Archive for the ‘Socialism for the rich’ Category

The motivating madness of government fascism

January 5, 2010 Leave a comment

People don’t see crises coming because they believe in the rationality of government.  They don’t see the dynamic inherent in a coercive rent seeking entity that necessarily compels governments worldwide towards madness again and again and again.

WWI was madness.  The Great Depression was madness.  WWII was madness.  Hiroshima was madness.  The Cold War was madness.  Chernobyl was madness.  The deliberate death of the Aral Sea was madness.  The destruction of arable land worldwide to convert this precious fertile land into low-density residential development is complete madness.  Deliberate and govt-supported over-fishing worldwide is unsustainable madness.  The GFC was predictable madness.  The continued presence of the West in Afghanistan is madness.

Why do governments the world over act with such apparent suicidal, manic-depressive blind stupidity, such venal short-termism, such environmental destruction, such barbarity?

Because very simple incentive structures built up over time around the coercive activities of government compel it towards destructive barbaric madness.  Simple.

Those contractors supplying government make money out of what government does.  Government (originally) was developed to provide a limited range of essential services – law and order and defence.  Suppliers to government have a natural incentive to try to convince government to spend more, to make government bigger.  It’s an easy gig because governments can print to finance their own spending habits (unlike the private sector).

Governments then get bigger doing things they shouldn’t do.  And because there is no appeal process beyond government (all you can do is appeal to another agent of government), government has a natural tendency to get bigger because nothing can stop it short of complete anarchy.  So it keeps growing until chaos really does ensue.

This happens again and again throughout history and every time people are “shocked” by the chaos, by the suddenness of the social breakdown.  The Soviet Union, Iran, the US in the ’60s, Cambodia, the former Yugoslavia, Europe after WWI… all these regions experienced government-induced chaos, government supported madness.

The US will experience exactly the same social breakdown, the same insane bankruptcy, the same comic-tragic stupidity.  Why?  Because the dynamics of government compel the country towards this inevitable denouement.

Let me explain by providing a quote from Bill Bonner of Daily Reckoning:

Bethesda is one of America’s wealthiest suburbs. Money from all over the nation rolls this way. The playing field is tilted in Bethesda’s direction.

“I was sitting in the Starbucks, having a cup of coffee,” Elizabeth reported. “One man next to me was on the phone. He was talking about some deal he had done with the US Army in Afghanistan. It sounded as though he was very happy with it. The man next to me on the other side was on the phone too. He was a jollier fellow, talking loudly about how much money he had made. I thought he was a stockbroker or something like that. Then, I realized he was talking about a contract with the government.”

While the rest of the nation has suffered a setback over the last ten years…the Washington metropolitan area has boomed more than ever. Real estate prices are down…but less than other areas.

And when we looked for a house to rent, we expected to be able to name our price. We thought it would be a buyer’s market. Not so. Nice houses in Bethesda are still being sought after. How so?

Wars…bailouts…boondoggles – this area loves them. Federal employees’ earnings keep going up…and a higher portion of the US national income goes to Washington.

People make money out of the government’s fascist madness.  So the fascist madness increases.


What’s hard to understand about rent-seeking?


Times top editorial cartoon of 2009

December 27, 2009 Leave a comment

Who am I to argue with the venerable Old Lady of old media?

Why isn’t Steve Keen an Austrian?

December 20, 2009 14 comments

Fantastic Steve Keen interview with Max Keiser below:

I’m genuinely puzzled by Steve Keen.  He correctly, brilliantly, diagnoses the problem – unsustainable growth of Ponzi debt finance that has grown like a cancer in every corrupt-at-the-top Western economy.  He correctly, brilliantly, identifies this Ponzi-finance system as the antithesis of true capitalism.  He correctly, brilliantly predicts that Japanese-style resuscitation efforts will only result in Zombie banks, Zombie companies, Zombie governments and a Zombie economy.  He correctly, brilliantly points out that politicians like Obama have been duped by corrupt advisors into thinking that giving trillions of e-dollars to the bankers will somehow kickstart the economy (it won’t do anything other than save these Ponzi-schemers’ own corrupt skins). 

If Steve Keen so clearly sees government as part of the problem, as a cesspool for rent-seeking behaviour, why doesn’t he grasp the only real solution – less government, less corruption, real competition in money – a return to gold and silver as money? Why isn’t he a follower of Murray Rothbard rather than (indirectly) that corrupt confused dandy, that semi-fascist Nazi-sympathiser, J.M. Keynes?

I’m sure if Keen had been schooled in Austrian economics at university he would have become a fantastic Austrian economist.

Then again, given I was unemployable as an Austrian at university and couldn’t even consider pursuing a PhD in the field (given the politics involved), perhaps he did the sensible thing and perhaps he is a closet Austrian on the inside.

So much of what I hear from him is pure Austrianism, pure Peter Schiff, pure Rothbard, I’m sure he’s sympathetic to at least some of ABCT and Austrianism more generally.  Or is it just that you can’t teach an old post-Keynesian dog new tricks?

Steve, tell me I’m right.  Please.

Jim Willie (a.k.a. The Golden Jackass) nails it

December 15, 2009 Leave a comment

Fantastic blockbuster post, predicting multiple, cascading sovereign debt defaults, a run on US debt and a final run to gold and silver.

I agree with all of this analysis, as can be seen in previous posts on gold, silver, fiscal Armageddon and other entries.

This is the best current synopsis on what’s coming that I’ve seen to date.  The question is timing.  I cannot say this will happen in 2010.  But it will happen.

The only question is when.

One year to go, Germany

December 15, 2009 1 comment

On 3 October, 2010, Germany will make its final payment on its WWI debts, imposed on it by the Allied Powers via the illegitimate, coercively imposed Treaty of Versailles, which precipitated the Weimar Republic’s hyperinflation, which wiped out the German middle class and precipitated WWII.

Can you believe that through all of this, the debt was still enforced, payments still honoured, and interest paid on the debt for nearly a century?

Oh, the humanity!

James Quinn, stop freaking me out

December 13, 2009 Leave a comment

All this Brave New World dystopian nightmare stuff is making me even more concerned for the future (if that’s possible).

Wikipedia is surprisingly accurate

November 30, 2009 Leave a comment

Taken from the “criticism of fractional reserve banking” article:

Some monetary reformers see the prevalence of the debt-based monetary system ultimately resulting in a political crisis, between the vast majority of dispossessed who have had any accumulated net wealth periodically “stolen” during periods of “credit crunch” (and find themselves in permanent inter-generational debt, being forced to work involuntarily in the money-economy simply to house themselves and survive in the debt-based economy), and a tiny minority of inter-generational, super-rich elites connected close to the font of the money supply (being the private banking sector), who will strongly resist calls for redistributive economic policies by using all of their financial strength and lobbying power in an attempt to entrench and sustain their artificially privileged status. Given that the profession of this privileged minority is to produce nothing other than debt and inflation, and given that they face being rendered impotent if the power to print debt-free money was returned to government, it is to be expected that those associated and aligned with the private banking interests will use any means necessary to preserve their power, as they have no other skill besides the issuance and distribution of debt money.