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Sunday, February 1, 2009

Change Is Here

I wrote a parody of the old, classic children's song "If You're Happy and You Know It," which is about our new killer-in-chief.

Please let me know what you think. It's got a libertarian streak in it, although it is meant to generate a couple of chuckles or two.

Change Is Here
(Sung to the tune of “If You're Happy and You Know It”)
By Todd Andrew Barnett




If you voted for Obama, change is here
If you did it for your mama, change is here
If you went to pull that lever
To vote for the man you ever,
Never think again forever change is here

He ordered no lobbyists, change is here
And he’s just an opportunist, change is here
If taxes just keep on risin’
Sinking us in the horizon
Though his people keep advising, change is here

Times are gettin’ harder, change is here
Recovery is farther, change is here
Economy is in the shitter
Though the boy is not a quitter
Even though many are bitter, change is here

Did you hear about his murder? Change is here
Pakistan’s attack is furthered, change is here
The damage is quite collateral
Hey, these things are unilateral
They’re never multilateral, change is here

One promise of his broken, change is here
There’s no good will as a token, change is here
If these times don’t get quite better
It’s not ‘cause you’re no go-getter
You follow it to the letter, change is here


[Cross-posted at The Freeman Chronicles.]

Saturday, January 31, 2009

Your Site May Harm Everyone's Computers

Google's infamous site warning "This site may harm your computer" had popped up all over Google's servers about over 40 minutes ago. This was even happening while I was trying to do some research on the search engine for a post I'm writing for this blog.

One blogger complained about this on his site, writing the following:

I’ve logged onto 6 computers in 4 different states, and two in other countries. I’m getting warnings for every link in the SERPS with Google attempting to block traffic to them.


Here's a couple of pics to show what I mean here:






(The last screenshot was taken by the blogger who issued the alert.)

Maybe it's me, but is Google engaging in systematic censorship or what? Considering it's embracing the omnipotent state, it wouldn't be a surprise. After all, the once-hailed, once-innovative company has become a mouthpiece for the Ol' Great Messiah himself.

This is what happens when government and Big Business (like Google, for instance) collude, creating what happens to be the Fascistic State that we've come to loathe today.

[Cross-posted at the Freeman Chronicles.]

Wednesday, January 28, 2009

Celebrity Collage by MyHeritage

MyHeritage: Celebrity Collage - Family roots - Family tree charts

Thursday, January 22, 2009

Announcing Libertarian Papers: A New Journal

From the LRC blog, posted by Stephan Kinsella:

The Mises Institute is proud to announce the launch of a new, online journal today: Libertarian Papers. Edited by yours truly and boasting a impressive and geographically- and academically diverse Editorial Board, Libertarian Papers is publishing its first seven articles today, one per hour starting at 8:00 a.m. CST. These include articles by two eminent libertarian thinkers, Jan Narveson (writing on Nozick, justice, and restitution) and Robert Higgs (on depressions and war). These are followed by two, count 'em, two, previously unpublished memos from ... Ludwig von Mises and Murray Rothbard. Mises's is a memo dated New Year's Eve, 1946, to F.A. Hayek, relaying his concerns and advice about the then-nascent Mont Pèlerin Society. Rothbard's is a 1961 "confidential" memo the Volker Fund, about libertarian tactics and strategy. Provocative, fascinating stuff.

The last three articles to be published today are a fascinating three-part exchange between Nicolás Maloberti and Joshua Katz about libertarianism, positive rights, and "Possibility of the Legitimate State."

---

More about the journal here.

Sunday, January 11, 2009

Arrested For Touching A Plant

Via Rob Wicks:


In the words of legendary singer/songwriter Bob Marley, "Get up, stand up, stand up for your right." The heroic Andrew Carroll decided to stand up for his in the city of Keene, New Hampshire. As expected, the police arrived shortly thereafter. Note the onlookers' apt description of the situation in which this peaceful young man is "getting arrested for touching a plant."


Some video here and here. There is also an interview with Andrew.

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 FreeKeene.com, 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 FreeKeene.com 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 LewRockwell.com 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 TMZ.com 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
By MICHAEL R. CRITTENDEN

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.
[Image]

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 michael.crittenden@dowjones.com

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
By MATTHEW SALTMARSH and KEITH BRADSHER
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.

CONTACT:
American International Group, Inc.
Charlene Hamrah (Investment Community)
212-770-7074

Nicholas Ashooh (News Media)
212-770-3523


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
By VIKAS BAJAJ
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.