Goldman Sachs Is A Small Fish

The Fed Is The Vampire Squid

By Monty Pelerin 

The gap between the reputation of the Federal Reserve and its actual value to the economy is perhaps greater than any other institution extant. It is a myth that the Fed is necessary and an even greater myth that it is beneficial to society. As Charles Hugh Smith observed:

In a system that depends on lies and the credulity of the citizenry, the greatest lie is that the Federal Reserve’s “quantitative easing” bailouts of the banks somehow help our citizens and communities.

Operating under the meme that it is necessary for a healthy economy, the Fed and its cronies in the financial system have exploited the wealth of the nation, systematically transferring earned wealth by ordinary citizens into the hands of the financial elite. The story behind its creation, see The Creature From Jekyll Island, should shock any American.

After 100 years of exploitation, the Federal Reserve (and other central banks) have placed all modern economies in risk of collapse. At this point, there is likely no way to avoid such an outcome. It is only a question of when matters spin out of control.

Wealth will continue to be destroyed (actually shifted) via inflation). This shift will continue to enrich the financial and monied class at the expense of ordinary citizens. The middle class is slowly being destroyed. The process has been a slow-motion version of Weimar Germany. At some point, control will be lost and fast-speed Weimar will emerge.

No one knows when the system will spin out of control. It could commence tomorrow or it could take another decade or two. The fact that the economy can no longer grow is a sign that we may be nearing that point. The trillions of dollars created to “save” the economy has not done anything to create jobs. Job creation appears to have reversed. Standards of living for the middle class are not rising and have not for decade or more. These are signs of the damage inflicted by dishonest money.

If anything has been accomplished by the Fed, it has been a deferral of the inevitable. This deferral has been purchased at great costs to be incurred in the future.

Matt Taibbi, in a famous article in Rolling Stone, unforgettably referred to Goldman Sachs as a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” His colorful description has haunted Goldman since.

In reality, Mr. Taibbi blamed a low-level officer for the sins of the general staff. Goldman Sachs behaved rationally based on the policies they were provided by the Federal Reserve and the political hacks in Washington. So did the rest of the financial industry. These generals at the Fed deliberately made the rules by which lower level officers like Goldman, Lehman, Merrill Lynch and the like could get rich as the expense of the rest of society. They made it legal to prey on the productive.

The following comments by Anthony Wile reflect on the true vampire squid — the Federal Reserve (emboldening by me):

Warren ett has just come out with the statement, about which I tweeted [@HACPWile] earlier today when I first stumbled on it, that the “Fed Is [the] Greatest Hedge Fund in History.” According to Bloomberg, he elaborated with the statement that the Fed‘s “generating ‘$80 billion or $90 billion a year probably’ in revenue for the U.S. government.” Here’s more:

Buffett compared the U.S. Federal Reserve to a hedge fund because of the central bank‘s ability to profit from bond purchases while accumulating a balance sheet of more than $3 trillion.

The central bank has been buying $85 billion of bonds a month to help the U.S. recover as it emerges from the deepest slump since the Great Depression. Chairman Ben S. Bernanke and other Fed policy makers unexpectedly opted this week to sustain that pace of asset purchases instead of tapering it, saying they need to see more signs of lasting improvement in the economy.

Have We Lost Our Common-Sense?

The only way to keep the status quo from imploding is to banish common-sense

by charles smith

I was surprised to find that many people took my satire/parody last month seriously:  Obama Administration Proposes 2,300-Page "New Constitution"  (October 10, 2013). A number of people wrote me asking for the source of the story, and others chastized me for not labeling the essay "satire/parody," as so many others didn't seem to get the joke. (The permanent link was constitution-parody 10-13.)

I thought the absurdity of hundreds of pages of the "New Constitution" being too secret for the public to read (i.e. redacted) would make the joke obvious, but I was wrong: apparently we are collectively ready to believe that an American administration would propose a law of the land that was too secret for the citizenry to read.

Even readers who suspected the post was satirical felt the need to confirm this was indeed the case. Other readers reported the essay had unleashed a torrent of vitriol on other sites' forums.

My first thought was that we may be losing our collective sense of humor. Readers of the zany satirical zine The Onion still appreciate that a good satire takes an element of truth and exaggerates it for humorous effect: for example, today's Onion headline Man Who Drinks 5 Diet Cokes Per Day Hoping Doctors Working On Cure For Whatever He’s Getting.

