The Seen and the Unseen in Our Social Liberation

Masking risk and suppressing feedback do not restore resiliency or vitality

By Theodore Dalrymple

The slightest and most seemingly insignificant utterance may in fact be a window on an entire world-view, and therefore worthy of reflection. For example, when leafing through a literary magazine recently that consisted entirely of book reviews, my eye alighted on a brief notice of a recently-discovered pre-World War II crime novel by C S Forester, best-known for his Hornblower stories.

The review was only 113 words long, and contained the following:

It is the story of a brutal husband who is murdered by his wife and mother-in-law. It’s not really credible, but grippingall the same – and a salutary portrait of marriage beforewomen’s liberation.

We've Decoupled, Alright--From Reality

Masking risk and suppressing feedback do not restore resiliency or vitality
by Charles Hugh Smith

Forget decoupling from Europe--we've been decoupled from reality since 2008.

Have we decoupled from the global slowdown? Doubtful. Have we decoupled from reality? Undoubtedly--and have been since 2008.One key attribute of reality is feedback: actions have consequences, and various forces reinforce or resist each other in a dynamic interplay of positive and negative feedback.

Another key attribute of reality is risk. Risk is as ever-present as gravity, and it cannot be eliminated; it can only be shared or transferred.

When you overwhelm feedback with massive interventions that mask risk, you decouple from reality. With feedback suppressed and risk hidden, the system's resilience and resourcefulness both atrophy. Participants start making decisions not on risk assessment and feedback from reality but on the results of the intervention.

The Financial Crisis Was Foreseeable

… Thousands of Years Ago

by George Washington

We’ve known for 4,000 years that debts need to be periodically written down, or the entire economy will collapse. And see this.

We’ve known for 2,500 years that prolonged war bankrupts an economy.

We’ve known for 1,900 years that rampant inequality destroys societies.

We’ve known for thousands of years that debasing currencies leads to economic collapse.

We’ve known for hundreds of years that the failure to punish financial fraud destroys economies, as it destroys all trust in the financial system.

Liberty and Community After Progressivism

The soft tyranny of the progressive administrative state

BY Ted McAllister   

Robert Nisbet’s most important and yet neglected insight is that modern individualism and collectivism are the twin movements of modern democratic despotism.  The first liberates individuals from myriad forms of authority (e.g., family, church, guild, local community) that characterize most pre-modern social orders.  The second represents a new, equalitarian order based on the consolidation of isolated (liberated) particles into a new administrative regime that promises solidarity and community.  In a previous essay I suggested that the dominant species of modern community, the democratic administrative state, faces severe—perhaps existential—threats to its hegemony because the financial burden faced by modern states makes it impossible for them to sustain the necessary level of provision for their citizens. The resulting austerity should open social space between the individual and state.  The question now is whether new patterns of authority as well as richer conceptions of the person will emerge in this new social space. 

Ignorance Is Bliss

So Go Back To Sleep

Whenever the legislators endeavor to take away, and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any farther obedience.

                                                                                          - John Locke

by Mike Krieger

Most of you that are taking the time to read this have already experienced some level of “waking up” over the past several years or longer.  Most of you have also probably felt from time to time that the knowledge you possess is a burden and have fully appreciated the meaning of “ignorance is bliss.”  I know this because I have felt these very same emotions at times.  The most important thing to remember; however, is that we are just awake individuals within a wave or cycle of awakening.  There were those that came before us and there will be many, many more to come after us.

Moral Preening and Capital Punishment

We always have to make a choice

By Theodore Dalrymple       

A feeling of moral superiority is often compensation for the lack of any other kind of superiority, and has the advantage that it can never be decisively disproved. With respect to capital punishment, Europeans feel morally superior to Americans because they have abolished it as a relic of judicial barbarism. So complete has been the revolution in moral sensibility that they speak as if the French foreswore the guillotine before the Roman invasion rather than in 1981, against the majority opinion of the public.

