Creeping Fascism, Part One

Return of the Company Town

By John Rubino

The US government's obliteration of the Bill of Rights via the Patriot Act, the recent defense bill that allows the military to detain citizens indefinitely without trial, the health care law that forces citizens to buy insurance, and the attempted takeover of the Internet through SOPA and PIPA has gotten a lot of attention lately, and in a few rare cases has generated some effective push-back.

But according to an article in this month's Harper's Magazine (Killing the competition: How the new monopolies are destroying open markets, by Barry C. Lynn), US corporations are evolving into forms that are more threatening to their victims than anything emanating from Washington. As the author characterizes it, a new generation of monopolists are imposing their own private governments on their industries -- and not always the industries one would expect. This long, detailed article should be read by anyone with a desire to understand how the US is evolving. Here I'll highlight a few excerpts to summarize the major plot points:

Silicon Valley

Just a few years ago a software engineer's talents were almost completely portable, allowing a programmer to move effortlessly between tech companies. In other words, there was a functioning market for talent in which the individual had power and choice vis-à-vis local employers. Then a handful of companies began to accumulate near-monopoly control over their product lines -- and their workers. From the article:

Τhe shores of Tripoli.

Remember Libya?

If you thought the war ended last year, you're dead wrong.

By ADAM GARFINKLE

Last week, the New York Times carried a front-page story on Libya entitled “Libya Struggles to Curb Militias as Chaos Grows.” If the headline were not enough to clarify the main point, the subheads in the print edition were: “Government Paralyzed” and “Officials Confronted by Rivalries, Grievances and Old Habits.”

To my knowledge, this is the first front page New York Times story on Libya in many, many weeks. The occasion for the story seems to be crack New York Times Arab-world reporter Anthony Shadid’s visit to Tripoli. If that is so, then the story is a prime example of nomad journalism. That interpretation of the occasion for the story is strengthened by the fact that the story itself appears to contain no brand new hard news. It is rather a short feature, as opposed to a straight news article, that reviews events of the past several weeks and months, speckled strategically with pithy quotations Shadid managed to elicit (and presumably translate into English) from several locals.

The end has come, but is not yet in sight

America 2.0

By WALTER RUSSELL MEAD

Writing about the onset of the Great Depression, John Kenneth Galbraith famously said that the end had come but was not yet in sight. The past was crumbling under their feet, but people could not imagine how the future would play out. Their social imagination had hit a wall.

The same thing is happening today: The core institutions, ideas and expectations that shaped American life for the sixty years after the New Deal don’t work anymore. The gaps between the social system we inhabit and the one we now need are becoming so wide that we can no longer paper over them. But even as the failures of the old system become more inescapable and more damaging, our national discourse remains stuck in a bygone age. The end is here, but we can’t quite take it in.

Mussolini’s Last Words

Mussolini, Mugabe, Ceausescu, Blunt—none of them ever got it up again after losing their knighthood

by Taki Theodoracopulos

At ten minutes past four on the afternoon of April 28, 1945, a plumber named Moretti shot and killed a prematurely aged man and a youngish woman who was not wearing any underwear in front of the Villa Belmonte near Lake Como. Next to Moretti—who was later tried for theft and other misdeeds—was one Colonel Valerio, whose submachine gun had jammed while he was trying to shoot the defenseless couple.

The skeleton that rattles loudest in the left's closet

Eugenics

William Beveridge, who argued that those with 'general defects' should be denied not only the vote, but 'civil freedom and fatherhood'

Socialism's one-time interest in eugenics is dismissed as an accident of history. But the truth is far more unpalatable

By Jonathan Freedland

Does the past matter? When confronted by facts that are uncomfortable, but which relate to people long dead, should we put them aside and, to use a phrase very much of our time, move on? And there's a separate, but related, question: how should we treat the otherwise admirable thought or writings of people when we discover that those same people also held views we find repugnant?

Chinese Labor, Cheap No More

The after-’80s generation 

By MICHELLE DAMMON LOYALKA

WHEN China’s vice president, Xi Jinping, visited the White House on Tuesday, President Obama renewed calls for China to play more fairly in the world economy. Vice President Joseph R. Biden Jr. echoed those sentiments, telling Mr. Xi that the two countries could cooperate “only if the game is fair.”

