LLR Pages

Friday, December 26, 2008

Be of Good Cheer: Christmas Greetings from Sean Gabb

Sean Gabb, director of the UK's Libertarian Alliance, has penned a quite interesting and eloquent Christmas Greeting, unlike others "from religious and political leaders from around the world," which "range from the vacuous (Her Majesty the Queen), to the impressively malevolent, so long as the volume is turned down (the Bishop of Rome), to the plain stupid (the Archbishop of Canterbury)."

Gabb's column is quite remarkable and full of subtle insights and sound, sober reasoning. He seems to be have the appropriate mixture of pessimism and optimism, and many of his suggestions mirrored or crystallized some thoughts I've had--on China and the relative prosperity of the West, and other matters.

I liked Gabb's observations about the possibility and hope that technological progress can help to continue to drive the underlying engine of economic prosperity despite the state's regulations and parasitism:

Here, though, is an end of my gloom. Much is bad now, and will get worse in the next few years. So long, however, as we can avoid a collapse into totalitarianism, the future is nowhere near so bleak as we are presently assured. Scientific and technical progress continue at the most wonderful speed. Sooner or later, there will be a renewed scramble to bring the results to market, and our lives will be still further enriched--and this time, I hope, considerably extended.
As for China's much-ballyhooed coming economic dominance, from my business dealings with that country and region over the last decade, I've become more and more skeptical of this. They've improved so much, in part, because they were so far down due to communism; loosening the chains a bit can easily double or quadruple GDP in a short time. But the corruption, the entrenched regulatory-state mindset, the lack of a liberalized property rights institutional history and framework, along with certain widespread character traits, I think are severe barriers to China catching or surpassing the US or Europe in economic terms. I've begun to think India has a better shot, given its better English skills and British-imposed legal and property institutions, but even they seem to be a basket case. While there are smaller economies that may be superior to the West, such as Singapore, there seems to me to be no serious large challenger to the US's economic dominance. Despite our flaws, America and Western Europe are still head and shoulders above all other large economies, and this can continue to be manipulated to our advantage. Gabb has some similar thoughts:
And there need be no relative decline of the West. We have been told for years--usually by self-righteous lefties, gloating over a fall that they assume they and their families can personally avoid sharing--that the coming economic giants of this century are China and perhaps India. This is as fatuous as earlier claims about Japan. If you type the phrase "population pyramids" into Google, the first result will be an American Government website showing how the population of every country in the world is, and will be, distributed by age. Until we know how to extend not merely life but also youth, the most dynamic people in any country will be aged between twenty five and forty five. In England and in America, this age group will predominate throughout the present century. In the Orient, every developing country is following the Japanese pattern of rapid ageing, followed by actual decline of population. The Japanese at least reached Western standards of living before they stopped having children. The Chinese may simply grow old before they get rich. After a fashion, China has been getting richer for about thirty years. We shall see how long that can continue once the majority of the population is over the age of fifty, and have neither savings nor children to support them in old age.
I've noted elsewhere (Dyslexic Vandarchists of the World--Untie!, Left Anarchists and Progressive Taxation, The Over-reliance on State Classifications) that some of the "left-libertarians" seem to overshoot when they attack the state-support of industry and industry's manipulation of the state to the detriment of competition, consumers, and workers--in vulgar anti-capitalist fashion, they go so far as to accuse even nominally peaceful and productive companies, like Macy's and Wal-Mart, of not being genuine owners of their own property and thus subject to vandalism, squatting, etc. In Gabb's column, he turns the tables and criticizes the more totalitarianism Chinese intermixing of state and commerce:
And China has been getting richer only after a fashion. About thirty years ago, its Communist rulers decided to turn the country into one big sweatshop, supplying the West on razor thin profit margins. They managed this by unlimited force. Ordinary working people in China have been ruthlessly exploited. With the banning of real trade unions, and with generally oppressive contracts of employment, labour there is free only in the nominal sense. Otherwise, costs have been socialised for favoured companies; and competitiveness has been maintained by an undervalued exchange rate. Look beyond those glittering towers built for the ruling class and its foreign partners, and you find endless and increasing misery.

Saturday, November 15, 2008

Free Talk Live's Ian Freeman In Jail for Questioning the Legitimacy of the System

Free Talk Live host Ian Freeman, formerly Ian Bernard, founder and host of the hit nationally syndicated talk radio show based in Keene, New Hampshire, creator and writer of, and frequent critic of the vile and diabolical state, was arrested yesterday for questioning the legitimacy of the state and its courts, which resulted in a secret trial conducted and not captured on camera. Free Mind TV’s Nick Michelewicz drafted a preliminary report, which has been up since yesterday. It says the following:

**preliminary report**
Active FreeKeene blogger Ian Freeman today helped the Keene District Court prove that it is ready to crack down on non-violent peaceful people today. At least 6 officers of various rank were present in court to try and outnumber the liberty activists. Judge Burke was obviously ready to order Ian’s arrest, and did so less than 45 seconds after entering the courtroom. Ian was then taken to a second room where his supporters could not go with him. He was viewed on closed circuit TV as he continued to question the system and not consent, and drew two further contempt of court charges, all three for 30 days in jail.

Watch for further updates, articles, videos, and more.

Freeman was ordered to show up in court over a couch that was on his property, even though it was on his tenant’s side of the yard. Even though his court appearance was caught on tape, his secret trial wasn’t, and that was deliberate on the part of the statists who were looking for an excuse to separate him from his pro-liberty supporters (many of them being members of the Free State Project) and to make an example of him in the process.

Here’s the video of the initial proceedings against Ian. Notice that, at one point in the video (shown below), the bailiff immediately moves to cuff Ian before the judge even ordered to remand him into custody:

As blogger Manuel Lora pointed out yesterday, this has been all executed to warn the liberty activists that the state is watching you.

Tuesday, November 4, 2008

The Evils of Libertarian Censorship

Is censorship on a libertarian blog the way to go? Is it the right, ethical, and moral thing to do? That's the question that has been weighing on my mind today. As the head of a blog that I already operate (yes, it's Let Liberty Ring for those who don't already know), I don't let censorship become the norm on the site. I let people blog, as long as it's about human liberty.

I don't care what your stripe of libertarianism is. If you're a geolibertarian, free marketeer (like Yours Truly), paleolibertarian, voluntaryist, anarcho-capitalist, anarchist, and whatever label you happen to go by, you have to believe in free speech and respect that right, even if it is deemed unpopular by the other bloggers and commentators on the site. There is a crucial question that needs to be asked: is it moral, ethical, and right to censor a blogger, not because he or she allegedly attacked the owner of the blog, but because he spoke out against the drama and the crud that have become the standard and the norm on the site? That's the question someone needs to ask.

As of today, Tuesday, November 4, 2008, I was kicked off of Last Free Voice. The reason for my boot? Because I wrote an even-handed, very reasonable piece about the drama and childish nonsense that was becoming part and parcel of the problems on LFV. Most of the drama centered on the allegation that our former Chairman Jim Davidson called Elf Ninos Mom "a child abuser," when he never did such a thing.

I basically, in a nutshell, wrote that everyone had a complicit part in the attacks and drama on the website. I never resorted to name-calling, and I never resorted to threats or abuse of any kind towards ENM. If I wanted to be abusive towards her, I would have employed every single four-letter word in my response to her. I would have been hateful to her about it, and I know that I would have been outspoken about it as well.

ENM's husband, who has obviously taken control of the entire site (because, apparently, ENM is not a happy camper that I and a few other people have been outspokenly scrutinizing her), has decided to attack me and my character because of it.

This is what he has said in the comment section of the LFV site (interestingly enough, my post and the comments that follow are no longer on the site):

"ENMHUSBAND: As I already said, "Todd", I wipe my ass with your opinion of me. You have been here all of five minutes and you think it's appropriate to post this kind of shit? ENM, where the hell do you even get these rocket scientists?

I did a little checking and see that you are one of this Jim Davidson's friends. That wasn't hard to find at all. It also wasn't hard to find that you and this Davidson asshole ganged up to abuse a woman who said she was raped as a child. Big men, both of you.

Yea, you are gone. I said no warnings and I didn't fucking stutter."

When I logged onto the site before I was kicked off, my post was no longer on there. It was "pending review" on Wordpress's server. And then, after that, the entire post was removed, along with all the comments. I still have the comments in my inbox. Minutes later, I was no longer a contributor to the site, and how I found out was that, once I logged back into Wordpress, I could no longer access LFV's dashboard. I can no longer write a post or manage a post like I did hours and days before.

As for the comments in my inbox, they were not written and blogged in a private setting. They were made public. Therefore, Elf Nino's Mom's Husband cannot attack me for posting his comments on a public website, such as the BTP.

Plus, ENMHusband and ENM have been very arrogantly spiteful and hateful towards the BTP, and therefore this does involve the Party, whether we care to acknowledge it or not. The level of nastiness and childishness that have become a part of the LFV showcases exactly how off the rocker a number of these LP partisans and their sycophants have become.