But as the gulf between the official state-cartel-Empire narrative ("everything is going great, but we will all die if Central Bankers don't run the world") and reality widens, people are losing their ability to separate satire from reality and truth from officially sanctioned fiction ("unemployment rate declines to 7%.")

The strains created by this cognitive dissonance (or perhaps more accurately, a double-bind that leads to alienation and a form of induced madness, as per psychiatrist R.D. Laing's extension of Gregory Bateson's concept) lead to short tempers, loss of perspective, emotional hair-trigger reactions and a host of other unhealthy responses.

The target of my mockery was not the Obama Administration per se but the nonsensical belief that a 1,300-page piece of legislation can possibly accomplish anything but strip us of the ability to actually solve critical problems.

Sex at Sunset

By 2020, in the Land of the Rising Sun, adult diapers will outsell baby diapers

by mark steyn
To Western eyes, contemporary Japan has a kind of earnest childlike wackiness, all karaoke machines and manga cartoons and nuttily sadistic game shows. But, to us demography bores, it's a sad place that seems to be turning into a theme park of P. D. James's great dystopian novel The Children of Men. As readers may recall from earlier citations in this space, Baroness James's tale is set in Britain in the near future, in a world that is infertile: The last newborn babe emerged from the womb in 1995, and since then nothing. The Hollywood director Alfonso Cuarón took this broad theme and made a rather ordinary little film out of it. But the Japanese seem determined to live up to the book's every telling detail.

In Lady James's speculative fiction, pets are doted on as child-substitutes, and churches hold christening ceremonies for cats. In contemporary Japanese reality, Tokyo has some 40 "cat cafés" where lonely solitary citizens can while away an afternoon by renting a feline to touch and pet for a couple of companiable hours. In Lady James's speculative fiction, all the unneeded toys are burned, except for the dolls, which childless women seize on as the nearest thing to a baby and wheel through the streets. In contemporary Japanese reality, toy makers, their children's market dwindling, have instead developed dolls for seniors to be the grandchildren they'll never have: You can dress them up, and put them in a baby carriage, and the computer chip in the back has several dozen phrases of the kind a real grandchild might use to enable them to engage in rudimentary social pleasantries.

P. D. James's most audacious fancy is that in a barren land sex itself becomes a bit of a chore. The authorities frantically sponsor state porn emporia promoting ever more recherché forms of erotic activity in an effort to reverse the populace's flagging sexual desire just in case man's seed should recover its potency. Alas, to no avail. As Lady James writes, "Women complain increasingly of what they describe as painful orgasms: the spasm achieved but not the pleasure. Pages are devoted to this common phenomenon in the women's magazines."

As I said, a bold conceit, at least to those who believe that shorn of all those boring procreation hang-ups we can finally be free to indulge our sexual appetites to the full. But it seems the Japanese have embraced the no-sex-please-we're-dystopian-Brits plot angle, too. In October, Abigail Haworth of the Observer in London filed a story headlined "Why Have Young People in Japan Stopped Having Sex?" Not all young people but a whopping percentage: A survey by the Japan Family Planning Association reported that over a quarter of men aged 16–24 "were not interested in or despised sexual contact." For women, it was 45 percent.

France clueless on Iran

Arak and Gallic Posturing

By Pepe Escobar 
Here is definitive proof - if any was needed - that the Gallic fit-throwing that burned the possibility of an interim Iranian nuclear deal last week in Geneva was completely pointless. 

The key "concern" expressed by Israel-firster French Foreign Minister Laurent Fabius to derail an interim deal was about the Arak heavy-water reactor. 

Well, UN inspectors this week reported that they had detected no new developments in Arak over the three months since August. [1] 

The head of the International Atomic Energy Agency (IAEA), Yukiya Amano, was also in Tehran on Monday, and - unusually for his trademark paperboy role for Washington - had nothing to complain about. 

Fabius used the Arak gambit at the last minute in Geneva to derail the talks, provoking the ire of even fellow European diplomats. That was out of pure disinformation; Tehran was already doing what Fabius insisted they were not doing. 

