Selecting a “kinder and gentler” candidate

Will the GOP Blow It? 

Conservatives must unite around one candidate to stop Mitt Romney.

By T. Sowell

martin van buuren

Justice Oliver Wendell Holmes said that a good catchphrase could stop thinking for 50 years. One of the often-repeated catchphrases of our time — “It’s the economy, stupid!” — has already stopped thinking in some quarters for a couple of decades.

There is no question that the state of the economy can affect elections. But there is also no iron law that all elections will be decided by the state of the economy.

Pres. Franklin D. Roosevelt was reelected for an unprecedented third term after two terms in which unemployment was in double digits for eight consecutive years.

Warren Harding

We may lament the number of people who are unemployed or who are on food stamps today. But those who give the Obama administration credit for coming to their rescue when they didn’t have a job are likely to greatly outnumber those who blame the administration for their not having a job in the first place.

An expansion of the welfare state in hard times seems to have been the secret of FDR’s great political success in the midst of economic disaster. An economic study published in a scholarly journal in 2004 concluded that the Roosevelt administration’s policies prolonged the Great Depression by several years. But few people read economic studies.

This economy has been sputtering along through most of the Obama administration, with the unemployment rate hovering around 9 percent. But none of that means that Barack Obama is going to lose the 2012 election.

Even polls that show “any Republican” with more public support than Obama do not mean that Obama will lose.

The president is not going to run against “any Republican.” He is going to run against some specific Republican, and that Republican can expect to be attacked, denounced, and denigrated for months on end before the November 2012 elections — not only by the Democrats, but also by the media, which is heavily pro-Democrat.

We have already seen how unsubstantiated allegations from women with questionable histories have dropped Herman Cain from front-runner status to third place in just a couple of weeks.

In short, it takes a candidate to beat a candidate, and everything depends on what kind of candidate that is.

The smart money inside the Beltway says that the Republicans need to pick a moderate candidate who can appeal to independent voters, not just to the conservative voters who turn out to vote in Republican primaries. Those who think this way say that you have to “reach out” to Hispanics, the elderly, and other constituencies.

What is remarkable is how seldom the smart-money folks look at what has actually been happening in presidential elections.

Ronald Reagan won two landslide elections when he ran as Ronald Reagan. Vice President George H. W. Bush then won when he ran as if he were another Ronald Reagan, with his famous statement, “Read my lips, no new taxes.”

But after Bush 41 was elected and turned “kinder and gentler” — to everyone except the taxpayers — he lost to an unknown governor from a small state.

Other Republican presidential candidates who went the “moderate” route — Bob Dole and John McCain — also came across as neither fish nor fowl and went down to defeat.

Now the smart money inside the Beltway is saying that Mitt Romney, who is nothing if not versatile in his positions, is the Republicans’ best hope for replacing Obama.

If conservative Republicans split their votes among a number of conservative candidates in the primaries, that can mean ending up with a presidential candidate in the Bob Dole–John McCain mold — and risking a Bob Dole–John McCain result in the next election.

The question now is whether the conservative Republican candidates who have enjoyed their successive and short-lived boomlets — Michele Bachmann, Rick Perry, and Herman Cain — are prepared to stay in the primary race to the bitter end, or whether their conservative principles will move them to withdraw and throw their support to another conservative candidate.

There has probably never been a time in the history of this country when we more urgently needed to get a president out of the White House, before he ruined the country. But will the conservative Republican candidates let that guide them?

“The debasement of paper money continues…”

Bank of England Announces More Currency Destruction

By Gary Gibson 

Detlev Schlichterv sent us his thoughts on the recent economic events…

“Hi Gary,“Weidmann’s position is understandable. He knows that this will lead to disaster. The Bundesbank is strongly opposed to the ECB’s buying of government bonds. I am pretty confident that concerns over this type of policy are also more widely shared, and more intensely felt, among the German public than in many other countries.

