INTERMEX POWER

The Sinful State. Mises Daily: by Llewellyn H. Rockwell Jr.

Hardly anyone talks of the table of virtues and vices anymore — which includes the Seven Deadly Sins — but in reviewing them, we find that they nicely sum up the foundation of bourgeois ethics, and provide a solid moral critique of the modern state.
Now, libertarians don't often talk about virtues and vices, mainly because we agree with Lysander Spooner that vices are not crimes, and that the law ought only to address the latter. At the same time, we do need to observe that vices and virtues — and our conception of what constitutes proper behavior and culture generally — have a strong bearing on the rise and decline of freedom.

"One of the key requirements for a 'sustainable' job is a profitable business."

I went to Starbucks recently for a cup of coffee and noticed a small sign and some "Create Jobs for USA" wristbands for sale. If you want to, you can donate $5, get a wristband, and support the Opportunity Finance Network, which is a nonprofit, private community-development financial institution. The $5 donation will help poor entrepreneurs start or maintain a business in typically underserved areas with the idea that this will help create or sustain small-business jobs. This sounds quite noble but mischaracterizes what jobs are and where they originate.

Seventy-five years ago, Henry George spelled out his "single tax" program Progress and Poverty, one of the best-selling economic works of all time. According to E.R. Pease, socialist historian and long-time secretary of the Fabian Society, this volume "beyond all question had more to do with the socialist revival of that period in England than any other book."

Mises Academy: Peter Klein and Art Carden teache Big Business and the Market: Friends or Foes?

Studying economics usually makes one enthusiastic about business and skeptical of politics. Cooperation under commercial institutions is voluntary and wealth creating, while cooperation under political institutions is coercive and wealth reducing. Historically, however, the business firm and the state have been closely linked. Businesses, large and small, are affected by the state: they lobby the state, they are often harmed by the state, and sometimes they benefit from the state. "Big business," in particular, has a long, complex, and often troubled relationship with politicians and bureaucrats. Ayn Rand called big business "America's most persecuted minority," while Murray Rothbard countered that

in the contemporary world of total neo-mercantilism and what is essentially a neo-fascist "corporate state" … Big Business most likely got that way through an intricate and decisive network of subsidies, privileges, and direct and indirect grants of monopoly protection.

‘Legalized Bribery’: How Bad is Congressional Insider Trading? You Might be Shocked at Some of the Details Revealed by Glenn Beck and Peter Schweizer

“How can we fix our country with this going on?” Glenn Beck asks Peter Schweizer.
“We can’t,” Schweizer responds, shaking his head. “And you know, Glenn, if we can’t fix this?”
“You can’t fix anything,” Beck says, finishing the sentence for him.
What are they discussing that’s so serious as to prohibit America from being fixed? Congressional insider trading.

One convict will think twice before attempting to mug anyone again.
The Chicago Sun-Times reports that 24-year-old Anthony Miranda allegedly pulled a gun on a driver in a parked car on the Southwest Side of Chicago Friday night.
The thug ended up with two black eyes and a gunshot wound to the ankle.
The intended victim…turned out to be an MMA fighter.
The Sun-Times reports on the Cook County man who now faces charges of armed robbery and aggravated discharge of a firearm, a Class X felony:

“After getting some money, he ordered the driver out of the car, police News Affairs Officer John Mirabelli said.
At some point, Miranda’s attention was diverted and the victim was able to grab control of the gun and the two wrestled.
During the fight, Miranda accidentally discharged his gun, shooting himself in the ankle, Mirabelli said.
The victim, who told police he’s a martial arts expert and ultimate fighting champion was able to pin Miranda down until police arrived. Police arrived to find Miranda with a face full of cuts and two black eyes.

Miranda had originally asked the man, whose name the police have yet not released, for lighter.
Fox Chicago reports that Miranda has had several convictions in the past, including at least one for a residential burglary. The 24-year-old was taken to the hospital Friday night and ordered held on $350,000 bond Sunday.

Gerald Celente Endorses Ron Paul For President 11/29/11

Salon Attack on Ron Paul Refuted

Woods Appeals to Key Iowa Radio Host: Please Endorse Ron Paul

Rich Nations That Went Broke by Spending Too Much. by Jim Powell

Government spending drives taxes, deficits, debt and inflation, so it's at the core of our economic problems. What to do about runaway spending? The tendency is to imagine that it might be controlled by electing the right politicians, enacting a law like a balanced budget amendment, passing a spending limitation ballot initiative, establishing a super committee or coming up with some kind of "grand bargain."

