What about Rage against those idiots

Tenn. law bans posting images that "cause emotional distress"

"Since there is no conceivable imagine that no one could claim to be distressed by, this law theoretically gives the State of Tennessee power to throw anyone in jail for any image they post on the Internet.How do people with such open contempt for the concept of liberty get elected to public office?"

By Timothy B. Lee

A new Tennessee law makes it a crime to "transmit or display an image" online that is likely to "frighten, intimidate or cause emotional distress" to someone who sees it. Violations can get you almost a year in jail time or up to $2500 in fines.

The Tennessee legislature has been busy updating its laws for the Internet age, and not always for the better. Last week we reported on a bill that updated Tennessee's theft-of-service laws to include "subscription entertainment services" like Netflix.

The ban on distressing images, which was signed by Gov. Bill Haslam last week, is also an update to existing law. Tennessee law already made it a crime to make phone calls, send emails, or otherwise communicate directly with someone in a manner the sender "reasonably should know" would "cause emotional distress" to the recipient. If the communication lacked a "legitimate purpose," the sender faced jail time.

The new legislation adds images to the list of communications that can trigger criminal liability. But for image postings, the "emotionally distressed" individual need not be the intended recipient. Anyone who sees the image is a potential victim. If a court decides you "should have known" that an image you posted would be upsetting to someone who sees it, you could face months in prison and thousands of dollars in fines.

If you think that sounds unconstitutional, you're not alone. In a blog post, constitutional scholar Eugene Volokh points out just how broad the legislation is. The law doesn't require that the picture be of the "victim," nor would the government need to prove that you intended the image to be distressing. Volokh points out that a wide variety of images, "pictures of Mohammed, or blasphemous jokes about Jesus Christ, or harsh cartoon insults of some political group," could “cause emotional distress to a similarly situated person of reasonable sensibilities,” triggering liability. He calls the bill "pretty clearly unconstitutional."

Another provision of the legislation governs law enforcement access to the contents of communications on social networking sites. The government can get access to "images or communications" posted to a social networking site by offering "specific and articulable facts," suggesting that the information sought is "relevant and material to an ongoing criminal investigation."

This section, too, faces constitutional problems. Julian Sanchez, a privacy scholar at the Cato Institute, tells Ars that "this is a lower standard than the federal Electronic Communications Privacy Act requires" for unread communications. More importantly, because Tennessee is in the Sixth Circuit, it is bound by that court's Warshak decision, which held that the Fourth Amendment requires the government to obtain a full search warrant in order to access e-mail communications. "That case dealt with e-mail," Sanchez said, "but there's no good reason to think a private message on a social network site is any different."

Free Banking or Central Plan Banking?

Those “Other” 100 Percent Reserve Banking Advocates

by G. Selgin

In the aftermath of the U.S. banking crises of the 1930s, it became common for American economists to speak of the “inherent” instability of fractional-reserve banking and of the “perverse elasticity” of money supply in fractional-reserve banking systems.

What the economists in question had in mind was the tendency in existing fractional reserve banking systems for any increase in the public’s preferred ratio of currency holdings to holdings of bank demand deposits to result in a decline in bank lending, and hence in a decline in the overall money stock, and to do so despite the lack of any decline in the public’s overall desire for money balances of one kind or another. It was chiefly owing to this phenomenon that, during the first few years of the Great Depression, the U.S. (M2) money stock collapsed to just two-thirds its pre-depression level.

It was in response to this supposedly inherent drawback of fractional reserve banking that several prominent economists—including Henry Simons, Irving Fisher, Loyd Mints, and (eventually) Milton Friedman—began offering or endorsing proposals for “100 Percent Money,” meaning money consisting either of basic money itself or of bank deposits fully backed by basic money. Although these proposals closely resembled later proposals for 100-percent reserve banking forwarded by Murray Rothbard and his Austrian-School followers, they differed in treating either fiat or “commodity-bundle” central bank money rather than either gold or silver as the ideal form of basic money, and also in not basing their arguments on any appeal to ethics: unlike their Austrian counterparts, the “Chicago” 100-percenters (for want of a more accurate designation) did not claim that fractional-reserve banks swindled their customers. Instead they condemned them solely for contributing to monetary instability.

