Liberty Forged

the State has no money of its own, so it has no power of its own. ` Nock

Posts Tagged ‘green’

Left or Right? Stalin or Hitler? That makes no sense.

Posted by Jesse on March 15, 2009

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Russia’s KGB Putin-Americans Sovietized.

Posted by Jesse on March 5, 2008

MP3 here. (43:13)

Antiwar Radio: Scott Horton Interviews Eric Margolis

Award winning author, columnist, and broadcaster Eric S. Margolis has covered 14 wars and is a leading authority on military affairs, the Middle East, South Asia, and Islamic movements.

Eric Margolis, foreign correspondent for Sun National Media and the American Conservative magazine, discusses the state of emergency in Pakistan, the history of the Musharraf dictatorship, his relationship with Dick Cheney, the return of Benazir Bhutto, her accusation that Musharraf was behind the recent suicide bomb attacks, the Islamists in Waziristan, the cause of their insurgency, Pakistan’s feudal system and the slim chance that crazies could get their hands on the nukes, the tension between Pakistan and India, the collision course coming this way as the Kurdish PKK attacks Turkey and vice versa, the U.S. and Israel’s policy of splitting off Kurdistan Iraq while simultaneously backing the Turks, U.S. support for Kurdish terrorism against Iran and the plan for long term occupation of Iraq.

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Posted in *Take Action, antiwar, Constitution, Current Events, democrat, economy, Education, election 2008, free market, Gold, government, healthcare, internet, Libertarian, mccain, obama, old right, Politics, republican, Rights, Ron Paul, technology | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 2 Comments »

Keynes’ General Theory. Much like cluster bombs for the world.

Posted by Jesse on March 5, 2008

The Crisis Point of the Inflationary Boom
By Sean Corrigan

Posted on 3/4/2008

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In a recent survey — jointly conducted by CFO magazine and Duke University — one of the top concerns being expressed by industry executives across the United States, Europe, and Asia was that of the rising cost and — to a slightly lesser extent — the reduced availability of labor, especially that of the skilled variety.

The worry most forcibly competing with this angst was that of whether “consumer demand” would hold up in coming months.

For a Keynesian this conflict can have no meaning, for the central chicanery around which the General Theory is constructed is that depressions can be warded off through monetary debasement, simply by stuffing the workers’ pockets with extra cash, while simultaneously fooling them as to the real value of the nominal wages being received in such a newly clipped coinage.

In the case where wages are rising (labor costs are mounting) because employment is near full (suitable candidates for work are hard to find) then, assuming the mythical “propensity to consume” remains broadly constant, consumer demand should be a shoe-in, and unlearned industrialists need not lose too much sleep over their prospects for either sales or profits.

Granted, “end demand” could also become (temporarily) curtailed by a sudden outbreak of thrift, that virulent, unpredictable strain of global pandemic feared by the macromancers more than dirty bombs, bird flu, melting ice caps, and a direct asteroid strike, combined, for its potency in disrupting the pristine, academic beauty of their consumption functions and ISLM curves.

The unlikelihood of this taking place in a world whose mail boxes bulge daily with unsolicited offers of new credit, and whose masses have been conditioned to view shopping as a sacramental rite, should be all too apparent.

In fact, what our survey results really display are the classic symptoms of the unhealthy discoordination that an unbacked credit expansion induces in the body economic.

What we see here is that most of the businessmen canvassed are finding their costs are rising and, in particular, the dominant cost they typically bear: that associated with retaining a competent and motivated workforce. At the same time, those who do not directly play a part in satisfying the needs of end consumers (an overriding majority, if our sample is representative of industrial and commercial organization as a whole) are beginning to fret about a slackening of demand for their (mainly higher and intermediate goods) output.

As Mises, Hayek, et al. took great pains to explain, what this means is that the seemingly golden age — in reality, a thinly gilded one — during which the first, most favored issuers of cheap credit and artificially boosted equity prices enjoyed almost effortless success, has reached the limit of its ability to postpone the workings of fundamental economic law.

Even if financial capital once appeared so abundant as to provoke strange, Swiftian fantasies about the “saving glut” and the “asset shortage,” real, physical capital was never called into being quite so readily, since its creation requires not the staccato keystroke of a fiat banker, but entrepreneurial vision, hard work, and genuine saving.

By that last we mean a voluntary abstention from current consumption, undertaken in order to improve the chance of greater plenty in the future, and not the corrupt preemption of a man’s spending power — effected with monetary trickery — which inflationists laud as “forced saving.” Being a species of initially unrecognized compulsion, this is a deceit doomed to fatal self-contradiction, once its dupes wake up to the nature of the con being practiced upon them.