What about the 99 Percent?. by Arnold Kling

I would never have guessed that lowering this particular borrowing rate would be a significant policy move. But the opinion of the stock markets is that it is a major development, perhaps a decisive move.

The action leaves some important matters unchanged. No government has brought its budget under control. No political impasse has been broken. No bank has become better capitalized. No wages within the euro zone have adjusted to address their misalignment. And yet the markets are in a state of euphoria. It is like watching Ben Bernanke play Peter Pan, the European banks as an ailing Tinkerbell, and the stock market as the audience, fervently proclaiming "We believe in fairies!"
Walter Bagehot's classic line about central banking is that in a crisis you must be willing to "Lend freely, at a penalty rate." The Fed's actions are consistent with the first half, but not the second. If the banks need our money so badly, then why shouldn't the Fed make them pay a premium for it?

Arnold Kling is an adjunct scholar at the Cato Institute and a member of the Financial Markets Working Group at the Mercatus Center at George Mason University.

More by Arnold Kling

It seems that the one thing we can always count on the Federal Reserve to do is lend money at low interest rates to big banks when large investors lose confidence in those banks. In the circles in which the Fed's top officials travel, it is understood that such action is the highest form of public service.
This raises a number of questions. Are the Fed's actions in the interest of the 99 percent of us who do not own many shares of European banks? Are the Fed's actions within its Congressional mandate? Can the Fed's far-reaching autonomy be brought within the framework of a Constitutional democracy? Does Congress care?
Am I being too cynical, or are others not cynical enough?

Legal Systems without Government

President Obama's Top 10 Constitutional Violations. by Ilya Shapiro

One of the biggest political changes that 2011 brought — in large part due to the tea parties and their effect on the 2010 election — is the centrality of the Constitution to our public discourse. Lawmakers and citizens no longer consider simply whether a given bill or policy proposal is a good idea but whether it is constitutional. "Where does the government get the power to do that?" is often critics' rallying cry.

Dodd-Frank Law: Regulations Won't Fix What's Wrong. by Mark A. Calabria

The new Consumer Financial Protection Bureau in many ways exemplifies the problem with the Dodd-Frank financial reform: It ignores the underlying causes of the financial crisis while pursuing an unrelated partisan agenda.

Advocates of the new agency argue that regulators put too much emphasis on banks' safety and soundness at the expense of consumer protection, so the two functions had to be separated. But after more than 300 bank failures and trillions of dollars of assistance to the financial sector, it would seem there was not enough emphasis on safety and soundness.

Tax Rates, Inequality and the 1% by Alan Reynolds

A recent report from the Congressional Budget Office (CB0) says, "The share of income received by the top 1% grew from about 8% in 1979 to over 17% in 2007."

This news caused quite a stir, feeding the left's obsession with inequality. Washington Post columnist Eugene Robinson, for example, said this "jaw-dropping report" shows "why the Occupy Wall Street protests have struck such a nerve." The New York Times opined that the study is "likely to have a major impact on the debate in Congress over the fairness of federal tax and spending policies."

Democracy versus Bureaucracy. by Richard W. Rahn

The financial crisis in Europe has resulted in the appointment of new prime ministers in both Greece and Italy, in reality, by the Germans and French, rather than through the ballot box in Greece and Italy. This raises the question, "Is it possible to have both a bureaucratic welfare state and a democracy that protects individual liberties?"

In the United States, as well as most other countries, the people are increasingly governed and regulated by unelected bureaucrats who create"administrative law." The rise of the bureaucratic state, at least in the U.S., is only about 80 years old. The number of federal employees grew slowly over the first hundred years of the American Republic so by the time of the first Grover Cleveland administration in the 1880s, there were still fewer than 100,000 federal civilian employees. By 1925, the number had grown to about a half a million, and now there are almost 3 million civilian federal government employees, plus another 17 million state and local government employees. Many government services are now contracted out, such as printing and maintenance, so the proportion of government employees engaged in some sort of regulation, rather than providing a service, has risen.

U.S. Should Learn from Europe's Welfare State Mistakes. by Daniel J. Mitchell

Our long-run outlook is grim, but at least we still have time to reform the entitlement programs and save America from Greek-style fiscal collapse.

The conventional wisdom among economists is that a nation gets in deep trouble when government debt reaches 90 percent of GDP. That's generally true, but it would be much more accurate to say that a nation gets in deep trouble when debt approaches 90 percent of GDP and the fiscal outlook shows even more red ink.
But this distinction doesn't really matter much for the United States and Europe. Thanks to a combination of entitlement programs and aging populations, both face a bleak fiscal future. A 2010 study from the Bank for International Settlement shows that government debt in most industrialized nations will soar above 200 percent of GDP (in some cases, much higher) within the next few decades.