What has transpired on LFV was an act of censorship. It sends the following message to libertarian bloggers and posters: "You are not allowed to freely post your views and comments that are not partial to the Libertarian Party and the Last Free Voice. You have no right to criticize the owners of a blog for their own biases, even if your criticisms do not involve ad hominems or berating of any kind. You are not allowed to speak freely about your feelings of any kind if it's not politically correct or in favor of the Libertarian establishment or, better yet, the Last Free Voice establishment."

These are the evils of libertarian censorship. It has become a disease in our own movement. It has become a disease in the LP. And that disease has now infected LFV.

The question is: will it infect the BTP? I pray that it doesn't. Otherwise, liberty in this country is doomed, and we all will pay a huge price for it.

[*Note: Crossposted on my blog on the Boston Tea Party website.]

Saturday, October 25, 2008

Mock the Vote

Jesse Ventura, when he’s not talking about 9-11, makes a lot of sense.

Describing the two party system to Larry King, he said: “[W]hat you have today is like walking into the grocery store and you go to the soft drink department, and there is only Pepsi and Coke. Those are the two you get to choose from. There is no Mountain Dew, no Root Beer, no Orange. They’re both Colas; one is slightly sweeter than the other, depending on which side of the aisle you are on.”

In an interview with Newsmax, he described politicians in the two party system as pro wrestlers. “In pro wrestling, out in front of the people, we make it look like we all hate each other and want to beat the crap out of each other, and that’s how we get your money, [and get you to] come down and buy tickets. They’re the same thing. Out in front of the public and the cameras, they hate each other, are going to beat the crap out of each other, but behind the scenes they’re all going to dinner, cutting deals. And [they’re] doing what we did, too — laughing all the way to the bank. And that to me is what you have today, in today’s political world, with these two parties.”

Jesse’s right. Our political system is a farce. This year, we have running for president a warmonger who’s a reluctant socialist versus a socialist who’s a reluctant warmonger. We have two parties that claim they’re different, but when the Establishment, the Complex, our shadowy overlords, whatever you want to call them, really want something, they get it. When the Establishment wanted the Bailout in the face of almost universal grassroots opposition, they got it. When the Complex wanted immunity to the telecoms who knowingly spied on Americans, they got it. When our shadowy overlords wanted stormtroopers to brutally stifle protesters during the party conventions, they got it.

But even if voters had a real choice, and even if the politicians followed the majority will on issues that matter, the system would still, most likely, be a farce. As Augustine observed, without justice, a government is nothing but a band of thieves. Augustine was writing about kingdoms, but his insight applies to democracy as well. Without justice, the ability of the subjects of a government to vote on the laws and rulers that govern them doesn’t make a government any more legitimate than an unjust monarchy. And the founders of this country did not believe democracies were likely to be just.

As Walter Williams points out, “We often hear the claim that our nation is a democracy. That wasn't the vision of the founders. They saw democracy as another form of tyranny.” In Democracy: The God That Failed, Hans-Hermann Hoppe notes “it is difficult to find many proponents of democracy in the history of political theory. Almost all major thinkers had nothing but contempt for democracy. Even the Founding Fathers of the U.S., nowadays considered the model of democracy, were strictly opposed to it. Without a single exception, they thought of democracy as nothing but mob-rule.”

In order to create a just government, the founders established a constitutionally limited republic, in which the popular vote was to be just one check among many. Notably, the word democracy does not appear anywhere in the Constitution.

Yet today, the word democracy is sacred. As election day approaches, Americans dutifully watch inane debates, respectfully watch commercials in which celebrities harangue them to “rock the vote” or other such nonsense, and compulsively ask each other who they’re going to vote for. On election day, they go to the polls as if they were receiving Holy Communion and then go through the rest of the day wearing “I Voted” stickers as if these stickers were ashes on Ash Wednesday.

Pat Buchanan calls the blind reverence to and awe of the seemingly divine force of democracy “democracy worship.” He notes it was the prospect of spreading democracy to the Middle East that ultimately convinced The Decider to decide on war in Iraq.

So how did we get from the founder’s deep suspicion of majority rule to the deification of democracy?

Once, humans lived in small bands and were free. True, life was dangerous, but no one told you what to do. As Philip Jackson explains, “Men might hunt individually or in groups. But when they cooperated, leadership was not based on official rank, but rather on one hunter proposing a group hunt and recruiting others to follow him. None were compelled to follow, however, and different hunts might have different leaders based on the relative charisma of different individuals at different times. Women needed even less coordination. With them leadership would be more a matter of the wiser or more skilled giving advice as the need arose.”

Then came the great collusion, followed by the long oppression. As humans increased in number and food became harder to come by, bands became tribes and tribes became chiefdoms. Big Chief, hungry for power, convinced the high priest to delude the people to his consent. Big Chief was divinely appointed, they were told, and maybe even divine himself. Therefore, the people must do what he says.

Murray Rothbard (1926 to 1995), economist, historian, and political theorist, was one of the greatest minds of the twentieth centuries. Perhaps Rothbard’s greatest achievement was his identification of the Court Intellectual. In contrast to the masses, who “do not create their own ideas, or indeed think through these ideas independently,” intellectuals are society’s opinion shapers. The Court Intellectual is the intellectual who, “in return for a share of, a junior partnership in, the power and pelf offered by the rest of the ruling class, spins the apologias for state rule with which to convince a misguided public.”

Until recently, the propaganda put out by the court intellectuals was linked to traditional religion. To quote Rothbard again, “particularly potent among the intellectual handmaidens of the State was the priestly caste, cementing the powerful and terrible alliance of warrior chief and medicine man, of Throne and Altar. The State ‘established’ the Church and conferred upon it power, prestige, and wealth extracted from its subjects. In return, the Church anointed the State with divine sanction and inculcated this sanc-tion into the populace.” In the West, the myth of the divine right of kings held sway until the Enlightenment.

According to Keith Preston, “A principal achievement of the Enlightenment of the seventeenth and eighteenth centuries was the demolition of the notion of the divine right of kings.” The word enlightenment may conjure up images of a man sitting in the lotus position on a mountaintop, at one with the universe, but in regards to the time period, enlightenment refers not to mystical insight but to the realization that much of the received wisdom, including the myth of the divine right of kings, was a pack of lies. With the courage to question the lies and disseminate their conclusions, the writers of the Enlightenment began a revolution in thought that culminated in the Declaration of Independence.

Unfortunately, at the same time they were knocking down one pillar of the Old Order, another writer, Jean-Jacques Rousseau, was planting the seeds of democracy worship. In Rousseau’s mystical vision of a society governed by what he called the “general will,” each of us would put “his person and all his power in common under the supreme direction of the general will, and, in our corporate capacity, we [would] receive each member as an indivisible part of the whole.” The resulting sovereign, “being formed wholly of the individuals who compose it, neither [would have] … nor … [could] have any interest contrary to theirs; and consequently the sovereign power [would] need give no guarantee to its subjects. In his imagined world, “[t]he Sovereign, merely by virtue of what it is, [would] … always [be] what it should be.” According to James Bovard, who calls Rousseau the “modern state’s evil prophet,” contends that in promoting his concept of the “general will,” Rousseau “unleashed the genie of absolute power in the name of popular sovereignty, which had hitherto been unknown.”

Rousseau’s concept of the general will proved irresistible to future court intellectuals, as it perfectly conflated society and state, as useful trick indeed. “With the [subsequent] rise of democracy,” Rothbard wrote, “it is common to hear sentiments expressed which violate virtually every tenet of reason and common sense: such as ‘we are the government.’ The useful collective term ‘we’ has enabled an ideological camouflage to be thrown over the reality of political life. If ‘we are the government,’ then anything a government does to an individual is not only just and tyrannical; it is also ‘voluntary’ on the part of the individual concerned. If the government has incurred a huge public debt which must be paid by taxing one group for the benefit of another, this reality of burden is obscured by saying that ‘we owe it to ourselves’; if the government conscripts a man, or throws him into jail for dissident opinion, then he is ‘doing it to himself’ and therefore nothing untoward has occurred.”

Observing the power of “the myth that says we are governing ourselves,” Lew Rockwell notes that whereas “[k]ings of old would have been overthrown in short order if they had tried to grab 40 percent of people's earnings, or told them how big to make their toilet tanks, or determined how schools taught every subject,” modern Americans “turn a blind eye to petty tyrannies in our midst.” As Bovard comments, it is as if “[b]eing permitted to vote for politicians who enact unjust, oppressive new laws magically converts the stripes on prison shirts into emblems of freedom.”

Wise up, America. There’s nothing special about 50% plus one. Truth and justice cannot be determined by a show of hands. We are not the government. Voting is not a sacrament. And as it stands today, when we're only given a choice between two Establishment approved candidates, voting is a joke.

Voltaire, the undisputed leader of the Enlightenment, used humor and wit as two of his primary weapons, and, as Robert Ingersoll remarked, “In the presence of absurdity he laughed....” It was largely by making the divine right of kings a laughing stock that the Enlightenment writers destroyed it. It is time for us to do the same thing to the divine right of the majority.

This year, vote laughing or stay home.

Thursday, October 23, 2008

Who's Nailing Paylin?

Apparently, there's an adult film about Sarah Palin called Who's Nailing Paylin? being filmed as we speak. According to a recent Raw Story piece, it's scheduled for an Election Day release by Hustler Video.

