Self-evident Economy

Real World Example of Malinvestment

Wed, 25 Jul 2012 08:25:00 -0500

Here is a perfect real world example of malinvestment due to government stimulus. From this Bloomberg article:

China, the world’s biggest steel producer, is exporting at the highest level in two years, exacerbating a global glut…

…Chinese steel mills, set for a record production in 2012, are ramping up overseas sales to avoid a softer domestic market, where prices for the commodity have dropped to a two-year low.

China is producing so much steel, that it must export the excess to keep prices from falling. In a world not dominated by Keynesian economics, this drop in price would signal that too much steel is being produced, prompting steel companies to cut back on production. Instead…

Chinese Premier Wen Jiabao is overseeing a $23 billion investment in new mills to stimulate automaking and housing to reignite growth that fell in the second quarter to the slowest in three years. The strategy already is sparking unfair-trade charges by Western rivals.

First, it’s a stupid strategy. They are producing an excess amount of steel and thus lowering prices in the process, making it likely unprofitable were it not for the government’s money. This is a perfect example of malinvestment - resources poorly allocated (the money could be used somewhere else) due to cheap credit or in this case government stimulus.

Second, although difficult for steel mill employees and owners to see, it is actually beneficial to the markets the steel is being exported too. By overproducing and exporting the steel at a subsidized price to the United States market, U.S. consumers are likely to see the price of anything built with steel to go down. This allows U.S. consumers to either save, invest, or spend this extra money elsewhere. Savings and investment are the lifeblood to an economy.

Intelligence vs. Wisdom

Fri, 01 Jun 2012 13:50:12 -0500

What is intelligence and what is wisdom? I like to think of it like this:

“Paul Krugman is smart as a whip, but he doesn’t know shit.”

That may be giving too much credit to his intelligence, but you get the idea.

President Obama, the Arbiture of Fairness

Tue, 22 May 2012 15:22:00 -0500

“When you’re president, as opposed to the head of a private-equity firm, then your job is not simply to maximize profits. Your job is to figure out how everybody in the country has a fair shot,” Obama said in Chicago at a NATO press conference.

Cory Booker comments: How badly have they hurt President Obama?

The President has it wrong. As President, your job is NOT to figure out how to give everybody in the country a fair shot. Fairness and freedom are completely different concepts. One does not necessarily complement the other. What is fair to one person, may not be fair to another. So to make things fair for one person most likely means taking something from the other.

No, as President your job is to figure out how to give everybody the FREEDOM to pursue whatever make them happy. This means the freedom to succeed as well as the freedom to fail. And their success or failure should not be any of your concern.

And if “fairness” is a job requirement, then the President is doing a terrible job. It is not “fair” that a bank or car company get significant help from the government in order to stay in business, while a local floral shop or other small business does not. It is not “fair” that the president can talk about using drugs on Jimmy Fallon while others languish in prison for doing the same thing as a result of the “war on drugs” as pursued under President Obama.

On Ron Paul & Fences Keeping Us In

Fri, 18 May 2012 08:17:52 -0500

Does anyone remember in the GOP debates when Ron Paul said something about walls built to keep people in?

“Every time you think about this toughness on the border and ID cards and REAL IDs, think it’s a penalty against the American people too. I think this fence business is designed and may well be used against us and keep us in. In economic turmoil, the people want to leave with their capital and there’s capital controls and there’s people controls. Every time you think about the fence, think about the fences being used against us, keeping us in.”

Everyone thought, “who is this crazy old man who thinks the government is going to try and keep people from leaving the country?”

Is Ron Paul really that crazy? It seems to me that Senator Schumer and Casey’s Ex-PATRIOT Act is doing what Ron Paul predicted.

Two senators want to stop Facebook’s Saverin from dodging taxes

“This is a great American success story gone wrong,” Schumer said. “Mr. Saverin wants to de-friend the United States just to avoid paying taxes, and we’re not going to let him get away with it.”

[…]

Schumer and Casey’s bill is called the Expatriation Prevention by Abolishing the Tax-Related Incentives for Offshore Tenancy Act, a name designed to produce the acronym Ex-PATRIOT Act.

