The state of the kleptocracy

Barry Ritholtz provides a useful summary of the crimes committed by the financial sector, complete with links and sources:

Laundering money for drug cartels. See this, this, this and this (indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis)

Laundering money for terrorists

Engaging in mafia-style big-rigging fraud against local governments.

Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide.

Charging “storage fees” to store gold bullion … without even buying or storing any gold . And raiding allocated gold accounts

Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them.

If it is not eminently clear that there is no rule of law whatsoever in the USA, this should suffice to prove it. It should come as no surprise that financial crime and corruption are on the upswing, as it has become increasingly obvious, even to those who don’t pay any attention to the financial sector, that the entire system is a criminal enterprise run by short-sighted financial gangsters. However, since they’re fast running out of other people’s cows to milk, as exhibited by the fact that less than one-third of the people who owe $1 trillion in school loans are repaying anything, the whole structure appears to be rapidly approaching collapse.

Some say it will end in fire (inflation), others in ice (deflation). But either way, it will end.

In the meantime, be sure to start a corporation and hire yourself before committing any crimes. Then fire yourself, and tell the police that you are no longer with the company when they come to investigate. They will then turn the matter over to the appropriate regulatory agency, which will fine the corporation about five percent of the profit you made from your illegal acts. This is what passes for criminal justice in America circa 2012.

The outdated myth of integration

There is a fundamental logical error being displayed in the assumption that because Italian, German, and Swedish-speakers learned English and integrated substantially – although not wholly – into American culture, other ethnic groups will necessarily do so, particularly given the way in which technology reduces any need to do so:

They were born in the UK, but many second and third generation immigrants speak or understand hardly any English, it was revealed today. Their poor understanding of the language means they are unable to take notes or understand basic instructions on training courses ranging from engineering to electronics. Experts warn that low standards of English in some minority groups have been blamed for widening ethnic divisions and creating communities where it is the second language.

There are several reasons why immigrants are no longer integrating much, if at all, into the larger cultures. The first reason is that they come from different ethnic groups. It is a mistake to assume that all cultures and national identities are equally willing to submit themselves to another one. Italy, for example, wasn’t even a singular nation until 1870 and the Irish hadn’t been independent for centuries, so it should come as no surprise that they did not cling to national identities that many of them did not even possess in the first place.

The second reason is demographic. To what culture and social mores is a new Guatemalan immigrant to southern California going to integrate when most of the people surrounding him in his new place of residence are Spanish-speaking Mexicans? Once immigration is permitted beyond certain highly restricted levels, the possibility of integration is necessarily reduced, if not eliminated entirely. And the third reason is technological. With Skype and satellite entertainment systems, it is entirely possible to live in a foreign country without any actual contact with the local populace and culture beyond the occasional visit to the grocery store. I’ve known English-speakers living in Italy who after 15 years of living there still don’t speak twenty words of Italian; they have no intention or need to integrate.

Natural enemies

Louis CK observes that feminists and comedians are natural enemies. And he also demonstrates on The Daily Show that whereas backing down and apologizing is neither funny nor courageous, kicking fascistic feminists demanding male subservience to female sensibilities in the teeth can be a bit of both.

LCK: For me, any joke about anything bad is great. Any joke about rape, the Holocaust, the Mets, whatever — any joke about something bad is a positive thing.

JS: You have now crossed the line, mister!

LCK: I’ve read some blogs during this whole thing that has enlightened me with things I don’t know. This woman said something how rape polices women’s lives, they have a narrow corridor, they can’t go out late, they can’t go to certain neighborhoods, they can’t dress a certain way, because they might — that’s stuff I didn’t know. And it’s a part of me now in a way that it wasn’t before and I can still enjoy a good rape joke….

Here is the last thing I want to say about it. This is also about men and women. Because a lot of people are trading blogs and stuff about this with each other. Couples are fighting about Daniel Tosh and rape jokes. But they’re both making a classic gender mistake. The women are saying here’s how I feel about this. But they’re also saying my feelings should be everyone’s primary concern. Now the men are also making this mistake, they’re saying your feelings don’t matter, your feelings are wrong, your feelings are stupid. If you’ve ever lived with a woman, you can’t step in shit worse than that, than telling a woman her feelings don’t matter. So, to the men I say listen, listen to what the women are saying about this. To the women I say now that we’ve heard you, shut the fuck up for a minute and let’s all get back together and kill the Jews. That’s all I have to say about it.

JS: Send your complaints to Brian Williams, care of NBC….

The Sports Guy was right

Women ruin everything. Everything. This is why women have to be ruthlessly kept out of places to which their sex have neither created nor contributed anything. In most such cases, literally the only thing women truly care about accomplishing is adding more women.

