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The United Kingdom in 1964 – a big government country that was O.K. ish (well perhaps).

Anti big government people often make the assumption that life gets worse as government gets bigger. It is true that if government grows, in size and scope, things will not be as good as they could have been – but life can still, for a while anyway, get better for most people.

Take my home town of Kettering, Northamptonshire. Government started to grow here in 1875 (in other towns it was after 1870 – but we did not vote for an Education Board here), with the rise in national taxation and the increase in functions pushed on local government by the Disraeli Act of 1875. Yet life still got better here till at least 1960 – and government was big indeed by then.

I am not just talking about real wages – but general life also. For example Wicksteed Park (the first amusement park in the country) did not exist in the 19th century – but it was a national institution by 1960, although it has sadly declined in recent years. Also ordinary people were better dressed in 1960 than they were in the 19th century (when some children did not even have boots or shoes – even in a town famous for making them) – although, again, one could hardly call people in 2014 well dressed, or well behaved.

And the buildings were fine (or at least O.K.) – the destruction of so much of the “town that Gotch built” did not really begin till 1960. And the town was not too big with endless housing estates eating the fields and the bluebell woods. It was still the Northamptonshire of the writer H.E. Bates and others.

In 1964 there was full employment and historically high wages, no welfare class (of any size) unlike today. But people were also mostly well behaved, polite, well dressed and so on.

“That is trivial stuff Paul” – perhaps. although I do not think so, but there is rather a lot more.

I have already mentioned the lack of a welfare class in 1964 – there were people who could not take care of themselves, but there were not millions of healthy working age people who had never worked and never would. Is this not important?

Also non state institutions were vastly less unhealthy in 1964 than they are now. “Oh Paul is going to obsess about the Churches again” – actually I was thinking of the family.

In 1964 most people still lived in stable families – now we do not. Is this not an important change – and not for the better.

In 1964 the fertility rate was positive, we could replace ourselves as a nation – now it is negative, we can not. We have vast immigration instead of our own children.

In 1964 most shares were still owned by individuals (there was no Capital Gains Tax) and the City of London was matter of self employed stock brokers and stock “jobbers” (wholesalers). The brokers worked for individual clients who still owned most shares (the “Aunt Agathas”) and stock jobbers worked selling shares for the companies.

Now most shares are owned by institutions (hired manages in control of other hired managers – with real owners a thing of the past) and private investors are taken to the cleaners by faceless organisations in a post “Big Bang” GOVERNMENT DOMINATED City of London.

Even Ulster (Northern Ireland) was quiet before 1964 – the main news stories there were about lost cows and the latest attractions at Port Rush. Not how the IRA (Sinn Fein) was running the government and destroying education.

Indeed education was much better in England and Wales also – Grammar Schools were common, intelligent children could get a good education (at the expense of taxpayers). Qualifications meant something – not like now. And the universities were only just starting to over expand.

And the United Kingdom of Great Britain and Northern Ireland was an independent nation in 1964 – not a slave of the European Union, we were are own masters.

Also the British armed forces were still a real force in 1964 – the Wilson-Healey gutting of the Royal Navy and Royal Air Force (reducing Britain to a token power dependent on others) had not yet happened. Britain was not a joke – we still mattered. Yes in spite of Suez, and in spite of the pathetic “Super Mac” we still mattered. And there was no conscription – getting rid of conscription was about the only good thing that “Super Mac” ever did.

And there was still freedom of speech and freedom of association – the 1965 (and all the later Acts) had not yet been passed.

“We get it Paul – in 1964 everything was wonderful – everything now is awful”.

No I am NOT saying that.

The advance of technology in the last 50 years has been a good thing (yes I find the internet time consuming – but the advance of technology has been a good thing) – and that has enabled higher living standards, for most people.

And government in 1964, although much smaller than now (the Welfare State has exploded since 1964), was still vastly too big – unsustainable big in the long term, all the seeds of our present and future societal crises were already long planted before 1964. Government dominated health care and education and old age provision (at least for the poor) and none of these things is good – although the old traditions of the pre government dominated schools and hospitals (the grammar schools and hospitals were still private in the 1930s) still dominated the government services of 1964, teachers, nurses and doctors still acted like dedicated professionals (not dominated by endless government rules and union practices).

However, it was a good country in 1964 – it was a better place to live than Britain had been in (say) 1874, when government was vastly smaller.

I am not saying that if government had been kept to the level, size and scope, it had been in 1870 or 1874 that Britain in 1964 would not have been an even better place – of course it would have.

But Britain in 1964 was an O.K. ish place in 1964 – in ways we are not now, and this should not be forgotten.

Pissing our Hard Earned up the wall…

In a report out this week,  The Independent Commission for Aid Impact has concluded that almost our entire ring fenced 10 Billion Foreign Aid budget is being wasted. Where it was hoped it would reduce corruption and support the most vunerable members of developing nations, they find that our hand outs are actually increasing corruption and never finding its way to those who need it most.

Well Doh! No shit Sherlock!! etc etc. We Kitty Counters could have told them that for virtually nothing. If you hand over large amounts of our cash direct to corrupt foreign Governments, all you are doing is topping up the regime and its cronies bank accounts, and providing the readies for their wives and families to go on a spending spree in Paris, London and New York. It does nothing for poor peasants whatsoever.

And I do not believe that iDave and the Coalition, or Mr Ed and Labour are naive fools, I believe they know exactly where the money is going. The money is a massive bribe for various services rendered, like voting the right way in the UN, not putting trade barriers up, buying a load of surplus weaponary that we can’t unload by legitimate means etc.

NickM of this Parish, has always been of the opinion that the only Aid that works is the money sent home by our various groups of immigrants, straight back to those who need it, their families and villages. It’s a shame that they are not spending their money in our country, but it beats the shit out of what the Department for International Development is doing, which is worse than nothing at all.

Add this to the 9 Billion net and rising that we give away to the EU every year, that is almost 20 Billion pounds. This is not chump change that has got lost down the back of the sofa, that is serious fuckin money! The only way to make a poor country less poor is to trade with it. So let’s can the Aid and fire up the trade.

