#Arkhaven INFOGALACTIC #Castalia House
A laundry detergent commercial. Directed by Rob Zombie. If this is not an indication of the End of Days, I don’t know what could be. I now await the second sign of the apocalypse, Al Jourgensen’s first feminine hygiene ad, with great anticipation.
Burning inside, burning inside….
The Allied Irish Bank has been determined to have officiallyeffectively defaulted:
The International Swaps and Derivatives Association (ISDA) yesterday said that a “credit event” had occurred on Allied debt, meaning the bank has effectively defaulted on its debt, a situation the Irish government has gone to extreme lengths to avoid. Credit default swaps (CDS) sold on Allied subordinated bonds and, crucially, its senior debt, have been activated by the decision of the ISDA determinations committee that decides whether a borrower has defaulted.
We should not be surprised that just as the rules about accounting for failed assets have been bent, the rules for being in default are also being actively danced around. But those interested in collecting on their derivative bets are not going to be inclined to permit a zombie bank to continue the charade enabled by the government regulators.
In tangentially related news, it appears that Bernanke finally blinked. There will be no QE3, at least not for the time being. There will, however be QE Lite, which is totally different because it will not be called quantitative easing and will be done on a smaller scale. For the moment.
There was a time, as a boy, that I read the Wall Street Journal and marveled at its apparent erudition. Now, I can seldom read a single article without rolling my eyes. But this pro-Keynesian article by Alan Blinder is remarkable for its cluelessness.
The generic conservative view that government is “too big” in some abstract sense leads to a strong predisposition against spending. OK. But the question remains: How can the government destroy jobs by either hiring people directly or buying things from private companies? For example, how is it that public purchases of computers destroy jobs but private purchases of computers create them?
One possible answer is that the taxes necessary to pay for the government spending destroy more jobs than the spending creates. That’s a logical possibility, although it would require extremely inept choices of how to spend the money and how to raise the revenue. But tax-financed spending is not what’s at issue today. The current debate is about deficit spending: raising spending without raising taxes.
For example, the large fiscal stimulus enacted in 2009 was not “paid for.” Yet it has been claimed that it created essentially no jobs. Really? With spending under the Recovery Act exceeding $600 billion (and tax cuts exceeding $200 billion), that would be quite a trick. How in the world could all that spending, accompanied by tax cuts, fail to raise employment? In fact, according to Congressional Budget Office estimates, the stimulus’s effect on employment in 2010 was at least 1.3 million net new jobs, and perhaps as many as 3.3 million.
A second job-destroying mechanism operates through higher interest rates. When the government borrows to finance spending, that pushes interest rates up, which dissuades some businesses from investing. Thus falling private investment destroys jobs just as rising government spending is creating them.
There are times when this “crowding-out” argument is relevant. But not today. The Federal Reserve has been holding interest rates at ultra-low levels for several years, and will continue to do so. If interest rates don’t rise, you don’t get crowding out.
I’m not in the mood to rip Blinder’s article apart; I’ve still got the third section of Hazlitt’s Chapter 11 to complete. But a one word rebuttal should suffice: malinvestment. My main object with regards to this post is to point out the sheer chicanery Blinder uses in making one of his points. He claims that there can be no “crowding out” if interest rates don’t rise; since the Fed has kept interest rates low, then government borrowing must not be having any effect on private borrowing.
But don’t you think it’s just a little strange to appeal to a supposedly causal factor rather than simply looking at the relevant metric? Which is to say, the amount of government borrowing compared to private borrowing. As it happens the Q1-11 Z1 report on total debt was released two weeks ago and the chart below shows exactly what has happened since 2005.
In 2005, government debt accounted for 16% of all debt, (11.6% Federal). In 2011, it accounts for 23% of total credit market debt, which has declined about $280 billion since its peak of Q3-08. In that time, household sector debt has fallen from 28% to 25% and the financial sector has reduced its debt from 32% to 27%. This would appear to show the very “crowding out” that Blinder claims cannot be possible due to the low interest rates.
But the key word is “appear”. It doesn’t actually show any crowding out, because Blinder’s entire economic model is incorrect. What it actually shows is the expected contraction of the private sector due to the ongoing economic depression as well as the utterly futile attempt of the Federal Reserve and the federal government to do exactly what Blinder wants them to do more of, which is to fill in the gap created by the private contraction. This is why the GDP numbers have held up despite all of the obvious signs of severe economic contraction; it is also why the Congress is going to raise the debt ceiling no matter what the Red Faction members say.
