Yellen in the Night

Oh dear.  Our new rule-of-the-experts nominee for Chairman of the Federal Reserve Board admits she didn't have a clue about the Crash of 2008.  Here's the quote from Janet Yellen:

“For my own part,” Ms. Yellen said, “I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.”

Now I think that it is reasonable to suppose that the average ruling-class bear couldn't have known that we had a once-in-a-generation financial crisis in 2008.



But the folks in charge of the nation's money supply should have known that cheap credit in the aftermath of the tech crash of 2000 and that huge subsidies for home mortgages and government policy to shovel mortgages to people that couldn't make the payments was going to end in tears.



The problem is that for the Keynesian liberals a little bit of cheap credit is worth it.  It's worth it to give the economy a bit of stimulus.  It's worth it to help create jobs.  And all the other self-indulgent stuff that the ruling class spews out.



But for you and I all this mucking around with the credit system is poison, for us and for our lives.  Right now it means that ordinary people can't get a decent rate of interest on their savings.  At other times it means inflation raising the price of groceries.  And inflation eating away at the value of your savings.



And all because the cheap credit philosophy of the Keynesians means that they are always trying to get out of a jam.



Now we have Janet Yellen, the president's nominee to run the nation's monetary policy.  And she admits that she didn't really have a clue about what was going on in the 2000s in the run-up to the Crash of 2008.



So what does it mean three years down the road when the current quantitative easing results in a nasty inflation?  What mumbo-jumbo will she be muttering when things start to go wrong?



Actually, we know what the liberals will be saying then.  They will be blaming the banks and they will be proposing credit controls to stop the reckless speculation that is the inevitable consequence of their foolish policy.



It will be a case of Yellen in the dark.

War and Force and Division and Government

In the old days human society was simple.  There was the community, within which differences were settled by hierarchy. If you were a high status person you got your way; if you were a low status person you gave way.

Outside the community things were also simple.  All other groups were enemies, actual or potential, because all other groups were competing for land, and land is life.

So in the old days every community was at peace within the community and at war without the community.

But in our world things are more complicated because every community has a government.

Government is force, meaning that government doesn't do anything by consensual agreement.  It does everything by law or by rule.  Not to do things by rule or by law is to commit an injustice because special favors and special allowances for certain favored people amounts to an injustice to all the others.

But who wants to sit there as a judge evaluating rules and violations?  People want action.  And so government gets involved in peoples' quarrels.  Who wouldn't want the government on their side when they have a disagreement with their neighbors, and want to force their neighbor to curb their barking dog or cut down a rotten tree?

So here we have the government with its apparatus of force with nothing to do unless someone has a quarrel.  If there's a quarrel that the participants can't resolve then you have a war on your hands, and you need a war to justify using force.

Thus it is that the men and women that direct government have a special interest in ginning up quarrels and dividing the people.

You can't justify the use of force unless there is a war to fight.  And you don't have a war unless there's a quarrel.  And you don't have a quarrel unless you have a disagreement that two parties won't resolve on their own.

Thus it is that politicians are in the business of division.  They need to divide people to gin up a quarrel.  And with a quarrel they have a chance to gin up a war.  And with a war they have the justification to use force.

And force is what government is all about.

But the whole point of human society is to maximize friendly cooperation and to structure society so that almost all transactions between people can be conducted in a spirit of amity and give and take.  It means that people work with the other rather than work to divide from the other; they work to help the other rather than work to defeat the other.

But it makes sense that the more government the less give and take, the more government the less people are thinking about how to help other people rather than dominate other people.

So the great question in all political affairs should be: How do we reduce government?  Because by reducing government we reduce the zone of force and division, and increase the zone of cooperation and agreement.

Why Did Liberals Have to Blame Right for JFK Death?

We all know the story of the Kennedy assassination on November 22, 1963.  A lefty ex-Marine who'd been to Moscow and to Cuba did it.



But liberals have ever since wanted to believe that it was right-wing hate that did it.  George Will rehearses the story for us.



James Reston wrote that Kennedy was "a victim of a 'streak of violence in the American character,' noting especially 'the violence of the extremists on the right.'"  A New York Times editorial spoke of "the shame all America must bear for the spirit of madness and hate that struck down" JFK.  Really?  From a lefty that went to Moscow?



What were they smoking?  And, of course, as the assassinations continued with Martin Luther King and Robert Kennedy, liberals intensified their indictment of America.  Gun violence was the problem, they have insisted ever since.