For the record, the actress who looks like Palin (someone named Lisa Ann) brings new meaning to the whole campaign tag line "The Maverick and the MILF."

The script for the soon-to-be-released DVD can be found here. You can even view a video preview of the porno at and the first ten minutes of the movie here.

I have to admit that this does sound hilarious and interesting at the same time. Everyone will be kept appraised when the DVD comes out.

Update: I erred late last night about the YouTube video. It's only a minute and twelve seconds long, not ten minutes long. My apologies to everyone!

Monday, September 29, 2008

Congress Votes Down The $700 Billion Paulson Bailout Bill

In a bold, shocking historic act on Congress' part, Capitol Hill voted down on the $700 billion Paulson bailout bill. The vote, incidentally, was 205-228.

Here's the entire story from the Wall Street Journal in its entirety (subscription to the site is required, by the way):

Bailout Bill Fails in House Vote
Amid Defections in Both Parties

WASHINGTON -- A bipartisan group of U.S. House lawmakers defeated a $700 billion rescue plan for Wall Street on Monday, rejecting pleas from the Bush administration and congressional leaders from both parties of the potential dire consequences of policymakers not acting to help financial markets.

The 205-228 vote against the plan sent stocks plummeting, with the Dow Jones Industrial Average down around 500 points as news of the vote spread through Wall Street.
The Bailout Deal

* Vote: Should the House have approved the bailout plan?
* Deal Journal: Wall Street Works the Phones as Dow Drops
* Earlier: U.S. Seals Deal for Financial Bailout
* Full Text of the Draft Bill | Summary
* Rescue Will Help Borrowers Keep Homes
* Bailout Tests Bush's Conservative Legacy
* Real Time Econ: Bailout Bill Assists Fed

The defeat came despite House leaders holding open the vote for well beyond the 15-minute time limit, supporters were unable to convince enough members of either party to switch their votes against the proposal.

The defeat is a massive setback for the Bush administration, specifically the Treasury Department, as well as lawmakers who have been working throughout the last week on the legislation in the wake of the collapse of Lehman Brothers Holdings as well as the government's bailout of American International Group Inc. and its takeover of Fannie Mae and Freddie Mac.

The White House expressed displeasure with the defeat of financial-market bailout legislation in the U.S. House of Representatives, and said President George W. Bush will meet with his economic team later Monday to determine the way forward.

Obviously we're very disappointed in the outcome this afternoon," Mr. Fratto said. "There is no question that the country is facing a difficult crisis that needs to be addressed."

Mr. Fratto said President Bush will meet with his team Monday afternoon and be in touch with congressional leaders.

The $700 billion rescue plan for Wall Street was defeated by a bipartisan group of lawmakers in a 205-228 vote. The vote, which was expected to be tight, is a sharp repudiation of the Bush administration and congressional leaders, who warned that failure to act would have dramatic implications for financial markets and the U.S. economy.

Earlier Monday, the White House said it believed it had the votes necessary for the rescue bill to pass.

President Bush, who tried to rally support for the package with a televised statement early Monday, had a list of a "couple dozen" lawmakers to call before the vote, Mr. Fratto said before the vote.
—Henry J. Pulizzi contributed to this article.

Write to Michael R. Crittenden at

Tuesday, September 23, 2008

Kinsella "Intellectual 'Property'" Interview by Lew Rockwell

A fifteen-minute interview by Lew Rockwell: Podcast #32; MP3 file (8.2MB). As Lew's site describes it, "Stephan Kinsella podcast on phony rights vs. real ones." We discussed mainly the moral, libertarian, propertarian, and state-related aspects of patent and copyright, and why there has been confusion about IP among libertarians.

More detailed discussion of these issues can be found on my libertarian publications page; see also my monograph Against Intellectual Property; and my speech and presentation, The Intellectual Property Quagmire, or, The Perils of Libertarian Creationism.

Thursday, September 18, 2008

The Fed Bails Out Money Markets

The Fed, in its collectivistic fashion, bails out the receding money market industry, costing taxpayers $180 billion.

As F.A. Hayek once noted, one intervention leads to another intervention. When will we ever learn from this mess?

September 19, 2008
Fed Offers $180 Billion for Ailing Money Markets
Reflecting concerns about the health of the global financial system, the Federal Reserve and the world’s other major central banks significantly escalated their assistance to global markets on Thursday, making almost $200 billion available after bank lending came to a near halt and threatened the global economy.

In a statement released at 3 a.m. in Washington, just as the markets opened in Europe, the Fed said that it had authorized a $180 billion expansion of its temporary reciprocal currency arrangements, known as swap lines, to allow banks to borrow more dollars in money markets at a lower rates.

Paul Mortimer-Lee, head of market economics in the London office at BNP Paribas, said the move reflected concerns that the financial markets now appeared to be facing their gravest problems since the Depression.

“We’re high on a mountain, with a thin rope and holding on by our fingertips,” he said. “Are policy makers scared? They should be.”

The concerted central bank action follows the rout on financial markets this week as the bank Lehman Brothers filed for bankruptcy protection, the brokerage firm Merrill Lynch lost its independence and Washington announced an $85 billion bailout of the American International Group, the insurance giant.

The move seemed to cheer equity investors, who reversed part of the earlier deep slide in Asian markets and bid stocks up in Europe. American stock indexes opened with strong gains, with the Dow Jones industrials rising more than 100 points in early trading.

The central problem is that, lacking confidence in one another’s ability to repay, banks have slowed their lending to each other via the money markets. The short-term rates at which they borrow have surged as they seek to keep cash on their books.

Besides the Fed, the coordinated action involved the European Central Bank, the Bank of Japan and central banks in Canada, Switzerland and Britain.

Analysts are starting to talk about the need for much more intervention from Washington, warning that Thursday’s move would not provide a quick fix to unlock bank lending.

Writing in The Financial Times on Thursday, Kenneth S. Rogoff, the former chief economist at the International Monetary Fund, said the United States would have to spend 5 to 10 times as much as it already has on bailouts, an amount closer to $1 trillion to $2 trillion.

The monetary fund had estimated in April that the losses related to the crisis, which started in mortgage markets in the United States, would be $1 trillion.

Such a rescue would dwarf the huge bailout of the American financial system in the 1980s by the Resolution Trust Corporation, a government-owned, asset-management company charged with liquidating assets of thrifts and the Japanese government’s mass purchase of bad debts from banks during the 1990s.

“We are moving from a monetary solution to a fiscal solution,” said Richard McGuire, a fixed-income strategist at RBC Capital Markets in London. He said that while the central banks’ moves had helped, other efforts would be needed.

Traders usually look at spreads in the money markets to measure the health of the money markets and judge whether banks are willing to lend to one another — and ultimately to consumers. Spreads are the differences between interest rate charges overnight and those charged over a longer period.

After the fund injections by the banks, the cost of borrowing dollars overnight fell, with the benchmark Libor rate falling 1.19 percentage points, to 3.84 percent, Bloomberg News reported, citing the British Bankers’ Association.

But the gap between three-month United States Treasury yields and the three-month London interbank, or Libor, rate — known in the market as the TED Spread — narrowed only slightly, to around 299 basis points at midday in London, from just over 300 basis points Thursday. A similar slight narrowing of spreads was seen in sterling and euro markets.

“The dust may settle and the market may take a more sanguine view in time,” Mr. McGuire said, “but for now, it looks like a palliative rather than a panacea.”

In its statement Thursday, the Fed said that as part of the infusion, it had also authorized increases in the existing swap lines with the European Central Bank, up to $110 billion, from $55 billion, and the Swiss National Bank, up to $27 billion, from $15 billion. Similar arrangements were announced with the Bank of England and the Bank of Canada.

“The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures,” the European Central Bank said in a statement.

Smaller central banks were also active on Thursday in providing extra money to their country’s financial systems so as to make sure that banks and other financial institutions could find money to borrow without having to pay exorbitant interest rates.

The Hong Kong Monetary Authority, for example, injected 1.556 billion Hong Kong dollars, worth $200 million, into the territory’s banking system on Thursday afternoon, John Tsang, the financial secretary of Hong Kong, said.

The monetary authority acted after the interest rate that Hong Kong banks pay to borrow money overnight from one another suddenly tripled shortly after lunchtime, to 4 percent, and threatened to rise further.

The maneuver appeared to be successful, with overnight interest rates falling through the rest of the afternoon. Central banks in Japan, Australia and India pumped tens of billions more into money markets, while China’s central bank said it had lowered the rate at which it conducts bond repurchase agreements.

Analysts said the central banks were doing what they could.

“This is clearly a very significant help and central banks are showing decisive leadership here as risk aversion is hitting the private sector,” said Julian Callow, chief European economist at Barclays Capital in London.

Still, noting that the Fed left its benchmark short-term rate unchanged this week, analysts said that the cash infusions did not necessarily mean that central banks would lower their benchmark short-term interest rates.

“If anything,” Mr. Callow said. “this sends the signal that they are trying to achieve stability via money markets rather than by cutting short-term rates.”

Heather Timmons contributed reporting.