[Editor's note: Germany's recent history is real-world proof of the evils of monetizing government debt with newly created money. For a detailed account of hyperinflation in early 20th-century Germany, get a copy of When Money Dies here, for 20% off.]
“The President of Germany, Christian Wulff, has publicly opposed it, and two senior central bankers in Germany have resigned in protest: Axel Weber, who was a shoo-in to succeed Trichet as ECB president, and Jurgen Stark, who is still chief economist of the ECB, but will leave soon.“But none of this will change the final outcome. These people are fighting a battle they have already lost. The ECB is already committed to supporting the euro-government bond market. The ECB had bought €160 billion in bonds a few weeks back but has since bought more Italian debt. I guess they must be close to €200 billion in total by now. The ECB is the single largest creditor to the Greek government. But what about the treaty, the ‘ban on monetary financing’? Rubbish. The ECB has simply argued that it is buying these bonds to allow a proper transfer of its monetary policy, to sustain orderly markets. And if need be, politicians will simply change the treaty. These people do as they please.“The Bundesbank has two people on the ECB board. They can easily be outvoted. Those who left in protest will be replaced with more-compliant bureaucrats. While Weidmann was giving this interview to the Financial Times, the chief economist of Deutsche Bank was calling for unlimited purchases of Italian bonds by the ECB to keep yields below 5%!“This thing will unfold as I predicted.“Best wishes,“–Detlev”

Just a few hours after getting Detlev’s response, we woke up to find the world rushing to unfold just as Detlev has been predicting. Not to be outdone by the Fed and the ECB, the Bank of England pours on the speed in the quantitative easing marathon. We read in the Financial Times:

“Bank of England Signals More Quantitative Easing”“Economic activity will be ‘broadly flat’ until the middle of next year, the Bank of England warned in a gloomy inflation report which signalled that its monetary policy committee [MPC] will announce more quantitative easing in the coming months.“Sir Mervyn King, the governor, said on Wednesday that ‘inflation is more likely to be below than above the target’ over the next two years, implying that the bank believes more asset purchases will be necessary. The report’s central forecast shows inflation falling to far below the Bank’s 2% inflation target toward the end of 2013, the forecast horizon the MPC considers when deciding whether or not to conduct further quantitative easing.“The bank is due to finish buying the £75billion worth of asset purchases that the MPC announced in October by February. Analysts had already expected more quantitative easing to be announced at that point. But a further round of asset purchases could now be brought forward.“Chris Williamson of Markit said: ‘Concerns over deflation have grown. If the situation in the eurozone fails to improve, then there is a good chance that the MPC could introduce more QE at its December meeting, though it is more likely to wait until the new year.’”

We remind our long-suffering readers every chance we get: Price deflation is a good thing. It’s the thing that free markets do best…turning luxuries into increasingly affordable everyday commodities.

That’s what happens in an environment of free enterprise, competition…and a stable form of money (and stable forms of money are exactly the kind that the markets pick when left to their own devices… without a “flexible” currency imposed on them by a central bank with the force of government law behind it)…

The modern economic myth is that “deflation” — falling prices — is the bogeyman, the killer of economic growth. This myth supports the existence of central banks, whose primary mandates include “price stability.”

Ha! “Price stability” means pumping the economy with more and more money to keep prices from falling.

This is always a bad idea. Because money supply inflation by the government-backed monopoly currency issuer is legalized counterfeiting. It transfers wealth from savers to the central bank…which then doles it out to its commercial bank stooges and eventually to underwater governments…

But the pursuit of so-called price stability is especially malicious during a depression, when falling prices would help the common man the most.

During an economic depression, one of the breadwinners in a household may lose his or her job. The other may not get a raise for two or three years…or ever worse, the remaining jobholder may get a pay cut. Is it better for such a household to have “stable” or rising prices for groceries and gas? Or would they be better off if prices came to reflect general economic conditions and, you know, actually declined?

Governments and central banks don’t see it this way. FDR certainly didn’t when he did everything in his power to prop up food prices “to protect the farm industry” even as it became harder and harder for everyone to afford to eat.

And we haven’t even yet considered that central bank action is what makes the boom and its attendant bust possible in the first place. They cause the illness. Then they prevent the healing. When the condition of the economy worsens, they enthusiastically administer more of the virus.

The result? An increasingly weak economy. The politically well-connected make out just fine under such conditions. After all, they’re the ones who benefit from the inflation-wrought transfer of wealth!

