Posts Tagged ‘smashing capitalism’

The evil empire

Monday, January 3rd, 2011

Wikileaks Cable 10Paris58 reveals the extent of US rule over Europe.  If Europe is further left than the US, broker than the US, and more $@$%# than the US, this primarily that the American ruling elite has a freer hand in ruling Europe than in ruling the US, due to the US constitution, and the American tradition of liberty.

In Cable 10Paris58, the writer announces that France is insufficiently left wing, therefore an American program of intervention in French internal affairs is required to move France further left.

“Gay Pride” is another illustration of the same process.  When the US implemented “Gay Pride” in the US, it implemented “Gay Pride” world wide.  And what is a gay pride parade called in Spanish?  el día del Orgullo Gay

The use of the American neologism “Gay” reveals who is calling the shots, who planned and organized this event.

Let us reflect on Aristide’s rule in Haiti:

The US intervened in Haiti to install Aristide at gunpoint and it also intervened in Haitian society and culture to convince Haitians that this was a good thing, was benevolent and progressive.

The US demanded an election. It then demanded an election rigged in Aristide’s favor. He won, was overthrown. US demanded with threat of violence that he be reinstated. He was reinstated again, overthrown again. US invaded, installed him on the presidential throne with the guns of US marines, and, just to make sure Aristide did not get up to any mischief, surrounded him with an all white praetorian guard.

You will probably read all over the internet and the mainstream media that the numerous occasions in which Aristide was removed from power were evil American plots by evil America to deprive Aristide of his immensely popular and well deserved power.  Each of the supposedly anti American sources saying that stuff is a US state department muppet – someone from the state department has his arm up the speaker’s @$$ and his fingers are moving the speaker’s lips – pretty much in the way the praetorian guard were moving Aristide’s lips.

They are indeed anti American – because the US state department and the US ruling elite is anti American.

Just look at the races of the actors.  The people who installed Aristide were white Americans.  The people who guarded him were white people of undisclosed nationality.   (Not all that undisclosed – when everything fell apart, Aristide’s praetorians were rescued from black Haitians by the US marines)  The people Aristide fled were black Haitians.

It is not the Joos, it is Harvard and the State Department, not a sinister Jooish plot, it is a sinister Harvard plot.  It is a government conspiracy to impose more government on those who can least resist it – the French being less able to resist than Americans, and the Haitians being less able to resist than the French.

The 1994 intervention in Haiti is not in itself all that important, Haiti being just a small pimple, but it is important in what it reveals – like Cable 10Paris58 it reveals the true face of US imperialism.

astroturf “anarchism”

Sunday, January 2nd, 2011

The Belmont club reports on left “anarchism”, taking the movement at face value, as if it was what it appears to be.

the purest and most uncompromising of which are the anarchists.

In fact, left anarchists are astroturf. They are the government threatening those that would restrain its growth.

Repeating my previous post on the Greek riots:

Observe the recent firebombings in the Greek riots, where the “rioters” murdered three people.

Here are a couple of videos of the “rioters” firebombing police.

The “rioters” charge the police, and bang on their shields with light sticks, making no attempt to jab through the gaps at the actual bodies of the cops, nor using sticks heavy enough to even shake the shields.    No axe handles or baseball bats.

Hey guys, if you want to bang on armored cops, I have a sledgehammer that would make a pretty good mace. It goes through concrete mighty fast.

They then fall back, and hurl firebombs – but they do not not hurl firebombs at the police, but at the ground in front of the police.  One cop gets one of his boots splashed with burning petrol.  He rolls around, and a couple of other cops put him out.  In the second video, same scene shot from a different angle, we observe that the cops make not the slightest attempt to arrest the firebombers for attempted murder, and the rest of the mob for assault and as accessories to attempted murder.  It is all theater.  When they see that one of the firebombs has actually hit, the theater pauses.

When right wing militia listens politely to an FBI provocateur provocateur at a meeting proposing that they bomb someone, they all go to jail for plotting crimes.  The “rioters” firebomb a cop, and everyone acts like it is an unfortunate accident – which of course is exactly what it is.

The “rioters” in the Greek riots are government employees put on the streets by government sponsored unions that are themselves as much part of the government as the police were.