But while China’s industrial subsidies, trade policies, undervalued currency and lack of enforcement for intellectual property rights all remain sticking points for the United States, there is at least one area in which the playing field seems to be slowly leveling: the cheap labor that has made China’s factories nearly unbeatable is not so cheap anymore.

China has experienced sporadic labor shortages, which in turn have driven up its once rock-bottom labor costs. This trend is particularly evident in the weeks following China’s Spring Festival, or New Year, when more than 100 million rural migrants return to the countryside to spend the year’s biggest holiday with family. Coaxing those same migrants back into the urban work force has proven increasingly difficult.

Germany drawing up plans for Greece to leave the euro

Schäuble's realistic pessimism

Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiraling out of control - with or without a second bailout.

By Bruno Waterfield

The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.

But the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them.

His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020.

Handing out condoms on the Titanic

Brokest Nation In History Fusses Instead About Sex

By MARK STEYN

Have you seen the official White House version of what the New York Times headline writers call "A Responsible Budget"?  My favorite bit is Chart 5-1 on Page 58 of their 500-page appendix on "Analytical Perspectives." This is entitled "Publicly Held Debt Under 2013 Budget Policy Projections."

To infinity and beyond!

This is the debt chart Obama and Geithner should be ashamed of

By James Pethokoukis

Testifying before the House Budget Committee today, U.S. Treasury Secretary Tim Geithner told Chairman Paul Ryan the following: 

“We’re not coming before you to say we have a definitive solution to that long-term problem. What we do know is we don’t like yours.”

Actually, President Obama sort of did have a definitive solution. He created a debt commission, which devised a long-term debt reduction plan. Which the president rejected. And instead, we get this new budget proposal, which makes no effort to deal with Medicare, Medicaid, and Social Security—the long-term drivers of U.S. federal debt. The debt curve never gets bent, as the above White House (!) chart shows. (Yes, the chart comes from the White House’s Office of Management and Budget.) It just goes up and up and up—until the heat death of the universe or the economy is struck by a Greek-style debt crisis.

It's in overtime already

A New “New Halftime” Commercial

By Jeff Harding 

Those of you who remember the hilarious cartoon that described quantitative easing, will know the mind of Omid Melikan. He has done a series of these cartoons which we will be featuring here soon.  Here Omid does his take on what Clint’s “Halftime in America” ad should have been. I think you will enjoy it. And thank to Omid.

A Race to Hunger

Rent seeking in bio-fuels still going strong

By Bjørn Lomborg

Spectators at February’s Daytona 500 in Florida were handed green flags to wave in celebration of the news that the race’s stock cars now use gasoline with 15% corn-based ethanol. It was the start of a season-long television marketing campaign to sell the merits of biofuel to Americans.

On the surface, the self-proclaimed “greening of NASCAR” (National Association for Stock Car Auto Racing) is merely a transparent (and, one suspects, ill-fated) exercise in an environmental form of whitewashing for the sport – call it “greenwashing.” But the partnership between a beloved American pastime and the biofuel lobby also marks the latest attempt to sway public opinion in favor of a truly irresponsible policy.

The United States spends about $6 billion a year on federal support for ethanol production through tax credits, tariffs, and other programs. Thanks to this financial assistance, one-sixth of the world’s corn supply is burned in American cars. That is enough corn to feed 350 million people for an entire year.

Government support of rapid growth in biofuel production has contributed to disarray in food production. Indeed, as a result of official policy in the US and Europe, including aggressive production targets, biofuel consumed more than 6.5% of global grain output and 8% of the world’s vegetable oil in 2010, up from 2% of grain supplies and virtually no vegetable oil in 2004.

Hubris and Lobying

Over-regulated America

The home of laissez-faire is being suffocated by excessive and badly written regulation

By The Economist
AMERICANS love to laugh at ridiculous regulations. A Florida law requires vending-machine labels to urge the public to file a report if the label is not there. The Federal Railroad Administration insists that all trains must be painted with an “F” at the front, so you can tell which end is which. Bureaucratic busybodies in Bethesda, Maryland, have shut down children’s lemonade stands because the enterprising young moppets did not have trading licences. The list goes hilariously on.

But red tape in America is no laughing matter. The problem is not the rules that are self-evidently absurd. It is the ones that sound reasonable on their own but impose a huge burden collectively. America is meant to be the home of laissez-faire. Unlike Europeans, whose lives have long been circumscribed by meddling governments and diktats from Brussels, Americans are supposed to be free to choose, for better or for worse. Yet for some time America has been straying from this ideal.

