Boom & Bust Rap

Starring Keynes and Hayek;  Too funny!

http://www.youtube.com/watch?v=d0nERTFo-Sk&feature=player_embedded

Here are the lyrics:

[Keynes Sings:]

John Maynard Keynes, wrote the book on modern macro The man you need when the economy's off track, [whoa] Depression, recession now your question's in session Have a seat and I'll school you in one simple lesson

BOOM, 1929 the big crash We didn't bounce back--economy's in the trash Persistent unemployment, the result of sticky wages Waiting for recovery? Seriously? That's outrageous!

I had a real plan any fool can understand The advice, real simple--boost aggregate demand! C, I, G, all together gets to Y Make sure the total's growing, watch the economy fly

We've been going back and forth for a century [Keynes] I want to steer markets, [Hayek] I want them set free There's a boom and bust cycle and good reason to fear it [Hayek] Blame low interest rates. [Keynes] No... it's the animal spirits

Hayek sings:

I'll begin in broad strokes, just like my friend Keynes His theory conceals the mechanics of change, That simple equation, too much aggregation Ignores human action and motivation

And yet it continues as a justification For bailouts and payoffs by pols with machinations You provide them with cover to sell us a free lunch Then all that we're left with is debt, and a bunch

If you're living high on that cheap credit hog Don't look for cure from the hair of the dog Real savings come first if you want to invest The market coordinates time with interest

Your focus on spending is pushing on thread In the long run, my friend, it's your theory that's dead So sorry there, buddy, if that sounds like invective Prepared to get schooled in my Austrian perspective

Quote of the Day

I admire the remarkable honesty

Quote of the Day

“People will never know what’s in that bill until we pass it.”

–Obama Advisor David Axelrod, discussing health care over the weekend.

IPCC; Himalayan Glacier Melt Data "Plucked from thin air"

The scientist behind the bogus claim in a Nobel Prize-winning UN report that Himalayan glaciers will have melted by 2035 last night admitted it was included purely to put political pressure on world leaders.

Dr Murari Lal also said he was well aware the statement, in the 2007 report by the Intergovernmental Panel on Climate Change (IPCC), did not rest on peer-reviewed scientific research.
In an interview with The Mail on Sunday, Dr Lal, the co-ordinating lead author of the report’s chapter on Asia, said: ‘It related to several countries in this region and their water sources. We thought that if we can highlight it, it will impact policy-makers and politicians and encourage them to take some concrete action.

‘It had importance for the region, so we thought we should put it in.’

Dr Lal said: ‘We knew the WWF report with the 2035 date was “grey literature” [material not published in a peer-reviewed journal]. But it was never picked up by any of the authors in our working group, nor by any of the more than 500 external reviewers, by the governments to which it was sent, or by the final IPCC review editors.’

In fact, the 2035 melting date seems to have been plucked from thin air.

Professor Graham Cogley, a glacier expert at Trent University in Canada, who began to raise doubts in scientific circles last year, said the claim multiplies the rate at which glaciers have been seen to melt by a factor of about 25.

Read more: http://www.dailymail.co.uk/news/article-1245636/Glacier-scientists-says-knew-data-verified.html#ixzz0dgQzCY8Y

MoveYour Money

Bank "too big to fail"?  We can collectively fix that by making them smaller. Just because the government propped them up, this does not mean we cannot make a dent in their retail business model. Why on earth does anyone bank with the majors anyways? I think a sense of security and credibility used to be part of it, but that was clearly a false assessment.  Now they are nothing but fee factories!  Put your money in a bank that did not get bailed out!
Choose George Bailey over Mr. Potter.  Better service, higher interest, lower fees- what's not to like?

Check out the movement here:
http://moveyourmoney.info/

Kling on Causes of Depth of Recession

Some of these causes are better than others; The "innovation slump" is a huge factor, because government kept partying like it was 1999, and the private sector could not continue to feed the beast without the illusory housing boom, which (unlike the internet boom) did not do anything to improve productivity.  Productivity is the only route to real and lasting wealth, and a higher standard of living, as it has been for millennia. Lately, the government has been doing everything it can think of to kill the golden goose.
----------------------
If I had a convincing explanation for the depth of this recession, I would shout it from the rooftops. Instead, let me toss out a few ideas, in no particular order of importance or plausibility.