The question of capital punishment has long agitated the minds of intellectuals, and recently I had the good fortune to find and buy The Punishment of Death by Henry Romilly, published in 1886, an anti-capital punishment tract. Romilly was the son of the lawyer and politician, Sir Samuel Romilly, one of the early abolitionists; Henry is therefore a case of hereditary abolitionism. He is not, of course, to be despised on that account.

Unintended Consequences of Intervention

Αn emerging crisis that could engage the world for years

By David Henderson

Many libertarian and conservative economists I know are good at pointing out the unintended, and usually negative, consequences of domestic government policy. But a smaller subset of these people seem willing to look at foreign policy with the same skeptical eye. As I have written elsewhere [gated], they should be even more skeptical when looking at foreign policy, for two reasons:

1. The information problem: It's often hard for citizens to get information about the effects of government's actions on the domestic front. It's even harder for citizens to get information about the effects of their government's actions in other countries.

2. The incentive problem: One of the things that makes government domestic intervention less harmful than otherwise is that the politicians need to take account of voters. But the main victims of a government's foreign policy are usually not the people who live in the country that government governs. The main victims live in foreign countries--and they don't get to vote.

The Growing Pressures Likely To Blow The Eurozone Apart

Politics in a planned economy are always more important than economics - until reality intervenes

by Chris Martenson

There was yet another European Union summit at the end of June, which (like all the others) was little more than bluff. Read the official communiqué and you will discover that there were some fine words and intentions, but not a lot actually happened. However, there are some differences when compared with past meetings that need explaining:

1.   The European Council is being asked to consider permitting the European Central Bank to have a regulatory role alongside national central banks “as a matter of urgency by the end of 2012.” When this new super-regulator is eventually established, perhaps the ECB might be able to recapitalize banks directly. This was needed three years ago; the Eurozone will be lucky not to have a new banking crisis in the next few months, let alone by the year-end.

Obama Shrugs

The Core Of American Values

By Jeff Harding

I read President Obama’s stump speech given on Friday, July 13 at Roanoke, Virginia. I urge you to read it; it’s not too long. It is a kind of manifesto of current left-wing thought in America; it describes almost every policy and concept that leftists support and are working to implement. In general it is wrong, based on a wrong, long discredited philosophy, on wrong and disproven social concepts, on wrong economic ideas, and on mostly wrong facts stated as truths. One could say they were lies, but I think we all understand that this is what politicians do and it is why they are held in such low esteem.

I rarely get hyperbolic, and I don’t intend to start here. So when I say that this speech represents an attack on the philosophy, ideals, and economics that made America great, I don’t think this is stepping over the line, rather it is a statement of fact. Read it yourself and make your own decision and let me know where I am wrong. 

An Exchange Of Wealth For Income

The Loan

by Keith Warner

As the title of this essay suggests, a loan is an exchange of wealth for income. Like everything else in a free market (imagine happier days of yore), it is a voluntary trade.  Contrary to the endemic language of victimization, both parties regard themselves as gaining thereby, or else they would not enter into the transaction.

In a loan, one party is the borrower and the other is the lender.  Mechanically, it is very simple.  The lender gives the borrower money and the borrower agrees to pay interest on the outstanding balance and to repay the principle.

As with many principles in economics, one can shed light on a trade by looking back in history to a time before the trade existed and considering how the trade developed.

It is part of the nature of being a human that one is born unable to work, living on the surplus produced by one’s parents.  One grows up and then one can work for a time.  And then one becomes old and infirm, living but not able to work.  If one wishes not to starve to death in old age, one can have lots of children and hope that they will care for their parents in their old age.  Or, one can produce more than one consumes and hoard the difference.