The problem is that it only digs the hole deeper. What we are seeing is the transformation of a mixed economy into a fully centralized command economy, where all of the economic production and consumption is directed by the State. The good news, or at least what will have to pass for the good news, is that the system will collapse of its own weight long before the red line reaches 100. But there is almost no chance that the economic interventionists will succeed and that yellow and blue lines will reverse course. They are unlikely to do anything but head downward at a faster weight, since they have already realized significant losses that have not yet been accounted for.
Just based on a very rough off-the-top-of-my-head calculation, both the blue and yellow lines would be down around 20% already if the housing market debacle was being realistically reported. To put it in perspective, if total credit market debt had been expanding at the rate it was expanding from 2005 to 2009, it would stand at $62.6 trillion, $10 trillion more than it is today. This indicates a total private debt-demand shortfall of around $14 trillion – or an entire year’s worth of GDP consumption.
RC still believes Miss Coulter was correct to attack libertarians as “cowardly frauds”:
Your article was interesting, but never addressed the substance of Ms. Coulter’s presentation. You offer several examples that purport to contradict her statements.
Let’s look at one:
“It is worth noting that in some states, such as Washington, all marriage-related information was kept at the county level until 1968. And yet, civil society somehow managed to settle these issues without devolving into total chaos.”
What’s missing? The fact that there was never previously a major societal push by homosexuals to attack the millenia-long history of traditional marriage. Somehow you fail to identify and address that significant departure from world and US history that you purport to address.
What else is missing? Never have historically bedrock institutions of morality like mainline religious denominations been so tolerant – nay supportive – of aberrant social behavior such as homosexuality.
There are a plethora of arguments and examples that could be given along these lines, all having to do with the current breakdown of societal mores and values at a level unprecendented since perhaps Roman times.
Don’t you see the difference? I think Ms. Coulter was completey correct in her wry observations concerning Libertarians. Hopefully you will, too.
Do I see the difference? No, I see a conservative who didn’t acknowledge a single one of the errors in Miss Coulter’s article that I pointed out. Of course, RC is clearly a historical illiterate with no clue what he’s talking about, given his assertion that “the current breakdown of societal mores and values” is unprecedented since Roman times. He should read Boccaccio, Solzhenitsyn, or the history of the Spanish Civil War if he wants to see what a real breakdown of societal mores and values looks like.
American culture is filth, but it is a mistake to confuse the media’s Hollywood version of it, very much skewed by its gay Jewish perspective, for the reality. In the real world, the quarterback didn’t dump the pretty blonde cheerleader at prom in favor of the ugly Barbara Streisand wannabee, every school bully isn’t a self-hating homosexual, everyone doesn’t want to move to New York City*, and a crack team of Jewish commandos didn’t win the war in Europe.
In any event, the column sufficiently demonstrated that Coulter is very poorly situated to be labeling anyone, let alone libertarians, as “cowardly frauds”. As Paul Gottfried noted in “The Mainstreaming of Michelle Malkin“, it’s only a matter of time before a fame-driven media whore learns to dance to the crack of the party establishment’s whip. No doubt Dana Loesch will be the next to look beautiful in chains.
“A recent syndicated column by Michelle Malkin indicates what happens to interesting conservative commentators when they sign on as GOP flacks: They become predictable Republican mouthpieces and attack dogs against the Dems…. As a Republican journalist and media entertainer, Michelle is following in the well-trod path of others such as Ann Coulter. Like Michelle, Ann started out as a very feisty rightwing news commentator, but unlike Michelle, Ann could be devastatingly witty as well as edgy. But she, too, succumbed to various pressures and became a sharp-tongued version of Sean Hannity rather than remaining a figure of the traditional right.”
Atheists often like to erroneously claim that Christians are more likely to be imprisoned than atheists. Both Sam Harris and Richard Dawkins have made this bizarre, and irrelevant, appeal to atheist “morality”. But these arguments are inevitably based on nothing substantive, and more importantly, they are belied by actual prison statistics. While the USA doesn’t keep comprehensive statistics related to religion, the UK does, and it’s here that we can see the actual facts of the matter.