Now we see the same paranoia from liberals.  It's directed at the Tea Party, the most sober and friendly of political movements.  But liberals call Tea Partiers "extremists."  It's directed at the government shutdown.  Liberals call the Republicans "arsonists."



I don't think there is anything special here.  We are just seeing the natural behavior of a quasi-religious movement.  Liberals don't experience politics as politics, but as saving religion.  So any setbacks they experience are not the vicissitudes of life, but the power of Satan.



Right now liberals are in a perilous situation.  The economy is barely recovering from the Crash of 2008 and liberals don't know why, because it ought to have responded to their wise Keynesian medicine.  Obamacare is debuting to catcalls; this is utterly demoralizing given that universal health care is a natural evolution of every civilized society.  Republicans, the hated party of racists, sexists, bigots, and homophobes, gives every indication of obstreperous disrespect.  Something weird and chthonic is taking place, and liberals are feeling the strain.  Liberals are starting to panic.



Rewinding back to the Sixties, the self-delusion that began with the "climate of hate" response to the Kennedy assassination ended up in the stagflation and powerlessness of the Carter years.  The remedy was the Reagan revolution of 1980.



It's beginning to look as if the delusion of 2000, that liberals were robbed of the election of Al Gore, that continued through the mad partisan destruction of George W. Bush and into the delusive worship of Barack Obama, is set to end in a massive liberal crackup in 2014-2016.



And it all issues from the central liberal delusion, that you can build a good society on the government of experts and activists, that administration and system can improve on the natural sociability of human individuals.



Our liberal friends make a big deal about the importance of science, at least when it comes to evolution and climate.  But when it comes to economics and government they are the worst deniers of all.  Government, we know from economics and public choice theory, is a very blunt instrument and is just not up to the job of running a modern society.



Once you promote government from the job of defending against enemies foreign and domestic you are heading for trouble.  That's because government is force, and force always means a war, and force applied to your fellow citizens leads to injustice.



Liberals have no clue about the depth and breadth of the injustice they have sponsored in this nation with their endless wars on poverty and wars on behalf of the marginalized.



But injustice is injustice.  Sooner or later it finds its voice and builds up to a head of rebellion.



And liberals, in their delusions about right-wing hate, will be the last to know.

Obamacare: Just Another Press on the Brow of Labor

The basic technique of government is to extract a fee from all market transactions.  That's what sales taxes and tariffs are all about.  Or government can demand to get a cut out of every paycheck in an income tax.



But probably the most ingenious approach is to demand that employers provide benefits to their employees.  Then the government doesn't actually apply a tax.  It just forces market participants to act in the way the government wants.



But it really doesn't make any difference in the big picture.



The big picture is that all these interventions harm the economy.  Let's look at Obamacare. Writes Michael Tanner:

By raising the cost of employment, Obamacare makes employers slower to hire and reduces economic growth. The CBO recently warned that due to the law, the equivalent of 800,000 full-time workers will leave the labor force over the next ten years.

But hey, that's what government does.  When it takes money from Bill to pay to Pete, or it forces Bill to provide services to Pete, there's a cost.  The cost is that the economy is smaller: less jobs, less products, less services.  Unfortunately, most people don't get it.  They buy into the idea that other people can and should be forced to provide benefits to them.



Here's a couple of Obamacare victims that suddenly find out from their insurance companies that they are going to be paying for Obamacare.

Cindy Vinson and Tom Waschura are big believers in the Affordable Care Act. They vote independent and are proud to say they helped elect and re-elect President Barack Obama.



Yet, like many other Bay Area residents who pay for their own medical insurance, they were floored last week when they opened their bills: Their policies were being replaced with pricier plans that conform to all the requirements of the new health care law.



Vinson, of San Jose, will pay $1,800 more a year for an individual policy, while Waschura, of Portola Valley, will cough up almost $10,000 more for insurance for his family of four.

Golly gee-willikins!  Who could have seen that coming?  They want to make me pay for the new government program?  Cindy Vinson, retired teacher, was laughing at Speaker Boehner and his government shutdown tactics, until the Obamacare bill came due.



But really, what planet do these people live on?  All government interventions have a cost.  They disturb the natural flow of the economy, of people providing goods and services to other people.  So, almost inevitably, something will get lost when the government steps in.