A EU diplomat (non-French) confirmed that Iranian Foreign Minister Mohammad Javad Zarif had already informed US Secretary of State John Kerry about these euphemistically defined "confidence-building measures". Kerry was fully aware before he landed in Geneva on his way to sign an interim deal. 

But guess what: the French were clueless. Kerry did not tell anybody else on the P5+1 table (comprising the United States, Britain, France, China, Russia and Germany) because he feared any leaks. This proves once again that this infinitely complex negotiation is really between Washington and Tehran. Russia and China are behaving - so far - as sort of quiet (and wary) observers. Yet Kerry, Francophile that he is, should have know better about Gallic peacock instincts. 

North Korea Executes Citizens for Having Bibles, Watching TV

Socialism in Action

by  Dave Bohon

One of South Korea's largest newspapers has reported that North Korea executed around 80 people in early November, some for such prohibited activities as viewing South Korean television shows and possessing Bibles. According to South Korea's daily JoongAng newspaper, the coordinated executions occurred in seven North Korean cities, with an estimated ten people killed at each locale.

An unidentified source reported that officials in the port city of Wonsan, on North Korea's eastern coast, gathered more than ten thousand residents into a local stadium and forced them to watch the firing squad executions. The source, who reportedly is familiar with North Korean internal affairs, said victims were lashed to poles, hooded, and then mowed down with machine gun fire. “I heard from the residents that they watched in terror as the corpses were so riddled by machine-gun fire that they were hard to identify afterwards,” the source told the newspaper.

“The Wonsan victims were mostly charged with watching or illegally trafficking South Korean videos, being involved in prostitution, or being in possession of a Bible,” reported the JoongAng newspaper. “Accomplices or relatives of the executed people who were implicated in their alleged crimes were sent to prison camps. The reason for the executions wasn’t immediately clear. They seem to have occurred in cities that are centers of economic development, according to a government official.”

While the newspaper cited only one source, other Korean news agencies appeared to corroborate the executions.

Ruthless Tyrants Win Seats on UN “Human Rights” Council

China, Cuba, and Vietnam, along with the hardline Islamic tyrants will enforce "Human Rights" to the rest of the World as well

by  Alex Newman

A motley assortment of the planet’s most ruthless Islamist and communist autocracies were appointed on November 12 to sit on the increasingly discredited United Nations “Human Rights” Council (UN HRC), drawing swift condemnation and ridicule from around the world. The week before, the mass-murdering dictatorship ruling over mainland China had its “education vice-minister” elected to lead the UN Educational, Scientific and Cultural Organization (UNESCO), adding more fuel to the fire for critics who advocate an immediate American withdrawal from the scandal-plagued planetary outfits.    
Among the mass-murdering regimes selected to sit on the UN’s self-styled “human rights” entity were the brutal communist dictatorships enslaving the people of China, Cuba, and Vietnam, along with the hardline Islamic tyrants ruling over Algeria and Saudi Arabia. Of course, numerous critics have pointed out that those are some of the most repressive tyrannies on earth. Vladimir Putin’s Russian government, widely criticized as a gangster regime, was also chosen to sit on the global body supposedly charged with upholding “human rights” around the world. Other brutal autocrats were already on the council prior to the most recent additions.  
There were a number of other controversial selections this week for three-year terms on the disgraced UN “human rights” outfit as well: the radical South African government, for example, which has been implicated in genocidal machinations by the world’s top expert on genocide, along with the socialist regime in Namibia. Rulers from Morocco and Macedonia were also appointed. Finally, among the least controversial of the 14 new selections for the council were the governments of France and the United Kingdom.As the dubious UN institution cements its status as a planetary laughing stock by adding even more of the world’s worst human-rights abusers to its leadership, more than a few analysts and human rights activists were left scratching their heads. However, when considering the composition of the 193-member UN General Assembly, the vote to add the planet’s leading communist and Islamist autocracies to an entity in charge of human rights — as defined by the UN: revocable privileges — makes perfect sense. There is a reason that the UN is regularly blasted by critics as the “dictators' club,” and the recent vote illustrated that perfectly. 
Still, outrage was being expressed around the world. “This is a black day for human rights,” noted Executive Director Hillel Neuer with the Geneva-based UN Watch, a non-governmental human rights group that monitors the global body and its activities. “Today the UN sent a message that politics trumps human rights, and it let down millions of victims worldwide who look to the world body for protection.”

