From Boston To Texas, It's Been A Freaky Week In America

It takes more than a bumper sticker

By MARK STEYN

This has been a strange and deadly week in America. On Monday, two bombs exploded at the Boston Marathon, the first successful terrorist attack on a civilian target on American soil since 9/11.

And yet a mere two days later, Boston's death toll was surpassed by a freak fertilizer accident at a small town in Texas.

In America, all atrocities are not equal: Minutes after the Senate declined to support so-called gun control in the wake of the Newtown massacre, the president rushed ill-advisedly on air to give a whiny, petulant performance predicated on the proposition that one man's mass infanticide should call into question the constitutional right to bear arms.

Simultaneously, the media remain terrified that another man's mass infanticide might lead you gullible rubes to question the constitutional right to abortion, so the ongoing Kermit Gosnell trial in Philadelphia has barely made the papers — even though it involves large numbers of fully delivered babies who were decapitated and had their feet chopped off and kept in pickling jars. Which would normally be enough to guarantee a perpetrator front-page coverage for weeks on end.

In the most recent testimony, one of the "clinic"'s "nurses" testified that she saw a baby delivered into the toilet, where his little arms and feet flapped around as if trying to swim to safety.

Then another "women's health worker" reached in and, in the procedure's preferred euphemism, "snipped" the baby's neck — i.e., severed his spinal column.

"Doctor" Gosnell seems likely to prove America's all-time champion mass murderer. But his victims are ideologically problematic for the media, and so the poor blood-soaked monster will never get his moment in the spotlight.

The politicization of mass murder found its perfect expression in one of those near parodic pieces to which the more tortured self-loathing dweebs of the fin de civilization west are prone. As the headline in Salon put it, "Let's Hope The Boston Marathon Bomber Is A White American." David Sirota is himself a white American, but he finds it less discomforting to his Princess Fluffy Bunny worldview to see his compatriots as knuckle-dragging nutjobs rather than confront all the apparent real-world contradictions of the diversity quilt. He had a lot of support for his general predisposition.

"The thinking, as we have been reporting, is that this is a domestic extremist attack," declared Dina Temple-Raston, NPR's "counterterrorism correspondent."

"Officials are leaning that way largely because of the timing of the attack. April is a big month for anti-government and right-wing individuals. There's the Columbine anniversary, there's Hitler's birthday, there's the Oklahoma City bombing, the assault on the Branch Davidian compound in Waco."

Miss Temple-Raston was born in my mother's homeland of Belgium, where, alas, there were more than a few fellows willing to wish the Fuhrer happy birthday back when he was still around to thank you for it. But it was news to me it was such a red-letter day in the Bay State. Who knew? At NPR, "counterterrorism" seems to mean countering any suggestion that this might be terrorism from you know, the usual suspects.

Biblical miserabilism disguised as science

Greens can't stand Earth's inhabitants

by Tim Black 

Environmentalist Andrew Simms, author of the posh grocers’ bible, Tescopoly, has a bit of a problem. And it is not just the nauseating, name-dropping self-obsession so evident in his new book, Cancel the Apocalypse: The New Path to Prosperity. (Of his changing perception of aeroplanes after 9/11, he writes: ‘Contrails behind disappearing jet engines meant something different also after a conversation I had with the author Philip Pullman, but I’ll come to that later.’ The tease.) No, Simms’ other problem is one that he shares with many other current environmentalists: an apocalypticism in want of an apocalypse, an environmentalist End of Days in want of a devastated, I-told-you-so terminus.

It’s getting ridiculous now. For the best part of a decade, prominent environmental types have been blithely telling us the end is nigh if we don’t change our producing and consuming ways. But have we listened to the terrifying drenched-then-scorched rhetoric? Have we met carbon-emissions targets? Have we stopped using aeroplanes, once handily likened by the Guardian’s leading environmental columnist to ‘child abuse’? Have we started to shun those Meccas of pre-packaged convenience, supermarkets, in favour of growing our own? Have we hell. And yet despite our unrepentant behaviour, despite our unwillingness to change our producing and consuming ways, we are still waiting for Gaia’s punishment, still awaiting the end which ought to be nigh.

