Too Big to Jail

Crooks Vs Suckers

By Simon Johnson

Among the fundamental principles of any functioning justice system is the following: Don’t lie to a judge or falsify documents submitted to a court, or you will go to jail. Breaking an oath to tell the truth is perjury, and lying in official documents is both perjury and fraud. These are serious criminal offenses, but apparently not if you are at the heart of America’s financial system. On the contrary, key individuals there appear to be well compensated for their crimes.

Capitalism, Socialism or Fascism?

Whatever we have, it isn’t free market capitalism

by WashingtonsBlog

What is the current American economy: capitalism, socialism or fascism?

Socialism

Many people call the Bush and Obama administration’s approach to the economic crisis “socialism”.

Are they right?

Well, Nouriel Roubini writes in a recent essay:

This is a crisis of solvency, not just liquidity, but true deleveraging has not begun yet because the losses of financial institutions have been socialised and put on government balance sheets. This limits the ability of banks to lend, households to spend and companies to invest…

The releveraging of the public sector through its build-up of large fiscal deficits risks crowding out a recovery in private sector spending.

Where does Money Come From?

Money as Debt

By Paul Grignon

The simple answer to the title question is DEBT. Whether paper cash or numbers on a computer screen, all money (except coins) is “evidence of debt”.

What is "cash” and where does it come from? Cash can be the familiar paper stuff, or it can be credit at the national central bank which banks use to settle accounts between banks. “Credit cash” at the central bank is always convertible to “paper cash” upon demand.

So, where does cash come from? Is it just printed by the government as we are shown on TV?

The Celtic Mind

How Adam Smith and Edmund Burke saved civilization
By Bradley J. Birzer

One contemplates the power, depth, and breadth of the finest 18th-century minds only with some trepidation and humility. Or at least, one should.

The favorite study of the great men of that day, famed editor of The Nation E.L. Godkin explained in 1900, was the glorification of the person against political power. In “opposition to the theory of divine right, by kings or demagogues, the doctrine of natural rights was set up. Humanity was exalted above human institutions, man was held superior to the State, and universal brotherhood supplanted the ideas of national power and glory.”

Exodus

White Muslims and Black Jews

By Mark Steyn

As far as the media were concerned, the murder of Jewish schoolchildren in Toulouse and a black teenager in Florida were the same story — literally: Angry white male opens fire on "the other," his deeply ingrained racism inflamed by the tide of toxic right-wing hate infecting our public discourse. Alas, in Florida, the angry white male turned out to be a registered Democrat and half Hispanic — or, as the New York Times put it, a "white Hispanic," a descriptor never applied by its editors to, say, Sonia Sotomayor or Gloria Estefan or indeed any other person living or dead. And in Toulouse the angry white male turned out to be yet another Muhammad.

Oh, well. Better luck next time, although the pickings seem likely to get thinner: Pitch the Western world a decade or two down the road, riven by an ever-more-fractious tribalism between blacks, Hispanics, and Muslims, and the one surviving nonagenarian neo-Nazi white supremacist will be at the retirement home. But it'll still all be his fault.

Happy Birthday Generation Y

Blog Birthday

A child of five starts school, but a blog of the same age has already taken more daring steps. Today I am making an effort to remember that quiet and fearful woman, from before April 9, 2007, who created Generation Y. But I can’t. Her face disappears, dissolving among all the beautiful and difficult moments I’ve experienced since I posted my first text on the web. I can no longer imagine myself without this accidental and personal diary. I have the impression that I have always, in one way or another, been writing a blog. When the indoctrination and the injustice reached intolerable points, my childish head glossed the reality–from the fringes–in ways I could never say out loud. The evasive adolescent I became did the same thing: narrating her daily life, trying to explain it and trying to escape it.

The better solution

Is the EU Too Weak?

By Charles C. W. Cooke

In the wake of the ongoing eurozone crisis, the New York Times reports that the European Union is looking to make “fundamental changes,” mooting the creation of a “central financial authority — with powers in areas like taxation, bond issuance and budget approval.” This, notes the Times, could “eventually turn the Eurozone into something resembling a United States of Europe.”

And so, in the face of arguably the most significant crisis in the history of the European integration project, the conclusion drawn by those who seek further federation is predictable: The problem with Europe, they say, is not that there has been far too much integration of a continent which is inherently unsuited to union, but that there has been too little. Plus ça change, plus c’est la même chose.

WWII referred to as the European Civil War

The EU cannot be serious?

By Donal Blaney

The great polemicist Richard Littlejohn has a phrase that sits alongside Victor Meldrew's "I don't believe it!" as being increasingly apt.

Littlejohn frequently says "You Couldn't Make It Up" (and it became the name of a book he published) - and for good reason.