Dependence Day

We're Looking At The End Of A Nearly Century-Long Experiment In Big Government

By John Browne

The Fourth of July week brought unwelcome birthday gifts to the United States in the form of poor domestic jobs data and similarly gloomy information from other major economies. Amidst the heat and festivities, it has become difficult to deny that the economy is deteriorating. Politicians appear helpless, thrashing about for a solution and blaming everything and everyone but themselves. This lack of leadership is apparent to those who have by now lost all confidence of a possible quick rebound, if only the tough decisions had been made early and swiftly.

For many of us the reality is simple: government has become too big, too costly and too aggressive. This has progressed to the point where what's left of the free enterprise system is now suffocating. Furthermore, the costs of massive amounts of quantitative easing (QE) and artificially low interest rates are perpetuating sluggish and unproductive economies both here and in Europe. Unless radical change is implemented, our economic future will be bleak.

How the nationalisation of parenting stoked the riots

People think that the government is responsible for their children

The state’s relentless undermining of parental authority has created a world in which no one knows how to control children or teens.

by Jennie Bristow 

‘We have nationalised child-raising’, claimed Shaun Bailey, head of the charity My Generation, during an autopsy of the riots and looting that swept England in summer 2011. Bailey continued: ‘People think that the government is responsible for their children - that weakens the family structure. One of the worst things as a parent is having nothing to teach your children; one of the worst things as a child is to believe that authority lies outside your parents.’ (1)

Now, I am spontaneously prone to questioning the pronouncements of Big Society worthies such as Shaun Bailey. I have no idea what My Generation actually is; according to the Charity Commission records, it has now ‘ceased to exist’. And it was striking that, having denounced the ‘nationalisation’ of parenting by the state, Bailey’s proposed solutions seemed to involve yet more of the same: for example, that school pupils should be taught about ‘parenting’ from an even earlier age.

But Bailey’s diagnosis of the dangers inherent in eroding parental authority was absolutely spot on. By attempting to ‘nationalise’ childrearing, whether by providing classes to instruct parents in officially approved childrearing methods or by using schools to inculcate children in a heightened awareness of the failings of their mothers and fathers, in recent decades, government parenting policy has stripped parents of their directly authoritative role.

Freedom of Association

The Right to exclude

by Llewellyn H. Rockwell Jr.

It seems incredible that in the last days, a fundamental right of the whole of humanity, the freedom of association, has been denounced by the New York Times and all major opinion sources, even as a national political figure was reluctant to defend his own statements in favor of the idea, and then distanced himself from the notion. Has such a fundamental principle of liberty become unsayable?

Or perhaps it is not so incredible. An overweening government, in an age of despotism such as ours, must deny such a fundamental right simply because it is one of those core issues that speaks to who is in charge: the state or individuals.

We live in anti-liberal times, when individual choice is highly suspect. The driving legislative ethos is toward making all actions required or forbidden, with less and less room for human volition. Simply put, we no longer trust the idea of freedom. We can't even imagine how it would work. What a distance we have traveled from the Age of Reason to our own times.

Referencing the great controversy about the 1964 Civil Rights Act, Karen De Coster put the issue to rest by turning Rachel Maddow's question on its head. She demanded to know whether a white businessman has the right to refuse service to a black man. Karen asked, does a black businessman have the right to refuse service to a Klan member?

America Has Failed to Big Pimp

"Embracing your own stigma is a political act, an act of resistance and defiance"

By ROD DREHER

In case you hadn’t noticed, hip-hop, the degenerate pop music genre known for hit songs like Jay-Z’s “Big Pimpin”, has failed America — but so too has the nation failed hip-hop. So says a person named Toure’, to whom the Washington Post gave actual column space to write wisdom such as:

Hip-hop is the product of a generation in which many black men did not know their fathers. How did these fatherless MCs construct their masculinity? For some, it was by watching and idolizing drug dealers. Many would make it as rappers by packaging themselves as former dealers — either because that is what they were or because that’s who they revered. I’m talking about the Notorious B.I.G., Nas, the Wu-Tang Clan, Jay-Z, Lil Wayne, 50 Cent, the Clipse, Rick Ross and others. By then, it seemed as though an MC needed to claim drug-trade stripes to earn acceptance among hip-hop’s elite.

