The Cause and Cure of the Second Great Depression

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The Second Great Depression, which afflicts the West while the Rest booms, is the direct result of the 1994 General Agreement on Tariffs and Trade (Gatt) now administered by the World Trade Organization (WTO). The Gatt agreement opened the Western economies to free trade with four billion Third Worlders working for pennies an hour.

The immediate impact was slight. It takes a while to mobilized tens and hundreds of millions of the children of peasant farmers to work in the sweatshops, factories and plantations of of BanglaDesh, Indonesia, China and Africa. And as the process got underway, the US tech sector boomed, the stock market zoomed, banking was deregulated, the profits of finance exploded, and Bill Clinton was easily reelected US President in 1996.

But by 2000, the steam was going out of US high-tech. Software developers were learning how to exploit cheap Asian brain-power and Chinese universities were turning out more engineers and programmers than all the universities in the West combined. Tens and then hundreds of thousands of IT jobs moved to India, along with MicroSoft's call center. In the Philippines, University accounting courses taught American accounting rules to students preparing to do off-shored back-office work for US financial and accounting firms.

The result? Al Gore lost the US Presidential election to "compassionate conservative" George W. Bush.

In response to the tech-sector bust, The Greenspan Fed slashed interest rates and set off a real estate boom. Construction is labor intensive, and it stimulates local industries: lumber, cement and steel, so that by 2004 the US economy was good enough to get "humble foreign policy" George W. Bush reelected, notwithstanding that he had launched the US on the NeoCon war for global hegemony. In fact, the war for global hegemony was one reason the US economy was as good as it was in 2004. Spending on weapons and pre-emptive war in Iraq was a key factor preventing the US from falling into recession despite the massive bleeding of manufacturing, design, engineering and research jobs overseas.

Within a year of Bush's reelection, the Greenspan Fed pricked the property bubble with 17 consecutive interest rate increases. The housing crash and the consequent financial crisis ended the Republican hold on the White House.

But nothing much went right for Democrat President Obama. GM and Chrysler went broke. Most of the banks went broke. Dell computer gave up snapping Asian-sourced components together in Texas, instead bringing fully assembled boxes from China. Brutal violence continued in Iraq. The struggle to subdue Afghanistan seemed endless. And today, as the presidential election approaches, US Unemployment remains over 9% according to the headline rate, or 16% according the the U6 definition, and even higher if you take account of those who just gave up looking for work. And an unprecedented number of Americans are on food stamps or some other form of welfare.

Nobel Peace Prize winner, Obama, has done what he could within the limits of the clearly inadequate advice he received.  With the aid of "we have a technology called the printing press" Ben at the Fed, he's printed trillions of dollars, he's expanded the wars to Libya, Syria, Yemen and Pakistan. But the dark shadow of depression still falls across the land: meaning that Republican Romney's up next.

What will President Romney do? Pursue the wars, surely, and, as a buyout specialist, restructure the US economy. But can a Romney administration revive the US economy where the Obama administration failed? Sure, although whether it will do so is another matter.

What to do?

The terms recession and depression are ill-defined, but it is impossible to end either a persistent recession or a great depression without ending mass unemployment. So to end America's economic malaise, the US must instigate policies that lead to the creation of tens of millions of new jobs within four years. These jobs will be mainly for the low-skilled factory operatives and construction workers who've lost their jobs to off-shoring and outsourcing or to the housing bust.

How to do it according to the pundits?

In the public realm, only two approaches are commonly promoted: those of the Keynesian and of the Austrian Economics school.

The Keynesian solution:
According to the Keynesians, more spending is all that is required. Since the private sector won't spend enough, the government must spend more. This Obama has done. The Obama administration has run a budget deficit of more than $5 trillion over four years, yet US unemployment is higher now than when Obama was elected.

To the Keynesians, the failure of the Obama administration to end the depression has been due to the failure to run large enough deficits. Maybe if the deficit had run at 16% of GDP instead of only 8%, or perhaps 24%, then all would have been well.

But there are two problems with this:

First, the debts created by the deficit have to be repaid.

Second, little if any of the deficit spending does anything to increase national output of useful goods and services that generate income that will ease the eventual repayment of debt. Mostly, the money's gone on such things as the wars, Homeland Security and its blue-gloved goons feeling up airline passengers thus destroying a huge chunk of the US tourism industry, and shoving politically correct propaganda down kids' throats in the name of education.

 The Austrian dream:
The Austrians are too nutty to take very seriously, but their dream is to return to a gold-based currency, end the money-printing Fed, without which they believe, incorrectly, that government deficit spending would be impossible, and let all those who borrowed too much go broke. Then the Austrian school fanatics, with their hoards of "physical gold," will be able to buy up prime down-town real estate, the stock market, whatever, for pennies on the dollar.

Oh, and then the economy will recover -- somehow.

What would actually work

You cannot, as the Keynesians believe, pay wages for unproductive work with printed money indefinitely. Debts increase but real income to support the debt does not, so prosperity is ultimately destroyed. And you cannot, as the Austrians believe, revive the economy by sending much of it into bankruptcy.

Which means finding ways of employing idle resources, both human and physical, in ways that generate a positive net return.

Which means promoting new, productive investment at home, not abroad.

What are the greatest restraints in the West to investment at home? There are three:

First, is the corporation tax, which should be abolished. Corporate income should be taxed only once, and that should be when received in the hands of shareholders as dividend payments.

Second, is the minimum wage, which denies employment to those whose labor is worth less than the minimum wage, i.e., most of America's black youth, half of the youth workers in Spain, etc.

Third, is the freedom to import goods and services produced under conditions, or in ways, that contravene Western standards on environmental protection and workplace health and safety.

Putting the solution into place

Eliminating the corporation tax:
Eliminating the corporation tax is easy. Just do it. The immediate result will be a reduction in government revenue and an increase in the government deficit, but in time there will be a compensating increase in income and sales tax revenue from the resultant increase in investment and the consequent expansion of the economy.

Eliminating the minimum wage:
Eliminating the minimum wage is a little more complicated. The solution, as I have discussed elsewhere is a wage subsidy scheme that, in effect, eliminates the minimum wage so far as employers are concerned, but not for employees, who will therefore receive a living wage.

Such a scheme will make redundant most welfare programs and the bureaucratic empires that administer them, resulting in a massive saving in government spending. Among other savings will be huge reductions in the cost of crime and mental illness to which mass unemployment gives rise.

Most importantly, though, this scheme creates a huge addition to the labor force in the West that is competitive in cost with the labor force of the Third World. This new resource will result in a wave of business start-ups, both large and small. Once again Western firms will be able to make shoes and shirts, computers and car parts in competition with overseas producers. At the same time, those formerly unemployed will gain workplace skills that increase the market value of their labor, and thus their future income. 

Creating a level international playing field:
Eliminating the regulatory disadvantage of home industry will require a blunt instrument. Each nation or trade zone must calculate the cost to its own industry of unfair competition due to overseas workplace and environmental regulation and then impose an across the board tariff to compensate. Such a measure will do a great favor to workers in the Third World, where governments will be forced to adopt Western standards of environmental protection and workers' rights.

With these three measures, Western prosperity will be rapidly restored, and the need for the ultimate Keynesian economic stimulus, World War III, will be eliminated. Unfortunately, the leadership of US/NATO seems unanimous in support for the NeoCon war for global hegemony. So whether the Second Great Depression is ended in one way or another, we'll likely all end either broke, due to endless "stimulative" and totally unproductive war spending,  or dead.