The end of the road to serfdom

Sunday, December 26th, 2010

Hayek, in “The Road to Serfdom” predicted the welfare regulatory state must inevitably become the totalitarian terror state.

Observe:  We have arrived. America is now a totalitarian terror state.

In 1992 I visited Cuba.  Thereafter, I argued it was a totalitarian state, because when I asked certain questions some people fled, fearing that merely hearing the question would result in them being punished for the thoughts it might elicit, and others answered furtively.

Yesterday, I asked someone very close to me a question apt to have a politically incorrect answer (I cannot identify him further, for he swore me to secrecy)

He looked around furtively.  We were on top of a hill overlooking the Coral Sea in a semi rural area, the other side of the world from his workplace.  He lowered his voice.  He then proceeded to utter a series of politically correct platitudes, with gestures and grimaces reversing their meaning, his grimaces implying the opposite of the ostensible meaning, the same sort of communication coded against possible eavesdroppers and hidden microphones that I encountered in Cuba, where they would swear loyalty to communism, while making a gesture of their throats being cut.

Like Havel’s green grocer, the truth would destroy his career.

This is the behavior that in 1992 I saw in Cuba and thereafter used as evidence that Cuba was a totalitarian state, a state of omnipresent fear.

So if Cuba was totalitarian in 1992, America is totalitarian in 2010.   We have arrived at the end of Hayek’s “Road to Serfdom”.

In America, unlike Soviet Russia, we don’t send dissidents to Alaska, and although lots of American psychiatrists are eager to diagnose political deviation as mental illness and treat it with electroshock and lobotomy as they do in Cuba, government has as yet declined to employ them in this capacity.  But what government does do is ensure that political deviation blights your career.  If a company knowingly employs political deviants, it is apt to be sued by quasi governmental organization for a “hostile work environment”, in which lawsuit, no evidence will be presented of anyone saying unkind things to those for which the work environment was supposedly hostile, but evidence will be presented that employees had subversive thoughts – often evidence that they expressed subversive thoughts far from their workplace, as perhaps on a hill overlooking the Coral sea the other side of the world from his workplace – so the company will be punished, for failure to punish subversive thoughts.

Hayek, in “The Road to Serfdom”, argued that regulatory welfare state must inevitably become totalitarian.  Lo and behold, totalitarianism has arrived.  Most people, everyone with some position in society, everyone with something that could be taken away from them, are very, very frightened.

And what is totalitarianism?  Hayek’s totalitarianism seems to be pretty much Havel’s totalitarianism, and here is Havel on totalitarianism:

The manager of a fruit-and-vegetable shop places in his window, among the onions and carrots, the slogan: “Workers of the world, unite!”

Why does he do it? What is he trying to communicate to the world? Is he genuinely enthusiastic about the idea of unity among the workers of the world? Is his enthusiasm so great that he feels an irrepressible impulse to acquaint the public with his ideals? Has he really given more than a moment’s thought to how such a unification might occur and what it would mean?

I think I can safely assume that the overwhelming majority of shopkeepers never think about the slogans they put in their windows, nor do they use them to express their real opinions. That poster was delivered to our greengrocer from the enterprise headquarters along with the onions and the carrots. He put them all into the window simply because it has been done that way for years, because everyone does it, and because that is the way it has to be.

If he were to refuse, there could be trouble. He could be reproached for not having the proper decoration in his window; someone might even accuse him of disloyalty. He does it because these things must be done if one is to get along in life. It is one of the thousands of details that guarantee him a relatively tranquil life “in harmony with society,” as they say.

Obviously the greengrocer is indifferent to the semantic content of the slogan on exhibit; he does not put the slogan in his window from any personal desire to acquaint the public with the ideal it expresses. This, of course, does not mean that his action has no motive or significance at all, or that the slogan communicates nothing to anyone.

The slogan is really a sign, and as such it contains a subliminal but very definite message. Verbally, it might be expressed this way: “I, the greengrocer XY, live here and I know what I must do. I behave in the manner expected of me. I can be depended upon and am beyond reproach. I am obedient and therefore I have the right to be left in peace.”

This message, of course, has an addressee: it is directed above, to the greengrocer’s superior, and at the same time is a shield that protects the greengrocer from potential informers. The slogan’s real meaning, therefore, is rooted firmly in the greengrocer’s existence. It reflects his vital interests. But what are those vital interests?

