The Shutdown Is a Sideshow. Debt Is the Threat

An entitlement-driven disaster looms for America, yet Washington persists with its game of Russian roulette

By  NIALL FERGUSON

In the words of a veteran investor, watching the U.S. bond market today is like sitting in a packed theater and smelling smoke. You look around for signs of other nervous sniffers. But everyone else seems oblivious.

Yes, the federal government shut down this week. Yes, we are just two weeks away from the point when the Treasury secretary says he will run out of cash if the debt ceiling isn't raised. Yes, bond king Bill Gross has been on TV warning that a default by the government would be "catastrophic." Yet the yield on a 10-year Treasury note has fallen slightly over the past month (though short-term T-bill rates ticked up this week).

Part of the reason people aren't rushing for the exits is that the comedy they are watching is so horribly fascinating. In his vain attempt to stop the Senate striking out the defunding of ObamaCare from the last version of the continuing resolution, freshman Sen. Ted Cruz managed to quote Doctor Seuss while re-enacting a scene from the classic movie "Mr. Smith Goes to Washington."

Meanwhile, President Obama has become the Hamlet of the West Wing: One minute he's for bombing Syria, the next he's not; one minute Larry Summers will succeed Ben Bernanke as chairman of the Federal Reserve, the next he won't; one minute the president is jetting off to Asia, the next he's not. To be in charge, or not to be in charge: that is indeed the question.

According to conventional wisdom, the key to what is going on is a Republican Party increasingly at the mercy of the tea party. I agree that it was politically inept to seek to block ObamaCare by these means. This is not the way to win back the White House and Senate. But responsibility also lies with the president, who has consistently failed to understand that a key function of the head of the executive branch is to twist the arms of legislators on both sides. It was not the tea party that shot down Mr. Summers's nomination as Fed chairman; it was Democrats like Sen. Elizabeth Warren, the new face of the American left.

Yet, entertaining as all this political drama may seem, the theater itself is indeed burning. For the fiscal position of the federal government is in fact much worse today than is commonly realized. As anyone can see who reads the most recent long-term budget outlook—published last month by the Congressional Budget Office, and almost entirely ignored by the media—the question is not if the United States will default but when and on which of its rapidly spiraling liabilities.

True, the federal deficit has fallen to about 4% of GDP this year from its 10% peak in 2009. The bad news is that, even as discretionary expenditure has been slashed, spending on entitlements has continued to rise—and will rise inexorably in the coming years, driving the deficit back up above 6% by 2038.

A very striking feature of the latest CBO report is how much worse it is than last year's. A year ago, the CBO's extended baseline series for the federal debt in public hands projected a figure of 52% of GDP by 2038. That figure has very nearly doubled to 100%. A year ago the debt was supposed to glide down to zero by the 2070s. This year's long-run projection for 2076 is above 200%. In this devastating reassessment, a crucial role is played here by the more realistic growth assumptions used this year.

The Snowden files: why the British public should be worried

Britain is sliding towards an entirely new kind of surveillance society

By John Lanchester

In August, the editor of the Guardian rang me up and asked if I would spend a week in New York, reading the GCHQ files whose UK copy the Guardian was forced to destroy. His suggestion was that it might be worthwhile to look at the material not from a perspective of making news but from that of a novelist with an interest in the way we live now.

I took Alan Rusbridger up on his invitation, after an initial reluctance that was based on two main reasons. The first of them was that I don't share the instinctive sense felt by many on the left that it is always wrong for states to have secrets. I'd put it more strongly than that: democratic states need spies. 

The philosopher Karl Popper, observing the second world war from his academic post in New Zealand, came up with a great title for his major work of political thought: The Open Society and Its Enemies. It is, in its way, a shocking phrase – why would the open society have enemies? (But then, the title of Charles Repington's The First World War, published in 1920, was shocking too, because it implied that there would be another one.)

We do have enemies, though, enemies who are in deadly earnest; enemies who wish you reading this dead, whoever you are, for no other reason than that you belong to a society like this one. We have enemies who are seeking to break into our governments' computers, with the potential to destroy our infrastructure and, literally, make the lights go out; we have enemies who want to kill as many of us, the more innocent the better, as possible, by any means possible, as a deliberate strategy; we have enemies who want to develop nuclear weapons, and thereby vastly raise the stakes for international diplomacy and the threat of terrorism; and we have common-or-garden serious criminals, who also need watching and catching.