But were the “Chicago” arguments for 100-percent money any sounder than their “Austrian” counterparts? Is it true that fractional reserve banking is “inherently unstable” in the manner they claimed? As even a careful reading of their own writings shows, it is not. In truth what the Chicago 100-percenters treated as an “inherent” problem of fractional reserve banking isn’t inherent to it at all. Instead it is a problem stemming from government regulations interfering with or altogether prohibiting banks from issuing their own circulating banknotes on the same terms as those by which they are allowed to create exchange media that consist of demand deposits. In the U.S., banknote issue has almost always been subject to special restrictions. But these restrictions became increasingly severe after the outbreak of the Civil War, finally culminating in the complete suppression of commercial banknotes in 1935. Consequently, on the eve of the Great Depression it was impossible for most commercial banks to issue any banknotes at all, and it was very difficult for the rest to do so. Banks therefore had to count heavily on the Fed to meet any considerable increase in the public’s demand for circulating money by creating more units of basic money. Otherwise the banks might be stripped of cash reserves, and forced either to severely contract their lending or to close their doors, if not to do both.

Failed social experimentation — on a grand scale

Economic Analysis and the Great Society

by R. Higgs

Although the Great Society should be understood as primarily a political phenomenon—a vast conglomeration of government policies and actions based on political stances and objectives—economists and economic analysis played important supporting roles in the overall drama. Even when political actors could not have cared less about economic analysis, they were usually at pains to cloak their proposals in an economic rationale. If much of this rhetoric now seems to be little more than shabby window dressing, we might well remind ourselves that the situation in this regard is no better now than it was then.

Regardless of how political actors in the 1960s might have sought to exploit economic analysis to gain a plausible public-interest rationale for their proposed programs, the most prominent body of economic analysis in those days—the sort taught by the leading lights at Harvard, Yale, Berkeley, and the other great universities—virtually cried out to be exploited in this way. During the mid-1960s the so-called Neoclassical Synthesis achieved its greatest hold on the economics profession.

This term “synthesis” refers to the combination of a microeconomic part, which contains the theory of individual markets that had been developed over the preceding two centuries, and a macroeconomic part, which contains the ideas about national economic aggregates advanced by John Maynard Keynes in his landmark 1936 book The General Theory of Employment, Interest, and Money and further developed by Keynes’s followers during the three decades after the book’s publication.

On the microeconomic side, the Neoclassical Synthesis incorporated the so-called New Welfare Economics that had been developed during the 1930s, 1940s, and 1950s. In this form microeconomic theory advanced a general-equilibrium theory of the economy’s various markets, identified the conditions for the attainment of equilibrium in this idealized system, and demonstrated that various “problems”—springing from external effects, collective goods, less-than-perfect information, and less-than-perfect competition, among other conditions—would cause the system to settle in a state of overall inefficiency: The value of total output would fall short of the maximum that would have resulted from systemic efficiency, given the economy’s available resources of labor and capital and its existing technology.

Attainment of such an inefficient state was characterized as a “market failure,” and economists expended enormous effort alleging the existence of such market failures in real-world markets and in proposing means (mainly taxes, subsidies, and regulations) by which the government might, in theory at least, remedy these failures and thus maximize “social welfare.”

Had economic theorists rested content with using the microeconomics of the Neoclassical Synthesis strictly as a conceptual device employed in abstract reasoning, it might have done little damage. However, as I have already suggested, this type of theory cried out for application—which, in practice, was nearly always misapplication. The idealized conditions required for theoretical general-equilibrium efficiency could not possibly obtain in the real world; yet the economists readily endorsed government measures aimed at coercively pounding the real world into conformity with these impossible theoretical conditions.

Closely examined, such efforts represented a form of madness. As the great economist James Buchanan has observed, the economists’ obsession with general equilibrium gives rise to “the most sophisticated fallacy in [neoclassical] economic theory, the notion that because certain relationships hold in equilibrium the forced interferences designed to implement these relationships will, in fact, be desirable.”

Great Society measures such as the Elementary and Secondary Education Act (1965), the Higher Education Act (1965), the Motor Vehicle Safety Act (1966), and the Truth in Lending Act (1968), as well as many of the consumer-protection and environmental-protection laws and regulations, found ready endorsement among contemporary neoclassical economists, who viewed them as proper means for the correction of purported market failures.

The assumptions that underlay these economic interpretations and applications, however, could be sustained only by wishful thinking. Economists presumed to know where general equilibrium lay, or at least to know the direction in which the quantities of various inputs and outputs should be changed in order to approach general-equilibrium efficiency more closely. But neoclassical economists cannot move the earth with a mathematical lever because they have no place to stand—no “given” information about (presumably fixed) property rights, consumer preferences, resource availabilities, and technical possibilities. What neoclassical economics takes as given is, in reality, revealed only by competitive processes.

If the microeconomic side of the Neoclassical Synthesis fostered government measures to remedy a variety of putative market failures, its macroeconomic side endorsed government measures to remedy the greatest alleged market failure of all—the economy’s overall instability and its recurrent failure to bring about a condition known as “full employment.”