Anyone who renounces U.S. citizenship and has a net worth of at least $2 million or an average income-tax liability of at least $148,000 over the previous five years would be presumed by the Internal Revenue Service to have done so to avoid paying taxes.

People who could not prove another reason for renouncing citizenship would face a 30% tax on future capital gains on U.S. investments — twice the current 15% rate — and be barred from receiving a visa to enter the country.

“Under current law, Mr. Saverin would get away for free. But Sen. Casey and I have a status upgrade for him — Pay your taxes in full or don’t ever try to visit the U.S. again,” Schumer said. “The despicable trend that Saverin exhibits must be stopped dead in its tracks.”

Only in a society where the people serve the government, instead of the government serving the people, does the government have a claim on an individuals wealth. And I’m not just talking about taxes. Saverin is in fact paying all of the taxes required of him by law. I am talking about Schumer and Casey’s greed and their insatiable demand for more.

If man is born free, if it is a Right given by his Creator as our Declaration of Independence so eloquently surmises, then what claim does government have on anything that is his?

Is the Gold Standard Inevitable?

Thu, 26 Apr 2012 09:46:58 -0500

This guy thinks so. And he has written a book. This video from a Reuters interview shows how simply the U.S. could be forced to back its currency with gold. If it happens, gold could reach $10K/oz.

After you watch the video, you’ll find it interesting that Russia and Mexico each bought a billion dollars worth of gold in March.

So how much gold do you own?

The Department Of Homeland Security Is Buying 450 Million New Bullets

Mon, 23 Apr 2012 15:17:00 -0500

The Department Of Homeland Security Is Buying 450 Million New Bullets:

I feel safer?

The Department of Homeland Security (DHS) and its Immigration and Customs Enforcement (ICE) office is getting an “indefinite delivery” of an “indefinite quantity” of .40 caliber ammunition from defense contractor ATK.

HA! Like the GOP wants to balance the budget. Good one Horsey....

Mon, 23 Apr 2012 13:22:23 -0500

HA! Like the GOP wants to balance the budget. Good one Horsey. And excellent point about subsidies to farmers.

disobey:

This cartoon is terribly distracting from the real issue. Our federal government pays out an incredible amount of money each year in subsidies to american farmers, which pays them not to produce food - in order to keep food prices high. What kind of backwards, idiotic, power-hungry organization spends billions paying food producers not to produce food so food prices will stay artificially high, at the same time that it spends billions on programs to feed those who cannot afford to feed their families? Let that one stew over in your noggin.

Drones Kill More Than Terrorists

Fri, 20 Apr 2012 08:54:00 -0500

A good article in Rolling Stone this month about drone strikes and the Obama administration’s use (abuse) of them.

The Rise of the Killer Drones: How America Goes to War in Secret

In his first three years, Obama has unleashed 268 covert drone strikes, five times the total George W. Bush ordered during his eight years in office. All told, drones have been used to kill more than 3,000 people designated as terrorists, including at least four U.S. citizens. In the process, according to human rights groups, they have also claimed the lives of more than 800 civilians. Obama’s drone program, in fact, amounts to the largest unmanned aerial offensive ever conducted in military history; never have so few killed so many by remote control.

Many of the civilians, including at least one of the U.S. Citizens killed, have been children. But what is SOO frustrating to me is that all those people who were so fired up and angry about George W. Bush, could give a shit that Obama does the exact same things, if not worse. Where did the anti-war movement go?

Here is the end of the article which pretty much sums up the Obama Presidency for me.

Many who oversee the drone program, in fact, seem to have little but contempt for those who worry about the potential dangers presented by drones. At a human rights seminar at Columbia University last summer, John Radsan, a former attorney for the CIA, admitted that the agency has no interest in debating the legal niceties of drone strikes. “The CIA is laughing at you guys,” he told the assembled human rights lawyers. “You’re worried about international law, and the CIA is laughing.” A White House official I spoke with is even more dismissive. “If Anwar al-Awlaki is your poster boy for why we shouldn’t do drone strikes,” the official tells me, “good fucking luck.”