You wouldn’t have thought it was possible given the kinds of headlines and commentaries that appeared routinely throughout the mid-Noughties. ‘“Almost too late” to stop a global catastrophe’, warned one UK broadsheet in 2006. An editorial in the Philadelphia Daily Inquirerstruck a similar dread note. ‘Now, the warning about the end of the world may yet become a grim and horrible reality, if not in our generation, then in our children’s or grandchildren’s generation.’ This, remember, was the era of ‘tipping points’, when climate change looked set to become ‘irreversible’ and ‘runaway’ unless WE ACT. NOW. Simms himself even started up a campaign in August 2008 with a rather specific deadline: ‘100 months to save the world.’

But 56 months down the line, things have changed somewhat. The apocalypticism, the catastrophism, so marked in recent environmentalist discourse, is losing what little real purchase it had. Doomsday increasingly looks like it has been postponed.

Even the scientific white noise is no longer providing a suitable soundtrack for the environmentalist disaster movie. For example, the UK’s official weather forecasters, the Met Office, released a forecast in December suggesting that global temperatures have not risen for over a decade and are unlikely to rise significantly in the period up to 2017. NASA’s James Hansen, the Godfather of contemporary greens, noted recently that the ‘five-year-mean global temperature has been flat for the last decade, which we interpret as a combination of natural variability and a slowdown in the growth rate of net climate forcing’. Which is bad news for the Panglooms out there.

The Reinhart – Rogoff Study Controversy

The Study and its Critics

By Pater Tenebrarum

In 2010, Carmen Reinhart and Kenneth Rogoff released an empirical study entitled 'Growth in a Time of Debt'. After crunching a long list of historical data series, they came to the conclusion that:

“..median growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower." Countries with debt-to-GDP ratios above 90 percent have a slightly negative average growth rate, in fact.”

Our first objection to the sentence above is that 'GDP' is a very poor 'measure' of economic growth in the first place. It omits the entire production structure preceding the final goods stage ex 'durable' capital investment; it uses 'hedonic indexing' in its calculation; and it actually counts government spending as contributing to 'growth'. A more useless economic statistic is really hard to imagine as far as we're concerned.

We suspect that in an unhampered free market economy no-one would get the absurd idea of going to the trouble of actually calculating it or something akin to it. The main reason why governments calculate such data is that they need a justification for meddling with the economy. Also, macro-economists need something to do. Again, in an unhampered free market economy many of today's macro-economists would have to compete in the private sector and offer skills to employers that are useful, or alternatively become entrepreneurs themselves and create products consumers actually want. It is a good bet very few consumers would be eager to purchase 'GDP' calculations.

It is quite different with the government – hence the intellectual output of most of today's economists, indeed of most intellectuals, is, to quote Hans-Hermann Hoppe, 'viciously statist'.

Reinhart and Rogoff are not outside of the mainstream – by dint of being monetarists, they are merely as close to free market thought as one is today 'allowed' to be by the establishment. In the 1940s, the Chicago School was regarded as part of the 'leftist fringe' (Hoppe), today they are considered the standard bearers of 'conservative economic thought', as evidenced by the fact that the Republican party cited their study frequently when urging to lower the deficit.

Now, we actually believe that Reinhart and Rogoff have detected a number of effects in their study that are very real and we also believe that cutting deficit spending would be an agreeable policy. In fact, doing away with the State altogether would be the most agreeable policy of all (it would be the very last act of 'public policy'), but let's not stray too far from the topic at hand.

Recently a number of economists based at the University of Massachusetts (a state that is incidentally also known by the nickname 'Taxachusetts') have taken a closer look at the study and discovered a few spreadsheet errors, weighting biases and coding errors (apparently nothing major that would actually invalidate the study's main conclusions, as the response of Reinhart and Rogoff indicates). In the wake of this discovery,  the 'howling of the Keynesians' immediately ensued. Even an at first glance fairly objective report on the errors discovered at the 'Roosevelt Institute' exudes, as a friend of ours put it, a 'strong Keynesian smell' – as evidenced by quotes such as this one:

 “The debt needs to be thought of as a response to the contigent circumstances we find ourselves in, with mass unemployment, a Federal Reserve desperately trying to gain traction at the zero lower bound, and a gap between what we could be producing and what we are. The past guides us, but so far it has failed to provide an emergency cliff. In fact, it tells us that a larger deficit right now would help us greatly.”