Who are the world's craziest rulers?

Dedicated to the tender memory of Saparmurat Niyazov RIP

By Robert Colvile

With the deaths of Saparmurat Niyazov of Turkemenistan – a maniac so megalo- that he renamed the days of the week after himself and his family – and of Kim Jong-un – a golfer so talented that he shot 38 under par on his first ever round, including five holes-in-one – some feared that the golden age of the crazed dictator had gone for good.

But Yahya Jammeh's decision to leave the Commonwealth, and subsequent outlining of his more unpleasant characteristics, has reminded us that there are still some old-fashioned brutes plugging away out there – and, more soberingly, that there are millions of people around the world who have to bear the consequences of their capricious decisions. Here are the leaders most likely to send you scurrying to the emigration queue:

1) Vladimir Putin

A controversial choice, given that the Russian president's chosen persona is "cold-eyed and ruthless" rather than "where are the men in white coats?". But Bad Vlad is showing alarming (or, for the purposes of this list, encouraging) signs of buying into his own publicity. There's the semi-naked calendar shots, the paranoia about foreigners and homosexuals, the diving expedition when he miraculously stumbled across buried treasure. He's a tiger-taming, fire-fighting, judo-champion hardman who plays on Angela Merkel's fear of dogs just because he can. As such, he's certainly earned a place on this list, if only out of fear of what he'd do if he were denied one.

2) Kim Jong-un 

 North Korea's dauphin of derangement loses points for having inherited the world's most terrifying cult of personality, rather than having built it. To date, he has yet to add more than a few individual touches to a regime built around the worship of the Kim family as, effectively, living gods. Still, the fact that the Brilliant Comrade devotes much of his time to having his ex-lover murdered by firing squad in front of Pyongyang's leading pop groups and befriending Dennis Rodman, while also threatening South Korea and the West with nuclear annihilation, speaks of the capacity to be both mockable and terrifying that marks out the all-time greats.

3) Isaias Afewerki

Afewerki, right, with fellow charmer Omar al-Bashir of Sudan

Eritrea's first and only president might not be a household name, but since winning independence in 1991 he's done his best to build his own low-budget version of North Korea, pursuing a policy of complete self-reliance. His People's Front for Democracy and Justice is not just the ruling party, but the only legal political entity, with the country managing the remarkable feat of ranking even lower for freedom of the press than Kim Jong-un's. As for the great leader himself, he's such a true believer in Maoist ideology that – according to Wikileaks – he berated the Chinese for their shameful compromises with the market.

Just because it’s a phony crisis doesn’t mean it can’t be made even phonier

Shutdown Simulacrum 

By Mark Steyn

Way back in January, when it emerged that Beyoncé had treated us to the first ever lip-synched national anthem at a presidential inauguration, I suggested in this space that this strange pseudo-performance embodied the decay of America’s political institutions from the real thing into mere simulacrum. But that applies to government “crises,” too — such as the Obamacare “rollout,” the debt “ceiling,” and the federal “shutdown,” to name only the three current railroad tracks to which the virtuous damsel of Big Government has been simultaneously tied by evil mustache-twirling Republicans.

This week’s “shutdown” of government, for example, suffers (at least for those of us curious to see it reduced to Somali levels) from the awkward fact that the overwhelming majority of the government is not shut down at all. Indeed, much of it cannot be shut down. Which is the real problem facing America. “Mandatory spending” (Social Security, Medicare, et al.) is authorized in perpetuity — or, at any rate, until total societal collapse. If you throw in the interest payments on the debt, that means two-thirds of the federal budget is beyond the control of Congress’s so-called federal budget process. That’s why you’re reading government “shutdown” stories about the PandaCam at the Washington Zoo and the First Lady’s ghost-Tweeters being furloughed.

What Is An American?

Give me your tired, your poor, Your huddled masses yearning to breathe free

By J. Hector St. John De Crevecoeur 

De Crevecoeur was born in France, educated in England, and came to America in 1754. He published his famous “Letters of An American Farmer” in 1781 and 1782, of which “What is an American?” was letter three.

