When Escape From A Previously Successful Model Is Impossible

This model of breakdown describes all the major systems of local and Federal Government

by Charles Hugh-Smith

I recently highlighted one historical example of a PSM (Previously Successful Model) in Our Dust Bowl Economy (November 20, 2012): in the ample-rain era of the 1920s, farmers in the semi-arid southern Midwest had reaped huge profits by plowing up and planting fragile native grasslands. They poured their profits into homesteads, equipment and more land to enable further expansion.

When grain surpluses pushed prices down, their "model" had only one "solution": plant more land and harvest even more grain to compensate for lower prices. When prices fell from $1 per bushel to $.25/bushel, the model collapsed.

This previously successful model exacerbated the Dust Bowl and left the trapped farmers with no alternative but to either keep trying to make a failed model work or leave and abandon all their sunk capital in land, homes and farm equipment.

A more current example can be found in Microsoft (MSFT a.k.a. Mister Softee), whose previously successful model took a 42% marketshare in smartphones and reduced it to 2%. Here is an excerpt from Microsoft has failed (semiaccurate.com):

Help for Small Nuclear Reactors

Trying a different route

An earlier modular reactor
 developed by Babcock & Wilcox

By MATTHEW L. WALD
The Energy Department, seeking to promote the development of a small modular reactor that could be factory-built and cheaply installed, on Tuesday chose a consortium consisting of Babcock & Wilcox, the Tennessee Valley Authority and Bechtel International to receive a dollar-for-dollar cost match in the creation of a prototype.

The department said the amount of money involved had yet to be negotiated. But the Obama administration has been seeking $500 million to spend over five years on two projects.

Two other initiatives are in the wings, including a team-up of Westinghouse and Ameren Missouri. Ameren has discussed the possibility of small reactors that could be installed on the sites of 1950’s-era coal plants as those are retired, possibly reusing some assets. Ameren and Westinghouse held a “supplier summit” last month in St. Louis attended by nearly 300 businesses.

The Energy Department said it would solicit additional applicants.

The T.V.A. has discussed placing a modular reactor at a site where the government once planned to build a breeder reactor that would make plutonium faster than it consumed uranium, adding to the stock of reactor fuel. It is one of a number of reactor concepts in Tennessee that did not reach fruition.

Obama as Wilson: Playing the Historical Analogy Game

Forget Lincoln and FDR — it's worse than that

by Justin Raimondo

A drone war that takes out old ladies in the name of “fighting terrorism” — a “regime change” campaign that plays with the fate of millions — a President supposedly committed to “transparency” who has topped the unprecedented secrecy and authoritarianism of his predecessor — a foreign policy that subsidizes and blindly supports a racist apartheid-style ally who brazenly spies on us, periodically invades its neighbors, and then demands more subsidies — and a brain-dead “left” that cheers it all as “progressive.”

This is America in the year 2012, Anno Domini. Sickening, isn’t it?

A more pertinent question, however, is how did we come to this pass? In as few words as possible: the Obama cult.

With the President’s near-landslide victory, and the triumphalist mood of the progressive elements of his coalition, the old-fashioned liberal attachment to a foreign policy of peace has been thrown overboard, while liberal Democrats exult in projecting American military power abroad.

Such is the power of the Obama cult, which mystifies its Maximum Leader as some kind of “transformational” figure in American politics, the grandiosity of which has no precedent except in the old-style Stalinist regimes of the former USSR and Eastern Europe. Indeed, the paeans of the President’s most fervent supporters bear an uncanny — and unseemly — resemblance to the rhetorical style of North Korean regime propagandists, who regularly infuse their praise of the ruler with historical and even mystical allusions.

Who is treating Palestinians like animals?