What Argentina tells us about Greece

Greece and the euro

By G.I.

The Free Exchange column in this week's print edition is a guest article by Mario Blejer and Guillermo Ortiz, former central-bank governors of Argentina and Mexico respectively. They note that some advocates of Greek exit from the euro cite Argentina's abandonment of its currency board in 2002. The peso devaluation that followed the collapse of the currency board led to a boom in Argentine exports and growth. Mr Blejer and Ortiz say these advocates understate the chaos that occurred in Argentina, and how much worse it would be in Greece:

"As soon as devaluation was considered possible, a persistent bank run took place in Argentina. It lasted for over a year and consumed two-thirds of the country’s foreign-exchange reserves...Exiting the euro would require the compulsory redenomination of banks’ assets and liabilities, and of practically all contracts, prices and wages. In Argentina, where dollars were widely used as a unit of account, redenomination took the form of “pesification”. It had vast redistributive consequences. If Greece abandons the euro the “drachmatisation” of loans and deposits—and the exchange-rate movements that would follow—would benefit bank debtors and harm depositors, leading to further social turmoil."

Bad as it was for Argentina, it would be worse for Greece: 

A weird little fairy tale

$6 Trillion In US Bonds Seized In Zurich, Said To Pose "Severe Threats To International Financial Stability"?

by Tyler Durden 

Back in the summer of 2009, a peculiar story circulated when two Japanese individuals were arrested trying to smuggle $134 billion in US bonds into Switzerland from Italy. The story quickly died down after it was subsequently reported that the bonds were merely fake bearer bonds. Nobody heard much about it since then. Until today, when out of the blue we get a new story which blows that one out of the water.

According to Bloomberg, "Italian anti-mafia prosecutors said they seized a record $6 trillion of allegedly fake U.S. Treasury bonds, an amount that’s almost half of the U.S.’s public debt."

The euro could turn into Monopoly money

This is Financial Armageddon, Lehman x 1,000

By Keith Barron

... “Once there is a resolution to this situation in Greece, we will see resurgence in the gold price.  We will see some major moves.  The only way to get out of this Greek mess right now is to bail it out with money.  We don’t know who’s going to do it.  They were talking with the Chinese today about getting them involved in a rescue fund.”

How many unknowns are really known

Do We Really Know Greece's Default Will Be Orderly? 

The market seems to be pricing in an orderly Greek default or a successful "firewall" around the potential instability. Are the unknowns really all known?

by Charles Hugh Smith

The equities market is acting like we know Greece's default will be orderly and no threat to financial stability. It is also acting like we know the U.S. economy can grow smartly while Europe contracts in recession. Lastly, the high level of confidence exuded by market participants suggests we know central bank liquidity is endlessly supportive of equities.

From Alfred Hitchcock to Johann Sebastian Bach

The day Teller gave me the secret to my career in magic

By Brian Allen Brushwood

Lately a lot of young magicians have been asking me for advice, which has caused me to remember one of the most valuable correspondences of my life:  one of the most mind-blowing letters I ever received, chock-full of insights that to this very day guide my career and philosophy in both creating and performing magic.

This is a pretty long post, but with Teller's permission, I'd like to share with you the secrets he gave me 14 years ago to starting a successful career in magic.

The pains of growing up

The eternal search for freedom from responsibility

Blame football fans not the police for the deaths of seventy people after a football match in Egypt 

by Theodore Dalrymple

The deaths of at least seventy people at a football match in Egypt has confirmed my reasoned prejudice against this sport, whose psychological, cultural and economic effects is so disastrous. Of course, there is nothing in the game itself, apart from its inevitable propensity to injure the players, that is intrinsically deleterious; but all that surrounds it, at least in its modern professional form, is harmful and horrible.

USA on automatic pilot

Athens on the Potomac

Yet another invitation for the conflagration in Greece to leap the Atlantic

By the Chicago Tribune editors

President Barack Obama's budget proposal Monday all but seals the deal: Together, Washington Democrats and Republicans have stopped governing. Both parties now are on automatic pilot. They'll do as little as possible to solve this nation's debt crisis before Nov. 6. Instead they'll wait to see whether American voters firmly choose a direction for the United States and its destructive indebtedness.