What government does, and it does it pretty well, is to inject plausible lies into the conversation.  It encourages people to believe that they have a right to a decent job, to health care, to education.  But the truth is that these basic goods are the reason we work.  It is our labor, our skills, what we can offer to other people, that makes gives us the right to hope for a decent life in exchange for what we provide to our fellow citizens.



We can use force to supply deficiencies, because some people get too little out of their contribution to society.  But every time we allow government off the leash to do this, we reduce the basic sociability of our society because we increase the span of force.

White Working Class Used to be Little Darlings

Here's conservative icon Ben Stein getting an earful from a racist.

“This is a George Wallace moment,” my interlocutor continued. “White working class people, white small businessmen, mothers, are just sick at being pushed around by the courts, by the government, by the media, by the intellectuals...."

And so on to blacks on welfare and affirmative action.

But I have to say to the apologist for the white working class: What did you expect?

Back in the day the white working class was the little darling of the liberal ruling class.  Liberals couldn't do enough to extol the sturdy virtues of the working stiff.  At least that's how it went back in the 1930s.

But you could tell things were changing in the 1950s when Jackie Gleason portrayed a less than stalwart municipal bus driver.  And the worm had clearly turned in the early 1970s when Atchie Bunker was made into a figure of derision.

Listen fellahs!  Sooner or later the ruling class gets bored with the little darlings they've created.  They decide that blacks, or women, or gays are far more engaging than bitter-clinger working class whites.

And then the old little darlings are left, deserted, with their bitter tale of betrayal.

Listen up!  When you sign up with the politicians as their little darling du jour you are signing up to be their mistress.  They'll be around to chuck you under the chin and give an expensive present at election time, but the rest of the time you are expected to smile sweetly and never complain.

Here's the future for the white working class.  The affair to remember is over.  The government goodies are over.  The movies, songs, paeans to honest toil are over.  Now there is nothing left but to suck it in, get an education, get a job, and join the People of the Responsible Self in the middle class.  You will find them in the Republican Party.

When you are a little darling of the politicians you can sit on your butt and complain about the unfairness of life.  And because you are a pretty little darling and you have still got what it takes the liberal ruling class will respond to your whining with government programs.

But what happens when the bloom of youth is over?  Then the victim card doesn't work any more.  Then you have a choice.  You can slowly decay like Blanche DuBois as you continue to depend on the kindness of strangers, or you can suck it in and get a life.

The time has come for the white working class to suck it in and get a life.  The time has come for the white working class to embrace the life-giving ideology of individualism, which means that you take responsibility for your own life before God and stop blaming other people.

I call the people that do this the People of the Responsible Self.  The political home of the People of the Responsible Self in the United States is the Republican Party.

Glenn Reynolds is complaining today that while Washington isn't working, the world outside achieves wonders like private spaceflight.  Well, yeah.  Politics isn't supposed to "do" anything.  It is civil war by other means.  Don't expect anything other than a war out of the political process.

Even liberal pup Ezra Klein knows something is wrong.  For him, of course, it's all about the intransigent Republicans preventing things from getting done, from the end of earmarks to the failings of Speaker Boehner to the lack of big-business influence on Republicans. (Imagine: The Chamber of Commerce supports a "clean" continuing resolution for the budget mess just like the Democrats!)  Oh, and Ted Cruz.

But really what's happening is that every time liberals try to spoon that big government medicine between the lips of the little darlings, the little darlings upchuck.

Probably what we are seeing is the entry, finally, of the white working class into the Republican Party.

Because, at long last, the little darlings of the white working class have hit bottom and they have nowhere else to go.

Let Liberal Billionaires Help With Debt Ceiling

There is only one thing that a government must avoid if it wants to live long on this earth.  It must avoid the situation of Greece and Co.  They must avoid the situation where the government has to offer brutal rates of interest to lenders.



Put it another way.  If you can sell your government debt for a reasonable rate of interest, you are in clover.  It's when you have to pay north of 10% interest that things start to go south quickly.



But right now the US Treasury expected to pay an average of 1.2% per year net interest, or $223 billion in FY14, according to usfederalbudget.us.  Hey, me worry?



No the real problem is a "sudden stop" like they had in Britain under the Stuarts.  That's why the Brits had to call in the Dutch Prince William of Orange and his Dutch Finance.



The problem for the US government if Congress fails to pass an increase in the debt ceiling is a) whether to ignore Congress, and b) what programs to finance.  Oh, the agony!