Max Keiser of Russia Today finally jumps the shark.

I have long known that Mr Max Keiser is a propagandist who works for Mr Putin’s “Russia Today” attacking the West. However, vile as he is, I have accepted that Mr Keiser is sometimes effective at his job – an effective propagandist. I think this is no longer true….

Russell Brand (yes the long haired moron) described as a “real revolutionary – someone who will lead the revolution” by Mr Keiser today on his show. And without the slightest hint of sarcasm or irony.

Followed by an interview with a lady who wants everyone (the entire adult population) paid to take part in politics – “like Ancient Athens” (blissfully unaware that the payment of citizens just for turning up to the Assembly marked the start of the DECLINE of Athens).

The subsidy of the rich is wrong – but the correct response is not to subsidise everyone (in the hope that Klingons, or some such, will pick up the bill).

And “revolution” is not going to solve anything.

Time for Mr Putin to hire new propagandists – his old ones have gone stale.

President Warren Harding – the real founder of the modern Republican Party (or the good bit of it anyway).

All most people know of Warren Harding is that he was corrupt – and all that most people know is wrong.

Although certainly no saint (he was a drinker, and a poker player, and a lover of women) Warren Harding was not personally corrupt – and his Administration was actually less corrupt than most. For example vastly less corrupt than the Administrations of Franklin Roosevelt or Harry Truman – and Hollywood and the rest of the media (and academia) do not present those Administrations as corrupt.

That is all the space I am going to waste on the so called “Ohio Gang” or “Tea Pot Dome” – people who are interested in such stuff can read a good biography of Harding (clue to what a good biography is – the author will not pretend Harding’s papers were destroyed, which is the standard “Progressive” excuse for not reading the documents and writing “history” based on nonsense instead). 0r they can just look at the chapter on Harding in the “Politically Incorrect Guide to the Presidents” by Steven F. Haywood (a good historian).

I am interested in other matters………

Today it is a common place among Republican politicians to talk of rolling-back-government – reducing the size of government, cutting taxes, getting rid of regulations, and reducing government spending.

Some (alas not enough) of these Republicans actually mean what they say – but WHERE DOES IT COME FROM?

Republicans have not always promised smaller government – Republican Presidents (and Governors, and Senators and Congressmen and …..) did not use to make a big thing of this. One does not hear this in the speeches of Lincoln, or in Chester Allan Arthur. or Harrison, or Taft…….

These were not the big (peacetime) government fiends of Rothbardian fantasies – but they were not roll-back-the-state types either.

So where does it come from? This modern identification of the Republicans (sometimes correctly – sometimes NOT correctly) as the make-government-smaller party?

Basically it comes from one man.

WARREN HARDING.

Essentially Warren Harding created this role for the Republican Party – he invented the approach, he created the modern Republican Party (or the good bit of it anyway).

In his campaign against the Administration of Woodrow Wilson, Warren Harding created all the themes we know today.

When you hear (for example) Senator Rand Paul speak (on civil liberties, on government spending, on ANYTHING) you are really hearing WARREN HARDING – Republicans did not tend to speak in this way before him (he, basically, invented it).

And Harding lived the dream – he made it real. And he was faithfully followed (in his policies) by his Vice President Calvin Coolidge (President Calvin Coolidge) and his Treasury Secretary Andrew Mellon (anther viciously libelled man).

As the British historian Paul Johnson (in “Modern Times” – long before Ron Radash’s work on Harding) pointed out – Warren Harding actually did the things he said he was going to do.

He sincerely believed in Civil Liberties.

Warren Harding utterly opposed the politics of the Socialists and Communal Anarchists (the Red Flaggers and the Black Flaggers) – but (ironically) they were physically safer under Warren Harding than they were under the Progressive Woodrow Wilson.

President Harding would not tolerate people (even Reds) being sent to prison on trumped up charges – and if he found them already in prison, he would pardon them to get them of prison.

“The bastard must have done something. so what does it matter what we got him for – after all he would murder millions if he had the chance ” may appeal to nasty people (nasty people including, perhaps, ME), but it horrified Harding.

Harding was also horrified by censorship – or any other aspect of the Police State.

He was denounced as Pro German (totally false) for defending German Americans from persecution – German thinkers (as far back as the 1700s) may have worked on aspects of a “Police State” (see Hayek – “The Constitution of Liberty” and “Law, Legislation and Liberty”), but this did not mean that German Americans deserved to be persecuted by an American Police State.

And Warren Harding defended black people also.

He was born in 1865 the year of defeat for the Slave Power – and Warren Harding did not have the “benefit” of a Rothbardian education (based on the writings of Woodrow Wilson – oh yes that was the source Rothbard based his stuff on) that the Civil War was not “really” about slavery. The old men that Warren Harding knew in Marion Ohio had fought in the Civil War – but what did they know, they were not academics…..

The continued persecution of blacks (above all lynching) disgusted Warren Harding to the core of his being – and he denounced the persecution.

The Democrats (and some Republican Progressives, for racism was a Progressive doctrine then, indeed it still is – accept now Progressives stir up blacks against whites, rather than whites against blacks, the switch came in the 1960s and was quite sudden, but as the Dems control the media they got away with it ) replied by spreading rumours that Warren Harding was part black himself (a lie) – but he carried on.

Unlike Woodrow Wilson (a German style trained intellectual [see my first comment] – and “scientific” racist), Warren Harding (a man with little formal education) held that prices and wages should be set by supply and demand – not government orders.

This is why the crash of the post World War One Credit Bubble in 1920-1921 was not like the crash of 1929.

The crash was just as bad (although the Progressive academics have put it down the “Memory Hole”) but Warren Harding was not Herbert “The Forgotten Progressive” Hoover (a man who became conservative after he left office – having never been so before). Harding did not prevent wages and other prices (a wage is a price) adjusting to the crash – instead he got government out of the way (so mass unemployment was not a feature of year-after-year – as was under Hoover-Roosevelt,  for most of Roosevelt’s policies were started by Hoover).

So what did Warren Harding do?

He cut the Federal government in half – from about six billion Dollars spending in 1920 (a peacetime total) to about three billion Dollars only a couple of years later.