1. The huge transfer of wealth to failed banks sucked a lot of energy out of the economy. In other words, the bank bailouts that are credited with keeping things from getting worse are in fact what made things worse.

2. The bloated housing and financial sectors created broader distortions in the economy. If the value of New York City's exports of financial services falls, then that has all sorts of effects. The city's nontraded goods and services sector is adversely affected. Its imports from other parts of the U.S. and the rest of the world fall. And so on. All sorts of trading patterns need to change, and that requires considerable recalculation.
3. Part of the adjustment process in the economy involves physical relocation. The nature of the collapse in the housing market means that relocation costs go up, which reduces the economy's capacity to adjust.
4. Since 2000, the economy has been in an innovation slump. The human genome project yielded less immediate benefits than expected. Progress in computer and communications technology has become evolutionary, not revolutionary. Nanotechnology is far too immature to create major new business opportunities.
Only when an innovation reaches the point where its economic impact can be felt, as happened with personal computers and the Internet in the 1990's, will lots of new businesses be created. Remember that in 1987 Robert Solow quipped that "we see computers everywhere but in the productivity statistics." That soon changed. Today, one could argue that we see genome decoding and nanotech research everywhere but in the productivity statistics.

The recent innovation slump was disguised by the housing boom. That is, if you take away the housing boom, you would have seen a steady increase in unemployment, due to the lack of new business formation. Instead, the housing boom caused unemployment to fall, and the crash caused unemployment to shoot up.

5. We ran into a "limits-to-growth" problem with energy. Tightness in the oil market means that we have to convert to less oil-intensive patterns of consumption growth and productions. Just as in the 1970's, this creates big adjustment problems.
Of course, it is possible to have several of these problems at once.




http://econlog.econlib.org/archives/2010/01/why_such_a_deep.html

Noonan on the Brown phenomenon

 Of Nuts and Creeps


Speaking broadly: In the 2006 and 2008 elections, and at some point during the past decade, the ancestral war between Democrats and the Republicans began to take on a new look. If you were a normal human sitting at home having a beer and watching national politics peripherally, as normal people do until they focus on an election, chances are pretty good you came to see the two major parties not as the Dems versus the Reps, or the blue versus the red, but as the Nuts versus the Creeps. The Nuts were for high spending and taxing and the expansion of government no matter what. The Creeps were hypocrites who talked one thing and did another, who went along on the spending spree while lecturing on fiscal solvency.
In 2008, the voters went for Mr. Obama thinking he was not a Nut but a cool and sober moderate of the center-left sort. In 2009 and 2010, they looked at his general governing attitudes as reflected in his preoccupations—health care, cap and trade—and their hidden, potential and obvious costs, and thought, "Uh-oh, he's a Nut!"
...
In a telephone conversation Wednesday night, Mr. Brown spoke of what's ahead. The conversation turned to the movie "The Candidate," to the moment Robert Redford wins the election and takes a top strategist aside to ask: "What do we do now?"
Mr. Brown laughed: "I know what I want to do: Go down there and be a good person, a good and competent senator. I have huge shoes to fill, the legacy is just overwhelming. I'm a consensus builder. . . . I can disagree in the daytime and have a coffee or beer later on. Everyone's welcome to their opinion."
He said he thought the president "inherited a lot of problems," that "he's doing a great job with North Korea, a nice job with Afghanistan." A centerpiece of Mr. Brown's campaign was opposition to the president's health-care plan, but he stressed that he opposes high spending wherever it comes from. "I've criticized President Bush for his failure to use his veto pen. There's plenty of blame to go around. The question is how solve problems. It's not bailouts. What made America great? Free markets, free enterprise, manufacturing, job creation. That's how we're gonna do it, not by enlarging government."
The next morning he took the 7 a.m. shuttle from Boston to Washington for his first trip to the Capitol. On the plane, after they took off, the pilot came on and said, "Senator Brown is on board, on his way to Washington." The plane erupted in applause.



http://online.wsj.com/article/SB10001424052748703699204575017503811443526.html?mod=djemEditorialPage

Supremes Gut McCain-Feingold

What the hell took them so long?  Disturbed by the 5-4 vote, I mean come on now.

