Farewell

It's been a blast and I appreciate all of the support and intellectual insight from the last 3 years. I may or may not start another blog in the future, only time will tell.

Take care,
Daniel

I Guess The Russians Will Never Learn

Yet again, freedom is being stripped away from the Russian people.

MOSCOW (AFP) - Pornographic, extremist and immoral -- that's how Russian prosecutors are describing popular US cartoons like The Simpsons, Family Guy and South Park...The channel that carries them has been forced to suspend broadcasts of the offending programmes pending legal action and throngs of teenagers have taken to the streets to demand their favourite cartoons back.[http://tinyurl.com/3fu4ba]

Will they ever learn? I guess not.

The Answer Lies In The Mirror

This keeps getting worse.

WASHINGTON (AP) -- The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.[http://tinyurl.com/4hcvfq]

You can bet your bottom dollar that the FBI, or any other governmental agency, will not be able to identify the true culprit of this financial meltdown. Instead, they will likely use businessmen as the scapegoats for the government's ineptitude (once again).

Stiglitz Is Wrong

Jesus Christ; how easy is it to get a Nobel prize now-a-days?

Joseph E. Stiglitz, professor at Columbia University, was awarded the Nobel Prize in Economics in 2001 for his work on the economics of information and was on the climate change panel that shared the Nobel Peace Prize in 2008.[http://tinyurl.com/6qjbqp]

Nothing a miss here, until he proposes his "6 ways to fix the financial system". Observe:

1. We need first to correct incentives for executives, reducing the scope for conflicts of interest and improving shareholder information about dilution in share value as a result of stock options. We should mitigate the incentives for excessive risk-taking and the short-term focus that has so long prevailed, for instance, by requiring bonuses to be paid on the basis of, say, five-year returns, rather than annual returns.

2. Secondly, we need to create a financial product safety commission, to make sure that products bought and sold by banks, pension funds, etc. are safe for "human consumption." Consenting adults should be given great freedom to do whatever they want, but that does not mean they should gamble with other people's money. Some may worry that this may stifle innovation. But that may be a good thing considering the kind of innovation we had -- attempting to subvert accounting and regulations. What we need is more innovation addressing the needs of ordinary Americans, so they can stay in their homes when economic conditions change.

3. We need to create a financial systems stability commission to take an overview of the entire financial system, recognizing the interrelations among the various parts, and to prevent the excessive systemic leveraging that we have just experienced.

4. We need to impose other regulations to improve the safety and soundness of our financial system, such as "speed bumps" to limit borrowing. Historically, rapid expansion of lending has been responsible for a large fraction of crises and this crisis is no exception.

5. We need better consumer protection laws, including laws that prevent predatory lending.

6. We need better competition laws. The financial institutions have been able to prey on consumers through credit cards partly because of the absence of competition. But even more importantly, we should not be in situations where a firm is "too big to fail." If it is that big, it should be broken up.

These reforms will not guarantee that we will not have another crisis. The ingenuity of those in the financial markets is impressive. Eventually, they will figure out how to circumvent whatever regulations are imposed. But these reforms will make another crisis of this kind less likely, and, should it occur, make it less severe than it otherwise would be.[bold added]

How does he wish to accomplish his economic goals? Force, no doubt. Who's "requiring" who? Who's "imposing" what? Who's "breaking up" what? Who's "preying" on whom? While these questions seem very simplistic, they are the most essential. Force does not belong in the marketplace, period. These are indeed strange times in the market, but government regulation will not fix anything; it will only make everything worse.

The only thing that these "reforms" guarantee is another crisis. Again. And Again. And Again. Ad infinitum.

How do you win a Nobel prize in economics without knowing what supply and demand is?

Economic Ignorance

This video is the compilation of all sort of different evils. Marxism, malthusianism, environmentalism, & collectivism just to name a few.

The video is fitting, especially since I recently had an argument over a post I wrote two years ago on the same subject.

I am embarrassed that I watched the entire thing.

7 Years

Today is the seventh anniversary of September 11th. For some crazy reason the people that brought the World Trade Center(s) down still exist. The reason why they ares still around eludes me seven years later. Here's a collection of other rational posts about this most sacred of days:

-At NoodleFood, Paul Hsieh asks "Do Americans Want Victory?" I'd say the majority of Americans claim they do, but in reality are not willing to take the measures to insure the protection of our country.

-John David Lewis' essay "No Substitute for Victory" is still relevant today - especially concerning September 11th - so I posted it again. In addition, it is one of my favorite Objectivist essays.

-At Born to Identify, Adam Reed has an insightful post about 9/11 and the following religious outrage that followed on September 14th. To quote:

It sets my teeth on edge whenever some timid weasel speaks of the Al Queda attacks of September 11, 2001 as a "tragedy." It was not a tragedy - which would mean something that was not the perpetrators' design. It was a massacre, a crime, an outrage. It was followed by a second outrage on September 13, when Christianist sociopaths Jerry Falwell and Pat Robertson broadcast their endorsement of the perpetrators' "reasons" for the massacre. The real tragedy came on September 14, when President George W. Bush sponsored a "National Day of Prayer and Remembrance" at the Episcopal National Cathedral in Washington, D.C.

