How Brown Ruined California in His First Term

Governor Brown wants "Temporary" Tax hikes

By MIKE SHEDLOCK

California, like Greece is perpetually in fiscal trouble. Overoptimistic revenue forecasts coupled with spending $2 billion more than expected has California in a deep hole. Governor Jerry Brown has the same non-solution as ever, hike taxes.

Brown wants a "temporary" (as in seven years) tax hike. Given we all know there are no such things as temporary tax hikes in California (seven years is permanent enough in the first place), and also given the California school budget needs an axe, I say let him.

Please consider California deficit has soared to $16 billion, Gov. Jerry Brown says

The Greek Lie

Greece Explained In One Picture

We were going to do a caption contest out of this image, but unfortunately this is not funny. It is tragic. Many people will lose all their money, savings, livelihood, and more because of this..

What is it? 

It is a picture taken at the Athens ministry of finance.

The European Farce

Will the continent act to avert an economic cataclysm?

By Niall Ferguson:

In the midst of a severe financial crisis, the French have just elected a champagne socialist on promises of a 75 percent top tax rate and a lower retirement age. The Greeks also had an election in which the established parties lost to a ragbag of splinter groups. The outcome of the election was that they need to have another election. (Cue Zorba the Greek theme music.) Meanwhile, the wailing gloom of the flamenco emanates from Spain, where youth unemployment is now around 50 percent.

Within a few hours of arriving in London, I hear the following announcement on the train: “We apologize for the late departure of this service. This was due to the late arrival of essential personnel. [Translation: the driver overslept.] However, we are happy to inform customers that the London Underground is running a nearly normal service.” It’s that “nearly” that is so quintessentially English.

The New European Serfdom

Cutting Greece out of the Bank Bailout equation

by John Aziz

So let’s assume Greece is going to leave the Eurozone and suffer the consequences of default, exit, capital controls, a deposit freeze, the drachmatization of euro claims, and depreciation.

It’s going to be a painful time for the Greek people. But what about for Greece’s highly-leveraged creditors, who must now bite the bullet of a disorderly default? Surely the ramifications of a Greek exit will be worse for the international financial system?

Apocalypse 2.0

Prediction is very difficult, especially if it’s about the future

by Marian L. Tupy

In 1972, the Club of Rome published an extremely popular and influential neo-Malthusian tract called The Limits to Growth. This apocalyptic warning about over-population, over-consumption, and environmental destruction sold some 12 million copies and was translated into 37 languages. According to the authors of The Limits to Growth, “Serious stresses involving population, resources, and environment are clearly visible ahead. Despite greater material output, the world’s people will be poorer in many ways than they are today.”

How accurate were those predictions? As I wrote on May 4 in the Washington Times, since the late 1960s,

 [The] world population has doubled from 3.5 billion to 7 billion, inflation-adjusted average annual income per person has risen from $3,147 to $5,997, and life expectancy at birth has increased from 59 years to 69 years.

Democracy and Debt

The Broken Link

By Michael Hudson

Book V of Aristotle’s Politics describes the eternal transition of oligarchies making themselves into hereditary aristocracies – which end up being overthrown by tyrants or develop internal rivalries as some families decide to “take the multitude into their camp” and usher in democracy, within which an oligarchy emerges once again, followed by aristocracy, democracy, and so on throughout history.

Debt has been the main dynamic driving these shifts – always with new twists and turns. It polarizes wealth to create a creditor class, whose oligarchic rule is ended as new leaders (“tyrants” to Aristotle) win popular support by cancelling the debts and redistributing property or taking its usufruct for the state.

How to talk about creative destruction

Schumpeter in the White House

by Guy Sorman

The 2012 presidential race will be, in part, a showdown between two different models of economic growth. President Barack Obama and his Democratic administration will defend the once-discredited and now-resurgent theory that government must act as the economy’s “tutor” and use public funds to stimulate it. The Republican nominee, presumably Mitt Romney, will advance the free-market argument that the main source of new growth is the innovative energy of American entrepreneurs and that government needs to get out of the way.