I wish I could be acquainted with the feelings and thoughts which must agitate the heart and present themselves to the mind of an enlightened Englishman, when he first lands on this continent. He must greatly rejoice that he lived at a time to see this fair country discovered and settled; he must necessarily feel a share of national pride, when he views the chain of settlements which embellishes these extended shores. When he says to himself, this is the work of my countrymen, who, when convulsed by factions, afflicted by a variety of miseries and wants, restless and impatient, took refuge here. They brought along with them their national genius, to which they principally owe what liberty they enjoy, and what substance they possess. Here he sees the industry of his native country displayed in a new manner, and traces in their works the embryos of all the arts, sciences, and ingenuity which flourish in Europe. Here he beholds fair cities, substantial villages, extensive fields, an immense country filled with decent houses, good roads, orchards, meadows, and bridges, where an hundred years ago all was wild, woody, and uncultivated! What a train of pleasing ideas this fair spectacle must suggest; it is a prospect which must inspire a good citizen with the most heartfelt pleasure. The difficulty consists in the manner of viewing so extensive a scene. He is arrived on a new continent; a modern society offers itself to his contemplation, different from what he had hitherto seen. It is not composed, as in Europe, of great lords who possess everything, and of a herd of people who have nothing. Here are no aristocratical families, no courts, no kings, no bishops, no ecclesiastical dominion, no invisible power giving to a few a very visible one, no great manufacturers employing thousands, no great refinements of luxury.

The Crazy Years and their Empty Moral Vocabulary

Man will not be sane unless Political Correctness is slain

by John C Wright

In Robert Heinlein’s famed ‘Future History’ he constructed an elaborate timeline of thing to come, to provide a structure for his short stories.

Looking forward from the year 1940, when the timeline was first formed, it was reasonable, even conservative guesswork to predict the moonlanding by the 1980’s, since the first powered flight by the Wright Brothers had been forty years earlier. Heinlein’s Luna City founded in 1990 a decade or so later, with colonies on Mars and Venus by 2000. Compare: a submersible ironclad was written up as a science romance by Jules Verne in 1869, based on the steam-powered ‘diving boat’ of Robert Fulton, developed in 1801. In 1954 the first atomic-powered diesel submarine—all three boats were named Nautilus—put to sea. The gap between Verne’s dream and Rickover’s reality was eight decades, about the time separating Heinlein’s writing of “Menace from Earth” and its projected date.

Looking back from the year 2010, however the dates seem remarkably optimistic and compressed. We have not even mounted a manned expedition to Mars as yet, and no return manned trips to the Moon are on the drawing boards.

One prediction that was remarkably prescient, however, was the advent of “The Crazy Years” described as “Considerable technical advance during this period, accompanied by a gradual deterioration of mores, orientation, and social institutions, terminating in mass psychoses in the sixth decade, and the interregnum.”

He optimistically predicts a recovery from the Crazy Years, the opening of a new frontier in space, and a return to nineteenth-century economy. Full maturity of the human race is achieved by a science of social relations “based on the negative basic statements of semantics.” Those of you who are A.E. van Vogt fans will recognize our old friends, general semantics and Null-A logic cropping up here. Van Vogt, like Heinlein, told tales of a future time when the Non-Aristotlean logic or “Null-A” training would give rise to a race of supermen, fully integrated and fully mature human beings, free of barbarism and neuroses.

The Political Science of Global Warming

The U.N.’s latest climate-change report should be its last

By RUPERT DARWALL

 “Human influence extremely likely to be the dominant cause of observed warming since the middle of the last century,” was the headline from Friday’s release of the first instalment of the Intergovernmental Panel on Climate Change’s fifth assessment report. “Extremely likely”—indicating a 95%-100% likelihood—was ratcheted up one notch from the 2007 fourth assessment report’s “very likely.” Yet compared to 2007, the IPCC widened its estimate of the responsiveness of the climate system to carbon dioxide by reducing the lower band to a 1.5°C increase from 2°C, qualifying the new estimate as only “likely.”

This is a glaring discrepancy. How can the IPCC be more confident that more than half the temperature rise since the mid-20th century is caused by greenhouse-gas emissions when it is less sure of the climatic impact of carbon dioxide? The explanation is that IPCC reports, especially the summaries for policymakers, are primarily designed for political consumption. And as if on cue, British Prime Minister David Cameron commented on the IPCC report, “If someone said there is a 95% chance that your house might burn down, even if you are in the 5% that doesn’t agree with it, you still take out the insurance.”