Chronicling The Decline And Fall Of Entitlement Democracy

America has now hurtled past the dependency tipping point

By Bill Frezza

It’s been a week of sober reflection, accompanied by a self-imposed news fast, during which I’ve struggled to understand the deeper meaning of our recent electoral catastrophe. Doing so undistracted by a thousand voices required strict electronic disengagement. I recommend this as one would take a purgative after eating a batch of bad oysters.

Many of us of the libertarian persuasion who had never previously voted Republican made an exception this time because the stakes were so high. In a purposeful departure from our usual  “pox on both their houses” approach, we waded into the partisan fray naively believing we could make a difference, ignoring the stink on those with whom we made common cause simply because the alternative was so much worse.

All for naught. After approaching it for decades, America has now hurtled past the dependency tipping point. We have scrapped the last vestiges of our constitutionally limited republic of strictly enumerated powers and replaced it with an unconstrained entitlement democracy neither better nor worse than any of the others whose failures have dotted the course of history—all over weighty issues such as who should pay for condoms.

Heeding the cry, Forward!, an electoral majority happily voted for itself unlimited benefits that will supposedly be paid for by a productive minority—even as the nation careens toward bankruptcy and said productive minority starts eyeing the exits. With demographic changes reinforcing a permanent ethnic tribalism that abjures the melting pot, the likelihood that our country will ever recover its founding values has vanished as thoroughly as our respect for the dead white men who pledged their lives, their fortunes, and their sacred honor to make our way of life possible.

So be it. Mourn, if you choose. But when you’re done you still have to pay the rent.

Making one’s way in a country increasingly falling under the spell of slogans used so effectively by Vladimir Lenin and his fellow travelers requires a new strategy, lest one fall into chronic despair. This is necessary because nothing is worse than becoming that one species of ideologue that no one can abide—a bore.

What should that new strategy be?

I searched for the answer as I reassessed my own mission as an opinion columnist. Today, that is a calling, not a true profession. The going rate for opinion pieces has dropped from $1.50 per word—eagerly paid by hungry editors back when magazines had business models that actually worked—to zero in today’s content-glutted, balkanized blogosphere. Let’s face it, as traditional publishing slowly perishes and is replaced by an electronically enabled mediocrity made possible by the removal of all barriers to entry, those of us who write do so solely to entertain what micro-audiences we can gather—a sorry business to be sure, yet one with deep cultural roots.

The Second Coming Of Kim Dotcom

Inside Mega 

By Andy Greenberg

Kim Dotcom, a.k.a. Kim Tim Jim Vestor, a.k.a. Kim Schmitz, doesn’t act much like a man with a net worth in the negative.

At 11 a.m. on a Tuesday he’s driving me around on a golf cart “safari” of his 60-acre estate outside of Auckland, New Zealand. He weaves among a grove of olive trees with alarming speed–he’s removed the speed regulator in his fleet of electric buggies, and they can clock up to 19 miles per hour. We swing past his 2,000-bottle-a-year vineyard and barrel down a hill toward his $30 million mansion, complete with a hedge maze, a five-flatscreen Xbox room and a 75-foot cascading water display.

Given that he owes millions of dollars to defense lawyers and now has to raise his five children on a $20,000-a-month government allowance meted out from his frozen bank accounts, wouldn’t it be wise to live a slightly simpler life?

“No way,” he says, leaning his massive 6-foot-7, 300-plus-pound body onto the cart’s steering wheel. “That would be allowing them to get away with this stunt. I won’t accept that. By staying here I’m saying, ‘Eff you! You can’t defeat me!’”

The “stunt” Dotcom refers to is the police helicopter raid on his compound that made global headlines 15 months ago, timed to coincide with the U.S. indictment that shut down his ultrapopular constellation of Mega-branded websites under charges of hosting half a billion dollars’ worth of pirated movies and music. Overnight Dotcom went from an underground entrepreneur to one of the most public and controversial figures on the Internet. His site domains, including the flagship Megaupload.com, are now the property of the U.S. government. His servers have been ripped out of data centers around the world and sit in evidence warehouses. He’s had to let go of 44 of his 52 house staff as well as Megaupload’s hundreds of employees. All but 2 of his 18 cars have been seized or sold.

