Saturday, September 24, 2011

All necessities [will be] provided, all anxieties tranquilized, all boredom amused


Intellectual Roots of Terror

by James Ostrowski

The Black Book of CommunismAs zebras are fascinated by lions, libertarians are fascinated by communists, their polar opposites and sworn enemies for the last 150 years. If one believes that society should function with an absolute minimum of governmental coercion, one is curious to know the results of a philosophy which places its faith in the maximum possible use of governmental coercion, force, and violence, to achieve its goals. If communism worked, we libertarians would be forced to check our premises and watch our backs.

Can the laboratory of communism also shed light on the viability of a related political philosophy, which also relies on centralized governmental coercion to achieve its goals: modern liberalism? The communists did all at once what stealthy left-liberals apparently intend to do piece by piece while we sleep. We just lived through a century in which liberals enacted several recommendations of the Communist Manifesto and transformed a night-watchman state into a welfare/warfare state with a continual flow of "progressive" legislation and various "Democrat wars" and crusades with the result that no one in my law school class in 1983 could identify, in response to Professor Henry Mark Holzer's query, any aspect of life that was not in some way regulated or controlled by the state. Seventeen years later, are they through?

Has liberalism closed up shop? Will they ever be through? Not until they have established an egalitarian utopia where virtually all responsibility for living has passed from the individual to the state. In the liberal utopia, if I may pilfer Paddy Chayefsky's words, "all necessities [will be] provided, all anxieties tranquilized, all boredom amused."

If you think I exaggerate, consider that liberals and communists share five critical premises: egalitarianism, utopianism (the use of impossible "ideals" as a guide to policy), the efficacy of force in accomplishing positive goals, hostility to civil society (nonstate institutions, e.g., Boy Scouts, private schools), and the individual's inability to govern himself.

In light of the recent attempted coup d'Ă©lection, I am tempted to add a sixth similarity — willingness to win political fights at all costs. Further evidence of some basic affinity between communism and modern liberalism is the latter's frequent coverups and apologies for the former. Finally, communists and liberals share a tendency to expressly support "mass democracy" while they in practice concentrate power in secretive elite bodies such as politburos and appellate courts.

The Black Book

In that spirit of fascination with the enemy, I recently read The Black Book of Communism, a clinical and relentless dissection of the crimes of communism in the 20th century — defined by "the natural laws of humanity" — written by several ex–fellow travelers led by Stephane Courtois.

It is not a book to be read before, during, or after a meal. You would not want to spoil a good meal with the image of Bolshevik troops throwing live human beings into a blast furnace. The Black Book is a story of mind-numbing and mindless brutality. Mao Zedong, one of the stars of the book, said, "political power grows out of the barrel of a gun."

One wonders, after reading this book, whether political power actually grows out of the depraved minds of solipsistic, megalomaniacs like Lenin, Stalin, and Mao. It seems that if you hypnotize yourself into discarding all known ethics and morality, and are willing to use any and all ruthless means to achieve power, then you can have it. A Bolshevik newspaper wrote in 1919, "Our morality has no precedent … everything is permitted … Let blood flow like water." And it did.

The Rap Sheet

When Khrushchev said, "We will bury you," he meant it. Communists buried 85 million people in the 20th century, give or take the number of people who live in New York State. What is really interesting, however, is not the sheer number of victims. After all, as Stalin said, "A single death is a tragedy. A million deaths is a statistic." And what a statistician Stalin proved to be.

But even more awesome is the incredible variety of their murderous means. In pursuit of utopia, the communists were forced to outdo themselves in continually discovering ever more ways to separate the bourgeoisie from their souls. They murdered people by hanging them, whipping them, slitting their throats, carving them up with axes, boiling them, crucifying them, beheading them, drawing and quartering them, stoning them, forcing them to fight to the death against other prisoners, massively drowning them, throwing them from helicopters, asphyxiating them, starving them, poisoning them, burying them alive, and making life unbearable leading to mass suicides. When creativity was absent, the communists fell back on their old standby — the banal bullet to the base of the brain.

Think about a world where you have to get a judge's permission to irrigate your crops


Environmentalists Clobber Texas


In April 1993, Murray Rothbard wrote on the Texas water problem, explaining how the government policy was on a disastrous course that could lead to massive drought. That day has finally arrived.
By Murray Rothbard

We all know how the environmentalists, seemingly determined at all costs to save the spotted owl, delivered a crippling blow to the logging industry in the North west. But this slap at the economy may be trivial compared to what might happen to the lovely city of San Antonio, Texas, endangered by the deadly and despotic combination of the environmentalist movement and the federal judiciary.