But poke beneath the surface of the IPCC’s latest offering and the confection is revealed for what it is. The IPCC’s quantification of the separate components of the warming since 1951 (greenhouse gases, cooling from aerosols, internal variability) is deemed only “likely” (66%-100% likelihood). Only at the IPCC could the sum of these components be given a greater likelihood than the individual building blocks. Perhaps the most revealing aspect is that none of the climate scientists involved seems embarrassed at this nonsense or protests at the manipulation of science for political ends.

Obamacare And The Tyranny Of Democracy

In a republic, there are things we have no right to vote on

By Clyde Wayne Crews Jr.

Increasingly, limited government is illegal in America. What are you going to do about it?

We’ve had decades to observe statism vs. market capitalism, to compare central planning with entrepreneurial freedom.

We’ve had centuries to ponder the fruits of power hungry, lawless and dictatorial politicians, in contrast to our often smeared founders.

Unfailingly, excesses of the state were and are grotesque.

And yet here we are in the 21st Century with Obamacare’s futility characterized as “glitches” and “hiccups” by the Washington Post and NPR.

Those aren’t “glitches.”

They are, as one title by the great Ludwig von Mises put it, an inevitable manifestation of the impossibility of Economic Calculation In the Socialist Commonwealth.

In modern America, this abomination should never have even been suggested, let alone enacted.

In this showdown over Obamacare in the continuing resolution and debt ceiling debate, we are continually reminded by Barack Obama that the public “voted” for the law, particularly via his re-election.

Political rulers can violate the laws of morality, but they can’t overturn the laws of economics

SHOCKER: Price Controls Lead to Shortages in Venezuela

By bob murphy

The news is rife with stories of the awful shortages of basic essentials in Venezuela. For example, the BBC World Service did an extended report, and the following comes from a Guardian article:

It’s the rainy season in Venezuela and Pedro Rodríguez has had to battle upturned manhole lids, flooded avenues and infernal traffic jams in his quest for sugar, oil and milk in Caracas.

…

In Avenida Victoria, a low-income sector of Caracas, Zeneida Caballero complains about waiting in endless queues for a sack of low-quality rice. “It fills me with rage to have to spend the one free day I have wasting my time for a bag of rice,” she says. “I end up paying more at the re-sellers. In the end, all these price controls proved useless.”

In 2008, when there was another serious wave of food scarcity, most people blamed shop owners for hoarding food as a mechanism to exert pressure on the government’s price controls, a measure that former president Hugo Chávez adopted as part of his self-styled socialist revolution.

School Days in Denmark

Boko haram and old Europe

By Mark Steyn

The other day, members of Boko Haram, a group of (surprise!) Muslim “extremists,” broke into an agricultural college in Nigeria and killed some four dozen students. The dead were themselves mainly Muslim, but had made the fatal mistake of attending a non-Islamic school. “Boko Haram” means more or less “Learning is sinful,” this particular wing of the jihad reveling more than most in the moronic myopia of Islamic imperialism.

But hey, that’s Africa, right? What do you expect? Up north, in the crucible of liberal social democracy, City Hall in Copenhagen held hearings earlier this year about the bullying of Jews in heavily Muslim public schools. Seventeen-year-old Moran Jacob testified:

In eighth grade, his teacher told him to say that he was Palestinian and that his mother was Russian. “I had to lie about who I was,” he recalls. But it didn’t work. They knew. Eventually, a group of his classmates ganged up on him and stabbed him in the leg. “You can’t go here anymore,” his teacher said. “I have scars,” he told the hearing. “Not on my body, but on my soul . . .”

“Jews have learned to keep a low profile,” Max Mayer, president of the Danish Zionist Federation, told the hearing. “To not exist in the city…” And they teach their sons to do the same: wear the skullcap at school, but take it off when you leave. This, Mayer said, has become standard practice for Danish Jews: “Don’t see us, don’t notice us.”

The Fed Gave Congress A Bottle Of Whiskey And The Car Keys

The Fed fools have just told the political fools to let the good times (for them, not the economy) to continue to roll

By Monty Pelerin Blog

At the last Fed meeting, Bernanke’s decision to not taper even a little bit damaged what little credibility he and his Fed have left. If one discounts stupidity (not something that should be relinquished easily when dealing with government decisions), then what remains for an explanation of such strange behavior?