If the targeted killing of al-Awlaki doesn’t inspire sympathy, given his alleged connections to Al Qaeda, then consider the case of Tariq Aziz, a 16-year-old boy from Pakistan. In April 2010, one of Tariq’s cousins was killed in a drone strike. Believing that his cousin was innocent, and not involved in any insurgent activities, Tariq joined a group of tribal elders last October at a meeting in Islamabad organized by Reprieve, the human rights group. Neil Williams, a volunteer for Reprieve, spent an hour speaking with Tariq at the meeting.

“We started talking about soccer,” Williams recalls. “He told me he played for New Zealand. The teams they played with from the village had all taken names from football clubs, like Brazil or Manchester United.”

Tariq and other teenagers at the meeting told Williams how they lived in fear of drones. They could hear them at night over their homes in Waziristan, buzzing for hours like aerial lawn mowers. An explosion could strike at any moment, anywhere, without warning. “Tariq really didn’t want to be going back home,” Williams says. “He’d hear the drones three or four times a day.”

Three days after the conference, Williams received an e-mail. Tariq had been killed in a drone strike while he was on his way to pick up his aunt. It appears that he wasn’t the intended target of the strike: Those who met Tariq suspect he was simply in the wrong place at the wrong time, especially since his 12-year-old cousin was also killed in the blast.

The Obama administration has no comment on the killing of Tariq Aziz, even though his death raises the most significant question of all. Drones offer the government an advanced and precise technology in its War on Terror – yet many of those killed by drones don’t appear to be terrorists at all. In fact, according to a detailed study of drone victims compiled by the Bureau for Investigative Journalism, at least 174 of those executed by drones were under the age of 18 – in other words, children. Estimates by human rights groups that include adults who were likely civilians put the toll of innocent victims at more than 800. U.S. officials hotly dismiss such figures – “bullshit,” one senior administration official told me. Brennan, one of Obama’s top counterterrorism advisers, absurdly insisted last June that there hadn’t been “a single civilian” killed by drones in the previous year.

For Nasser al-Awlaki, who lost his teenage grandson to a predator drone, such denials are almost as shocking as the administration’s deliberate decision to wage a remote-control war that would inevitably result in the deaths of innocent civilians. “I could not believe America could do this – especially President Obama, who I liked very much,” he says. “When he was elected, I thought he would solve all the problems of the world.”

You’re not alone. Most American’s refuse to believe it as well.

No Good Cop Goes Unpunished

Wed, 18 Apr 2012 16:06:20 -0500

No Good Cop Goes Unpunished:

huskerred:

Thank the good Lord we cede a monopoly on force to these clowns.

Subsidies and Solar's Decline

Wed, 18 Apr 2012 10:23:00 -0500

What happens when you flood a market with government loans and subsidies - both to consumers and manufacturers? You distort the market. People take risks they normally would not because it’s not their money. Good money starts to follow bad. You create bubbles that will eventually burst. This is what is happening in solar right now.

First Solar Latest Casualty in Renewable Energy Shakeout

Solar manufacturers, which expanded rapidly to meet double- digit demand growth in the past decade, are struggling with subsidy cuts in Europe and plunging natural-gas prices that make renewable energy less competitive. The largest producers in China say their profits will slump this year as shipments grow.

“Oversupply has become a problem for the entire industry,” said Ben Schuman, an analyst at Pacific Crest Securities LLC in Portland, Oregon. “China’s manufacturers have not demonstrated rational behavior.”

The best way to create green jobs, or any other kind of job, is to let the markets handle it. Politicians can not see the future. A politician - even the President - knows less about the solar market and the potential risks involved than investors who are willing to risk their own money. If they could tell the future, they would be starting their own solar companies and would be rich.

Pound Strength Is ‘Crippling’ Britain’s Recovery, Civitas Says - HUH?