Yes prices were falling – but you try and do that. Cut government spending – dramatically.

No “fool” or “lazy man” could do what Warren Harding did - roll back the government on civil liberties, on taxation, or regulation, and on government spending itself.

That is what “normalcy” (and, contrary to ignorant leftists, “normalcy” was the correct American English in Webster’s dictionary when Harding was young) meant to Warren Harding.

Civil Society – where individuals and private associations (commercial companies, churches, clubs, fraternities……) could exist and thrive – and not have every day of their lives spent looking over their shoulder for the commands of the state. A government limited by the Constitution of the United States - in which Warren Harding believed (unlike Woodrow Wilson who despised it) and even physically saved (the physical document was falling apart when he became President – Warren Harding had preserved).

This (his belief in liberty, in property rights, in limited government)  is why the collectivists hated Warren Harding (and still do) – and that is why they (the academic-media-cultural elite) have spent more than 90 years spitting on his name.

UK High Street store takes Bitcoin

Well, this is interesting. The UK operation of CEX, the used DVD/videogame/etc. retailer, has started accepting Bitcoin. In its brick-and-mortar shops.

We’re proud to be first national UK retailer adopting Bitcoin, adding it permanently to webuy.com. Yes, you can now buy with Bitcoin and sell your old gadgets, phones and games for Bitcoin on webuy.com in the UK.

To celebrate the online launch we have turned our Glasgow Sauchiehall Street store into a pound free zone from 13 to 15th May and introducing Scotland’s first Bitcoin ATM, only the 4th in the UK. We’re excited to run such an innovative trial. Like you, we live and breathe technology so it’s only natural we looked at Bitcoin as a choice to offer you when you buy and sell games, phones, gadgets and films.

I actually stumbled across this when I wandered into the Sauchiehall St. branch this afternoon. (Should’a taken some pictures. Damn.) The “Pound-free zone” thing is, as they say, a temporary promotional gimmick, and all the price tags were still in Sterling, with GBP/BTC rates plastered liberally around the place. I’m not sure how well it’ll work, since the rate can still fluctuate quite a lot over the course of a day, but it’s fascinating to see a national retailer commit to the e-currency so wholeheartedly.

(Not sure why their blog post is dated next Thursday, mind you…)

The Affordable Cell Phone Care Act

I do not apologize for withholding from you dear feline Zanzibarians the treat of beholding yet again His Face, even though for once it bears a relatively pleasant expression. You will see it anyway if, as I recommend, you follow the link to the whole column. :)

The Affordable Cell Phone Care Act
by EDWARD CLINE February 4, 2014

Groucho Marx had many great monologues and spiels, but this is one of his finest:

“The nickel today is not what it was fifteen years ago. Do you know what this country needs today?…A seven-cent nickel. Yessiree, we’ve been using the five-cent nickel in this country since 1492. Now that’s pretty near a hundred years’ daylight saving. Now, why not give the seven-cent nickel a chance? If that works out, next year we could have an eight-cent nickel. Think what that would mean. You could go to a newsstand, buy a three-cent newspaper and get the same nickel back again. One nickel carefully used would last a family a lifetime.”

Note the absurd application of a Keynesian Money Multiplier effect, where inflation allows a carefully spent nickel to last a lifetime. Of course, the gentleman falls for the muddled logic and obfuscation, responding, “Captain Spaulding, I think that is a wonderful idea.”

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Bitcoins: Money of the Future, or Ponzi Scheme?

Bitcoins: The Second Biggest Ponzi Scheme in History

Gary North – November 29, 2013

I hereby make a prediction: Bitcoins will go down in history as the most spectacular private Ponzi scheme in history. It will dwarf anything dreamed of by Bernard Madoff. (It will never rival Social Security, however.)

To explain my position, I must do two things. First, I will describe the economics of every Ponzi scheme. Second, I will explain the Austrian school of economics’ theory of the origin of money. My analysis is strictly economic. As far as I know, it is a legal scheme — and should be.

PONZI ECONOMICS

First, someone who no one has ever heard of before announces that he has discovered a way to make money. In the case of Bitcoins, the claim is literal. The creator literally made what he says is money, or will be money. He made this money out of digits. He made it out of nothing. Think “Federal Reserve wanna-be.”

Second, the individual claims that a particular market provides unexploited arbitrage opportunities. Something is selling too low. If you buy into the program now, the person running the scheme will be able to sell it high on your behalf. So, you will take advantage of the arbitrage opportunity.

Today, with high-speed trading, arbitrage opportunities last only for a few milliseconds seconds in widely traded markets. Arbitrage opportunities in the commodity futures market last for very short periods. But in the most leveraged and sophisticated of all the futures markets, namely, the currency futures markets, arbitrage opportunities last for so brief a period of time that only high-speed computer programs can take advantage of them.

The individual who sells the Ponzi scheme makes money by siphoning off a large share of the money coming in. In other words, he does not make the investment. But Bitcoins are unique. The money was siphoned off from the beginning. Somebody owned a good percentage of the original digits. Then, by telling his story, this individual created demand for all of the digits. The dollar-value of his share of the Bitcoins appreciates with the other digits.

This strategy was described a generation ago by George Goodman, who wrote under the pseudonym of Adam Smith. You can find it in his book, Supermoney. This is done with financial corporations when individuals create a new business, retain a large share of the shares, and then sell the stock to the public. In this sense, Bitcoins is not a Ponzi scheme. It is simply a supermoney scheme.

The Ponzi aspect of it comes when we look at the justification for Bitcoins. They were sold on the basis that Bitcoins will be an alternative currency. In other words, this will be the money of the future.

The coins will never be the money of the future. This is my main argument.

THE AUSTRIAN SCHOOL’S THEORY OF MONEY’S ORIGINS

The best definition of money was first offered by Austrian economist Carl Menger in 1892. He said that money is the most marketable commodity. This definition was picked up by his disciple, Ludwig von Mises, who presented it in his book, The Theory of Money and Credit, published in 1912.

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Analysis continues. In sum, he thinks the buyers of bitcoins are in thrall of the Greater Fool Theory; but is Mr. North correct?