Argentina embraces ‘Flexible Justice’

Argentines Protest Fernandez’s Bid to Increase Grip on Courts

By Eliana Raszewski

Argentines packed the streets of Buenos Aires last night to protest against President Cristina Fernandez de Kirchner’s proposals that would increase state control over courts. The bills are set to be approved by Congress next week.

Protestors banging pots and holding Argentine flags and banners saying “Enough,” “No to Impunity,” gathered in central avenues of the country’s capital and sang the national anthem. Thousands gathered at the Plaza de Mayo square, in front of the presidential palace, brandishing banners urging “Independent Justice” and “Stop Corruption.”

“The government wants to domesticate justice, to get more control on judges and that’s a risk for all of us,” said Gustavo Alvarez, a 50-year-old lawyer who attended the rally with his son and wife. “We are here to force Cristina to listen to us, it’s all we can do.”

Fernandez, 60, sent a bill to Congress on April 8 to restrict court injunctions against the government and would limit any injunction to a period of six months. The bill would leave citizens and companies unprotected in their attempts to seek an injunction against state action to protect their finances or assets, said Gregorio Badeni, a professor of Constitutional Law at University of Buenos Aires.

“The idea of injunctions was to strengthen the position of people and companies to confront the strongest actor, which is the state,” Badeni said in a telephone interview. “This means a step back of 70 years.”

Million Marchers

Yesterday’s demonstrations in the streets of major cities represented the third nationwide protest against Fernandez’s government in eight months.

Mayor of Buenos Aires Mauricio Macri said in message on his Twitter account that there were more than 1 million people out on the streets taking part in the protests in the capital. TN television network showed rallies in cities of Salta, Cordoba and La Plata as well.

Fernandez’s proposal also seeks to expand the council of magistrates, a body that selects, monitors and evaluates the nation’s judges, to 19 from 13.

The planned changes to the justice system come four months after the government failed to impose a deadline for Grupo Clarin SA, the country’s largest media group, to sell assets that exceed limits set in a 2009 media law.

When Fernandez announced the proposed changes, she said the goal was to “democratize” and increase transparency in hiring attorneys for the judicial branch, justice workers’ wealth declarations and in selecting new members of the council of magistrates.

How Does This End?

The fleecing of the American public continues

by Monty Pelerin

The theft takes different forms, but it all serves one purpose — to transfer wealth from the average Joe to the crony corporatists and their political lackeys. Here are but a few examples of how this has been accomplished:

• Bailouts for the wealthy and well-connected are paid for by the unconnected middle class.

• Subsidies are provided for unworkable schemes submitted by political donors and favorites. These schemes inevitably fail and the tax-payer is left holding an empty bag.

• Laws are routinely ignored when “friends” need help. In identical circumstances, would you receive the same treatment as Jon Corzine?

• Despite the biggest theft in world history, no one was prosecuted. The Savings and Loan crisis in the 1980s was trivial in comparison to the recent financial crisis. More than a thousand S&L executives were prosecuted.

• Ever-increasing sacrifices in the form of higher taxes from the productive sector are demanded to continue the plush living of the ruling class.

Capitalism and free markets depend upon trust, integrity, property rights and the rule of law. Without these, there are no advantages to free markets. Nor are there any incentives to create wealth. Instead, an economy becomes little more than a massive plunder scheme where the powerful exploit the weak. No economic recovery is possible under such circumstances.

When Suckers Revolt

As people recognize what is happening, they alter their behavior. Three reactions are to be expected:

1. Some will become discouraged when they realize the game is stacked against them. They will diminish their efforts to succeed, even perhaps dropping out of the game altogether. Given the enhanced returns to not working, it should not be surprising that this alternative has become popular.

2. Others will adopt the same behavior as the ruling class. They will exploit those lower on the food chain than themselves.  Justice Brandeis warned of the implications of government misbehavior:

In a government of laws, the existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipotent teacher. For good or ill, it teaches the whole people by its example. If government becomes a lawbreaker it breeds contempt for law: it invites every man to become a law unto himself. It invites anarchy.

Daniel Patrick Moynihan described the process of declining moral values as “defining deviancy down.”

3. Others may resort to acts of violence. These reactions could be isolated domestic terrorist acts against government and corporations seen as the exploiters. Or the acts might be broader based where the poor see fit to attempt to take from the wealthy. They also could manifest in wide civil unrest against the government if it is seen as the cause of misery or if it is seen as intending to default on promises made. 

