Game of Thrones

The Debate of Liars

By Econophile

It was fairly unanimous in the MSM that Romney won the debate. Comments were that he was forceful, engaged, animated, presidential, challenging, and on the offensive. The president seemed lackluster, dull, unresponsive, and tired. All this is true.

Unfortunately they both lied.

I wish to point out that I will vote for Romney and I was pleased that he is perceived to have won the debate. But I thought he won based on theatrical performance rather than content, which, to be honest, is how most of the great unwashed judge candidates.

Neither candidate made much sense. Saying words people want to hear won't make it so.

Look, President Obama is a left-wing liberal (Progressive, socialist, whatever). He is an ideologue and I respect him for at least letting us know what he stands for. I know exactly what to expect from him and I strongly disagree with most of his policies. There are two really good reasons to vote him out, beside the fact that his policies have failed.

The Pains of Memory

Man never learns, at least not from the experience of others

by Theodore Dalrymple (June 2008)

We are enjoined, when we suffer or feel unhappy (which are not necessarily quite the same thing, of course), to consider those who are yet worse off than ourselves. This is supposed to relieve and console us, but it rarely does. The most that it achieves is to make us feel guilty that we are so miserable over comparative trifles when others have so many worse travails than ours; and this in turn makes us feel more wretched than ever. Moreover, there is a curious moral asymmetry at work: while the thought that there are always people worse off than ourselves is supposed to be edifying, the thought that there are always people better off than ourselves is not. Indeed, it is the very reverse, a powerful stimulus to resentment, the longest-lived, most gratifying and most harmful of all emotions.

As children, many of us were told to finish what was on our plate because there were so many hungry people in the world who would have been grateful for what we left. I confess that, at a very early age, I was puzzled by this line of moral reasoning: I did not see how the hungry people of Africa would be helped if I stuffed food I really did not want down my protesting gullet. But a home is not a parliament, and I did, more or less, what I was told.

Youth, it is often said, is a generous age, fully of pity and compassion. I do not agree: I think it is mainly an age of self-pity, when one is inclined to imagine that the problems of growing up are the greatest problems in the world. 1968 in Paris, for example, was all about self-pity, not about making the world a better place. You can see from the photographs that the student rioters were spoilt and narcissistic children, posing carefully for the photographers.

The Contest in Caracas

No one expects Hugo Chávez to go down without a fight

BY PETER WILSON

MARACAY, Venezuela — Henrique Capriles Radonski has been called many things in his uphill fight to unseat Venezuelan President Hugo Chávez.

Chávez has constantly ridiculed him as a majunche ("nobody") and a U.S. lackey. Foreign Minister Nicolás Maduro called him "queer," while government ministers have said that he is a right-wing reactionary.

On Sunday, Oct. 7, however, Capriles's detractors may have to call him something else: winner.

Capriles, 40, handsome, and single, has emerged as the first viable democratic challenger in 14 years to Chávez, the eccentric socialist leader who styles himself the ideological heir to Fidel Castro. Young and photogenic, Capriles has barnstormed the country, visiting more than 300 cities since he began his campaign.

Drawing big crowds along the way -- along with women imploring him to select them as his first lady -- Capriles has sought to differentiate himself from the cancer-stricken Chávez, 58, by his vigor and energy. He often wades into crowds or breaks into a jog during his fact-finding campaign caminatas ("walks") through towns and cities.

Capriles has criticized Chávez for spending too much money and time on promoting his socialist revolution at home and abroad, at the expense of the needs of the country's 29 million inhabitants. He has also harped on Venezuela's soaring crime rate -- the number of homicides in Venezuela last year exceeded 19,000, more than the United States and Europe combined -- as well as the breakdown in government services and the lack of employment opportunities for youth during Chávez's tenure.

Regime Uncertainty And The Fallacy Of Aggregate Demand

There is little incentive to risk precious capital when it could be looted at any time

by James E. Miller

In a recent New York Times column, economist Paul Krugman once again took to chastising a claim he has infamously dubbed  the “confidence fairy.”  According to the Nobel laureate, the “confidence fairy” is the erroneous belief that ambiguity over future government regulation and taxation plays a significant role in how investors choose to put capital to work.  To Krugman, the anemic economic recovery in the United States shouldn’t be blamed on this “uncertainty” but rather a “lack of demand for the things workers produce.”  Being the most prominent mouthpiece for Keynesian economic policy in modern times, the Princeton professor represents the school’s circular thinking very well.  Keynes and his followers saw most economic slumps as being the result of insufficient spending.  A slowdown in spending means the animal spirits aren’t so aggressive in their lust for immediate consumables.

