FRIDAY MORNING RAMBLE: The “going wrong with confidence” edition
From the G-20’s 20-2- ability to go exactly wrong, to Gen. David Petraeus’s hope things don’t keep going wrong, to the new Australian PM’s desperate attempt not to go quite so wrong, to New Zealand’s announced intent this week to go completely wrong--it’s been a very, very interesting week for all sorts of interesting reasons.
So let’s take a ramble round the net and see what good people have been saying about it all…
- “Obama’s letter to the G20 a few weeks ago imploring Western leaders not to embark on austerity measures to rein in their expanding budget deficits but instead to continue stimulating their economies has been the starting gun to an immense battle between the forces of rational economic management and Keynesian claptrap.
“This is a battle full of misinformation and one needs to remain on their toes to see through the fog.”
The Keynesian Illusion – Murray Dawes, MONEY MORNING AUSTRALIA
- The G-20 met, and saw that the world was rooted—and pledged thereat to stabilize public debts by 2016?
Stabilize public debts by 2016? By then, the US and other major economies “will have more government debt than GDP. It is bound to be too late for many of them.
“And even this modest goal presumes that economies are able to grow faster than their debt – in real terms. When you get debt equal to 100% of GDP, you’re over a barrel. If interest rates were to return to the double digit levels of the ’70s—and they could—it could cost more than 10% of GDP just to pay the interest.
”The recovery won’t work…”
G20 Meddlers At It Again - Bill Bonner, DAILY RECKONING
- If you’ve liked what you’ve heard about European governments cutting their coats according to their dwindling cloth, about talk of “austerity” in their government budgets, perhaps you’ve been under some illusion as to what they mean by “austerity.”
Austerity, European Style – Doug Reich, THE RATIONAL CAPITALIST
- ”Deficit Hawks” at the G-20? Yes, they really are intellectually dishonest.
”At Casey Research, we like to focus on facts. Unfortunately, when it comes to government deficits (which beget debt), the facts aren't pretty. They show that the country is already sliding towards financial collapse that will ultimately result in a hyperinflation not dissimilar to the Weimar Republic.
”Even the Congressional Budget Office (CBO) forecasts that the U.S. government will accumulate total deficits in excess of $6 trillion over the next decade. But we think it will be much worse than that….”
Deficit Hawks at the G-20? – Chris Wood, DOUG CASEY’S DAILY DISPATCH
- PS: Bye, Bye! G20 summit drops 'climate-friendly' energy pledge -- 'Went through document with vacuum cleaner to remove any reference to clean energy'…
"If Gov't spending created wealth
then Greece would be a superpower!"
- Please consider Krugman’s article ‘The Third Depression.’
“We are now, I fear, in the early stages of a third depression. It will probably
look more like the Long Depression than the much more severe Great
Depression. But the cost — to the world economy and, above all, to the millions
of lives blighted by the absence of jobs — will nonetheless be immense.
“And this third depression will be primarily a failure of policy. “
I completely agree with those statements.
How Policy Errors Cause Depressions (and how "in isolation" some things Krugman says make sense) – MISH’S GLOBAL ECONOMIC ANALYSIS
- In the now much-quoted Paul Krugman column, our generation’s second coming of Keynes shows just how thoroughly he embraces what Ludwig von Mises called the “Inflationist View of History” by espousing the ridiculous notion that the late 19th century, a time of unprecedented economic growth, was dominated by a “Long Depression.” If only what is in store from us were similar to the economic growth of the late 19th century!
Krugman and the “Long Depression” Myth - Grayson Lilburne, MISES ECONOMICS BLOG
- The key fallacy embedded in Keynesian economics is the idea that government spending adds to an economy’s health. In reality, the opposite is true. So let’s bury that GDP equation baloney and get back to work.
C + I + G = Baloney – Phiipp Bagus, MISES ECONOMICS DAILY
- “As with inflation, there is a great confusion as to what deflation is. The people who steadfastly insist that inflation is raising prices are consistent in insisting the deflation is falling prices. This is why, time and time again, since the 1930s, they insist that prices need to be kept at least level when the economy hits a bad spot. They hold this position in the face of overwhelming evidence to the contrary... Maintaining price levels has resulted in some of the most insane actions that we have seen in the free world…”
Deflation – KRAZY ECONOMY
- “The current economic path of the United States, some argue, is unsustainable. Americans understand this, yet many have been misled into believing that economics is hopelessly complex and the country would be at sea without a paddle if the government weren't around to sort through the mess.”