The middle class, however, suffers. They slip into the ranks of the poor. And often, they have no idea why. The mainstream media aren’t exactly of much help in telling them either. In his article “Why the Old Media Ignore Ron Paul,” Thomas DiLorenzo explains why:

“All governments, Rothbard wrote, rely crucially on a set of myths and superstitions about its alleged greatness and benevolence, coupled with accompanying lies, myths and superstitions about the ‘evils’ of freedom, voluntarism, private enterprise and the civil society. These myths and superstitions are not spread by government bureaucrats as much as by various intellectual prostitutes in academe and in the media. The ‘court historians’ of academe spin tall tale after tall tale about the alleged need for more and more government (Keynesian economics would be a good example), while these ideas are spread about to the general public by pundits and journalists.“This, too, is why the media ignore Ron Paul. There are a few exceptions, but for the most part, they have invested many years of schooling and work as propaganda mouthpieces for the state. They are as much a part of the state apparatus as is any government bureaucrat or any politician.“They are the essential tool of the state in dumbing down the general population so that it will peacefully acquiesce in the never-ending expansion of the state and the financial enrichment of all its functionaries, while losing their own freedom and prosperity at the same time.“They are the paid professional liars who repeat, over and over, such absurdities as ‘Higher taxes and more government spending will make us prosperous’…”recessions and depressions are caused by sudden outbursts of greed and animal spirits” (according to John Maynard Keynes); ‘capitalists get rich by selling people products that harm or even kill them’; and on and on and on.”

With this in mind, we cast our dubious, Whiskey-soaked eye upon an article in The New York Times with the headline:

“Middle-Class Areas Shrink as America Divides Into ‘Two-Tiered Society’ of Rich and Poor“Study: 44% of families lived in middle-income neighborhoods in 2007, down from 65% in 1970.”

To be fair, the article didn’t prescribe the usual stuff — more regulations, more taxes on the productive, more redistribution. It just points out the growing gulf between the haves and have-nots, along with the social ramifications.

But it also failed to do what all the other articles from the mainstream media do. Like a cop on the take at a crime scene, it pretended not to notice the muddy footprints leading straight back to the perpetrator’s hideout.

The growing disparity in incomes started in the early 1970s. Despite nominal increases in their wages, working American families haven’t seen real increases in wages or purchasing power since around 1971.

Note, good patron, that was just after President Nixon severed the last ties of the U.S. dollar to gold. We’ve found our perp…and he’s still holding a smoking gun!

The world has been floating on a sea of unbacked currencies ever since. With the luxury of a flexible currency governments have been freer to rack up debts. The financial sector also benefited at the expense of manufacturing. And as Bill Bonner recently put it, “The fed’s funny money system caused the export of millions of good jobs to emerging markets.”

Wealth has been harder to build for the middle class, and now they’re falling hopelessly behind.

You won’t see the press or the academics talking about the damage wrought by unbacked fiat money, however. They’ll point you to the dangers of free trade…or the speculators…or the profit seekers.

They won’t tell you that the one thing that kept the state in check — the gold standard — was the only thing that could have prevented the collapse now unfolding across the world.

(For a more-thorough explanation of how the gold standard kept the state in check and provided the environment for economic progress, please read Congressman Ron Paul’s minority report, The Case for Gold.)

This catastrophe was inevitable. But all hope is not lost. Though the masses may find themselves falling into poverty — and while the mainstream media continue to mock gold and venerate central banking — those in the know have been taking the steps to protect themselves.

Step one is the ownership and continued purchasing of precious metals. Gold and silver are your very first line of defense as the central banks around the world continue to debase their currencies.

Sadly, gold and silver aren’t the bargains they used to be. As we mention from time to time, perhaps the world is slowly waking up to the nature of the problem. Sure, the media and benighted protesters around the world may call for more “help” from the state…but we get the sense that more and more people are figuring out the root of the problem. And they’re bidding up the prices of gold and silver.

The soulless agents of greed

Business and the Literati

By ALGIS VALIUNAS

For as long as the culture of business has been an integral part of American life, it has also been frowned upon by important sectors of our society. Among our intellectuals especially, the business world has been the subject of many brutal caricatures, portraying corporations large and small, and the people who run them, as heartless, soulless agents of greed. These caricatures have shaped our implicit understanding of the nature of the business world, so much that they have come to pass for conventional wisdom.