As a thinker, Keynes viewed a preference for saving over spending as ignorant and asinine.  In his essay “Economic Possibilities for our Grand Children,” he belittled the “purposiveness” of misers who are forever looking toward the future instead of relishing in the present.  The man who behaves with a purpose is “always trying to secure a spurious and delusive immortality” while depriving those around him of his wealth.  This is the heart of Keynesianism.  Saving is seen as a necessary evil while instant gratification is looked down upon as morally repugnant.  Keynes was a hater of bourgeoisie prudence throughout his professional career.  It is likely that this antagonism played a role in the development of his theories on economics.

Central banking - Pillar of Socialism

Communist approval for western central banking

By Toby Baxendale

I received an interesting email recently from a distinguished colleague in Spain. He was looking at the Central Bank of Cuba’s website where they state their monetary policy. He said to me, “you could ask your readers if they can grasp similarities and spot differences (other than that they recognize they are not a market economy) as compared with the monetary policy conducted by the Bank of England or the ECB. I guess that more than one western-world central banker would feel comfy with the Cuban approach.”

Here’s the text:

In dealing with monetary policy, it is necessary to take into account that it adopts particular characteristics in the case of Cuba, since there is not a market economy but a central planning, mainly, of a financial type.

In keeping with these considerations, the instruments of monetary policy carried out by the work of the central bank up to date are the following: controls over exchange rates and legal reserve ratios, among other provisions.

Clubs and Governments

Government regulation versus market exchange

By Stephen Davies

Earlier this year the world lost one of its most original and insightful scholars with the death of Elinor Ostrom. Unlike some winners of the Nobel Prize for economics, Ostrom will be inspiring research and fresh thinking for many years to come. One of her central insights was that human beings have a huge capacity to create institutions that conserve scarce resources and prevent predatory behavior without relying on political power or market exchanges. This means we should move away from the simple dichotomies public versus private, State versus market, and government regulation versus market exchange.

In particular we should stop thinking we must choose between regulation (control by government) on the one hand and unregulated private action on the other. The reality is more complex. Rules and regulations govern many activities but can have all kinds of sources other than the State.

Nor do things end there. Another of Ostrom’s insights is that complex human institutions and social systems frequently are governed not by explicit rules or laws but rather by generally understood norms and expectations, with accepted penalties for violation. Again, these are created not by diktat or legislation but spontaneously, by human interaction, yet they bind and regulate the actions of individuals as tightly as any printed code or regulation—often more so.

Spontaneous Order in Action

The Universal Product Code

By Stephen Gross

Have you ever wondered who regulates the Universal Product Code (UPC) and barcode industry? Probably not. Because of its complexity, there must be a central authority that administers these product identification numbers and the zebra-looking line segments on almost every product sold around the world. Even products imported from tiny villages in tiny countries have these identifying codes on them. There must be an international authority that determines all of this for those producers, right? Wrong.

But wait. Wasn’t there a congressional hearing or presidential panel some years back that concluded it was in the consumer’s best interest for businesses to come up with a system to manage the inventory of almost every product sold? No!

Think for a moment about all the items we see in grocery stores. There are thousands of them, all with their own identification numbers and barcodes. Somehow, when we bring our baskets up to the register and the products are swiped across the scanner, the system not only identifies our products and their prices but also provides merchants with inventory information. With some large retailers and superstores, inventory information can also be sent directly to a supplier. Barcode technology also gives sellers a reliable mechanism to reduce product and revenue loss by more closely tracking inventory. This little innovation, which we consumers now take for granted, has enabled merchants to achieve greater efficiency—that is, lower costs. That in turn benefits the public through lower prices because when producers reduce their costs, competition transfers the gain to consumers.

What will Ankara do?

Turkey is on the edge

by Vijay Prashad 

Death has escaped from Syria. The numbers within its borders have climbed to near 30,000. But over the past few months, death has scaled the borders into Lebanon, threatening, as the Lebanese Prime Minister Najib Mikati put it, to "drown" the country in its neighbor's flood. Turkey has not been immune from the escalating violence either. 

Syrian refugee camps have been targeted by the Syrian government's forces, and yesterday a mortar attack into the Turkish town of Akcakale killed at least five people and wounded eight. These numbers are miniscule compared to the dead Syrians, and to the dead Turkish Kurds (30,000 killed, including in "operational accidents"). 

Nevertheless, they have set Turkey on edge. The government has begun to clear camps on the border, and Turkey's Foreign Minister Ahmet Davutoglu said, "No one should doubt Turkey's defense capabilities." 