Related:

Rolling Stone Magazine: The Sharp, Sudden Decline of America's Middle Class

When Pop Sci Turns Toxic

The best of popular science provides the non-specialist with both a sense of delight that comes with discovery, and a feeling of awe at the ability of the human mind to extract, often by means of only a few simple logical steps, some fact totally new and astoninshing about the world in which we live.

Not surprisingly, the most able popularizers of science have often been among the most able scientists. And among the great scientists of the 20th Century, Richard Feynman, whether explaining the space shuttle Challenger disaster, or why it is not the flanges on the wheels that keeps a rail locomotive on the tracks,  was among the most effective popular exponents of science.

But Richard Feynman had little time for social science.

Because of the success of science, there [has emerged] a kind of pseudo-science. 

Social science is an example of a science that is not a science. They follow the forms. [They] gather data, but the don't get any laws. The haven't found any yet. Maybe someday they will.  They are not scientific. They sit at a typewriter and they make up something. Maybe true, maybe not true, but it has not been demonstrated.

I might be quite wrong. Maybe they do know all these things. [But I have] found out how hard it is to really know something: how careful you have to be about checking the experiments; how easy it is to make mistakes. 

I see how they get their information and I can't believe they know it: they haven't done the work necessary; they haven't done the checks necessary; they haven't taken the care necessary.

I have a great suspicion that they are intimidating people.

Yesterday, I wrote about CalTech Prof. Leonard Mlodinow's book Subliminal, How Your Unconscious Mind Rules Your Behavior where the author presented what I believe to be narrow, and most probably false, interpretations of the results of various studies in psychology.

But were these examples of what Feynman called "intimidation?"

Well, consider Mlodinow's claim that the tendency to exaggerate one's own popularity, looks, intelligence, etc., is due to a kind of delusional thinking that can be "a problem." Perhaps this idea is, itself, "a problem," a kind of intimidation, in fact. After all, the only people who don't over assess their own merits are those classified as mentally ill and suffering from clinical depression.

Perhaps we know our limitations only too well, but put a gloss on things to keep our spirits up and maintain appearances, an interpretation that suggests a whole different idea about the underlying cause of clinical depression.

And here are three other ideas advanced by Mlodinow on the basis of "studies show" etc., that look very much like pseudoscience applied to the task of politically correct intimidation.

Mlodinow describes a test employed to investigate the way people associate words and ideas. It would be both tedious and pointless to describe the exact method, which so far as one can tell, is just a clever word/idea association test.

Among the things these tests reveal is that people tend to associate men with the sciences, women with the arts.That most people associate men with science is hardly surprising. Only six women have won the Nobel Prize for physics versus several hundred men.The association of women with the arts is more surprising. What proportion, after all, of the great artists and sculptors, poets and playwrights were women?

But no matter, to Mlodinow, these associations are evidence of "gender bias," or "gender stereotyping." And in the same way, Mlodinow finds widespread evidence of "pro-white" and "anti-black:" sentiment among Americans, of whom many, Mlodinow tells us "are (consciously) appalled at learning that they hold such attitudes."

But wait a minute, if I associate, say, the word "black" with "crime," where's the evidence that I am "anti-black?" What's the proof that an association of words is "an attitude?"

I will resist the temptation to resort to a bloggish expostulation concerning the mental capacity of Caltech professors, for such is the author of this astounding non sequitur. But his view is, surely, a clear case of what Feynman would today have called sitting at a computer keyboard and making something up, which may be true, may be not true, has not been demonstrated, but seems intended to intimidate.

Consider this: give me the name Garbo and I will give you the name Greta.Does that mean anything? Only that in the media environment in which I have been immersed for last 50 years and more the name Garbo has usually if not invariably been associated with the name Greta. Other than that my association of the names almost certainly means nothing.

Likewise, if you give me the word "black" I might very well, among a number of alternatives, give you the word "crime." Does that mean I think (a) all black people are criminals, or (b) that blacks account for a disproportionate percentage of the US prison population, or (c) that I consider black people are an inherently inferior race to my own race of green people with pink stripes. Obviously, to (a) no, to (b) so I understand, and to (c) I don't think of race in such dimwitted terms.

In other words, I have no need to accept Mlodinow's offensive, and indeed intimidating, imputation that I am guilty of racial bias and stereotyping merely because I associate certain words or concepts in ways that reflect the use of those terms in the cultural atmosphere I breathe.

In a final chapter, which is very much an exercise in sitting at a keyboard and making stuff up, Mlodinow, gives us the psycho. insight into the scientific method. Scientists, he tells us, engage in "motivated reasoning." What that means is they adopt hypotheses and then focus on supporting evidence while dismissing evidence to the contrary. Wow, who'd have thought it?

But then Mlodinow puts his personal toxic spin on the phenomenon. Motivated reasoning, Mlodinow tells us, "helps us believe in our own goodness and competence, to feel in control, and to generally see ourselves in an overly positive light."

Oh yeah! But what's that got to do with science?

What happens in science is that the creative individual, a Galileo, Darwin, Einstein, formulates a hypothesis and then look for evidence in its support. He works like a mine prospector who, having staked a claim, will likely work the claim until it yields gold or leaves him broke. With hindsight, it might have been better to have staked a claim over there rather than here, but having invested so much here, it makes no sense to work some other claim until the potential of this claim has has been fully evaluated.

And if scientists didn't work that way, nothing much new would ever be discovered. Only the consensus view would be considered, and as a consensus view, it would never be seriously tested. It's only because of the cranks out there, who insist on working out the implications of the theory of the constant velocity of light, or the possibility of time reversal, or some other crazy thing, that science advances.

But to Mlodinow, the cranks are just that. People with warped judgment, inadequate people who have to engage in warped thinking to feel good about themselves. They are, so Mlodinow would have one believe, people who cannot see that the Big Bang theory of the origin of the universe long ago made fools of the steady staters, people like Fred Hoyle, one of the greatest scientists of the 20th Century.

Thus, Mlodinow writes:

... to any disinterested party, the evidence landed squarely in support of the big bang theory, especially after 1964, when the afterglow of the big ban was serendipitously detected ... What did the steady state researchers proclaim? ...Thirty years later another leading steady state theorist, by then old and silver-haired, still believed in a modified version of his theory.

But then this just in:

Scientists glimpse universe before the Big Bang

November 23, 2010 by Lisa Zyga
Enlarge

(PhysOrg.com) -- In general, asking what happened before the Big Bang is not really considered a science question. According to Big Bang theory, time did not even exist before this point roughly 13.7 billion years ago. But now, Oxford University physicist Roger Penrose and Vahe Gurzadyan from the Yerevan Physics Institute in Armenia have found an effect in the cosmic microwave background (CMB) that allows them to "see through" the Big Bang into what came before. 

Huh! Before the big bang?

Big bang doesn't allow that. And Sir Roger Penrose of the Oxford Mathematical Institute may be a silver-haired, but he's no fool.

 In fact it is Mlodinow who seems the very perfect example of a scientist engaged in "motivated reasoning." Thus, on climate change he writes of

...a thousand unanimous scientific studies [that] can converge on a single conclusion, and people will still find a reason to disbelieve."

But if those thousand "unanimous papers" are contradicted by a single valid study, they must be called in question by any rational person.