European Endgame. by Johan Norberg

If you owe your bank a hundred dollars, you have a problem. But if you owe it a million, it has a problem, the saying goes. Today we can add that if the governments of Italy, Spain, Portugal, Greece and Ireland owe your banks one trillion dollars, we're all dead. And that might be where the Euro-zone is headed.

Instead of fixing the financial crisis, the EU postponed it with a get-poor-quick pyramid scheme, by sending the debts of households to banks, who sent it to governments, and governments passed it on to the Euro-zone. Now the Euro governments find that they are at the end of the chain, with a crushing burden. Markets are beginning to price in a small risk that the entire European financial system can collapse — and reacting accordingly.
Debts that were unsustainable in 2008 aren't more sustainable just because they were transferred from banks to governments. Especially when those governments overspent in good times, and have few reserves to deal with bad times when the budget of big welfare states suffer more than others when tax revenue is down and benefits expand automatically.

Sooner or later Europe has to stop throwing bad euros after good euros.

In a way this is 2008 again, with the same toxic mix of misguided regulation and moral hazard at work. Back then, it was banks and mortgage securities; this time, it's euro states and government bonds.
Basel regulations categorizes sovereign debt as risk-free, and a bank's exposure to sovereign debt in its own currency has zero risk weights when capital requirements are calculated. And right now, banks are actually preparing themselves for Basel III, which forces them to build bigger liquidity buffers, and most of it has to come in the form of sovereign debt.
The ECB also subsidized government debt because banks could buy short-term government bonds from weak states and deposit them with ECB as collateral for loans. It was a way to make a decent profit from the margin between bond yields and lending rates — which they invested in more bonds.
Poor Euro economies used the implicit guarantee that Germany would bail them out, to lend cheaply and increase spending and wages as competitiveness collapsed. This is what made it seem like a good idea to retire at 55 and give Greek engine-drivers a bonus of $5,000 a year if they washed their hands.
The Euro-zone has now had to bail out Greece, Portugal and Ireland, but this just creates larger problems in the future. If someone can't pay his debts, you don't help him by giving him a larger loan. It expands the total debt burden and creates a need for more bailouts.
It also undermines the strong economies that have to pay up. Italy and Spain have already gone from being trusted life-savers to becoming potential drowning victims. The â‚¬440 bn European Financial Stability Facility (EFSF) was enough to deal with small, peripheral countries. But it will be difficult to bailout Spain, and impossible to deal with Italy. Hence the proposals to double its size.
But the EFSF can only borrow cheaply on capital markets as long as it is backed by rich triple-A countries. The second biggest is France, but after more than 35 years of deficit spending, bigger guarantees could result in a downgrade. If France goes, the whole burden ends up with Germany, which would have to contribute with guarantees amounting to a quarter of its GDP. We think of Germany as indestructible, but it already has a public debt of 82 percent and growth of 0.1 percent in the second quarter of 2011. Trying to save more drowning victims could end up sinking the life boat.
The assumption that the European Central Bank can always step in is dangerously flawed. It has already lent around $700 billion to weak Euro countries and their banks. It is grossly leveraged and it wouldn't take large losses on those loans for the central bank's capital base to be wiped out — and in need of a bailout itself.
Hope is fighting a losing battle against arithmetic. Sooner or later Europe has to stop throwing bad euros after good euros. Hopefully it can be done in an orderly way, with debt-restructuring, far-reaching long-term debt reduction plans and reforms to get back to growth.

Johan Norberg is a senior fellow at the Cato Institute and author of Financial Fiasco: How America's Infatuation with Homeownership and Easy Money Created the Economic Crisis.

More by Johan Norberg

The alternative is a chaotic end game, where reforms are postponed and more money is sent to mismanaged economies until strong economies are also on the brink. Sooner or later the bailouts will end — either when states are out of money or when voters are out of patience. Then the markets would also flee big euro economies and we would see a series of defaults and banking crises around Europe.

Trading with the Bear: Why Russia's Entry into the WTO Is in America's Interest. by Daniel Griswold and Douglas Peterson

Russia is poised to join the World Trade Organization (WTO), solidifying its transition from a closed communist economy to a full participant in the global marketplace. The only question is whether the United States will embrace Russia as a fellow WTO member or forfeit the benefits for the sake of an outdated policy rooted in the Cold War.