The supposition that mass unemployment constitutes or reflects a market failure came easily to economists who had reached maturity during the Great Depression. By the early 1950s Keynesian ideas had entrenched themselves among the leading lights of the mainstream economics profession. Since then, some species of Keynesianism has been either in the professional saddle or clamoring to get there.

In the 1960s few economists disputed this general framework of analysis. Even critics such as Milton Friedman accepted it, arguing only that certain second-order aspects of the model differed from what the Keynesians assumed.

Few macroeconomists looked to monetary-policy changes as important means of pushing an economy out of what they viewed as a mass-unemployment equilibrium. For the typical macroeconomist of those days, fiscal policy—changes in government spending, taxing, and borrowing—held the key to keeping the economy on a steady growth path. By employing these instruments policymakers could effectively select from a menu of inversely related rates of inflation and unemployment, a trade-off schedule known as the stable Phillips Curve. As if to certify the completeness of Keynesianism’s conquest, in December 1965 Time magazine put an image of Keynes on its cover and featured a long, laudatory article titled, “We Are All Keynesians Now.”

The Great Society programs, whether for microeconomic remedy of alleged market failures or for macroeconomic fine-tuning, had an important element in common: the presumption that technocrats possessed the knowledge and the capacity to identify what needed to be done, to design appropriate remedial measures, and to implement those measures successfully. In short, the Great Society amounted to social engineering—or worse, to sheer, groping social experimentation—on a grand scale. People ought not to have been surprised when its attainments failed to match its pretensions.

"Confidential" spending by our Betters

EU chief's private jet, plush hotel and cocktail bill

by James Ball and Caelainn Barr

European Commission president José Manuel Barroso and 35 others spent €28,000 at a luxury New York hotel during their visit to the UN climate change convention in 2009. 

The office of José Manuel Barroso, the president of the European commission, racked up a €249,000 bill for private jets during the same period he attended the 2009 UN convention on climate change.

Barroso's jet bill for the nine-month period is just a small part of €7.5m worth of trips on private jets chartered by EU commissioners over the last five years, uncovered in research by the Bureau of Investigative Journalism.

The commission declined to comment on the specifics of the spending on private jets, other than to confirm €249,000 was a private jet spend for 2009 for the president's office, but refused to say whether he took such a jet – which releases around 55 tonnes of carbon dioxide each transatlantic flight – to the convention itself.

The bureau found that Barroso and 35 others spent €28,000 at the luxury Peninsula New York hotel during the visit to the UN climate change convention. This figure was confirmed by the commission.

The research also uncovered public money being used to fund a €75,000 cocktail party at a science conference – Discovery 09 – which was "filled with wonder like no other ... with trendy cocktails, surprising performances and top DJs", as much of the EU was in the grip of recession.

The commission funded €300,000 worth of events described in internal documents as cocktail parties in the same year. At least a further €1.2m was spent on hotel and conference costs in 2009, including stays in San Diego, Prague and Balmoral.

An additional €20,000 was spent on gifts for commission guest speakers since 2008, including cufflinks, fountain pens and Tiffany jewellery.

Don’t bet the farm on it.

Europe’s Food Poisoning Outbreak: Reaping What It Has SownEurope’s Food Poisoning Outbreak: Reaping What It Has Sown

by Henry Miller

Northern Europe is in the throes of a record-setting outbreak of potentially fatal food poisoning that has caused serious illness in more than 1,200 and killed 16.  The pathogen is a virulent strain of bacteria called enterohemorrhagic E. coli.  This enterohemorrhagic E. coli can cause severe gastrointestinal and systemic disease, including hemolytic-uremic syndrome leading to kidney failure and death.  The source of the bacteria is still unknown, but fresh cucumbers, tomatoes or lettuce are the prime suspects.

Modern farming operations — especially the larger ones — employ strict standards and safeguards designed to keep food free of pathogens. But growers of fresh produce cannot ensure that their harvests will be completely safe all the time.  During the past few years, the American food supply has experienced a number of high-profile incidents of contamination of beef, fresh produce and processed foods, including Mexican peppers, California lettuce and peanuts from a Georgia processing plant.  Federal officials have expressed concern: “We recognize that we have reached a plateau in the prevention of foodborne disease, and there must be new efforts to develop and evaluate food-safety practices from the farm to the table,” said Robert Tauxe, the deputy director of the CDC’s Division of Foodborne, Bacterial and Mycotic Diseases.

Because agriculture is an outdoor activity and subject to all manner of unpredictable challenges, there are limits to how safe we can make it.  If the goal is to make a cultivated field completely safe from microbial contamination, the only definitive solution is to pave it over and build a parking lot on it.  But we’d only be trading very rare agricultural mishaps for fender-benders.