As I see it, the most likely justifications and the ones most frequently used in the past no longer hold:

• The government needs the Fed to continue buying in order to keep paying its bills.
• The Fed believes it is helping the economy with this policy.

The first reason is not plausible, at least in the short-term. For a while, Fed bond buying appeared to be necessary (indeed was almost equal to the government deficits) in order to fund the government’s shortfalls. Deficits have dropped recently, providing room for a token taper. Had the Fed wanted, they could have tapered without putting undue pressure on the federal government’s ability to fund its deficits. Indeed, putting some pressure on Congress would probably have been wise.

The second reason is also invalid. The Fed has fired most of its weapons (zero interest rates, money creation, etc.) at various levels of intensity for five years. It quadrupled its balance sheet during this period. The economy remains stalled. There is little evidence that the Fed boosted the economy. Of course one cannot know what would have happened or where we would be had the Fed’s actions been less aggressive.

Regarding Fed effects, there is no question that they saved banks who would have (perhaps should have) failed. In doing so, they prevented a collapse of the financial system and the ensuing havoc that would have occurred in the economy. But saving these banks was done in the beginning of the crisis. The last several years presumably has been targeted at the economy with no apparent effect.

Sadly, these same banks are now bigger than they were when they were deemed too big to fail. No meaningful regulation or policies were enacted to downsize them and prevent the same scenario from recurring. Next time it will be on a larger scale.

Benjamin Constant on Liberty

Benjamin Constant, The Liberty of Ancients Compared with that of Moderns (1819)

Gentlemen,

I wish to submit for your attention a few distinctions, still rather new, between two kinds of liberty: these differences have thus far remained unnoticed, or at least insufficiently remarked. The first is the liberty the exercise of which was so dear to the ancient peoples; the second the one the enjoyment of which is especially precious to the modern nations. If I am right, this investigation will prove interesting from two different angles.

Firstly, the confusion of these two kinds of liberty has been amongst us, in the all too famous days of our revolution, the cause of many an evil. France was exhausted by useless experiments, the authors of which, irritated by their poor success, sought to force her to enjoy the good she did not want, and denied her the good which she did want. Secondly, called as we are by our happy revolution (I call it happy, despite its excesses, because I concentrate my attention on its results) to enjoy the benefits of representative government, it is curious and interesting to discover why this form of government, the only one in the shelter of which we could find some freedom and peace today, was totally unknown to the free nations of antiquity.

I know that there are writers who have claimed to distinguish traces of it among some ancient peoples, in the Lacedaemonian republic for example, or amongst our ancestors the Gauls; but they are mistaken. The Lacedaemonian government was a monastic aristocracy, and in no way a representative government. The power of the kings was limited, but it was limited by the ephors, and not by men invested with a mission similar to that which election confers today on the defenders of our liberties. The ephors, no doubt, though originally created by the kings, were elected by the people. But there were only five of them. Their authority was as much religious as political; they even shared in the administration of government, that is, in the executive power. Thus their prerogative, like that of almost all popular magistrates in the ancient republics, far from being simply a barrier against tyranny became sometimes itself an insufferable tyranny.

The regime of the Gauls, which quite resembled the one that a certain party would like to restore to us, was at the same time theocratic and warlike. The priests enjoyed unlimited power. The military class or nobility had markedly insolent and oppressive privileges; the people had no rights and no safeguards.

In Rome the tribunes had, up to a point, a representative mission. They were the organs of those plebeians whom the oligarchy -- which is the same in all ages -- had submitted, in overthrowing the kings, to so harsh a slavery. The people, however, exercised a large part of the political rights directly. They met to vote on the laws and to judge the patricians against whom charges had been leveled: thus there were, in Rome, only feeble traces of a representative system.

Egalitarianism as a Revolt Against Nature

A profoundly evil and morally corrupt ideology

By Murray N. Rothbard

For well over a century, the Left has generally been conceded to have morality, justice, and “idealism” on its side; the Conservative opposition to the Left has largely been confined to the “impracticality” of its ideals. A common view, for example, is that socialism is splendid “in theory,” but that it cannot “work” in practical life. What the Conservatives failed to see is that while short-run gains can indeed be made by appealing to the impracticality of radical departures from the status quo, that by conceding the ethical and the “ideal” to the Left they were doomed to long-run defeat. For if one side is granted ethics and the “ideal” from the start, then that side will be able to effect gradual but sure changes in its own direction; and as these changes accumulate, the stigma of “impracticality” becomes less and less directly relevant. The Conservative opposition, having staked its all on the seemingly firm ground of the “practical” (that is, the status quo) is doomed to lose as the status quo moves further in the left direction. The fact that the unreconstructed Stalinists are universally considered to be the “Conservatives” in the Soviet Union is a happy logical joke upon conservatism; for in Russia the unrepentant statists are indeed the repositories of at least a superficial “practicality” and of a clinging to the existing status quo.