Let us take note: if the greengrocer had been instructed to display the slogan ‘I am afraid and therefore unquestioningly obedient,’ he would not be nearly as indifferent to its semantics, even though the statement would reflect the truth.

The greengrocer would be embarrassed and ashamed to put such an unequivocal statement of his own degradation in the shop window, and quite naturally so, for he is a human being and thus has a sense of his own dignity. To overcome this complication, his expression of loyalty must take the form of a sign which, at least on its textual surface, indicates a level of disinterested conviction. It must allow the greengrocer to say, “What’s wrong with the workers of the world uniting?”

Thus the sign helps the greengrocer to conceal from himself the low foundations of his obedience, at the same time concealing the low foundations of power. It hides them behind the façade of something high. And that something is ideology.

As Bruce Charlton points out:

If you go into an institutional environment – a government office, a school or college, a hospital or doctor’s surgery, a museum, public transportation – and you observe posters adorning the walls on politically-correct topics such as diversity, fair trade, global warming, approved victim groups, third world aid – remember Havel’s essay, and that the correct translation of such posters is as follows:

“I am afraid and therefore unquestioningly obedient”

Such posters are a coded admission of submission to ideology – except in the rare instance where they advertise genuine corruption by ideology.

The frequency of such posters nowadays, compared with a generation ago, is a quantitative measure of the progress of totalitarian government.


Monday, November 8th, 2010

Officially, America has near zero inflation and a mere ten percent official unemployment.  Odd that it has a mere ten percent unemployment when the proportion of young adult males with jobs has dropped a lot more than ten percent.

As with third world and Marxist countries, the government’s reaction to bad news is to declare a new era of prosperity.  The recession is officially over.  With an unprecedented proportion of the workforce on the government payroll, productivity has officially risen to amazing heights and somehow, despite the big increase in the proportion of people on the government payroll, public spending has officially not risen much.

Unofficial inflation, however, is starting to look quite frightening:

Market Ticker tells us:

I just got back from the grocery store.  Eggs, which were $1.60 two weeks ago, are now $1.99/dz.  Butter?  Two boxes for $6 – on sale.  The same two boxes were $4.50 a couple months ago.  Land-O-Lakes Brand?  $4.89 – each.
Cheese?  8oz bricks were commonly 3/$5 as recently as September.  Now?  $3.50 – for one.
But there’s no inflation, you see.
Oh, and on the way home I passed the gas station.  It was $2.59 for regular a couple of weeks ago.  Now?  $2.89.  30 cents in about 2 weeks, a 12% increase.

This is consistent with inflation rates of thirty to fifty percent per year, early hyperinflation rates.

Sarah Palin is, as usual, on the ball, while ruling class is floating away in La La Land, sincerely puzzled that the peasants are failing to eat cake.

This is the decisive test of Keynesianism.  Of course, we already had a decisive test of Keynesianism:  The Japanese crisis.  Keynesianism failed dismally, to which the Keynesians replied that Japan’s troubles were the result of not applying Keynesianism vigorously enough.    This time, however, it has been applied vigorously enough.  The results should be apparent by around 2012-2016.  The fat lady has not yet sung, but so far, things are not looking good for Keynesianism.

Money is a matter of functions four,
a medium, a measure, a standard, a store.

There is a conflict between the use of money as a store and the use of money as a standard, since if everyone wants to store value at the same time, the value of money is apt to rise, and if everyone wants to use their store at the same time, the value is apt to fall.  Keynesianism therefore addresses a real problem, but its proposed solution tells the ruling class what they want to hear – that they can buy votes with money they do not have, that they can eat their cake and have it to, which is of course not true, and not a solution to the problem.  Keynesianism addresses a real problem, but is not a real solution.

It seems to me that a sounder solution would be to target the long run value of money.  If people had confidence that in the long run, the value of money would be constant, that inflation would run for a few years to be followed by deflation, and deflation would run for a few years to followed by inflation, that what goes up must come down, then I doubt that natural fluctuations would be large or damaging.   Fluctuations are large and damaging because there is no telling what the future value of money is likely to be, because Keynesianism makes money dangerously ineffectual as either a standard or as a store.  This large uncertainty destabilizes the economy.  The objective of monetary policy should be to give people confidence that the value of money will be the same in twenty or thirty years, even if it fluctuates a bit from year to year.