Palestinian solidarity campaigns sound similar to bleeding-heart animal-rights campaigns

by Brendan O’Neill 

At a time when the mass struggle for Palestinian national liberation is a distant memory, and when the Palestinian political movement has splintered into various opportunistic outfits, what does ‘Palestinian solidarity’ mean? Who are Western activists solidarising with, and to what end? A clue was provided at Saturday’s demonstration against Israel’s bombing of Gaza, which took place outside the Israeli Embassy in Kensington in west London. What was striking was that there was very little to distinguish this loud demo from an anti-fur stall that some sad-eyed animal-rights activists had set up outside west London’s most famous shopping landmark, Harrods. Both were about drawing attention to the ‘cruel treatment’ meted out by powerful forces to defenceless creatures, whether it’s men in white coats skinning rabbits or men in Jerusalem firing bombs at Palestinians.

‘Cruelty’ was the big concern of the pro-Palestinian marchers. Not political repression or frustrated national rights, but the ‘cruel treatment’ suffered by Palestinians, as Baroness Jenny Tonge described it from the podium. Some protesters held up placards with the names of children ‘murdered by Israel’. Palestinian solidarity groups often upfront the ‘cruel treatment’ suffered by Palestinian children in particular. Israel practises ‘unrivalled cruelty’ against the inhabitants of Gaza, we are told. Even a clearly political, repressive act such as making Palestinians who travel into Israel go through various checkpoints is now discussed in terms of cruelty - campaigners refer to it as ‘checkpoint cruelty’. In order that privileged activists might get a taste of this cruel treatment, the London School of Economics’ Palestine Society recently set up a mock Israeli checkpoint on campus to ‘raise awareness of the dire conditions’ Palestinians live in, at which the students playing IDF soldiers were told to ‘be as rude as you can. Beat, kick, swear, humiliate. That’s what will make you an Israeli soldier.’ Students at the LSE lined up to get a thrill from vicariously experiencing the cruelty suffered by Palestinians.

Statistics Canada confirms : 491 babies born alive after failed abortions, left to die

There is something rotten in the contemporary western "civilization"

Nearly 500 babies were born alive after failed abortions

 and left to die between 2000 and 2009.

BY PATRICK B. CRAINE

OTTAWA, Nov. 28, 2012 (LifeSiteNews.com) – Pro-life advocates are calling for a federal investigation after Canada’s official statistics agency has confirmed that 491 babies died after they were born alive during abortions between 2000 and 2009.

Statistics Canada confirmed the information in an e-mail to LifeSiteNews Tuesday. Pro-life blogger Patricia Maloney first discovered the data about the abortions in the federal agency’s online database.

Mary Ellen Douglas, National Organizer for Campaign Life Coalition, called the revelation “outrageous.”

 “The federal government needs to do whatever it can to investigate this data,” she added. “It’s bad enough that babies are being killed in the womb, but now we learn that even those protected under Canadian law are apparently being left to die.”

Douglas recalled that pro-lifers heard about babies being born after hysterotomy abortions in Kingston in the 1980s. “Babies were found struggling for life in a basin and nurses were told to leave them alone because they were aborted,” she said.

Andre Schutten, legal counsel for the Association for Reformed Political Action, pointed out that Canada recognizes the baby as a human being as soon as it emerges alive from its mother, and questioned why there have been no homicide investigations into the live births.

“Why have there been no criminal prosecutions? Why no outcry? And why are the provinces funding this explicitly criminal activity?” he asked.

Pro-life activists have long known that babies are often born alive after failed abortions, but until now, it was not known how frequently this occurred in Canada.

For a free press, with no buts

Too many have accepted the myth that the UK press is too free and must be tamed

by Mick Hume 

Lord Justice Leveson’s report into media ‘culture and ethics’, widely expected to propose a new press regulator backed by law, will spark a war of words in parliament and across the media. But will it be a phony war?

The trouble is that leading figures on both sides of this battle have accepted the central myth of the Leveson debate: the myth that the British press has been too free to run wild, and needs a tough new ‘independent’ regulator, whether statute-backed or not, to keep it in line.

As spiked has argued from the start of the phone-hacking scandal and the Leveson Inquiry, the truth is that the press is neither free nor open enough, even before a new regulator is appointed to wash its mouth out with soap. This is why we reject all of the options on the table today.

You can use whatever inoffensive-sounding weasel words you choose – statutory backdrop / underpinning / recognition etc – but a law to regulate the press still means more state intervention in a supposedly free press by any other name.