World’s No. 1 Jailer

No other country on the planet puts more of its citizens in cages for life for nonviolent drug offenses than the USA

by Mark J. Perry

It’s been well-documented that the US is the World’s No. 1 Jailer, and imprisons far more of its people than any other country on the planet (716 per 100,000 population), including countries generally thought to be repressive like Myanmar (120 per 100,000), Iran (284 per 100,000), Syria (58 per 100,000), or Cuba (510 per 100,000). It’s also been documented that America’s cruel and failed War on Drugs, launched by President Nixon in 1971, is largely responsible for the country’s shameful status as the World’s No. 1 Incarcerator, see chart above.

A new report released this week from the American Civil Liberties Union ”A Living Death: Life without Parole for Nonviolent Offenses” examines a very disturbing trend that contributes to America’s notoriety as the World’s No. 1 Jailer – the increasing number of nonviolent offenders in the US who are being sentenced to life in prison without parole. As Reason.comreported “The ACLU found, perhaps unsurprisingly, that the War on Drugs, mandatory minimums, and “tough-on-crime” policies are to blame” for the more than 3,000 prisoners in America serving life sentences without parole (LWOP) for nonviolent drug and property crimes.

Here are some highlights of the ACLU report:

This report documents the thousands of lives ruined and families destroyed by sentencing people to die behind bars for nonviolent offenses, and includes detailed case studies of 110 such people. It also includes a detailed fiscal analysis tallying the $1.78 billion cost to taxpayers to keep the 3,278 prisoners currently serving LWOP for nonviolent offenses incarcerated for the rest of their lives.

Using data obtained from the Bureau of Prisons and state Departments of Corrections, the ACLU calculates that as of 2012, there were 3,278 prisoners serving Life without parole (LWOP) for nonviolent drug and property crimes in the federal system and in nine states that provided such statistics (there may well be more such prisoners in other states). About 79% of these 3,278 prisoners are serving LWOP for nonviolent drug crimes. Nearly two-thirds of prisoners serving LWOP for nonviolent offenses nationwide are in the federal system; of these, 96% are serving LWOP for drug crimes. More than 18% of federal prisoners surveyed by the ACLU are serving LWOP for their first offenses. Of the states that sentence nonviolent offenders to LWOP, Louisiana, Florida, Alabama, Mississippi, South Carolina, and Oklahoma have the highest numbers of prisoners serving LWOP for nonviolent crimes, largely due to three-strikes and other kinds of habitual offender laws that mandate an LWOP sentence for the commission of a nonviolent crime.

The incompetence of our neo-monarchy

Thus Spake Obama 

By Mark Steyn

It is a condition of my admission to this great land that I am not allowed to foment the overthrow of the United States government. Oh, I signed it airily enough, but you’d be surprised, as the years go by, how often the urge to foment starts to rise in one’s gullet. Fortunately, at least as far as constitutional government goes, the president of the United States is doing a grand job of overthrowing it all by himself.

On Thursday, he passed a new law at a press conference. George III never did that. But, having ordered America’s insurance companies to comply with Obamacare, the president announced that he is now ordering them not to comply with Obamacare. The legislative branch (as it’s still quaintly known) passed a law purporting to grandfather your existing health plan. The regulatory bureaucracy then interpreted the law so as to un-grandfather your health plan. So His Most Excellent Majesty has commanded that your health plan be de-un-grandfathered. That seems likely to work. The insurance industry had three years to prepare for the introduction of Obamacare. Now the King has given them six weeks to de-introduce Obamacare.

“I wonder if he has the legal authority to do this,” mused former Vermont governor Howard Dean. But he’s obviously some kind of right-wing wacko. Later that day, anxious to help him out, Congress offered to “pass” a “law” allowing people to keep their health plans. The same president who had unilaterally commanded that people be allowed to keep their health plans indignantly threatened to veto any such law to that effect: It only counts if he does it — geddit? As his court eunuchs at the Associated Press obligingly put it: “Obama Will Allow Old Plans.” It’s Barry’s world; we just live in it.