But not by Mlodinow. If you don't believe we're all doomed unless we slash the World's GDP by 90% or whatever it is that the scientific consensus led by non-scientist Al Gore and the UN Panel on Climate change insist, then you're not rational and "studies show it."

The cover of Mlodinow's book is printed with a transparent film overlay with multiple instances of the word "Buy," the purpose being, presumably, to motivate book browsers to buy the book on an irrational subliminal impulse. I suggest anyone interested in not wasting their money, resist the impulse.

Is Pop Psychology Mostly Bunk?

CanSpeccy: June 27, 2012. Most books stores have dozens of books about psychology. But do they tell us anything useful?

Some surely must, but reading Leonard Mlodinow's latest contribution: Subliminal, How Your Unconscious Mind Rules Your Behavior, I begin to wonder about the pop psych genera.

Mlodinow, for example, discusses our apparent inability to assess ourselves realistically. Ninety-four percent of college professors, Mlodinow reports, say they do "above average work," while 25% of US high school seniors rated themselves among the top 1% in ability to get along with others. "Ironically," he says, "people tend to recognize that inflated self-assessment and overconfidence can be a problem -- but only in others."

But is this so-call "above average effect" due to faulty self-assessment, which is to say self-deception, or to the fact that most of us, reasonably enough, try to do good PR for ourselves?

When devious stock market manipulator Joseph Patrick Kennedy, father of President John F. Kennedy, was about to sail from New York to take up his appointment as US Ambassador to Britain -- or rather to the Court of St. James, to use the correct British terminology -- he was asked by a reporter: "Are you really qualified for the job?" To which Kennedy replied: "If Marlene Dietrich asked you to go to bed with her, would you say you weren't very good at it?"

Which reminds me of the time I published a scholarly journal. When I launched it, one editor, a Fellow of the Royal Society, remarked, "you realize there aren't any good people in this field," which was no great exaggeration. But for 23 years I never spoke a negative word about that journal or its "distinguished" contributors, except possibly in my sleep, and in due course it came to be rated on the basis of citations analysis as the most "prestigious" journal in a field that included almost 100 international titles. So was I self-deceived for 23 years about that journal and its contributors, or simply doing what a publisher has to do, which is to promote his authors?

But what particularly roused my skepticism about pop psychology, and indeed about much of psychology in general, was Mlodinow's account of an experiment by Stanley Schachter and associates in which an attempt was made to solve the riddle of the relationship between emotion and its physiological and behavioral accompaniments. More specifically, do we run from a charging bull because we are afraid or are we afraid because we run away?

This is a question that particularly interests me, having published in a most august journal the claim that both views are incorrect, since as I maintain, emotion and its bodily correlates are related to one another in a feedback loop as both cause and effect (But don't buy the Science Magazine "content": it's only three paragraphs long, and the first paragraph is a joke.)

In outline, what Schachter and co. did was to measure the behavioral response (making a phone call) of test subjects (all males) to a stimulus (attractive young woman) under normal (at ground level) or anxiety provoking (on a high swaying bridge) conditions. What they found was that being on a high swaying bridge at the time of stimulus presentation increased the likelihood of the subject making the call. The conclusion drawn by the authors from the study was that prior emotional and physiological arousal (i.e., due to being on a high swaying bridge) increased the emotional interest of the male subjects in the female object of arousal.

Apart from the rather weak statistical support for this conclusion, there is no indication in Shachter's own account of the experiment that any attempt was made to control for the effect of physiological and emotional arousal of the female "stimulus" from the effect of being on a high, swaying bridge. Yet adding a little color to the cheeks surely adds to a girl's appeal. Moreover, there is no evidence that any effort was made to insure that the experimental result was unaffected by the expectations of the experimenters and their accomplice. Yet it is one of the most well established assumptions in psychology that expectations influence outcomes.

So I reject William James' ingenious notion that we run away not because we are afraid, but that we are afraid because we run away. Rather I maintain that fear evokes the "flight or fight" response, the increase in heart rate, blood sugar, blood flow to the brain, etc., and that that response then damps the emotion, so that we are not petrified with fear, but utterly focused and fully primed emotionally as well as physically for fight of flight. That is why Charles Darwin observed in The Expression of the Emotions in Man and Animals, that the arousal of anger can make one feel good:

A physician once remarked to me as a proof of the exciting nature of anger, that a man when excessively jaded will sometimes invent imaginary offences and put himself into a passion, unconsciously for the sake of reinvigorating himself; and since hearing this remark, I have occasionally recognized its full truth.

But the effect, I maintain, is not experienced until the emotion has evoked a physiological response that exerts a feedback effect on the central nervous quelling the initial emotional response, while empowering appropriate action in response to the arousing stimulus. That, pretty clearly, was Dawin's view, also, for he said:

Anger and joy... [lead] to energetic movements, which react on the heart and this again on the brain.

And, talking of Marlene Dietrich, she could act: Shanghai Express 

Continued as: When Pop Sci Turns Toxic

Havoc in the Eurozone: Was that the whole point?

Greg Pallast, writing in the Guardian says:

The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.

Specifically, he says it was the intention of the Canadian Nobel-prize-winning economist, Robert Mundel, who urged the creation of the Eurozone, to hobble European governments by denying them the freedom to print money thereby devaluing their currencies to cover the cost of welfare programs and union-exacted pay raises by means of the inflation tax.

If so, the thing seems to have misfired. Instead of restraining government spending it has led to government spending financed by debts that cannot be repaid, which in turn threaten the stability of the entire financial system.

But a final judgment must depend on the end game. If the Eurozone breaks up, it will have proved a costly and destructive failure. If, instead, those seeking to exploit the crisis as a trigger to force full European integration and the formation of a common tax system and treasury, the result will also be a failure as a means to straight-jacket European governments, since the pan-European government thus formed will have the same freedom to print money as had its predecessor nations.

Thus, the only possibility of success, from what Pallast claims to be Mundel's point of view, is if the Eurozone can be stabilized and the indebted countries forced to cut wages and government services and pay back the gigantic debt load they have accumulated.

So, whichever way you look at it, the Eurozone, appears to have been a bad deal for nearly everyone in Europe, with the exception of Germany and one or two other North European states, which have benefited in trade from the weakness of the Euro resulting from the lack of competitiveness of most of their Eurozone partners.

How the West Is Winning Battles and Losing the War With Islam

As Europe is overrun by migrants from the Third World, it is increasingly clear that the West is an empire in rapid disintegration, and that the racial, cultural and religious identities of its constituent peoples will soon to be almost wholly obliterated.

The point is made nicely in a piece by Colin Liddell on the stupidity of liberals.

the idea that the Muslims are backward and need to catch up with us is clearly wrong. Indeed, it is entirely the other way round. In terms of demographic effectiveness, the Muslims are streets ahead of us, as are Non-Islamic Africans, Hispanics, and Indians. This might be one tiny little point lost in the great big bundle of Western technological, cultural, and consumerist superiority, but come back in a hundred years and see the difference it makes.

In response to which there is the comment:

 Nature endowed us with sex for a purpose: to replicate ourselves. We have an education system, a media and an entertainment industry dedicated to disguising this basic [fact]. Perhaps we should stop listening to the hostile elite that controls those institutions and return to our traditional value system that developed the West, Christianity, and start listening to the Pope and his Protestant counterparts in these matters. They are at the very least promoters of policies that will energize us in the race war being waged against us. 