A statute compelling newspapers to sign up to a new regulator would look like a modern version of state licensing of the press. That system dictated that nothing could be published without the permission of the Crown. People went to the Tower and the gallows to fight for a free press until licensing was ended in 1694. Despite what some might like, we are unlikely to see a return to hanging, drawing and quartering for dissident journalists and publishers. But what happens to a newspaper that refuses to pay penalties under the new statutory-backed system? Are the authorities going to close it down?

The Population Control Holocaust

The ultimate outcome of such a worldview can only be enforced stagnation, tyranny, war, and genocide

by Robert Zubrin

There is a single ideological current running through a seemingly disparate collection of noxious modern political and scientific movements, ranging from militarism, imperialism, racism, xenophobia, and radical environmentalism, to socialism, Nazism, and totalitarian communism. This is the ideology of antihumanism: the belief that the human race is a horde of vermin whose unconstrained aspirations and appetites endanger the natural order, and that tyrannical measures are necessary to constrain humanity. The founding prophet of modern antihumanism is Thomas Malthus (1766-1834), who offered a pseudoscientific basis for the idea that human reproduction always outruns available resources. Following this pessimistic and inaccurate assessment of the capacity of human ingenuity to develop new resources, Malthus advocated oppressive policies that led to the starvation of millions in India and Ireland.

While Malthus’s argument that human population growth invariably leads to famine and poverty is plainly at odds with the historical evidence, which shows global living standards rising with population growth, it nonetheless persisted and even gained strength among intellectuals and political leaders in the twentieth and twenty-first centuries. Its most pernicious manifestation in recent decades has been the doctrine of population control, famously advocated by ecologist Paul Ehrlich, whose bestselling 1968 antihumanist tract The Population Bomb has served as the bible of neo-Malthusianism. In this book, Ehrlich warned of overpopulation and advocated that the American government adopt stringent population control measures, both domestically and for the Third World countries that received American foreign aid. (Ehrlich, it should be noted, is the mentor of and frequent collaborator with John Holdren, President Obama’s science advisor.)

We Already Went Over the Fiscal Cliff

The U.S. government is insolvent, and Paul Krugman's remedy means inflation

By ROBERT P. MURPHY

The hemming and hawing over the looming “fiscal cliff” is akin to passengers fighting over who gets to sit in the first class seats in a jumbo jet that just ran out of fuel. The U.S. government already sent the country over the cliff years ago; it’s just taken this long to (possibly) acknowledge reality. Legislators may strike a “compromise deal” that will postpone the crisis yet again, but soon enough it will return and with greater vengeance.

When people speak of “the national debt,” they usually have in mind the official Treasury securities held by the public. This figure is currently about $11.45 trillion (72% of GDP). However, this is just a small portion of the total indebtedness of the federal government, once we include all of the implicit obligations in the current benefit schemes for Medicare, Social Security, and other social insurance programs. Using GAAP procedures the way they would be applied to a corporation that had pension obligations for its employees, the federal government could be in the hole more than $70 trillion. Even the government-approved Social Security Trustees reported earlier in 2012 that the “unfunded liabilities” (i.e. benefit payments that will exceed incoming payroll tax receipts) of the major federal social insurance programs over the next 75 years have a present-discounted value of $38.6 trillion.

Why Global Fuel Prices Will Spark the Next Revolutions

Once you have subsidies in place it is very, very hard to remove them

By Vivienne Walt

Protesters at al Baqaa Palestinian Refugee Camp confront riot police and chant anti-king Abdullah slogans during a demonstration against the end of government fuel subsidies in Baqaa, Jordan, Nov. 15, 2012.

While the demonstrators that have mobbed the streets of Amman for two weeks now are demanding the overthrown of King Abdullah — a criminal offense in Jordan — it’s not the demand for democracy that sparked their protests. Instead, thousands of Jordanians have been spurred to act by a more basic issue: the rising price of gas after the government withdrew its subsidies.