Wednesday, September 17, 2008

The Fed Bails Out AIG for $85 Billion

The Fed, which is a Leviathan-constructed enterprise, has bailed out the faltering American International Group (AIG) juggernaut at a cost to taxpayers in the amount of $85 billion. This move will only compound the problem of malinvestments in the financial services industry, which happens to be a welfare queen to the nth degree.

Here's AIG's statement on the Fed bailing it out:

Addresses Liquidity Issues and Policyholder Concerns

NEW YORK--Sept. 16, 2008--The Board of Directors of American International Group, Inc. (NYSE:AIG) issued the following statement in response to today's announcement by the Federal Reserve Board that the Federal Reserve Bank of New York is providing a two-year, $85 billion secured revolving credit facility to AIG that will ensure the company can meet its liquidity needs:

"The AIG Board has approved this transaction based on its determination that this is the best alternative for all of AIG's constituencies, including policyholders, customers, creditors, counterparties, employees and shareholders. AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues. We believe the loan, which is backed by profitable, well-capitalized operating subsidiaries with substantial value, will protect all AIG policyholders, address rating agency concerns and give AIG the time necessary to conduct asset sales on an orderly basis. We expect that the proceeds of these sales will be sufficient to repay the loan in full and enable AIG's businesses to continue as substantial participants in their respective markets. In return for providing this essential support, American taxpayers will receive a substantial majority ownership interest in AIG.

"We commend the Federal Reserve and the Treasury Department for taking this decisive action to address AIG's liquidity needs and broader financial market concerns. We thank them for their leadership during this critical time for the global financial markets. We also thank Governor Paterson, Commissioner Dinallo, Commissioner Ario, the other state Commissioners, and the Office of Thrift Supervision for their willingness to assist AIG.

"Policyholders of AIG companies around the world can rest assured that AIG's commitments will continue to be honored."

It should be noted that the remarks made in this press release may contain projections concerning financial information and statements concerning future economic performance and events, plans and objectives relating to management, operations, products and services, and assumptions underlying these projections and statements. It is possible that AIG's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these projections and statements. Factors that could cause AIG's actual results to differ, possibly materially, from those in the specific projections and statements are discussed in Item 1A. Risk Factors of AIG's Annual Report on Form 10-K for the year ended December 31, 2007, and in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations of AIG's Quarterly Report on Form 10-Q for the period ended June 30, 2008. AIG is not under any obligation (and expressly disclaims any such obligations) to update or alter its projections and other statements whether as a result of new information, future events or otherwise.

American International Group, Inc. (AIG), a world leader in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in Ireland and Tokyo.

American International Group, Inc.
Charlene Hamrah (Investment Community)

Nicholas Ashooh (News Media)

This is definitely economic fascism to the core. Fascism is a profit system, in which the private enterprise's profits are private, but the losses are socialized. Laissez-faire (free market) capitalism is a profit-and-loss system, in which both profits and losses are private, and the taxpayers are not footing the bill for either one. The former should be condemned and opposed, while the latter should be embraced. This isn't a matter of oversimplifying the issue; this is a matter of the Left, including the vast majority of the American public, being ignorant and uneducated on free market economics, particularly the Austrian school of thought.

Having said all that, there's a dime's worth of difference between the systems, and the Left has gotten laissez-faire all wrong. Not only that, they're both ignorant and arrogant about it. Ignorant because they choose not to look at the economic models in depth and understand how they truly work. Arrogant because they think they know everything there is to know about economics, and yet they know nothing.

So much for tolerance, open-mindedness, and diversity in the world of progressive liberalism.

The Fall of the Financial Markets

The crumbling of the U.S. financial markets have begun. Tragic yet not a surprise.

September 18, 2008
Stocks Slump as Investors Run to Safety
The financial crisis entered a potentially dangerous new phase on Wednesday when many credit markets stopped working normally as investors around the world frantically moved their money into the safest investments, like Treasury bills.

As a result, the cost of borrowing soared for many companies, while the stocks of Wall Street firms like Goldman Sachs and Morgan Stanley that only a couple of weeks ago were considered relatively strong came under assault by waves of selling. Investors were so worried that they snapped up three-month Treasury bills with virtually no yield and they pushed gold to its biggest one-day gain in nearly 10 years. Stocks fell by nearly 5 percent in New York.

The stunning flight to safety, away from other kinds of debt as well as stocks, could cause serious damage to an already weakened economy by making it more expensive for businesses to finance their daily operations.

Some economists worry that a psychology of fear has gripped investors, not only in the United States but also in Europe and Asia. While investors’ decision to protect themselves may be perfectly rational, the crowd behavior could cause a downward spiral with broader ramifications.

“It’s like having a fire in a cinema,” said Hyun Song Shin, an economics professor at Princeton. “Everybody is rushing to the door. You are rushing to the door because everyone is rushing to the door. Clearly, as a collective action, it is a disaster.”

Faltering confidence could have an infectious effect in Asia, whose savings has essentially bankrolled America for decades. “Asia, perhaps more than other markets, is a bit more volatile, a bit more based on sentiment,” said Dan Parr, the head of Asia-Pacific for brandRapport, a consulting firm with an office in Hong Kong. “It doesn’t take much for the man on the street to become very, very concerned.” In early trading in Japan, the Nikkei index fell 3 percent.

Despite government efforts to reassure investors over the last 10 days by rescuing some giant institutions — Fannie Mae, Freddie Mac and American International Group — many investors remain worried that the financial system has been badly battered and that more firms may fail as Lehman Brothers did.

The Federal Reserve has greatly expanded its lending to banks and securities firms this year and is continuing to relax rules that govern financial companies in hopes of alleviating the credit squeeze. Central banks globally are also injecting more money into their economies and lowering reserve requirements for their own institutions out of concern that the problems in the American financial system will inflict further damage.

If the problems in the financial system persist, businesses will have less money to put to work, job cuts will spread and consumers, already fearful, will have less money to spend, knocking the economy down another notch. High borrowing costs will further weaken the housing market, which is still struggling. The Commerce Department reported Wednesday that housing starts fell to their lowest level since early 1991.

Flashes of fear were evident Wednesday as investors clamored for government debt. When investors bid up the price, the yield falls, and it sank on three-month Treasury bills to 0.061 percent, from 1.644 percent a week ago. The yield was the lowest in more than 50 years.

In the stock market, the Standard & Poor’s 500-stock index fell 4.71 percent, to 1,156.39, the lowest close in more than three years. Worries over financial investments hammered even the well-regarded Wall Street firms of Goldman Sachs, whose shares fell nearly 14 percent, to $114.50, and Morgan Stanley, whose shares dropped more than 24 percent, to $21.75. Now, both firms are reconsidering what their best strategies might be in such a fearful market.

In addition to shares of financial companies like Bank of America, those of other bellwethers like General Electric have also tumbled.

Responding to this pressure, the Securities and Exchange Commission proposed new rules on short selling, or betting on falling share prices, and even suggested that hedge funds and others might have to disclose short positions, a proposal that is likely to meet stiff resistance.

One key overnight lending rate was above 5 percent on Wednesday, more than double its level a week earlier. GMAC, the auto finance company owned in part by General Motors, had to pay interest of 5.25 percent on Wednesday for a form of short-term financing known as one-week commercial paper, up from 4 percent the previous day.

Businesses, stung by high interest rates, may be forced to trim expenses, an ominous turn in a slowing economy with unemployment rates on the rise.

“This is throwing sand in the gears of the economy,” said G. David MacEwen, chief investment officer for the bond department of American Century Investments. “The economy depends on credit to finance homes, automobiles, student loans, and inventories.”

Local governments and other enterprises will feel pressure, too. The city of Chicago and Lincoln Center in New York postponed debt offerings because they would have to pay such high interest rates to investors, said Daniel S. Solender, director of municipal bond management at Lord Abbett & Company.

Money market funds braced for possible fallout from the disclosure that one big fund’s net assets fell below $1 a share, because it had held securities issued by Lehman Brothers. It is so rare for money market funds to fall below that threshold that many investors consider them as safe as cash or a checking account.

Some mutual fund companies reported that customers were moving money from broader money market funds that have had higher yields to more conservative funds within the same company, Peter Rizzo, a senior director of Standard & Poor’s, said late Wednesday afternoon. The overall effect is to reduce the appetite for securities of companies with anything other than the most stellar reputations.

Governments around the world stepped up their efforts to ease the strain on the global financial system. The Bank of England extended a special bank lending program for three more months, while central banks in Japan and Australia injected more money into their banking systems. Russia injected money into its banks and lowered reserve requirements.

In New York, the Federal Reserve on Tuesday night said it would extend an $85 billion credit line to the insurer A.I.G. and receive the rights to a nearly 80 percent stake in the company. The deal came just after the government refused financial support to Lehman, leading it to file for bankruptcy on Monday.

The Treasury and Fed also said they would auction more Treasury bills. The Fed will use the securities to manage its balance sheet and inject more money into the financial system. Because the Fed has expanded its lending to banks and securities firm this year, some analysts had grown concerned that the central bank might run out of Treasury securities to conduct its operations. Mark Gertler, an economics professor at New York University, said the Fed was trying to balance two interests: protecting against a crisis but telling the market that it will not bail out every troubled institution. Despite the stress in the markets, he said, the Fed’s actions may have averted a worse outcome.