Since the boom has been driven forward according to the projections of the borrowers and the low-hurdle eagerness of their lenders, rather than being predicated on meeting the imperatives of consumer sovereignty, we eventually find ambition has come to overmaster achievability and hope to have triumphed over hardheaded calculation.

To be harmonious and self-consistent, production should be guided by the wants of those whose ability to express them comes by virtue of being in harness to the same web of mutually supportive processes that help satisfy the needs of others, in turn. If not, scarce physical resources will be squandered in trying to realize misplaced visions of a world as overbrimming with affordable means as the unnaturally low interest rate treacherously seems to imply.

Worse still, once the fever of the boom spreads from its initial promoters and their preferred clients to infect the populace at large, sobriety and forbearance tends to vanish in a kind of Gresham’s Law of the spirit. A world awash with “liquidity” is not one where the steady flame of good husbandry can outshine the neon-lit promise of instant gain.

To recap, what then we find is that not only does the availability of financial capital become wholly divorced from the extent of the pool of physical capital goods; not only does much of that pool become misused (and, hence, ultimately, stripped of its original “capitalness”); but that the wellspring of capital maintenance and augmentation — namely, voluntary saving — is concreted over to provide a gaudy, Baroque fountain of greater exhaustive consumption.

As this happens, many final-goods prices will rise as they are revealed to have been undersupplied in relation to the monetary means now pouring into the hands of their would-be consumers. Where such goods also comprise inputs to production taking place further upstream (as is archetypically the case with, say, energy), this increase in expense will primarily add to costs and may therefore begin to sap profitability, if these are not either offset with greater efficiencies or fully recouped in higher selling prices.

Furthermore, as they find their standards of living slipping, those workers who are so enabled — and they will be legion at the height of the boom — will be far less shy about insisting upon more from their employers, by way of compensation for their efforts. Labor costs will now feature in the list of boardroom anxieties.

Simultaneously, since “demand” will have come to a white-hot focus of insistency on end-consumer items, all those who can do so will be shifting resources towards meeting it. If this means abandoning half-completed schemes for long-duration projects in favor of pursuing more mundane but now more lucrative goals, such as putting food on the average man’s table and keeping his boiler stoked with fuel in the here-and-now, so be it.

Unfortunately for the Keynesians, with their quaint, quasi-hydraulic depiction of the economy, such intensified end demand will not automatically translate into higher revenues for all the businesses strung out along the chain of production, just as a sudden appetite for beef will not instantly cause the grass upon which the cattle feed to grow more luxuriantly in the pasture.

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What it will tend to do instead is to strip those not immediately involved in meeting that end demand of their ability to call upon productive resources on the same terms as before.

Squeezing margins as in a vice, this development may also diminish the orders received from those closer to the shop front, since these erstwhile business customers will now be too busy scrambling to restack their emptying shelves to contemplate closing off the sales area for a refit, much less to ponder the purchase of a gimmicky new IT system, or to think of splashing out on an expensive and distinctly nonessential corporate makeover.

This last may not wholly be a matter of discretion since, besides seeing their own wage bill expand, consumer-goods merchants are likely to see inventory replacement come complete with higher invoices, so working-capital needs may soon start to crowd out much more deferrable fixed-investment schedules.

Costs up, labor more pricey, yet demand flagging: this is the fate of all too many of the myriad businesses which comprise the vast, hidden, submarine bulk of the iceberg that is our modern, highly specialized, vertically stratified, distributed assembly-line economy — to the befuddlement of a mainstream lacking a proper theory of capital or a true appreciation of the role of time.

Welcome to the crisis point of the inflationary boom!

Sean Corrigan is Chief Investment Strategist at Diapason Commodities Management. Send him mail. See his articles. Comment on the blog.

Posted in *Take Action, abortion, antiwar, Constitution, Current Events, democrat, economy, Education, election 2008, free market, Gold, government, healthcare, internet, lew rockwell, Libertarian, mccain, Mises, obama, old right, Politics, Pro Market, republican, Rights, Ron Paul, Rothbard, technology, Video | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 2 Comments »

Obama pulls at our heart strings…

Posted by Jesse on March 4, 2008

but who’s pulling his?…

January 27, 2008

Paul vs. Obama
Posted by Anthony Gregory at January 27, 2008 03:08 PM
Anyone serious about foreign policy, civil liberties, and the war on drugs — issues on which the left is typically, if however marginally, better than the right (at least today) — has got to hand it to Ron Paul for being so principled and correct. Tom Woods points out Paul’s superiority here. And let’s keep in mind that Ron Paul has been a unique voice on all these crucial issues – issues on which his own party tends to be nearly uniformly terrible – quite consistently, at times when all popular sentiment was going in the opposite direction.