Nor can we rely on processors to consistently make food pathogen-free.  A 2006 spinach-based outbreak of food poisoning demonstrated that our faith in processor labels such as “triple washed” and “ready to eat” must be tempered with skepticism.  Processors were quick to proclaim the cleanliness of their own operations and deflect blame toward growers.  Finger-pointing aside, every link in the food chain shares responsibility for food safety and quality.

Risks of the trade

Chinese agency accuses U.S. of ‘already defaulting’

by agence france-presse 

A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order.

“In our opinion, the United States has already been defaulting,” Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.

Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies — eroding the wealth of creditors including China, Guan said.

Guan did not immediately respond to AFP requests for comment.

The U.S. government will run out of room to spend more on August 2 unless Congress bumps up the borrowing limit beyond US$14.29 trillion — but Republicans are refusing to support such a move until a deficit cutting deal is reached.

Ratings agency Fitch on Wednesday joined Moody’s and Standard & Poor’s to warn the United States could lose its first-class credit rating if it fails to raise its debt ceiling to avoid defaulting on loans.

A downgrade could sharply raise US borrowing costs, worsening the country’s already dire fiscal position, and send shock waves through the financial world, which has long considered US debt a benchmark among safe-haven investments.

China is by far the top holder of U.S. debt (not counting the FED) and has in the past raised worries that the massive U.S. stimulus effort launched to revive the economy would lead to mushrooming debt that erodes the value of the dollar and its Treasury holdings.

Beijing cut its holdings of U.S. Treasury securities for the fifth month in a row to US$1.145 trillion in March, down US$9.2 billion from February and 2.6% less than October’s peak of US$1.175 trillion, U.S. data showed last month.

Foreign ministry spokesman Hong Lei on Thursday urged the United States to adopt “effective measures to improve its fiscal situation”.

Dagong has made a name for itself by hitting out at its three Western rivals, saying they caused the financial crisis by failing to properly disclose risk.

The Chinese agency, which is trying to build an international profile, has given the United States and several other nations lower marks than they received from the the big three.

Beyond Gas

Oil is "Lifeblood" of U.S. Economy

by Mark Perry

Less than 46% of each barrel of crude oil gets processed into "finished motor gasoline" according to the EIA. So what gets produced from the other 54% of each barrel of crude oil?  
You can find the details here, but the list includes aviation and jet fuel, kerosene, lubricants, waxes, asphalt, dyes, athletic shoes, crayons, car tires, cosmetics, and plastics that are used in appliances, toys, flooring, computers, desks, carpeting, automobiles and medical equipment (syringes, artificial joints, prosthesis, catheters, hearing aids, artificial corneas, etc.).  
As ExxonMobil's Ken Cohen concludes, "When some politicians, celebrities and even other companies talk about getting “off oil,” [MP: Or raising taxes on "Big Oil"] I hope they realize what that would really mean for our way of life – because it might make them think twice."

America’s Last Acceptable Prejudice

Hating Boomers

By Leonard Steinhorn

So now we can finally point the finger at those truly responsible for the sex abuse scandal in the Catholic Church. No, it’s not the priests who actually exploited the young children entrusted to them. Nor is it the bishops themselves, many of whom looked the other way and willfully ignored the signs of dysfunction in their church.

Thanks to a new report released by the United States Conference of Catholic Bishops, we now have a group of people singularly deserving of blame: baby boomers.

Yes, baby boomers, the new piñata for all the problems we have in society today. Or as the New York Times put it, the Church has decided to put forth a “blame Woodstock” defense.

By now we can pretty much dismiss any excuse Church leaders offer as yet another acrobatic attempt to rationalize a demon the hierarchy should have honestly addressed long ago. Displacement of blame seems to be Church practice these days.

More interesting is that the Church chose to hold the baby boom culture of the Sixties and Seventies responsible for its problems. It’s a very clever ploy not because it’s right, but because hating boomers has become the last acceptable prejudice in America – and the Church probably figures it can get a bit of a free pass in the blame game by riding this anti-boomer sentiment for all it’s worth.

Perhaps Church leaders took their cue from New York Times columnist, Thomas Friedman, who calls boomers a generation of “hungry locusts”whose penchant for excess and self-indulgence disrespects the sacrifice of their self-effacing parents.

Or perhaps the bishops found inspiration from Indiana Governor Mitch Daniels, who describes boomers as “self-centered, self-absorbed, self-indulgent, and all too often just plain selfish.”