“Maybe this is being Pollyannaish, but they have been successful in signaling that the bailouts are no longer automatic, and thus far they have prevented a market meltdown,” Mr. Gertler said.

The dramatic events of the last year have called into question much of what policy makers, economists and investors once espoused about the financial system. As recently as the spring of 2007, many in Washington and New York continued to say housing prices could not fall across the board and that most of the bets made by Wall Street traders were inherently safe.

Now, there are signs that psychology is driving a reverse line of thinking. People are assuming that things will get worse and that any move by the Fed or the Treasury is a step down, not a step closer to improvement.

“There has been a tremendous amount of denial over the past two years, three years,” said Barry Ritholtz, chief executive of Fusion IQ, an investment firm, and author of The Big Picture blog. “The list of really, really bad decision making and poor analysis from Wall Street is legendary.”

The Treasury’s benchmark 10-year note rose 6/32, to 104 28/32, and the yield, which moves in the opposite direction from the price, fell to 3.41 percent from 3.44 percent late Tuesday. Following are the results of Wednesday’s auction of 35-day cash management bills:

Diana B. Henriques and Hilda Wang contributed reporting.

Diana B. Henriques and Hilda Wang contributed reporting.

Tuesday, September 16, 2008

LNC Treasurer Aaron Starr's Anti-Ron Paul Resolution

Here's Libertarian National Committee (LNC) Treasurer Aaron Starr's anti-Ron Paul resolution, which died at the LNC due to a lack of adequate votes (the same with LNC At-Large Rep. Mary Ruwart's anti-Bob Barr resolution). I figured those wondered what the resolution says; well, here it is:

September 13, 2008

The Honorable Ron Paul

Committee to Re-Elect Ron Paul
837 W. Plantation
Clute, TX 71531

Dear Dr. Paul:

The Libertarian National Committee is disappointed to learn that you have recently urged those in the freedom movement to vote for the likes of Ralph Nader, Cynthia McKinney and Chuck Baldwin, none of whom truly grasp the meaning of Liberty.

More than before, we remain committed to our nominees for President and Vice President, Bob Barr and Wayne Root. We believe both of them boldly present the ideals of limited government, lower taxes, lower spending, and more freedom to the American people.

We invite you to restore your commitment to Liberty by supporting the only candidates on the ballot this year who understand the Constitution and are prepared to restore our republic to what the Founders believed.

Toward Liberty,

The Libertarian National Committee

[H/T to my good friend LNC At-Large Rep. Angela Keaton and El Nino's Mom of the Last Free Voice blog who both reported on this matter. ENM's report can be found here.]

Pink Floyd on Government Education

After blogging about the death of Rick Wright, I've decided to blog about Pink Floyd a bit further by noting that the band is heavily anti-government, particularly in the area of government education. This is one of the best lyrics from The Wall (which inspired that excellent surrealistic movie of the rock opera of the same name).

Here's some of the band's best anti-government lyrics on government schooling by Roger Waters, taken from the song "Another Brick in the Wall" (which is a three-part tune featured on The Wall):

We don't need no education
We dont need no thought control
No dark sarcasm in the classroom
Teachers leave them kids alone
Hey! Teachers! Leave them kids alone!
All in all it's just another brick in the wall.
All in all you're just another brick in the wall.

We don't need no education
We dont need no thought control
No dark sarcasm in the classroom
Teachers leave them kids alone
Hey! Teachers! Leave them kids alone!
All in all it's just another brick in the wall.
All in all you're just another brick in the wall.

Update: Here are two different versions of the band's music video "Another Brick in the Wall." Please enjoy them; I have.

This one is the original first video clip of the tune:

This second one is a video clip taken from the film version of the rock opera:

Michigan Chapter of ACORN Tied to Voter Fraud in Michigan

Michigan's branch of the Association of Community Organizations for Reform Now (ACORN), a grassroots political organization allegedly geared towards communities of low- and middle-income people and families totalling over 400,000 members, apparently is in legal hot water with the state. According to a recent Detroit Free Press piece, ACORN has been discovered to have submitted fraudulent and duplicate voter registration forms to state officials. The group, which is based in Detroit, enrolled over 200,000 voter applications with the state with approximately 200,000 paid, part-time employees on its payroll.

Here's the article in its entirety:

September 14, 2008

Bad voter applications found

Clerks see fraudulent, duplicate forms from group


Several municipal clerks across the state are reporting fraudulent and duplicate voter registration applications, most of them from a nationwide community activist group working to help low- and moderate-income families.

The majority of the problem applications are coming from the group ACORN, Association of Community Organizations for Reform Now, which has a large voter registration program among its many social service programs. ACORN's Michigan branch, based in Detroit, has enrolled 200,000 voters statewide in recent months, mostly with the use of paid, part-time employees.

"There appears to be a sizeable number of duplicate and fraudulent applications," said Kelly Chesney, spokeswoman for the Michigan Secretary of State's Office. "And it appears to be widespread."

Chesney said her office has had discussions with ACORN officials after local clerks reported the questionable applications to the state. Chesney said some of the applications are duplicates and some appear to be names that have been made up. The Secretary of State's Office has turned over several of the applications to the U.S. Attorney's Office.

The U.S. Attorney's Office on Friday declined to confirm whether an investigation was taking place.

In recent years, ACORN's voter registration programs have come under investigation in Ohio, Colorado, Missouri and Washington, with some employees convicted of voter fraud.

ACORN officials said they were looking into the problem.

"We'll do an investigation to see what's happening," said David Lagstein, a spokesman for the Detroit office. "If it's really as many as that, it warrants further investigation."

In Pontiac, where several thousand applications have been submitted by ACORN in the last few weeks for the November election, the clerk's office is finding that numerous applications are sometimes filed under one name.

"What it causes is a slowdown of our operations," said Pontiac City Clerk Yvette Talley. "They're steadily coming in, and we are finding a huge number of duplications."

Talley said she could not provide an exact number.

Clerks are required to check their records against a statewide database of all registered voters within their jurisdiction, so it would be unlikely that duplications would allow voters to cast their votes more than once, Talley said.

"We catch them all, but it's taking up a lot of our time," she said.

In Oak Park, clerk Sandra Gadd said they have been seeing "lots of duplication" from ACORN in recent months but were reassured by ACORN officials that the group was working to correct the problem.

"They've been very cooperative," Gadd said. "I spoke with them this week. They called me, and they're willing to go door-to-door to do whatever they have to do to take care of this."

ACORN is the nation's largest community organization for low- and moderate-income families. Created more than 30 years ago, it has branches in 100 cities and claims 350,000 families as members. It works to help create affordable housing and health care, and to improve job conditions and neighborhood schools.

Lagstein said ACORN's Detroit office has hired dozens of employees for the voter registration program and that any problems likely stem from sloppiness or incompetence -- not an intent to let people vote more than once.

"We're proud of our efforts to increase voter registration, and we have aggressive training for our staff to make sure the cards are filled out appropriately," he said.

ACORN has a method to track the workers who filled out individual registration cards, which will allow investigators to question the workers, Lagstein said.

"We certainly do our best to keep the duplications as low as possible, so we'll have to evaluate what's happening here," he said.

Contact L.L. BRASIER at 248-858-2262 or

The article conveniently leaves out the allegation that Obama is behind the voter fraud with the help of ACORN. Not only that, the Press also leaves out recent investigations into ACORN's voter registration practices in Wisconsin, Nevada, Pennsylvania, and a number of other states. Moreover, Obama's associations with ACORN is said to be very deep.

Now, with all of this information out, is anyone really ecstatic about voting this year, especially in those states?

Hilarious SNL Impersonation of Sarah Palin and Hillary Clinton

Check out this hilarious impersonation of Palin (portrayed by Tina Fey) and Hillary Clinton (portrayed by Amy Poehler). SNL was spot on with the idiotic statism of both Palin and Clinton. Even many of Fox News' Palin-McCain sycophants love the skit.

Palin's $600 Million "Other" Bridge Boondoggle

Sarah Palin's public opposition to using state funds for the Alaskan Bridge to Nowhere will be nothing compared to the latest story that's broken today so far. Apparently, Palin supports a bridge being constructed in her home state of Alaska, one that will be connected to her hometown of Wasilla. This state-subsidized boondoggle will cost Alaskan taxpayers approximately $600 million, linking the state's largest city to her home town with a population of 7,000 residents.

Here's more on the story:

Palin supports $600 million 'other' bridge project

The Associated Press
Tuesday, September 16, 2008; 6:58 AM

ANCHORAGE, Alaska -- Gov. Sarah Palin may eventually have said "no thanks" to a federally funded Bridge to Nowhere.

But a bridge to her hometown of Wasilla, that's a different story.

A $600 million bridge and highway project to link Alaska's largest city to Palin's town of 7,000 residents is moving full speed ahead, despite concerns the bridge could worsen some commuting and threaten a population of beluga whales.