America's Next Energy Revolution

Forget peak oil; forget the Middle East

By WALTER RUSSELL

The energy revolution of the 21st century isn’t about solar energy or wind power and the “scramble for oil” isn’t going to drive global politics. The energy abundance that helped propel the United States to global leadership in the 19th and 2oth centuries is back; if the energy revolution now taking shape lives up to its full potential, we are headed into a new century in which the location of the world’s energy resources and the structure of the world’s energy trade support American affluence at home and power abroad.

By some estimates, the United States has more oil than Saudi Arabia, Iraq and Iran combined, and Canada may have even more than the United States. A GAO report released last May (pdf link can be found here) estimates that up to the equivalent of 3 trillion barrels of shale oil may lie in just one of the major potential US energy production sites. If half of this oil is recoverable, US reserves in this one deposit are roughly equal to the known reserves of the rest of the world combined.

Social Darwinism and the Free Market

The Free Market is the means by which human beings cooperate

by David Gordon

In a speech to the American Society of Newspaper Editors on April 3, 2012, President Obama called a budget proposal of his Republican opponents in Congress "thinly veiled social Darwinism."

What did the president mean by this comment? The budget proposal in question, he claimed, would require drastic cuts in government programs designed to aid the poor. "And by gutting the very things we need to grow an economy that's built to last — education and training, research and development, our infrastructure — it is a prescription for decline." Further, his opponents reject proposals to increase taxes on the rich.

How can anyone favor refusing government aid to the poor and oppose requiring the rich to pay more in taxes? Obama answered that those who think in this way must believe that the welfare of the rich is of primary significance. The poor, and everyone else, must take whatever "trickles down" to them from the rich.

Who Actually Destroyed The Middle Class?

Economic Forensics

A gold-standard 1928 one-dollar bill.
The income of the median full-time male worker
begins to stagnate  at exactly the point in 1971
when the dollar was de-linked from gold.   

By Nathan Lewis

The difficulties experienced by the great middle in the U.S. can be, in my opinion, traced to the delinking of the U.S. dollar from gold in 1971. Now, I know a lot of people are going to say that is ridiculous. But, one reason I say that is, even by the U.S. government’s own statistics, the income of the median full-time male worker begins to stagnate at exactly that point, after rising by huge amounts during the 1950s and 1960s.

The median U.S. full-time male income was $47,715 in 2010. In 1969, it was $44,455. The 1969 numbers are of course “adjusted for inflation,” and you know that the government’s inflation adjustments are thoroughly low-balled. With slightly more honest statistics, the trend would not be flat, but instead downward over the past forty years.

Another way of looking at it is in terms of ounces of gold. After all, gold was the monetary basis of the United States for 182 years, from 1789 to 1971, so why shouldn’t we use that as a measure of how much people are really getting paid?

The Government makes all the difference

Quite Possibly The Dumbest Thing I’ve Heard An Economist Say

by Simon Black

In the mid-1800s, a cousin of Charles Darwin by the name of Francis Galton wrote a series of works expanding on an old idea of selective breeding in human beings.

Galton’s theory became known as eugenics. At its core, eugenics was underpinned by an assumption that talent and genius were hereditary traits, and that deliberate breeding could improve the human race.

Within decades, intellectuals were spending their entire careers studying these ideas, quickly spawning a number of different fields dedicated to ‘racial sciences.’

Scholars began closely examining racial differences and building volumes of statistics on everything ranging from intelligence to reproduction to genetic effectiveness in combating disease.

‘Scientists’ would scurry about taking cranial measurements, sizing up jaw lines, calculating forehead slopes, and estimating nose angles… all of which became ‘evidence’ of racial superiority.

Peugeot Has 51% Chance of Debt Default

Hollande Says France Will Not Let Peugeot Lay Off Workers

The incredibly inept policies of French president Francois Hollande are back in the news.