The sole source of water for the 900,000-resident city, as well as the large surrounding area, is the giant Edwards Aquifer, an underground river or lake (the question is controversial) that spans five counties. Competing for the water, along with San Antonio and the farms and ranches of the area, are two springs, the Comal and the Aquarena on the San Marcos River, which are becoming tourist attractions. In May 1991, the Sierra Club, along with the Guadalupe-Blanco River Authority, which controls the two springs, filed a suit in federal court, invoking the Endangered Species Act. It seems that, in case of a drought, any cessation of water flow to the two springs would endanger four obscure species of vegetables or animals fed by the springs: the Texas blind salamander; Texas wild rice; and two tiny brands of fish: the fountain darter, and the San Marcos gambusia.

On February 1, 1993, federal district judge Lucius Bunton, in Midland, Texas, handed down his ruling in favor of the Sierra Club; in case of drought, no matter the shortage of water hitting San Antonio, there will have to be enough water flowing from the aquifer to the two springs to preserve these four species. Judge Bunton admitted that, in a drought, San Antonio, to obey the ruling, might have to have its water pumped from the aquifer cut by as much as 60 percent. This would clobber both the citizens of San Antonio, and the farmers and ranchers of the area; man would have to suffer, because human beings are always last in line in the environmentalist universe, certainly far below wild rice and the fountain darter.

San Antonio Mayor Nelson Wolff was properly incensed at the judge's ruling. "Think about a world where you are only allowed to take a bath twice a week," exclaimed the mayor. "Think about a world where you have to get a judge's permission to irrigate your crops."

John W. Jones, president of the Texas and Southwestern Cattle Raisers Association, graphically complained that the judge's decision "puts the protection of Texas bugs before Texas babies."

How did the federal courts horn into the act anyway?

Apparently, if the Edwards Aquifer were ruled a "river," then it would come under the jurisdiction of the Texas Water Commission rather than of the federal courts. But last year, a federal judge in Austin ruled that the aquifer is a "lake," bringing it under federal control.

Environmentalists oppose production and use of natural resources. Federal judges seek to expand federal power. And there is another outfit whose interest in the proceedings needs scrutinizing: the governmental Guadalupe-Blanco River Authority. In addition to the tourist income it wishes to sustain, there is another, hidden and more abundant source of revenue that may be animating the Authority.

This point was raised by Cliff Morton, chairman of the San Antonio Water System. Morton said that he believed that the Authority would, during a drought, direct the increased spring flow into a reservoir, and then sell to beleaguered San Antonio at a high price the water the city would have gotten far more cheaply from the aquifer. Is the Authority capable of such Machiavellian maneuvering? Mr. Morton thinks so. "That's what this is all about," he warned bitterly. "It's not about fountain darters."

Wolff, Jones, and other protesters are calling upon Congress to relax the draconian provisions of the Endangered Species Act, but there seems to be little chance of that in a Clinton-Gore administration.

A longer-run solution, of course, is to privatize the entire system of water and water rights in this country. All resources, indeed all goods and services, are scarce, and they are all subject to competition for their use. That's why there is a system of private property and free-market exchange. If all resources are privatized, they will be allocated to the most important uses by means of a free price system, as the bidders able to satisfy the consumer demands in the most efficient ways are able to outcompete less able bidders for these resources.

Since rivers, aquifers, and water in general, have been largely socialized in this country, the result is a tangled and terribly inefficient web of irrational pricing, massive subsidies, overuse in some areas and underuse in others, and widespread controls and rationing. The entire water system is a mess, and only privatization and free markets can cure it.

In the meanwhile, it would be nice to see the Endangered Species Act modified or even — horrors! — repealed. If the Sierra Club or other environmentalists are anxious to preserve critters of various shapes or sizes, vegetable, animal, or mineral, let them use their own funds and those of their bedazzled donors to buy some land or streams and preserve them.

New York City has recently decided to abolish the good old word "zoo" and substitute the politically correct euphemism "wildlife preservation park." Let the Sierra Club and kindred outfits preserve the species in these parks, instead of spending their funds to control the lives of the American people