Local officials already have spent $42 million on plans to route traffic across the Knik Arm inlet, a narrow finger of water extending roughly 25 miles northeast of Anchorage toward Wasilla. The proposal exists thanks to an earmark request by Republican Rep. Don Young, whose son-in-law has a small stake in property near the bridge's proposed western span.

A Democratic council member in Anchorage will try Tuesday to spike the city's sponsorship of the project, which Palin supports with some reservations.

"This is basically an incredibly expensive project that doesn't help commuters, doesn't help create jobs and may drive whales to extinction," said Justin Massey, an attorney advising environmentalists opposed to the proposal. "It is also a project that serves the area where the governor is from, which is near and dear to her heart."

The Knik Arm was one of two bridge proposals in Alaska awarded more than $450 million from lawmakers who requested money for special projects in 2005, when Young chaired the House Transportation Committee. Young, Alaska's 18-term congressman, has said Alaska still lacks basic roads, railroads and bridges that were developed long ago in older and less spacious states.

At the time, Palin's running mate for the Republican ticket, Arizona Sen. John McCain, derided both projects as wasteful. He called Young's highway bill a "monstrosity" that was "terrifying in its fiscal consequences."

"I want no part of this," McCain said in a July 2005 statement. "This legislation is not _ I emphasize not _ my way of legislating."

The governor initially championed the first so-called Bridge to Nowhere, which would have connected the southeastern Alaska town of Ketchikan to its airport on nearby Gravina Island. She later pulled the plug on the project after it became a national symbol of extravagant federal spending.

Palin's record on the Bridge to Nowhere has emerged as a central point of controversy in the campaign over her recent public claims that she had opposed it, aligning herself with McCain's anti-earmarks philosophy.

Palin still supports the second bridge, officially named Don Young's Way in honor of the congressman. She called for a review of the bridge's financing plans and raised concerns about its financial risks for the state. Still, the planning process is marching forward.

"Governor Palin's demand for accountability and transparency around this project is exactly what she has called for across the board to ensure taxpayers' dollars are being used wisely," spokeswoman Maria Comella said.

Dianne Keller, who succeeded Palin as mayor in Wasilla, has said the new $600 million crossing could lower traffic congestion in the fast-growing community. A Federal Highway Administration study shows the project would cut down some area commutes, but could add to others as more people move to the suburbs.

The average commuter trip to work for Wasilla residents is 34 minutes, compared to an average of 25 minutes for the rest of the United States, according to 2000 Census figures, the most recent available.

The bridge is popular with property developers _ including a group comprised of Young's son-in-law, the former legislative director for indicted Republican Sen. Ted Stevens and three others _ who own land across from Anchorage on the inlet's western side.

The National Marine Fisheries Service is evaluating whether the isolated beluga whales that breed and feed in the waterway's strong tides should be listed as endangered under the federal Endangered Species Act. Palin has publicly urged the government not to list Cook Inlet beluga whales as endangered.

Anchorage Assembly members Patrick Flynn and Matt Claman, both Democrats, plan to introduce a proposal to kill the bridge on Tuesday. They argue the money would be better used to set up commuter van pools and fix Alaska's existing highways, some of which are so rutted that cars go skidding off the road.

"She clearly hasn't said 'no thanks' to this particular bridge," Claman said. "If money were not an issue and we had no limits, maybe we'd build a bridge. But this is not a pragmatic or efficient way to spend scarce resources."

So much for Alaska's great governor being a "fiscal conservative," as many of her Republican colleagues, including John McCain, claim she is.

R.I.P. Pink Floyd's Rick Wright

Rick Wright, the founder and keyboardist of the psychedelic and space rock bank Pink Floyd, passed away from an undisclosed type of cancer yesterday. His death has sent an enormous shockwave to the music and entertainment industries, although it's no secret that he had been ill for quite some time.

I remember when I was approximately four or five years old, my brother Brian and his then-girlfriend (now his wife) Barb, both of whom had been high school sweethearts, were heavily into Pink Floyd with their friends. At that time, the band's monstrous hit rock operaThe Wall had already hit the rock music scene, and it already had secured itself a number-one hit entitled "Another Brick in the Wall" in the U.S., the U.K., Germany, and many other countries.

I recall one day, as a young kid, I wandered into my brother's room where Brian, Barb, and their friends were hanging out. I saw them painting the back wall, copying the cover of the band's album. I even partook in it (painting the wall that is), and I do remember them smoking pot in those days. When I first heard the song in that room, I fell in love with it. Obviously, at that age, I didn't exactly understand it, but I loved it. It wasn't until my later years that I came to appreciate the song for its anti-government school, pro-human liberty stand on education.

Thank you, Rick Wright, David Gilmour, and Roger Waters for a wonderful time. It was great. I will never forget that experience for as long as I live.

Here's a great clip of Rick singing a solo version of "Breakthrough," which, as a studio tune, was originally arranged to have another singer on vocals. This is the only time he sang it by himself.

[H/T to Tom Woods of the LRC blog for blogging about this last night.]

Monday, September 15, 2008

The Left Brings Back the Culture War

The biggest problem that the Left, including "libertarian" Real Time host Bill Maher, has is that it has played right into the GOP's hand of demonizing the culture war, which has always been a Republican talking point. Their recent attack of Sarah Palin on her family background (including Bill Maher's obtuse and not-so-funny smear conflating Palin's Down Syndrome-stricken infant son Trig with former Senator John Edwards because of his infamous affair with a campaign employee which he later admitted but denied being the father of her child) and claims that the "lack" of government regulations on Wall Street, corporations, and business in general is tantamount to "lawlessness" and all free markets are inherently evil are just moronic to the nth degree.

As of recent they have been idiotically bashing Palin's retort on Obama's alleged experience as a community organizer, saying, "Well, Jesus Christ was a community organizer and Pontius Pilate was a governor." Come on now! Is this the best they can do in a politically-charged climate, thanks to the government media's over-hyped election season?

Do leftists really want to lose this race? In a predictable fashion the rightist pundits have berated the Left for this, asserting that the liberal talking point per se is highly strange, unnecessary, and implausible. But, as I seem to recall, the Right was doing the same thing when they deified Bush by comparing him and his troops in Iraq to Jesus and His sacrifices, all the while implying that the Democrats were equivalent to Satan. Apparently, as Anthony Gregory pointed out on the LRC blog, there is a clear-cut double standard here, like so many other culture wars.

My advice to the Left is this: please shut up! You're egging on the Right to moan about the culture war, which seems to be its favorite past time. Stop pushing it! Just stop for once!

Fed Finally Bails Out Wall Street

Following the recent fall of the government-subsidized financial industry, the Fed's claim that it wouldn't bail out Wall Street has been short-lived.

NEW YORK: Global markets plummeted on Monday after investment bank Lehman Brothers filed for bankruptcy protection, rival Merrill Lynch agreed to be taken over and the Federal Reserve threw a life line to the battered financial industry.

As a deepening crisis took new, bigger victims, The U.S. Federal Reserve said for the first time it would accept stocks in exchange for cash loans and 10 of the world's top banks agreed to establish a $70 billion (39 billion pound) emergency fund, with any one of them able to tap up to a third of that.

As always, the government (and the Fed is a big part of it) will willingly continue to process worthless fiat called "money" and disperse loans in its guise. Message to Alan Greenspan and Ben Bernanke: the problem has nothing to do with liquidity but has everything to do with colossal malinvestments that need to be liquidated.

Shattered AIG

In the wake of the fall of Wall Street's banks, the American International Group (AIG), this ridiculously government-leveraged insurance firm, has been downgraded by Moody's Investor Service from Aa3 to A2 and Standard & Poor's from AA- to A-.

Bloomberg, which reported on this latest move, also points out:

S&P said it cut the rating of the largest U.S. insurer by assets because of a "combination of reduced flexibility in meeting additional collateral needs and concerns over increasing residential mortgage-related losses."

S&P also lowered AIG's short-term counterparty credit rating by two levels to A-2 from the top A-1+ rating, and cut its counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries by three notches to A+ from AA+. The ratings remain on watch for a possible further downgrade, S&P said.

I think S&P's rating is highly unrealistic, simply because it's far too moderate. Moody's is somewhat more sensible than S&P's. Here's my rating for AIG: SHATTERED. That seriously destroys the illusion that the government, especially the Fed, can "save" free enterprise. Considering Leviathan and the Fed are not bailing out Merrill Lynch and the Lehman Brothers (or at least those organizations say they won't do it, at least not directly), the people who had those accounts with those banks or had FDIC securants and would have otherwise lost their deposits would have the Fed create that money out of thin air and deposit it into another bank, despite the fact that money had already been created out of thin air in the first place. Interestingly enough, the FDIC has already approached the Treasury and said they need more money because they can't insure all the deposits.

This political and financial quagmire shows the reality of the damage done by the Greenspan-Bernanke boom. How exciting it is to see the Fed and the Treasury being helpless to "save" their biggest subsidized pals!