But I have a better idea.  Let liberals step in and help.  Liberals after all believe with Oliver Wendell Holmes that "I like to pay taxes.  With them I buy civilization."



OK liberals, here's a chance for you to walk the walk.  Just log into eftps.gov and pay the Feds some estimated on your 2013 Federal Income Tax.  Here's the schedule I suggest for my liberal friends.

1. If you are a liberal billionaire, in the Warren Buffet or Penny Pritzker class, I suggest a $10,000,000 payment on eftps.gov.  Remember, the poorest guy on the Forbes 400 is worth $1.2 billion so there ought to be a good 100 liberals in there.   That $1 billion to buy civilization.


2. If you are a liberal centi-millionaire, I suggest a $1,000,000 payment on eftps.gov.  There ought to be a good thousand or so of liberal centi-millionaires.  That's another $1 billion.


3. If you are a liberal earning over $10,000,000 a year, I suggest a $100,000 payment to eftps.gov.  I figure there must be 10,000 of you chaps.  So that's another $1 billion.


4. If you are a liberal earning over $1,000,000 a year, I suggest a $10,000 payment to eftps.gov.  There must be 100,000 of you.  So now we've got another $1 billion.


5. Now let's talk about the lumpen liberals: government managers, professors, executives with non-for-profits.  There must be half a million of you folks.  How about a cool $2,000 payment to eftps.gov for you guys and girls.  That adds up to another $1 billion.

So there we have a quick $5 billion whip-round to tide Uncle Sam over for the week or so before we get a deal on the debt ceiling.  And liberals will like it.  Because by paying those taxes, liberals will buy civilization.



Oh, don't worry, liberals.  eftps.gov is still up and running.  In spite of the government shutdown.

And if that $5 billion isn't enough, hey liberals!  Pony up another $5 billion.  We are talking civilization here.

Media Lapdog Syndrome Strikes Again

I suppose you can say that the moment I lost my youthful innocence was the day that Jack Patera, the Seattle Seahawks first coach, was fired.  We immediately learned from the sports reporters that they had never liked Jack.

Oh really.  This was the guy that these reporters had been interviewing on the pre-game and post-game and in-between and goodness-knows-what show and we all thought he was their best buddy.

And all along these intrepid reporters were just being regular media lapdogs.  Do the Seattle Seahawks need the media more than the media needs the Seahawks?  Who knows?

What we do know is that the self-serving nonsense about comforting the afflicted and afflicting the comfortable is just that.  What the media really do is take kicks from the powerful and apply kicks to the powerless.

So now we learn that the proposed biopics about the saintly Hillary Clinton have run into a problem. Nobody is willing to talk to the movie producers.  The word has gone out from Clinton HQ and everyone that knows what is good for them has clammed up.

What we really know about the media is that if they aren't dishing the dirt on some political figure it is because they are too powerful.  Nice little career you got going here.  Pity if something happened to it.  Pity if nobody who was anybody refused to talk to you.  Because what use to a journalist is anybody who is really nobody?

My theory about the Obama years is that the media adulation is not just knee-jerk terminal liberalism.  The bottom line is that the enforcers are out there and they will quickly remind any journalist what it would cost to go public on the Obamis.  In other words, the media is afraid, and rightly so,  because any single media personality is expendable.  In a minute.

Hey.  No biggie.  But the fact of the lapdog media is just another argument for limited government.  If the media won't expose wrongdoing because it's afraid, and won't write inconvenient truths about existing powerful political figures, then there is one thing to learn.  The political figures are too powerful.

How do you reduce the power of political figures?  You reduce the power of government, the power of government to come down like a ton of bricks on anyone for any reason.

What was it that Conrad Black did that sent him to jail?  Apart from the fact that a Chicago US Attorney, Patrick Fitzgerald, wanted to make a name for himself.  Here's Ben Stein wondering what his friend, a financial planner, did that got the SEC after him.  That's the SEC that failed to stop the Crash of 2008.  And why not?  Because the drivers of the crash, "affordable" home mortgages, were supported by the most powerful people in the land.  And don't get me started about Bernie Madoff.

Maybe there's a silver lining to this black cloud.  Maybe the rise of the blogosphere means that there is more likely to be some naive fool out there that will publish the dirt about some powerful person before he realizes that he is fishing in deep waters and that he will regret his rashness for the rest of his life.