Or maybe they were reading the columnist George F. Will, who regularly bashes boomers, saying they are a generation steeped in “moral vanity” and “narcissism” and claiming that the only thing serious about the boomers is their “own self-flattering estimate of their seriousness.”

Or perhaps they picked up on the many anti-boomer headlines written by snarky journalists, as in “A generation learns that the world doesn’t revolve around it anymore” (Washington Post) or “Boomers hit new self-absorption milestone” (New York Times).

Indeed the bishops didn’t have to go far to find their boomer villain. Liberals and conservatives, left and right all seem united on this: boomers are to blame for whatever has gone wrong in America. And all the good things in our country today? According to these critics, boomers had nothing to do with them even though they like to take all the credit, which is yet another sign of their vanity and narcissism.

Last year the conservative group Citizens United produced a film,Generation Zero, blaming boomers for the Wall Street financial crisis. The film, according to Citizens United, shows “how the mindset of the baby boomers sowed the seeds of economic disaster that will be reaped by coming generations.”

Okay, so let’s hold boomers responsible for the worldwide credit crisis.

Back in the early 1980s, before the bulk of boomers started raising families, they were said to be too selfish to have kids. Then, when boomers turned out to be pretty good and selfless parents, they were accused of getting too involved in their kids’ lives.

Boomers have been accused of creating cultural chaos through moral relativism. Then, when boomers came of age and declared that bigotry of any kind was immoral in America, they were accused of being politically correct.

Boomers have been derided as Yuppies living in a state of Transcendental Acquisition even though the 1984 Newsweek Magazine article that spawned this caricature acknowledged that only about two percent of boomers fit the description. Of course the Greatest Generation had its “keeping up with the Jones” cohort and many of their Roaring Twenties parents lived lives of “conspicuous consumption,” but only boomers get tarred with this unflattering stereotype.

Today the critics point their venom at boomers simply for being alive. As a demographically huge generation that will live long because of medical advances, boomers are being pilloried in advance for eventually bankrupting America through Social Security and Medicare. Rarely are these accusations thrown at those older than boomers, who squawk every time legislators propose cuts in their cost of living adjustments.

Boomers have pretty thick skin and take all this hostility in stride. They’ve been through worse. Millions went off to fight a pointless and duplicitous war created by their elders, and millions more took all the slings and arrows from that elder generation as they protested the pointlessness and duplicity of that war. To the horror of their scolding parents, boomers willingly dated across ethnic lines and ushered in a culture in which gay did not mean closeted.

Nor do boomers really need credit for raising the most inclusive and least prejudiced generation in our nation’s history. Or for building a society unprecedented in its equal rights for minorities and women. Or for flattening hierarchies and opening up society for people to express themselves without fear and shame. Or for creating a nonprofit sector far greater in reach, scope, and impact than we have ever seen before. Or for advancing environmental awareness so that we now consider the green consequences of economic progress.

Boomers are comfortable with these accomplishments and don’t need to justify them.

The irony, of course, is that in pushing so hard to free America from its overt, covert, public, and genteel prejudices, and in stepping on so many toes in the process, boomers left themselves open as an all-purpose target of blame.

But boomers are moving into their twilight years. So if in the decades ahead there’s another sex abuse scandal or financial collapse or unforeseen misfortune, who will we blame then?

If it pays, it stays

Shoot an Elephant, Save a Community

by Terry Anderson

When GoDaddy CEO, Bob Parsons, posted a video online of himself shooting an elephant in Zimbabwe, he unleashed a stampede of criticism. The hunt, which took place in March, resulted in the killing of a problem bull elephant found raiding farmers’ crops. People for the Ethical Treatment of Animals (PETA) discovered the video, plastered it all over the web, and dropped their account with GoDaddy—a web hosting service—urging others to follow suit. NameCheap, a rival web company, persuaded more than 20,000 GoDaddy customers to switch their accounts by pledging to donate a portion of its revenue to the nonprofit Save the Elephants.

Such emotional activism on behalf of elephants is understandable. But whether PETA’s activism goes beyond rhetoric to achieve results—like more elephant habitat and more elephants—is another matter. Unfortunately, environmental groups such as PETA are too often long on rhetoric and short on results.

Like many environmental groups, PETA is all about the "anti." In this case, it is anti-hunting. Its supporters rally against causes with easily identifiable "bad guys" such as corporations and hunters like Bob Parsons. While such good-versus-evil narratives are useful for garnering financial support, they ignore the complexity of human-wildlife conflicts in Africa and the role of property rights and local management in resource conservation.