The reason for the benign Sovereign’s exercise of the Royal Prerogative is that millions of his subjects — or “folks,” as he prefers to call us, no fewer than 27 times during his press conference — have had their lives upended by Obamacare. Your traditional hard-core statist, surveying the mountain of human wreckage he has wrought, usually says, “Well, you can’t make an omelet without breaking a few eggs.” But Obama is the first to order that his omelet be unscrambled and the eggs put back in their original shells. Is this even doable? No. That’s the point. When it doesn’t work, he’ll be able to give another press conference blaming the insurance companies, or the state commissioners, or George W. Bush . . . 

Generation Wait

Share of young adults who move hits 50-year low

By HOPE YEN

U.S. mobility for young adults has fallen to the lowest level in more than 50 years as cash-strapped 20-somethings shun home-buying and refrain from major moves in a weak job market. 

The new 2013 figures from the Census Bureau, which reversed earlier signs of recovery, underscore the impact of the sluggish economy on young people, many of them college graduates, whom demographers sometimes refer to as "Generation Wait." 

Burdened with college debt or toiling in low-wage jobs, they are delaying careers, marriage and having children. Waiting anxiously for their lucky break, they are staying put and doubling up with roommates or living with Mom and dad, unable to make long-term plans or commit to buying a home — let alone pay a mortgage. 

Many understood after the 2007-2009 recession that times would be tough. But few say they expected to be in economic limbo more than four years later. 

"I'm constantly looking for other jobs," says Jeremy Bills, 27, of Nashville, Tenn., who graduated from Vanderbilt University in May 2011 with a master's degree in human and organizational development. Originally from Tampa, Fla., Bills has stayed put in his college town in hopes of finding a job in management consulting or human resources. Instead, he has mostly found odd jobs like pulling weeds and dog-sitting. 

Bills says he pursued a master's degree to bolster his credentials after getting his college diploma in 2008, shortly before the financial meltdown. Instead, he finds himself still struggling financially and worrying that the skills he learned in school — where he incurred $20,000 in student loan debt — are "kind of atrophying right now." 

"It's not like riding a bicycle. You can't just jump into a career position so many years after training," said Bills, who now works at a nonprofit organization making $12 an hour and is looking for a second job. 

Among adults ages 25-29, just 4.9 million, or 23.3 percent, moved in the 12 months ending March 2013. That's down from 24.6 percent in the same period the year before. It was the lowest level since at least 1963. The peak of 36.7 percent came in 1965, during the nation's youth counterculture movement. 

Defining bubbles

Psychology and economics

Dr. Frank Shostak

According to the popular way of thinking, bubbles are an important cause of economic recessions. The main question posed by experts is how one knows when a bubble is forming. It is held that if the central bankers knew the answer to this question they might be able to prevent bubble formations and thus prevent recessions.

On this, at the World Economic Forum in Davos Switzerland on January 27, 2010, Nobel Laureate in Economics Robert Shiller argued that bubbles could be diagnosed using the same methodology psychologists use to diagnose mental illness. Shiller is of the view that a bubble is a form of psychological malfunction. Hence the solution could be to prepare a checklist similar to what psychologists do to determine if someone is suffering from, say, depression. The key identifying points of a typical bubble according to Shiller, are,

1.      Sharp increase in the price of an asset.

2.    Great public excitement about these price increases.

3.    An accompanying media frenzy.

4.    Stories of people earning a lot of money, causing envy among people who aren’t.

5.     Growing interest in the asset class among the general public.

6.    New era “theories” to justify unprecedented price increases.

7.     A decline in lending standards.

What Shiller outlines here are various factors that he holds are observed during the formation of bubbles. To describe a thing is, however, not always sufficient to understand the key factors that caused its emergence. In order to understand the causes one needs to establish a proper definition of the object in question. The purpose of a definition is to present the essence, the distinguishing characteristic of the object we are trying to identify. A definition is meant to tell us what the fundamentals or the origins of a particular entity are. On this, the seven points outlined by Shiller tell us nothing about the origins of a typical bubble. They tell us nothing as to why bubbles are bad for economic growth. All that these points do is to provide a possible description of a bubble. To describe an event, however, is not the same thing as to explain it. Without an understanding of the causes of an event it is not possible to counter its emergence.

Now if a price of an asset is the amount of money paid for the asset it follows that for a given amount of a given asset an increase in the price can only come about as a result of an increase in the flow of money to this asset.