Of course, I am prescribing what an honest issuer of fiat money should do, if he cares about the long term, and wants everyone to continue using the fiat money he issues.  Since issuers of fiat money sooner or later find themselves in a situation where the major question is whether the political leadership will survive another week, such advice is unlikely to be heeded.  Keynesianism will continue to be believed, not because it is true, but because issuers of fiat money are compelled to act as if it was true.

Yale Harvard and Basel style Free Enterprise

Sunday, May 16th, 2010

After the collapse of socialism, the elite support free enterprise – they support it the way they support free speech.

If anyone is allowed to disagree with the orthodoxy taught at Yale and Harvard, or even doubt it, this endangers the free speech of people from Harvard and Yale, and similarly if any enterprise run by people from Harvard or Yale could go bust, this endangers the free enterprise of people from Harvard and Yale.

Basel II is tens of thousands of pages of regulations, no one knows how vast it is, because not all the regulations can be found in any one place, but it could all be replaced by two simple rules:  Politically correct victim groups shall always find it easy to borrow money, regardless of their ability or intention to pay it back, and politically well connected businesses shall always make money, regardless  of whether they are competently run or not.

The seeds of the crisis were the CRA and the ratings agencies.  I have discussed the CRA at length, but the CRA would have been resisted had it not been for other changes in the system that insulated the players against the consequences of making bad loans.  These changes, guaranteeing that badly run businesses would succeed, started with the bailout of the ratings agencies in the seventies, forty years ago.

Back then, the ratings agencies were in trouble, because they had made a lot of bad calls.  It seemed that whenever an institution was going under, the guys at the credit rating agencies were the last to know about it.  Back then, they sold their assessments of credit risk to subscribers. So no one wanted to subscribe.

So in the seventies, the regulators stepped in to make people use the credit rating services. In 1975 the SEC created the Nationally Recognized Statistical Rating Organization (NRSRO) designation. Credit rating agencies so designated received what was in effect a grant of governmental power. The SEC then relied on the NRSRO’s credit risk assessment in establishing capital requirements on SEC-regulated financial institutions – which meant that for SEC-regulated financial institutions to borrow and lend, they had to get rated.  A cascade of regulatory decisions followed over the years, each decision forcing more and more reliance on the risk assessments issued by these demonstrably incompetent institutions – and less and less reliance on other people’s risk assessment.  For more and more organizations, it became illegal for them to make their own judgments about risk.

By the 1990s, as Levine and Partnoy tell us, the NRSROs were not selling assessments of credit risks, but licenses to issue securities.  The rating agencies did not genuinely assess risk, nor did anyone really expect them to.  Nor could repeatedly demonstrated incompetence reduce demand for their services, so the ratings agencies had no incentive to provide correct credit ratings.  Since their income was entirely dependent on the state granting them power, they did, however, have an incentive to make politically correct credit ratings.  If you lend to the poor, the oppressed, etc, and you are run by good old boys from Yale and Harvard, and you make donations to the right politicians, the NRSROs have a very powerful incentive to give you a good credit rating.  And if you have a good credit rating, you can borrow as much as you like – and if you go bust, the government will bail you out.

Badly run companies that had been empowered to borrow as much as they pleased got in trouble – and were bailed out for the same reasons as they had been empowered to borrow as much as they pleased.

In addition to corruptly favorably rating the politically correct, the NRSROs corruptly favorably rated those who simply gave them money, which is perhaps what those who complain about “deregulation” have in mind.  The banks creating structured financial products would first pay the rating agencies for “guidance” on how to package the securities to get high ratings and then pay the rating agencies to rate the resultant products – a glaring conflict of interest, though one less apt to lead to bailouts when the proverbial hits the fan.

Now since all this dirty dealing has cost the taxpayer trillions, you may well ask what measures have been taken to punish the NRSROs for bad conduct, or give them incentives for better conduct in future, or indeed restrain them from continuing to do this stuff?