The Demography of Debtors

A government big enough to give you everything you want, isn't big enough to get you to give any of it back

By Mark Steyn

The other day, Abdul Qadir Fitrat, the governor of Afghanistan's central bank, fled the country. The only wonder is that there aren't more fleeing. Not Afghans; central bankers. I mean, you gotta figure that throughout the G-20 there are more than a few with the vague but growing feeling that the jig's up big time.

Round about the time the Afghan central banker was heading for the hills, the Greek central banker ventured some rare criticisms of his government. "Piling more taxes on taxpayers has reached its limit," said Giorgos Provopoulos. The alleged austerity measures do not "place enough emphasis on the containment of spending."

Western Sharia

Integration Versus Accommodation

By Andrew C. McCarthy

Ismail Belghar, a 36-year-old Muslim man living in Australia, assaulted, abducted, and nearly killed his sister-in-law. The victim, a 25-year-old Moroccan named Canan Kokden, had dared to take her older sister, Mrs. B, to the beach without Belghar’s permission. This heinous effrontery was amplified, Belghar later recounted for police, when Mrs. B thereupon “displayed her body,” sustaining the shoulder sunburn that tipped him off.

To Australians, this may have been, well, just a day at the beach. For Belghar, though, it was an “abhorrent” offense against sharia, Islam’s legal code and comprehensive societal framework.

Cheap Natural Gas Heralds an Energy Revolution

The Economics of Natural Gas

By S. Fred Singer

All bets are off for the future of energy in the United States and, indeed, the world, as the price of natural gas plummets to ever-lower values—thanks to the development of technology that can access gas and liquids trapped in hitherto inaccessible shale rocks. In 2011, shale gas accounted for a quarter of U.S. natural gas production. But this seemingly bright future may depend on a court decision (expected in June 2012) and, of course, on the outcome of the November elections.

They are making up the “plan” as they go along

Germany Has Waved The White Flag And Will Allow Printing And Inflation to the very end

"A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools."

            - Douglas Adams, The Hitchhiker's Guide to the Galaxy

By John Mauldin

For quite some time I have been making the case that for the eurozone to survive, the European Central Bank would have to print more money than any of us can now imagine. That the sentiment among European leaders was that they were prepared for such a move was clear – except for Germany, which is haunted by fears of a return to the days of the Weimar Republic and hyperinflation.

When Germany agreed to a fixed monetary union and a European Central Bank, it was with the clear understanding that it would be run along the lines of the German central bank, the Bundesbank. The members of the Bundesbank and the German members of the ECB were most outspoken about the need for a conservative monetary policy that would keep a clamp on inflation.

Hollande's economic illiteracy

Democracy is the theory that the common people know what they want and deserve to get it good and hard

By Mark Hendrickson

The election of Socialist Party candidate Francois Hollande to the presidency of France epitomizes the sorry state of contemporary democracy. By that, I don’t mean to imply that the French people should have voted for the incumbent, Nicolas Sarkozy. Neither would be capable of solving France’s intractable problems in a way acceptable to French voters, nor are the problems with democracy unique to France. To varying degrees they exist throughout Europe as well as here in the United States.

The Europe Crisis from a European Perspective

Flawed from the Start

by Alasdair Macleod

When we talk about Europe today in an economic context, we really mean the Eurozone, whose seventeen members are the core of Europe and share a common currency, the euro. The euro first came into existence thirteen years ago, on January 1, 1999, replacing national currencies for eleven states; Greece joined two years later. In theory, the idea of a common currency for European nations with common borders is logical, and it was Canadian economist Robert Mundell's work on optimum currency areas that provided much of the theoretical cover.

However, the concept was flawed from the start.