In recent years, one of the clearest expressions of the reigning caricature was that offered by the commencement speaker who addressed the graduating class of Arizona State University in May 2009. Warning the students away from what he described as the familiar American formula for success, the speaker put forward what he took to be the ethic of the business world:

You're taught to chase after all the usual brass rings; you try to be on this "who's who" list or that top 100 list; you chase after the big money and you figure out how big your corner office is; you worry about whether you have a fancy enough title or a fancy enough car. That's the message that's sent each and every day, or has been in our culture for far too long — that through material possessions, through a ruthless competition pursued only on your own behalf — that's how you will measure success. Now, you can take that road — and it may work for some. But at this critical juncture in our nation's history, at this difficult time, let me suggest that such an approach won't get you where you want to go; it displays a poverty of ambition.

As it happens, those words were spoken by the president of the United States, Barack Obama. But they could easily have been uttered by almost anyone with his education and intellectual pedigree. Those words convey an image that the architects of our elite culture's self-understanding — especially America's foremost authors and playwrights, who do a great deal to shape the way that other intellectuals, and Americans in general, think about our country — have long labored to construct.

The business of America may be business, but the business of American literature in the past century has been largely to insist that the nation is, in pursuing business, wasting itself on unworthy objects. In the eyes of most novelists and playwrights who deal with the subject, business is not an honorable vocation, but rather an obsessive scramble for lucre and status. Tycoons are plunderers. Salesmen are poor slobs truckling to their bosses, though most of them aspire to be cormorants and highwaymen, too. The mass desire to strike it rich has launched a forced march to nowhere. In short, American literature hates American business for what it has done to the souls of the rich, the poor, and the middling alike.

Right-thinking people now take it for granted that, in criticizing business, American literature has saved (or at least elevated) the nation's soul. But after a century of slander, that assumption needs revisiting. In so doing, it is worth examining the process through which our literati have framed the way we think about capitalism, and especially those who practice it. How did our culture come to hold the image of the businessman that it now does? Which literary works and authors have had done the most to shape that (mostly negative) image? And in this casting of the entrepreneur as villain in America's morality tale, which culture has been exposed as more corrupt — that of American business, or American letters?

RAKING THE MUCK

Boodle, graft, scam, gyp, hustle, hoodwink, chisel, flim-flam, chicanery, rake-off, skullduggery, swindle: Our language has a rich and evocative technical vocabulary for snake-bellied business dealing and the government malfeasance that is its indispensable servant. And beside the distinguished native tradition of underhandedness runs a counter-tradition of moral outrage and attempted reform, which emerged with force just as the culture of business was peaking at the turn of the 20^thcentury.

In The Shame of the Cities (1904), Lincoln Steffens — dean of the muckrakers, the vanguard of investigative journalists who early in the 20^th century drew the public's attention to the filthier aspects of our national life — pronounced all Americans complicit in sin: "We break our own laws and rob our own government, the lady at the custom-house, the lyncher with his rope, and the captain of industry with his bribe and his rebate. The spirit of graft and of lawlessness is the American spirit."

Soon after, Upton Sinclair's novel The Jungle (1906) became the most celebrated muckraking work of its time; a century later, it is the only one still widely read. The story relates the brutal suffering of a Lithuanian immigrant meat-packer in Chicago, and sickened the country with indignation at the execrable manner in which food was processed. Nauseating the readership had practical benefits: President Theodore Roosevelt's admiration for the novel — qualified by his distaste for Sinclair's socialism — issued in the passage of the Pure Food and Drug Act and the Meat Inspection Amendment the same year as The Jungle's release.

Sinclair's socialist loathing for the capitalist oppressors thunders through the novel. Here a speaker who will inspire the downtrodden hero to join the Socialist Party roars at the prevailing injustice:

There are a thousand [in Chicago] — ten thousand, maybe — who are the masters of these slaves, who own their toil. They do nothing to earn what they receive, they do not even have to ask for it — it comes to them of itself, their only care is to dispose of it. They live in palaces, they riot in luxury and extravagance — such as no words can describe, as makes the imagination reel and stagger, makes the soul grow sick and faint. They spend hundreds of dollars for a pair of shoes, a handkerchief, a garter; they spend millions for horses and automobiles and yachts, for palaces and banquets, for little shiny stones with which to deck their bodies. Their life is a contest among themselves in ostentation and recklessness . . . .