Precisely. Why is so hard for liberals and leftists like Richard Dawkins, the late Christopher Hitchens and their vast army of admirers to understand that simple biological reality. Or are they all self-hating racists intent on the genocide of their own people?

On the whole, the latter seems quite possible. Certainly during the interwar years, there was a vogue for genocide among the leftist elite in Europe, as exemplified by the appeal of Fabian socialist George Bernard Shaw to the chemists "to discover a humane gas that will kill instantly and painlessly. Deadly by all means, but humane, not cruel," for use in the disposal of the unemployed and other useless eaters.

Since then, Hitler's use of gas chambers has given the wholesale liquidation of supposed undesirables a bad name, so genocide has to be conducted by other means. Social manipulation and brainwashing now provide a slow but sure means to destroy the nation states of Europe, and replace them by a mongrelized population of Third Worlders and demoralized remnants of the original ancient peoples.

UK Government proposes law to cover up Iraq war crimes

UK soldiers 'beat innocent Iraqi men in black ops jails but new secret justice law means their torture will be hidden forever.'

The Mail on Sunday can today reveal devastating new claims of abuse by British soldiers carried out at a secret network of illegal prisons in the Iraqi desert.

One innocent civilian victim is said to have died after being assaulted aboard an RAF helicopter, while others were hooded, stripped and beaten at a camp set up at a remote phosphate mine deep in the desert.

The whereabouts of a separate group of 64 Iraqi men who were spirited away on two RAF Chinooks to a ‘black site’ prison, located at an oil pipeline pumping station, remain unknown.

Read more

Egyptian President, Mohamed Morsi, American Satrap

By Aangirfan

USA TAKES OVER EGYPT

Morsi, who worked at NASA on the development of space shuttle engines. Only American citizens can work at NASA. Morsi's children are American citizens. (The US /Egyptian Chronicles!)

The USA has got its candidate into power in Egypt.

Mohamed Morsi, 62, a US-trained engineer, has been declared president of Egypt ...

Read More

Rampant Racism at the University of Minnesota

Lendley Black, President of the University of Minnesota believes white people should be ashamed of being white, or so one must assume from this video, sponsored by the University, which seeks to shame and demoralize white people for the mere fact of their being white.

In the video, to be white is said to be a privilege. And it's not just said, it's written over the faces of the rather stupid white people who volunteered to be in the video, or the rather despicable white people who accepted payment to appear in the video.

Why is it a privilege to be white?

Because, according to some poor child who probably means everything for the best:

"people see us, Not (double underlined) a color."

Think about that. What she's saying, and what's written on her face (a nice humiliating touch that), is that American white people are incapable of acknowledging those of color as people with a personality, with rights, etc., to be judged on their merits, but see them only as objects.

That's blatant nonsense. It's also a blatant anti-white racist slur.

The slur is repeated in different words by a young witless white male saying:

"We're privileged because we don't get stared at when we walk into the room."

Meaning, clearly, that all white Americans are so crassly ill-mannered as to rudely stare if a colored person walks into the room, which in any case flatly contradicts the claim of the girl that white people see a non-white only as a color, i.e., as a person of no account, someone at whom one has no reason to stare.

Then there's the middle aged female agent of political correctness intoning the words written on her face:

"We're privileged we don't get followed by security when we go shopping."

But what is the assumption here? That white people should be ashamed that their behavior provides no statistical basis to indicate they are a special security risk?

Then there's a female complaining that:

"We're pulled over when we're in the wrong neighborhood."

Does she really likes the idea of getting into the wrong neighborhood and being mugged, raped, or what?

Then there's some dopey guy saying:

"We're privileged because society was set up for us."

Really. It's hard to believe George Washington, John Adams, James Madison or Tom Payne would have done anything for the benefit of this brainwashed moron whose ancestors were probably still hoeing turnips in the old country long after America's founding.

Then he tells us:

"And our silence, keeps it in place."

What it keeps in place, he fails to mention. Presumably the white American tradition (alleged) of staring rudely at a non-white person when they walk into the room.

Then to end it, there's the same simple-minded innocent that the video began with saying:

"We're privileged. And that's unfair."

But a privilege is:

A special right, advantage, or immunity granted or available only to one person or group of people.

And no such right, advantage, or immunity granted or available only to white people has been demonstrated.

This video is simply an expression of white self-hatred. A bizarre pathology that flourishes, apparently, in the intellectual environment of a state-funded institution of higher education.

Students should boycott the University of Minnesota - Duluth as a gesture of solidarity with white people and in opposition to racist hate speech.

Enrollment numbers are all that most university administrators care about. It determines how much taxpayers' money they get to spend on indoctrinating taxpayers' children to hate their own parents, etc., and how much the school president and football coach get paid. Slash the enrollment numbers as an expression of public disapprobation and the universities will rapidly change course.

Source

More about UM's hate whitey campaign here.

The Kahn Academy: The Future of Education?

Thinking of Universities and how toxic their mix of alleged education and politically correct indoctrination can be, prompts mention of the Kahn Academy. If you learn nothing else useful from this lousy blog, you may well find Salman Kahn's educational resource of real value.

Kahn is a hugely well educated and hugely gifted instructor who has developed an approach to online learning that offers promise of eliminating much of the ruinously expensive and politically corrupting bureaucratic educational establishment that is one of the most destructive state elements sucking the life-blood from Western nations.

Here, on 60 Minutes, Kahn explains his approach to on-line learning. What Kahn has developed is the mechanism for the kind of flexible, personalized, non-politicized and cost-effective education system we argued for here.

In essence, the process is this. Instead of teachers lecturing students and giving them homework assignments to test their learning, Kahn's approach has online instructors lecturing students at home in short, manageable segments, while teachers monitor and assist students in exercises to test how well they have assimilated the lessons viewed.

According to this paradigm of learning, the teacher serves as a tutor, checking to see that assigned lessons have been learnt, trouble-shooting when students run into difficulties in understanding, and directing students to appropriate material to take them to the next stage.

This scheme of education eliminates the lock-step advance of an entire age-group, for the lecturing is one-on-one, over the internet. Each student can thus take whatever lessons that logically follow from what he has successfully mastered so far. The teacher, as tutor, assists each student with whatever part of the program he happens to be working on now. By the time of high school graduation, some kids will have mastered advanced university or even post-graduate material, while others will have attained only a much lower standard. But that lower standard will have been fully mastered, because the student has been tutored at every step of the way and not advanced from any stage until that stage has been mastered.

University administrators like Lendley Black, President of U Minnesota, Duluth, who think it the role of the university to brainwash students instead of teach them to be self-confident and accomplished young adults, will soon be redundant. New media are making the traditional university, with its astronomical costs, its rampant political corruption and its remarkable educational inefficiency increasingly insupportable.

Bloomberg News: How the US Government spends more subsidizing banks than on education

When JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon testifies in the U.S. House today, he will present himself as a champion of free-market capitalism in opposition to an overweening government. His position would be more convincing if his bank weren’t such a beneficiary of corporate welfare.

To be precise, JPMorgan receives a government subsidy worth about $14 billion a year, according to research published by the International Monetary Fund and our own analysis of bank balance sheets. ...

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Obama: American Tyrant

Rachel Maddow: Obama the two-faced: Abandoning the rule of law in the name of the rule of law.