Justice Kennedy's opinion says it all:

“When Government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought.  This is unlawful ... The First Amendment confirms the freedom to think for ourselves.”

WASHINGTON — Sweeping aside a century-old understanding and overruling two important precedents, a bitterly divided Supreme Court on Thursday ruled that the government may not ban political spending by corporations in candidate elections.
The ruling was a vindication, the majority said, of the First Amendment’s most basic free speech principle — that the government has no business regulating political speech. The dissenters said allowing corporate money to flood the political marketplace will corrupt democracy.

“If the First Amendment has any force,” Justice Anthony M. Kennedy wrote for the majority, which included the four members of its conservative wing, “it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.”

http://bigjournalism.com/fross/2010/01/21/supreme-court-drop-kicks-mccainfeingold-scores-victory-for-1st-amendment/

Chavez; US Caused Haiti Earthquake

Venezuelan leader Hugo Chavez has once again accused the United States of playing God. But this time it's Haiti's disastrous earthquake that he thinks the U.S. was behind. Spanish newspaper ABC quotes Chavez as saying that the U.S. navy launched a weapon capable of inducing a powerful earthquake off the shore of Haiti. He adds that this time it was only a drill and the final target is ... destroying and taking over Iran.

http://www.realclearpolitics.com/video/2010/01/21/chavez_us_weapon_test_caused_haiti_earthquake.html

Bernanke Going Down?

Not sure it would make much difference- the chairman is little more than a figurehead for the secret society that is the Fed. Would imply a crack in the facade though.

Senate Dems Not Sure They Can Get Enough Votes to Reconfirm Bernanke

Amidst the voter anger at Wall Street and Washington, D.C., ABC News has learned that the Senate Democratic leadership isn't sure there are enough votes to re-confirm Ben Bernanke for another term as chairman of the Federal Reserve.
Bernanke's term expires on Jan. 31.
"The American people are disgusted with the greed and recklessness of Wall Street," Sen. Bernie Sanders, I-Vt., said in an interview with The Associated Press last month. "People are asking, 'Why didn't the Fed intervene at the appropriate time to stop the casino-type activities of large financial companies?'"

Sanders, Sen. Jim Bunning, R-Ky., Sen. Jim DeMint, R-S.C., and Sen. David Vitter, R-La., have all put holds on Bernanke's nomination, requiring 60 votes to proceed to a vote.

Voter anger is of heightened concern to members of Congress given the surprise victory of Sen.-elect Scott Brown, R-Mass., who rode a tide of voter discontent and economic anxiety to an upset victory in a special election earlier this week.



http://blogs.abcnews.com/politicalpunch/2010/01/senate-dems-not-sure-they-can-get-enough-votes-to-reconfirm-bernanke.html

Don't Blame Me...

I couldn't find a 1972 bumper sticker, so this will have to do.

Haiti; Man Made Disaster

Sad but true- the place was structurally unsound before the ground shook, which is what turned a tragedy into a full-blown disaster.
---------------------------------------------
Though the earthquake was a powerful one, its impact was multiplied many, many times by the weakness of civil society and the absence of rule of law in Haiti. As Roger Noriega has written, "You can literally see [the] dysfunction from space": Satellite photos of Hispaniola, the island split between Haiti and the Dominican Republic, show green forests on the Dominican side and bare, deforested hills on the Haitian side. Mudslides and collapsing houses were routine in Haiti, even before this disaster. Laws designed to prevent erosion, and building codes designed to prevent criminally shoddy construction, were ignored. The rickety slums of Port-au-Prince were constructed in ravines and on steep, unstable hills. When they collapsed, they collapsed completely.
So weak were Haiti's public institutions, literally and figuratively, that nothing is left of them, either. Parliament, churches, hospitals, and government offices no longer exist.* The archbishop is dead. The head of the U.N. mission is dead. There is a real possibility that violent gangs will emerge to take their place, to control food supplies, to loot what remains to be looted. There is a real possibility, within the coming days, of epidemics, mass starvation, and civil war.

http://slate.com/id/2241861/

I'm with SEIU?

These union thugs are so intimidating

http://www.thetreeofliberty.com/vb/showthread.php?t=90013

Look out for your 401k

The greedy pols are eying your pile of money to pay off their obscene debts.