All of this behavior is anti-social and it is unproductive. It reduces the output of the economy, further exacerbating the problems. 

We Can't Save Capitalism Unless We Denounce Its False Prophets

The battle we are in is actually a three-sided struggle

By Bill Frezza

A debate is raging among free market advocates regarding the proper posture to take with respect to Too Big to Fail (TBTF) banks. This has become an increasingly important issue as the financial sector has grown to take up an unprecedented share of our economy. While cleaving to tried-and-true libertarian defenses of finance as vital to the economy, some of us fear that the machinations of the crony capitalists running the TBTF banks—in cahoots with their allies in the Treasury Department and the Federal Reserve—will result in not only another global financial collapse, but a populist anti-capitalist backlash that could destroy what’s left of our free enterprise system.

But before we can tackle this problem, we must figure out what is really going on. In all public policy debates, perceptions matter, and public perceptions are often driven by the leading narratives that gain cultural acceptance. Let’s look at what these are.

The prevailing narrative on the left is that we are locked in a two-sided conflict pitting greedy capitalists against the working man. Within this narrative noble legislators and wise regulators must accumulate power unto themselves in order to: 1) rein in the capitalists’ depredations; 2) balance the playing field to offset “market failures;” and 3) “invest in the future” to compensate for the shortsightedness of profit-seeking investors. Success requires waging a permanent campaign against corrupt political opponents doing the dirty work of the wicked 1 percent—who if left to their own devices would accumulate all the wealth leaving the 99 percent destitute.

The prevailing narrative on the right is that we are locked in a two-sided conflict pitting American business against ham-handed legislators and clueless regulators whose well-intentioned but misguided laws, regulations, taxes, and mandates threaten to kill the goose that lays the golden eggs. Within this narrative, free market advocates must fight every attempt by tree-hugging Luddites and their socialist fellow travelers to interfere in the free flow of information, goods, and services that are responsible for driving innovation and creating all the wealth the left is trying to redistribute. Failure will leave the working man unemployed, American businesses crippled, and the global economy in perpetual recession.

Both of these narratives are oversimplifications, and both contain elements of truth. How can that be? Because they both miss the key point that the battle we are in is actually a three-sided struggle. Why is this important to realize? Because attempts to defend capitalism strictly within the bounds of a two-sided dialectic can only accelerate the emergence of a populist regime that fuses the centralized economic controls of fascism with the income redistribution of socialism. We are already more than halfway there with today’s “mixed economy”—a pale shadow of the laissez faire system that serves as the libertarian ideal.

So, who are the three constituencies battling over America’s economic soul?

The Untold Story of Antiwar Conservatives

And how the truth about invading Iraq was suppressed by laptop bombardiers

By JON BASIL UTLEY

What’s missing from reminiscences of the War on Iraq is how and why the war propaganda was spread so effectively, particularly among Republicans. In fact, the refusal of most conservative media to publish contrary information was one of the reasons this magazine was founded. The American Conservative provided an outlet for many respected conservatives who couldn’t get antiwar views published.

Over and over we hear that U.S. allies believed that Iraq had WMDs. Well, sure, our CIA and British intelligence fed them misinformation, which they then repeated back to us—especially Eastern Europeans, who wanted to strengthen military relations with Washington. Even so, Germany, France, and the UN Security Council refused to support the war. There was also widespread opposition inside the U.S. military and by former U.N. inspectors, which was given little publicity by major conservative media. The big push for war came from neoconservatives and the Religious Right, evangelical fundamentalists who believed God wanted war to hurry up the second coming of Christ. Indeed, former French President Chirac wrote in his memoirs about the born-again George W. Bush telling him how God wanted war.

Conservatives opposed to empire and war included Pat Buchanan, Scott McConnell, Charley Reese, Paul Craig Roberts, Paul Gottfried, myself, Doug Bandow, Bill Kauffman, Sheldon Richman, Leon Hadar, Allan Brownfeld, Martin Sieff, Phil Giraldi, as well as other respected leaders such as congressmen John Duncan and Ron Paul and future senator James Webb.