Turkey retaliated with artillery fire toward the Syrian city of Idlib. The North Atlantic Treaty Organization (NATO) went into a huddle as did the UN Security Council. Whether this will escalate is to be seen. NATO's statement stayed with a call for consultation (article 4 of its Charter) and not with a call to arms (article 5). This indicates that there will be no escalation at this time. 

Breaking Bad: the best thing on the box

The moral descent of a drug-dealing chemistry teacher with cancer has been turned into sublime TV

by Emmet Livingstone 

To all you TV illiterates out there who have not yet seen Breaking Bad, hang your heads in shame. To the chosen few who are in the know, pause for a moment and share among yourselves a self-congratulatory chuckle. You are witnessing the acme of the golden age of television.

Criminally overlooked by the Emmys and British broadcasters alike, AMC’s drama charts the rise of the drab Walter ‘Walt’ White, a high-school chemistry teacher and study in mundane underachievement. On learning that he is suffering from an aggressive form of lung cancer, he turns to manufacturing crystal meth to secure his family’s financial future, finding his role releases him from the kind of mouldering suburban rot we all dread. In an era of easy TV thrills, a series opening with the midlife crisis of a grizzly depressive should be commended. The series’ genius lies not in the originality of its conception, however, but in the depths to which it explores the capacity for evil and its rancorous taint.

The Incredibly Ballooning Bailout Of Cyprus

How can a tiny country get in so much trouble in such a short time?

By Wolf Richter

Cypriot President Christofias dug in his heels. On Greek TV. Not behind closed doors with the Troika, the austerity gang from the European Commission, the IMF, and the ECB that have performed such miracles in Greece.

But as Cyprus veers toward bankruptcy, his game of playing the Russians against the Troika has fallen apart, banks are in worse condition than imagined, and the bailout amounts jumped again. How can a tiny country get in so much trouble in such a short time?

The real-estate and construction bubble, fed by corruption and abetted by banks, burst two years ago. Home sales and prices have collapsed. Some 130,000 homeowners (in a country of 840,000 souls) are tangled up in a nationwide title-deed scandal [Another Eurozone Country Bites the Dust].

The Troika estimated that 50,000 homes would be dumped on the market—though only 4,876 homes were sold during the first nine months of the year! Losses have gutted banks. Unemployment has reached record levels. And the construction industry, once a major employer, is being annihilated.

Signs of the gold standard emerging In China?

The classical gold standard, conjoined with other free market policies, can lead to worldwide prosperity

By Ralph Benko

As noted in last week’s column about the rising recognition by authorities in Germany about the virtues of gold, the gold standard is receiving impressive new recognition internationally. The GOP plank calling for a commission to study “possible ways to set a fixed value for the dollar” — with an unmistakable nod to gold — is the most prominent element of the 2012 GOP platform still being heard to “reverberate around the world.” Meanwhile, it continues to gain impressive momentum in the United States.

CNN’s Kevin Voigt writes, in The China Post, “Currencies: Re-evaluating the ghost of gold:”

One platform of the recent U.S. Republican National Convention that, ultimately, could reverberate around the world is a plan to study a possible return of the U.S. to the gold standard. While it was perceived as a move to appease the party’s extreme right wing, economists like Mundell think the world needs a limited return to the gold standard.

This is by no means an isolated blip on the economic radar screen of China watchers.  As Christopher Potter, president of Northern Border Capital Management, so astutely observed in a column entitled China’s Preparing for the End Game — Are We Paying Attention, published in The Lehrman Institute’s TheGoldStandardNow.org — which Potter advises (and this columnist professionally edits):

• China is … increasing its monetary gold reserves at an alarming rate.  Five years ago China surpassed the US in gold production and five years from now it will own more gold than the US Federal government.

Poor Athens; The Gods Flee Mt. Olympus

What I like to drink most is wine that belongs to others

 “Look now how mortals are blaming the gods, for they say that evils come from us, but in fact they themselves have woes beyond their share because of their own follies.”

                                                        -Homer
By Mark J. Grant

When asked, and oh so many times, how I thought that Greece would play out, I have always offered the same answer. “They will continue to beg, they will say anything, do anything, until the money stops and then they will proclaim Greece for the Greeks and revolt.” The Greeks only assume the mantle of serfdom to keep the pipeline of capital flowing. As an outsider I would say that they have damaged their national psyche in the process and caused undue pain for their citizens but it must seem simpler, to the elite of Greece, to beg rather than go back to work. The problem for Europe now is that the amount of money is so large and the pain will be so great that they wince at the consequences of their misbegotten strategy. Europe provided money, demanded austerity, and kept the charade in play far longer than good sense would dictate. This should have all been shut down years ago but the poorly performed play limped along as the benefactors wanted neither the shame of closing it down nor the financial loss that it will ultimately entail. Now, however, I would assert; the tragedy is about to end and the farce about to begin.