Never has the virus of “practicality” been more widespread than in the United States, for Americans consider themselves a “practical” people, and hence, the opposition to the Left, while originally stronger than elsewhere, has been perhaps the least firm at its foundation. It is now the advocates of the free market and the free society who have to meet the common charge of “impracticality.”

In no area has the Left been granted justice and morality as extensively and almost universally as in its espousal of massive equality. It is rare indeed in the United States to find anyone, especially any intellectual, challenging the beauty and goodness of the egalitarian ideal. So committed is everyone to this ideal that “impracticality” – that is, the weakening of economic incentives – has been virtually the only criticism against even the most bizarre egalitarian programs. The inexorable march of egalitarianism is indication enough of the impossibility of avoiding ethical commitments; the fiercely “practical” Americans, in attempting to avoid ethical doctrines, cannot help setting forth such doctrines, but they can now only do so in unconscious, ad hoc, and unsystematic fashion. Keynes’s famous insight that “practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist” – is true all the more of ethical judgments and ethical theory. 1

The unquestioned ethical status of “equality” may be seen in the common practice of economists. Economists are often caught in a value-judgment bind – eager to make political pronouncements. How can they do so while remaining “scientific” and value-free? In the area of egalitarianism, they have been able to make a flat value judgment on behalf of equality with remarkable impunity. Sometimes this judgment has been frankly personal; at other times, the economist has pretended to be the surrogate of “society” in the course of making its value judgment. The result, however, is the same. Consider, for example, the late Henry C. Simons. After properly criticizing various “scientific” arguments for progressive taxation, he came out flatly for progression as follows:

The case for drastic progression in taxation must be rested on the case against inequality – on the ethical or aesthetic judgment that the prevailing distribution of wealth and income reveals a degree (and/or kind) of inequality which is distinctly evil or unlovely. 2

Another typical tactic may be culled from a standard text on public finance. According to Professor John F. Due, “[t]he strongest argument for progression is the fact that the consensus of opinion in society today regards progression as necessary for equity. This is, in turn, based on the principle that the pattern of income distribution, before taxes, involves excessive inequality.” The latter “can be condemned on the basis of inherent unfairness in terms of the standards accepted by society.” 3

No Idea is Too Stupid …

The Welfare State Incarnate Strikes Again

By Pater Tenebrarum

You have to hand it to French president Hollande. He is actively eradicating discrimination against bad ideas. He lets even the most stupid ones live, breathe and take wing. The following is from Austrian newspaper 'Die Presse': 

“In the fight against industrial decline and high unemployment, France's socialist government enacts a bill against the closure of factories. Entrepreneurs with more than 1,000 employees could in future be threatened with a big fine if they close a factory that has been deemed as still economically viable.

According to the law passed on Tuesday by the National Assembly, companies with more than 1,000 employees are forced to conduct an intensive search for buyers for factories that are under threat of closure. If the company cannot sufficiently prove that these efforts have been undertaken, it can be charged with 20 times of the minimum wage of €1,430 per fired worker.” 

They named the law after Florange, where Hollande and his industrial renewal clown Mountebank tried to interfere with Arcelor Mittal's decision to close an unprofitable steel factory. In the process, they were exerting a great deal of pressure on the company, but ultimately found out they were legally unable to force it into subsidizing Hollande's voters. 

From now on, they can. We wrote a long time ago that Hollande was erecting a 'Zwangswirtschaft' in France – an economy that it is still nominally capitalist and based on property rights, but where government bureaus decide what entrepreneurs may or may not produce, whom they may fire or hire, etc. – in other words, 'property rights' would only exist on paper, but not in reality.  Basically the type of economy Hitler's national socialists put in place in Germany. Frankly, at the time we thought we were exaggerating a bit for effect. We're not sure if that assessment is still appropriate.