Politics in it’s old hat.

This started as a reply to Sam’s comment here.

Sam, you have a point. The older I get the more I realise that politically we are regressing to a bastardized-Victoriana that never really existed. How else would the largest ever proposed engineering project in British history be a railway that George and Robert Stephenson could envisage – literally – it’s George’s gauge metal rails of course. It’s also 50 billion quid jizzed up the wall

It was cutting edge when George and son were building the Rocket but that was nigh on 200 years from an MP idling on the track and getting mown-down by the Rocket to the first paying passenger getting on the “new” HS2. What happened to the Fairey Rotodyne? Political pignorance and bastarding fuckwittery is what happened. There were concerns over noise (Fairey had got it down to the sound of a tube train). The fact the US military wanted loads of ‘em was irrelevant. The fact there was significant commercial interest in a high-speed city to city VTOL aircraft matter nothing if it scared the horses. Literally. The Bellendius Maximus who first championed HS2 was (and is) Lord Adonis. Yes, it does sound like he should be a porn-star. Lord Andrew [which means "manly" BTW] Adonis looks like this…

What mental image do you have of a Lord Adonis? A sort of demi-god who traded blows with Hektor of Troy? Or that piss-poor wankenshaft? He wrote a scholarly history of the poll-tax.

Short version. I did more against that. I simply didn’t pay. Not because I objected nor because I knew it was wrong as such but because I knew I could get the feck away with it and those quids in my pocket were worth more to me than being in the pockets of the cuntcil. At the time, there was, as ever a C19th (perceived as) idea that the community charge was either right or wrong. I just didn’t want to pay. Yes, I was shellfish. I was the full lobster.

So I didn’t pay and they never got me. So, what’s my point? Well, possibly it is Ike’s about “guided missiles but unguided men”. No politricks this last fifty years has moved much beyond WWI. Anywhere.

Look at the lavish expense of HS2 and compare with the dismal spending on Skylon? The first is a C19th solution to a C21st problem and the second is an SSTO aerospace plane that would result in Bristol Filton being re-monikered “Bristol International Spaceport”. Now if that isn’t cooler than making the trip from London to Birmingham 15 minutes shorter I despair. I have been to Birmingham. It’s OK but space!

It is the chronic lack of imagination that gets me about politricks.

And put it this way… 50 billion quid in you or my pocket is much more likely to get us to Mars than any ammount in the poche of the taxman. And that will only get you to Brum.

Which is like OK and all but seriously nothing to write home about.

Birmingham – it’s OK I guess.

Back in Britain.

I have been back in Britain a few days (it feels like years), my impressions are….

“Evening Standard” on the late night-early morning train from the airport.

Weird article attacking “golf club Nazis” (for such clearly Nazi things as likeing Monty Python – no the article made no sense to me either). I have now remembered that this article was supposed to prove that “Citizenship” classes-tests should teach immigrants how to claim government benefits.  No I do not know why that is supposed to be a good (not a bad) thing  – or what it has got to do with Monty Python.

Odd letters to the editor saying they supported the government’s policy of reducing state spending (what reduction in state spending?) but wanted more spending on X, Y, Z – such as railways to places which already have railways going to them.

A big article on the “living wage” idea, which showed no idea of what a labour market is – and how trying to increase wages (with no increase in productivity) can only increase unemployment. But quoted various “leading conservatives” as being in support of the “living wage” concept, as a way of fighting the multinational corporations (why would a conservative want to do that?).

And an article by Mr Cameron on “keeping the spirit of the games alive” – but I could not bring myself to read it.

Back in Kettering told that Holocaust memorial day was used as an excuse for death-to-Israel speeches (killing six million Jews in the 1940s was wrong – but killing another six million Jews now would be good, because Jews are Nazis or something…. a bit like the golf club people?).

Visit London – go round bookshops. Leftist books are the ones pushed forward (on bits of board) or turned to face the customers. Pro free market books very rare in the London bookshops anyway. Do the shareholders in Waterstones, W.H. Smiths, and Foyles know that the staff (including the managers?) want them robbed and murdered?

And why do people employed in comfortable bookshops hate “capitalists” and “capitalism” anyway (it is something to do with the shareholders likeing Monty Python? or are they Jews? or perhaps they play golf?). Anyway the people in London appear to be very prosperious – try to force down “credit bubble city” thoughts….

Lots of students – perhaps this “education” thing explains a lot…..

Try to see the film “Zero Dark Thirty” in Kettering – but it is only on late at night in the cinema. So they can say that there is not much call for it? Something I have noticed before with non P.C. films – they are either not shown at all in the local cinema, or they are shown only once a day and an irritating time.

Notice that leftist newspapers (such as the “I”) still have special stands at the local supermarket or (like the ultra Keynesian “Financial Times”) are raised on boards to make them more visible than other newspapers. Why?

Leftist magazines also still pushed and non leftist ones not. Even “Time” magazine (which is not even a British magazine and has no British news in it) put in favoured position – for no reason.

British television and radio news (and television and radio comedy) scream, gag, slump to floor…….

Oh yes – I almost forgot…..

Hour long speech (loud enough to be a speech anyway) on the train to London from a young person who worked in the Cabinet Office (amongst other places) about how he went to see Barack Obama sworn in again – and had the words “Barack Obama” written into his flesh. Supposedly Comrade Barack is a great leader for “our people” (the gentleman had an English accent) and lots of words about Barack Obama’s skin colour (which was the same as that of the person giving the speech).

Does this chap understand that he is a racist? Or does he have some some sort of Frankfurt School way out of basic logic?

Anyway his friends seemed most impressed by his words. And he did make a couple of references to things other than Mr Obama’s skin colour. For example the importance of “networking” to gain money from the state (I suppose the word “networking” is a word that modern people use for “corrupt influence”) and how much money (1.2 million) a friend of his had raised for the Obama campaign.

Oh, of course, also how people joined the “public sector” to “help people”. The young gentleman was expensively dressed – so clearly the “public sector” (the taxpayers) have helped him, and his “networking friends”.

Israeli Elections 2013.

