francisco Hotels

One of the epicenters of money flow as a result of the current round of Federal Reserve money printing has been Silicon Valley. SV is having an impact just up the road as San Francisco experiences a boom in hotel sales.

Investors paid a record $780 million for hotels in the 12 months through June, a 75 percent increase from the previous year, according to broker Atlas Hospitality Group, reports the San Francisco Chronicle.

 

"San Francisco has never been this hot, ever," said Alan Reay, president of Atlas Hospitality. "You have a low cost of capital, pent-up demand and properties that wouldn't normally come to market."
The city's revenue per available room, a measure of rates and occupancy that is the most important metric for hotel investors, is projected to rise 15 percent this year, more than double the U.S. average, according to San Francisco's PKF.

Eathquake Damaged Treasury Building

An omen?

A portion of a granite railing on the roof on the U.S. Treasury building dislodged and fell either immediately after Tuesday’s earthquake or after an aftershock early Thursday, the Treasury Department reports.

Roger Stone Disses the Bushies---All of Them

Self-described political hitman Roger Stone organized the so-called "Brooks Brothers riot" where Republican congressional staff members protested at an office where ballots were being recounted. Many believe this protest blocked key Al Gore votes from being counted and resulted in George Bush gaining the presidency.

But times have changed. Stone is a Bush loyalist no more. Here's Stone on his Facebook page profiling the Bush family:

Bush family opposition to Rick Perry single best reason to be FOR Perry.
Barbara Bush, a boozed up old witch hates Perry. GHWB, who raised taxes, GWB who spent like a drunken sailor and Jebbie the turd all campaigned against Perry's re-election and got the crap beat out of them. Rove has made millions while leading the GOP to the loss of both Houses of Congress. The GOP must purge our party of Bushism

Clearly, Stone has failed to receive the designated Iraqi oil well he was promised.

(Thanks2Nick)

New Yokers Unimpressed with Mayor Bloomberg Hurricane Fear Mongering

AFP via Yahoo:

More than 200,000 New Yorkers are under orders to flee a once-in-a-century hurricane, but many in the famed City That Never Sleeps are brushing aside danger -- and heading to the beach.

Hours after Mayor Mike Bloomberg ordered the evacuation from the low-lying Rockaway Beach, the sun-kissed coastline was packed with sunbathers and surfers as city dwellers took the dire warnings about Hurricane Irene in stride.

Roberto Luzuriaga, who was making a brisk business selling Italian Ice desserts to swimmers straight off the sand, echoed the views of many when he said that authorities' warnings were at times self-serving.

"It definitely is a concern, but sometimes things are blown out of proportion. Sometimes the people who make the calls just want to save their asses," said Luzuriaga, who is still debating whether to leave his nearby home.

Jeffrey Rose, a clinical hypnotist strolling the beach dipping onion rings into guacamole, said he was considering leaving the city on a business trip but was not overly concerned about Irene, which is set to barrel down by Sunday.

"We're a very litigious society. The city knows that if something happens, they could get sued. That's okay; it's just that people have to cover themselves," Rose said.

The biggest outrage is the Mayor ordering people to abandon residences in low-lying areas. The choice should be left up to the residences. Leaving people alone who aren't hurting others, allowing them to make their own decisions on their own property, should apply during a hurricane as much as it does any other time. Their is no hurricane exception clause in the Constitution. Forcing people out of their residence is simply another case of coercive decision making of the government over-ruling the decisions of individuals. There is certainly enough information broadcast about the hurricane for people to make their own decisions. I am much more concerned about long-term expanding government than I am about a passing hurricane.

Another Anti-Gold Howler from Nouriel Roubin

Nouriel Roubini continues his attack on gold:

Roubini tweeted:

Gold can be & has been endlessly debased thru history

@Room747 responded:

Gold can be debased under Gov coinage. You couldn't do this with private coinage.

Roubini replied:

Debasement under private coinage is even easier

@Room747 responded with a Murray Rothbard quote and link identifying gold debasement linked to government:

Debasement was the State's method of counterfeiting the very coins it had banned private firms from making in the name of vigorous protection of the monetary standard. Sometimes, the government committed simple fraud, secretly diluting gold with a base alloy, making shortweight coins. More characteristically, the mint melted and recoined all the coins of the realm, giving the subjects back the same number of "pounds" or "marks," but of a lighter weight. The leftover ounces of gold or silver were pocketed by the King and used to pay his expenses. In that way, government continually juggled and redefined the very standard it was pledged to protect. The profits of debasement were haughtily claimed as "seniorage" by the rulers.

Just how Roubini claims that gold has been debased under private coinage to such a degree  is undoubtedly a head scratcher for @Room747, since the key to government debasement is the fact that governments make their debased coins legal tender, not something private minters can do. It is very easy to test gold and weigh it, and refuse to accept bad private coins.  Merchants on 47th Street in Manhattan do it on a daily basis.

Debasement is a government business. It is very difficult to do without the strong arm of government forcing people to accept debased coins.

@Room747 correctly links to the definition of Gresham's Law:

Gresham's law is an economic principle "which states that when government compulsorily overvalues one money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."

Roubini has not responded.

The D.C. Government at Your Service

The District Department of Public Works ran out of sandbags and stopped distributing them at 5 p.m. After handing out 7,000 bags in five hours, the agency announced that another shipment of 2,700 bags would be available in the morning on a “first-come, first-served basis.”