Increasingly we find ourselves shaking our heads as yet another astonishing pronouncement comes from on high that we, the governed, are expected to take in our strides. 

Today we learn that the European Union (our real ruler) is opening a £44m museum that will be a House of European History. This vanity project in and of itself is an offensive waste of money as governments and peoples tighten belts across Europe. 

But what I found most offensive of all is that World War II is to be described as "the European Civil War". 

Rights concern the liberty of individuals, not the prerogatives of the collectivity

Judging, the cosmic way

By George F. Will

Judge J. Harvie Wilkinson III, a Reagan appointee to the 4th U.S. Circuit Court of Appeals, is a courtly Virginian who combines a manner as soft as a Shenandoah breeze with a keen intellect. His disapproval of much current thinking about how the Constitution should be construed is explained in his spirited new book, "Cosmic Constitutional Theory: Why Americans Are Losing Their Inalienable Right to Self-Governance" (Oxford).

A "cosmic theory," Wilkinson says, is any theory purporting to provide comprehensive and final answers. The three jurisprudential theories Wilkinson criticizes are the "living Constitution," "originalism" and "constitutional pragmatism." Each, he says, abets judicial hubris, leading to judicial "activism."

Marxist Dreams and Soviet Realities

Freedom Vs Servitude

by Ralph Raico
The sharp contrast that Alexis de Tocqueville drew in 1835 between the United States and Tsarist Russia — "the principle of the former is freedom; of the latter, servitude"[1] — became much sharper after 1917, when the Russian Empire was transformed into the Soviet Union.

Like the United States, the Soviet Union is a nation founded on a distinct ideology. In the case of America, the ideology was fundamentally Lockean liberalism; its best expressions are the Declaration of Independence and the Bill of Rights of the U.S. Constitution. The Ninth Amendment, in particular, breathes the spirit of the worldview of late-18th-century America.[2] The Founders believed that there exist natural, individual rights that, taken together, constitute a moral framework for political life. Translated into law, this framework defines the social space within which men voluntarily interact; it allows for the spontaneous coordination and ongoing mutual adjustment of the various plans that the members of society form to guide and fill their lives.

Spain is Greece…

Only Bigger and Worse

On the Surface, Spain’s debt woes have many things in common with those of Greece:

1.   Bad age demographics

2.   A toxic bank system

However, you’ll note that as we tackle each of these, Spain is in fact in far worse fiscal shape than Greece.

Currently there is one person of non-working age (65 or older) for every four people of working age (15-64) in Spain.  This is expected to worsen to one person of non-working age for every three people of working age by 2025 and an astounding more than one person of non-working age for every two people of working age by 2040.

These demographics alone set Spain up for a sovereign debt Crisis. According to Jagadeesh Gohkale of the Cato Institute Spain would need to have 250% of its GDP sitting in a bank account collecting interest forever in order to meet its unfunded liabilities without raising taxes or cutting government outlays.

Bibi’s Dilemma — and Barack’s

The “October surprise” of 2012

By Patrick J. Buchanan

“Bibi” Netanyahu was disgusted.

“My initial reaction is that Iran has gotten a freebie. It has got five weeks to continue enrichment without any limitation.”

The Israeli prime minister was referring to Saturday’s meeting in Istanbul of the P5-plus-1 — the five permanent members of the U.N. Security Council and Germany — with representatives from Iran.

Subject: Iran’s nuclear program. After a “constructive” meeting of one day, all agreed to meet again in Baghdad, May 23, and departed.

For Bibi, it was a strategic defeat.

For Israel’s goal is a halt to Iran’s enrichment of uranium and the removal of enriched uranium from that country.

Cubans have come to rely on each other for five long decades in order to survive

In Cuba, hitchhikers bemoan a host of economic problems

BY KEVIN G. HALL

“Subanse,” climb aboard, I said repeatedly, pulling the right wheels of my eight-seat van off the dangerous two-lane highway that snakes hundreds of miles across an island considered off limits to most Americans.

Ostensibly, I was in Cuba to cover Pope Benedict XVI’s visit. But over the week and across the length of the Ohio-sized country, I gave more than five dozen Cubans a botella — in Cuban slang, a ride.

The end of innovation

The contrasting fates of  Ιnstagram and Kodak shows there’s more money in navel-gazing than transformative tech

by Norman Lewis

Facebook’s acquisition of the social mobile photo-sharing application Instagram for $1 billion reveals two fundamental realities. First, that despite being the darling child of the media - who keep trumpeting its youthful uniqueness - Facebook is simply another large enterprise that is slow to innovate and is driven by the inexorable logic of age-old capitalist economics. Second, the deal truly marks the end of the age of innovation; the purchase of Instagram can be contrasted to the fact that Kodak, the company that pioneered photography from the end of the nineteenth century, went into receivership earlier this year. The contrasting fates of two photographic-based companies speak volumes about the world we now live in.