The balance of power will be held by a political party headed by a television presenter (the son of a another media type) who has promised everything (education, health, housing) to everybody – and who is known (even to his actual supporters) as “Pretty Boy”.

Anyone want to explain how Representative Democracy is a good thing?

Debt Crisis? What Debt Crisis!

In my time as an astrophysicist I got used to, well, astronomical numbers. So there are several hundred billion galaxies each boasting several hundred billion stars. That’s cool. Not least because some might have solar systems where they can do economics but this is terrifying…

We are not having a debt crisis.

It’s important to make this point, because I keep seeing articles about the “fiscal cliff” that do, in fact, describe it — often in the headline — as a debt crisis. But it isn’t. The U.S. government is having no trouble borrowing to cover its deficit.

Paul Krugman in the NYT. If I raped and murdered a baby I would clearly be a Bad Man. Raping and murdering the countless millions to come though… As Keynes disgracefully said, “In the long-run we’re all dead.” Well, John me old silver that is looking like a very much shorter run these days.

Or to put it more bluntly it’s pretty much George Best arguing that he isn’t an alkie because the offie is still open for another fifteen minutes.

To be fair to Krugman in a technical sense he is right. The USA (and the rest of us) are not teetering on the “fiscal cliff” as much as well over it and doing 9.81m/s/s straight down and looking at some rocks most hard and pointy without a bungee. So, in a sense he is correct because we are beyond the crisis (the point of decision or whatever) and are already well and truly fucked.

So let’s watch a video

Now bear in mind two things. The first is those are $100 bills and the largest generally circulated note in the USA is $20 and the USA doesn’t owe $1,000,000,000,000 but $17,000,000,000,000.

And that is just on record debts… If you include pensions, medicare/medicaid, assorted other Ponzi schemes I have heard estimates as high as $86,000,000,000,000.

Now if we work on a Coke costing roughly $1 I leave it as an exercise for the reader to work that one out as a visualization in 12 fl oz (355ml) Coke cans. Extra marks will be given for comparing that to the distance to various heavenly bodies and to the quantity of exploitable aluminium on the planet.

H/T – The Whited Sepulchre.

Greedy capitalist corporation really nonprofit state entity.

All the msm in the United States (including Fox News) are treating the “Long Island Power and Light Company” as a greedy capitalist corporation which is letting people sit in the cold and dark while it counts its profits.

There is a problem with this picture. The “Long Island Power and Light Comany” DOES NOT EXIST (it has not done for years).

The thing in charge is “LIPA” the Long Island Power AUTHORITY – a non profit, government owned entity.

If America was going socialist by the considered choice of the people that would be one thing. But the people do not even know – they think they are been persecuted by evil capitalist corporations, because the media (including even Fox News now) implies that this is the case.

And Britain?

No better  – here the 100% government owned Network Rail is called “private” and there is endless discussion of the massive “cut” in government spending that has not happened.

The scariest site on the internet…

There are some horrors out there but I don’t mean SAW style torture-porn or even the contents of Jimmy Savile’s hard-disk. Nor do I mean more sophisticated stuff that would make the shades of Edgar Allen Poe and MR James huddle together and cry like girls. The hate-fests of Pyongyang or Tehran? Mayan prophecies, alien invasions, another Star Wars trilogy… Gimme a break!

This.

Fuck-a-doodle-do! that is horrifying. Where the Count Fuckula is it all going? God doesn’t even know.

In the US (and for a few years now here) there is a tradition of a baby shower where the mother-to-be has a party and female friends and relatives turn-up with gifts for the soon-to-be-born. Usually practical things for babies like a set of posidrives or something (look I’m a bloke with no kids so I’m improvising here). And then there is a sharp chilling blast from the front door and a man in a dark rain-coat with a fedora masking his face (I always imagine this drawn in comic-book fashion) turns-up and says, “I’m from the government, I’m here to look after your son or daughter to be.” and presents an envelope. What is in it? As the shadowy figure exits into the rain (it has to be raining doesn’t it?) the expectant mother opens the envelope…

It says, “Before your child has taken their first breath they will owe $51,602. Thank you for your co-operation”.

I dunno about the USA but here that’s about the tuition fees for a 3/4 year undergraduate degree. It’s certainly a mortgage deposit or enough money to set-up a business. If that were $51,602 the other way set in trust (with reasonable interest) until they are say 18 that is enough money to give everyone a bloody good start in adult life. But no. Alas it is on the debit side.

But let’s look at the headline figure: the USA is 16 trillion, 240 billion, 420 million in debt (plus some “loose change”). Now I have a background in physics and astrophysics so when I say a figure is astronomical please believe me. I say “loose change” because I assume that is the way government thinks of it – and up to a point when you are $16 trillion in debt what’s the odd hundred thou here or there? That’s something you lose down the back of the sofa.

Except… The Manhattan Project cost $2 billion. Apollo cost $10 billion. The Voyager and Viking missions cost in the region of a billion a throw. The merest dust of the valance. I’m not adjusting for inflation here. Nor should I. Voyager 1 is (arguably) around the heliopause and it’s still working. JPL, I salute you! If we go to kibbles and bits (or Greek as it is otherwise known hummus and mezes – I guess) at least something, somewhere might know we were once magnificent. It might even happen as we are still gnawing the bones of the first-born beneath the idols that the Old Ones called “wind turbines”. There might even be an ageing shaman who remembers how the Gods made the sparks and then took them away as the Goreacle of Kyoto said must happen for the Righteous to be exalted. He might even have a musical box to show a feral child with really bad back-combing*. Something of us will reside in the stars. That is a comfort of sorts.

So let’s do some arithmetic…

A US dollar bill is 0.0043″ thick (US Treasury). In real money that is 0.00010922 metres (1 inch = 2.54 cm exactly). Let us proceed… 16.243 (It’s tricky because it keeps going up, OK? – and I’m scraping my head on the ceiling due to the “loose change” accumulating under the sofa – bear in mind this is the sort of loose change you can buy a small warship with, not a can of Coke – this is government loose change) x 1012 multiplied by that means a stack of dollar bills 1,774,060,460 metres tall (I round off even more loose change here so the roof now needs re-jigging and I have hypoxia). In miles that is 1,102,350. That is a column of dollar bills to the Moon four times (with a fair bit left over). That is truly an astronomical sum.