It was one of the most offensive rants I have ever heard.

-Myrhaf's "Twilight of the West" is also a very good post about September 11th. He said:

My reasoning went like this: In World War II we faced a totalitarian ideology that wanted to destroy the west. We went toe to toe with fascism and destroyed it instead. In the Cold War we faced another totalitarian ideology that wanted to destroy the west: communism. Although we were undermined by pragmatism on the right and anti-Americanism on the left, we managed to win in the long run because of the weakness of communism.

Now we face yet another totalitarian ideology that wants to destroy the west, Islam -- or Islamofascism, militant Islam, Islamicism, whatever (the fact that we still have not settled on a name for the enemy is symbolic of the mess we are in). Unlike fascism and communism, which are based on the idiotic economic fantasies of Karl Marx, Islam is more dangerous because it is based on religious fantasies that cannot be easily disproved in this world -- at least, not to those who place faith above reason. Our enemies are willing to blow themselves up to get to heaven.

It is important to remember that Islam did not attack us because of our interests in the Middle East. Islam, by its nature, is a infectious evil that is bent on eradicating freedom and liberty to satisfy some fictitious deity, so says the pervert anyways. That is their basis for attack, not our ties with Israel.

Inflation Is No Good

Inflation in the UK has risen to 4.4% in July. I find this coincidental, especially since I started reading Henry Hazlitt's What You Should Know About Inflation last night. As Hazlitt points out in his essay, which is still relevant almost 50 years later, is that the definition of inflation has 'dual' meanings - even though there is still only one true definition. Observe:

If you turn to the American College Dictionary, for example, you will find the first definition of inflation given as follows: "Undue expansion of increase of the currency of a country, esp. by the issuing of paper money not redeemable in specie."

The second definition being: "A substantial rise of prices caused by undue expansion in paper money or bank credit." However, as Hazlitt identifies, the second definition has of the American College Dictionary is completely different than the first:

Now obviously a rise of prices caused by an expansion of the money supply is not the same thing as the expansion of the money supply itself. A cause or condition is clearly not identical with one of its consequences. The use of the word "inflation" with these two quite different meanings leads to endless confusion.

Inflation is the increase of the supply of money and bank credit relative to the production of goods and services of a specific country. Knowing the correct definition of inflation, it is easy to identify when some people, whether they're in special interest groups or not, try to skew the definition by blaming inflation on something like the "shortage of goods". Indeed, prices climb by an increase in the money supply or because of a shortage of goods. Prices usually increase with a shortage specifically to goods that are experiencing the shortage. Inflation causes a general increase in the prices of all goods, regardless of the category. Seldom can we identify when the shortage of goods has produced a general level of price increase all across the board, even in war time. However, identifying inflation as a consequence of the shortage of goods does not fly. Hazlitt offers an example:

Yet so stubborn is the fallacy that inflation is caused by the "shortage of goods," that even in the Germany of 1923, after prices had soared hundreds of billions of times, high officials and millions of Germans were blaming the whole thing on a general "shortage of goods" - at the very moment when foreigners were coming in and buying German goods with gold or their own currencies at prices lower than those of equivalent goods at home.

Keeping in mind the example above, as well as the rest of my post, observe how the article below almost mirrors Hazlitt's example, and almost completely avoids identifying the true cause of inflation:

The statistics office said that the strongest upward pressure on prices came from nonalcoholic beverages and food, especially meat, bread, cereals and vegetables. Inflation was also pushed up by rising transport costs resulting from spiking fuel prices.

However, a major concern is that the rise could not be solely attributed to higher food and energy prices.

Core inflation, which excludes volatile items such as energy and food, jumped to 1.9 percent from 1.6 percent, indicating that higher energy and food prices are having second-round inflationary effects.

The prices were pushed up due to monetary injections made by the UK. The increase of prices is not from the shortage of goods, but from the government's expansion of money supply and credit relative to its production. If there is too much money chasing too few goods, prices must rise to ensure that shortages do not occur. However, it is different when prices increase from inflation than when they increase just from a shortage of goods.

In conclusion, inflation is brought on by governmental interference. By eliminating the gold standard, the government has illegalized the only method to objectively determine the proper money supply as well as calibrating proper interest rates. When governments take their country off of the gold standard and thus create inflation, several consequences unavoidably follow: The depreciation of the monetary unit, an increase in the cost of living (which in turn decreases the standard of living), the annihilation of past savings, the discouragment of future savings, the redistribution of wealth, and an overall undermining of confidence in the economy, which effects its future growth and value.