China Eases One-Child Policy

Concession Comes as Labor Shortage Looms

By LAURIE BURKITT

China is tempering its controversial one-child policy, allowing more couples to have a second child in a surprise concession over a much-disliked control that comes as the country faces a looming worker shortage.

Couples will be able to have two children if one spouse is an only child, according to a wide-ranging Communist Party reform blueprint issued Friday, the most significant adjustment in a policy that has defined Chinese family life for more than three decades and perhaps the most dramatic policy change out of leaders' recent party conclave.

Previous exemptions mainly allowed some rural couples to have a second child and ethnic minorities to have more. Couples consisting of two only children were also exempt. The new move expands exemptions to many more couples, chiefly urban ones who have seen their living standards improve and increasingly chafed under social controls.

The shift comes after years of high-level debates and was greeted by those who have been pushing Beijing for change as game-changing.

"It's a historic moment in the life of this infamous policy," said Wang Feng, a demographer at Fudan University in Shanghai.

He and other experts said Chinese leaders also realized that this reform—which comes amid increasingly vocal criticism of Beijing's handling of a number of social issues—was easier to deliver than concrete change on problems such as poor medical care and pollution that have developed amid the country's breakneck growth.

"This is the only concrete policy change," said Cheng Li, an expert on China's elite politics at the Brookings Institution. For the authorities, he said, "It's a very good story."

However, demographers say the shift, in the document charting China's economic course for the next decade,t comes too late to solve a looming labor crisis in a rapidly aging society.

The document didn't say when the new policy will start, saying only that it would "gradually adjust and improve family planning, promoting the development of balanced population."

Venezuela Declares Economic Laws Abolished

It's Been Tried Before …

President Maduro of Venezuela. He reminds us faintly of a bouncer or some other type of enforcer. We wouldn't hesitate to cast him in a movie about the mob. Getting 'protection' from this dude sounds like a slightly scary prospect.

By Pater Tenebrarum

Mish already wrote about the latest escapades in the ongoing Venezuelan crack-up boom/hyper-inflation catastrophe. In the meantime, Bloomberg has updated its original report, noting inter alia that the latest news have provoked a mini-crash in the country's bonds. 

“Venezuelan bonds tumbled, sending yields to a 22-month high, after President Nicolas Maduro dispatched the military to take over a retail chain as part of his effort to quell inflation that’s soared above 50 percent.

The country’s benchmark bonds due 2027 fell 3.9 cents to 72.1 cents on the dollar as Maduro’s seizure of electronics retailer Daka and his warnings to other businesses to cut prices to “fair” levels deepened investor concern that growth is being choked off by government controls. Yields on the bonds soared 0.79 percentage point to 13.82 percent, the highest since January 2012, at 3:19 p.m. in New York.

Maduro, who took over as president this year after his socialist mentor Hugo Chavez died of cancer, is stiffening government-imposed price controls that have contributed to food and goods shortages across the South American country. Maduro blamed the “parasitic bourgeoisie” and said he’d impose limits on profit margins throughout the economy after inflation surged to 54 percent in October, the fastest pace in 16 years.

“In the 20 years that I’ve been managing emerging markets, I have never seen the mismanagement of the scale that I’m seeing in Venezuela today,” Ray Zucaro, who oversees $375 million of emerging-market debt at SW Asset Management LLC in Newport Beach,California, wrote in an e-mailed response to questions. “The government effectively is promoting anarchy. This disconnect with reality, I’ve never seen it bigger than it is now.” 

Venezuela Jails Over 100 "Bourgeois, Barbaric, Capitalist Parasites"

The Land of Plenty

"It's time to deepen the offensive, go to the bone in this economic war," warned Venezuelan President Maduro - echoing Hugo Chavez's iron fist of socialism (and nationalization) before him - as his decision to jail over 100 businessmen is "defending the poor." As Reuters reports, plenty of Venezuelans have applauded his measures, saying price hikes were out of control, while others have expressed fears that Maduro could be uncorking dangerous forces as opposition forces note Maduro's economic policies were "chillingly similar" to those of Zimbabwean President Robert Mugabe. Officials say unscrupulous companies have been hiking prices of electronics and other goods more than 1,000 percent. Critics say failed socialist economic policies and restricted access to foreign currency are behind Venezuela's runaway inflation. No matter which, Maduro thundered "They are barbaric, these capitalist parasites!" 