Seldom does PETA advocate for more practical but less emotive "pro" causes such as wildlife habitat, community resource management, or higher incomes. As a result, it neglects solutions such as devolving wildlife management to the local level, where the people living with the costs of wildlife can find ways to profit from sustaining the habitat and the animals. Where property rights to wildlife have been assigned to local communities—either through explicit institutional reforms or innovative entrepreneurship—Africans have proven that private ownership means resources stewardship.

Parsons’ hunt epitomizes results rather than rhetoric and shows how active conservationists can help both people and wildlife. In Parsons’ words, "This farmer was desperate. He couldn’t get the herd out of his field. He asked us to come and deal with it." Parsons’ video, albeit distasteful at times, reveals the cold reality of conservation in Africa. Wildlife imposes real costs on the nearby communities. Achieving results means involving these communities in wildlife management and providing them the right incentives to protect wildlife and its habitat.

PETA’s anti-hunting rhetoric fails on both counts. Anti-hunting groups succeeded in getting Kenya to ban all hunting in 1977. Since then, its population of large wild animals has declined between 60 and 70 percent. The country’s elephant population declined from 167,000 in 1973 to just 16,000 in 1989. Poaching took its toll on elephants because of their damage to both cropland and people. Today Kenya wildlife officials boast a doubling of the country’s elephant population to 32,000, but nearly all are in protected national parks where poaching can be controlled. With only 8 percent of its land set aside as protected areas, it is no wonder that wildlife in general and elephants in particular have trouble finding hospitable habitat.

After Kenya banned all hunting in 1977, its population of large wild animals declined between 60 and 70 percent.

For the landowners who bear the costs of wildlife, the decision of whether to protect wildlife is a simple one: if it pays, it stays. The ban on hunting gives wildlife little or no economic value, causing rural Africans to view wildlife as a liability to be avoided rather than an asset to be protected. As a result, landowners have increasingly turned to agriculture instead of habitat protection, which decreases available habitat and increases the potential for human-wildlife conflicts.

The social role of scavengers

What the Turks Can Teach Us about Recycling

by Doug French

After battling the teacher's union in Wisconsin, that state's governor, Scott Walker, proposed a state budget that would have eliminated mandatory recycling. The outrage came fast and furious. An editorial at TheJournalTimes.com began with:

"Recycling has developed into a service too valuable to toss on the scrap heap.

Some officials worry Wisconsin communities will revert to a sort of Wild West dumping ground if Gov. Scott Walker's budget passes as is. Under the plan, subsidies for local recycling programs would end and municipalities would no longer be required to run those programs."

The editorial went on to say: "recycling is cleaner than garbage, trims energy use, creates jobs, and keeps tons of waste from ending up in landfills."

The governor quickly folded his plan when he failed to get the backing of key Republican lawmakers, who said his plan goes too far. So Wisconsin residents can look forward to sorting and separating their paper, plastic, and cans under the thumb of Wisconsin authorities. It's now radical to believe that people should just throw unwanted items away. To allow people to do this is "going too far."

Forcing people to spend time separating garbage turns the division of labor on its head. Wisconsin residents could hire specialists to come to their homes to separate the garbage, but that would be costly and inefficient. Plus, the government mandate gives no consideration to which materials have value in the scrap market.

As Wisconsin's Governor Scott Walker learned the hard way, it's now radical to believe that people should just throw unwanted items away.

So while in certain cities of the United States, people are forced to sort through their own garbage, in a number of places in the world, residents throw away their trash with no worries. The trash will be sorted and removed by the estimated 15 million waste pickers in the world.

Spend any time in Istanbul and you see(mostly) men pulling what look to be large canvas bags strapped to steel frames on two wheels. They are everywhere — residential and commercial areas.

Before the municipal garbage trucks pull up to empty trash bins, these waste pickers comb through the trash, pulling out paper, plastic, glass, or anything else they know they can sell. The typical garbage collectors reportedly earn from 50 to 100 Turkish lira a week.

But there is considerable upside depending upon what a picker may find in the trash.

In the words of one trash picker,

"Every garbage can contains a new dream. You go to a garbage bin. You dip your hand inside, and you start dreaming about what you might find. Perhaps it will be something valuable. And if you don't find it in this bin, you go to the next. In this manner, you can walk for seven or eight hours daily."

Another take on the Austrian Business Cycle

Death By Debt

by Chris Martenson

One of the conclusions that I try to coax, lead, and/or nudge people towards is acceptance of the fact that the economy can't be fixed.  By this I mean that the old regime of general economic stability and rising standards of living fueled by excessive credit are a thing of the past.  At least they are for the debt-encrusted developed nations over the short haul -- and, over the long haul, across the entire soon-to-be energy-starved globe.