We have a few questions: who decides what is still 'economically viable', and how do they go about it? What constitutes 'proof' that one has 'actively searched for a buyer'? This sounds like a very expensive, despotic and bureaucratic nightmare of major proportions could await employers in France. In addition to the already existing despotic and bureaucratic nightmare that is – a nightmare-within-the-nightmare, so to speak. It will of course be bureaucrats arbitrarily deciding all these issues. The new vistas for graft that are opening up here probably have a number of people already salivating (if anyone sees an unidentified trail of slime in Paris, that's where it comes from).

Hollande isn't doing this only due to his truly appalling economic ignorance. As the paper also mentions, he is angling for votes from the 'worker's camp' prior to municipal and European elections.

Keeping these cynical realpolitik deliberations aside though, we think it can be stated that there probably has never been an utterly atrocious economic idea that Hollande didn't somehow like. One can only hope that he hasn't had the time to read Marx' tome 'Das Kapital' yet. In spite of the book's fearsome reputation of putting to sleep even people stricken with a severe case of insomnia, some people have actually read it.

It is almost as if Hollande were actively and deliberately seeking to completely f*** up the hollow shell of an economy that is reportedly still left in France. He cannot be that ignorant, can he?

A False Choice Between Tyranny and Anarchy

The Resolutionary War

By Mark Steyn

Further to my post below on the specific point of the power of the purse, it’s worth noting more generally that government-by-continuing-resolution is a real banana-republic racket entirely unbecoming to any mature society. Robert Stacy McCain in extremely-extreme-extremists:

Here’s a simple question: Why are we currently funding the federal government through a series of short-term measures known as “continuing resolutions”?

The answer is that the budgeting process has completely broken down in recent years, and the two men most responsible for that breakdown are President Obama and Senate Majority Leader Harry Reid. For three consecutive years — 2010, 2011, and 2012 — the Democrat-controlled Senate did not pass a budget bill because Reid knew that it would be a political liability to do so. Passing a budget that detailed the Democrats’ plans for spending and revenue as official policy would have exposed the “something for nothing” swindle that Reid and his colleagues are perpetrating on the American people.

That’s true. The first term of the Obama era gave us Scandinavian levels of spending with American levels of taxation — an unsustainable contradiction that would have been more difficult to pass off without the Dems’ we-don’t-need-no-steenkin’-budgets feint. But, again, they were only able to pull that off because of the utter degeneration of the broader budgeting process. Angelo Codevilla:

Since the Middle Ages, the first and most basic restraint on arbitrary government has been the people’s power to decide how much money the government will spend, and for what purposes. The US Constitution puts it this way: “No money shall be drawn from the Treasury but in consequence of Appropriations made by law” (Art. I sect.9). Nowadays however our bipartisan ruling class limits the Congress’ opportunity to approve, disapprove, or modify what the government does, to voting on “Continuing Appropriations Resolutions” – single, all-inclusive bills crafted behind closed doors. Then it cynically asks the people’s representatives: “will you agree to laws no one has read, to programs on the continuation of which you have not voted, and to regulations that haven’t been written yet, or will you shut down the government?” This turns democracy into a choice between tyranny and anarchy.

America’s much vaunted “checks and balances” are only as good as the political class’ deference to them. In Congress, the constitutional order has been largely replaced by procedural legerdemain by thug operators. It’s unseemly and pathetic. 

The Continuing Appropriations Resolution Scum

Continuing Appropriations Resolutions Subvert Limited Government

by Angelo M. Codevilla

The current battle over whether the 2013 Continuing Appropriations Resolution (CR) should de-fund Obamacare or not is the latest instance in which the CR mechanism is being used on behalf of a big government program the demise of which would be certain were Congress to play its Constitutional role by following its “regular order” as the keeper of the people’s purse – a role fundamental to democracy.

Herewith, a brief explanation of how new the CR system of funding the US government is, and how radically subversive of republican government. Important to America as Obamacare’s fate may be, the current battle’s stake is nothing less than whether the people can control government through their representatives or whether government can define its own scope and powers.