Obama's Harvard Law Professer, Roberto Unger:

President Obama must be defeated in the coming election.

He has failed to advance the progressive cause in the United States.

He has spent trillions of dollars to rescue the monied interest and left workers and homeowners to their own devices.

He has subordinated the broadening of economic and educational opportunities to the important but secondary issue of access to healthcare in the mistaken belief that he would be spared a fight.

He has surrendered the politics of democracy to the rule of money.

He has reduced justice to charity. His policy is financial confidence and food stamps.

Unless he is defeated, there cannot be a contest for the reorientation of the democratic party as the vehicle of a progressive alternative...

Joseph Curl: Obama: enemy of the US Constitution.

From the very beginning, the president and his administration made clear they had no intention of enforcing laws they didn’t like. Mr. Obama and his minions decided that they would simply stop enforcing the Defense of Marriage Act, no longer prosecute growers of “medical” marijuana, and let some states walk away from provisions in the No Child Left Behind law (which, by the way, was co-authored by Sen. Edward M. Kennedy, Massachusetts Democrat, and passed the Senate by a 91-8 vote).

Mr. Obama’s Justice Department has even more flagrantly flouted the laws of the land. Out of the blue, Attorney General Eric H. Holder Jr., the nation’s chief law enforcement officer, reinterpreted America’s gambling laws (and dumped the decision on Christmas Eve so as to avoid scrutiny). More recently, Mr. Holder has decided to thwart congressional oversight by refusing to release documents on the disastrous “Fast and Furious” gun-running scheme, and he is actively fighting Florida for trying to expunge dead people from its voter rolls.

Now comes Mr. Obama’s decision to stop enforcing America’s immigration laws. The new policy states that illegal immigrants who were younger than 16 when they entered the country are eligible for a two-year exemption from deportation. Of course, the “deferred action process,” as Homeland Security Secretary Janet A. Napolitano called it, will apply to illegals up to age 30. (Think when they legally get their driver’s licenses they will also be handed a voter registration card?)

Rachel Cohen: Obama decrees that law-abiding illegal immigrants need not obey immigration law

Judge Andrew Nepolitano: Obama claims the right to incarcerate persons even after a jury has found them not guilty

Jesse Ventura: When You Go To ANY Airport In The U.S. You Are NOT Protected By The Constitution Or Bill Of Rights. John Whitehead: Barak Obama: a Law Unto Himself?

How liberals truly hate England

The gratuitous denigration of things English – the reign of Elizabeth I

By Robert Henderson

England Calling, June 14, 2012

Allan Massie, a Scot be it noted, decided to celebrate the Diamond Jubilee of Queen Elizabeth II  with a deprecating piece on her great predecessor and namesake, Elizabeth I designed to pour  cold water on the idea that hers was a glorious reign. (http://www.telegraph.co.uk/history/9307110/Lets-not-overlook-the-gory-details-of-Gloriana.html). He complains of the general treatment of Catholics, the use of torture on Catholic priests and those who harboured them,  nudges the reader to consider the likes of Francis Drake to be hovering on or going over edge of piracy and in best liberal bigot fashion invokes the ultimate condemnation of English adventurers of the time by dwelling on Sir John Hawkins’ involvement in the slave trade. In addition, Massie belittles the defeat of the Amada and Elizabethan military exploits on the continent, bemoans English involvement in Ireland and stands aghast as he considers the Earl of Essex’s execution of one in ten of his army after they failed to press hard enough in battle.  As for the great intellectual glory of the reign, the  sudden flowering of literature symbolised by Shakespeare,  this is dismissed of being only a tailpiece to the Elizabethan age.

Massie, a professional historian so he has no excuse, has committed  the cardinal sin of historians by projecting the moral values and customs of his own time into the past. For a meaningful judgement Elizabeth’s reign has to be judged against the general behaviour of European powers of the time and that comparison , ironically, shows   Gloriana’s England’s   to be considerably nearer to what Massie would doubtless consider civilised values than any other state in Europe.

There were no terrible wars of religion as there were in France ; no Inquisition as there was in Spain.; no burning of those deemed heretics as there was under Mary Tudor.  Torture was used  in Elizabeth’s England, and in the reigns which immediately followed,  but sparingly and  only for cases which had national importance,  normally involving treason,  such as those involved in the Gunpowder Plot which took place only two years after Elizabeth’s death .  On the continent it was a commonplace of judicial process.  English law, by the standards of the time, was generally remarkably fair, not least because of the widespread use of juries. Those who gasp with horror at Essex’s execution of his troops should bear in mind that in the First World War several hundred British soldiers were shot for behaviour such as desertion and failing to go forward when ordered  over the top.

In Elizabeth’s reign the first national legislation anywhere in the world to provide help to the needy was passed, a legislative series which began in 1563 and culminated in  the Poor Law of 1601. This legislation put a duty on every parish to levy money to support the poor and made it a requirement to provide work for those needing to call on the subsistence provided by the Poor Law.   Educational opportunities, whilst far from universal, increased substantially.  Despite , by pre-industrial  standards,  very high inflation and the inevitable bad harvests, which included a  series of poor years in the late 1590s,  the population grew  substantially, possibly  by as much as a third from 3 to 4 million (http://www.bbc.co.uk/history/british/tudors/poverty_01.shtml). London expanded  to be the largest city in Europe by the end of the  Elizabeth’s reign with an estimated  population of  200,000 by 1600 (http://www.londononline.co.uk/factfile/historical/ ).

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Oregon State U fires Author of Slide Show: "Global Warming Cracked Open"

Oregon State University chemist, Dr. Nickolas Drapela, who created the slide show Global Warming Cracked Open has been summarily fired from his position as a “Senior Instructor” in the Department of Chemistry.

According to Gordon Fulkes, writing at WUWT "The department chairman Richard Carter told [Drapela] that he was fired but would not provide any reason. Subsequent attempts to extract a reason from the OSU administration have been stonewalled. Drapela appears to have been highly competent and well-liked by his students. Some have even taken up the fight to have him reinstated."

Dr. Drapela's slide show is concerned not with the science of global warming, or lack thereof, but with the politics. It asserts that under the leadership of Piss Prize winners such as Barack Obama and Al Gore, the World is being driven to accept a fascist New World Order that will mean the destruction of the nations of the World, Israel apparently to be excepted, with the elimination of most of the World's population through cultural, psychological and economic means.

I agree. Naturally, Dr. Drapela had to go.

 Via WRH

This Depression Created and Perpetuated by Keynesian Economists

Maynard Keynes obtained a doctorate from Cambridge University for a thesis entitled A Treatise on Probability. In it, he argued that the probability that the cover of a book you have not seen is black is exactly 50%. How so? Because either the cover is black or it is not. Since you know nothing else, the probability of it being either one or the other must be 50%.

To convince the Cambridge dons of that, whether correct or not, one had to be a smart fellow. Keynes was. Following WW1 he wrote The Economic Consequences of the Peace, which convinced many that the Versailles Treaty which concluded the Great War was unfair to Germany, a perception that did much to consolidate support in the 1930's for Britain's policy of German appeasement.

Most importantly, Keynes figured out the cause of the 1930's Great Depression. Business was bad, so business laid off workers and axed plans for new investment. Laid off workers spent almost nothing at all, so business got worse. The result? a vicious cycle of reduced consumption leading to reduced hiring and investment leading to reduced consumption.

