The only thing we learn from history is that we don't learn from history

History can be a fantastic guide for the future, and it seems to work pretty well when it comes to macroeconomic policy. But why doesn't the government, especially the "independent" Federal Reserve, learn from its mistakes? Right now they are continuing to "prime the pump" with liquidity to stave off recession. As you can see by this quote from an article by historian/economist Thomas DiLorenzo, the government tried the same thing during the Great Depression to no avail.

"But as Murray Rothbard showed in America’s Great Depression, it was the easy money policies of the early and mid-1920s that created all the malinvestment that was the trigger for the Great Depression. The only wise thing to have done was to allow the liquidation of hundreds of overcapitalized businesses to occur. Instead, the Fed increased the monetary base by 100 percent in five years, causing more of the same overcapitalization problems that were the source of the problem in the first place."

Isn't it the definition of insanity when you do the same thing over and over again and keep getting the same results, but expecting different results?

The article by DiLorenzo appeared in The Free Market, a publication of The Mises Institute, November, 2004. Full article here.

More political rhetoric

Speaker of the House Pelosi tonight after the decider-in-chief's State of the Union address: "We will work with the president -- where possible -- to bolster the housing market ... restore confidence in consumer goods ... and to give our workers and employers more tools to compete in a global economy."

1) How does the government "bolster" the housing market? What does bolster mean, in this context?
2) How does the government "restore confidence in consumer goods?"
3) What "tools" will the government give so that American workers can compete in a global economy?

Her quote can only mean one thing: a violation of property rights, by force, to provide the three above. Does "bolster" mean money? A bailout? Only if the government takes the money from us and gives it to distressed homeowners. A violation of our property rights.

The same with 2 and 3. Money from us to business, so somehow American-made goods are better and we have confidence in them? Money from us for what, retraining, so people have the "tools" to compete?

The entire quote is typical politician blather. It means nothing. Absolutely nothing. If this blather does mean anything, it's that you and I will have less money in our pockets.

A no responsibility society

This article provides us with the clue we've been looking for! Why people are losing their homes all over America. No, it's not the people who took out the loan. They're not responsible just because they didn't read the contract and closing papers. It's not the government and the Fed, who flooded the country with money printed out of thin air - and a lot found it's way into real estate.

No! Just read the article. It's the greedy lenders. Those greedy lenders. You know, the ones who held guns to people's heads, forcing them into signing and moving into nice new homes. The greedy lenders. It wasn't poor old you and me - we couldn't help ourselves because of those greedy lenders.

Please, give me a break. It's amazing how America has turned into the "no responsibility society."

A new era has begun

Ron Paul hit the nail on the head last night at the Republican debate. He said that a new era for America has begun. Nothing could be so true. Decades ago the U.S. was a dominant force in the world, and not necessarily in a negative way. That has changed.

Never before in our history have we faced the threat of a massive amount of people retiring (now, 10,000 baby boomers turn 60 every week). Never before have we had over 700 bases around the world. Never before have we spent more on the military than the rest of the world combined. Never before has most of the world disliked us so much (they actually used to love us). Never before has the Federal Reserve inflated our currency so much and destroyed our dollar so much (three bubbles in eight years!). Never before have we had such a broken health care system (which will get worse once we get "universal health care.")

Never before have we been in such bad shape. Yes, Ron, you are right. A new era has begun.

The omnipotent state strikes again

The omnipotent power of the state strikes again. This time, they hauled off a 5 year old boy in handcuffs. Misbehaving in school? No need to call the parents, just handcuff the lad and cart him off to the psych ward at the local hospital. Of course, he must be nuts to refute and protest the treatment received at the hands of the New York City Babysitting District. Read the article here.

Can government do anything right?

The government can't even rebuild firehouses. Amazing article that shows the State of Louisiana/New Orleans governments are unable to rebuild a single firehouse destroyed by Katrina. Unbelievable.

The drainage of the empire

All empires fail because they bleed financially. As you can see by this article, we're playing right into our enemies hands, who have repeatedly said they want to bleed the U.S. empire dry. How much can we fork over each month, especially now that there's a credit/liquidity bubble about to implode, a few million foreclosures, inflation is up, etc.? We're broke and the only solution is a sound currency and reduction of the empire as the founders and framers wanted.

U.S. banks getting slaughtered in the carnage

Eighty years ago Ludwig von Mises was writing about what is happening to the U.S. and world financial markets today. As Mises and the rest of the Austrian economists knew, whenever you print money out of thin air (it's not backed by anything), bankers run amok with the easy credit while the populace takes the bait, leading to malinvestment. It's simple - the inevitable contraction follows the peak from the Fed-induced expansion.

As you can see in this article, U.S. banks got creamed in the 4th quarter. Also on prudentbear.com today, the president of the IMF said this worldwide crisis could be quite severe. Well, he finally got something right (after the Austrians have been discussing this for a decade).

The solution? Abolish the Fed, get back on the gold standard, and get the government out of the economy. 2008 and 2009 won't be pretty.