Quite why (I have said this before) the Republicans engaged in a kerfuffle over such things as gay marriage when they had four Towers of Babel in the room already is beyond me. Perhaps because Dubya was involved in building this? Perhaps because they really didn’t plan on hacking this inverse beanstalk down themselves because they had their own bread and circuses planned? God knows.

Anyway, to any new-born American who has just took their first breath right now. You now owe an extra $6 and the midwife hasn’t weighed you yet. Best of luck. I mean that sincerely. You have been born into a World of troubles that were not of your making. Your personal tabula rasa is in hock now for $51,608. And that is between me starting this post and finishing it. I started it late last night. I publish mid-afternoon.

I have used a fair bit of Biblical imagery here and that is apt. Talk about the sins of the fathers, ye even unto the fourth generation and all that malarkey.

*You can see that anyway in Chesterfield on a Friday night.

The terrible year of 1986.

A post on an often overlooked year – 1986. A year in which events occured that had (and are having) terrible consequences.

A British person when hearing of the date “1986″  will think (if they think of anything) of the “Single European Act” – formally it came into effect in 1987, but the agreement was made in 1986. Mrs Thatcher was told that the agreement with the European Economic Community (as some still called it at the time) would lead to free trade, an open market, and was, therefore a good thing for a free market person to agree to.

Of course Mrs Thatcher’s information came from officials – note to all politcians, the moment you start to rely on official information (and interpretations) you are lost. For you are no longer really in power – the officials are.

This is not hidesight – I remember as a university undergraduate knowing what the Single European Act was really about, and my friends all knew as well. We all knew that it meant that the EEC (EC – now EU) would be able to impose any regulation it liked in vast areas of life (the British veto having gone  – in these areas) and under vague words like “health” the Euros would be able to crush liberty in this land. The later works of such people Christopher Booker and Richard North just confirmed what we expected to happen. Lord Denning (and many others) had predicted the crushing of Common Law principles by Euro edicts (of course happily extended by British officials – overjoyed to have all restraints on their power destroyed by the Single European Act) at the time.

It was not an open market – it was a “single market” (a very different thing). In an open market customers decide what they want to buy – in a single market officials decide what customers should buy.

However, other terrible things happened in the year 1986.

The other great evil to hit Britain in 1986 was the “Big Bang” in the City of the London – the financial centre.

“But that was deregulation Paul” – it was deregulation, if by “deregulation” you mean government intervention ripping up the rules of private clubs and subtituting its own rules – a government definition of a “free market” defined not by what people had actually evolved over time (by voluntary interaction), but by following the “perfect competition” model from neoclassical economics text books.

There is some evidence that even the people who originally thought up the perfect competition conception only thought of it as theorectical tool (not as a picture of how the world was – or should be), and certainly the Austrian School of economics disputes the concept from start to finish – but the government went ahead anyway. It knew what a market “should” be – and if the people who actually built the markets thought differently, they must be wrong.

Remember although the London stock exchange was created in 1801, there was no law preventing anyone setting up a rival stock market (not before 1986 anyway). And also no law preventing people buying and selling shares “off exchange”. So the City of London (with all its guild like “restrictive practices”) was actually a voluntary institution. In fact a series of private clubs – covering the selling stocks and shares, insurance, commodities (and so on).

What had “deregulation” actually brought? The end of the great partnerships that created the City (the investment banks) – the partners sold up and ran away (not exactly a vote of confidence in the new order – from people some of whom had been in the City for generations). And the self employed stock brokers (who bought shares for the public) and stock jobbers (who sold shares for companies) were replaced by enterprises that did both (no conflict of interest there) and whose employees tended to have no lasting relationship with clients (they see them as cash cows – no more). And, of course, thousands of pages of government regulations (Financial Services Acts – and agencies to enforce them) with endless box ticking.

Somehow this not really seem like “deregulation” to me – in fact I think it will be the death of the City of London. But only time will tell.

Turning to the United States….

An American will say “1986 is that the year the Republicans lost control of the United States Senate?” – yes it was, but I am not concerned with party politics here. I am concerned with policy.

In 1986 an amnesty Act was passed by the Congress (including the Republican Senate) and signed into law by President Reagan. It was not descibed as an amnesty Act of course – the people who voted for it (and Reagan when he signed it) thought they were “controlling immigration” from this point onwards – and (to start from a clean slate) people who had been in the country a long time (and were nice and good – and had puppy dogs with big eyes) would no longer fear being dragged from their homes by evil jack booted thugs from the government. After all this was how officials (and the media – following academia) explained everything to the politicians, just as they had during the 1965 immigration law debate – which first messed up American immigration law.

“But what is wrong with this Paul – free migration, sounds very libertarian”. So it might be – had the Supreme Court (5-4 some years before 1986) not ruled that government (local, State and Federal) had to give “free” (i.e. paid for by taxpayers) education and other benefits to illegal immigrants – otherwise it was “discriminating” against them.

And the few nice illegals (the ones with the puppy dogs with big eyes – the people who love America dearly and do not wave the Mexican flag and pray for the destruction of the United States, not even slightly) who got amnesty? There turned out to be three million of them and (of course) many more millions of illegals followed them into the United States, believeing that they would eventually also get amnesty. As Comrade Barack is doing by Executive Order right now, after all the illegals vote for him even though they are not citizens, thanks to the “Motor Voter” (a driving license is enough to vote) Act he supported as a Senator.

“We should try to win their support Paul” – a person (regardless of ethnic background) who loves the United States can enter legally right now (join the military – serve your term, and you have citizenship). Yes the American immigration system is a mess (and has been since at least 1965 – the Teddy Kennedy Act), but 1986 made it worse – and made it farcical.  Someone who believes the United States unjustly took land from Mexico in 1848 (ignoring the fact that the Mexican government, a military dictatorship,  also wanted war – and had its own expansionist plans) are not likely to vote for people who do not hate the United States. Odd that they are so eager to vote for Barack Obama – of course not odd at all. But have “free migration” as long as there are no government benefits (“free” education for the children and so on) – except, oh dear, there is that Supreme Court judgement  (see above) of some 30 years ago.