All the strengthened regulation is regulation to make people continue to treat NRSRO ratings as true, even though it has become horrifyingly apparent that the ratings are generally false.  All the strengthened regulation is more of what caused this mess in the first place.  Any real reform would necessarily start by abolishing the legal privilege of NRSROs, would have to start by rolling back regulations to what they were in 1974.  Instead, compulsion and bailouts are being applied to make NRSRO ratings true, or to enable people to continue pretend that they are true.  Their power has been increased, their misconduct unpunished, and their incentives have become even worse.

President McCain would have been worse.

Thursday, September 24th, 2009

Doctor Zero argues that a President McCain would have been better for various reasons, among them:

none of them would be a Truther, a supporter of cop killer Mumia Abu Jamal, or a communist… let alone all three. His Supreme Court nominations would not have to defend their racial theories of judicial supremacy at their confirmation hearings.

And that is precisely why McCain would have been worse: He would have implemented the policies of financial ruin, national socialism, economic destruction, defeat and humiliation, from the “center”, and these policies would have been associated with Sarah Palin instead of Bill Ayers and Reverend Wright.

American debt

Sunday, September 6th, 2009

Total federal debt twelve trillion

That is not too alarming in itself. It is a bit less than GDP, and for most countries, trouble ensue when debt is around twice GDP. The liberty papers are not too worried.

Total American indebtedness (public and “private”) is sixty trillion, which is much larger than federal debt, and has been rising very rapidly. The primary cause of this rise has been implicit and explicit governmental and quasi governmental guarantees – FHA guarantees, debt of too-big-to-fail corporations, guarantees by too-big-to-fail corporations, state debt, for example California, and so on and so forth.

Some substantial part of this sixty trillion is secured by real assets such as houses and the income stream of hard working people, and some substantial part is not.

Thus the excess “private” debt is not private.  The normal level of public and “private” debt is about twice GDP, say twenty six trillion, so we are about thirty trillion or so in the hole and getting deeper fast – well past the danger level of twice GDP.

Chinese GDP to surpass US by about 2016 or so

Friday, August 14th, 2009

We are already seeing some people heading off to China and opportunity: “Shut Out at Home, Americans Seek Opportunity in China”

According to the CIA, not always a reliable source, China’s 2008 GDP is about 7800 000 000 000$, US 2008 GDP is about 1429 000 000 000$.  Since China is growing about nine percent faster than the US …

In many important respects it has already surpassed the US.  Innovation in the US is very rapidly drying up, while we are seeing dramatic and important innovations coming out of China – for example improvements in the synthesis of liquid fuel from coal, the new CBHD (High density DVDs at low density prices), and critical advances in the most esoteric of the pure sciences, General Relativity.  They are on the leading edge in heavy industry, consumer goodies, and basic pure research.

Although Mainland China is in part still a centralized command economy based on terror, pillage, and murder, in other important ways it is vastly more capitalist than the US. It absorbed capitalism from Hong Kong, which was a lot closer to the hard core capitalism of Manchester and the Industrial Revolution than the diluted and castrated capitalism of the US and Europe, therefore can expect rapid growth rates that catch up to Hong Kong and Singapore, thus massively surpass the US and Europe.

It is often said that America has rule of law and China does not, yet we have lost track of the difference between rule of law and rule of lawyers:  Reflect on the numerous outrageous patent-the-wheel lawsuits and the destruction of the light plane industry when lawyers discovered they could sue people who build planes for not building them as wisely and well as lawyers and courts supposedly would have.  The car industry and the vaccine industry nearly went the same way, requiring federal interventions that suspended what we are now calling rule of law for some industries, but not others.

A big Chinese advantage is that their political elite is less arrogant and less out of contact with reality.  It is willing to acknowledge that government interventions can fail, can have bad results.  When government intervention fails cataclysmally in the US, then that branch of the government is immediately given more wealth, power, and prestige, that area of the economy promptly becomes more socialist.  When government intervention fails in china, then that branch of the government eventually loses wealth, power, and prestige, that area of the economy becomes less socialist.  Thus remaining socialism in China are those parts of socialism that are functioning well, while newly expanded socialism in the US, for example accounting, finance, and perhaps soon health care, is failing disastrously.  The American governing elite is solidly immersed in a cloud of lies and denial, rationalizing away, or simply lying barefaced, about all their failures.  The Enron case led to increased government intervention against truthful accounting, rather than diminished government intervention against truthful accounting, the disastrous losses from affirmative action lending led to an increased takeover of the finance industry, and we are likely to soon see the same in health care.