Neither Buchanan nor any other anti-war writer could get published by The Washington Times. The Wall Street Journal op-ed would not accept any article opposing the war until one by Brent Scowcroft, who was too big a name to block. National Review, the Heritage Foundation, and the American Enterprise Institute’s publications and conferences would only promote pro-war opinions and propaganda. Fox News was a solid barrage of war promotion and panic-mongering. Human Events, the Cold War bulwark, had lost its great editor, Allan Ryskind, after which it just parroted the Bush administration.

The seeds and theories of American empire-wishers were planted after the collapse of Communism. Well before 9/11, I had tried to get National Review to publish my article “America Is not Rome.” I still remember how Bill Buckley, who was the godfather of my first child, waved my article off with an outstretched arm when I sat with him in the lobby of the Hay Adams in Washington. Later he changed his views and become an early defector over the Iraq War, though by then he had delivered National Review to the neocons. Similarly, when I wrote to the Heritage Foundation’s foreign-policy staff urging that they at least allow an occasional non-empire speaker at their Washington conference, I was told that those ideas could be heard at the Cato Institute. I knew most of the major conservative leaders from my years as an anti-Communist writer and donor to conservative causes and from my 17 years as a commentator on Third World issues for the Voice of America. My mother, Freda Utley, had been one of the earliest anti-Communist writers in America, and many knew her work.

Funding the welfare state by vast borrowing and regulatory taxation hides the costs from the public

What's behind the funding of the welfare state

By George F. Will

The regulatory, administrative state, which progressives champion, is generally a servant of the strong, for two reasons. It responds to financially powerful and politically sophisticated factions. And it encourages rent-seekers to exploit opportunities for concentrated benefits and dispersed costs (e.g., agriculture subsidies confer sums on large agribusinesses by imposing small costs on 316 million Americans).

Such government inevitably means executive government and the derogation of the legislative branch, both of which produce exploding government debt. By explaining these perverse effects of progressivism, the Hudson Institute’s Christopher DeMuth explains contemporary government’s cascading and reinforcing failures.

Executive growth fuels borrowing growth because of the relationship between what DeMuth, in a recent address at George Mason University, called “regulatory insouciance and freewheeling finance.” Government power is increasingly concentrated in Washington, Washington power is increasingly concentrated in the executive branch, and executive-branch power is increasingly concentrated in agencies that are unconstrained by legislative control. Debt and regulation are, DeMuth discerns, “political kin”: Both are legitimate government functions, but both are now perverted to evade democratic accountability, which is a nuisance, and transparent taxation, which is politically dangerous.

Today’s government uses regulation to achieve policy goals by imposing on the private sector burdens less obvious than taxation would be, burdens that become visible only indirectly, in higher prices. Often the goals government pursues by surreptitious indirection are goals that could not win legislative majorities — e.g., the Environmental Protection Agency’s regulation of greenhouse gases following Congress’s refusal to approve such policies. And deficit spending — borrowing — is, DeMuth says, “a complementary means of taxation evasion”: It enables the political class to provide today’s voters with significantly more government benefits than current taxes can finance, leaving the difference to be paid by voters too young to vote or not yet born.

The European Central Bank Changes Its Spots

The ECB is now a lender of last resort not only to the commercial banks in its club but to governments in its area

By Pedro Schwart

Almost from the start, the single currency was seen as a necessary ingredient of a unified Europe. The Treaty of Rome that launched the Common Market was signed in 1957; the Werner Report outlining the path towards full economic and monetary union was commissioned in 1969 and made official in 1970. Despite this relatively early start, the creation of a solid euro is taking time; from the beginning it was beset with incident. It was not finally launched until the year 2000. The honeymoon lasted until 2007. Since then, progress has become less than smooth, to say the least.

The original euro

The intention was to make the euro a special kind of currency, a sort of European Deutschemark with no need for a government to back it. Monetary sovereignty would reside in a fully independent European Central Bank. Its remit according to the Maastricht Treaty (1992) was strictly reduced to issuing the euro, to managing an area-wide interest rate, and to leading the old national central banks in the oversight of the Eurozone banks. The ECB was to be a rule-bound institution. Its only obligation was to maintain the purchasing power of its currency. Knowing that repeated budget deficits and continuous accumulation of sovereign debt sooner or later lead the issuer of the currency to print excessive amounts of money, a parallel document, the Stability and Growth Pact (1998) put a limit to member states' deficits and debt. This transfer of monetary sovereignty to the ECB and the limiting rules accompanying it meant that neither member states nor the European Union could use the euro as an instrument of discretionary economic management. In practice, no devaluation and no inflation imposed a harsh discipline on the Ministers of Finance of the Euro area—a welcome brake on democratic profligacy.