Lastly there is the another major Act of Congress from 1986 – one that may help to destroy civilisation, and not just in the United States.

Again neither the people in Congress or President Reagan understood what they were supporting (the officials, media, and academia – advised them again). They thought they were supporting an Act that prevented evil hospitals throwing women on to the street in the middle of giving birth (seriously – that is how the Act was presented to them, after all it is so wonderful for the reputation of a hospital to throw a women who is the middle of giving birth on to the street, they were doing it all the time……).

What did the Act really do?

It made “emergency” treatment (without proof of payment) compulsory at all private hospitals with an ER (formally a hospital was not covered by the Act if it in no way had anything to do with government schemes – in the age of Medicare try and avoid any involvement with government schemes…..).

Wonderful – free treatment for the poor (indeed for anyone – one might try and chase them up afterwards, but about half of them never pay so what is the point….). Accept someone has to pay to pay for all this “free” treatment – so the bill (as with all government mandates) got passed on to the people who were paying their bills. The people who had carried on with private insurance in spite of the previous government interventions – such as Medicare and Medicaid (which has the same effect on health cover costs as government backing for student loans had on college tuition fees – they sent costs into the upper atmosphere) and the endless regulations (insurance mandates and so on) that have so increased costs. No surprise – insurance bills (that now carry all the “free” treatment) have exploded since 1986.

American government (State and Federal) interventions have been pushing up the cost of healthcare since doctor licensing spread from State to State like a plague (that this is about “protecting the sick” was exposed as a lie by Milton Friedman – more than half a century ago, it really has the same purpose as lawyer licensing, to increase producer incomes by keeping people out of the market) and the FDA (this agency was made even worse in 1962 – turning the development of new medical drugs incredibly expensive and delaying their introduction for years, thus costing tens of thousands of human lives). However, it was the Act of 1986 that really sent American health cover into a death spiral – that pushed the costs of insurance (for the old mutual aid “fraternal” system had long been undermined) beyond the reach of ordinary people.

Most people still oppose “Obamacare” (which will complete the destruction of independent health care in the United States – replaceing it with crony capitalist “private providers” who will depend upon the government – till the government decides to get rid of the crony capitalists, as it already has with the providers of government backed student loans), but the majority of people that are opposed was not a big enough majority to stop it (let alone repeal it). After all  everyone agrees that “something must be done” and the “something” is always even more collectivism – “free” health care for all “children” up to the age of 26 (SCHIP on steroids – but paid for by the insurance companies, i.e. by their customers) no “denial” (i.e. honest priceing) of medical cover for “pre exiting conditions” and on and on – the honest insurance companies (oh yes there are some) will be bankrupted over time, and only the cronies (those in bed with the government – hoping to become “private providers” for government funded health cover) will remain. Already more and more employers are dropping health insurance for their employees – as they have worked out that the fines will be cheaper than paying the inflated (inflated by Obamacare regulations) costs of medical insurance.

Does anyone really believe that Mitt “Romneycare” Romney is going to be willing or able to repeal all this?

So American health care will fall – and more than this will fall. For this entitlement program is added to all the existing entitlements – the ones that are already bankrupting the United States.

So the United States will go into de facto bankruptcy. And it will not fall alone – most other major Western nations stand on the knife edge of economic collapse already. The fall of the United States will drag us over the cliff with it.

So, overall, 1986 was not a good year. It may even lead to the “Progressive” dream (of Richard Ely, mentor of  “Teddy” Roosevelt and Woodrow Wilson, more than a century ago) of the desruction of “selfish capitalism”. For the history of the last century (including 1986) has not been an accident – and nor has it been some hole-in-the-wall “conspiracy”.  On the contrary it has been out in the open  – for those who bothered to look.

The Progressives were open in their aims – and even in their means. They openly said in their books (the century old books that, for example, Glenn Beck tried to bring to public attention) that they would use schools, universities and the newspapers to fundementally transform society – by manipulating opinion (both public and political elite opinion). Truth does not matter to the Progressives (it has never mattered to them) only their cause matters – and they will use any lie and distortion to further their cause – the cause of the destruction of existing society, of “selfish capitalism”. The Fabians in Britain had much the same aims – and used much the same methods. Including the desire to dominate education – not just at university level, but at school level (via text books and “teacher training” – step forward Comrade Bill Ayers and “social justice” education).

The books are more subtle today – such books as “Looking Backward”, “Philip Dru: Administrator” and “New Deal” (oh yes there was such a book) were a lot more blatent in their love of tyranny and hatred of freedom (sorry hated of selfish capitalism) than “Freakonomics”,  “Nudge” and “Thinking – Fast and Slow”, but they have the same message. The message is as follows …. most people are vermin (“Homer Simpson” types) they are bound to be maniputed by someone (most likely by greedy capitalists) so why should not the noble we (the enlightened elite) manipulate them – for their own good. “Thinking Fast and Slow” is the most fundemental of the lot – it openly denies that people (apart from, nudge and wink, the noble author and his noble readers) are human beings, they do not really think (they do not really have free will) so someone must control them – for their own good……. Yes it is “So You Think That You Think” the fictional collectivist book (aimed at making people accept that they are vermin – fit only to be controlled by an enlightened elite) that Ayn Rand makes up in her novel “Atlas Shrugged” back in the 1950s (the collectivists never really change – and their “science” is actually as old as Plato).

“But Paul – how do you know the authors of Freakonmics and Nudge share the idealogy of the author of Thinking – Fast and Slow?” Errr  – the praise they give the latter work (on its front and back cover – and when interviewed) is a little hint. I did tell you that this was not a hole-in-the-wall conspiracy – it is quite open, if you look. What more do you want – for the evil elite to have glowing red eyes and tenticles? Sorry, but they look like ordinary folk – and have gentle voices full of charming wit (whereas their enemies, people like me, sound like old storm crows).