“What I like to drink most is wine that belongs to others.”

                                                      -   Diogenes

Merkel’s First Greek Crisis Visit May Mark Turning Point

Greek democracy stands before what is perhaps its greatest challenge

By Rainer Buergin and James Hertling 

German Chancellor Angela Merkel will travel to Athens for the first time since Europe’s financial crisis broke out there three years ago, a sign she’s seeking to silence the debate on pushing Greece out of the euro.

Merkel’s visit to the Greek capital Oct. 9 to meet with Prime Minister Antonis Samaras underscores the shift in her stance since she held out the prospect last year of Greece exiting the 17-nation currency regime.

“The meeting could mark the turning point to the Greek crisis,” said Constantinos Zouzoulas, an analyst at Axia Ventures Group, a brokerage in Athens. “This is a very significant development for Greece ahead of crucial decisions by the euro zone for the country.”

Unintended Consequences

The Case of the Red-Cockaded Woodpecker

By STEPHEN J. DUBNER and STEVEN D. LEVITT

One year from today, a new president moves into the White House. This president will be eager to carry out any number of plans — including, surely, plans to help the segments of society that most need help. Extending a helping hand, after all, is one of the great privileges and responsibilities of the presidency.

But before charging ahead with such plans, the new president might do well to first ask him- or herself the following question: What do a deaf woman in Los Angeles, a first-century Jewish sandal maker and a red-cockaded woodpecker have in common?

A few months ago, a prospective patient called the office of Andrew Brooks, a top-ranked orthopedic surgeon in Los Angeles. She was having serious knee trouble, and she was also deaf. She wanted to know if her deafness posed a problem for Brooks. He had his assistant relay a message: no, of course not; he could easily discuss her situation using knee models, anatomical charts and written notes.

The woman later called again to say she would rather have a sign-language interpreter. Fine, Brooks said, and asked his assistant to make the arrangements. As it turned out, an interpreter would cost $120 an hour, with a two-hour minimum, and the expense wasn’t covered by insurance. Brooks didn’t think it made sense for him to pay. That would mean laying out $240 to conduct an exam for which the woman’s insurance company would pay him $58 — a loss of more than $180 even before accounting for taxes and overhead.

Progress is met by protest rather than praise

How Shale Gas Can Benefit Us and the Environment

By STEVE SEXTON

It took less than an hour for Apple to sell out the initial supply of its new iPhone 5. It’s thinner, lighter, faster, brighter, taller than its predecessors, and yet it costs the same. That’s called progress.

Elsewhere, progress is met by protest rather than praise.

A suite of technologies has brought vast supplies of previously unrecoverable shale gas within reach of humans, dramatically expanding natural gas reserves in the U.S. and around the world. Horizontal drilling and hydraulic fracturing have produced a fuel that can at once promote a cooler planet and an expanded economy, essentially eliminating the tradeoff between climate change mitigation and the pursuit of other public projects and, perhaps, economic growth. But unlike the iPhone, the productivity gain embodied in shale gas technologies doesn’t attract a cult following and its benefits get obscured. 

Among some of the most ardent advocates of climate policy, the growth of shale gas extraction is lamented because, in addition to being 30-50% cleaner than coal (even accounting for escaped methane), it is also (gasp) cheaper than coal. And cheaper than wind. And cheaper than solar.

A Capitalist Revolt in Socialist France

A country on a death march

By Wolf Richter   

The French government is trying to reign in its deficit by jacking up taxes, including the capital gains tax, which it wants to bring to the same level as the tax on income earned by the sweat of your brow—an old philosophical pillar of the French left. But an explosive essay published last Friday hit a nerve with entrepreneurs, venture capital investors, artisans, and mom-and-pop business owners. And their anger, which spread across the social media, the papers, and finally TV news, turned into an open revolt.

The trigger was an editorial in La Tribune by John-David Chamboredon, Executive President of ISAI, an internet startup fund. After the Finance Law 2013 was proposed during the presidential elections, he wrote, “la France du business stopped breathing.” Investments and hiring were put on hold. The cause: the capital-gains tax provisions. An entrepreneur, for example, who risked his savings, spent 10 years growing his business, created perhaps hundreds of jobs, survived all the challenges, and then wanted to cash out, would have to pay two layers of taxes on the capital gains, totaling, according to his calculations, 60.5%. And so would investors.

