The Caesar in DC is busy

Building roadblocks

Instead of roads and bridges, Obama-sized government funds stasis and sclerosis: The Hoover Dam of regulatory obstruction, the Golden Gateway to dependency.

By mark steyn

On the evidence of last week's Republican campaign events, President Obama's instant classic – "You didn't build that" – is to Mitt Romney what that radioactive arachnid is to Spider-Man: It got under his skin, and, in an instant, the geeky stiff was transformed into a muscular Captain Capitalism swinging through the streets and deftly squirting his webbing all over Community-Organizerman. Rattled by the reborn Romney, the Obama campaign launched an attack on Romney's attack on Obama's attack on American business. First they showed Romney quoting Obama: "He said, 'If you've got a business, you didn't build that. Somebody else made that happen.'" And then the Obama team moved in for the kill: "The only problem? That's not what he said."

Indeed. What Obama actually said was:

Exasperated lenders get blunt with Greece

The Fat Lady is on Stage

By Dina Kyriakidou

The International Monetary Fund's mission chief for Greece, Poul Thomsen, walked grim-faced into his first meeting with newly elected Prime Minister Antonis Samaras on July 5 wearing a black tie looking as if he was going to a funeral.

Whether he was making a point or not, the first meet-and-greet visit by Greece's exasperated international lenders with the new government was blunt, both sides told Reuters.

"Talking to them was like going to a doctor, who is looking over your tests shaking his head, and you're wondering if you are going to live or die," a senior Greek government official told Reuters, on condition of anonymity, after the visit.

What's So Bad About Deflation?

What's not to like?

Perhaps all the assumptions about inflation being good and deflation being bad miss the key question: cui bono (to whose benefit?)

by Charles Hugh-Smith

One of the most widely accepted truisms of our time is that deflation is bad: bad for debtors, bad for the indebted government, and therefore bad for the economy.

What all this overlooks is how wonderful mild deflation is for those who owe no debt but who own the debt and the income streams that flow from debt. What the "deflation is bad" argument ignores is who controls the financial and political systems, and what set of conditions benefits them.

The entire Survival+ critique is based on one simple but revealing question: cui bono--to whose benefit?

What exactly is the American military?

Meet America's socialist military

BY ROSA BROOKS

F. Scott Fitzgerald, meticulous chronicler of American social class, famously confided to Ernest Hemingway that "the rich are different from the rest of us."

"Yes," was Hemingway's laconic reply. "They have more money."

These days, the same could be said of the American military. Is the military different from the rest of us? Yes -- it has more money.

How new technology is driving a U.S. industrial comeback.

The Future of Manufacturing Is in America, Not China

BY VIVEK WADHWA

A furor broke out last week after it was reported that the uniforms of U.S. Olympians would be manufactured in China. "They should take all the uniforms, put them in a big pile, and burn them," said an apoplectic Sen. Harry Reid. The story tapped into the anger -- and fear -- that Americans feel about the loss of manufacturing to China. Seduced by government subsidies, cheap labor, lax regulations, and a rigged currency, U.S. industry has rushed to China in recent decades, with millions of American jobs lost. It is these fears, rather than the Olympic uniforms themselves, that triggered last week's congressional uproar.

But Ralph Lauren berets aside, the larger trends show that the tide has turned, and it is China's turn to worry. Many CEOs, including Dow Chemicals' Andrew Liveris, have declared their intentions to bring manufacturing back to the United States. What is going to accelerate the trend isn't, as people believe, the rising cost of Chinese labor or a rising yuan. The real threat to China comes from technology. Technical advances will soon lead to the same hollowing out of China's manufacturing industry that they have to U.S industry over the past two decades.

Several technologies advancing and converging will cause this.

First, robotics. The robots of today aren't the androids or Cylons that we are used to seeing in science fiction movies, but specialized electromechanical devices run by software and remote control. As computers become more powerful, so do the abilities of these devices. Robots are now capable of performing surgery, milking cows, doing military reconnaissance and combat, and flying fighter jets. Several companies, such Willow Garage, iRobot, and 9th Sense, sell robot-development kits for which university students and open-source communities are developing ever more sophisticated applications.

Black America & The Marriage Gap

From “family values” to “collective action”

By ROD DREHER

As an addendum to the earlier discussion of America & hip-hop, consider this story from The New York Times. It begins with an anecdote about two white women, friends from childhood, who have ended up in very different places economically:

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.

Ms. Faulkner goes home to a trim subdivision and weekends crowded with children’s events. Ms. Schairer’s rent consumes more than half her income, and she scrapes by on food stamps.

The Rule of Law

What do we do about it?

by Andrew P. Napolitano

The greatest distinguishing factor between countries in which there is some freedom and those where authoritarian governments manage personal behavior is the Rule of Law. The idea that the very laws that the government is charged with enforcing could restrain the government itself is uniquely Western and was accepted with near unanimity at the time of the creation of the American Republic. Without that concept underlying the exercise of governmental power, there is little hope for freedom.

The Rule of Law is a three-legged stool on which freedom sits. The first leg requires that all laws be enacted in advance of the behavior they seek to regulate and be crafted and promulgated in public by a legitimate authority. The goal of all laws must be the preservation of individual freedom. A law is not legitimate if it is written by an evil genius in secret or if it punishes behavior that was lawful when the behavior took place or if its goal is to solidify the strength of those in power. It also is not legitimate if it is written by the president instead of Congress.

Happy interventionists

The economist’s attack on your property

Pieter Brueghel the Younger, 'Paying the Tax (The Tax Collector)' 

by DETLEV SCHLICHTER

Last week, the Deutsches Institut für Wirtschaftsforschung (DIW), or German Institute for Economic Research, an influential think tank, proposed an ingenious solution to the Euro Zone debt crisis. The German government should issue a Zwangsanleihe, a compulsory bond that every German with savings of €250,000 or more should be compelled to underwrite with 10 percent of his or her own money. Such measures could help the German state grab another €230 billion in resources from the private sector to support its bailout commitments, the DIW economists announced with apparent satisfaction.

Didn’t economists once use to explain the importance of clearly delineated and legally protected private property, of free and voluntary exchange, and of true market prices? By explaining how capitalism works, these economists also demonstrated the limits and dangers of state interference, which is the reason why those who rather put their faith in strong political leadership and governmental design than the spontaneous order of free markets called economics – after Thomas Carlyle – the ‘dismal science’.

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.