What is interesting is that it appears atheists have become significantly more criminal since I found the 2002 statistics when writing TIA. (Since then, the UK Ministry of Justice has gotten its online act together and it’s much easier to find the relevant annual statistics.) In the seven years between 2002 and 2009, the number of imprisoned High Church Atheists rose 475%, from 0.17% of the England and Wales prison population to 0.84%. That’s still fairly small, of course, but it’s worth noting that it is a larger percentage of the prison population than is represented by any of the following religions and denominations:
Baptist, Congregational, Methodist, Pentecostal, Presbyterian, Episcopalian, Quaker, United Reformed Church, Hindu, Jewish, Sikh, Christian Scientist, Coptic Christian, Greek/Russian Orthodox, Mormon, Jehovah’s Witnesses, Seven Day Adventist, BaHai, Jain, Pagan, Rastafarian, Scientologist, Zoroastrian.
That’s only a partial list, as I left out about an equal number of more obscure denominations and religions. It was also the second-fastest rate of growth, surpassed only by the agnostic population, which increased 812% to 0.64% of the total prison population.
However, as I pointed out in TIA, the correct comparison between Christians and atheists is not between all Christians and self-identified High Church Atheists, but rather between all Christians and all No Religion atheists, less agnostics. It is easy to demonstrate why this is so, the inevitable Atheist Dance notwithstanding, given the correct definition of an atheist as “one who believes that God does not exist” rather than “one who calls himself an atheist”. This assertion is supported by the action of the atheists at the British Humanist Association and their census campaign, which asserts that is an individual’s identification with a religion – or presumably, identification with a specific appellation – irrespective of the extent of their religious belief or practice is not the appropriate concept to measure. And while one could argue that “no religion” is not perfectly synonymous with “belief that God does not exist”, it is safe to assume that most, though not all, no religion individuals are practical atheists even if they are not inclined to call themselves atheists. It is also in keeping with the practice of Richard Dawkins, the British Humanist Association, and many vocal atheists to consider “no religion” a form of atheism.
The reason this matters is that is the Low Church atheists of the No Religion variety who make up 33.1% of the prison population, more than twice the 15% of the general population. (The 15.1% number is from 2001 and will likely be around 20% in the 2011 census; I will update the numbers accordingly when they become available.) The statistical overrepresentation of no religion atheists in prison is surpassed only by Buddhists (0.3% general, 2.2% prison) and Muslims (2.8% general, 11.9% prison).
So, keep this in mind the next time that an atheist attempts to claim that atheists are more moral or less criminal than Christians. All they are doing is cherry-picking the most intelligent subset of the atheist population and comparing it with the entire intelligence spectrum of the Christian population. Since low IQ tends to correspond highly with criminal behavior and imprisonment, it should come as no surprise that self-styled Atheists are less likely to be found in prison than no religion atheists.
As any fully sentient human must be, Fred is an evolution skeptic:
Evolutionists espouse the mechanistic and deterministic view, though more as metaphysics than science. Selective pressures, plausible though not measurable, defined, or confirmed, push evolution in certain directions. Much of it is wonderfully questionable, but we will pass over this. The evolutionist, again meaning the sort for whom evolution must explain all human behavior, falls into difficulties when he considers humanity.
Consider morality. For the evolutionist, everything must be explained in terms of maximizing the production of offspring so that, for example, honesty serves to promote cohesion in hunting bands, making them more efficient and therefore having more children. Right and wrong do not exist, nor Good and Evil, as these have no meaning within evolutionism unless they can be tied to fecundity.
Which leads the evolutionist into logical swamps. I have asked such people why I should not make a hobby of torturing to death the genetically feeble-minded. In evolutionary terms, killing them is a good idea, as it reduces the diversion of resources in maintaining them and raises the average intelligence of the group.
How they are killed has no evolutionary importance, and in any event executing them with a blowtorch would consist merely in substituting certain chemical reactions for others: Pain has no existence in physics.
Of course if I actually did such a thing, the evangelists of scientism would be horrified. They are not immoral. They just can’t explain why they are not.
I now await with no little pleasure the predictable attempts to redirect the discussion from the obvious problems with evolution to religion, creationism, and intelligent design in lieu of actually attempting to defend their “theorum”. Note to the insufficiently read: “theorum” is the word for a a statement that has been not proven on the basis of previously established statements, but one that credentialed midwits would like you to accept at face value.