In their new book How an Economy Grows & Why it Crashes, Peter and Andrew Schiff “seek to provide readers with a "basic tool kit for cutting through the economic clutter" by sharing a revised and updated version of ‘The Fish Story’ that their father, Irwin A. Schiff, presented in the well-known illustrated book ‘How an Economy Grows and Why It Doesn't.’"
Cutting through economic clutter - WASHINGTON TIME'S
How an Economy Grows and Why It Crashes – GOOGLE BOOKS
- “The fact that there is no apparent end to this crisis gives rise to the question, ‘How much longer might it actually last?’
”The accurate answer is that no one can know… for the simple reason that the market is so heavily skewed by government interference. In other words, no one can say what hijinks they’ll get up to next or what the consequences of those hijinks will be.
“That said, the signs that the end of the crisis is approaching will be unmistakable in that it will coincide with the government capitulating in such a way that makes it clear it will no longer squander the nation’s future in the failed attempt to spend, tax, and regulate the crisis away. Given that none of those standard ‘tools’ of government make things better – quite the opposite – makes the capitulation assured.
“But when? I have some thoughts on the timing…”
Monster Money Printing – David Galland, CASEY’S DAILY DISPATCH
- I said it here already at NOT PC: we have no choice about having a recession, the only choice was how long recovery would take. All the world’s stimulus has merely ensured that what could have taken ten months may now take ten years—and leave multi-generational debt to pay for the failed stimulunacy. Yet as the US irrevocably enters the double-dip recession, they’re already talking about not just Quantitative Easing (i.e., printing shitloads of money) but Super-Quantitative Easing (i.e., printing so much money you could wallpaper the Grand Canyon with it).
USA enters the double dip – Sean Corrigan, COBDEN CENTRE
RBS tells clients to prepare for 'monster' money-printing by the Federal Reserve - Ambrose Evans-Pritchard, TELEGRAPH
- The Cobden Centre (add them to your blogroll) recommend that in reference to Sean Corrigan’s piece linked above on the problems that Ben Bernanke is facing, you may want to refresh your background to this story by watching this nicely produced YouTube video first broadcast seven months ago, featuring Ron Paul, Peter Schiff, and Marc Faber:
- New Aussie PM Julia Gillard will be announcing this morning, Friday, at 10am NZ time, what she will be doing about the Kevin Rudd/Wayne Swan Resource Super Profits Tax, and how she will attempt to solve her budget problems if she cans it. How will she square the circle? And will she even try?
What is the Future of the Resource Super Profits Tax under Prime Minister Gillard? – Dr Alex Cowie, MONEY MORNING AUSTRALIA
[UPDATE: Gillard cuts a deal. Super-theft only applies to iron ore and coal; theft capped at 30%; company tax cuts halved.
News of the tax changes saw the value of BHP Billiton rise by $600 million. Rio Tinto is up by $1.2 billion.
TIM BLAIR: “If you want to change the tax,” we were told, “you have to change the government.” In fact, all we needed to do was scare them.]
- Australia’s Catallaxy Files blog is happy at its now-recognised role in overturning some of the major spin of the Rudd government, and ipso facto Rudd himself.
The power of blogging: Henry edition – CATALLAXY FILE
Thanks to Tax Competition, Corporate Tax Rates Continue to Fall in Europe – Cato @Liberty
- The Afghan War—what was it for again? “We must dramatically reduce expectations for Afghanistan,” says Michael Yon in recommending this article. “It's not suddenly going to wake up from its prehistoric slumber.”
Taliban rule out negotiations with Nato – BBC
- Joe Maurone summarises the latest rounds in the Great Objectivist Mosque debate:
The Mosque Debate Continues: (Paul) Hsieh and (Amy) Peikoff – OBJECTIVISH
- Time for a reality check on the historical successes of Islam: the error “is in attributing to ‘Islam’ the accomplishments of the Arab world of a thousand years ago. The [error] couldn't be more wrong. It was Arabs qua Aristotelians and not Arabs qua Islamists who are responsible for the accomplishments…”
The United States Of America And Islam Have Nothing Fundamental In Common – Andy Clarkson, CAPITALISM MAGAZINE
- Back to Auckland (how’s that for a non-segue?) Proximity to political power the size of a great city obviously leads to delusions of adequacy.