The solution? Government deficit spending financed by borrowing the funds capitalists were hoarding for lack of investment opportunity. Nazi Germany provided the first verification of Keynes' theory which, as Keynes noted in the Preface to the German edition of his most famous work, The General Theory of Employment, Interest and Money, was "easily adapted to the conditions of a totalitarian state".

Hitler brooked no delay in setting the wheels of German industry humming with the construction of autobahnen, Volkswagens, tanks and Stuka dive bombers financed with ingenious Erzatz money devised by finance minister Hjalmar Schacht. The rearmament boom in response to Germany's aggressive stance, first in Britain and later in America, verified the counter-cyclical efficiency of deficit government spending.

Thus vindicated, Keynesianism became the basis for post-war economic management throughout the West. If business was bad, governments had to do whatever was necessary to stimulate employment and consumption. Thus did capitalism triumph intellectually over communism. Not only did capitalism not impoverish the masses, as was fundamental to Marxist theory, it in fact could survive only by ensuring that the masses continually consumed more and more.

So why does the Keynesian solution no longer work? What went wrong? The 1994 General Agreement on Tariffs and Trade (GATT), now embodied in the World Trade organization (WTO), is what went wrong. The WTO, opens the West to unrestricted competition from four billion Third Worlders working for pennies an hour under what by Western standards are conditions of gross exploitation tantamount to slavery.

The impact of global free trade, or globalization, has been gradual. In 1994, the Third World lacked the capital, the technology and the trained workforce to constitute a great threat to Western industry. But following the GATT agreement, things changed rapidly. Western corporations worked diligently to develop manufacturing bases and service centers throughout the Third World to exploit cheap Third World muscle and brain power.

For the West, the most significant results of globalization have been twofold. First a huge increase in profits of globalized corporations such as IBM, Microsoft, and Apple, which have seen their market capitalization increase ten-fold or more over the last decade during which they have out-sourced and off-shored more and more manufacturing and service work from the West to the Rest. Second, a slump in investment and hiring in the West. Hence the Second Great Depression

Image source.

How have Western Governments responded to this undermining of Western prosperity? With bubbles and Third-Worldization.

Financial deregulation created an explosion of financial innovation including a derivatives bubble that, at ten times the size of the World's GDP, is still expanding. The result has been an increase in financial industry profits from less than 20% of domestic US profits in 1990 to to 45% in 2002.

Following the bust in the tech sector and stagnation in the stock market, which occurred at the turn of the century, financial industry profits stagnated, but real estate and real-estate-linked finance became the engine of Western economic expansion. Fueled by low interest rates, property boomed throughout Europe and the United States, then busted, taking much of the finance industry with it.

Throughout the bubble economy era, Western governments have pursued an aggressive policy of Third Worldization, or national self-genocide through mass immigration. The United States has tens of millions of illegal, mainly Hispanic immigrants, contrary to the wishes of most Americans, while Western Europe is flooded with Asians, Africans, Middle Easterners and East Europeans (most of them good people, no doubt), with the full connivance of the ruling elites in London, Paris, etc.

The policy of Third Worldization of the West serves both to discipline the indigenous people by subjecting them to massive competition from energetic, immigrants eager for work even at minimum or sub-minimum wages that far exceed what they could earn at home, and to complete the Bilderberger-Liberal-Left plan for global governance and the destruction of the nation state.

Now that the finance and real estate economies are busted, Western governments continue with the project of Third Worldization, Britain for example, absorbing a near record 550,000 immigrants in the first nine months of 2011. In addition, they have fallen back on the old policy standby, Keynesianism, which is to say subsidies for windmills, electric cars, and solar panels, plus food stamps and welfare paid for with money either freshly printed, or borrowed in large part from the the developing Third World and the oil states.

The results are as you'd expect. Third Worldization is going well, and leading to massive unemployment, since as Cambridge economist Ha-Joon Chang -- no that's not an English name -- points out, for every low-skilled Englishman in need of a job, there's a more competent immigrant ready to take whatever job he might otherwise have had. Meantime, the Keynesian "stimulus" spending does little for the unemployed, but instead pulls in more shoes and shirts and computers and car parts from the Third World, where wages have risen from about 3% of those in the West in 1994 to about 5% of those in the West today.

Keynesians like to quote Keynes' retort to a questioner who charged him with changing his position: “when the facts change, I change my mind.  What do you do, sir?” It's time for Keynesians to take Keynes' advice and review the facts that now prevail. The West is in a depression not for lack of demand but for lack of competitiveness. That means stimulus spending on more school teachers, on roads and bridges, windmills and solar panels is counter-productive. It makes the West less competitive, not more so, thus further reducing the incentives for investment and hiring in the West. 

What Keynes would recommend now, would be quite different from the prescription of the Keynesians. His advice would be to end mass immigration, eliminate tax disincentives to investment, i.e., the corporation tax, and cut consumption spending, particularly wasteful government programs many of which contribute nothing to the public welfare -- in America the TSA's blue-gloved goons and the entire apparatus of Homeland Security comes to mind, not to mention the war for global empire.

In the meantime, to mop up surplus labor, the necessary solution is either a tariff, or as I have advocated, state-funded wage subsidies distributed by competitive auction, which would eliminate unemployment at less than the cost of welfare, while providing a huge affordable labor resource to Western entrepreneurs. Once again workers in America and Europe could then make stuff for one another, instead of being dependent for almost every manufactured product on the slave plantations of the Third World.

The European Atrocity You Never Heard About

By R.M. Douglas

In the largest episode of forced migration in history, millions of German-speaking civilians were sent to Germany from Czechoslovakia and other European countries after World War II by order of the United States, Britain, and the Soviet Union.

Hoover Institution Archives, June 11, 2012: The screams that rang throughout the darkened cattle car crammed with deportees, as it jolted across the icy Polish countryside five nights before Christmas, were Dr. Loch's only means of locating his patient. The doctor, formerly chief medical officer of a large urban hospital, now found himself clambering over piles of baggage, fellow passengers, and buckets used as toilets, only to find his path blocked by an old woman who ignored his request to move aside. On closer examination, he discovered that she had frozen to death.

Finally he located the source of the screams, a pregnant woman who had gone into premature labor and was hemorrhaging profusely. When he attempted to move her from where she lay into a more comfortable position, he found that "she was frozen to the floor with her own blood." Other than temporarily stanching the bleeding, Loch was unable to do anything to help her, and he never learned whether she had lived or died. When the train made its first stop, after more than four days in transit, 16 frost-covered corpses were pulled from the wagons before the remaining deportees were put back on board to continue their journey. A further 42 passengers would later succumb to the effects of their ordeal, among them Loch's wife.

An estimated 500,000 people died in the course of the organized expulsions; survivors were left in Allied-occupied Germany to fend for themselves.

During the Second World War, tragic scenes like those were commonplace, as Adolf Hitler and Joseph Stalin moved around entire populations like pieces on a chessboard, seeking to reshape the demographic profile of Europe according to their own preferences. What was different about the deportation of Loch and his fellow passengers, however, was that it took place by order of the United States and Britain as well as the Soviet Union, nearly two years after the declaration of peace.

Between 1945 and 1950, Europe witnessed the largest episode of forced migration, and perhaps the single greatest movement of population, in human history. Between 12 million and 14 million German-speaking civilians—the overwhelming majority of whom were women, old people, and children under 16—were forcibly ejected from their places of birth in Czechoslovakia, Hungary, Romania, Yugoslavia, and what are today the western districts of Poland....

