Incompressible

The mantra of liberals these days is separation of church and State - keep religion out of politics (because apparently religion can somehow make politics even worse), keep theology out of government schools, and so on. The mantra of conservatives is not quite the opposite - because everyone is all too painfully aware of the horrific instances of State power wielded for the purposes of church-sanctioned "purification" of society, the Inquisition being perhaps the most notable example. But evangelical conservatives in the United States have come to see the State as the sole salvation of moral goodness in society. Why, if we don't ban those gay marriages, the whole country will become overrun by a bunch of girly men! If we don't incarcerate teens for pot or alcohol possession, why, they won't learn their lesson! If they intend to destroy their lives on pot and alcohol, we'll make sure we destroy them first in state prisons and juvenile facilities. Think of it li...

In an earlier post , I discussed the risks associated with making extended preparations for extinction events and other armageddon scenarios (by making a human-induced extinction event significantly more probable). I just ran across an article today that presents many of the same concerns about ultra-wealthy misanthropes using their wealth to promote anti-population causes (the latest rage being Global Warming). I found this quote particularly salient: "It may not come as a shock to find that those involved heavily in the unproductive, if still important, sphere of finance should believe that there is little point to the human race. When you are a member of a strand of society that is widely regarded as parasitic on the rest, the notion that the whole of humanity is parasitical on the planet is not a huge intellectual leap. But once you have ruled out suicide as an option, you need some reason to keep going. ‘Saving the planet’ has become a mission statement both for the pointless...

An article in the news today details violent suppression of protests in Zimbabwe. With hyper-inflation (11,000,000%!), Zimbabwe's corrupt government gives us a look behind the curtain at the true nature of any state. When Mugabe came to power, he used the crimes of the British (esp. the much-celebrated criminal, Cecil Rhodes) to justify confiscation of the farms of whites. In principle, retaking stolen property is not wrong. But the State has no interest in justice and a state actor never intends to seize property to do justice. Mugabe has distributed the seized land to his cronies - friends and family - to solidify his power base. In the process, the agricultural industry of Zimbabwe has been decimated and its population hurled into 85% unemployment with disastrous hyper-inflation. This is the true face of the state. Our government is only better as a matter of degree, but its actions in running up public debt, inflating the currency and redistributing wealth from the poor to ric...

The Presidential election is a dog and pony show, people. It is the modern equivalent of the Roman games. The intent is to keep you, the sheeple, distracted on something irrelevant while you are being fleeced by the Washington Mafia. Remember, the basic principle of magic (and street cons) is to conceal the minor motion (the trick) with a major motion (the flourish). The election is the flourish. The bailout is the trick, though today's political magicians are pretty pathetic. They just don't make FDRs anymore. Isn't this a bit extreme? Maybe, maybe not, but you at least owe it to yourself to understand this financial catastrophe and the implications for you. Here's some of the lessons of history that are relevant. 1) Fiat and inflationary currencies always collapse sooner or later. Whether it be the Chinese and their "flying cash" under Kublai Khan, the debased coins of the Roman empire, the paper Continental under the Continental Congress, the paper money of...

http://www.nytimes.com/2008/10/11/ny...1marriage.html Well, we should take time to celebrate the small advances of liberty, especially during these times of rampant fascism. While it is my religious belief that homosexuality is immoral, if two adults make a choice to live in a certain way, that is their business. While marriage, per se, should be a religious, not a civil issue, in my opinion, it is a step in the right direction for the court system to extend the same property protections and make available divorce and other kinds of legal proceedings related to resolving disputes that arise in sexual relationships of any kind. We have a long way to go in terms of sexual freedom - there is still a massive prejudice on the left against poly- lifestyles. It will be interesting to see the left forced to confront its own moral fascism over the next decade or so in the arena of poly- families. Apparently, Canada is already extending some protections to poly- families. Hopefully, the US will ...

The Renaissance Italian Luca Pacioli is credited with the invention of double-entry bookkeeping (liabilities, equity, revenues, expenses and asset balance.) This enables businesses to calculate in terms of money their profitability and track their true capital. When the government redistributes "wealth" it is not really redistributing what economists call wealth ("subjective satisfaction with a good, service or state of affairs") because that cannot be redistributed. Rather, it is redistributing profits orequity (assets). It does this by putting a liability or expense on the balance sheet of one individual or organization (usually in the form of taxes) and simultaneously putting an equity or revenue on the balance sheet of some other individual or organization. This is no different than any other transaction, except that it is not voluntary. Pacioli's double-entry bookkeeping could be used to track how this occurs all throughout our economy as wealth is redist...

What does it even mean for credit to freeze and why should that be a problem? Let's look at what credit is. Loans (credit ) are given out to individuals or organizations on the basis of their credit-worthiness. Credit-worthiness is a kind of financial reputation that is usually attained through documented repayment of past credit. Or, in the case of the loan by which I purchased our second car, credit-worthiness is established through family relationship to my creditor (my wife's grandfather). In any case, loans entail some degree of reputability and trustworthiness of the debtor and the creditor's ability to believe in the debtor's reputability. The giving of a loan requires the creditor to forego the consumption or capital purchases he could have otherwise engaged in with the money. This means that the act of giving a loan has a cost to the creditor. This is a common point of confusion among the populace as the charging of interest (usury) is typically seen as mean-sp...