Over at the Black Gate, I comment upon what may be the ultimate tribute to an accomplishment in both filmmaking and literary characterization.
It is shocking to discover that pumping $19 billion (nearly one year of its GDP) into aid for Afghanistan has achieved next to nothing in the way of substantive results in light of how providing financial resources to unproductive, low-IQ, semi-civilized populations has worked so well in the United States over the last 50 years:
After a thorough two-year review of U.S. aid efforts in Afghanistan, the staff of the Senate Foreign Relations Committee emphasized, “The unintended consequences of pumping large amounts of money into a war zone cannot be underestimated.”
Much of the aid effort was premised on the assumption that development would foster stability. Young men with jobs wouldn’t plant roadside bombs. Communities with growing economies would reject the Taliban. This assumption was based on the modern prejudice that bad behavior has material roots. Give people money and jobs and you will improve their character and behavior.
In Afghanistan, as elsewhere, this assumption seems not to be true. A conference of experts brought together last year in Wilton Park in Britain concluded that there is a “surprisingly weak evidence base for the effectiveness of aid in promoting stabilization and security objectives” in Afghanistan.
Violence doesn’t stem from poverty. It stems from grudges, tribal dynamics and religious fanaticism — none of which can be ameliorated by building new roads. The poorest parts of the country are not the most violent. Meanwhile, the influx of aid has, in many cases, created dependency, fed corruption, contributed to insecurity and undermined the host government’s capacity to oversee sustainable programs.
To put things in perspective, what the USA has done is the equivalent of someone giving Americans an additional $1.36 trillion every year for 10 years. Perhaps the greatest irony is that this attempt to replicate the War on Poverty on an international level was actually labeled “Smart Power”. Such an appellation highlights the supremely clueless arrogance of the government bureaucrat, where there is no such thing as a policy failure, even completely predictable disasters are put down to nothing more than the disappointing result of an improper implementation.
Card-carrying Red Faction members would do well to note that this grand distributional debacle was not the result of the evil Blue Faction running amok again, it was the enthusiastic policy of “national greatness conservatives” of the sort you are hoping will rescue you from another four years of the SSO administration.
This would appear to be a timely article. However, this piece on prospective profit repatriation in the NYT must be a shameless lie. It’s simply not possible for there to be vast dollar balances sitting there in overseas accounts, remaining unused. After all, as we learned from Henry Hazlitt, “Because we have permitted the British to sell more to us, they are now able to buy more from us. They are, in fact, eventually forced to buy more from us if their dollar balances are not to remain perpetually unused. So as a result of letting in more British goods, we must export more American goods.”
Some of the nation’s largest corporations have amassed vast profits outside the country and are pressing Congress and the Obama administration for a tax break to bring the money home. Apple has $12 billion waiting offshore, Google has $17 billion and Microsoft, $29 billion…. “For every billion dollars that we invest, that creates 15,000 to 20,000 jobs either directly or indirectly,” Jim Rogers, the chief of Duke Energy, said at the conference. Duke has $1.3 billion in profits overseas.
We must, must we? Note that these are nominally American organizations that are doing precisely what the free trade champion claims that the British ones could not do. Furthermore, note that these offshore funds are not the result of imports, but rather exports. So, in addition to the loss of jobs due to imports, we’re actually seeing them lost – or at least delayed – due to supposedly beneficial exports.
This is a negative aspect of free trade that I do not believe was ever anticipated by either its historical advocates or its critics. And it underlines Ian Fletcher’s point that there are problems with free trade that go very far beyond simple matters of conventional protectionism and tariffs.
It is remarkable to see the likes of Rogers claim that each billion brought back would create 15,000 jobs, given his apparent failure to notice that if that were true, exporting that billion must have already cost a similar number of jobs. Of course, he’s incorrect about the relationship between repatriated profits and jobs, since the 2005 tax incentive that brought $312 billion back into the USA did not generate between 4,680,000 and 6,420,000 new jobs. What actually happened is that total employment increased to 2,383,000 in 2006, just barely more than the 2,268,000 increase in the year that preceded the repatriation program.