Russia's petition to join the WTO dates back to 1993. Since that time it has negotiated accession agreements with all major WTO members, including the United States, committing to open its economy further and to accept WTO rules on nondiscrimination, dispute settlement, intellectual property, and a range of other trade-related issues. WTO members are expected to approve Russia's admission at the organization's ministerial meeting in Geneva, Switzerland, December 15–17. To enjoy the enhanced access to Russia's market, the U.S. government will need to grant permanent normal trade relations (PNTR) to the Russian Federation. Under the 1974 Jackson-Vanik Amendment, Congress is required annually to pass a special exemption for Russia extending it conditional access to the U.S. market. The law was originally intended to withhold normal-trade-relations status from communist countries that did not allow Jewish citizens to freely emigrate. Even after the fall the Berlin Wall in 1989 and the dissolution of the Soviet Union in 1991, the law continued to apply to most former communist countries because of their continued status as "nonmarket economies."

Back to Bush's Big-Government Conservatism. by Michael D. Tanner

In the wake of the disastrous Bush presidency and the Republican defeats of 2006 and 2008, it was widely assumed that the GOP had repudiated the idea that big government could be harnessed for conservative ends. And, of course, in 2010, the Tea Party led a return to conservatism's traditional small-government roots, resulting in the biggest Republican landslide in 70 years. One would think that settled the matter.

Yet, just five weeks out from the Iowa caucuses, both of the front-runners for the Republican nomination are strong advocates for a bigger, more activist government. Obviously, everything is relative. Neither Mitt Romney nor Newt Gingrich represents the sort of income-redistributing welfare state embodied by the Obama administration. But neither are they a threat to truly cut back the size, cost, and intrusiveness of the federal government.

Keynesian Policies Have Failed. by Chris Edwards

Lawmakers are considering extending temporary payroll tax cuts. But the policy is based on faulty Keynesian theories and misplaced confidence in the government's ability to micromanage short-run growth.

In textbook Keynesian terms, federal deficits stimulate growth by goosing "aggregate demand," or consumer spending. Since the recession began, we've had a lot of goosing — deficits were $459 billion in 2008, $1.4 trillion in 2009, $1.3 trillion in 2010, and $1.3 trillion in 2011. Despite that huge supposed stimulus, unemployment remains remarkably high and the recovery has been the slowest since World War II.

Now It's 'Obama the Irrelevant'

by Gene Healy

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If our fashion-conscious president still finds the time to read the lad-mags, December's GQ had to hurt.

Obama made the magazine's list of "The 25 Least Influential People Alive," along with Tiger Woods's ex-caddie, the prosecutor who couldn't convict Casey Anthony, and MTV tart Tila Tequila.
Obama "should be the most transformational figure of the century," GQ carped, "Instead, he wields all the power of a substitute teacher at night school."
Sure, the piece was somewhat tongue-in-cheek, but there's real venom behind the smirk. Now is the hour of liberal discontent with the Obama presidency.

Obama's problems are all our fault, you see.

Liberty Conspiracy - 10-13-11 News! US Politicians Decry Assassination Plot - After US Assassinates US Citizen, Dale Farm, UK, Update

Anyone notice that politicians seem to be more and more confident that they can get away with double-speak and hypocrisy? Just two weeks ago, the US government killed a US citizen they accused of "terrorism", killed without trial or a presentation of the evidence against him. Then, a fortnight later, the US government proudly announces that its agents have busted a plot to ASSASSINATE an Arab ambassador. While the Arab ambassador is not seen as a criminal in the eyes of the US politicians, the Iranians claim that Saudi Arabia has been guilty of assisting the US government in its campaign of killings of innocent Muslims in the Middle East. So on the one hand, the US claims it is illegal and bad to try to assassinate a person who has not been proven to have done anything bad, and on the other, the US officials claim that it is a noble thing to kill a person who has not been proven to have done anything bad -- but in the latter case, it is the US government that's doing the killing, so it is alright, we're told.

BIG SISTER IS WATCHING YOU

Unconstitutional Homeland Security "Tsar" Janet Napolitano recently took offense to being called "Big Sis", saying charges that have been leveled against her as an invader of privacy and a breaker of the 4th Amendment are spurious. (Actually, she wasn't so specific as to bother with talking about the 4th Amendment.) We offer her side of the argument, and then offer the facts, which make her arguments look even sillier than they already sound.
(Really, at times it's difficult to even comprehend what she is trying to express in extemporaneous dialogue!)
This production offers a great deal of evidence showing the illegality of the TSA and Homeland Security Admin, as well as free market alternatives that allow people to CHOOSE and be FREE to get the security and privacy levels they desire -- all while actually being more vigilant against violence.
Great stuff! With music by Fitz and The Tantrums, Public Image Limited, and The Damned!
Be Seeing You!