Co-producer Philippa Boyens addressed some changes made for the movie adaptation, especially the addition of a new character or two, something that could be seen as heresy by the literary community or Tolkien fans. Boyens said the story felt weighed down by males, so they created a female elf, being played by Evangeline Lilly and seen briefly in the footage.

“We created her to bring that feminine energy,” Boyens said. “We believe it’s completely within the spirit of Tolkien. We didn’t want her to be a ploy.”

What. The. Fuck? Tolkien’s novels are a masterpiece. A classic. They define a genre. So Philippa Fucking Boyens decides she can improve upon them by adding a female character to do what, discuss tampons and boy bands? Does Tokenlass spend her screen time regaling the dwarves with tedious gossip about elves that none of them have ever met? Does she have sex with Borin before making a hypergamous upgrade to Thorin, then demanding that the dwarves replace their battleaxes and warhammers with lighter ones that she can carry?

The problem with Jackson’s LOTR trilogy wasn’t the omission of Tom Bombadil but the addition of the idiotic dialogue invented by Boyens; HBO’s adaptation of A Game of Thrones is much superior due to the fact that Martin himself is being used to create the additional dialogue required by the new medium. Now, I’ll still watch The Hobbit when it comes out. Like The Lord of the Rings, the source material is too good to be ruined by the “contributions” of Ms Boyens’s script. But it’s unsurprising that the Tolkien estate is less than ecstatic about Jackson’s films, which fortunately means there will be future films that will be conceived and advertised as being more faithful to Tolkien’s text instead of presenting the Ms Magazine version of them.

Anyhow, to Hell with Boyens, her feminine energy, and her fear of an excessively male story.

The great intergenerational con

America should have known the Boomers were evil from the moment they made “never trust anyone over the age of 30” mantra. It’s always the liar who assumes everyone else is lying:

Today’s youth, both here and abroad, have been screwed by their parents’ fiscal profligacy and economic mismanagement. Neil Howe, a leading generational theorist, cites the “greed, shortsightedness, and blind partisanship” of the boomers, of whom he is one, for having “brought the global economy to its knees.”…

The screwed generation also enters adulthood loaded down by a mountain of boomer- and senior-incurred debt—debt that spirals ever more out of control. The public debt constitutes a toxic legacy handed over to offspring who will have to pay it off in at least three ways: through higher taxes, less infrastructure and social spending, and, fatefully, the prospect of painfully slow growth for the foreseeable future.

In the United States, the boomers’ bill has risen to about $50,000 a person. In Japan, the red ink for the next generation comes in at more than $95,000 a person. One nasty solution to pay for this growing debt is to tax workers and consumers. Both Germany and Japan, which appears about to double its VAT rate, have been exploring new taxes to pay for the pensions of the boomers.

The huge public-employee pensions now driving many states and cities—most recently Stockton, Calif.—toward the netherworld of bankruptcy represent an extreme case of intergenerational transfer from young to old. It’s a thoroughly rigged boomer game, providing guaranteed generous benefits to older public workers while handing the financial upper echelon a “Wall Street boondoggle” (to quote analyst Walter Russell Mead).

It’s not just in the USA either. The “youth movement” was international, and so, unsurprisingly, is the cancer of Boomer-created debt. It’s fine to blame today’s young for taking on credit card and school loan debt, but let’s not forget that it is the Boomers who created the massive public debt as well as making it impossible for those who followed them to do what they did, and shed their school loan debt in bankruptcy.

Fortunately, the time is rapidly approaching when the younger generations can band together and permit the Boomers to experience the consequences they deserve by shutting down their overly generous pensions and refusing to pay for their medical care. They’ll keep voting for anyone who promises to serve their self-centered interests, but that will become increasingly irrelevant as more states and localities simply don’t have the wherewithal to live up to their contractual obligations.

Mailvox: improving RGD

PR has a suggestion or two:

I just got done with Return of the Great Depression. Great read. Thanks for the Nook version. I thought you did a pretty good job of dumbing things down enough that I could make sense of what you were saying, but you managed to do it in a way that it didn’t seem like you were talking down to me at all. I really appreciated that dictionary since I was reading it in a location where I didn’t have web access and therefore couldn’t use any outside references to help me out.

If you care for any criticism on it, here’s my effort:

1. You made me laugh about the apocalypse scenario. But I would’ve also appreciated a little more of an explanation as to why you think it’s not likely at all. Something a little more than telling me that no serious economists take that scenario seriously. So what! I want(ed) to know why YOU think it’s unlikely.

2. I would suggest maybe even a little bit more of a dictionary at the end. I’ll show a little bit of my ignorance here and confess that I wasn’t really sure what a “sub-prime” loan was and why it was a crisis. I did figure it out. But I started off thinking that “sub-prime” meant something like “below the ‘prime’ interest rate”. That sounds like some loan that would be given to only the best risks. I am certainly more knowledgeable now that I realize it’s quite the opposite. But a quick dictionary note would’ve helped me.

Anyway, I’m not even sure you care about feedback like this. But I thought it only right that since you gave me such a bargain, that I would give you my best critique. I’m looking forward to your next economics book.

In answer to (1), my reasoning is that despite the expectations of those anticipating the Eschaton, it never arrives. Societies seldom perish in blood and fire except at the hands of an implacable and merciless enemy; the fact that it is hard to think of many such societies besides some of the Slavic ones overrun by the Mongol hordes and the Carthaginian society wiped out by Rome is an indicator that when the global economy collapses, it will reduce living standards without ending civilization.

I’ve been reading Vanished Kingdoms, by Norman Davies, and one of the things that becomes eminently clear is that for the most part, societies are absorbed and replaced by larger societies that overwhelm them, either by invasion, immigration, or political amalgamation. So, America is much more likely to either devolve into a Brazilian-style second world country or break apart into a Europe of sovereign American states than to shatter into some sort of post-apocalyptic chaos out of Robert Adams or Walter Miller. Even a hypothetical Round 2 isn’t likely to be particularly apocalyptic, although it would certainly be interesting to see the South rise again once Aztlan separatism draws the primary focus of the American Unionists.

The big thing that is missing from the scenarios drawn up by those prophesying apocalypse is the Aztlan factor. Most people are thinking in Red/Blue, urban/rural, black/white terms, but possibly the most important question is whether the Hispanics simply return to Mexico once the flow of benefits end or if they stay to carve out their own state. I would tend to assume the latter, but no one actually knows.

I digress. In response to number two, if I do an updated RGD, I will certainly consider expanding the appendix to include the various non-economic terms that may be unfamiliar to some readers. It’s a good idea that simply had never occurred to me.

I should point out that although I’m not currently planning to write the economics book that melds Keensian Post-Keynesian economics with modified Austrian theory that some suggested yesterday, I do plan to begin working on an economics-related project after I finish the current novel in October.

In defense of mass murder

I find myself contemplating quitting. No, not the blog. And not writing in general. But it is really incredible to see how few people at WND are interested in substantive matters like a conceptual revolution in economics versus other, considerably less significant issues.

There are all of two comments on today’s WND column. That’s less than one-twentieth of how many comment on any given column. And it’s not the WND readership, it wouldn’t be any better if I wrote for Salon, the New York Times, or the Daily Show. I mean, it’s not that I don’t understand MPAI, I coined the acronym after all. But that’s true for varying degrees of “most” and sometimes the percentage is just a little higher than I can fathom. I mean, the world is on the brink of a total economic meltdown, and still no one gives a damn about why? I feel like Jonah staring at the walls of Nineveh, stomping up and down the beach, gesticulating wildly and saying: “Go ahead and do it, Lord, let them have it, you know they deserve it!”

Seriously, I’m not sure I can deal with trying to pretend I don’t think a world where the best-selling novel is Twilight fan fiction deserves to perish in fire and ice. I used to wonder to whom the old Norse pagan religion held any appeal, but now I understand completely. If I read one more idiot Republican bank apologist claiming that the root cause of the financial crisis was Democratic politicians forcing banks to provide home loans to minorities, I may climb the Rainbow Bridge, wrest the horn from Heimdall and blow it myself. Then I’ll sit there and cheer for the frost giants and fire demons.

I’m considering a literary experiment of sorts. I’m wondering how much more interest would be expressed in the dumbest, most lowbrow column I can get past the editors devoted to the simple and straightforward concept of Obama being bad. Bad for the nation. Bad for the world! Bad. So bad. I’m thinking of calling it: Obama is Bad. Subtitled: Obama is really and truly very bad for America.

And if the column hits Drudge and results in an offer from Fox News to host my own cable news show, I’m going to give up op/ed, study genetics, build a lab, and start creating customized killer viruses.

The wages of theological sin

It’s really remarkable how cause and effect seems to repeatedly elude liberal Christians:

IN 1998, John Shelby Spong, then the reliably controversial Episcopal bishop of Newark, published a book entitled “Why Christianity Must Change or Die.” Spong was a uniquely radical figure — during his career, he dismissed almost every element of traditional Christian faith as so much superstition — but most recent leaders of the Episcopal Church have shared his premise. Thus their church has spent the last several decades changing and then changing some more, from a sedate pillar of the WASP establishment into one of the most self-consciously progressive Christian bodies in the United States…..

Yet instead of attracting a younger, more open-minded demographic with these changes, the Episcopal Church’s dying has proceeded apace. Last week, while the church’s House of Bishops was approving a rite to bless same-sex unions, Episcopalian church attendance figures for 2000-10 circulated in the religion blogosphere. They showed something between a decline and a collapse: In the last decade, average Sunday attendance dropped 23 percent, and not a single Episcopal diocese in the country saw churchgoing increase.

For some reason, despite the observable fact that chasing after the world and attempting to “appeal to today’s young people” has been negatively affecting church attendance since I was in junior high, no one ever seems to question an assumption that so repeatedly and reliably fails. It’s no different than politics and the fallacy of moderate appeal. People without direction seek leadership, and when the Church refuses to stand for its Christian principles as defined in the New Testament and provide intellectual leadership against the zeitgeist, it not only sacrifices its reason to exist, but counterintuitively, also loses its primary appeal.

Of course Douthat, being somewhat of a moderate conservative, fails to recognize that the gifts of progressive Christianity he cites, “Social Gospel and the civil rights movement”, were both intellectually poisonous and societally destructive in the long run. Liberal Christianity shouldn’t be saved and it won’t be saved. Having cut itself off from its Christian roots, it should be abjured by the rest of the Church and left to its inevitable demise.

There were surely wolves in sheeps clothing who helped engineer the demise of the liberal denominations and congregations, but it should not be forgotten that they were abetted by many foolish and short-sighted individuals who were genuine Christians. One of the great shortcomings of nearly every church I have ever attended is the complete lack of vigilance for the wolves. Paul warns of them, and yet most churches never stop to think that among their most avid volunteers are likely those who seek to destroy the institution.

Book Review: Debunking Economics

Staking the Undead Economist

After nearly three decades of reading across a broad spectrum of economic thought, the two books on the subject I would most recommend are Joseph Schumpeter’s History of Economic Analysis and Murray Rothbard’s An Austrian Perspective on the History of Economic Thought. But now there is a third. After finishing Debunking Economics: The Naked Emperor Dethroned? I have to assert that Keen’s book is not only an absolute masterpiece, but may, in fact, represent the most important intellectual development in economics since The General Theory of Employment, Interest and Money was published in 1936. And if some of Keen’s more controversial assertions hold up over time, it will be the most important contribution to the literature since The Wealth of Nations.

Avert your eyes

In which I publicly engage in the practice of the Ricardian Vice:

Unit Labor Costs

Britain 100 cloth 110 wine
Portugal 90 cloth 80 wine

In the absence of transportation costs, it is efficient for Britain to produce cloth, and Portugal to produce wine, as, assuming that these trade at equal price (1 unit of cloth for 1 unit of wine) Britain can then obtain wine at a cost of 100 labor units by producing cloth and trading, rather than 110 units by producing the wine itself, and Portugal can obtain cloth at a cost of 80 units by trade rather than 90 by production.

Now let’s do this Ricardo-style and assume the perfect mobility of labor, maintaining, as Ricardo does, the perfect immobility of capital. We will likewise assume that Britain and Portugal have equally-sized labor forces. We will also follow Ricardo in leaving time and transport costs out of the equation. So, what are the consequences?

Obviously the wine and cloth laborers will move to Britain, since they will receive an 11 percent raise and a 38 percent raise respectively. However, once they get there, the doubling of the labor supply in Britain this causes will cause the price of labor to be cut in two. Britain can now produce the same amount of cloth for the cost of what was previously 50 units of labor and the same amount of wine for 55, thereby obtaining both wine and cloth for a much lower unit labor cost than what it used to cost to produce the wine alone. Portugal doesn’t get anything out of it, but that doesn’t matter because they’ve got no ability to retain their laborers without resorting to badges and guns.

Therefore, open immigration is not only desirable, but is vastly preferable to comparative advantage by a factor of 105/200 and autarky by a factor of 105/210. QED. What else can we conclude?

1. Ricardo implicitly postulated the immobility of labor.
2. The mobility of labor not only fails to disprove comparative advantage, but actually strengthens the case for even freer trade… at least if you’re in the higher labor cost country and you only look at the labor costs.
3. The mobility of labor will eliminate international trade since everyone will be living in Britain.
4. The mobility of labor operates to the detriment of labor.
5. Ricardo’s logic is remarkably stupid.