Note to the intrepid free trade advocates: This is the sort of post where it is perfectly appropriate for you to trot out your boilerplate arguments in support of free trade as if no one who studies economics has ever heard them before. They’re not necessarily going to be any more convincing than they were when you were erroneously presenting them as if they had anything at all to do with the arguments that Henry Hazlitt made in Chapter 11 of Economics in One Lesson, but they will at least be potentially relevant here.
This should not, however, be interpreted as an indication that I am inclined to pay any more attention to them now than I did previously.
Ross Douthat defects in the New York Times:
Rubio is the great neoconservative hope, the champion of a foreign policy that boldly goes abroad in search of monsters to destroy. In the Senate, he’s constantly pressed for a more hawkish line against the Mideast’s bad actors. His maiden Senate speech was a paean to national greatness, whose peroration invoked John F. Kennedy and insisted that America remain the “watchman on the wall of world freedom.”
Paul, on the other hand, has smoothed the crankish edges off his famous father’s antiwar conservatism, reframing it in the language of constitutionalism, the national interest and the budget deficit. (As Matt Continetti noted in The Weekly Standard, “Whereas Ron Paul criticizes U.S. interventionism in tropes familiar to the left — anti-imperial blowback, manipulation by neocons, moral equivalence — Rand Paul merely says America doesn’t have the money.”)….
The country is weary of war, but the story Rubio tells, with eloquence and passion, is still tremendously appealing — the story of a great republic armed and righteous, with no limits on what it can accomplish in the world.
This is a story that many conservatives — and many Americans — want to believe. Once, I believed it myself.
But that was many years and many wars ago, and now I think Rand Paul is right.
One unmentioned factor here is that Rand Paul is an native American. Marco Rubio is not. He may have grown up in the United States, but he is a Cuban raised in a community that has been agitating for the USA to overthrow the Castro regime for decades. So, it should come as little surprise that Rubio is so content to ignore the American national interest in favor of the latest neocon cause du jour. Because neocons, regardless of their background, have limited allegiance to the national interest, they see the nation primarily as a means rather than an end.
As I have pointed out in the past, it was always mistaken to conflate neoconservatism with Jews and the Israel First lobby. They are merely the most obvious example of what would be more accurately be described as Neoconnery, (there is nothing conservative about it), and is a concept that is as old as the Roman Republic. Back then, when Rome ruled over the Mediterranean just as America rules over the Atlantic and Pacific, foreign nobles would come to Rome and offer promises of allegiance, troops, and gold in return for a Rome-supported crown. These Friends of Rome were the neocons of their day.
On the one hand, it is encouraging that even the moderate conservatives are beginning to respond to the geostrategic and financial realism of the Red Faction’s libertarians. On the other, it is depressing that even bankruptcy isn’t enough to slow down those like Rubio, who talks a good game but appears to see America as little more than a tool to serve foreign interests.
Those who deny that transnational freedom of movement will tend to ultimately work against the interests of human liberty would do well to pay attention to the way in which the foreign policy positions of second- and third-generation immigrants tend to diverge from those leaders whose families are more rooted in the nation. Consider: would any other British leader have intrigued so shamelessly to manipulate the USA into World War II as the half-American Winston Churchill? All great powers are tempted by the neocons of their day. And history indicates that most eventually succumb to the temptation, and as a result, follow the predictable trajectory of decline and fall. It is far from the only factor in national decline, of course, but it is an easily recognized one.
On a stylistic note, full credit to Douthat for referencing John Quincy Adam’s 1821 Independence Day address. Read it and mourn for an America that post-Americans like Marco Rubio have never known and would trample upon in their Wilsonian pursuit of “national greatness”.
America, in the assembly of nations, since her admission among them, has invariably, though often fruitlessly, held forth to them the hand of honest friendship, of equal freedom, of generous reciprocity…. Wherever the standard of freedom and Independence has been or shall be unfurled, there will her heart, her benedictions and her prayers be. But she goes not abroad, in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own. She will commend the general cause by the countenance of her voice, and the benignant sympathy of her example. She well knows that by once enlisting under other banners than her own, were they even the banners of foreign independence, she would involve herself beyond the power of extrication, in all the wars of interest and intrigue, of individual avarice, envy, and ambition, which assume the colors and usurp the standard of freedom. The fundamental maxims of her policy would insensibly change from liberty to force.