What Price for Socialism?

Billionaire Peter Thiel Is Worried About America's Future

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

by Niall Ferguson  

Damn. Peter Thiel is smarter than I am.

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

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

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

Interest Rates and Real Goods

Cyclical Changes in Business Conditions

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

by Ludwig von Mises

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

Germany Speaks

Not So Fast On The Greek "Deal"

by Tyler Durden

Europe's now painfully transparent policy of demanding that Greece decide to default on its own is becoming so glaringly obvious, we truly fear for the intellectual capacity of everyone who ramps the EURUSD on any incremental "europe is saved" rumor. As a reminder, yesterday we said, in parallel with the Greek irrelevant MoU vote: 

We are running behind schedule

Friedrich Hayek on the sanctity of the Rule of Law

by SIMON BLACK 

One of the greatest thinkers of all time was Austrian economic Friedrich Hayek, and his work The Road to Serfdom is an absolute must-read.

Hayek’s writings are incredibly powerful in these times. In light of the countless recent examples of governments changing the rules whenever/wherever it suits them (from the Troika nonsense in Europe to the Fraudclosure settlement in the US), I’d like to share a few key passages with you today.

The Dream and the Nightmare

Europe in the Rearview Mirror

By Victor Davis Hanson 

The European Union was always a paradox. Its existence was predicated entirely on the notion of German guilt, translating into massive cash transfers east and south. Just as Versailles was supposed to have restrained Germany, then a divided, postwar Germany, then NATO integration and the common Soviet enemy, and then the EU — and now what next?

There was quite a EU veneer placed over the politically incorrect “German Problem.” Most of us listened in disbelief as we were lectured that veritable disarmament, subsidized windmills, reach outs to a Syria or Libya, easy anti-Americanism, and sermons about cradle-to-grave socialism were the way of the new Europe. And always came the grating condescension, that a self-appointed bureaucratic class in Brussels might lecture Neanderthals what was good for them, without worry over democratic checks and balances.

The White Man's Burden

The boycottistas didn’t end Apartheid

At long last, a TV documentary on how South Africans, not PC Western shoppers, ended Apartheid.

by David Bowden 

Allegedly, when, in 1972, Richard Nixon asked Zhou Enlai about the impact of the French Revolution, the then Chinese premier quipped: ‘It’s too early to tell.’ He was referring to the 1968 unrest, rather than the 1789 one. Whether or not the attribution is accurate, it was a good line and it particularly came to mind this week as BBC4’s monumental, five-hour documentary The World Against  Apartheid: Have You Heard From Johannesburg? Quietly passed its mid-point.

Three hours into its total running time, it’s still too early to tell just how comprehensive the series will be. And, nearly 20 years after the end of apartheid, it’s still perhaps ‘too early’ to judge how significant its global impact has been. But it’s certainly good to see the topic being given the serious and lengthy treatment it deserves. From economic sanctions to sporting boycotts, so many of the tactics pioneered in the international campaign against the apartheid regime have become touchstones for other political movements in the past few years – from Palestinian solidarity and Chinese human rights campaigning, to environmentalism and the Occupy protests. It was helpful to return to them in their appropriate context.

No more solutions, just ugly choices

The Answer We Don’t Want to Know

By John Mauldin

2012 will be the 11th time in my short life that I will be able to participate in the choosing of a president of the United States. While it may just be me, it seems like each and every election is cast as the most important election of our time and a defining moment for the American Experiment. The future of the Republic was being weighed in the balance, and only the proper outcome (which would of course be the election of the candidate you supported) would assure its survival. This week we will continue our meditations on the economic choices that confront the world, this time focusing on the US.

We will start with a thought experiment, in which I invite you to think about alternate histories. Just how important are presidents (or leaders in general) to the success or failure of the economy? And then how critical is the coming election this fall? We will assault a few of our most cherished beliefs, both from the left and from the right. If I do not offend you in the first few pages, I invite you to keep reading; I will get to you somewhere.

The Rule of Men

Farewell to the Free Market?

Western governments have compounded the economic crisis by rejecting the one force that can end it.