Check out Ron Paul’s warning in October of 2001, at a time when most Democrats were firmly behind the war on terror. Paul was prescient then in saying the war on terror could easily become as deadly and disastrous as the war on drugs.
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February 18, 2008

Obama: Warmonger
Posted by Anthony Gregory at February 18, 2008 09:23 PM
Although I do think he’s probably less of one than Hillary and McCain, and maybe less of one than Bush, here Obama is advocating war in Pakistan.

Sure, he sounds less bad on foreign policy than McCain, now. And Bush sounded less bad on foreign policy than Gore — before he was elected.

Ron Paul is pro-peace, pro-national defense, anti-intervention and anti-empire. None of the other major candidates have come close. Too bad the best debate the establishment wants us to get to see in November, 2008, will be one between escalated neocon aggression and old-school, someone less belligerent Rockefeller imperialism. And that is only if Mr. Change actually defeats the witch.

magcoverlg.jpg

The above photo comes from this article:

Make the World Safe for Hope
Can Barack Obama, who campaigns as an icon of peace, actually be more bellicose than Bush?
Yes, he can.

Obama-mania is getting out of hand. Full-grown and well-educated men—from swooning Andrew Sullivan to the entire staff of GQ magazine—are developing “man crushes” on Barack Obama, going weak in the knees for his immaculately pressed suits, oratorical skills, and shameless hope-mongering.

“I’ve never wanted anyone more than I want you,” warbles Obama Girl in a song called “I Got a Crush on Obama,” which has been viewed over 6 million times on YouTube. Celebs are queuing up to fall at his feet. “My heart belongs to Barack,” says Scarlett Johansson. There’s a palpable whiff of semi-religious hysteria at Obama rallies. As Joel Stein wrote in the Los Angeles Times, “Obamaphilia has gotten creepy,” and its “fanatical” adherents are starting to embarrass themselves.

Actually, it’s worse than that: they are deluding themselves. Many Democrats have become so goggle-eyed, so insanely convinced that Obama is the savior of American politics (potentially rescuing both the Democratic Party from political ruin and America herself from the decadence and violence of the Bush era), that they are beginning to suffer political hallucinations. They fantasize that he is pure and righteous, a miracle-worker who, in a pique of rage, will overturn the conventions of neocon-ruled America.

The blind hope in Obama-as-messiah is most clearly expressed in the widespread delusion that he would be a “president of peace,” welcomed by a world eager to bury the warmongering ways of the office’s former occupant and renew its respect for America. Columnist Michael Kinsley praised Obama’s “valuable experience … as what you might call a ‘world man’—Kenyan father, American mother, four formative years living in Indonesia, more years in the ethnic stew of Hawaii, middle name of Hussein, and so on—in an increasingly globalized world.” But from my sedate Obamarama-free home in London, I’m not cheered by the prospect of this “world man” in the White House. Rather, I see him for what he is—or for what he threatens to become. Having never been stirred by the sight of Obama giving an MLK-style speech on the need for change, I can only take the candidates at their words. And Obama’s words are ominous indeed.

President Obama would be a warmonger. He would be a wide-eyed, zealous interventionist who would not think twice about using America’s “military muscle” (his words) to overthrow “rogue states” and to suppress America’s enemies, real and imagined. He would go farther even than President Bush in transforming the globe into America’s backyard and staffing it with spies and soldiers. He would relish the “American mission” to police the world and topple tyrannical regimes.

After eight years of Bush’s military meddling in the Middle East, if you want more war, vote Obama.

Read the rest here…..

Posted in abortion, antiwar, Constitution, Current Events, democrat, economy, Education, election 2008, free market, Gold, government, healthcare, internet, Libertarian, mccain, obama, old right, Politics, republican, Rights, Ron Paul, technology | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Recession or Depression? by Rockwell

Posted by Jesse on January 18, 2008

You can find the article here.

Many people are finally saying the R word: Recession. The fundamentals don’t look good. The externals are even scarier: dollar and stocks skidding, gold and other prices (particularly producer prices) rising. But what has tipped the psychological scales is the statistic no one has cared much about in many years: unemployment.

