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This is an excellent post on political economy that is well worth reading, even if “corporatism” or “faux-financialism” might be more accurate terms for the collapsing system of “state capitalism” it describes.

The current state and the current banking sector require one another; neither can exist without the other. They are so reciprocally intertwined that each is an extension of the other…. It is therefore no surprise that the loudest advocates for the effective nationalization of the finance industry are to be found on Wall Street; at this point, failing financiers welcome any government actions that will socialize their risks. But such actions that socialize “losses while keeping the profits in private hands” are a hallmark of fascist and neofascist economies. They are just another manifestation of “Horwitz’s First Law of Political Economy”: “no one hates capitalism more than capitalists.”

The extent to which belief in this fraudulent form of “capitalism” spreads can be seen in the way that some “conservatives” can be seen on Fox and other networks complaining about the incipient executive compensation caps, as if there is anything at all free market about the government-created, government-regulated, government-funded entities that will be affected by the regulation.

The caps are a minor issue, of course. The much larger problem is the fact that the entire infrastructure built around central finance and debt-back money is inherently flawed and looking increasingly likely to collapse. History will show that it wasn’t ultimately any more sustainable than Soviet Communism, to name one failed political economy of similar duration.

Sometimes, the choice is literal:

A 10-year-old boy died after he was found hanging from a hook in a bathroom at his suburban Chicago school, and his mother said Wednesday that school officials haven’t given her an explanation for what they described as an accident. Aquan Lewis, a fifth-grader at Oakton Elementary, was found unresponsive and hanging from a hook in a bathroom at about 3 p.m. Tuesday. He was pronounced dead Wednesday morning at Children’s Memorial Hospital in Chicago.

The fact that the school and the police are playing coy suggests that the boy’s death, while unintentional, was probably caused by the actions of one or more of his fellow students.

The problem isn’t that the police occasionally make mistakes. The problem is that the police are insulated from every being held responsible for those mistakes no matter how egregious they are:

At the end of a New Year’s Eve traffic stop on Interstate 94 in St. Paul, State Patrol Sgt. Carrie Rindal rammed Salter’s 2001 Toyota Sienna van, causing $1,500 damage to his vehicle, and arrested him at gunpoint while his three children, ages 2, 3 and 6, sat in the van. His wife had to pick up the kids as he was taken to jail.

Rindal said Salter was attempting to flee. He said he was merely looking for a safe place to pull over. The Ramsey County attorney’s office declined to charge Salter after reviewing the evidence, including a video of the stop.

NWA was right. Police in the USA are little more than a gang armed with guns and badges, roaming the streets demanding “respect” from the public as they collect the protection money known as “fines”. Rindal should be immediately removed from the force for her poor judgment and incompetence as well as her demonstrated predilection for turning a routine traffic stop into a potentially lethal situation.

Lest you wonder why I am supremely confident that the USA is doomed:

“Every month that we do not have an economic recovery package, 500 million Americans lose their jobs.”
– Nancy Pelosi, Speaker of the House

Where, oh where, would we be if those brave advocates of women’s suffrage hadn’t unlocked the vast reservoirs of governing talent being kept on the sidelines thanks to the Patriarchy’s oppression of the fair sex? Macroeconomics is bogus enough, but even if you subscribe to one of the Keynesian, Neo-Keynesian, or Monetarist myths, you have to be at least a little dubious about the success of any model which relies on correct application by individuals so vastly ignorant of the relevant statistical factors.

Banking executives deserve a cap in the ass more than a cap on their compensation packages, but better the latter than the fascistic Bush approach of private black and public red:

The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan. Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends….

Mr. Reda said only a handful of big companies pay chief executives and other senior executives $500,000 or less in total compensation. He said such limits will make it hard for the companies to recruit and keep executives, most of whom could earn more money at other firms. “It would be really tough to get people to staff” companies that are forced to impose these limits, he said. “I don’t think this will work.”

Obama is already shaping up to be a better president than George W. Bush, which is very faint praise indeed. It is beyond ludicrous to argue that it will be tough to staff companies for only $500k per year. Considering what a historically horrific job was done by the massively overpaid banking executives of the very recent past and present, there’s absolutely no empirical reason supporting the idea that massive compensation has any connection whatsoever to positive results.

And for those idiots who would claim that compensation caps are somehow anti-capitalistic, please note that since government regulates nearly every other aspect of the American financial system, there’s no logical reason it shouldn’t regulate executive pay as well. Many corporate executives have demanded socialism in the form of a government bailout, and so it’s satisfying to see that they’re getting it good and hard.

My only criticism is that the $500k cap is too high. There’s no reason not to knock those salaries back to $174,000, the current Congressional salary. After all, an executive at a bailed-out corp is little more than a government employee now.