Markets Vs Jungles

Markets - A Layman's Primer

By David R. Henderson

In his famous book, The Wealth of Nations, published in 1776, Adam Smith explained to his countrymen why some economies grew and others stagnated. Thus the book’s complete title: An Inquiry into the Nature and the Causes of the Wealth of Nations. Many of Smith’s keen insights have weathered the test of time and evidence, and thus are still relevant today. Particularly relevant, to the world and to this article, are Smith’s insights about markets. Economists since Smith, particularly Friedrich Hayek and Ludwig von Mises, have added their own insights about the power of markets in creating wealth and opportunity. In this article, I will not always identify the particular economist who first had a given insight. Rather, my focus in this article is on the insights themselves no matter what their origin.

Japan Runs Out Of Capital

Going Poof

By Jeff Harding

What did you think the odds were of seeing this headline when Japan was here buying up Rockefeller Center back in 1990: “In a Shift, Chinese Capital Flows to Japanese Firms.”

In late ’80s and early ’90s the Japanese were here buying large real estate projects such as Rockefeller Center and the Pebble Beach golf course. The way overpaid and by then mid ’90s, many of these projects were bought back. A syndicate comprising, among others, Arnold Palmer and Clint Eastwood, bought Pebble Beach back from the Japanese lender who foreclosed on the property. Mitsubishi bought Rockefeller Center for $1.4 billion in 1989 and lost the property in bankruptcy in the mid-’90s. It is now owned by an American syndicate.

Welfare and unintended consequences

The New York Times’s Welfare Myopia

Poverty remains a story of bad decision-making and out-of-wedlock child-rearing.

BY HEATHER MAC DONALD

Desperate single mothers are mugging illegal aliens, shoplifting, and fencing stolen goods in order to survive, and it’s all the fault of those heartless Republicans and spineless Democrats who passed the 1996 welfare reform law. Such, at least, is the message of a front-page article in the New York Times, the first salvo in a likely campaign to roll back the most successful federal law in recent memory.

Temporary Assistance to Needy Families (TANF) limited federal welfare payments to five years and conditioned them on a recipient’s effort to find work—in essence, stripping welfare of its entitlement status. As a result, the welfare rolls dropped two-thirds from 1996 to 2009, work rates of never-married mothers surged, and black child poverty fell to its lowest level ever.

Egypt on the Edge

State of chaos prevails over Egypt's divisive candidates

By Issandr El Amrani

Not the revolutionary groups that have become a sideshow as politics has moved from the streets to parliament and the courts. Not the politicians who, even if they were not spending most of their time bickering and manoeuvring for advantage, are bound by rules that are a bundle of contradictions. Not the generals now nominally running the country, who sulk at the ungratefulness of their subjects and have lost whatever moral authority they may once have had. Not even the country's leading presidential candidates, all of whom may be barred from the race on various technicalities by the time of the vote. And certainly not the Egyptian people, hostage to all this political confusion, who have seen their "glorious revolution" go from crisis to crisis since Hosni Mubarak was forced out over a year ago.

Egyptians have a dark sense of humour, and are used to making light of their misfortune. The present situation offers them plenty of material, but even so the jokes often seem half-hearted. Never over the tumultuous events of the last year has the country seemed more on the brink, or has there been more talk of a potential military coup or some other sort of political earthquake.

A framework to interpret the world

The Chicago School versus the Austrian School

By R. Murphy

People often ask me, "How are the Austrians different from the Chicago School economists? Aren't you all free-market guys who oppose big-government Keynesians?"

In the present article I'll outline some of the main differences. Although it's true that Austrians agree with Chicago economists on many policy issues, nevertheless their approach to economic science can be quite different. It's important to occasionally explain these differences, if only to rebut the common complaint that Austrian economics is simply a religion serving to justify libertarian policy conclusions.

The Political Economy of Morality

Political Pretense vs. Market Performance

by Dwight R. Lee

There is a large gap between the performance of markets and the public's approval of markets. Despite the clear superiority of free markets over other economic arrangements at protecting liberty, promoting social cooperation and creating general prosperity, they have always been subject to pervasive doubts and, often, outright hostility. Of course, many people are also skeptical about government. Yet when problems arise that can even remotely be blamed on markets, the strong tendency is to "correct" the "market failures" by substituting more government control for market incentives. Recent evidence of this bias is healthcare reform, which, instead of freeing up healthcare markets to correct the distortions created by government subsidies and mandates, made the distortions worse by expanding the subsidies and mandates.