Sunday, September 14, 2008

The Fall of Wall Street's Banks

It now appears that the mortgage and housing crisis is hitting the fan big time. Merrill Lynch, the pro-corporate welfare, pro-state banking and mortgage powerhouse which has been in financial turmoil simply by teetering on bankruptcy, has now been sold to Bank of America for approximately $50 billion in an effort to avert another financial meltdown -- a debacle that has been plaguing the housing, financial, and mortgage industries for quite some time. This comes at the same time that another government-subsidized financial juggernaut Lehman Brothers is looking to bankruptcy protection over its failure to secure a buyer. All of this comes on the heels of Obama and McCain collectively agreeing to a bailout of Freddie Mae and Freddie Mac, another powerhouse that's been on the verge of financial collapse as well.

With Obama and McCain agreeing to "save" Fannie Mae and Freddie Mac, Merrill Lynch being placed under another government-subsidized banking entity, and Lehman Brothers filing for bankrupty protection, isn't there any wonder that corporatism (or fascism, if you really want to call it) allows allies in the financial and political sectors (including the Republican and Democratic camps) to rob from the poor and give it to the rich? Talk about reverse income redistribution at its worst!

With friends (that is, collusions between government and its politically-connected firms like Bear Sterns, Lehman Brothers, and Merrill Lynch) like those, who needs enemies?

Here's the New York Times piece on the fall in its entirety:

September 15, 2008
After Frantic Day, Wall St. Banks Falter
This article was reported by Jenny Anderson, Eric Dash and Andrew Ross Sorkin and was written by Mr. Sorkin.

In one of the most dramatic days in Wall Street’s history, Merrill Lynch agreed to sell itself on Sunday to Bank of America for roughly $50 billion to avert a deepening financial crisis, while another prominent securities firm, Lehman Brothers, said it would seek bankruptcy protection and hurtled toward liquidation after it failed to find a buyer.

The humbling moves, which reshape the landscape of American finance, mark the latest chapter in a tumultuous year in which once-proud financial institutions have been brought to their knees as a result of hundreds of billions of dollars in losses because of bad mortgage finance and real estate investments.

But even as the fates of Lehman and Merrill hung in the balance, another crisis loomed as the insurance giant American International Group appeared to teeter. Staggered by losses stemming from the credit crisis, A.I.G. sought a $40 billion lifeline from the Federal Reserve, without which the company may have only days to survive.

The stunning series of events culminated a weekend of frantic around-the-clock negotiations, as Wall Street bankers huddled in meetings at the behest of Bush administration officials to try to avoid a downward spiral in the markets stemming from a crisis of confidence.

“My goodness. I’ve been in the business 35 years, and these are the most extraordinary events I’ve ever seen,” said Peter G. Peterson, co-founder of the private equity firm the Blackstone Group, who was head of Lehman in the 1970s and a secretary of commerce in the Nixon administration.

It remains to be seen whether the sale of Merrill, which was worth more than $100 billion during the last year, and the controlled demise of Lehman will be enough to finally turn the tide in the yearlong financial crisis that has crippled Wall Street and threatened the broader economy.

Early Monday morning, Lehman said it would file for Chapter 11 bankruptcy protection in New York for its holding company in what would be the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago, the Associated Press reported.

Questions remain about how the market will react Monday, particularly to Lehman’s plan to wind down its trading operations, and whether other companies, like A.I.G. and Washington Mutual, the nation’s largest savings and loan, might falter.

Indeed, in a move that echoed Wall Street’s rescue of a big hedge fund a decade ago this week, 10 major banks agreed to create an emergency fund of $70 billion to $100 billion that financial institutions can use to protect themselves from the fallout of Lehman’s failure.

The Fed, meantime, broadened the terms of its emergency loan program for Wall Street banks, a move that could ultimately put taxpayers’ money at risk.

Though the government took control of the troubled mortgage finance companies Fannie Mae and Freddie Mac only a week ago, investors have become increasingly nervous about whether major financial institutions can recover from their losses.

How things play out could affect the broader economy, which has been weakening steadily as the financial crisis has deepened over the last year, with unemployment increasing as the nation’s growth rate has slowed.

What will happen to Merrill’s 60,000 employees or Lehman’s 25,000 employees remains unclear. Worried about the unfolding crisis and its potential impact on New York City’s economy, Mayor Michael R. Bloomberg canceled a trip to California to meet with Gov. Arnold Schwarzenegger. Instead, aides said, Mr. Bloomberg spent much of the weekend working the phones, talking to federal officials and bank executives in an effort to gauge the severity of the crisis.

The weekend that humbled Lehman and Merrill Lynch and rewarded Bank of America, based in Charlotte, N.C., began at 6 p.m. Friday in the first of a series of emergency meetings at the Federal Reserve building in Lower Manhattan.

The meeting was called by Fed officials, with Treasury Secretary Henry M. Paulson Jr. in attendance, and it included top bankers. The Treasury and Federal Reserve had already stepped in on several occasions to rescue the financial system, forcing a shotgun marriage between Bear Stearns and JPMorgan Chase this year and backstopping $29 billion worth of troubled assets — and then agreeing to bail out Fannie Mae and Freddie Mac.

The bankers were told that the government would not bail out Lehman and that it was up to Wall Street to solve its problems. Lehman’s stock tumbled sharply last week as concerns about its financial condition grew and other firms started to pull back from doing business with it, threatening its viability.

Without government backing, Lehman began trying to find a buyer, focusing on Barclays, the big British bank, and Bank of America. At the same time, other Wall Street executives grew more concerned about their own precarious situation.

The fates of Merrill Lynch and Lehman Brothers would not seem to be linked; Merrill has the nation’s largest brokerage force and its name is known in towns across America, while Lehman’s main customers are big institutions. But during the credit boom both firms piled into risky real estate and ended up severely weakened, with inadequate capital and toxic assets.

Knowing that investors were worried about Merrill, John A. Thain, its chief executive and an alumnus of Goldman Sachs and the New York Stock Exchange, and Kenneth D. Lewis, Bank of America’s chief executive, began negotiations. One person briefed on the negotiations said Bank of America had approached Merrill earlier in the summer but Mr. Thain had rebuffed the offer. Now, prompted by the reality that a Lehman bankruptcy would ripple through Wall Street and further cripple Merrill Lynch, the two parties proceeded with discussions.

On Sunday morning, Mr. Thain and Mr. Lewis cemented the deal. It could not be determined if Mr. Thain would play a role in the new company, but two people briefed on the negotiations said they did not expect him to stay. Merrill’s “thundering herd” of 17,000 brokers will be combined with Bank of America’s smaller group of wealth advisers and called Merrill Lynch Wealth Management.

For Bank of America, which this year bought Countrywide Financial, the troubled mortgage lender, the purchase of Merrill puts it at the pinnacle of American finance, making it the biggest brokerage house and consumer banking franchise.

Bank of America eventually pulled out of its talks with Lehman after the government refused to take responsibility for losses on some of Lehman’s most troubled real-estate assets, something it agreed to do when JP Morgan Chase bought Bear Stearns to save it from a bankruptcy filing in March.

A leading proposal to rescue Lehman would have divided the bank into two entities, a “good bank” and a “bad bank.” Under that scenario, Barclays would have bought the parts of Lehman that have been performing well, while a group of 10 to 15 Wall Street companies would have agreed to absorb losses from the bank’s troubled assets, to two people briefed on the proposal said. Taxpayer money would not have been included in such a deal, they said.

Other Wall Street banks also balked at the deal, unhappy at facing potential losses while Bank of America or Barclays walked away with the potentially profitable part of Lehman at a cheap price.

For Lehman, the end essentially came Sunday morning when its last potential suitor, Barclays, pulled out from a deal, saying it could not obtain a shareholder vote to approve a transaction before Monday morning, something required under London Stock Exchange listing rules, one person close to the matter said. Other people involved in the talks said the Financial Services Authority, the British securities regulator, had discouraged Barclays from pursuing a deal. Peter Truell, a spokesman for Barclays, declined to comment. Lehman’s subsidiaries were expected to remain solvent while the firm liquidates its holdings, these people said. Herbert H. McDade III, Lehman’s president, was at the Federal Reserve Bank in New York late Sunday, discussing terms of Lehman’s fate with government officials.

Lehman’s filing is unlikely to resemble those of other companies that seek bankruptcy protection. Because of the harsher treatment that federal bankruptcy law applies to financial-services firms, Lehman cannot hope to reorganize and survive. It was not clear whether the government would appoint a trustee to supervise Lehman’s liquidation or how big the financial backstop would be.

Lehman has retained the law firm Weil, Gotshal & Manges as its bankruptcy counsel.

The collapse of Lehman is a devastating end for Richard S. Fuld Jr., the chief executive, who has led the bank since it emerged from American Express as a public company in 1994. Mr. Fuld, who steered Lehman through near-death experiences in the past, spent the last several days in his 31st floor office in Lehman’s midtown headquarters on the phone from 6 a.m. until well past midnight trying to find save the firm, a person close to the matter said.

A.I.G. will be the next test. Ratings agencies threatened to downgrade A.I.G.’s credit rating if it does not raise $40 billion by Monday morning, a step that would crippled the company. A.I.G. had hoped to shore itself up, in party by selling certain businesses, but potential bidders, including the private investment firms Kohlberg Kravis Roberts and TPG, withdrew at the last minute because the government refused to provide a financial guarantee for the purchase. A.I.G. rejected an offer by another investor, J. C. Flowers & Company.