Thorstein Veblen, whose Theory of the Leisure Class (1899) provided the muckrakers with an abstract sociological foundation, lamented with a characteristically dry eye that vice does a man more good than virtue if he wants to get on in the world: "Freedom from scruple, from sympathy, honesty, and regard for life, may, within fairly wide limits, be said to further the success of the individual in the pecuniary culture." From Veblen, whom he read with "a continuous ebullition of glee," Sinclair learned the shame of conspicuous consumption: Lives wasted in profligate expenditure never appear more repulsive than through Sinclair's eyes. His novel The Metropolis (1908) is a 200-page catalogue of exorbitant self-indulgence by the wealthiest people in New York. Preposterous extravagance and pretensions to gentility constitute the obverse of tearing wolfishness; persons of savage appetite bare their teeth when denied their rightful pleasures. In The Moneychangers (1908), a priapic 80-year-old banker — the most powerful man on Wall Street — destroys his sexual rival and the young woman he wants, and brings on a nationwide depression in the process, just to teach the rabble to fear their masters. Sinclair's villains are peerless in their malignancy.

Infinite repetition

Finance in Parrot Talk

By Anthony de Jasay*

George Stigler, the 1982 Nobel laureate, was almost as great a humorist as he was an economist. His deadpan irony was devastating. In his The Economist as Preacher and Other Essays he speaks of "that most irresistible of all the weapons of scholarship, infinite repetition."1

I call "parrot talk" the loud and relentless repetition of some plausible fallacy that is first launched as an original and debatable notion by some minor authority or small group, often with an axe to grind, and then, by a mysterious process of perverse selection, is taken up and hammered home by public intellectuals and the media, triumphantly becoming a firmly established truth. When used as prophecy or forecast it is liable to be self-fulfilling. When used as explanation and diagnosis, it dictates the remedy. In either case, it is capable of causing deep and lasting damage in political thought and the public policy the thought tends to shape.

In the present column and the one next month I will be dealing with a few particularly insidious and dangerous subjects of parrot talk. I will first recall a few that I had identified in earlier writings. Then I will present some more recent untruths, such as the idea of "financial capitalism", the supposedly vital need, to stock up the banks with extra capital, monetisation of the debt, and the alleged vices of modern capitalism, such as speculations and short-termism.

Fundamental Fallacies2

Among my Collected Papers there is an essay entitled "Parrot Talk."3 It treats a number of fallacies in political philosophy that, looking plausible and pleasing to most people's ears are being repeated on every possible occasion with an air of assured conviction. Each time they are declared, more academic parrots take them up and relay them in ever wider circles until they become ineradicable common knowledge that feeds prevailing political thought.

One of these fallacies, pilloried in "Parrot Talk," is the separateness of production and distribution. The gross national cake is first baked according to the laws of economics, and then sliced and distributed according to the collective decisions of society. It remains unsaid that the very reason why a cake of a certain size is baked at all (rather than a sweeter, bigger or smaller one or indeed none) is that its distribution will be of a certain kind and not a different one. Income is not a grabbed and redistributed with impunity without reacting back on production.

Another fallacy, often repeated to reassure the voter called "liberal" in English English that he has little to fear from the candidate called "liberal" in American English, is that it is possible to bring about equality of opportunity without enforcing equality of outcomes. It takes a minute of extra thought to realise that once preceding outcomes are allowed to be unequal, current opportunities cannot possible remain equal.4 But this extra minute of thought is suppressed by the rising noise of parrot talk. Finally, the essay notes that the most widely accepted modern theory of justice lays down, as its first principle, that everybody must have a right to the greatest possible liberty compatible with the same liberty for everybody else. One may ask why having a right to liberty is better, or different, than having liberty itself. Adding the "right to" should raise suspicious second thoughts, or perhaps it is just empty verbiage—but having a right always sounds nice, and passes well in parrot talk.

Must Safety-First Economics Prevail?