Here is a sobering article discussing Britain's planned next steps in implementing the techno-fascist society. I would like to note that there are a few monkey wrenches in the plans of the would-be Big Brothers. First, while technology enables data-mining and other voyeuristic activities - to which the perverts in government bureaucracy are perenially addicted - technology also enables far more interaction than is possible without it. Since there are far more data-generators than data-miners, the job is still disproportionately difficult. Second, computers are not AI - they only automate things. Spying requires more than automated data-mining, it requires intelligent filtering. While government perverts can use computer software to amplify the amount and detail of voyeurism they engage in, so long as they are dealing with 1000:1 or greater ratio of human data generators to human data miners, their task will always be just as hard. Last, the more government spies on us, the more in...

Originally Posted by "Undead2" on CARM discussion forums: " So a person in my shop is asking how this will affect him personally? I gave the analogy about how when the price of oil goes up from Saudi, that means the price of corn goes up because farmers must pay more for the deisel in their tractors and that increase must be passed on to consumers, but he doesn't understand (and I am having trouble explaining) how the real estate market will affect him. He says he buys corn but is not buying a house any time soon.. Can you explain to both of us how this could balloon into another depression? Thanks in advance " Well, a recession/depression is inevitable, it's not a "this could happen if the government doesn't step in to ___________" scenario, as is being painted out by the bailout proponents. The only question we need to answer is how deep and long we intend to make this recession. The root causes of this economic downturn are: - too much easy ...

In this little article, Steven Landsburg raises obvious objections to the bailout that few people are talking about. I have been saying essentially the same thing on this forum since the beginning. It's good to know a well-respected economist shares my concerns. Why do we need these big Wall St. banks again? With a price tag of $700bn, surely our leaders owe us an explanation of at least that.

One of the very, very few defenders of freedom in our government, Ron Paul, demolished the bailout proposal in a few short paragraphs today. You can read his statements here . In light of what Ron Paul says, I have a question for those of you touting this bailout bill: If the price of "stability" is rewarding rich, irresponsible CEO's, stockholders and boardmembers of reckless companies and punishing the American public with the double insult of a future tax burden and untold billions in lost investment opportunities, how is stability worth it? What is stability? Is it not having your own 401(k) go down? Is that what this is all about? The war of invested Americans on the uninvested? I cannot for the life of me understand how anyone with an ounce of humanitarian conscience can justify this bailout plan. It is the raw, unconcealed, naked use of power to rob the poor to give to the rich. This is American socialism, folks. Welcome to 1984.

I ask this in light of the new powers (read the section "Out of Control?") the Treasury and the Federal Reserve have bestowed upon themselves. The annual Federal budget is but $3T, a sum whose expenditure is controlled by the 435 members of Congress but just two men have directed the expenditure of over 1/3 of the yearly Federal budget in the span of a couple weeks! Leave aside the sophistry which could be used to justify these actions de jure, and ask yourself, has the executive - and the Fed - assumed de facto dictatorial powers, regardless of the Constitutional window dressing? Remember, Hitler was very careful to have the Enabling Act (which gave him unlimited power) renewed every four years. Legality and reality are often two very different animals. No one (of merit) calls the President a dictator, but does that mean he has not become a de facto dictator? Between the executive branch and the Federal Reserve, is there anything which is truly outside their power to do? I ...

We all know that finances are a key component of how terrorists and mobsters fund themselves. Money can be, in itself, a weapon, especially when it is used to destabilize an economy. If the claims in this article are true, I want to know whether we could bring up the responsible parties on charges of crimes against humanity or other war-crimes level charges?! Destroying hundreds of billions or trillions of dollars of wealth must certainly have very deadly consequences to those left begging on the streets, without medical care, in its wake. Is this not waging war on the poor and downtrodden? Is this not just blatantly corrupt, criminal behavior?! Why is there zero outrage about this? Why doesn't the media care? Why is Congress asleep? You're all arguing about McCain versus Obama while these bilge rats are stealing everything we own. Are you all a bunch of brainwashed zombies? What is wrong with you people!?!? This is all starting to feel just a little surreal. I think I'm g...

I have been watching the cable news networks with some amusement as the financial empty suits have been repeatedly calling for "calm" and "trust." I cannot count how many times I've heard it stated, "this is a crisis of confidence - the worst thing we can do is to lose faith in the system because it will become a self-fulfilling prophecy." FDR said essentially the same thing when he said that "the only thing we have to fear is fear itself." This quote is often seen on TV in connection with the rise of Nazism, but it had nothing to do with that - it was the banking crisis that Roosevelt was talking about. It is the nature of fractional reserve banking that if all depositors do demand all their demand-deposits at once, the banking system will collapse. Note that the uniform sort of fractional reserve banking we have today only exists in a regulatory environment which makes it less profitable to pursue other reserve ratios by protecting the low ...