The weekend’s events indicate that top officials at the Federal Reserve and the Treasury are taking a harder line on providing government support of troubled financial institutions.

While offering to help Wall Street organize a shotgun marriage for Lehman, both the Fed chairman, Ben S. Bernanke, and Mr. Paulson had warned that they would not put taxpayer money at risk simply to prevent a Lehman collapse.

The message marked a major change in strategy but it remained unclear until at least Friday what would happen. “They were faced after Bear Stearns with the problem of where to draw the line,” said Laurence H. Meyer, a former Fed governor who is now vice chairman of Macroeconomic Advisors, a forecasting firm. “It became clear that this piecemeal, patchwork, case-by-case approach might not get the job done.”

Both Mr. Paulson and Mr. Bernanke worried that they had already gone much further than they had ever wanted, first by underwriting the takeover of Bear Stearns in March and by the far bigger bailout of Fannie Mae and Freddie Mac.

Outside the public eye, Fed officials had acquired much more information since March about the interconnections and cross-exposure to risk among Wall Street investment banks, hedge funds and traders in the vast market for credit-default swaps and other derivatives. In the end, both Wall Street and the Fed blinked.

Reporting was contributed by Edmund L. Andrews, Eric Dash, Michael Barbaro, Michael J. de la Merced, Louise Story and Ben White.

Sarah Palin: Bush Has Attempted to "Rid This World of Islamic Extremism"

Or says Palin during her first ABC interview last Thursday.

LNC Rejects "Snubgate"

The Libertarian National Committee (LNC) has rejected to remove Bob Barr from its presidential ticket. Apparently this latest story, which broke on IPR tonight and serves as a response to "Snubgate," pertains to the grassroots move to eliminate Barr from the ticket. However, not a single member of the 17-member body was willing to make a motion to vote on it.

Interestingly enough, LNC At-Large Representative Mary Ruwart (who ran for president on the LP's ticket this year and lost to Barr) presented her resolution calling for Barr to "apologize" to Dr. Ron Paul. LNC Treasurer Aaron Starr, who's leading the "pro-Barr faction," counters that with a resolution of his own -- one that berates Paul, simply because Ron didn't hand his endorsement to Barr and is responsible for "splitting the Freedom Movement."

Neither resolution passed, simply due to a lack of adequate votes.

[H/T to IPR for making this report available.]

Saturday, September 13, 2008

Sarah Palin's True Colors

One of Sarah Palin's biggest problems is that she tries too hard to be very libertarian on the issues, but she doesn't even accomplish that very well. Her recent two-part interview that she gave to ABC News' Charles Gibson last Thursday should be any indication to libertarians and even many conservatives about her neoconservative, Bush-esque stands on the issues. At first it seemed as though she was very libertarian on a number of issues, including her past support for the Alaskan Independence Party of which she was a member. Not only that, she stood by its advocacy of secession, which is now a matter of public record.

However, if you dig beneath the surface, you'll find that she's not as libertarian as many "libertarians" like Eric Dondero Rittberg and conservatives like Matt Drudge would like you to think she is. Let's be quite blunt about this. She's a social conservative. Her stands on social and some economic issues are hardly pro-freedom; in fact, they're more statist than ever. Her public opposition to abortion, especially in cases of rape and incest, epitomizes that record of hers and is hardly pro-freedom. Another anti-freedom position of hers is that she opposes gay marriage, simply parroting the typical "traditional marriage" conservative line. If she were truly libertarian on the issue, she would have called for government to get out of the marriage industry at the federal and state levels once and for all. But she doesn't do that; thus, that is where her social conservativism goes off the deep end.

When Gibson asked her whether she could tell the country whether she had "the experience" to not only be vice president but perhaps also be president, she bluntly said:

PALIN: I do, Charlie, and on January 20, when John McCain and I are sworn in, and if we are so privileged to be elected to serve this country, we'll be ready. I'm ready.

This statement alone has raised a lot of eyebrows in the political establishment. The fact that she thinks she is "experienced" to do the job as the vice president is troubling on all accounts. No one is qualified to be president or vice president or even hold any political office for that matter. Her brief record as governor, while hailed by many conservatives and libertarians (because of her libertarianesque positions, although they're not as libertarian as they appear to be) and denounced by many liberals (because of her inexperience and her role as a mother of five children), is substandard and mostly bad. Her problem is not that she has too "little experience," but rather too much experience in government. As a newbie and a McCain acolyte, she's learning the political trappings of Washington and its cronies. Is that someone to look up to? Is that something that you would want to aspire to be?

And what is this "privileged" nonsense? What makes her think that John McCain and she "are so privileged" to rule the United States? There's nothing that is "privileged" about it. She is truly learning the political tricks of the trade here. When she talks about "being so privileged," what she really means is that McCain and she are politically adulated and deified to sit on the thrones of the state. In politics, the term "privilege" is a code word for government worship of the rulers by the ruled. There's nothing truly glorious and sacrosanct about this sentiment. She, along with McCain on the GOP, Barack Obama, and his running mate Biden are looking to be graciousy accepted and welcomed by the ruled via the political tools of campaigning. These candidates are nothing more than wanna-be rulers who are coercively ensuring that voters of all stripes partake in this governmental process of "electing their leaders." Moreover, this is especially when the "leaders" (the pluralized term rulers is more like it) are going to win by default, whether the voters get involved in the political process or not.

And this claptrap about "serving the country" needs to be debunked once and for all. Palin, along with McCain, isn't looking to "serve her country" if and when she's elected to the vice presidency. She's looking to have individual Americans "serve" her. This claim that she would be "serving" the nation is far from the truth. She's simply serving the interests of her special interests and buying votes, while putting on an act to make it look as though she cares about "serving" the people. She will impose her political and religious will on individual Americans and support McCain's neoconservative doctrine, especially when it's not even discernible from the Bush Doctrine. After all, she blatantly admitted that she was on board with Bush's insane intervention in Iraq and even a possible intervention in Iran, and she's on especially on board with McCain's plan for miring us in the Iraqi occupation for 100 years. Those actions are in direct contrast to a foreign policy of non-interventionism.

Her concession to not having met foreign heads of state is a double-edge sword, politically speaking. On one hand, it is good that she has never met them, because the less politicians get involved in matters of foreign affairs, the better. While diplomacy is better than war, the real libertarian position is scrap our current foreign policy of interventionism and replace it with one of non-interventionism. On the other hand, since she has never dealt with the foreign policy issue, it shows that her naivete is showing. If she pushes for a pro-war policy and carries out McCain's 100-year war, then the United States will be mired in it neck-deep for decades to come. Even her ignorance on the Bush Doctrine is unsurprising but inexcusable. There's no reason for her not to be aware of what that policy is and how deleterious it has been to our country.

Moreover, her support for the war in Iraq, while not a surprise, is unjustifiable. Her comments to her church's congregation that national leaders are sending our sons and daughters "on a task from God" to Iraq are heavily theocratic. This zealotry coming from her is indicative of the ideological influence coming from the Religious Right base of the GOP. She posits that she is borrowing from what Lincoln said in a similar fashion:

Sir, my concern is not whether God is on our side; my greatest concern is to be on God's side, for God is always right. -- Abraham Lincoln.

But Lincoln was talking about the country being on "God's side," not the other way around. He was merely speaking about the War Between the States in a ponderous fashion -- that is, whether the Union should be "on God's side." (Not that Lincoln was innocent, as he, with strong support from the Union, nationalized the railroads and shut down enterprises, including newspapers, that didn't agree with him on the War.) However, this entire talk about the "task from God" is seriously a distraction, because it focuses too much attention away from the real issue: government too much in our lives, in our economy, and in the Middle East and the entire world.

Besides, her fundamentalist religious views have no place in government as much as govenment has any place in the church. Such collusions seriously weaken and harm the separation of church and state. Doesn't she get that at all?

Even her opposition to marijuana, even for medicinal use, showcases her anti-libertarianism on a strong note. (Guess what? She tried and didn't like it, although she did inhale it.) While she was right on refusing to use state monies to complete the construction of the Bridge to Nowhere at a price tag of $398 million, she hypocritically supported the funding initially before Congress pushed for the funding and then came out against it. She didn't even try to "marketize" (truly privatize) the airport to which the bridge would have connected and the ferry boat system, which made access almost impossible. How are any of these stands libertarian at all? They are typical of a staunch social conservative Republican. She even supported taxing windfall profits of oil companies that were looking to do business in Alaska. That's hardly libertarian at all. Plus, the allegation that she fired a Wasilla librarian for removing books is a serious charge. (Even that controversy might not necessarily help McCain and the ticket, but it's a very strong possibility.) However, it shows that government should not be funding libraries, and they ought to be in the province of the free market, not bureaucrats and politicians.

It's obvious that Palin's true colors have been shining brightly. While it was a good political move for McCain to choose her in order to draw away attention from Obama, the Left, and their cronies from behind-the-scenes and in the media, it was a bad philosophical move, because Palin is not going to be against the establishment. Actually, she is the establishment now. Whatever hopes that "limited-government" conservatives might have had simply have gone up in smoke.