Europe has bet the farm. Let’s Roll

Things that go Bump in the Night

by Mark Grant

Europe is heading for a showdown and in a number of places; that much can be acknowledged with certainty. The first, and perhaps the most important, is the stand-off between France and the European Commission. The EU budgetary office is demanding that France reduce its deficit to 3.00% for 2012 while the projection is for 4.50% so that the Commission is threatening France with large fines. 

Black Swans And Complexity

Nassim Taleb is wrong about the financial crisis and black swans

by Jim Lewis

The ongoing financial crisis is not the result of a perplexing phenomenon of complexity. It is the beginning of a train wreck we have seen for decades. We are not wandering into a surprise or horrified by the dark specter of a Black Swan rearing its long tailed head; this macro crisis appeared on the horizon long ago, easily calculated by any actuary armed with the knowledge that governments were not investing tax streams, but stealing them for current consumption.

Double or Nothing

How Wall Street is Destroying Itself

by John Azis

There’s nothing controversial about the claim— reported on by Slate, Bloomberg and Harvard Magazine — that in the last 20 years Wall Street has moved away from an investment-led model, to a gambling-led model.

This was exemplified by the failure of LTCM which blew up unsuccessfully making huge interest rate bets for tiny profits, or “picking up nickels in front of a streamroller”, and by Jon Corzine’s MF Global doing practically the same thing with European debt (while at the same time stealing from clients).

As Nassim Taleb described in The Black Swan these kinds of trades — betting large amounts for small frequent profits — is extremely fragile because eventually (and probably sooner in the real world than in a model) losses will happen (and of course if you are betting big, losses will be big). If you are running your business on the basis of leverage, this is especially dangerous, because facing a margin call or a downgrade you may be left in a fire sale to raise collateral.

"Peak oil" is "Peak idiocy"

200 Year Supply of Oil in Green River Formation

By Mark Perry

The Green River Formation, the world's largest oil shale deposit, is located in a largely vacant region of mostly federal land on the western edge of the Rocky Mountains that includes portions of Wyoming, Utah, and Colorado (see map above).

Here's an excerpt from testimony about the Green River Formation that was provided on Thursday by Anu K. Mittal, Government Accountability Office (GAO) Director of Natural Resources and Environment, to the House Subcommittee on Energy and Environment, Committee on Science, Space, and Technology titled "Unconventional Oil and Gas Production: Opportunities and Challenges of Oil Shale Development":

Hayek’s Tolerant and Pluralistic Liberal Vision

Disagreement is the basis of tolerance and progress

by Steven Horwitz

I write this on the 113th birthday of F. A. Hayek, perhaps the most important economist and social philosopher of the twentieth century. So much has been written about Hayek and his contributions that it is sometimes hard to find a point of entry to say something both new and valuable. But that challenge hasn’t stopped me for the last 25 years, and it’s not going to stop me now.

While much has been said about Hayek’s economics, political theory, and theory of knowledge, not nearly as much has been said about his broader vision of a liberal society. It’s one thing to talk of constitutions and spontaneous orders and the use of knowledge in society, but what is the vision behind it all? What kind of world is the liberal order, what Hayek called the “Great Society,” at the more personal level?

A global program of mass human sacrifice

The New Holocaust Deniers

By Robert Zubrin 

Recently, in conjunction with publication of my new book, Merchants of Despair ^[1], which exposes the crimes of the global Malthusian movement, I was interviewed on the radio by a liberal talk show host. When I brought up the issue of race- or caste-targeted forced sterilization programs instituted in Peru, India, and many other Third World countries with USAID and World Bank funds, the host chose to deal with the matter by pooh-poohing the existence of these atrocities.

Everything is up for grabs this November

The Antietam of the Culture War

by Patrick J. Buchanan   

It took Joe Biden’s public embrace of same-sex marriage to smoke him out.

But after Joe told David Gregory of “Meet the Press” he was “absolutely comfortable” with homosexuals marrying, Barack Obama could not maintain his credibility with the cultural elite if he stuck with the biblical view that God ordained marriage as solely between a man and woman. The biblical view had to go.