Frank Shostak of the Ludwig von Mises Institute discusses the bailouts of Fannie Mae and Freddie Mac in his article Are Fannie and Freddie Too Big to Fail? Leaving aside the obvious problem of moral hazard (in this case, foreseeable and widely exploited moral hazard), Shostak explains how the bailout actually causes more immediate damage to the economy than would allowing these institutions to fail, "The view that some institutions are far too big to be allowed to go under is another fallacy. According to the popular way of thinking, if a large institution is allowed to go under, this could cause severe damage to the economy, since the failure of a large institution would generate large disruptive shocks. Since everything in an economy is interrelated, this means that a major shock could end up in a massive disaster. In a market economy, a business that reaches the state of bankruptcy is most likely pursuing activities that do not contribute to real wealth but rather squander weal...

mis•an•thro•py –noun hatred, dislike, or distrust of humankind. There are always those among us who are so overwhelmed with such a sense of self-loathing, that they project their disgust onto the rest of mankind. These people are misanthropists. Today, we typically think of radical Islamic fundamentalists as misanthropists. They are driven by a general hatred of humanity, fueled by their own self-loathing. Certain theological sects within Christianity, especially among Calvinists, use theological arguments to justify a general loathing of humanity. But it is not only the ignorant, backward or social rejects who are misanthropists. The wealthy and powerful harbor misanthropy, as well. What was Hitler's Holocaust fueled by if not misanthropy? The pseudo-science of eugenics which was once very fashionable among the wealthy elite (and which is still alive and kicking today, though it has gone underground and today calls itself "social biology") is fueled by a caustic mixture ...

When you hear the word "liberty" today, you might think of romantic paintings of colonial heroes replete with white stallions, waving flags and tricorn hats. Or, you might think of an eloquent speech by your favorite visionary. Or, you might think of the gun-obsessed paranoid living in some backwater. Most importantly, you are probably thoroughly convinced that you are free, that you have liberty. Today, liberty is more of an abstraction, an obsession of a few complainers for whom nothing will ever be good enough. Today, the only people agitating about liberty are the grumbling misers who don’t want to pay their fair share of taxes along with everybody else or who want to maintain a private collection of dangerous military weapons with no conceivable use of social value. After all, haven’t we achieved equal rights for almost every imaginable social group? Sure, there remains more work to be done, but blacks are no longer openly and formally oppressed, women are paid a far lar...

Frederic Bastiat wrote a now-famous essay titled What is Seen and What is Not Seen . In it, Bastiat discusses the principle of economics that inspired Henry Hazlitt's one lesson in economics: "From this aspect, therefore, the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." (Economics in One Lesson) These long-range consequences, or the consequences for all groups mostly consist of Bastiat's unseen. Because these consequences are unseen, it is easy to discount them in the public discourse. There has been a great deal of discussion on the problems of health care and education, among other issues of social concern in the US during this Presidential race. What I wanted to discuss in this post, in ter...

In a retrospective article on the Russian-Georgian conflict, Lewellyn Rockwell discusses Washington's attempt to resurrect WWI-era rhetoric. He quotes a 1915 book written by Francis Neilson, "How Diplomats Make War": "During a war it is no easy task to prevent your sympathy clouding your reason. The whole social system seems to be organized against any individual attempt to concentrate the attention dominantly upon the causes of the war. Governments, churches, theatres, the press, and local authorities, direct their efforts, in the main, warwards; the whole thought of society and commerce seems to be occupied with war; and all desire to question the reasons given by statesmen for participating in the war must be suppressed. It has been ruled already by certain 'leaders of thought' that it is unwise, unpatriotic, and un-English, to suspect the motives of Governments, or waver for a moment in swearing wholehearted allegiance to the authorities: you must think ...

This article has been making the rounds. The author, Paul McCulley, argues that as the banks deleverage their balance sheets they are counter-acting each other. As bad mortgages are sloughed off, the prices of homes generally fall, driving down the asset columns of all banks' balance sheets simultaneously. He has a point, but this is a symptom of the fraudulent nature of fractional-reserve banking and money multiplication, not an indictment of the sound practice of sloughing bad assets to shore up one's balance sheet. McCulley proposes a band-aid solution that only serves to perpetuate the root problem: shifting the bad assets off of the banks that took them on and forcing taxpayers to foot the bill. The moral hazard of socializing investment risk should be obvious. Frank Shostak of the Mises Institute gives a detailed response to McCulley's article here . A key difference between McCulley and Shostak is the mainstream (Keynesian) view of savings versus the Austrian view o...

What is money? Money is a human invention that solves the problem of a double coincidence of wants in a barter (primitive) economy. Man's earliest form of trade was barter: my rock for two of your bones. The problem with barter - as anyone who has been to a swap meet will understand - is that I have to want something you have and I have to have something you want. What if I don't want any bones and all you have to exchange for my rock is bones? Money emerges from barter as the good which is in greatest demand, or the most marketable good. The reason for this is simple: if you are going to accept a good which you don't want for its own sake (money) in exchange for something you have, you want to be sure that you can get rid of that good to someone else in exchange for something they have that you really want. You can only be confident that this will be the case if the good you are accepting in exchange for what you have is very marketable. There are other properties which mo...