Jordanians are hardly alone in their anger. Governments across the world are attempting to wean their citizens off subsidized fossil fuels —a critical issue which environmentalists say is a big contributor to the output of carbon gases that contribute to global warming, and which have even more immediately burdened public finances the world over by an estimated total of $523 billion last year — a 30% increase over the previous year. “In a lot of emerging and developing countries you see fuel subsidies, where the government is picking up the tab,” says Helen Mountford, deputy director of the environmental directorate for the Organization of Economic Cooperation and Development, or OECD, in Paris, which represents the world’s biggest economies. “In many cases it has been put in place to help support the poor.”

The Laffer Curve Is Alive & Well In The UK

Two-thirds of millionaires left Britain to avoid 50p tax rate

Almost two-thirds of the country’s million-pound earners disappeared from Britain after the introduction of the 50p top rate of tax, figures have disclosed.

By Robert Winnett

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.

This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.

The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.

It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.

George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.

Since the announcement, the number of people declaring annual incomes of more than £1 million has risen to 10,000.

However, the number of million-pound earners is still far below the level recorded even at the height of the recession and financial crisis.

The Pauperization of Germany

Poverty Report in Europe

By Wolf Richter   

On September 17, the German Labor Ministry sent a draft report “on Poverty and Wealth” to the other ministries to be rubber-stamped. Only the final report, once sanctified by Chancellor Angela Merkel, would be made public. The draft was supposed to remain hidden. But it seeped to the surface almost immediately. And it was hot. Too hot.

The massive data (PDF, 535 pages) described the tough reality that many people faced in Germany—a reality that got tougher every year. For example, in 1998, the lower 50% of the population owned 4% of all private wealth, while the upper 10% owned 45%. By 2008, the lower 50% owned only 1%, but the upper 10% had increased its share to 53% (at the expense also of the in-between 40%). Other reports have painted similar pictures.

The poverty report by Germany’s statistical agency showed that the “poverty rate” in Germany has been creeping up: in 2008, it was 15.5%; in 2009 it was 15.6%, and in 2010 it was 15.8%. Particularly hard-hit were people under 65 who lived alone. Their poverty rate was 36.1%. For single-parent households, it was 37.1%. The city of Munich issued its own poverty report. By taking into account Munich’s high cost of living, it found that nearly a fifth of its residents lived in poverty.

Poverty data has been stirring public debate for a while, and across most of Europe. Even the largest consumer products companies are adjusting to it by using commercial strategies that were successful in developing countries [read....  The “Pauperization of Europe”]. But now the Labor Ministry’s “Poverty and Wealth” report, as revised by the Economy Ministry, was leaked to the Süddeutsche Zeitung, which then put a grunt to work to compare the two versions. Turns out, the original version had been censured!

It started in the introduction. In the new version, the sentence, “Private wealth in Germany is very unevenly distributed,” has been deleted.

Who's Afraid of the Fiscal Cliff?

The market may tank. Let the party of high taxes explain it

by Patrick J. Buchanan

Were the average Republican asked for a succinct statement of his views on taxation, he or she might respond thus:

"U.S. tax rates are too high for the world we must compete in. The tax burden – federal, state, local, together – is too heavy. We need to cut tax rates to free up our private and productive sector and pull this economy out of the ditch."

This core conviction holds the party together.

Yet today the leadership is about to abandon this conviction to sign on to higher tax rates or revenues, while the economy is nearing stall speed. Yet, two years ago, President Obama himself extended the Bush tax cuts because, he said, you do not raise taxes in a recovering economy.

Why are Republicans negotiating this capitulation?

Because they have been warned that if they do not sign on to a tax hike, they will take us all over a fiscal cliff.

If we go over, Republicans are being told, you will be responsible for tax hikes on all Americans as the Bush tax cuts expire on Jan. 1.

You will be responsible for a surge in tax rates on dividends, interest, capital gains, estates.

You will be responsible for an automatic sequester catastrophic to the national defense.

This is the pistol Obama is pointing at the GOP. This is extortion.

Republicans are being told that they either vote for something they believe to be wrong and ruinous – or get something worse. Pay the ransom, fellas, Obama is demanding, or take the blame for a second recession.