How destructive? Conveniently, one of this nation's plausible futures plays out vividly on a TV screen near you: Fire-heaving mobs enraged by the harsh consequences of rampant public borrowing have torched one of Europe's grossly indebted capitals, Athens. Fretful officials in other capitals — Rome, Lisbon, Madrid and more — must wonder whether the flames will rage in their countries next.

A blessing in disguise ?

California’s Demographic Revolution

If the upward mobility of the impending Hispanic majority doesn’t improve, the state’s economic future is in peril.

By Heather Mac Donald

California is in the middle of a far-reaching demographic shift: Hispanics, who already constitute a majority of the state’s schoolchildren, will be a majority of its workforce and of its population in a few decades. This is an even more momentous development than it seems. Unless Hispanics’ upward mobility improves, the state risks becoming more polarized economically and more reliant on a large government safety net. And as California goes, so goes the nation, whose own Hispanic population shift is just a generation or two behind.

The scale and speed of the Golden State’s ethnic transformation are unprecedented. In the 1960s, Los Angeles was the most Anglo-Saxon of the nation’s ten largest cities; today, Latinos make up nearly half of the county’s residents and one-third of its voting-age population. A full 55 percent of Los Angeles County’s child population has immigrant parents. California’s schools have the nation’s largest concentration of “English learners,” students from homes where a language other than English is regularly spoken. From 2000 to 2010, the state’s Hispanic population grew 28 percent, to reach 37.6 percent of all residents, almost equal to the shrinking white population’s 40 percent. Nearly half of all California births today are Hispanic. The signs of the change are everywhere—from the commercial strips throughout the state catering to Spanish-speaking customers, to the flea markets and illegal vendors in such areas as MacArthur Park in Los Angeles, to the growing reach of the Spanish-language media.

The War on Progress, Freedom, and Human Civilization

Anti-Counterfeiting Trade Agreement (ACTA)

by Gennady Stolyarov II,  Tuesday, August 03, 2010

A clandestine international treaty is currently being negotiated among parties including the United States, Canada, New Zealand, the European Union, Japan, Singapore, and Morocco. It can justly be called the greatest threat of our time to the advancement of human civilization. Considering the magnitude of the other abuses of power pervading the world today, this might seem an exaggeration, but the Anti-Counterfeiting Trade Agreement (ACTA) contravenes every principle of civilized society, both in its content and in the nature of the proceedings leading to its creation.

It threatens to undo the accomplishments of the great Internet revolution and to thrust humankind back to a time when individuals had no public voice and no countervailing power against politically privileged mercantilist institutions. ACTA tramples on essential rights that have achieved even mainstream recognition: innocence until one is proven guilty, due process, personal privacy, and fair use of published content. Moreover, because of its designation as a trade agreement, ACTA could be imposed on the people of the United States by the president, without even a vote of Congress.

Is there a small light at the end of the tunnel ?

Is Austerity Bad?

While is was reported that the Greek economy once again contracted by a 'bigger than expected' 6.8% in 2011,  these reports are merely highlighting events of the past. They are a slice of economic history.

“Greece’s economy, reeling from austerity measures demanded by creditors in exchange for rescue funds, contracted almost a percentage point more last year than the government forecast, according to Bloomberg calculations.

Gross domestic product dropped 7 percent from a year earlier in the fourth quarter after contracting a revised 5 percent on an annual basis in the third quarter; the Athens- based Hellenic Statistical Authority said in an e-mailed statement today. GDP declined 6.8 percent for the full year, according to Bloomberg calculations, compared with a 6 percent contraction projected in the government’s 2012 budget.

Greece is now in what is forecast to be a fifth year of a recession compounded by spending cuts and tax increases as the country seeks to trim its budget deficit and debt burden. Prime Minister Lucas Papademos’s government on Feb. 13 passed through Parliament a new package of austerity measures demanded by the European Union and the International Monetary Fund in exchange for a 130 billion-euro ($172 billion) second rescue plan.The fourth-quarter preliminary figure is based on available non-seasonally adjusted data, the statistics authority said. GDP declined a revised 8 percent in the three months through March and 7.3 percent in the second quarter, the agency said. It didn’t provide seasonally adjusted figures.”

(emphasis added)

An Endless Greek Tragedy?