The Progressives may not share the doctrines of the Marxists (although modern Frankfurt School “cultural” Marxists do not seem to make a big thing of the actual doctrines of Karl Marx either) – but they share their aim (the destruction of selfish capitalism). Ditto the alliance with the Black Flag people (the so called “anarchists” who happily cooperate with the Red Flag Marxists in such things as the international “Occupy” movement and the unions the collectivists control, for you see the Black Flag “anarchists” do not really oppose collectivism, they just want to rename the state “the people” and then get on with the looting and killing) – the Progressives may (privately) sneer and their uncouth allies – but leading Progressives (such as Mr George Soros and the other rich people who fund such things as the “Tides Foundation”) still fund them. And Progressive teachers and college Profs understand that both the Red Flag Marxists and the Black Flag “anarchists” are allies – allies against “selfish capitalism”, the old world they must destroy in order to build their perfect world.

Of course I am a reactionary – I do not believe that the interventions (the ever higher government spending and ever greater regulations) make the world a better place. And many of the Progressives do not believe that either – they believe (along with the Marxists who follow the “Cloward and Piven” doctrine and others) that the ever greater statism will destroy the present world – and, thus, (in their minds) leave things open for the building of the perfect world.

The “Fabian Window” (perhaps the most blatent example of evil turned into a work of art – and the Fabians were natural allies of the Progressives) makes this clear – wolves in sheep’s clothing, trickery and lies (openly praised), the world held over a fire and beaten with hammers (in order to create a better world – regardless of the human cost). George Bernard Shaw and H. G. Wells openly talked of the tens of millions of human beings they wished to kill (not because they hated them “I do not hate anyone” said Shaw), but simply because they were in the way – in the way of creating the perfect world (the Heaven on Earth). And these evil people remain “liberal” heros to this day – ever seen a television show or a Hollywood film where they are shown as “bad guys”?. And, of course, they went on to support the Soviet Union – with Mr and Mrs Webb pretending that tens of millions of people were not being murdered (remember lying is O.K. if it is for the Progressive cause). Mrs Webb had some doubts, over the mass killings in Poland when the Soviets invaded in 1939 – you know when they were the allies of Adolf Hitler, but Mr Webb simply told her that “in a century no one will even remember this”. All was justified to build the “New Civilisation”.

And the American Progressives were the same. With Hollywood personalities busy doing such things as justifying the Soviet invasion of Finland – “I have been there and it seemed a little Fascist Republic to me” said Lillian Hellman (wife of  Dashiell Hammett [1929 "Red Harvest" evil capitalist America "Poisonville"] – together they made the prototype “celeb” Progressive power couple, both in Hollywood and in literary circles). One could always tell when Hellman was lying – her lips moved, not only was Finland not Fascist but Hellman had not been there.

One could go on and on – and people may already be bored (although in 1986  – and 2012 the Progressive celebs are just as powerful in cultural circles). And there is the standard defence (made by “anti McCarthyites”, even though Joe was actually interested in Communist agents of influence in the government not in the culture,  since the 1940s) “they are not Marxists”.  And they may not be – they may not have read a page of “Das Kapital” . The “Progressives” just share the objectives of the Marxists – the extermination of the existing society of  “selfish capitalism” (and anyone who defends it – rich or poor “henchman of the capitalists”), and the building of the wonderful new perfect world.

However, I am such a reactionary that I not only believe that that their interventionism (their ever higher government spending and ever more regulations) makes the world worse (not better) than it otherwise would be -  I also believe that their wonderful new perfect world (the one they dream of creating on the ashes of the existing world) would be Hell on Earth.

Jim Morrison had it right

So the Bank of England’s monetary policy committee, (currently about as relevant as condoms in a Nunnery) has decided that keeping interest rates at 0.5% is not stimulus enough for the sluggish economy.  Nor apparently was the £325,000,000,000 they have counterfeited thus far.  No siree bob, what this economy needs apparently is another £50,000,000,000.  Just to put the overall figure of £375B into some sort of perspective, if you assume there are about 30 million net taxpayers in the private sector who pay tax meaningfully, then that works out to an absolutely staggering twelve and a half grand each. 

 

Now Pravda or as some people still insist on calling it, the BBC tell us that this money will be used to “stimulate the economy” but of course it will do no such thing.  This will simply be used to buy government bonds (which are simply loan instruments); this holds down the interest rate artificially because bond prices are inversely proportional to interest rates.  This simply allows the criminally inept government to keep on spending money it has just conjured up out of thin air whilst loading further interest payments onto an already over-burdened exchequer.  It will need to be repaid at some point so it’s really just deferred taxation.  Remember, this is the government that is apparently going to get the deficit under control and if their aspirations are met (and they won’t be), the one Trillion national debt in 2010 will be 1.4 Trillion if the plan works.  This incidentally is what the odious Mr Balls claims is cutting “too far too fast”

 

UK sovereign bonds are becoming more and more a devalued, hideously asymmetric bet and when the light-bulb of recognition goes on in the markets, watch interest rates climb, far and fast. 

 

At that point borrowing will either be wholly unaffordable or simply not available and with interest rates still at 0.5% (and no-one sane keeping money in any of the bust banks) the only play left in the book will be more QE or a voluntary abandonment of the fiat money experiment.

 

Now I do not expect politicians to give up on absolute power (i.e. the ability to create money from nothing) ever, and only when reality is smacking them in the face will they be forced to stop QE and stop spending.  Consequently, contrary to some serious Austrian economists, I do not expect deflation.  It is true that in a depression, prices should fall, malinvestments should be liquidated and more realistic values should be ascribed by the market to previously inflated goods.  The very fact this is not happening (recession and inflation? Something very, very wrong) shows that the politicos are wedded to artificial credit creation and thus endemic inflation.  When this dragon really gets out of the bottle I suspect we will see an inflationary apocalypse quite the equal of the 1970s and possibly far, far worse.

 

So let’s be honest.  The government and the opposition (no hope with any of these clueless cunts) are not Monetarists, or Keynesians (you had to repay debt in good times according to JMK) and they certainly aren’t Austrians, mores the pity.  They are Mugabe-ists.  They fund their own government with money they print.  Total, total madness and the path to utter ruin. 

 

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