Hollande is following up on his proposal to not let companies fire workers, starting right now with French car maker Peugeot's Plan to Cut 8,000 Jobs, Close Plant

An article in El Pais has better details of Hollande's denial of reality than I have found elsewhere.

My friend Bran who lives in Spain offers this translation key paragraphs of Hollande's "Moralization" of Political Life.

Hollande says "Peugeot's plan is unacceptable and will be renegotiated."

Hollande accused Peugeot owners of having delayed the restructuring plan with the excuse of not interfering in the election campaign and denied that the biggest problem are labor costs, as claimed.

"There is also a strategy, a market and some shareholders who have distributed a dividends rather than reinvest them," he said.

The solution? "Have an independent expert examine the company, find a way out of the plan to close the plants, and create a strategic plan for the automotive industry and encourage the purchase of French products in France."

Peugeot Has 51% Chance of Debt Default

Just to highlight how out of touch with reality Hollande is, please consider Peugeot Has 51% Chance of Debt Default, Credit Swaps Show

Austerity In Greece? Sure, And There's Snow In Mykonos Too

The Beast is still very hungry

By Nathan Lewis

Let’s look at “austerity” in Greece, which must certainly be under the greatest pressure of any government today to resolve its financial issues.
In January-May 2012, the central government had revenue of €18.173 billion (this is net of the public investment budget, which is accounted for separately). It spent €29.243 billion.

In the same period in 2011, the government had €18.358 billion of revenue, and spent €27.747 billion.

Financial Disintegration In Europe

Planned Chaos

By Jeff Harding

Here are some recent research notes from DB Research of Deutsche Bank Group. I noticed that Thomas Mayer, the former Chief Economist for Deutsche Bank no longer is listed as the author of these notes. In fact, he has been replaced as Chief Economist and is now listed as “Senior Economic Advisor” to the bank. My guess: he was gently fired, they pay him the balance of his contract, and he gets to do “academic research.” I originally carried his commentary when he announced he was “Austrian” but upon further probing I discovered he was not really. Maybe he has time now to read some Mises.

Still, these research notes represent some of the best thinking in Germany about the Eurozone’s economic crisis, and that’s important to know. The Financial Disintegration note is quite interesting (disturbing). Weren’t they supposed to be integrating?

The Cure for Our Economy’s Stationary State

The cure is so simple

By Niall Ferguson

Jesse L. Jackson Jr. has been suffering from “a mood disorder.”

He is not alone. The world economy may not be in a depression as bad as that of the early 1930s. But it’s certainly got emotional problems.

A year ago, according to Gallup, economic confidence in the United States plunged, touching bottom in late August. It then rallied, only to start sliding again with the arrival of summer. Sunshine doesn’t seem to work like it used to.

What is going on?

The middle is shifting toward the bottom

Two Classes, Divided by ‘I Do’

By JASON DePARLE

Jessica Schairer has so much in common with her boss, Chris Faulkner, that a visitor to the day care center they run might get them confused.

They are both friendly white women from modest Midwestern backgrounds who left for college with conventional hopes of marriage, motherhood and career. They both have children in elementary school. They pass their days in similar ways: juggling toddlers, coaching teachers and swapping small secrets that mark them as friends. They even got tattoos together. Though Ms. Faulkner, as the boss, earns more money, the difference is a gap, not a chasm.

But a friendship that evokes parity by day becomes a study of inequality at night and a testament to the way family structure deepens class divides. Ms. Faulkner is married and living on two paychecks, while Ms. Schairer is raising her children by herself. That gives the Faulkner family a profound advantage in income and nurturing time, and makes their children statistically more likely to finish college, find good jobs and form stable marriages.

5 Signs of the Chinese Economic Apocalypse

From hog ratios to growing coal stockpiles, the Chinese economy is blinking red

BY TREFOR MOSS

The lights are flickering in the world's economic powerhouse.