By NICOLE GELINAS

In the years leading up to 2007, the rules necessary to govern a flourishing market economy broke down, producing a financial and economic crisis. Rather than responding to the crisis by fixing those rules, the West aggressively repudiated market economics, and the repudiation continues to this day. Through their actions, which have lately involved everything from European debt to the American financial system to house prices in Britain, government officials around the world have revealed a disturbing assumption: that they can decide how to allocate resources better than markets can. No longer, it seems, do Western governments use investor signals as valuable feedback in devising effective policies; instead, they ignore those signals and plow ahead with their policymaking, leaving chaos in their wake. Often, in fact, public officials actively mute market signals in a vain but destructive attempt to impose their own will on struggling economies.

Last installments on the Greek Drama

Merkel's Official Denial "I will have no part in forcing Greece out of the euro"; Schäuble Starts Salami Tactics on German Participation, Calls for Vote

Germany's "Official Denial"

If you seek confirmation that Germany is actively trying to force Greece out of the Eurozone, strong evidence appears in the form of an "Official Denial"

Please consider Merkel Says Won't Force Greece Out of Euro

German Chancellor Angela Merkel said on Tuesday she did not want to see Greece being forced out of the euro, warning that this would have "unforeseeable consequences."

Tooth-level surveillance

The Church of Obama

By Mark Steyn

Announcing his support for Commissar Sebelius’s edicts on contraception, sterilization, and pharmacological abortion, that noted theologian the Most Reverend Al Sharpton explained: “If we are going to have a separation of church and state, we’re going to have a separation of church and state.”

Thanks for clarifying that. The church model the young American state wished to separate from was that of the British monarch, who remains to this day supreme governor of the Church of England. This convenient arrangement dates from the 1534 Act of Supremacy. The title of the law gives you the general upshot, but, just in case you’re a bit slow on the uptake, the text proclaims “the King’s Majesty justly and rightfully is and ought to be the supreme head of the Church of England.” That’s to say, the sovereign is “the only supreme head on earth of the Church” and he shall enjoy “all honors, dignities, pre-eminences, jurisdictions, privileges, authorities, immunities, profits, and commodities to the said dignity,” not to mention His Majesty “shall have full power and authority from time to time to visit, repress, redress, record, order, correct, restrain, and amend all such errors, heresies, abuses, offenses, contempts, and enormities, whatsoever they be.”

I Scream, You Scream…

 Paranormal Activity

By Mark Steyn

The other day, The New York Times offered the story of Juliet Pries, who attempted to open an ice cream parlor in San Francisco:

Ms. Pries said it took two years to open the restaurant, due largely to the city’s morass of permits, procedures and approvals required to start a small business. While waiting for permission to operate, she still had to pay rent and other costs, going deeper into debt each passing month without knowing for sure if she would ever be allowed to open.

“It’s just a huge risk,” she said, noting that the financing came from family and friends, not a bank. “At several points you wonder if you should just walk away and take the loss.”

We're All State Capitalists Now

It's called fascism

The debate about whether America or China will ultimately triumph is a red herring that distracts us from the real contest of our time.

BY NIALL FERGUSON

If there is one issue on which the rival candidates for the U.S. presidency agree, it's that America's global leadership will endure. Mitt Romney insists it is not a "post-American century," while Barack Obama declared in his State of the Union address that "anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn't know what they're talking about."

They must enjoy this kind of chest-beating in Beijing.

Did Germany Just Walk Out?

The Athens crew keeps digging deeper

By Tero Kuittinen

After a prolonged week of drama, Athens finally seemed to accept the terms of the new bail-out package.

Too bad the groom may have walked off from the altar. Germany’s response to the Greek “Yes” has been fairly brutal.

According to Reuters sources, Finance minister Schäuble has told German cabinet colleagues that Greece is still on track to 128% debt-to-GDP ratio in 2020 – a clearly unacceptable level. According to WSJ, Schäuble rejected the Greek deal already yesterday, basically immediately.

Sound money as a pillar of civilization

Hazlitt's Battle with Bretton Woods

by Llewellyn H. Rockwell Jr.

"The Austrians were right" is a phrase we hear often now, and for good reason. The housing bubble and bust were called by the Austrians and, essentially, no one else. The Austrians were right about the dot com bubble and bust. The Austrians were right about the 1970s stagflation and the explosion in the price of gold after the gold window was closed.