 

The sooner we can accept that idea and make other plans the better.  To paraphrase a famous saying, Anything that can't be fixed, won't. 

The basis for this view stems from understanding that debt-based money systems operate best when they can grow exponentially forever. Of course, nothing can, which means that even without natural limits, such systems are prone to increasingly chaotic behavior, until the money that undergirds them collapses into utter worthlessness, allowing the cycle to begin anew.

All economic depressions share the same root cause. Too much credit that does not lead to enhanced future cash flows is extended.  In other words, this means lending without regard for the ability of the loan to repay both the principal and interest from enhanced production; money is loaned for consumption, and poor investment decisions are made. Eventually gravity takes over, debts are defaulted upon, no more borrowers can be found, and the system is rather painfully scrubbed clean. It's a very normal and usual process.

When we bring in natural limits, however, (such as is the case for petroleum right now), what emerges is a forcing function that pushes a debt-based, exponential money system over the brink all that much faster and harder. 

But for the moment, let's ignore the imminent energy crisis.  On a pure debt, deficit, and liability basis, the US, much of Europe, and Japan are all well past the point of no return.  No matter what policy tweaks, tax and benefit adjustments, or spending cuts are made -- individually or in combination -- nothing really pencils out to anything that remotely resembles a solution that would allow us to return to business as usual.

At the heart of it all, the developed nations blew themselves a gigantic credit bubble, which fed all kinds of grotesque distortions, of which housing is perhaps the most visible poster child.  However, outsized government budgets and promises, overconsumption of nearly everything imaginable, bloated college tuition costs, and rising prices in healthcare utterly disconnected from economics are other symptoms, too. This report will examine the deficits, debts, and liabilities in such a way as to make the case that there's no possibility of a return of generally rising living standards for most of the developed world.  A new era is upon us.  There's always a slight chance , should some transformative technology come along, like another Internet, or perhaps the equivalent of another Industrial Revolution, but no such catalysts are on the horizon, let alone at the ready.

At the end, we will tie this understanding of the debt predicament to the energy situation raised in my prior report to fully develop the conclusion that we can -- and really should -- seriously entertain the premise that there's just no way for all the debts to be paid back.  There are many implications  to this line of thinking, not the least of which is the risk that the debt-based, fiat money system itself is in danger of failing.

Too Little Debt! (or, Your One Chart That Explains Everything)

[Note: this next section is an excerpt from a recent Martenson Blog entry, so if this seems familiar to any site members, it's because you've seen it before.]

If I were to be given just one chart, by which I had to explain everything about why Bernanke's printed efforts have so far failed to actually cure anything and why I am pessimistic that further efforts will fall short, it is this one:

 

There's a lot going on in this deceptively simple chart so let's take it one step at a time.  First, "Total Credit Market Debt" is everything - financial sector debt, government debt (federal, state, and local), household debt, and corporate debt - and that is the bold red line (data from the Federal Reserve). 

Next, if we start in January 1970 and ask the question, "How long before that debt doubled and then doubled again?" we find that debt has doubled five times in four decades (blue triangles).  

Then if we perform an exponential curve fit (blue line) and round up, we find a nearly perfect fit with a R² of 0.99.  This means that debt has been growing in a nearly perfect exponential fashion through the 1970's, the 1980's, the 1990's and the 2000's.  In order for the 2010 decade to mirror, match, or in any way resemble the prior four decades, credit market debt will need to double again, from $52 trillion to $104 trillion. 

Finally, note that the most serious departure between the idealized exponential curve fit and the data occurred beginning in 2008, and it has not yet even remotely begun to return to its former trajectory.

This explains everything.

From the era of mismanagement into the era of no-management

Ecoterrorism Kills

But not necessarily the way you think

By Robert J. Smith

With reports that some of the fires in California may have been started by arsonists, some people have speculated that all the fires were set by ecoterrorists. What these accusations seem to overlook, however, is that the nation has long faced a much deeper and more insidious philosophical ecoterrorism.

This philosophical ecoterrorism envisions and strives for an mythical, pre-settlement America — while ignoring the fact that we have 300 million people living here. This philosophy, combined with governmental inefficiencies, has created the conditions under which forest fires flourish and eventually spread out to destroy private property, as has occurred with the most recent catastrophe.

Every one of this month’s 15 major southern California’s fires started on government lands — mainly in the three or four National Forests that stretch 250 miles from Mexico into Ventura County. These are the Cleveland National Forest, the San Bernardino National Forest, Angeles National Forest, and Los Padres National Forest. Also the Malibu fire came down out of the infamous Santa Monica Mountains National Recreation Area. The eighth-largest fire was at Camp Pendleton Marine Base, which is now run largely as an inviolate Endangered Species Preserve.