How’s that 401(k) working out for you?  Well, if the Obama administration has its way, you won’t have to worry about that any more.
Apparently, you’re too stupid and lazy to be trusted with your own retirement planning. So, what you need is for the government to “urge” you to convert your 401(k) plan to a government annuity.

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

TaxProf has a roundup of some useful links concerning this, but here’s the key takeaway:
There literally isn’t enough money in the world to float the T-notes the Treasury must issue in order to prop up our unsustainable spending path.  There are, however, about $3.6 trillion in funds just sitting in 401(k) accounts.  If the government can urge–or force–you to convert your 401(k) into T-note funded annuities, the Treasury can continue to issue those notes to float the government’s deficit.  Essentially, you’ll be converting your retirement funds into an IOU from the government…just like your social security account has already done.

http://www.qando.net/?p=6596

Brown Polls ++

Wow!
Still skeptical, but there they are.  I'd feel better if Rasmussen was higher- they have a good record. I have no confidence this will be a fair accounting- the stakes are too high- bet they can move things 5 points with just dead people.

Politico/InAdv	1/17 - 1/17	804 LV	52	43	Brown +9
PJM/CrossTarget (R)	1/17 - 1/17	574 LV	52	42	Brown +10
PPP (D)	1/16 - 1/17	1231 LV	51	46	Brown +5
ARG	1/15 - 1/17	600 LV	52	45	Brown +7
Daily Kos/R2000	1/15 - 1/17	500 LV	48	48	Tie
InsideMedford/MRG	1/15 - 1/15	565 LV	51	41	Brown +10
PJM/CrossTarget (R)	1/14 - 1/14	946 LV	54	39	Brown +15
ARG	1/12 - 1/14	600 LV	48	45	Brown +3
Blue Mass Group/R2000 (D)	1/12 - 1/13	500 LV	41	49	Coakley +8
Suffolk/7News	1/11 - 1/13	500 LV	50	46	Brown +4
Rasmussen Reports	1/11 - 1/11	1000 LV	47	49	Coakley +2
PPP (D)	1/7 - 1/9	744 LV	48	47	Brown +1

http://www.realclearpolitics.com/epolls/2010/senate/ma/massachusetts_senate_special_election-1144.html

Coakley; The unprosecuted; DeMasi, Wilkerson, Turner

Crushes the Amiraults, but lets these guys off the hook. If it weren't for the Feds, they would still be in power.

Savvy politics doesn't always make for great policy, though. Take, for instance, the cases Coakley didn't prosecute as AG. Though she's gone after public officials, the three biggest public-corruption cases of the past three years—the only three that anyone remembers—saw her sitting on the sidelines. The indictment of former House Speaker Sal DiMasi for allegedly receiving payments for state software contracts that he helped push through; the indictments of state Senator Dianne Wilkerson and Boston City Councilor Chuck Turner for allegedly accepting bribe money from undercover FBI agents—Coakley didn't charge any of these people with crimes. The U.S. Attorney's Office did. The FBI had video proof of Wilkerson stuffing bribe money into her bra. Coakley did nothing. The Globe and Secretary of State William Galvin hammered DiMasi and his 
(allegedly) shady friends for 14 months. And the best Coakley could do was indict DiMasi's golfing buddy Richard Vitale? On misdemeanor charges?
Coakley knows that pouncing on big-name prey (like Goldman Sachs) will score headlines and position her as a tough prosecutor. But she also knows toughness will get her only so far. As AG, Scott Harshbarger nailed all sorts of public officials in the 1990s, and paid the price: When he ran for governor in 1998, he did it without the help of state Democrats, many of whom he'd angered at some point. Harshbarger lost.

http://www.bostonmagazine.com/articles/running_scared_martha_coakley/page2

It's not JUST That 60th Seat

Coakley is the ultimate anti-libertarian. Anti-freedom on every front. A ruthless prosecutor and a rabid collectivist. All about the power of the state.