First Len Brown, now John Banks – INQUIRING MIND
- And the contiguity of these three events makes you think that proximity to political power the size of a small country leads to megalomaniacal delusions of entitle-itis:
1. The price of power, petrol and car licences start going up from yesterday as the emissions trading (ETS) scheme cuts in and ACC levies increase hit.
(Yesterday's) price rises - and the others still to come – NBR
2. “It just gets worse. ETS, GST increases, ACC increases, and today they slip in another increase in alcohol excise taxes. Even I had no idea that 70% of the price of my whisky nightcap goes to the National Socialists.”
Yet more tax increases driving me away from drink ... – Mark Hubbard, SOLO [UPDATE: and yet more taxes on pleasure…]
3. Meanwhile, MPs are up for a 10% pay hike…
10% salary rise sought for MPs – OTAGO DAILY TIMES
- Contrast that with what British MPs did back in March:
Ministers to turn down MPs' pay rise | Reuters
- And in an historic move, British Deputy Prime Minister Nick Clegg is asking people to submit ideas about which UK laws need to be scrapped. He has already set up a website for contributions called "Your Freedom"
Which laws should we scrap? – Marcus Bachler, SOLO
- Meanwhile, Tony Blair is receiving a medal. For services to liberty.
Tony Blair is given a medal for his support for "liberty" – CENTRE-RIGHT
- And Labour finance spokesman David Cunliffe is still flying a kite to allow NZ’s Reserve Bank to let rip with inflationary stimulunacy here.
The Naked Economist: Part 1 – David Cunliffe, RED ALERT
The Naked Economist: Part 2 – David Cunliffe, RED ALERT
- Perhaps we here in NZ need a good dose of cabinet ministers from the underground punk scene, which Iceland now enjoys. Couldn’t really do worse, could they?
Best Party campaign material – DIM POST
Politics is the art of looking for trouble, finding it whether it
exists or not, diagnosing it incorrectly, and
applying the wrong remedy.
- Sad news: Christopher Hitchens diagnosed with esophageal cancer
Christopher Hitchens' Cancer: Author Undergoing Chemotherapy For Esophageal Cancer – HUFFINGTON POST
- As tribute to man who will hopefully be with us some time, here’s Olivia’s favourite Hitch interview:
- Stop with the BP-bashing already, says engineer Matthew Novak. “ I want to illustrate that while BP is being bashed for the company-wide effort to contain its recent spill in the Gulf of Mexico (amidst cries for government to "DO SOMETHING!"), the spill is so difficult to deal with precisely because of government intervention in the marketplace.”
Bashing BP — When We Should Be Bashing the Corporatist State – Matthew J. Novak, MISES ECONOMICS BLOG
- President Obama spoke this morning at American University on the need for comprehensive immigration reform, calling for “comprehensive reform” while neglecting to advocate the expansion of legal immigration in the future through a temporary or guest worker program for low-skilled immigrants, “the necessary “third leg” of immigration reform.”
But as Daniel Griswold at CATO has pointed out plenty of times, without accommodation for the ongoing labor needs of our country, any reform would repeat the failures of the past…
President Obama’s Incomplete Speech on Immigration – Daniel Griswold, Cato Institute
- Read this. Go on, read this. Alexander Marriott has a lengthy but superb post on immigration, especially good on the situation at the Mexican Border.
Immigration: A Problem in Need of Principled Application – ALEXANDER MARRIOTT’S WIT &WISDOM
- “There seem to be a lot of young people who sing the praises of anarchy…
”Last weekend Toronto got to see what anarchy really breeds. It’s not peace, it’s not freedom, it is brutal, mindless violence and destruction. It is the law of the pack, and as an individual you are one with the pack or you are its prey.”
The Face of Anarchy – UNCOMMON SENSE
- Ari Armstrong looks at the resurgence of Atlas Shrugged and the various controversies surrounding it.
Americans Look to Big Ideas of Liberty: Resurgence of Ayn Rand – FREE COLORADO
- On a related note, when Glenn Beck attempted to get deep with Atlas he more than met expectations by failing to get beyond the shallows, and sticking with his conservative, concrete-bound ways instead.