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Clueless Krugman?

Paul Krugman is a Nobel Prize winner, and a Professor or economics at Princeton University. He is also a blogger and, in his book End This Depression Now, the proclivities of the blogger show. The derisive partisanship, the "of course" this and "of course" that, the breezy self-reference to "yours truly", the typographical emphasis of statements that remain to be demonstrated, and the occasional resort to the one-sentence paragraph all combine to give the work a bloggishness that detracts from an argument that Krugman is perfectly well able to present in plain unaffected English.

But presented in plain English the argument would hardly fill a book, for in essence, all that Krugman is saying is that the Obama administration failed to provide an adequate Keynesian antidote to the contraction in demand that has driven the US economy and that of much of the rest of the Western World into depression.

That antidote is massive government deficits and stimulus spending. The Obama administration did enact the American Recovery and Reinvestment act, a stimulus package of $787 billion, but, says Krugman, this was "far too small."

So what exactly does Krugman want to End This Depression Now? He wants a multi-trillion-dollar Federal government deficit to be financed by borrowing and money printing, which will deliver cash to the States to enable rehiring of laid off public sector employees, to finance infrastructure such as more and better roads and bridges for the diminishing number of cars actually driven in America, and to provide debt relief to homeowners in the hope, presumably, of restarting house price inflation and all the stimulative economic consequences that could have.

To demonstrate the workability of his scheme for rebooting the economy with a flood of borrowed or printed money, Krugman draws a parallel with the United States following WW2. At that time, returning war vets borrowed to buy houses, cars, etc. and the economy boomed with the growth in consumer debt. But the analogy is absurd. In 1945 America was the workshop of the World supplying the tools and materials that the countries devastated by war needed to restore their shattered economies. At the same time the quantity of private debt in the US was abnormally low.

Image source

Today, the situation is totally different. First, because Americans are loaded to the eyeballs with debt, which they are desperately trying to shed and succeeding at the rate of about a trillion dollars a year. Second, because America is no longer industrially supreme. On the contrary, America is losing jobs by the tens of millions as manufacturing, IT and many other services are off-shored and out-sourced to the Third World where wages are small fraction of wages in the US.

So Krugman offers a time when Americans were pre-eminently creditworthy and prosperous due to the abundance of well paid jobs in productive industries as a parallel to today when Americans are mostly not creditworthy, having lost 40% of their net worth since the housing market peaked, and who's best hope of a job is in the public sector feeling up passengers at the airport or some other occupation adding only very questionably to the real wealth of the nation.

Amazingly, Krugman totally ignores the elephant in the room, which is the tremendous competitive weakness of the West versus the Rest, i.e., four billion Third Worlders earning pennies an hour, which was mandated by the 1994 GATT agreement. For example, the index to Krugman's book contains no entry for "globalization;" no reference to "trade deficit" only one reference to the "balance of trade" (that concerning the balance of trade among Eurozone nations); and no references to "outsourcing," "off-shoring," or mass immigration.

Krugman thus altogether fails to acknowledge the most prominent cause of  the present economic crisis in the West, i.e., the competitive failure of the West against the Rest. Oddly, he does recognize competitive failure of the Southern European states as a cause of financial crisis within the Eurozone and he acknowledges that a solution to the Eurozone crisis can only come from either wages cuts in the failing economies or what would be equivalent in terms of real incomes, a breakup of the Eurozone to allow the non-competitive states to adopt independent currencies that can be devalued until national competitiveness is regained.

But for some reason Krugman is unable to see that the crisis of the Eurozone is precisely analogous to the crisis of the West in competition with the Rest. To maintain that these crises are not comparable because the Western states have their own currencies that can be devalued against currencies of Third World competitors overlooks the fact that the Western currencies are not being devalued against those of the industrializing Third World, or at least not sufficiently rapidly to provide the necessary relief to the Western workforce. And the reason that the US dollar, for example, is not being devalued sufficiently rapidly is that competitor nations are hoarding those currencies. Japan and China, for example, between them hold around $2 trillion in US Treasury bonds.

Those foreign held dollars represent tens of millions of lost US jobs. At minimum wage, those $2 trillion unspent dollars earned through sales of goods and services to the US represent the loss of approximately one hundred million man years of labor at the minimum wage. Enough, in other words, to provide every unemployed American a job for three or four years.

This is the issue that Krugman does not discuss, either because he is clueless, or because he knows that the truth about globalization, which as a liberal he must support, if known to the people would set off a revolution.

But if Krugman's argument is irrelevant, what then is the way to end the depression now? The answer is exactly that which Krugman offers in the case of the Eurozone crisis. Specifically, he mentions two options. One is an across the board wage cut, undertaken in the manner I outlined here, which would restore competitiveness to the West and make it possible once again for Americans and Italians and people throughout the West to make shoes and shirts and car parts and computers for one another, thereby regaining and enhancing their industrial skills and hence the value of their labor.

The other option is to force a devaluation of Western currencies, which in turn will force China, Japan, the oil states and other nations that have hoarded paper denominated in Western currencies to spend the cash fast before it loses much, say 50 to 90%, of its value.Ultimately, that spending will stimulate demand for goods and services in the West.

In fact, Option 1 is the official but unacknowledged policy. Wages are to be ground down during a long-drawn out depression during which the plight of the Western worker will be greatly exacerbated by a mass influx of Third Worlders with no tradition of civil rights or the rule of law and who are generally more capable than the least competent members of the native workforce. This is the genocidal liberal policy of globalization, which necessitates the destruction of the the nations of the World as racial, cultural or religions entities -- Israel apparently excepted. 

To be fair to Krugman, it must be acknowledged that his preferred means of ending the depression would have the combined effects of forcing a devaluation of Western currencies and driving down wages in the West as a result of the price inflation caused by massive government deficit spending and money printing. This is not an efficient solution, however, since the deficit spending would mostly go on more government of which the Western nations already have more than they can afford. The danger in Krugman's solution is thus that it would lead to massive social unrest while achieving little if anything in the way of increased Western competitiveness.

Why Germany Can't Fix the Euro Crisis

By HANS-WERNER SINN
New York Times, June 12, 2012: ALTHOUGH Europe may seem far away from the economic life of the average American, the fate of the euro zone weighs heavily on the United States economy. Pension funds have invested in bonds issued by southern European states, while banks and insurance companies have underwritten a sizable fraction of the credit-default swaps protecting investors against default.

 It’s no wonder, then, that President Obama is urging Germany to share in the debt of the euro zone’s southern nations. But in doing so, he and others overlook several critical facts.

For one thing, such a bailout is illegal under the Maastricht Treaty, which governs the euro zone. Because the treaty is law in each member state, a bailout would be rejected by Germany’s Constitutional Court.

Moreover ...

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America's Obsession With Cosmetic Surgery

All You Need to Know About 9/11, Democracy and the MSM

Via WRH

Ending This Depression Now

A central argument of Paul Krugman's book, End This Depression Now, is that calls for the imposition of austerity by heavily indebted governments are based on the mistaken belief that governments and individuals must respond to indebtedness in the same way. This is the fallacy of composition, the belief that what is true of individuals is necessarily true of the class to which those individual belong. To say that atoms are colorless, cats are made of atoms, therefore cats are colorless, is an example of such fallacious reasoning. [Actually, atoms are not colorless, they're just too small to see.]