What the earlier "Parrot Talk" essay sought to do in political thought, the present one aims to do in the current language parrots use about finance. It is written by taking as read certain well-established theses of neo-classical economics that are basic to what in English English is called "liberalism".

Thanks to incessant repetition in the last few years, public opinion is now convinced that risk is a bad thing and ought to be purged from the economy as far as possible. Economics, on the contrary, teaches that some risk is inevitable because the future is not predictable, and necessary for efficiency. The size and severity of risk and its price should and under a regime of free contract would adjust to each other. The wish to avoid risk by paying the market to bear it (e.g. by hedging, forward dealing or insurance) would, in equilibrium, be equal to the willingness of the market to assume that risk. This situation is an optimum, because neither the marginal risk-avoider nor the marginal risk-bearer can expect to do better by moving away from it. The spectacular stock and bond market losses of 2008-2009 showed that the expectations of large operators, such as the insurer as AIG, may occasionally be spectacularly wrong (especially if biased by existing regulations and Fannie Mae activities, as was the case in the U.S. residential mortgage market), but they did not invalidate the theorem. The losses were the outcomes of zero-sum games and as far as one can tell, they involved no destruction of tangible value. As Milton Friedman would say, for every loser, there was a gainer. Damage did occur due to massive mismanagement of the shock waves, but not because risk was allocated by price in the first place. After all the ensuing parrot talk, the received truth now is that risk is bad and almost reprehensible and should be purged from the system. Poor system! Risklessly, it would be heading for an unpromising future.

The condemnation of risk and particularly of its assumption by professional risk-bearers has become a rock-solid dogma. It is not the only one that is firmly believed because everybody else seems to believe it and is saying so. The over-arching untruth that assiduous parrot talk is converting into a new truth is that the freedom of contract, the basic enabling condition for allocative efficiency in the economy, is "all right in theory but does not work in practice" and needs to be limited and regulated in an ever larger variety of sensitive contexts, many of them in finance. Loses made by any lame duck industry must be doctored because they are obviously bad things. Finance attracts the curiosity of the busybody because its techniques are ill understood and it is shrouded in an air of mystique and power.

"Finanzkapitalismus"

German parrot talk has achieved the feat of uniting in a single word two of the most hated ideas that in other current languages would take two or more to express.

There must be some people, though not very many, who would be happier as cavemen or nomadic herdsmen battling periodic famine and the cruelty of elements than denizens of our urban civilisation. For the rest of us, however, the populist dreams of abolishing the "dominance of money and the dictatorship of the market", as well as seeking "production for real needs, not for profit" should and can be dismissed as irrational ranting. It would be rational if we harboured a strong streak of masochism that could best be satisfied by self-inflicted economic and social pain.

At a more sophisticated level than masochistic oratory, a few standard accusations are obstinately levelled against finance, capitalism or both. Often no distinction is drawn between the two, which can be excused on the ground that finance and capitalism have flourished together and though each can be imagined without the other, the result looks painfully contrived. Quantitative economic planning by input-output matrices, on the one hand, and market socialism on the other, are examples of such contrived monstrosities. You can perhaps run an economy without prices set in a single money of account, but it looks hardly promising. You can perhaps run a money economy while suppressing the profit motive, but it looks unpromising, too.

The steady stream of parrot-talk charges come under two headings. One is morality. Capitalism is immoral because it promotes immoral or at best amoral conduct in pursuit of a morally worthless objective, profit. It also generates inequality of material conditions among men, and relations of subordination. It is not realised that all economic systems, except perhaps subsistence farming, do these things and have done so through history. Where capitalism is superior to its real or putative alternatives is in its relation to morality. It is the only system where the optimal rule to follow in order to achieve success is "honesty is the best policy", ( though following a rule is not the only or necessarily a better road to success than not following one). Capitalism, as has been recognised by the more intelligent among its defenders, systematically economises morality: it needs less of it than other systems in order to function properly. It achieves more with morally fallible human agents than in other systems could hope to do by relying on the scarce supply of clean-handed, selfless, public-spirited people they could find. Capitalism shrinks the opportunities for corruption, pre-capitalist and socialist systems open them widely.