Mon, 16 Apr 2012 11:42:00 -0500

Pound Strength Is ‘Crippling’ Britain’s Recovery, Civitas Says - HUH?:

I don’t understand this thinking. Civitas (a UK “think” tank) says the pound should be devalued by as much as 25% so Britain can export more goods.

If you think about it, what this really means is they think the government should flood the system with so much money that the price of everything valued in pounds increases by 25%. Once purchasing power has been sufficiently eroded for the British consumer, foreign consumers (their currency will be worth more relative to the pound) will be able to exchange fewer of their goods and services to get the British products they want. Or to look at it another way, British citizens will have to work 25% harder in the future to buy the same things they can buy now. This also means that anyone with savings will be able to purchase 25% less with that savings after the devaluation - a particularly painful sacrifice for retired people who can not increase their savings from higher wages (wages will eventually increase as well).

The supposed “benefit” comes from an increase in jobs. But the reason more people will have to work is because Britain will have to produce more (work harder) to get what they once could before the devaluation.

Something else they seemingly fail to grasp is that the price of imported raw materials will also increase. I’m not sure what the percentage is in the UK, but in the US, about 50% of our imports are raw materials that we use to produce goods. This added cost to manufacturing will likely eat up any “profits” created by the increase in exports.

How would any of this benefit the British economy?

Ordered me some RP paraphernalia.

Fri, 13 Apr 2012 10:55:18 -0500

Ordered me some RP paraphernalia.

More on the “bait and switch” our government is...

Thu, 12 Apr 2012 08:52:00 -0500

More on the “bait and switch” our government is taking toward our debt problem, this time from Rick Santelli. Blaming it on the rich not paying enough taxes, or anyone else for that matter, does not address the problem. The problem is that our government is spending far more then it bring in. The solution is to stop spending.

So what do the candidates want to do about this?

Governor Romney: Romney support’s Paul Ryan’s budget plan. Under the Ryan plan, the government would be 46% bigger in real terms then under President Clinton. Paul Ryan’s plan would also freeze spending at 22.2% of GDP. Under President Clinton, spending reached 18.2% of GDP. Paul Ryan proposes to cut spending to $3.4 trillion in FY 2013, but increases it to $3.8 trillion in FY 2017.

President Obama: President Obama thinks limiting government spending to just 22.2% of GDP is “thinly veiled social Darwinism”. His budget keeps deficit spending at around $1 trillion a year. Paul Ryan’s deficit spending is $300 billion a year.

Ron Paul: The Ron Paul budget would cut $1 trillion from the budget THE FIRST YEAR! Which would pretty much balance the budget, THE FIRST YEAR! Not over five years, not over ten years, not over 50 years. One year. He would do it by eliminating 5 government departments and using our military to defend the United States instead of every other country on the planet.

If you are concerned about the debt, you have one choice. Vote for Ron Paul. Voting for Romney or Obama will not solve the debt problem. The only difference between Obama and Romney is the amount of time until the next financial crisis. Voting for Romney because Ron Paul “doesn’t stand a chance” and because Obama is the “worse of two evils” still puts “evil” in the oval office.

Politicians will never get the message that we want change until they start losing votes to someone who will actually make the changes we want.

Why taxes won’t fix our deficit problem.

Wed, 11 Apr 2012 10:27:10 -0500

Why taxes won’t fix our deficit problem.

What zero percent interest rates mean for most people.

Wed, 11 Apr 2012 08:37:10 -0500

What zero percent interest rates mean for most people.

YES! It’s a game where you are Ron Paul on the way to the...

Tue, 10 Apr 2012 16:40:00 -0500

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Collect Delegates to ensure your seat as the President, collect Gold Coins to unlock branches of the Federal Reserve where you defeat bosses and progress your quest to end the Federal Reserve.