It would kill entrepreneurship. Funding for startups would dry up. And growth in the private sector would wither. “If the fiscal maelstrom is confirmed, the sequence of events is quite clear,” he wrote. “Instead of hiring people and developing the business, owners threatened by this confiscation would spend the rest of 2012 imagining ways to escape it.”

An Empire on the Run

The Unraveling of Obama’s Foreign Policy

by Patrick J. Buchanan

Three days after Ambassador Chris Stevens was assassinated, Jay Carney told the White House press corps it had been the work of a flash mob inflamed by an insulting video about the Prophet Muhammad.

As the killers had arrived with rocket-propelled grenades and automatic weapons, this story seemed noncredible on its face.

Yet two days later, U.N. Ambassador Susan Rice doubled down. Appearing on five Sunday talk shows, she called the massacre the result of a “spontaneous” riot that was neither “preplanned” nor “premeditated.”

Carney and Rice deceived us. But were they deceived?

It is impossible to believe that Carney would characterize the Benghazi, Libya, massacre as the result of a protest that careened out of control unless he had been told to do so by the national security adviser, the White House chief of staff or President Barack Obama himself.

Who told Carney to say what he did? Who arranged for Rice to appear on five shows to push this line?

Throwing a rope to Rice and Carney, the director of national intelligence, James Clapper, said last week that only recently had his team concluded that Benghazi was the work of terrorists.

Yet intelligence insiders were leaking to the press the day after Stevens was murdered that it was terrorism.

Now that the cover story—that the murder of Stevens and the other Americans was the result of a spontaneous outburst the Obama administration could not have foreseen or prevented—has collapsed, the truth is tumbling out.

The Dictator’s Handbook

Why Bad Behavior Is Almost Always Good Politics

By Svetozar Pejovich

This book has a terrific title. Every dictator should have a copy. In it Bruce Bueno de Mesquita and Alastair Smith explain the brainchild they call the “selectorate” theory.

The focus of that theory is the leadership of governments, organizations, business establishments, and other associations. Leaders’ power and longevity depend on the balance of power among three key groups in their respective communities: 1) the nominal selectorate, or “interchangeables”; 2) the real selectorate, or “influentials”; and 3) the winning coalition, or “essentials.” The nominal selectorate consists of the pool of all potential supporters. The real selectorate is the group actually choosing the leader. And the winning coalition is the subset of the real selectorate on whose support the survival of all leaders depends.

Stealing You Blind

How Government Fat Cats Are Getting Rich Off of You

by George C. Leef

Frédéric Bastiat introduced one of the most important concepts in political economy: “legal plunder,” the government’s forcible extraction of wealth from the populace for the benefit of the ruling class. French monarchs in Bastiat’s time sent out tax collectors to plunder the people, most of whom understood perfectly that the king was robbing them to pay for his extravagances and follies.

As Bastiat well knew, democratic governments also engage in legal plunder, although it is obscured by the myth that elected representatives do whatever is in the “public interest.” Under democracy the people supposedly are the government and therefore all its actions are justified. You certainly can’t steal from yourself.

Survival of the “Fittest”

Survival of the Weakest, Too

By David R. Henderson

Last April President Obama called a House Republican budget plan “thinly veiled social Darwinism.” Of course Obama meant it as a put-down. But by the Encyclopedia Britannica’s characterization, social Darwinism is simply a correct, ideology-free statement about the world. Moreover, the fact that Obama is president is evidence of social Darwinism. Let me explain.

The Encyclopedia Britannica describes social Darwinism as “the theory that persons, groups, and races are subject to the same laws of natural selection as Charles Darwin had perceived in plants and animals in nature.” “According to the theory,” says the Encyclopedia, “the weak were diminished and their cultures delimited, while the strong grew in power and in cultural influence over the weak.” The Encyclopedia states that social Darwinists “held that the life of humans in society was a struggle for existence ruled by ‘survival of the fittest,’ a phrase proposed by the British philosopher and scientist Herbert Spencer.”

That raises the question: What is “fit?” The answer to that depends crucially on the context—that is, on what is rewarded.

Take the Soviet Union. Was Joseph Stalin particularly fit? He certainly didn’t produce much that other people valued; yet he thrived. He did so by lying, manipulating, intimidating, and murdering, all on a massive scale. In the Soviet Union the fittest got the best food, houses, cars, and more, but fitness meant the ability and willingness to be untrustworthy, unscrupulous, and bloodthirsty. In that environment Stalin was indeed one of the fittest.