The actual rate is very low by any historical standard: 5%. What matters here is the direction of change. It jumped from 4.7%. In the old days, unemployment rates of 5% and 6% were considered “full employment” in the Keynesian models. If government attempted to push employment below that level (and it is absurd to think that anyone in Washington can control the economy in that way), it would risk setting off inflation, or so it was believed.

If the actual unemployment rate is low, why this wave of pessimism? All data in the postwar period of American economic history consistently show that an increase in the rate has coincided with the onset of recession. The parallel between the two is the most consistent feature of the business cycle. See the NBER list: 2001, 1990–91, 1981–82, 1980, 1973–75, 1970, 1960–61, 1957–58, 1953–54, and so on. In each case, unemployment begins to rise at the onset.

Now, keep in mind that the link between rising unemployment and recession is largely true by definition only. In other words, those charged with defining what is and what isn’t a recession put a huge weight on rising unemployment. So of course it appears that weak labor markets are what push an economy into recession.

This is sheer fallacy, and a particularly dangerous one. Rising unemployment is a symptom of a recession, not its cause. If the critical problem of recession is unemployment, policy makers are tempted to address this one area to the exclusion of everything else.

Already, Bush administration spokesmen are talking about a “fiscal stimulus” to counter this trend. But why isn’t this laughable on its face? Perhaps if Bush had been a famed penny pincher, you could see how a stimulus would make some sense on the surface. But it is hard to imagine a more fiscally profligate regime than the Bush administration. We can confidently say that more spending is not the answer.

The view that unemployment causes recession was one of the great errors of the New Deal and the Great Depression. The government looted the private sector and transferred it to visible jobs programs. It forced business to maintain high wages precisely when the market was attempting to equilibrate them downward. It increased the costs of hiring just when the costs needed to be lower.

None of it did any good; in fact, it delayed recovery for many years. Lionel Robbins, in his classic book The Great Depression, wrote this in 1934: “If it had not been for the prevalence of the view that wage rates must at all costs be maintained in order to maintain the purchasing power of the consumer, the violence of the present depression and the magnitude of the unemployment which has accompanied it would have been considerably less…. A policy which holds wage rates rigid when the equilibrium rate has altered, is a policy which creates unemployment.”

Writing in 1931, in his book Causes of the Economic Crisis, Ludwig von Mises explained that there would be no involuntary unemployment in a free market. There will always be some unemployment in a market in the same way that there are houses that are empty and not selling and resources that are not being used for production. This isn’t due to market failure but to individuals who have the freedom to lower their asking price, provided they are permitted by policy to do so and businesses are free to negotiate wages freely.

What, then, is the solution to unemployment? “The determination of wage rates must become free once again. The formation of wage rates should be hampered neither by the clubs of striking pickets nor by government’s apparatus of force. Only if the determination of wage rates is free, will they be able to fulfill their function of bringing demand and supply into balance on the labor market.”

There is an error even more fundamental than seeking an interventionist solution to the problem of unemployment. It is the attempt to seek a solution to the recession itself, as if it were the critical problem. Writing all throughout the 1930s, both Mises and F.A. Hayek tried to explain that the recession itself served a market purpose, in the same way a correction to an inflated stock market serves a purpose. It re-coordinates economic structures that have grown seriously out of balance.

In other words, they urged that we look back before the recession, to the good old days of economic boom, and realize the prosperity of the past was a partial illusion. The recession is the way that the economy tells the truth about the fundamentals. The illusion itself is caused by errors in monetary policy. Interest rates are driven down by the Fed, and this causes widespread errors in the investment sector. These investments are unsustainable over the long term. The recession is the time of cleansing out errors and reestablishing economic soundness.

The housing boom and bust is only a symptom of a wider problem. If the economy has indeed fallen into recession, we can know with certainty that recession is precisely what the economy needs the most. It is the equivalent of the drunk who needs time on the wagon.

The rap on the Austrian School of the 1930s is that they counseled a do-nothing policy on the depression. That is not true. There are many things that government can do but they all amount to doing less, which is a positive action of sorts. It must not attempt to prop up and raise wages. It must stop taxing business so heavily and raising the costs of investment. It must cut regulations that are hampering recovery. It can cut spending dramatically as a way of returning resources to the private sector where they can do some good.

What government cannot do without causing even more problems is take positive action against symptoms, such as falling stocks or housing prices, rising unemployment, business failures, and falling incomes. This is precisely what caused the Great Depression to get its name instead of being called what it might have been called: the recession of 1929–1931.

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