Although China's outlook may still be positive by, say, European standards, the numbers show that the country's storied growth engine has slipped out of gear. Businesses are taking fewer loans. Manufacturing output has tanked. Interest rates have unexpectedly been cut. Imports are flat. GDP growth projections are down, with some arguing that China might already be in recession. In March, Premier Wen Jiabao put the 2012 growth target at 7.5 percent; then seen as conservative, it's now viewed as prescient. If realized, it would be China's lowest annual growth rate since 1990, when the country faced international isolation after the 1989 Tiananmen Square massacre.

What are the concrete indications that China is experiencing something more than just a spreadsheet slowdown? Here are five real-world signs of China's economic malaise.

Are Millennials the Screwed Generation?

‘Boomer America’ never had it so good

by Joel Kotkin  

Today’s youth, both here and abroad, have been screwed by their parents’ fiscal profligacy and economic mismanagement. Neil Howe, a leading generational theorist, cites the “greed, shortsightedness, and blind partisanship” of the boomers, of whom he is one, for having “brought the global economy to its knees.”

How has this generation been screwed? Let’s count the ways, starting with the economy. No generation has suffered more from the Great Recession than the young. Median net worth of people under 35, according to the U.S. Census, fell 37 percent between 2005 and 2010; those over 65 took only a 13 percent hit.

The wealth gap today between younger and older Americans now stands as the widest on record. The median net worth of households headed by someone 65 or older is $170,494, 42 percent higher than in 1984, while the median net worth for younger-age households is $3,662, down 68 percent from a quarter century ago, according to an analysis by the Pew Research Center.

The older generation, notes Pew, were “the beneficiaries of good timing” in everything from a strong economy to a long rise in housing prices. In contrast, quick prospects for improvement are dismal for the younger generation.

One key reason: their indebted parents are not leaving their jobs, forcing younger people to put careers on hold. Since 2008 the percentage of the workforce under 25 has dropped 13.2 percent, according to the Bureau of Labor Statistics, while that of people over 55 has risen by 7.6 percent.

“Employers are often replacing entry-level positions meant for graduates with people who have more experience because the pool of applicants is so much larger. Basically when unemployment goes up, it disenfranchises the younger generation because they are the least qualified,” observes Kyle Storms, a recent graduate from Chapman University in California.

A Gold Rush in the Abyss

The last redivision of the world

By WILLIAM J. BROAD

Tom Dettweiler makes his living miles down. He helped find the Titanic. After that, his teams located a lost submarine heavy with gold. In all, he has cast light on dozens of vanished ships.

Mr. Dettweiler has now turned from recovering lost treasures to prospecting for natural ones that litter the seabed: craggy deposits rich in gold and silver, copper and cobalt, lead and zinc. A new understanding of marine geology has led to the discovery of hundreds of these unexpected ore bodies, known as massive sulfides because of their sulfurous nature.

These finds are fueling a gold rush as nations, companies and entrepreneurs race to stake claims to the sulfide-rich areas, which dot the volcanic springs of the frigid seabed. The prospectors — motivated by dwindling resources on land as well as record prices for gold and other metals — are busy hauling up samples and assessing deposits valued at trillions of dollars.

“We’ve had extreme success,” Mr. Dettweiler said in a recent interview about the deepwater efforts of his company, Odyssey Marine Exploration of Tampa, Fla.

Skeptics once likened mining the deep to looking for riches on the moon. No more. Progress in marine geology, predictions of metal shortages in the decades ahead and improving access to the abyss are combining to make it real.

Environmentalists have expressed growing alarm, saying too little research has been done on the risks of seabed mining. The industry has responded with studies, reassurance and upbeat conferences.

The technological advances center on new robots, sensors and other equipment, some of it derived from the offshore oil and gas industry. Ships lower exploratory gear on long tethers and send down sharp drills that gnaw into the rocky seabed. All of this underwater machinery is making it more and more feasible to find, map and recover seabed riches.