Glenn Beck Gives Birth To An Ant – Andy Clarkson, CHARLOTTE CAPITALIST
- You’ve had all you can hear about ClimateGate? Then come on in JudithGate. Yes, she’s cute isn’t she, but the IPCC relied on one person—her--citing her own work to deny all solar influence in global warming
Judithgate: IPCC relied on one solar physicist – Lubos Motl, REFERENCE FRAME
http://bit.ly/alPfbY IPCC Relied on a Single Scientist to Deny Solar Influence – HEARTLAND INSTITUTE
- Confused by them all? Here’s an abridged list of all the various '-gates' in climate science—from AmazonGate to HimalayaGate to YamalGate--for your future essential reference. Gate Blowup! Come On In Gate Lovers! – CLIMATE NEWS
Penn State clears Michael Mann in Climate-gate probe (Full 19 page report here.) Reaction: 'It has been designed as a whitewash...To admit that Dr. Mann is a conman now would be extremely embarrassing for Penn State. But the scandal will not be contained no matter how many whitewash reports are issued. The evidence of manipulation of data is too obvious and too strong' [hat tip Climate Depot]
Penn State clears Michael Mann in Climate-gate probe – WASHINGTON POST
And “A bombshell from the [Con man] Lord Oxburgh's Climategate 'inquiry': Oxburgh: The 'science was not the subject of our study.” Climate Audit's Mcintyre mocks: 'Why would anyone have expected that science would be the subject of study of the Science Appraisal Panel?'
Oxburgh and the Jones Admission – CLIMATE AUDIT
- Oh, Julia Gillard gives her first interview as PM. Naturally, it involves John Clarke.
- And this was ‘her’ last as Deputy PM:
- If you think the 2010 FIBA Soccer World Cup is whacky, and it is, you haven't seen anything yet! Check out this story about the 1994 Shell Caribbean Cup showing how the delights of perverse incentives ended up with both teams trying to score own goals.
Says the Samizdata blog, “Read the whole thing. Really, read the whole thing. It's a classic of perverse incentives, showing how the wrong kind of rules can cause everyone to want to do badly. It's about much more than football, in other words.”
Soccer Shennanigans – KIDS PREFER CHEESE
- I’ll bet you didn’t know that your favourite blogger Lindsay Mitchell also has her own art blog, and by “her own” I mean her own art.
See, she’s multi-talented: that’s one of her incredible pastels on the right!
LINDSAY MITCHELL, Artist
- Young mum Kelly Elmore has a handy helpful guide to a host of children’s books including maths, history, science, and good fiction.
What Livy and I Have Been Reading – REEPICHEEP’S CORACLE
- Obseration looks outward, Introspection looks inward. One of the most important ways by which we get to know ourselves is introspection. “Ultimately, just as with all knowledge, the reason to seek introspective knowledge is to guide action, but the first purpose is to gain knowledge.”
Introspection as a Cognitive Tool – SHEA’S BLOG
- Who knew that one of the best ways to lose weight would be philosophical—checking your premises. “I have been re-evaluating my premises about eating and health,” says Rational Jenn, and “I've lost 30 pounds so far this year! :o)"
Checking Premises, Part 2 – RATIONAL JENN
- Sarah from the Summer Aesthete reviews the film Bright Star, an intensely romantic and tragic film about the 19th century English poet, John Keats, and his love, Fanny Brawne, although she didn’t see much of it. Too much time spent sobbing!
Bright Star (movie review) – SUMMER AESTHETE
- Lindsay Perigo posted this clip by pianist Freddie Kempf, the chap responsible for a magical musical weekend in Auckland’s Town Hall a couple of weeks ago. Magnificent!
Music Gem of the Day: Fabulous Freddy! – Lindsay Perigo, SOLO
- And conductor Antonio Pappano, Music Director at the Royal Opera House, has begun "a journey through the most thrilling art form of all"—Italian Opera, beginning with Claudio Monteverdi. (Keep up with these at SOLO, where Perigo is posting and discussing them all.)
Here’s Part One:
For added interest, see if you can work out whether his version owes more to Miles Davis or to Chet Baker, or to Chris Botti.
- Thanks for reading.
Enjoy your weekend.