Features:

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Challenging puzzle-platformer element. There’s no ‘beating up monsters until they’re dead’ aspect. You must guide the baddies through each level.

original soundtrack

bonus unlockable characters

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CIA interrogators rode on a 73-year-old grandmother's back, broke her fingers, anally raped her with a broom handle

Tue, 10 Apr 2012 14:57:55 -0500

CIA interrogators rode on a 73-year-old grandmother's back, broke her fingers, anally raped her with a broom handle:

Sorry if this article offends anyone’s sensibilities. This is what happens in war. This is why we should vote for someone who understands this and would think long and hard before going to war. Someone who would require Congress to vote for or against war, as required by the Constitution.

antigovernmentextremist:

hipsterlibertarian:

aheram:

The American Civil Liberties Union obtained a series of US defence documents that showed that the unit’s personnel had been investigated repeatedly over their alleged involvement in a catalogue of abuses. In one case, taskforce interrogators were said to have forced a 73-year-old woman to crawl around a room while a man sat on her back, before forcing a broom handle into her anus. Two of her fingers were broken. The woman, a retired teacher, said her interrogators demanded to know the whereabouts of her son and husband, both of whom she said were dead.

I considered not reblogging this because that headline is, frankly, hard to read. It’s not a pleasant way to start a Monday morning.

But then I clicked through and read the article. And then I read the FOIA report the ACLU got exposing this story. And the headline just scratches the surface of what was done to this elderly lady who was innocent all along.

So then I came back to tumblr and looked at the ten notes this post has as of my clicking “reblog,” and I realized I couldn’t not reblog it. While there’s nothing tangible I can do to help this woman, I can at least let a few more people know that happened.

It was done by the U.S. government.

And it was categorically, unquestionably, disgustingly wrong.

I can already hear the statist apologists claiming that this is an isolated incident and that we need not worry about our government’s “enhanced interrogation techniques.” This is utterly disgusting.

Santorum Leaves 2012 Presidential Race

Tue, 10 Apr 2012 14:13:10 -0500

So there are now three potential candidates for President. Yes, yes, Ron Paul doesn’t have a chance, bla, bla, bla. I don’t care. I will not vote for Romney or Obama. What I will do is start to compare the three remaining candidates, hopefully to show that the difference between Obama and Romney is minimal and it doesn’t matter which of them wins. The only chance our country has is if someone like Ron Paul wins - if not this election, then the next. If you vote for anyone else, you vote for the status quo, which is to say, the financial ruin of our country.

Boudreaux: Don't curse the oil speculators

Mon, 09 Apr 2012 11:27:16 -0500

Boudreaux: Don't curse the oil speculators:

I think the first sentence sums things up best…

Nothing sparks spasms of poor economic commentary like rising oil prices.

Amen. This article does a very good job explaining how speculation and higher prices actually benefits society.

Speculators who anticipate that oil will be in shorter supply tomorrow than today can profit by buying oil today and selling it tomorrow. Oil is transported across time from today (when it’s relatively abundant) to tomorrow (when it will be less so). Barrels of oil that would, without speculation, have been used today when they aren’t so desperately needed are, with speculation, conserved for use tomorrow when they will be more desperately needed. Surely this result deserves applause.

It reminds me of another letter Don Boudreaux wrote a while back. One where a reporter was talking to a person filling up their gas tank. The reporter contributed higher gas prices to speculation and asked if oil speculation should be outlawed. The interviewee gave an unequivocal, “yes”. She then added that the reason she was buying gas was actually because she was afraid gas prices would go higher over the weekend, so wanted to top off her tank. Damn speculators!!! I was explaining this to my 15 year-old stepson and he saw the irony before I even had to explain it. The person buying gas wasn’t buying it because she needed it, she was speculating that gas prices would increase, thereby participating in the same market activity she thought should be outlawed.

It’s easy to blame things we don’t understand.

A Rare Mix Created Silicon Valley's Startup Culture

Wed, 04 Apr 2012 16:05:00 -0500

A Rare Mix Created Silicon Valley's Startup Culture:

This series about Silicon Valley on NPR should be interesting. If you listen to it and like the story, definitely read “Steve Jobs” by Walter Isaacson.

The libertarian in me would also like to make the following quip. I was shocked to learn that Silicon Valley wasn’t somehow a product of our benevolent and all-knowing government. How could such innovation happen without the guidance of our elected officials?