If the current attorney general of Massachusetts actually believes, as no serious citizen does, the preposterous charges that caused the Amiraults to be thrown into prison—the butcher knife rape with no blood, the public tree-tying episode, the mutilated squirrel and the rest—that is powerful testimony to the mind and capacities of this aspirant to a Senate seat. It is little short of wonderful to hear now of Ms. Coakley's concern for the rights of terror suspects at Guantanamo—her urgent call for the protection of the right to the presumption of innocence.
If the sound of ghostly laughter is heard in Massachusetts these days as this campaign rolls on, with Martha Coakley self-portrayed as the guardian of justice and civil liberties, there is good reason.


http://online.wsj.com/article/SB10001424052748704281204575003341640657862.html?mod=djemEditorialPage

Spontaneous Order in the Ivory Coast

Accidental freedom and spontaneous order in the Ivory Coast.  This is probably the freest place in Africa, and perhaps the world.  Some lessons here in prosperity caused by the absence of government. Unfortunately they seem intent on uniting with the South, and destroying their freedom.


"Here no-one can say to you: 'No, that's pirated' or 'You can't sell that here,'" he tells me when I ask if he ever has any trouble from the authorities.
"If we were in the south of the country, you could complain that no customs tax has been paid for example, but when you're in the New Forces-zone everything can come in and be sold," he says. 

Soroland may not be a breakaway zone, but for seven years the inhabitants of this zone have got used to living without government taxes, customs charges and even water and electricity bills.


"Things are a lot cheaper than in the south - we see that people from the south often come here to stock up, above all the military who come for all their electronics - mobile phones, DVDs, televisions, everything," he says.
...
Gradually with contributions from parents, the ad-hoc schools helped save a generation of children, and in some years the rebel zone got better results in national exams than the government zone.
Other volunteers helped cover for the absence of the state in other ways: setting up an ad-hoc postal service; their own television stations and some basic policing.
The New Forces do collect taxes in some areas - like from cocoa and cotton producers but most areas of business are unregulated in the city.

http://news.bbc.co.uk/2/hi/africa/8446994.stm

2000+ Year Old Computer!

Technology is frequently lost to history, but this is really extraordinary.
----------------------
X-rays and advanced photography have uncovered the true complexity of the mysterious Antikythera mechanism, a device so astonishing that its discovery is like finding a functional Buick in medieval Europe.
In 1900, some divers found the wreck of a Roman vessel off the Greek island of Antikythera. Among the other treasures remanded to the Greek government was an unassuming corroded lump. Some time later, the lump fell apart, revealing a damaged machine of unknown purpose, with some large gears and many smaller cogs, plus a few engraved words in Greek. Early studies suggested it was some type of astronomical time-keeping device – researcher Derek J. de Solla Price laid the groundwork by establishing initial tooth counts and suggesting that the device followed the Metonic cycle, a 235-month pattern commonly used to predict eclipses in the ancient world.

The findings, published in Nature, are probably best described as "mind blowing." Devices with this level of complexity were not seen again for almost 1,500 years, and the Antikythera mechanism's compactness actually bests the later designs. Probably built around 150 B.C., the Antikythera mechanism can perform a number of functions just by turning a crank on the side.
Using nothing but an ingenious system of gears, the mechanism could be used to predict the month, day and hour of an eclipse, and even accounted for leap years. It could also predict the positions of the sun and moon against the zodiac, and has a gear train that turns a black and white stone to show the moon's phase on a given date. It is possible that it could also show the astronomical positions of the planets known to the ancients: Mercury, Venus, Mars, Jupiter and Saturn.


http://io9.com/5441889/advanced-imaging-reveals-a-computer-1500-years-ahead-of-its-time

Correlation or Causation?

The Emperors are bleeding us dry.

Hey Big Spender- Bush's Fault!

Why it really is GWB's fault- he really raised the bar on government spending of all types, showing the next regime what was possible. Thanks Alot! Didn't buy him any friends either...
-------------------------
Spending in Bush’s first year (FY2001) was $1.863 trillion, thus he presided over an 83-percent increase in overall federal spending, which includes defense, domestic, entitlements, and interest. Even without TARP and Fannie/Freddie, spending was up a huge 70 percent under Bush over eight years. By contrast, total spending under eight years of President Clinton increased just 32 percent. These are the overall increases in nominal dollars.

http://www.cato-at-liberty.org/2009/12/19/george-w-bush-biggest-spender-since-lbj/