Since the Middle Ages, the first and most basic restraint on arbitrary government has been the people’s power to decide how much money the government will spend, and for what purposes. The US Constitution puts it this way: “No money shall be drawn from the Treasury but in consequence of Appropriations made by law” (Art. I sect.9). Nowadays however our bipartisan ruling class limits the Congress’ opportunity to approve, disapprove, or modify what the government does, to voting on “Continuing Appropriations Resolutions” – single, all-inclusive bills crafted behind closed doors. Then it cynically asks the people’s representatives: “will you agree to laws no one has read, to programs on the continuation of which you have not voted, and to regulations that haven’t been written yet, or will you shut down the government?” This turns democracy into a choice between tyranny and anarchy.

Until circa 1990, Americans had taken seriously the relationship between appropriations and democracy. House and Senate used to divide the Executive departments’ requests for funds and programs into multiple categories and sub-categories. Then many committees and subcommittees held hearings on each item, followed by “mark-up” sessions in which each would be modified and voted on. Thereafter, the full House and Senate would debate, amend, approve or disapprove them, one by one. This was “regular order” – more or less as described in civics books.

This changed at first gradually in the 1980s, when Democrats (and Republicans) who were resisting the Reagan Administration’s efforts to trim government figured out that individual appropriations bills delayed until the end of the fiscal year could be rolled together into “omnibus” bills. These could be advertised as merely “continuing” the current year’s programs and spending levels. In reality, these all-in-one bills 1) protected current programs from scrutiny, amendment, or repeal 2) were stuffed with new favors, programs, provisions and priorities that could not have survived an open process. Since 1989, the Congress has followed mostly “regular order” only twice: in 1995 and 1997. Not since 2000 have the people’s representatives voted and taken responsibility for each of the government’s activities. In this century, the US government has been funded exclusively by single, omnibus “Continuing Resolutions” (CRs).

Extremely Extreme Extremists

Liberal “shutdown” rhetoric ignores the irresponsibility of Democrats

By ROBERT STACY MCCAIN

Democrats and their media allies have spent the past week labeling Republicans “anarchists,” “fanatics,” “radicals,” and “terrorists” who are wholly to blame for the situation that we are told will soon lead to a government shutdown. And if all you know about this situation is what you get from the media, you might actually believe that this is a crisis created by Texas Sen. Ted Cruz and his fellow conservatives who sought to use the vote on a short-term spending bill as a means of preventing implementation of the Affordable Care Act (ACA), otherwise known as Obamacare.

Here’s a simple question: Why are we currently funding the federal government through a series of short-term measures known as “continuing resolutions”?

The answer is that the budgeting process has completely broken down in recent years, and the two men most responsible for that breakdown are President Obama and Senate Majority Leader Harry Reid. For three consecutive years — 2010, 2011, and 2012 — the Democrat-controlled Senate did not pass a budget bill because Reid knew that it would be a political liability to do so. Passing a budget that detailed the Democrats’ plans for spending and revenue as official policy would have exposed the “something for nothing” swindle that Reid and his colleagues are perpetrating on the American people. Republican challengers campaigning against Democrat senators could have cited their votes for the budget bill, saying that the incumbent voted for this, that, or the other unpopular component of the measure.

Reid and the Democrats knew this. They knew very well that the federal deficit was spiraling out of control, that there was not enough tax revenue to pay the mushrooming cost of entitlement programs (Medicare, Medicaid, food stamps, unemployment, et cetera), and certainly there wasn’t enough revenue to pay for all the boondoggles and giveaways the Democrats voted for in the name of “stimulus.” Adding to this, there was not enough revenue to pay the cost of Obamacare, which Democrats rammed through Congress in March 2010 on a party-line vote. Passing an actual budget would have made clear the unsustainable fiscal nightmare into which Democrat policies have plunged the nation during the Obama Age, and so Harry Reid simply didn’t pass a budget for three years.

Inevitably, there will be serious fiscal and economic consequences for what has been done in Washington since 2009. Democrats, however, cared less about such real-world matters than they did about the short-term political gain to be had by promoting the pleasant fiction that liberal “generosity” with taxpayer money (including trillions of dollars in deficit spending) had no real cost. The political project of electing and re-electing Democrats required this exercise in fiscal unreality, and so began Reid’s policy of avoiding the painful choices inherent in the budget process. As a direct result of Reid’s irresponsible policy, Americans are now faced with what is being described by many in the media as a “budget” battle, but is in fact about the short-term alternative to an actual budget, a continuing resolution which would authorize the government to keep spending more money than it has, by borrowing billions of dollars it has no feasible plan to repay.