Perhaps Not

A Few Quotes From Actual Greek Tragedies:

"Drive the corruption from the land" Creon (Oedipus Rex, Sophocles)

"Chance rules our lives" Jocasta (Oedipus Rex, Sophocles)

“How terrible to see the truth” – Teireisias (Oedipus Rex, Sophocles)

 "So much for prophecy" Jocasta (Oedipus Rex, Sophocles)

"Half my life is wasted away in hopeless waiting" Electra (Electra, Sophocles)

"My policy is to bow before the storm" Crysothemis (Electra, Sophocles)

"I smell the open grave" Cassandra (Agamemnon, Aeschylus)

"What a brilliant day it is for vengeance" Clytemnestra (Agamemnon, Aeschylus)

"Words, endless words I've said to serve the moment." Clytaemnestra (Agamemnon, Aeschylus)

"Mother, have mercy" Pentheus (The Bacchae, Euripides)

"O misery!" Electra (Electra, Sophocles)

"If you will not cease your wailing you are to be sent to some place where you'll never see the light" Chrysothemis (Electra, Sophocles)

"I'll let loose, I have such fury in me“ Oedipus (Oedipus Rex, Sophocles)

It almost sounds as if the famous Greek dramatists of the 5th century B.C. have had a glimpse of the future.

Something Happened

Black Community Responsible For Its Young People

By WALTER E. WILLIAMS
 The Philadelphia Inquirer's big story Feb. 4 was about how a budget crunch at the Philadelphia School District had caused the district to lay off 91 school police officers. Over the years, there's been no discussion of what has happened to our youth that makes a school police force necessary in the first place.

The Inquirer's series, "Assault on Learning" (March 2011) reported that in the 2010 school year, "690 teachers were assaulted; in the last five years, 4,000 were."

The newspaper reported that in Philadelphia's 268 schools, "on an average day 25 students, teachers, or other staff members were beaten, robbed, sexually assaulted, or victims of other violent crimes. That doesn't even include thousands more who are extorted, threatened, or bullied in a school year."

I graduated from Philadelphia's Benjamin Franklin High School in 1954. Franklin's students were from the poorest North Philadelphia neighborhoods — such as the Richard Allen housing project, where I lived — but there were no policemen patrolling the hallways. There were occasional after-school fights — rumbles, we called them — but within the school, there was order. Students didn't use foul language to teachers, much less assault them.

The Noble Savage

Getting back to the stone age

by David Deming

The late Joseph Campbell maintained that civilizations are not based on science, but on myth. "Aspiration," Campbell explained, "is the motivator, builder, and transformer of civilization." Our technological society has been built on Francis Bacon's myth of the New Atlantis. Bacon was the first person to unambiguously and explicitly advocate the practical application of scientific knowledge to human needs. "The true and lawful goal of the sciences," he explained, "is that human life be endowed with new discoveries and powers." Writing in the early seventeenth century, Francis Bacon predicted lasers, genetic engineering, airplanes, and submarines.

Freedom Watch Finest Hour

What Happened to America

It' Over.

'Greece Cannot Be Ruled Against the Will of its People'

By Charles Hawley, Spiegel Online

Greece may now have passed the austerity measures demanded from the European Union and the International Monetary Fund, but the country's political system is showing signs of stress. Additional pressure from Europe isn't helping. German commentators warn that political radicalization cannot be ruled out.

One can perhaps understand the European Union's lack of trust when it comes to pledges emanating from Greece. Despite multiple promises of political reform and fiscal austerity, progress has been slow in some areas (privatization of government held assets, for example) and virtually non-existent in others (such as the collection of billions in back taxes).

Comments in parliament on Monday night by conservative New Democracy leader Antonis Samaras are unlikely to foster any trust in Brussels. "I am calling on you to vote for the new loan agreement because I want to avoid falling into the abyss, to restore stability, so that we can have the possibility tomorrow to negotiate and change the policy that is being imposed upon us today," he said.

On to Tehran–or Is It Damascus?

If Assad falls, who rises?

By Patrick J. Buchanan

Our War Party has been temporarily diverted from its clamor for war on Iran by the insurrection against the Syrian regime of Bashar al-Assad.

Estimates of the dead since the Syrian uprising began a year ago approach 6,000. And responsibility for the carnage is being laid at the feet of the president who succeeded his dictator-father Hafez al-Assad, who ruled from 1971 until his death in 2000.