Can Texas secede?

Every July 4th, we celebrate a document that states Texas, or any state, can secede from the United States: "whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and institute new government . . ."

What if an overwhelming majority of Texans voted to leave the United States? Would the U.S. let us go? After all, we could easily survive on our own. We have over 22 million people, which is a lot more than dozens of countries. We have a productive port, the Port of Houston, and an economy that could thrive without the rest of the U.S. dragging us down.

What if the overwhelming majority of Texans said: "you know, we've had enough of high taxes, military spending and an over aggressive foreign policy, limits on our personal liberty, crummy roads and crummy public education, etc. etc." Would the U.S. let us go? NO! The rest of the U.S. would not let us go, and would use military force to keep us in. But how could they, since they celebrate a document every year that says we can?

Because Mr. Lincoln's War took secession away. Even though every delegate at the Constitutional Convention in 1787 believed secession was a fundamental right and important for liberty, it was taken away by the Civil War. That event was a watershed moment in American History. Now, unchecked by the threat of secession, the federal government could grow dramatically (and boy, did it ever!).

Americans love capitalism, not democracy

It's capitalism Americans love more, not democracy. We spend almost all of our time, minus time for family, seeking more wealth by working harder, smarter, and longer to purchase the nicer car, house, plasma tv, Wii, DS (for the kids), clothes, gardens, etc. etc.

A tiny percentage of Americans actually subscribe to a political or economic journal, even though they remember seeing them on the shelves at the library while in college. Billions more is spent on fiction novels. Write to the representative in Congress? Hardly. Take part in demonstrations? Not likely. Write letters to the editor of the local newspaper? Once in awhile. Americans don't do their civic duty, partly because they are uniformed of the issues, but mainly because they are actively engaged in what they love more: capitalism. After all, capitalism pleases us.

Most Americans, however, do take part in a ritual every four years: the mainstream media's successful efforts to whip us into a frenzy about the election of the next decider-in-chief. Yet for 80 years, it hasn't made a whit of difference. 80 years of more government, more taxes, more regulation, more war, less liberty, and on, and on, and on.

Here's two great reads to begin the discussion on capitalism and democracy: How Capitalism Saved America by Thomas DiLorenzo, and Democracy: The God That Failed by Hans Herman Hoppe.

My apologies to those who actually do get involved on a monthly basis by writing letters, reading journals, etc. It's not my intention to lump you in with the uniformed and the apothetic.

It was fun while it lasted

Well, at least we had a century. Yes, the 20th century was America's. This country dominated, pretty much, the entire century. But, we let our unfettered free market get hammered by taxation and regulation. And, beginning in 1913, we began to print money through the Federal Reserve and whack away at the gold standard. Now our money is not backed by anything and the dollar is worth only 4 cents.

The bottom line? Unless we embrace unbridled free market capitalism again, and limit the two things that destroy wealth faster than anything else, taxation and regulation, we're done. Read this article that posted on prudentbear.com today. The European Union and China may be eating our lunch sooner than we think.

Shoddy U.S. embassy a mess

The government can't even build a building correctly, on time, and on budget. Read this amazing article about the fire hazard, shoddy work, etc. at the new monster-size embassy in Iraq that you and I paid for. Amazing.

Thanks to lewrockwell.com for posting a link to this article.

My house is cold - call the government!

Thanks to lewrockwell.com for posting this article about how California wants people to have remote control thermostats in their homes. We wouldn't want a person to use more than their fair share of air conditioning, now would we?

Twenty years from now the government will probably be assigning new names to us. Time to read Brave New World again.

Social workers clueless

Government fails at all levels, from the petty bureaucrat social workers to the decider-in-chief who tries to run an empire on borrowed money. In this article, we read how social workers let down this family who was in deep trouble. Children Protective Services should be abolished nationwide. For the first 300 years in America, families, friends, neighbors, communities, churches, and charities helped families. Now, people don't help each other as much because the government has said "we'll do that" for the last 100 years or so. And look at the results. This goes on all the time; fortunately, the results are not nearly as tragic.

Nothing will change

People in Iowa and New Hampshire had a chance to show the country that they were finally fed up with war, taxes, and big government. But they blew it. They voted for more war, taxes, and big government. Absolutely nothing will change, no matter who gets elected in November. Nothing. Mark my words. Nothing will change. We will have more war, higher taxes, and more government.

Somehow, almost every American is into war. So far, Iraq and Afghanistan have cost over $2 trillion dollars and over 3,900 Americans have lost their lives. How could anyone in their right mind support war? And don't let the Democrats fool you. They're into it too. Read this article by Glen Greenwald from antiwar.com today. It's about the U.S. empire. Barack and Hillary are into it too.

Don't forget. Nothing will change. The Federal Reserve will still print money out of thin air, there will be more bubbles like the real estate and credit bubbles, immigration will still be a problem according to many, no bases around the world will close, more Americans will die, health care will still be a problem, etc. Nothing will change.

