greenspan: statist bastard

Some libertarians have always been down on Greenspan, but I usually cut him some slack. After all, what exactly should he have done as Fed Chair? He couldn't unilaterally imposed a gold standard or a set up a free banking system on his own, now could he?

But the bottom line is that when he has a chance to act one way or another, he does indeed take the side of the State. Check it out, "ABC News: Greenspan Wants Banking Exemption Halted":

Federal Reserve Chairman Alan Greenspan is urging Congress to close a regulatory loophole that lets companies own a certain breed of banks, including a bank Wal-Mart Stores Inc. wants to operate in Utah

Wal-mart is trying to help the consumer and all you're concerned about is protecting the banking cartel? Screw you, Alan!

lord of war

The girlfriend and I watched "Lord of War" last night. Although I like Nicholas Cage, I had refrained from watching it when it was in the theatres because it looked soooo anti-gun. Recently, I had heard some good reviews of it so I decided to rent.

Fortunately, although it is superficially anti-gun, the underlying message is anti-war and anti-state. Cage's character starts his career by selling guns to criminals in America, but quickly realizes that the big money is in selling arms to governments, terrorists and international drug dealers. Cage is eventually caught by Interpol, but is released when officials decide that he is a necessary cog in the efforts of governments to ensure arms get to the right groups. The films ends with an explicit message that the top five governments that do most of arms trade are also all on the UN Security Council.

danger time for america

That's the title of this article from The Economist, discussing the state of the economy, the role Greenspan has played in getting us here, and the likely moves Bernanke will make as the new money czar...and what a hilarious and insightful graphic! The article quotes Ludwig Von Mises on "burning the furniture":

Ben Bernanke, Mr Greenspan's successor, likes to explain America's current-account deficit as the inevitable consequence of a saving glut in the rest of the world. Yet a large part of the blame lies with the Fed's own policies, which have allowed growth in domestic demand to outstrip supply for no less than ten years on the trot. Part of America's current prosperity is based not on genuine gains in income, nor on high productivity growth, but on borrowing from the future. The words of Ludwig von Mises, an Austrian economist of the early 20th century, nicely sum up the illusion: “It may sometimes be expedient for a man to heat the stove with his furniture. But he should not delude himself by believing that he has discovered a wonderful new method of heating his premises.”...

...How should Mr Bernanke respond to falling house prices and a sharp economic slowdown when they come? While he is even more opposed than Mr Greenspan to the idea of restraining asset-price bubbles, he seems just as keen to slash interest rates when bubbles burst to prevent a downturn. He is likely to continue the current asymmetric policy of never raising interest rates to curb rising asset prices, but always cutting rates after prices fall. This is dangerous as it encourages excessive risk taking and allows the imbalances to grow ever larger, making the eventual correction even worse. If the imbalances are to unwind, America needs to accept a period in which domestic demand grows more slowly than output.

The whole article is worth a read.

a new john stossel special

Good news! Friday night, John Stossel will have a new, hour-long special on education:

There are many factors that contribute to failure in school. A major factor, Stossel finds, is the government's monopoly over the school system. Parents don't get to choose where to send their children. In other countries, choice brings competition, and competition improves performance.

Stossel questions government officials, union leaders, parents and students and learns some surprising things about what's happening in U.S. schools. He also examines how the educational system can be improved upon and reports on innovative programs across the country.

Don't miss it!

the friedmans on military intervention

No, no, no, not Tommy the neocon, but Chicago school economist Milton and his anarcho-capitalist son David, as summarized in this piece by David R. Henderson at antiwar.com.

Nobel laureate in economics Milton Friedman has never, to my knowledge, written on foreign policy. But the framework in one of Friedman's best articles from the early 1950s can be applied directly to foreign policy. As far as I know, no one has done so. This is not surprising for two reasons. First, the article, "The Effects of a Full-Employment Policy on Economic Stability: A Formal Analysis," is not well-known because it was originally published in a French economics journal and its translation appears only in Friedman's 1953 book, Essays in Positive Economics. Second, U.S. economists, in my experience at least, tend not to think of foreign policy in the systematic way they think of domestic policy; instead, they tend to be flag-wavers who talk about our brave young men and women who are "fighting for our freedom." One of my goals in the economics profession is to get my fellow economists to apply some of the powerful analytic frameworks we have to issues in foreign policy. This article is my application of Milton Friedman's reasoning in the above-mentioned article to foreign policy.

Where does David Friedman come in? He does not apply his father's formal economic model as I'm about to do. However, in "Is There a Libertarian Foreign Policy?," a chapter in his outstanding book, The Machinery of Freedom, he makes a case that is very much in the spirit of my application of his father's model. For those who are impatient for the bottom line, here it is. For an interventionist foreign policy to work, the government must be right much more often than it's wrong. This is an unlikely scenario.

The Machinery of Freedom is indeed an excellent book, a very important work that really helps one visualize a potential world without government, and it doesn't shy away from the tough issues. An excellent point made by David Friedman is quoted by Henderson in his article:

"To say that our foreign policy is badly run is in a sense misleading. Perhaps when we [sic – see my "Who is 'We'"] support dictators who contribute very little to the defense of the U.S., the reason is that they contribute instead to the profits of American firms who do business in their countries, and the American firms in turn contribute to the politicians who make our foreign policy. If so, what we are observing is not the incompetence of the people making our foreign policy but their competence at achieving objectives other than the defense of the U.S. – most notably their own wealth and power." (p. 214)

Read the rest of Henderson's piece, and be sure to read The Machinery of Freedom if you haven't done so already.

syriana

The girlfriend and I went to see "Syriana" Saturday night. She wanted to see it when it first came out a few weeks ago, but I figured it was an anti-capitalist diatribe by leftists like Clooney. I ended up reading a good review of it over at antiwar.com by Charles Peña so I changed my mind. It's OK, politics-wise, considering who made it. The businesses are corrupt, but it's clear that it's the State that is doing the most evil and the problem with the corporations is the corruption that comes with making deals with the State. The major problem with the movie is that there are too many story lines and too many characters. There's a whole subplot with suicide bombers that is completely unnecessary and adds nothing to the major story arc of the movie.

an excellent use of gps

And how long can it be before paper bills themselves have signalling devices embedded in the paper?

SPOKANE, Wash. - Moments after a bank was robbed, police found a duffel bag full of cash — and the global positioning satellite device that bank workers had tucked inside.

The device used satellite signals to relay the location of the getaway minivan to police shortly after the Wednesday robbery.

The driver, Thomas R. Fricks, 38, was ordered held without bond Thursday by U.S. Magistrate Judge Cynthia Imbrognio.

"You guys are good!" Fricks said as Spokane Police Officer Tim Moses arrested him shortly after the Washington Trust Bank branch robbery, according to documents filed in federal court.

From this Yahoo! News story.

the shanghai bubble bursts

From this latimes.com article, we find that real estate bubbles can pop just like any other:

For the first time, homeowners here are learning what it means to have an upside-down mortgage — when the value of a home falls below the amount of debt on the property. Recent home buyers are suing to get their money back. Banks are fretting about a wave of default loans.

"The entire industry is scaling back," said Mu Wijie, a regional manager at Century 21 China, who estimated that 3,000 brokerage offices had closed since spring. Real estate agents, whose phones wouldn't stop ringing a year ago, say their incomes have plunged by two-thirds.

Brings a slightly new meaning to the term "Shanghaied"! Of course, this could NEVER happen here in the good old US of A, where housing prices never go down...Spotted via Housing Panic.