Andrew Stuttaford reminds us of how the Michael Phelps scandal highlights the debilitating effects of the most evil drug ever developed by Man:

I merely note that this broken wreck of a man’s failure to win any more than a pathetic fourteen Olympic gold medals (so far) is a terrifying warning of the horrific damage that cannabis can do to someone’s health—and a powerful reminder of just how sensible the drug laws really are.

I despise the drug-war and I despise its idiot supporters even more. There is absolutely no excuse whatsoever for the continued existence of the ludicrously ineffective drug laws, much less the many violations of human liberty their enforcement is used to excuse.

Anti-drug conservatives have to be among the dumbest and most illogical individuals in the nation, since the idea of forcibly preventing a man from making a decision that might lead to his eventual harm should be completely anathema to conservatives on both philosophical and practical grounds.

The Middle East comes to Minnesota:

On January 5, representatives of Hamas and Fatah rallied on the steps of the Minnesota state capitol in St. Paul. Their purpose was to condemn Israel, and an Israeli flag was burned…. How did Minnesota get to the point where its state capitol can become an outpost of a terrorist organization from the Middle East? Until a few years ago, I wouldn’t have believed it possible.

How did it happen? It’s not exactly rocket science, this is exactly what one had to expect when large-scale immigration from non-Western cultures was encouraged. The immigration argument has always depended upon one vital question: will immigrants adapt to American norms or will they alter American norms? The answer, as has been made abundantly clear everywhere from St. Paul to Stockholm, is the latter.

Now that the global economic crisis has made it clear that remaking the world in the form of the West through democracy and economic abundance is not viable, there are only two possibilities that remain. One is the continued transformation of the West into the Third World. The other is deportations on the same scale as the preceding migrations. Nations that choose the latter will survive and prosper, nations that choose the former will survive in the form of West Bangladesh or North Mexico.

The Word of the Day for February 02, 2009 is:
cyberpunk • SY-ber-punk • noun

*1 : science fiction dealing with future urban societies dominated by computer technology

2 : an opportunistic computer hacker

Example Sentence: Cyberpunk — with its androids and cyborgs and human-electronic networks — almost turns reading into a computer game.

In science fiction circles, “cyberpunk” is a genre that often features countercultural antiheroes trapped in a dehumanizing high-tech future. Its roots extend back to the technical fiction of the 1940s and ’50s, but it was years before it matured. The word “cyberpunk” was coined by writer Bruce Bethke, who wrote a story with that title in 1980. He created the term by combining “cybernetics,” the science of replacing human functions with computerized ones, and “punk,” the raucous music and nihilistic sensibility that became a youth culture in the 1970s and ’80s. Not until the 1984 publication of William Gibson’s novel, Neuromancer, however, did “cyberpunk” really take off as a term or a genre.

Ah, fame….

The poli-demographic cycle at work in California:

How does one explain how California is broke, tens of billions of dollars in aggregate debt, despite having among the highest sales and income taxes in the nation?

We are naturally rich beyond belief—timber, oil, agriculture, a long sea-coast, wonderful weather, mountains, sea, and valleys—and inherited lucrative industries in tourism, computers and software, defense and great universities. Our grandparents left us a once wonderful freeway network, a tripartite higher education system, ports, airports, dams and canals.

So what went wrong, and why are tens of thousands of Californians leaving the state with bachelor degrees and above, while tens of thousands enter without high-school diplomas?

The answer, as VDH knows perfectly well, is simple. Ideology matters. Left-wing ideology is intrinsically parasitic, and once its depredations sufficiently weaken its host, both the parasite and the host are doomed. California is appears to be reaching that point, and the entire United States of America is not far behind it. Unfortunately for the residents of other states, many of the individuals who passively permitted this transformation – and in some cases actively encouraged it – have relocated and are now spreading their ideological filth in their new environs.

Recover is not right around the corner:

As George Bush did with the creation of the Troubled Asset Relief Program, Herbert Hoover oversaw the founding of an unaccountable organization making secret loans to banks and other failing institutions, the Reconstruction Finance Corporation. As President Barack Obama has done with his “stimulus” program of massive federal spending, Hoover convinced Congress to increase federal spending 30 percent in 1931 alone. In relative terms, this failed spending package was larger than Obama’s incredible $775 billion “stimulus” plan, which would only amount to a 25 percent increase even if all of the spending were to take place in 2009.

But one of the more striking things [chronicled in America’s Great Depression] was the way in which the politicians and professional economists almost uniformly expected recovery to take place in 1931, and their panic when their expectations were dashed. Depression set in despite a resort to extreme measures that are all too familiar to the modern observer. Interest rates were cut to historic lows. Millions of dollars were loaned to the states to finance a vast series of public works and stave off unemployment. Taxes were increased at both the state and federal levels, and the Federal Reserve made use of every tool at its disposal to prop up failing banks.

On a related note, this WSJ article by two economists is timely and informative, if nothing new to the AGDers.