This well-meaning project had its failings, as experience has shown. Some small instrumental changes, especially regarding the over-lenient interest rate policy, would have given the new currency greater stability. But nobody made clear from the start its possible costs in terms of budgetary discipline, structural reform and reduction of entitlements. A pampered electorate should have been told the price to be paid for the great advantage of a stable currency. In sum, the euro could have been a sort of pale replica of the gold standard, aspiring to the solidity of gold but free of gold's automatic rigidity. Better that than nothing.

An 'American' euro

The current crisis has led the European authorities and the Bank to throw away the monetary ideal of rule-bound action, independence from politics and attention to the long run. The ECB is now a lender of last resort not only to the commercial banks in its club but to governments in its area. Far from being independent of politics, it is in continuous consultation and collaboration with European and national authorities. The current president of the ECB has gone so far as to says that the Bank will "do whatever it takes" to save the euro, which markets have understood as creating all the liquidity necessary to stop speculators. Thus, the ECB is now turning itself into a traditional government banker, ready to aid and abet in counter-cyclical monetary management, protectionist exchange rate policy, and 'controlled' inflationism.

The Rich Get Richer and Everyone Else Poorer Under Socialism

Socialism puts power over the lives of the many into the hands of the few

"Some regard private enterprise as if it were a predatory tiger to be shot. Other look upon it as a cow that they can milk. Only a handful sees it for what it really is – the strong horse that pulls the whole cart."

by Benedict D. LaRosa

When President Clinton unveiled his national health care plan in 1993, known as HillaryCare, Republicans opposed the details, but not the concept of a government controlled health care system. The same is true with the Obama health care plan of 2010. The Republican establishment promises to repeal ObamaCare and replace it with something else. Regardless of the details, the very concept of government imposed health care represents a giant step toward socialism.

But don't wait for the President or members of Congress who favor such government intervention in the marketplace to refer to their philosophy of government as socialism, for that would alienate their targeted constituency. Norman Thomas, the head of the Socialist Party of the United States until his death, said:

The American people will never knowingly adopt Socialism, but under the name of Liberalism they will adopt every fragment of the Socialist program until one day America will be a Socialist nation without knowing how it happened.

The well known writer and Fabian socialist, H.G. Wells, predicted in his 1908 book New Worlds for Old:

Socialism would cease to be an open revolution, and would instead become a subtle plot. Functions were to be shifted from the elected representative, to the appointed official; . . . a scientific bureaucracy appointed by representative bodies which would have diminishing activity and importance. . . . The replacement of individual action by a public organization could achieve socialism without public support.

(The much maligned term liberal, when applied to socialists is a misnomer, for classical liberalism holds that the government which governs least governs best, and attempts to maximize freedom.)

Socialists argue that capitalism exacerbates the problems of poverty, environmental degradation, expensive health care, alienating work, racial inequality, inadequate housing, and a host of other ills. They are correct in that our present economic system fosters these ills. Where they go amiss is in calling this system free market capitalism. What we have developed in recent history is not free-market capitalism, but the socialism critics find so attractive.

Americans began flirting with socialism as early as the Civil War when both the U.S. and Confederate governments intervened in the economic lives of their respective citizens to a previously unheard of degree. Well-intended Americans advanced the socialist cause in a populist revolt against the monopolists and crony capitalists of the late 19th century known as Robber Barons. The pace quickened with the passage of the Federal Reserve Act and the income tax in 1913. With America's entry into World War I in 1917 came increased regulation of commerce and industry. Franklin Roosevelt, who promised lower taxes and less government during the 1932 campaign, spent his four terms as President poking the heavy hand of government into everything he could. H.G. Wells was so impressed with Roosevelt's policies that during his 1934 visit to the Soviet Union, he "tried to persuade Stalin that Roosevelt's New Deal was the beginning in America of a movement toward socialism." (H.G. Wells in Russia, Martin Gardner, THE FREEMAN, May 1995, p.287). The pace has quickened since then under both Democrat and Republican administrations.

There are two ways to obtain goods and services: through force (slavery and plunder) or free exchange (cooperation).