Friday, September 23, 2011

The beginning of the End


Global Stocks Enter Bear Market
By Stephen Kirkland and Rita Nazareth
Stocks sank, dragging a gauge of global equities into a bear market, Treasury 10-year yields slid to a record low and the Dollar Index rose to a seven-month high amid concern central banks are running out of tools to prevent a recession. Commodities erased gains for the year.
The MSCI All-Country World Index plunged 4.5 percent at 4:39 p.m. New York time and is down 22 percent from its May peak, while emerging-market stocks tumbled the most in almost three years. The Standard & Poor’s 500 Index lost 3.2 percent to 1,129.56 after briefly falling below its 2011 closing low. The Dow Jones Industrial Average slid the most over two days since 2008. Ten-year Treasury yields lost as much as 16 basis points to 1.6961 percent. The Dollar Index rose 1.4 percent.
The Federal Reserve said yesterday it saw “significant downside risks” in the economy and it will replace $400 billion of short-term debt with longer-term Treasuries to spur growth as the recovery falters. China’s manufacturing may shrink for a third month, U.S. jobless claims topped estimates and euro-area services and manufacturing output contracted for the first time in more than two years, reports showed.
“The storyline is that global growth is decelerating,” Mike Ryan, the New York-based chief investment strategist at UBS Wealth Management Americas, said in a telephone interview. His firm oversees $774 billion. “Financial stresses are rising and policymakers are finding few viable options to stabilize the real economy.”
Bear Markets
The MSCI global index of developed and emerging-market stocks joined gauges of European and developing-nation equities in entering a so-called bear market, typically defined as a drop of at least 20 percent from a peak. The only developed markets out of 24 that aren’t in bear markets are the U.S., the U.K., Canada, Singapore and New Zealand. The S&P 500 is down 17 percent from a three-year high at the end of April.
The world is on the eve of the next financial crisis, with sovereign debt at its epicenter, said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., which runs the biggest bond fund. The European Central Bank hasn’t put in place a “circuit breaker” to contain the region’s debt crisis, El-Erian, who is also Pimco’s co-chief investment officer, said at an event in Washington today.
The Dow average plunged 391.01 points, or 3.5 percent, to 10,733.83 and lost 5.9 percent in two days for its steepest decline since December 2008.
Commodity Shares Lead
Gauges of raw-material and energy producers lost more than 5 percent and industrial companies slid 3.8 percent to lead losses among all 10 industry groups in the S&P 500, with Alcoa Inc., Chevron Corp. and Caterpillar Inc. falling at least 4.4 percent. FedEx Corp. (FDX), operator of the world’s biggest cargo airline and considered a proxy for the global economy, tumbled 8.2 percent in its biggest drop since March 2009 after cutting its full-year profit forecast amid falling demand in the U.S. and Asia.
The S&P 500 extended this week’s slump to 7.1 percent and dipped as low as 1,114.22, below its lowest closing level in more than a year. The index lost 2.9 percent yesterday after the Fed’s statement and as Moody’s Investors Service cut its long- term credit ratings on Bank of America Corp. and Wells Fargo & Co., saying U.S. support has become less likely if lenders get into financial trouble. Citigroup Inc.’s short-term rating also was downgraded by Moody’s.
‘Orderly Selling’
“We’re seeing orderly selling,” Ryan Larson, head of U.S. equity trading at RBC Global Asset Management Inc. in Chicago, wrote in an e-mail. “While the headlines and tone remain very much negative, the panic is not setting in.” Larson said he was watching the 1,101 level on the S&P 500, which marked the 2011 intraday low on Aug. 9. “You might see panic set in if that level fails to hold.”

Another case of Boom and Bust


IMF Getting a Little More Worried About China

By Bob Davis

While the International Monetary Fund forecasts torrid 9.5% GDP growth this year in China, the IMF is clearly getting a little more worried that China’s boom could turn to bust.

In the IMF’s Global Financial Stability Report, released on Wednesday morning, economist AndrĂ© Meier assessed the risk of a banking crisis in China and is less than reassuring.

A huge expansion of credit in China since 2008 helped that country prosper despite the global financial crisis. But that lending spree is may produce “significant write downs” on debts by local governments, the IMF report says, citing private sector analysis. Although Chinese government has since tried to slow the growth of traditional bank loans, “other forms of credit have surged,” the IMF said As a result, the IMF estimates, China’s domestic loans equaled 173% of GDP at the end of June 2011, which the IMF called “well above the levels of credit” for developing countries of similar income level as China.

Add to that a real estate boom, which has boosted property prices by at least 60% since the end of 2006. Measures to cool the market “might induce a sharper-than-expected correction in prices,” which could further undermine the ability of local governments to repay debt, the IMF warns. That’s because the localities rely on property sales for financing.

China has the wherewithal to bail out its banks, including $3.2 trillion in foreign exchange reserves. But the IMF says that may not be sufficient to “preclude significant bouts of uncertainty as to how losses will ultimate be allocated” among private investors and the central government. Already, the IMF notes, Chinese bank stock prices are slumping.

If the government does step in, the IMF report says, “the consequences could be a substantial worsening of China’s public debt metrics and a narrower scope for future fiscal stimulus” if the economy does slump.