A Golden Deutsche Mark Can Save Germany and maybe the World

Germany Should Seize the Moment!

by Patrick Barron and Godfrey Bloom

Prologue

The euro debt crisis in Europe has presented Germany with a unique opportunity to lead the world away from monetary destruction and its consequences of economic chaos, social unrest, and unfathomable human suffering.  The cause of the euro debt crisis is the misconstruction of the euro that allows all members of the European Monetary Union (EMU), currently seventeen sovereign nations, to print euros and force them upon all other members.  Dr. Philipp Bagus of King Juan Carlos University in Madrid has diagnosed this situation as a tragedy of the commons in his aptly named book The Tragedy of the Euro.  Germany is on the verge of seeing its capital base plundered from the inevitable dynamics of this tragedy of the commons.  It should leave the EMU, reinstate the Deutsche Mark (DM), and anchor it to gold.

The Structure of the European Monetary Union

The European System of Central Banks (ESCB) consists of one central bank, the European Central bank (ECB) and the national central banks of the EMU, all of which are still extant within their own sovereign nations.  Although the ECB is prohibited by treaty from monetizing the debt of its sovereign members via outright purchases of their debt, it has interpreted this limitation upon its power NOT to include LENDING euros to the national central banks taking the very same sovereign debt as collateral.  Of course this is simply a back door method to circumvent the very limitation that was insisted upon when the more responsible members such as Germany joined the European Monetary Union.

We're Heading For Economic Dictatorship

We are all now members of the Permanent No-growth Club

by Janet Daley

Forget about that dead parrot of a question – should we join the eurozone? The eurozone has officially joined us in a newly emerging international organisation: we are all now members of the Permanent No-growth Club. And the United States has just re-elected a president who seems determined to sign up too. No government in what used to be called “the free world” seems prepared to take the steps that can stop this inexorable decline. They are all busily telling their electorates that austerity is for other people (France), or that the piddling attempts they have made at it will solve the problem (Britain), or that taxing “the rich” will make it unnecessary for government to cut back its own spending (America).

So here we all are. Like us, the member nations of the European single currency have embarked on their very own double (or is it triple?) dip recession. This is the future: the long, meandering “zig-zag” recovery to which the politicians and heads of central banks allude is just a euphemism for the end of economic life as we have known it.

Now there are some people for whom this will not sound like bad news. Many on the Left will finally have got the economy of their dreams – or, rather, the one they have always believed in. At last, we will be living with that fixed, unchanging pie which must be divided up “fairly” if social justice is to be achieved. Instead of a dynamic, growing pot of wealth and ever-increasing resources, which can enable larger and larger proportions of the population to become prosperous without taking anything away from any other group, there will indeed be an absolute limit on the amount of capital circulating within the society.

Print me a jet engine

Additive manufacturing

By The Economist

CONFIRMATION as to how seriously some companies are taking additive manufacturing, popularly known as 3D printing, came on November 20th when GE Aviation, part of the world’s biggest manufacturing group, bought a privately owned company called Morris Technologies. This is a small precision-engineering firm employing 130 people in suburban Cincinnati, Ohio. Morris Technologies has invested heavily in 3D printing equipment and will be printing bits for a new range of jet engines.Morris Technologies uses a number of 3D printing machines, all of which work by using a digital description of an object to build it in physical form, layer by layer. Among the 3D printing technologies used by Morris Technologies is laser sintering. This involves spreading a thin layer of metallic powder onto a build platform and then fusing the material with a laser beam. The process is repeated until an object emerges. Laser sintering is capable of producing all kinds of metal parts, including components made from aerospace-grade titanium.

The US has imposed protective shoe tariffs on Americans for decades, even with no domestic shoe industry to protect

We should have more legislation with an “expiration date

By Mark J. Perry 

Almost all (99%) of the footwear Americans purchase is imported, so there is no longer a domestic shoe industry that needs special-interest protectionist trade legislation to compete more successfully with lower-cost foreign competitors.  And yet remarkably, Americans are still paying protective tariff tax rates of between 37.5% and 67.5% on imported footwear as a legacy of the Smoot-Hawley Tariff Act of 1930.