Residents are limited to five bags per household and must show identification.

Lew Rockwell on Ron Paul

Below is an Alex Jones interview with Lew Rockwell. Lew has been a long-time supporter and confidant of Ron Paul. They say one mark of a man is the friends he keeps ,and you can see from this interview that RP has made a wise choice in making Lew a life long friend.

Billy Joel is generally correct when he sings that most of us haven't started any major fire. But that is not the case with Lew Rockwell, he had a lot to do with starting the Ron Paul fire.

Conspiracy Theory

Emailed to Lew Rockwell by Brian Wilson:

Obama goes to a primary school to talk to the kids to get a little PR. After his talk he offers question time. One little boy puts up his hand and Obama asks him his name.

" Walter," responds the little boy.

"And what is your question, Walter?"

"I have 4 questions:

First, why did the USA Bomb Libya without the support of the Congress?

Second, why do you keep saying you fixed the economy when it's actually worse?

Third, why did you say that Jeremiah Wright was your mentor, then said that you knew nothing about his preachings and beliefs?

Fourth, why are we so worried about Brazil drilling for oil, but we aren't allowed to?"

Just then, the bell rings for recess. Obama informs the kiddies that they will continue after recess.

When they resume Obama says, "OK, where were we? Oh, that 's right: question time. Who has a question?"

Another little boy puts up his hand. Obama points him out and asks him his name.

"Steve," he responds.

"And what is your question, Steve?"

"Actually, I have 6 questions.

First, why did the USA Bomb Libya without the support of the Congress?

Second, why do you keep saying you fixed the economy when it's actually worse?

Third, why did you say that Jeremiah Wright was your mentor, then said that you knew nothing about his preachings and beliefs?

Fourth, why are we so worried about Brazil drilling for oil, but we aren't allowed to?

Fifth, why did the recess bell go off 20 minutes early?

And sixth, what the #$%@ happened to Walter?"

Would Keynes Think Bernanke is Useless?

Paul Krugman spotted it:

John Maynard Keynes:

But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again. 
Ben Bernanke (today):

These are tempestuous times, but when the storm is long past the ocean will be flat again

Krugman doesn't draw out the full conclusion here, but Bernanke is pretty much admitting that he is only good at, what Keynes dubbed a "useless task,"  by only telling us that the ocean will (someday) be flat again?

Breaking Down the Bernanke Speech

Here are the takeaway points from Bernanke's speech. My comments are in italics.
1. ...recovery in the United States has, for the most part, proved disappointing thus far

No kidding. When you have roller coaster monetary policy, what do you expect?

2.The financial crisis that gripped global markets in 2008 and 2009 was more severe than any since the Great Depression.

It should be noted this occurred under the watch of the Federal Reserve. Those who state the economy has been more stable since the Fed, have a lot of explaining to do.

3. ..., it is clear that the recovery from the crisis has been much less robust than we had hoped. From the latest comprehensive revisions to the national accounts as well as the most recent estimates of growth in the first half of this year, we have learned that the recession was even deeper and the recovery even weaker than we had thought; indeed, aggregate output in the United States still has not returned to the level that it attained before the crisis.

Here, Bernanke is basically admitting that he doesn't understand what the hell is going on.

4.Temporary factors, including the effects of the run-up in commodity prices on consumer and business budgets...were part of the reason for the weak performance of the economy in the first half of 2011; accordingly, growth in the second half looks likely to improve as their influence recedes.

He's joking, right? Does Bernanke actually believe that price inflation was a temporary factor and the influence of price inflation is going to recede?

5.The Federal Reserve continues to monitor developments in financial markets and institutions closely and is in frequent contact with policymakers in Europe and elsewhere.

Translation: Bernanke is very concerned about Europe, and is muscling Europe to start printing money.

6.With commodity prices and other import prices moderating and with longer-term inflation expectations remaining stable, we expect inflation to settle, over coming quarters, at levels at or below the rate of 2 percent, or a bit less, that most Committee participants view as being consistent with our dual mandate.

He is really clueless about price inflation or lying through his teeth.

7.In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days (the 20th and the 21st) instead of one to allow a fuller discussion.

Extended September meeting to two days? He's sweating.

8. Our K-12 educational system, despite considerable strengths, poorly serves a substantial portion of our population.

He's dissing the public school system! Go Bennie!---Though this is probably a lead in for Obama's September 5 speech where he will likely call for more spending on public schools.

9.Our economy is suffering today from an extraordinarily high level of long-term unemployment, with nearly half of the unemployed having been out of work for more than six months.

Well, damn it Bennie, you are paying people up to 99 weeks to stay unemployed. What the hell do you expect to happen, the number of unemployed to shrink?

Bottom line: Ben Bernanke may, or may not be, clueless about the exploding money supply (now 9% plus). But he sure wants to keep the focus away from money supply, since he doesn't even mention the topic in his speech. Got that? The one thing the Fed does control is the money supply and Bernanke doesn't mention the accelerating growth in his speech. Bernanke is one tricky dude. Watch the numbers not his lips.


Here is what is really going on. Bernanke is printing money at very aggressive rates. This is going to lead to huge price inflation. Below is the data from the St. Louis Fed  showing  annualized perecentage growth in money supply (m2) since the start of the year: