The Return of The Great Depression, Vox Day

This is a book for anyone and everyone wanting to make sense of the economic turmoil of the last two years. At the outset, Day very clearly states that his purpose…

…is merely to consider how, after more than 200 years of refining the science of political economy, we arrived in the present situation, and to reflect upon where we are likely to go next. My hope is that it will provide you, the reader, with a rational context that will help you make more informed decisions as you face the difficult challenges that lie ahead. It will also help you put the economic news reported by the financial media in a more historical perspective.

On each point – how we got here, where we’re going, a rational context and a historical perspective – Day delivers; offering a penetrating analysis of three of the most reported, yet inaccurate, economic statistics (GDP, inflation and unemployment), a devastating critique of Keynesian and Monetarist thought, a clear and concise explanation of the Austrian school and its business cycle theory; then ties it all together in a sobering forecast for the future.

As for his conclusions, frankly, I hope he’s wrong.  Unfortunately, I think he’s right.

King of kings and Lord of lords

This is a most excellent speech.  The Judge clearly demonstrates the wisdom of governing by principle and Law rather than power and Man and offers an exhortation for all patriots to return to the Constitution and defend Freedom “…in its maximum hour of danger.”

“Assaults by fanatics on our safety does not justify assaults by the government on our freedom!”

Share it with your children, family, friends and neighbors.  If you only have time for one piece watch Part 3.

The irony escapes her…

The Democratic governor signed the measure Friday at Michigan Brewing Co., a downtown Lansing brew pub that already bans smoking. She said the pub’s experience with going smoke-free shows that “you can make a go of it and be very successful, and be healthy as well.”

The owners of the Michigan Brewing Co have already made and implemented a business decision to ban smoking.  After May 1, other business owners will no longer be able to exercise the same right.  Instead, they will be forced “…to make a go of it…” under penalty of law.

I’m thoroughly enjoying my read of The Return of The Great Depression, authored by Vox Day.  I won’t venture a review yet since I’m not done but it’s safe to say, it’s very well done.  Here’s a bit from a section on the Beast from the Sea, the Federal Reserve.

What the theoretical economists and the practical financiers alike have failed to take into account is that the impossibility of socialist calculation applies to the price of money as well as to the prices of goods and services.  A central banker has no more ability to correctly ascertain the intersection of the collective supply and demand curves for money in a modern economy than the historical communist planner was able to calculate the correct number of shoes required in the now-defunct socialist economies.  The significant point is not that the Federal Reserve’s inability to enforce its target price of money or control the size of the money supply, but its inability to know independent valuations of money set on a dynamic basis by its various buyers and sellers according to their momentary needs.  Lacking this godlike knowledge, its actions will inevitably be incorrect no matter what it does, which necessarily casts serious doubt on the utility of the concept of central banking.

Frédéric Bastiat wrote a lifetime of work during the last few years of his too short life.  He’s probably most well known for “The Broken Window” chapter of  What is Seen and What Is Not Seen, an essay in which he explains and demonstrates the overlooked moral hazards that occur when economic policy is based on economic fallacy.

His other essays are worthy of attention too.  In particular today, “Property and Law“, in which Bastiat addresses the fundamental questions regarding the origin of property and law and the role of legislators (he was one) in making laws concerning property.  Regarding the origin of property and law, he reasons that “Property does not exist because there are laws, but laws exist because there is property…The function of the law, then, is to safeguard the right to property.”  He further reasons regarding the role of legislators that their “…jurisdiction is limited to guaranteeing and safeguarding property rights.”

On both of these points, Michigan legislators failed miserably this week with their vote on HB 4377, a bill that will now (with a few special interest exceptions) prohibit private businesses from allowing patrons to smoke on their property.  Especially disappointing, but not surprising, were the  Republican votes.  In the House, 20 of 43 Republicans voted for more, not less, government.  Even worse, in the Republican controlled Senate, nine Republicans enabled passage of the bill, casting their lot with the socialists of Bastiat’s day, apparently seeing their role as one to “…organize, modify, and even eliminate property if [they deem] it good to do so.”

Among the Republicans voting for Property, State Representative Justin Amash has been clear and consistent in his principled stand.  In online discussions on his Facebook page he stated that “To dismiss the [property] rights issue is to cede all power to the government, and I will never do that.”

In 1848, Bastiat could say to his countrymen that:

In a country like the United States, where the right to property is placed above the law, where the sole function of the public police force is to safeguard this natural right, each person can in full confidence dedicate his capital and his labor to production. He does not have to fear that his plans and calculations will be upset from one instant to another by the legislature.

While no longer true in Michigan or the United States, maybe that day will come again with more legislators like Amash and those who joined him in the vote for Property and Liberty.

Letting Be is presented by LibertyisLearning and is an entry in The Fraser Institute Student Video Contest.  Win or lose, and I’m hoping for a win, LibertyisLearning has produced an excellent, clear and concise explanation of inflation, it’s cause, it’s symptoms and it’s effects.  The solution?  Watch and learn.

From the Letter From the Founders, in the Google’s 2004 SEC Registration Statement:

Our search results are the best we know how to produce. They are unbiased and objective…

Maybe not.  Talking About the Weather reveals in Googlegate? his correspondence with Google representatives in which he seeks an explanation for the disappearance of the term “climategate” in Google Suggest, the tool that offers suggestions when you start keying  a search term in the Google search text box.  The last statement he received from Google indicated….well, nothing.  They didn’t respond to his most recent email.  And..

As of three days after this post (on Saturday December 5, that is), Google Suggest no longer offers any choices for C-l-i-m-a-t-e-g-a-t-e, no matter how many letters one types. The total number of links appears to be stable around 30 million. The first reader who finds any Google search with 30 million or more links that Google Suggest doesn’t assist with wins the prize.

(HT to The Western Confucian – Don’t Be Evil?)

(Google image taken on Dec 6, 2009 by your blogger.)

From Agora Finacial’s 5 Min. Forecast we learn of Andrew Ross Sorkin’s photo of a Morgan Stanley executive reveling in corporate welfare.

New York Times columnist Andrew Ross Sorkin spotted this license plate in Greenwich, Conn. It traces to a vice chairman at TARP beneficiary Morgan Stanley. Clearly, he doesn’t feel the sort of jitters that have reportedly prompted some executives at Goldman Sachs to buy handguns for self-defense.

The Foundation For Economic Education (FEE) presents The House That Uncle Sam Built, an excellent synopsis of the government’s role in the housing boom and bust.  Authors are Peter Boettke and Steve Horwitz of The Austrian Economists.  Editor is Lawrence Reed, President of FEE and President Emeritus of the Mackinac Center for Public Policy.

From the Introduction by John Allison, one of the few financial CEOs to run a profitable and sound business during the boom and take exception to the financial bailout during the bust in the fall of 2008.

This paper provides a “common sense” and understandable outline of fundamental causes and cures. The analysis is based on long proven economic laws. Despite the wishes and hopes of politicians, economic laws are just as immutable as the laws of physics. If you jump off a ten story building, hitting the ground will not be pleasant. If the Federal Reserve holds interest rates below the natural market rate by rapidly expanding the money supply (“printing” money) as Alan Greenspan did, individuals and businesses will make bad investment decisions and there will be negative consequences to our long term economic well-being. There are no free lunches.