Blake Krueger, chairman of the Footwear Distributors & Retailers Association, explains in yesterday’s WSJ:

Smoot-Hawley legislation set high tariffs on hundreds of products. In the decades since 1930, many of these rates have been reduced to more reasonable levels, or eliminated altogether. However, footwear tariffs have remained largely untouched. The thriving U.S. shoe-manufacturing sector of the 1930s is long gone, but what remains are protective tariff rates of 37.5%, 48% and some as high as 67.5%.

The euro lives, but unity is dead

Europe is bound to become marginal in global affairs over the next decade as the world refocuses on the Pacific

By Francesco Sisci

Greece is saved one more time and the euro sound. Yet it is the European Union that has fallen apart in the most recent round of the crisis on the old continent. 

The bet that the International Monetary Fund (IMF) made with the eurozone on Greek debt paid off. IMF chief economist Olivier Blanchard pledged an intervention by the Fund in support of Greece only as long as Europe took part. Initially, Europe wanted only the IMF to intervene, but the IMF replied that it would step in only if Europe was committed to rescuing Greece. In other words, Europe refused to save Greece on its own, and it wanted an extra-European intervention to solve Europe's most critical problem. 

This was not because Europe lacked the funds or instruments to support Greece, but because it lacked the political will necessary to rescue the euro's weakest link. In other words, Europe refused to resort to political instruments to solve the European crisis. It wanted, rather, a purely economic solution that wouldn't bring the continent closer together politically. 

Why $16 Trillion Only Hints at the True U.S. Debt

Hiding the government's liabilities from the public makes it seem that we can tax our way out of mounting deficits. We can't.

by CHRIS COX AND BILL ARCHER

A decade and a half ago, both of us served on President Clinton's Bipartisan Commission on Entitlement and Tax Reform, the forerunner to President Obama's recent National Commission on Fiscal Responsibility and Reform. In 1994 we predicted that, unless something was done to control runaway entitlement spending, Medicare and Social Security would eventually go bankrupt or confront severe benefit cuts.

Eighteen years later, nothing has been done. Why? The usual reason is that entitlement reform is the third rail of American politics. That explanation presupposes voter demand for entitlements at any cost, even if it means bankrupting the nation.

A better explanation is that the full extent of the problem has remained hidden from policy makers and the public because of less than transparent government financial statements. How else could responsible officials claim that Medicare and Social Security have the resources they need to fulfill their commitments for years to come?

As Washington wrestles with the roughly $600 billion "fiscal cliff" and the 2013 budget, the far greater fiscal challenge of the U.S. government's unfunded pension and health-care liabilities remains offstage. The truly important figures would appear on the federal balance sheet—if the government prepared an accurate one.

The Facts About Spending & Taxes

An Overdue Book

By Thomas Sowell

If everyone in America had read Stephen Moore's new book, "Who's The Fairest of Them All?", Barack Obama would have lost the election in a landslide.

The point here is not to say, "Where was Stephen Moore when we needed him?" A more apt question might be, "Where was the whole economics profession when we needed them?" Where were the media? For that matter, where were the Republicans?

Since "Who's The Fairest of Them All?" was published in October, there was little chance that it would affect this year's election. But this little gem of a book exposes, in plain language and with easily understood facts, the whole house of cards of assumptions, fallacies and falsehoods which constitute the liberal vision of the economy.

Egypt is rocking, a new Pharaoh rises

Morsi against the New Left

By M K Bhadrakumar

Catching the tumult of a revolution on camera is virtually impossible — especially a revolution like the one Egypt which rolls on with no end in view. Another revolution in revolution is unfolding. The Chinese cameramen have caught some fantastic visuals as the banks of the Nile begin to heave again with seamless human passions. The Xinhua photo album is here. 

Egypt is rocking. The country is being torn apart. The left has become the right. The Muslim Brotherhood, which championed the underdog has become the Establishment. And a New Left has appeared, comprising, paradoxically, the western style liberals and centrists, secularists and leftists — in fact, all else except the Islamists.