Under the less high-minded heading of stability and efficiency, parrot wisdom, particularly since the mayhem of 2008, has it that an excessive financial superstructure renders the economy top-heavy, crisis-prone and badly in need of re-regulation after the decades of doctrinaire free-marketism of the latter part of the 20th century. This charge, for all its plausibility with bank rescues and stubborn unemployment weighing on our minds, is nevertheless an arbitrary one. The capitalist economies and in particular their financial service sectors prior to 2008 were too lightly regulated in the view of some, too heavily in that of others. They were in either view hybrids. There is no earthly way of telling, from the performance of a hybrid system, what the performance of a pure system would have been. Maybe putting the banks in straitjackets would have averted 2008, maybe setting them really free to swim or sink would have done it. Maybe neither would have made much difference. But pretending to know that more regulation was needed, as Mr. Volcker, Mr. Mervyn King, Dodd-Frank legislators and the Basel committee do and as incessant parrot talk to the same effect raises to the rank of a self-evident truth, should not be allowed to serve as an argument-stopper.

Probably the best French current affairs commentator exclaimed the other day that every day hundreds of billions of money transactions flow through the exchanges without the least attempt by governments at regulating them, and this was truly terrifying and inadmissible. She might as well have added that every day hundreds of billions of hectolitres5 of water slosh about in the oceans without the least attempts by governments to regulate them, and this was truly inadmissible and terrifying.

---

Footnotes

1. George J. Stigler, The Economist as Preacher and Other Essays. (Chicago University Press, 1982), p.122.

2. [Editor: Anthony de Jasay continues the great tradition in free market economics of exposing the commonly held "fallacies" which prevent clear thinking on economic matters. The 19th century French political economist Frédéric Bastiat was a master of this form (see his Economic Sophisms (1848) available online at the Library of Economics and Liberty and at the Online Library of Liberty). In our own century there is Thomas Sowell, Economic Facts and Fallacies (New York: Basic Books, 2007, 2011) and the "letters to the editor" by Prof. Don Boudreaux at Café Hayek.]

3. [Editor: To avoid confusion one needs to distinguish between the general concept of "parrot talk" which Jasay is exploring in this essay, and the essay in his Collected Papers which has the title "Parrot Talk".]

4. This point was made by Robert Nozick in his discussion of the earnings of Wilt Chamberlin in Anarchy, State, and Utopia. (New York: Basic Books, 1974), "How Liberty upsets Patterns," pp. 160 ff.

5. [Editor: A hectolitre is 100 litres, which is the equivalent of 26.4 U.S. gallons.]

Politics and religion

WHAT DOES CO2 HAVE TO DO WITH CLIMATE?

BY JOHN HINDERAKER

Little or nothing, if Tim Ball is correct. This post on his web site packs more iconoclasm (and useful information) into a shorter space than just about anything I have read on the subject:

Recently a Japanese Research Institute published a satellite map of sources of CO2 emissions. It was virtually ignored by the mainstream media, but that has become an inverse measure of its significance to the climate debate. It showed a pattern that most would not expect because of the misleading information presented by the Intergovernmental Panel on Climate Change (IPCC) amplified by most media.

Here it is:

North America is a net consumer of CO2. Dr. Ball explains: 

“The map is only surprising if you believe that humans are the primary source of CO2.” 

But he is just getting warmed up:

The oceans are the main control of atmospheric CO2 as one of the atmospheric gases in constant flux between the water and the atmosphere. The ocean’s ability to absorb CO2 is a function of its temperature – cold water absorbs more CO2 than warm water.

This is why whenever the Earth’s climate gets warmer, it is followed by an increase in atmospheric CO2.

There are several misconceptions about CO2, most created because proponents tried to prove the hypothesis rather than the normal scientific practice of disproof. It helped them if the misinformation created unfounded fears. An early IPCC claim said atmospheric residency time of CO2 was at least 100 years. Done, ostensibly, for the political point that even if we stopped production immediately the damage was done. We now know the actual time is at most 5 to 6 years. The major assumption of the hypothesis says a CO2 increase causes a temperature increase. After publication in 1999 of Petit et al., Antarctic ice core records were presented as evidence. Just four years later proof that the major assumption of the hypothesis was wrong appeared. Somehow it was shuffled aside, probably because of the diversionary claim that the lag was between 80 and 800 years. It doesn’t matter, it still contradicts the basic assumption. Temperature change before CO2 change is the case in every record for any period or duration is studiously ignored by proponent and skeptic.