On the Dangers of Central Banking

The Other Bagehot

by George Selgin 

Free bankers like to claim Walter Bagehot, the British essayist and former (and most famous) editor-in-chief of The Economist, as one of their own. And they well ought to, for there can be no disputing the fact that Lombard Street, Bagehot's celebrated "description of the [London] money market," treats the concentration of cash reserves in the Bank of England as the Achilles heel of the British financial system, while in turn regarding that concentration as the unintended and "unnatural" consequence of the Old Lady's accumulation of monopoly privileges:

I shall have failed in my purpose if I have not proved that the system of entrusting all our reserves to a single board, like that of the Bank directors, is very anomolous; that it is very dangerous; that its bad consequences though much felt, have not been fully seen; that they have been obscured by traditional arguments and hidden in the dust of ancient controversies.

The times they are a changin

A reprieve, nothing more

by The Economist

CITI economists Willem Buiter and Ebrahim Rahbari write:

First, we raise our estimate of the likelihood of Greek exit from the eurozone (or ‘Grexit’) to 50% over the next 18 months from earlier estimates of ours which put it at 25-30%. Second, we argue that the implications of Grexit for the rest of the EA and the world would be negative, but moderate, as exit fear contagion would likely be contained by policy action, notably from the ECB.

Not "Grout"? Exposure to Greece among European financial institutions was always relatively small given the relatively small size of the country. Banks have been working furiously to reduce even that, and with the European Central Bank now directing a flood of money toward euro-area banks it looks, to these fellows at least, as if the economic and financial risks of a Greek departure are mostly contained. As this paper acknowledged recently, the cost of a Greek exit to the broader euro zone is falling:

In Memorial of a human loving human

Julian Simon

By David R. Henderson

On February 8, just four days before what would have been his 66th birthday, the economist Julian Simon died. He was one of a kind. He believed that having more people on earth was good. People--their skills, spirits, and hopes--are the ultimate resource, Simon claimed. He came to these beliefs after years of research, and his writings are filled with the evidence that convinced him.

How could population growth not reduce resources? It is true that in the short run, population increases drive up demand for natural resources and thus their prices. But then the high prices prompt entrepreneurs and innovators to find new resources, or new ways of getting existing resources more cheaply. The net result: resources are more plentiful and cheaper than they were before the population grew. In The Population Bomb, Mr. Ehrlich generalized from animal behavior--he had studied butterflies--to human behavior. But Simon saw humans as fundamentally different from animals. He liked to quote the 19th-century American economist Henry George: "Both the jayhawk and the man eat chickens, but the more jayhawks, the fewer chickens, while the more men, the more chickens."

What Price for Socialism?

Billionaire Peter Thiel Is Worried About America's Future

Venture capitalist Peter Thiel has made a fortune as an investor. Why is he so worried about the future?

by Niall Ferguson  

Damn. Peter Thiel is smarter than I am.

It’s not just that, as the founder of PayPal, president of the hedge fund Clarium Capital, managing partner of the venture-capital firm Founders Fund, and one of the early angel investors in Facebook, he’s vastly and maddeningly wealthier than I am. I have met some people even richer than Thiel who turned out to be intellectually vacuous.

It’s the fact that Thiel is also one of the most interesting and original thinkers in America today—something you’ll already know if you’ve read the darkly powerful article he published in National Review last year titled “The End of the Future.”

Thiel is not the only dotcom billionaire to have views on history and politics. Google’s Eric Schmidt is writing what promises to be a fascinating book on the impact of the Internet on democracy. Also impressive is Yuri Milner’s vision of the whole of humanity connected to form a single megabrain. But most Silicon Valley sages tend to be incorrigible optimists. And the fact that technology has made them so rich as individuals makes you wonder—just a little—when they proclaim that technology will save us all. They would say that, wouldn’t they?

Interest Rates and Real Goods

Cyclical Changes in Business Conditions

An artificially stimulated boom must inevitably lead to crisis and depression.

by Ludwig von Mises

The Role of Interest Rates
In our economic system, times of good business commonly alternate more or less regularly with times of bad business. Decline follows economic upswing, upswing follows decline, and so on. The attention of economic theory has quite understandably been greatly stimulated by this problem of cyclical changes in business conditions. In the beginning, several hypotheses were set forth, which could not stand up under critical examination. However, a theory of cyclical fluctuations was finally developed which fulfilled the demands legitimately expected from a scientific solution to the problem. This is the circulation-credit theory, usually called the monetary theory of the trade cycle. This theory is generally recognized by science. All cyclical policy measures, which are taken seriously, proceed from the reasoning which lies at the root of this theory.