The Chinese elite still tends to the traditional chinese and communist view that the political elite are the genuinely productive ones, and the entrepeneurs are parasites, and if they were to act on that view, they would return China to the poverty and chaos it has long endured.  Because of this continual threat, the entrepeneurial class in China is to a substantial extent overseas based and cyberspace based.  Chinese companies are largely run through servers located in tax havens, but such non violent defenses could easily fall to a sufficiently determined attack.  Meanwhile, however, the US government is engaged in a sufficiently determined attack on tax havens, having recently successfully pressured the Swiss to deny financial services to Americans, blissfully unaware of the increasing dependence of the American economy on entrepeneurial skills and knowledge mediated through such havens.  Interpreting the golden goose as a parasite, as a challenge to their authority and a rejection of their superior wisdom, they prepare to slay the golden goose.

What is wrong with the Bush/Obama economic stimulus

Sunday, July 5th, 2009

Tim Kane tells us:

Ironically, the harshest critics of Obama are also overly optimistic. The White House wants to believe the stimulus is working. The critics want to believe the stimulus wasn’t necessary because the economy is getting better already.

No, that is not what the harshest critics believe.  The harshest critics, such as myself, believe that the Keynesian description of the crisis only addressed a small and unimportant part of the truth, thus stimulus could only have a small and unimportant benefit.  The economy is not “starting to get better already”, rather it is only beginning to go bad.

The crisis was originally well described by the Austrian model of recessions – we discovered that we were erroneously over investing in the finance and housing sectors, that the value supposedly created by financiers and real estate agents was largely phony, and that many of the customers for housing were unable or unwilling to pay, and that as a result of CAFE and other restrictions on new cars, new cars were less useful than old cars.  As a result, we got a diminution not in aggregate demand but in demand in particular sectors, which cannot be remedied by aggregate stimulus, but only by labor and capital mobility.

The continuing crisis is well described by the “Atlas Shrugged” model, rather than the Austrian or Keynesian model: the government smashes capitalism causing the economy goes to hell.  Thus, for example, a substantial part of the stimulus package was to impose burdens on employers who lay off workers, which of course increases, rather than decreases layoffs.

Our new permanently high level of unemployment will resemble the permanently high unemployment of many European countries.

Smashing capitalism

Wednesday, April 1st, 2009

President Barack Hussein Obama tells us:

Your warranty will be safe. In fact, it will be safer than it has ever been. Because starting today, the United States will stand behind your warranty.

This reads like something out of “Atlas Shrugged”.

I predict fifty percent inflation or so over the next three or four years – and that is if we eventually turn back from this course, or at least stop walking along it.  If, on the other hand, this goes on, with the government taking responsibility for one thing after another, as each intervention creates a crisis bigger than the last crisis, leading to more interventions, then I predict hyperinflation and widespread inability or unwillingness of government to provide order and protect property. Obama is not going to get under your car and fix it, and as the government takes on an ever growing multitude of tasks it is incapable of performing, its performance in its area of core competence (hurting people and breaking things) will deteriorate.

This crisis did not start with Obama, it did not even start with Bush.

During the final years of the Clinton presidency, Clinton greatly strengthened the CRA, which was glowingly reported by the newspapers

More than $1 Trillion Invested through CRA

Lenders and community organizations have negotiated $1.09 trillion in CRA dollars from 1992 to 2000.

A more accurate report of the same facts would be

Politicians shovel one trillion dollars of off budget money to irresponsible and improvident members of narrowly targeted voting blocks, for which taxpayers are going to wind up on the hook

Government regulation winds up as off budget handouts to voting blocks (in this case mostly Hispanics) and well connected insiders (in this case some elements in Wall Street).  Crisis ensues as the bill comes due. To maintain the superficial appearance of normality, there is a drastic increase in intervention, but the synthetic normality is a mere facade, like putting makeup on a corpse.

We now have trillions of dollars of capital flowing away from well managed businesses, to businesses with implicit or explicit government guarantees – businesses that will rapidly lose that money – a huge increase in the already huge off budget expenses of government, in addition to the huge and rapidly growing on budget deficit.  Unacknowledged off budget government expenditures far exceed government’s ability to tax.  They will not necessarily exceed government’s ability to borrow – yet.