Via Reuters,

Venezuela's socialist government has arrested more than 100 "bourgeois" businessmen in a crackdown on alleged price-gouging at hundreds of shops and companies since the weekend, President Nicolas Maduro said on Thursday. 

"They are barbaric, these capitalist parasites!" Maduro thundered in the latest of his lengthy daily speeches. "We have more than 100 of the bourgeoisie behind bars at the moment." 

...

Officials say unscrupulous companies have been hiking prices of electronics and other goods more than 1,000 percent. Critics say failed socialist economic policies and restricted access to foreign currency are behind Venezuela's runaway inflation. 

"Goodyear has to lower its prices even more, 15 percent is not enough, the inspectors have go there straightaway," Maduro said in his evening address, sending officials to check local operations of the U.S.-based tire manufacturer. 

Like Chavez, Maduro says he is defending the poor.

The U.S. economy is falling into Europe’s footsteps

What the Ice Cream Scooper Told Me in Venice

by Michael Lombardi

I’m blessed to be able to travel to Europe once or twice a year. I use the trips as an opportunity to see how the economies are faring over there. And I can tell you this first-hand: the economic situation in Europe is much worse than what we’re hearing from the mainstream media in the U.S. economy.

Here’s just one small story that paints the picture…

A couple of weeks back, while in Venice for four days, I walked into my favorite ice cream store for my daily fix of Italian ice cream. I’m chatty wherever I travel, as I want to get the locals talking so I learn what’s going on.

After engaging the store’s only employee in conversation (I’m fluent in Italian), the young man, who was between 25 and 30 years old and educated, told me how happy he was to have his job as an ice cream scooper at this particular location of a well-known chain of Italian ice cream stores. “Jobs in Italy are very hard to come by,” he told me.

But what he said next really got me thinking … 

The ice cream scooper said he travels 65 kilometers (that’s about 40 miles) each way to and from work each day. He takes the train. Total travel time is four hours a day; two hours in the morning to get to work, and two hours at night to get home from work. Yes, four hours a day to travel to a job scooping ice cream for tourists.

When I asked him about getting a job closer to the town he lives in, he says there are no jobs to be had. When I ask him about moving closer to his job to cut down on the commute, he says he can’t afford the higher rent.

The discussion had an impact on me. If you are a long-time reader of this column, you have read how I believe the U.S. is headed for the same fate as most eurozone countries: there is no middle class, only the very poor and the very rich.

And it’s already happening in the U.S. economy…

Your Life is Worthless

But police-state employees are invaluable

By Paul Craig Roberts

In my last column I emphasized that it was important for American citizens to demand to know what the real agendas are behind the wars of choice by the Bush and Obama regimes. These are major long term wars each lasting two to three times as long as World War II.

Forbes reports that one million US soldiers have been injured in the Iraq and Afghanistan wars. http://www.forbes.com/sites/rebeccaruiz/2013/11/04/report-a-million-veterans-injured-in-iraq-afghanistan-wars/

RT reports that the cost of keeping each US soldier in Afghanistan has risen from $1.3 million per soldier to $2.1 million per soldier. http://rt.com/usa/us-afghanistan-pentagon-troops-budget-721/

Matthew J. Nasuti reports in the Kabul Press that it cost US taxpayers $50 million to kill one Taliban soldier. That means it cost $1 billion to kill 20 Taliban fighters. http://kabulpress.org/my/spip.php?article32304 This is a war that can be won only at the cost of the total bankruptcy of the United States.

Joseph Stiglitz and Linda Bilmes have estimated that the current out-of-pocket and already incurred future costs of the Afghan and Iraq wars is at least $6 trillion.

In other words, it is the cost of these two wars that explain the explosion of the US public debt and the economic and political problems associated with this large debt.

What has America gained in return for $6 trillion and one million injured soldiers, many very severely?

In Iraq there is now an Islamist Shia regime allied with Iran in place of a secular Sunni regime that was an enemy of Iran, one as dictatorial as the other, presiding over war ruins, ongoing violence as high as during the attempted US occupation, and extraordinary birth defects from the toxic substances associated with the US invasion and occupation.

In Afghanistan there is an undefeated and apparently undefeatable Taliban and a revived drug trade that is flooding the Western world with drugs.