You can tick through the issues and see that the Austrians have been right again and again throughout history: on price controls, on protectionism, on bailouts, on wars, on regulation, on prohibitions and civil liberties, and so on.

But issues concerning fiat money and the business cycle stand out because the Austrians possess unique insight. Only the Austrians have consistently warned that fiat money creates the wrong incentives for the banking industry, that central-bank manipulation of interest rates distorts the structure of production, that the combination of paper money and central banking leads to economic calamity.

The non market force behind rating agencies

Is S&P a Weapon of Mass Destruction ?

By Anthony de Jasay

Is Standard & Poor, the venerable debt rating agency, a weapon of mass destruction reminiscent of the pre-Iraq war of George W. Bush and, like that phantom WMD, perhaps a merely imagined one? The answer is not easy to call, and has some relevance to how we should evaluate the strident demands for more and more regulation to correct alleged market failures.

Self-Interest and the Pathology of Power

Social Fractals and the Corruption of America

Social fractals and social control myths help explain the complete corruption of America.

By Charles Hugh Smith

Part I

Kathy K. recently elucidated a powerful concept: social fractals. We typically think of fractals--structures that are scale-invariant--as features of Nature or finance. For example, a coastline has the same characteristically ragged appearance from 100 feet, 1,000 feet and 10,000 feet in altitude. It is scale-invariant, i.e. its characteristics remain constant whether it is viewed on a small, medium or large scale.

The windmills of our collective minds

Dutch Pull the Plug on Offshore Wind Subsidies

By D. BRADY NELSON

The nation known for its iconic windmills is throwing in the towel on offshore wind power, as Dutch officials have determined the Netherlands can no longer afford large-scale subsidies for expensive wind turbines that cannot produce electricity at economically competitive prices.

The decision is a powerful blow against renewable power advocates who have long asserted Holland proves renewable power can be practical and economical.

Offshore Wind ‘Very Uncompetitive’

“Offshore wind remains a very uncompetitive option,” Dutch Minister of Economic Affairs Maxime Verhagen told Wind Directions: The European Wind Industry Magazine.

In the meantime, the debasement of paper money continues.

There will be no end to ‘quantitative easing’

Money

by DETLEV SCHLICHTER

The Bank of England is expected today to announce another round of debt monetization, called ‘quantitative easing’. A majority of economists polled by Dow Jones Newswire earlier this week expect the central bank’s policy committee to agree “to £50 billion ($79 billion) of additional bond purchases using freshly created money to underpin demand and ensure its 2% inflation target is met. Some expect it to go for £75 billion.”

Deadly Games

Energy policy based on renewables will win hearts but won't protect their owners from frostbite and death due to exposure

By Kevin Myers

Russia's main gas-company, Gazprom, was unable to meet demand last weekend as blizzards swept across Europe, and over three hundred people died. Did anyone even think of deploying our wind turbines to make good the energy shortfall from Russia?

Of course not. We all know that windmills are a self-indulgent and sanctimonious luxury whose purpose is to make us feel good. Had Europe genuinely depended on green energy on Friday, by Sunday thousands would be dead from frostbite and exposure, and the EU would have suffered an economic body blow to match that of Japan's tsunami a year ago. No electricity means no water, no trams, no trains, no airports, no traffic lights, no phone systems, no sewerage, no factories, no service stations, no office lifts, no central heating and even no hospitals, once their generators run out of fuel.

Alas. Politicians are also Human. Really.

How Kennedy bought 1,200 hand rolled Cuban cigars just hours before he ordered blockade of communist state 50 years ago
By LEE MORAN

President John F Kennedy ordered an aide to buy him as many Cuban cigars as he could just hours before he authorised the U.S. trade embargo - which subsequently made them illegal.

Kennedy asked his head of press and fellow cigar smoker Pierre Salinger to obtain '1,000 Petit Upmanns' on February 6, 1962, so he could have them in his hands before they were deemed contraband.

Then, seconds after he was told the next morning that 1,200 of Cuba's finest export had been bought for him, he signed the decree to ban all of the communist state's products from the U.S.

Read more:http://www.dailymail.co.uk/news/article-2098064/John-F-Kennedy-bought-1-200-Cuban-cigars-hours-ordered-US-trade-embargo.html#ixzz1lu1jnctG