Nixon, I mean Bush wants to . . .

The decider-in-chief wants to pull a Richard Nixon and suspend the fundamental laws of economics. He says he wants to "freeze" all mortgages that may reset to a higher interest rate. What a disaster this will be. Just like the disaster in the '70's when then President Nixon did almost the same thing and suspended all wages and prices for 90 days! Isn't it a good thing that government officials can't suspend the fundamental laws of physics too?

Amazingly, the decider-in-chief's plan is backed by the equally incompetent Secretary of the Treasury. Read the amazing news here.

Red-cockaded woodpeckers and the Preble Meadow jumping mouse

Radical environmentalists (you know, the ones who care more about bugs and weeds than humans) love the Endangered Species Act. But as you can read in this article published in the latest issue of Regulation, there are perverse incentives that actually harm the woodpeckers and mice these people care so much about. The enforcement of private property rights, rather than legislation, is the key to a pristine environment.

By the way, 96% of all species that have ever inhabited the earth have gone extinct. That's the way nature is, and it's not our business to try to prevent that.

Is Iraq less violent?

The MSM (main stream media) is buying the government's take that the surge is working and Iraq is now less violent. But is it? Maybe in Baghdad, but what about the rest of the country? Interesting article that appeared on antiwar.com today. Read it here.

Were the "titans of industry" good guys?

Whenever I cover Vanderbilt, Morgan, Carnegie, Rockefeller, Gould and others in class, the overall first impression my students give me is that the "titans of industry" were really "robber barons" who capitalized on people in order to obtain wealth. Yet a closer examination is necessary, and it reveals that these men knew what created wealth: please thousands or millions of people.

As I hear presidential candidate John Edwards villify the oil companies, I think about The Myth of the Robber Barons by Burton W. Folsom. Also, here's an article from the June, 1998 issue of The Freeman: Ideas on Liberty, called The Ghost of John D. Rockefeller. Thanks to The Foundation for Economic Education for publishing Thomas DiLorenzo's article.

Spin and her cousin, denial

Interesting article on the outlook for this year and how Wall Street is still in denial. There will be no recession, Wall Street says, just a correction. Everything will be fine, they say, the bubble was small. Financial pundits who make dire predictions are in the minority as the majority don't want to face the music.

Peter Schiff right on target

Read Peter Schiff's article that appeard on prudentbear.com today. He's one of the few that get it. He often appears on Kudlow and Co. and he's usually the only one sounding the alarm bells as the others say everything's going to be allright.

The Fed just filled the punch bowl again

The Fed has promised more liquidity for the credit bubble. It's like a balloon with a hole in the side. The Fed keeps filling the balloon, but the air keeps rushing out. The more they fill, the greater the ultimate collapse. The Fed is creating a 1930's meltdown. The longer they forestall the pain, the greater the ultimate pain will be. They should let the market correct itself instead of printing more money. I hope everyone's got a lot invested in gold and precious metals. Katy, bar the door!

Founders' intent irrelevant?

In his book The Constitution in Exile, Judge Andrew Napolitano lists all the ways the Constitution and our civil liberties have been assaulted by the growth of big government. He discusses an important 1934 case, Home Building & Loan Association v. Blaisdell, where the Supreme Court "flatly subordinated the Contracts Clause to whatever the Court and the legislature would deem a 'valid police pupose.' It also dismissed the Founders' intent for the Contracts Clause as being irrelevant in 1934. The code words "emergency legislation" and "valid police purpose" seem to be just what George Orwell warned us to watch out for in 1984. Any time the government claims to be helping by way of an "emergency," it usually just means it is taking power from individuals."

All Americans should read this important book. You'll be especially disturbed by the chapter on the Patriot Act.

Why can't I get in to see the Taj Mahal?

Another sign of the times: the U.S. dollar is now being refused at certain resorts in India, like the Taj Mahal. Rupees only please. Get that weak crap out of here. Who do we have to thank? The Fed.

More theft

Governments never cease in their ability to extract our money from us. Here's an article that many business owners won't find amusing. Governments at all levels tax us cradle to grave. The founding fathers are turning over in their graves. I'll put up with it for a little while longer, then I'm leaving the empire. My tax free, no armed forces future locale is already picked out. It's small, quiet, and it's not a target.

Weak dollar good for the U.S.?

Lately, some of the eternal optimists on the financial news channels, who constantly remind us that a recession will be avoided (sorry guys, we're already in one), have been chirping about how a lower dollar is good for exports. That may be true, but is that the whole story? Here's a short but good article by Domenick Armentano, and it questions how good a weak dollar is for the U.S. economy. Thanks to mises.org for posting Armentano's article today.

Repeat of history?

Harvard professor Niall Ferguson offers up a warning to us based on history: the Ottoman Empire acted in a way similar to how the U.S. is acting now - trying to maintain an extended presence around the world and of course, going into tremendous debt. Will we suffer the same fate? Read the interesting article here.