The icing on these Bush and Obama “successes” are demands from around the world that Americans and former British PM Tony Blair be held accountable for their war crimes. Certainly, Washington’s reputation has plummeted as a result of these two wars. No governments anywhere are any longer sufficiently gullible as to believe anything that Washington says.

These are huge costs for wars for which we have no explanation.

The Bush/Obama regimes have come up with various cover stories: a “war on terror,”“we have to kill them over there before they come over here,” “weapons of mass destruction,” revenge for 9/11, Osama bin Laden (who died of his illnesses in December 2001 as was widely reported at the time).

None of these explanations are viable. Neither the Taliban nor Saddam Hussein were engaged in terrorism in the US. As the weapons inspectors informed the Bush regime, there were no WMD in Iraq. Invading Muslim countries and slaughtering civilians is more likely to create terrorists than to suppress them. According to the official story, the 9/11 hijackers and Osama bin Laden were Saudi Arabians, not Afghans or Iraqis. Yet it wasn’t Saudi Arabia that was invaded.

Democracy and accountable government simply does not exist when the executive branch can take a country to wars in behalf of secret agendas operating behind cover stories that are transparent lies.

I Have Seen the Future, and it Is Idiocy

One cannot not exaggerate the degree to which official idiocy impinges on our lives

by Theodore Dalrymple

Yesterday morning, as I was sitting in the flat on Paris that I have rented for a time quietly finishing my latest book, Murderers I Have Known (and I have known quite a few), a furious row broke out in the street six floors below. I went out onto the terrace—the flat is on the building’s top floor—to see what was going on. There were several other equally curious people standing on their balconies on both sides of the street.

A little knot of young black men, with two or three girls among them, was having a furious row. It was obvious that they were in earnest, though goodness knows about what, as I could not make out any words. I was like a dog; I went by the tone of their voices. 

One of the young men struck another and he fell, his face covered in blood. The man who had struck him kicked him with full force and got down on him to punch him as hard as he could. He got in several very hard blows before some others hauled him off. If he had not been hauled off, I think he would have beaten him to death. I was very glad that neither of the two, the beater and the beaten, had a gun, for I am sure that in their heightened state of emotion, whatever it was about, one of them would have used a gun to kill. Of course, there will be those who say that if each of them had thought the other had a gun, they would not have fought in the first place.

It was strange to see cars crawl by this scene, the drivers obviously seeing what was going on but doing nothing about it. Some passersby passed by and others tried to intervene. More than one called the police. 

Oddly enough, once the man had been hauled off his prostrate associate (former friend? longtime enemy?), the group reformed and went up the street, still arguing furiously. A couple of shopkeepers came out to tell them to calm down, as the frightening fury was presumably bad for trade. 

This all continued for several minutes. The police never came. They probably had other things to do.

The Economics of ObamaCare

The “Unintended” But Entirely Predictable Effects

by Robert P. Murphy

Near the end of Human Action Ludwig von Mises declared that it was the “primary civic duty” to learn the teachings of economics. The public’s growing furor over the Patient Protection and Affordable Care Act — popularly known as “ObamaCare” — beautifully illustrates Mises’s point. No one has any business being shocked — shocked! — that millions of Americans will lose their current health insurance (including the present, irritated, writer), because such an outcome was obvious all along. Furthermore, the hilarious snags with healthcare.gov are merely a sideshow; the true problems with ObamaCare run much deeper than a malfunctioning website.

The Basic Structure of “ObamaCare”

The Affordable Care Act (ACA) was formally signed into law on March 23, 2010. There are numerous provisions that kick in at various stages, through 2020. For our purposes in this article, there are four key elements of the ACA that merit our attention:

·         Insurers are legally required to provide coverage to all applicants, regardless of medical history, with a partial “community rating” system for premiums, which means that insurers must set premiums based (mostly) on geography and age, rather than sex and (most) pre-existing conditions.

·         Health insurance policies must meet minimum standards (called “essential health benefits”), including no caps on annual or lifetime payments from the insurance companies for an individual policy.

·         Everyone is required to obtain health insurance, except for waivers granted for certain religious groups and those deemed to be unable to afford coverage. Government subsidies and state-based “health exchange markets” will be provided to assist individuals.

·         An “employer mandate” penalizes firms with 50 or more employees if they do not offer coverage for their full-time employees, defined as those working 30 or more hours per week.