Humans actually have little to do with the production of CO2:

According to the IPCC, who produce the original numbers, humans produce approximately 9 gigatons of CO2 per year. This is within the error factor for the amount of CO2 from at least two natural sources. Estimates of CO2 from natural sources are very crude as evidenced by the large error factors. Reports with headlines like, “Forests soak up more CO2 than thought” and “Old-growth forests absorb CO2 too: study” keep appearing. In 2010 humans produced 9 gigatons, but ocean output was between 90 and 100 gigatons and ground bacteria and rotting vegetation was between 50 and 60 gigatons according to Dr Dietrich Koelle. Spread the human annual production across the planet and it doesn’t even show on the world map. The pattern confirms this because it reflects natural sources.

Global warming alarmism isn’t science, it it a combination of politics and religion. Dr. Ball sums up: 

“Science must be about skepticism, otherwise the science is settled, but then it isn’t science.”

UPDATE: The alarmists are trying to shut Dr. Ball up. Two of them, the notorious Michael Mann and Andrew Weaver, are suing him for libel. Dr. Ball, one of Canada’s foremost climatologists (now retired) said of Mann that he “should be in the State Pen, not Penn State,” for his role in covering up climate fraud, and of Weaver that he cherry-picked scientific data in his work with the IPCC. It would be great fun to conduct discovery on Dr. Ball’s behalf, but that costs money–money which Mann and Weaver assume that Ball, a retired academic, does not have. You can contribute to Ball’s legal defense fund at the linked web site.

The China Model is falling apart

Every province in China is Greece?

By Dinocrat

Epoch Times:

Larry Lang, chair professor of Finance at the Chinese University of Hong Kong, said in a lecture that he didn’t think was being recorded that the Chinese regime is in a serious economic crisis — on the brink of bankruptcy. In his memorable formulation: every province in China is Greece. The restrictions Lang placed on the Oct. 22 speech in Shenyang City, in northern China’s Liaoning Province, included no audio or video recording, and no media. He can be heard saying that people should not post his speech online, or “everyone will look bad,” in the audio that is now on Youtube…

Lang’s assessment that the regime is bankrupt was based on five conjectures. Firstly, that the regime’s debt sits at about 36 trillion yuan (US$5.68 trillion). This calculation is arrived at by adding up Chinese local government debt (between 16 trillion and 19.5 trillion yuan, or US$2.5 trillion and US$3 trillion), and the debt owed by state-owned enterprises (another 16 trillion, he said). But with interest of two trillion per year, he thinks things will unravel quickly.
Secondly, that the regime’s officially published inflation rate of 6.2 percent is fabricated. The real inflation rate is 16 percent, according to Lang. Thirdly, that there is serious excess capacity in the economy, and that private consumption is only 30 percent of economic activity. Lang said that beginning this July, the Purchasing Managers Index, a measure of the manufacturing industry, plunged to a new low of 50.7. This is an indication, in his view, that China’s economy is in recession.

Fourthly, that the regime’s officially published GDP of 9 percent is also fabricated. According to Lang’s data, China’s GDP has decreased 10 percent. He said that the bloated figures come from the dramatic increase in infrastructure construction, including real estate development, railways, and highways each year (accounting for up to 70 percent of GDP in 2010). Fifthly, that taxes are too high. Last year, the taxes on Chinese businesses (including direct and indirect taxes) were at 70 percent of earnings. The individual tax rate sits at 81.6 percent, Lang said…

Professor Frank Xie at the University of South Carolina, Aiken, said that the idea of China going bankrupt isn’t far fetched.Major construction projects have helped inflate the GDP, he says. “On the surface, it is a big number, but inflation is even higher. So in reality, China’s economy is in recession.” Further, Xie said that official figures shouldn’t be relied on.

Oh those empty cities. Also in the piece above: “former aide to ousted Party leader Zhao Ziyang, said that high praise of the ‘China model’ is often made on the basis of the high-visibility construction projects.” We recall some of that praise from a few years ago.