The Bitcoin Money Myth

Bitcoin is not money but rather a new way of employing existent money in transactions

by Frank Shostak

Many economists and financial commentators believe that in the unregulated market of the internet economy, new forms of money can be created that bypass central-bank and government supervision. The latest development is the emergence of a new electronic means of exchange, Bitcoin (BTC). Bitcoin was launched on January 3 2009 by its inventor, a programmer called Satoshi Nakamote.

The basic idea behind Bitcoin is to create, by means of a mathematical algorithm, a digital good that is scarce and fungible.

Nakamote devised a software system that enabled people to obtain bitcoins as a reward for solving complex mathematical puzzles. The resulting coins are then used for online trading. Nakamote also arranged that the number of bitcoins can never exceed 21 million.

Some experts maintain that Bitcoin will displace the existent fiat money and will usher in a new era of free banking, which will finally put to rest the menace of inflation.

Unfortunately, this is a pipe dream. Electronic money will not replace fiat paper money. The belief that it can stems from a failure to understand the nature and function of money and how it emerges on the market.

To see where this view goes wrong, let's first see how money comes about. Money emerges out of barter conditions that permit more complex forms of trade and economic calculation. The distinguishing characteristic of money is that it is the general medium of exchange, evolved from private enterprise from the most marketable commodity. On this Mises wrote,

There would be an inevitable tendency for the less marketable of the series of goods used as media of exchange to be one by one rejected until at last only a single commodity remained, which was universally employed as a medium of exchange; in a word, money. (The Theory of Money and Credit,pp. 32-33)

In short, money is the thing for which all other goods and services are traded. Furthermore, money must emerge as a commodity. An object cannot be used as money unless it already possesses an exchange value based on some other use. The object must have a pre-existing price for it to be accepted as money.

Why? Demand for a good arises from its perceived benefit. For instance people demand food because of the nourishment it offers. With regard to money, people demand it not for direct use in consumption, but in order to exchange it for other goods and services. Money is not useful in itself, but because it has an exchange value, it is exchangeable in terms of other goods and services.

The benefit money offers is its purchasing power, i.e. its price in terms of goods and services. Consequently for something to be accepted as money, it must have a pre-existing purchasing power: a price. This price could have only emerged if it had an exchange value established in barter.

Once a thing becomes accepted as the medium of exchange, it will continue to be accepted even if its non-monetary usefulness disappears. The reason for this acceptance is that people now possess previous information about its purchasing power. This in turn enables them to form the demand for money.

How Empires Fall

How Rome Fell: Death of a Superpower

The imperial tree falls not because the challenges are too great but because the core of the tree has been weakened by the gradual loss of surplus, purpose, institutional effectiveness, intellectual vigor and productive investment.

by Charles Hugh-Smith

Comparing the American Empire with the Roman Empire in its terminal decline is a popular intellectual parlor game. The comparison is inexact on a number of fronts, starting with the nature of empire: Rome ruled a territorial empire, while the U.S. is a hegemony that doesn't need to hold territory (other than key overseas military bases); its dominance is based on the global projection of hard and soft power, diplomacy, finance and the monetary regime of the reserve currency.

Despite the apparent difference, the two empires share the key characteristic of all enduring empires: they extract the cost of maintaining the empire from client states and/or allies.

The mechanisms differ, but the results are the same: the empire's cost is distributed to those who benefit from its secure trade routes.

Two of the key characteristics of an empire in terminal decline are complacency and intellectual sclerosis, what I have termed a failure of imagination.

Michael Grant described these causes of decline in his excellent account The Fall of the Roman Empire, a short book I have been recommending since 2009:

There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. (The Status Quo) attitude is a complacent acceptance of things as they are, without a single new idea.

This acceptance was accompanied by greatly excessive optimism about the present and future. Even when the end was only sixty years away, and the Empire was already crumbling fast, Rutilius continued to address the spirit of Rome with the same supreme assurance.

This blind adherence to the ideas of the past ranks high among the principal causes of the downfall of Rome. If you were sufficiently lulled by these traditional fictions, there was no call to take any practical first-aid measures at all.

In other words, if our idea of intellectual rigor and honesty is Paul Krugman dancing around the Neo-Keynesian Cargo Cult campfire waving dead chickens and mumbling nonsensical claims of grand success, we are well and truly doomed.