These fires have burned out of control for a number of reasons. First, the federal government has mismanaged all the National Forests for a century — believing fires were unnatural and evil, the government sought to extinguish at all costs. The Smokey the Bear era — beginning in the 1940s — exacerbated that policy, pushing to stop every fire within 24 hours.

By contrast, the pre-settlement, open, park-like forests naturally were characterized by relatively frequent ground-hugging low-intensity underbrush clearing fires. However, the action on the part of the feds to stamp these out for about 100 years, filled the forests with duff, needles, cones, deadwood, and downed wood, and thousands of small undergrowth trees — what amounts to a tinder box. In addition, these conditions stressed and weakened the entire forest.

Paradox

Europe Is Warning Us

By Victor Davis Hanson

If Americans think fuel and food prices are high, they should try Europe, where both can nearly double those in the United States -- while salaries here are often lower.

Italians, like most now-broke Southern European countries, are desperate to privatize bloated public-owned utilities. Politicians are trying to curb pensions, and to encourage the private sector to hire workers and buy equipment, as a way of attracting wary foreigner parents to lend such perpetual adolescents more bailout money.

In theory, Italians accept that they are going to have to be a lot more like the Germans, and less like the Irish, Portuguese and Spaniards. In fact, they may end up like the Greeks, who are still striking and occasionally rioting because too few foreigners wish to continue subsidizing their socialist paradise. Red graffiti on Italian streets still echoes socialist solidarity, while Italian politicians talk capitalism to foreign lenders.

The European Union, like the 19th-century Congress of Vienna, can point to one achievement -- a general absence of war in Western Europe for more than 60 years. Otherwise, almost all its socialist promises of an equality of result are imploding before their eyes.

The higher taxes go, the more people cheat on them, the less revenue comes in. There are sometimes two prices in Italy (and often elsewhere in Europe) -- the official price that includes a high value-added tax that the unwary pay, and the negotiated, under-the-table, tax-free discount that the haggling shopper obtains.

Europe is essentially defenseless, as governments further trim defense budgets to keep shrinking spread-the-wealth entitlements alive. The French and British -- the continent's two premier military powers -- have been trying for nearly three months to defeat Muammar Gadhafi's ragtag nation of less than 7 million, itself rent by civil war. The ancestors of Wellington and Napoleon so far seem no match for Gadhafi or the Taliban. Both nations will soon be leaving Afghanistan in frustration.

Subsidized wind and solar power have not led to much of an increase in European electricity supplies, but they helped to make power bills soar. Highly taxed gas runs about $10 a gallon, ensuring tiny cars and dependence on mass transit. Central planners love the resulting state-subsidized, high-density European apartment living without garages, back yards or third bedrooms. Yet the recent Japanese tsunami and accompanying nuclear contamination have reminded European governments that their similarly fragile models of highly urbanized, highly concentrated living make them equally vulnerable to such disasters.

Popular culture may praise the use of the subway and train. But about every minute or two, some government grandee in a motorized entourage rushes through traffic as an escort of horn-blaring police forces traffic off to the side. A European technocratic class in limousines that runs government bureaus and international organizations -- for example, disgraced former International Monetary Fund chief Dominique Strauss-Kahn -- lives like 18th-century aristocrats at Versailles as they mouth socialist platitudes.

Throughout Western Europe, a subordinate class of unassimilated North African, sub-Saharan African and Pakistani immigrants hawk wares and do menial labor -- and are increasingly despised by Europeans as times get rougher. A growing number of the working classes here are getting fed up that the welfare state means sky-high fuel and food costs for the masses, small and expensive apartments, limited disposable income -- and lots of aristocratic perks for the technocrats who oversee the redistributive mess. The notion of a large and esteemed class of self-made, independent-thinking business people and empowered upper-middle-class entrepreneurs is a concept that seems foreign, if not subversive.

An acknowledged despair now seems to permeate Western Europe. A glorious past is equated with tourist dollars, not appreciation of the European Renaissance or the Enlightenment. Majestic churches are more moneymaking museums or tourist stops than honored hallmarks of past culture and current faith. European Christendom often helped to preserve humanity through horrific crises, but you would never learn that from the average cynical European, who appears either indifferent to or apologetic about both his religion and the hallowed European origins of Western Civilization, responsible for much of what is good in the world today.

All this European turmoil raises a paradox. If dispirited Europeans are conceding that something is terribly wrong with their half-century-long experiment with socialism, unassimilated immigrants, cultural apologies, defense cuts and post-nationalism, why in the world is the Obama administration intent on adopting what Europeans are rejecting?