Refuting such logic, Keynsians point out that, unlike individuals, governments may in some circumstances improve their finances through increased expenditure. If, for example, a government increases expenditure during a period of high unemployment in such a way as to stimulate investment, unused labor and capital will be re-employed, thereby generating increased output and tax revenue. [Actually, this is no less true of individuals or households. If you get a bank loan, invest in a truck and a ladder and spend the weekends cleaning gutters and washing windows, then you may improve your household budget.]

But to suggest that boosting the government deficit in Greece, for example, would be a solution to the government's insolvency is utterly daft. The Greek government, to name one of many governments in a similar situation, has bankrupted itself by over-investing in the public sector while failing to make taxpayers shoulder the full cost of the services -- many of doubtful value -- thus provided. Any arrangement to enable corrupt politicians, Greek or otherwise, to continue buying votes by overpaying and over-staffing the bureaucracy will only worsen a country's financial difficulties.

In any case, the problem for Greece and most other Western nations is not that there is a need for a wee bit more investment in productive sectors of the economy. The problem is that the West has been priced out of too many markets by four billion Third Worlders working for pennies an hour. The solution to that problem is either to give everyone in the West a 60 to 80% pay cut or to return to a closed market protected by tariffs. In the meantime, it would be a good idea to stop importing Third Worlders to the West to take what job opportunities exist from the least competent section of the Western work force.

Of the alternatives, tariffs and a return to protectionism are totally unacceptable to the Bilderbergers and others of the monied interest who dictate the course of affairs. Cutting wages sharply, immediately and across the board, though a perfectly effective solution, presents certain political difficulties. So we appear to be in for a long grinding down of expectations in the West. But give it a generation or so, and we may be as willing as the Chinese to work 12 hours a day, seven days a week for three hundred bucks a month.

By that time, unfortunately, much of our workforce will be essentially without skills due to years of enforced idleness. By then it will be the formerly low-wage, Third World nations that will have the industrial workforce skills, the technology and the capital to dominate the high-wage manufacturing sector of the World economy.

So although our economic problem is not theoretically insoluble, it is effectively insoluble because of the self-serving control of the plutocratic elite and the pathetically blinkered vision of the elite-owned economists at the Ivy League universities and elsewhere who are, with few exceptions, incapable of articulating novel solutions to novel problems.

The West is being beaten at its own game. The West achieved the first the industrial revolution and profited mightily from it. The Rest have now launched their own industrial revolution and are eating our lunch. The Western nations have gone from a position of overwhelming competitive superiority into a competitive decline that is accelerating because the leadership will neither acknowledge, nor deal with, what is happening.

To restore competitiveness we need austerity throughout the public sector, meaning wage cuts for public sector workers, and cuts to welfare, healthcare, pensions and education, the money saved to be returned to the private sector through tax cuts. In particular, the corporation tax must go. Higher net profits will mean more investment. The income tax must also be cut to bring offshore wealth home to be taxed -- moderately -- and invested at home.

Then, to make the least skilled of the Western workforce more competitive with workers in the Third World, employers must be provided with wage subsidies. Sold by competitive auction, such subsidies would cost less than welfare and the other costs associated with unemployment, including the costs of increased crime increased policing and an increased prison population.

The number of subsidies offered would be adjusted to achieve full employment. That way, Western workers would be available once again make to shoes and shirts and car parts for one another at a competitive price, rather than living a demoralized or degraded existence on welfare or by crime because the jobs that should be theirs by right have been outsourced to the Third World.

See also:

Canspeccy: State-Financed Capitalism and the End of Western Hegemony

Ron Paul, Bilderberg and the New World Order

A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. Cicero, 42 B.C.

The Bilderberg Group, founded in 1954 by the likes of ex-Nazi Prince Bernhard of the Netherlands, David Rockerfeller, Dean Rusk, who was both a top official of the Council on Foreign Relations and head of the Rockerfeller foundation, provides the very rich and their political adjuncts the chance to get together in private to discuss how to rule the World in the interests of the very rich and their political adjuncts.

Among members of the Bilderberg's steering committee is the youthful, gay, billionaire, Peter Thiel, who just happens to be Ron Paul's largest presidential election campaign contributor.

A connection between Ron Paul and Bilderberg should be no surprise. Peter Thiel is a libertarian and like most very rich people hates the income tax, the corporation tax, welfare, healthcare and publicly funded education. Ron Paul, as his supporters ought to know, is if not very rich, at least a multimillionaire and a libertarian who would like to scrap the income tax, the corporation tax, welfare, healthcare and publicly funded education.

So what's the fuss about Ron Paul being backed by Bilderberg-steering-committee member Thiel?

Probably, although I have not seen this articulated clearly, the reaction is due to the apparent inconsistency between Ron Paul's avowed opposition to the American war for global empire and the Bilderberger's ideological closeness with the imperialistic Council on Foreign Relations.

However, the difference is not fundamental. The American drive for global empire aims at the creation of a world safe for very rich people, which means global governance owned by very rich people. Bilderbergers share this objective with the most insanely warlike NeoCons. As a libertarian, Ron Paul shares this objective.

Although Paul may sincerely disagree with the present US approach to the destruction of the democratic nation state, including the United States, as the fundamental unit of political power, he is not opposed to the overriding goal, which is the creation of a world without borders, where the nations states, their identities, their distinctive cultures and their religious traditions are to exposed to the impact of unrestricted human migration, and flows of capital, goods and services.

The libertarians, like the Bilderbergers, the CFR and the Trilateral Commission are united in a campaign for universal genocide and the mongrelization of humanity. National cultures and religious traditions are to be trashed in the process and replaced by a universal culture consisting in little more than a byproduct of the commercial system.

The emergence of this World, the New World Order, announced by George H.W. Bush in 1991, will inevitably lead to the division of humanity into two species, the Eloi and the Morlocks of HG Wells dystopian novel the Time Machine, i.e., an elite class, the Eloi, living completely apart from the slave class, the Morlocks.

It will be a simple matter to genetically engineer both classes to (a) prevent inter-class breeding and (b) to give each of the resultant species the appropriate characteristics: beauty, longevity, etc. for the Eloi, servility, and brevity of existence for the Morlocks, who will have only what physical or mental powers they require to fulfill their allotted tasks.

As this genocidal scheme unfolds, most of the existing wonderful human physical and cultural diversity will be trashed. Whether, as Wells predicted, the Eloi will become decadent and feeble minded remains to be seen. More likely, they will break into competing tribes, engaged in a furious technological competition to breed the most useful slaves, including intellectual slaves, and to advance their own path to human perfection. 

Wells predicted this development in the year 802,701 AD, in which estimate he seems to have been about eight hundred thousand years out.

So Paulists beware: you may get what you wish for.

State-Financed Capitalism and the End of Western Hegemony

According to the CIA World Factbook, the United States has the World's largest economy with a GDP of $15.0 trillion, unless that is, you count the EU economy (GDP, $15.4 trillion) as a single entity. The US is followed closely by China (GDP $11.3 trillion), if you measure GDP on the basis of purchasing power parity, with India a long way behind at $4.4 trillion, the same as Japan.

The numbers seem to suggest that despite the extraordinary dynamism of the Asian economies, the West, with its Asian ally Japan, is still comfortably on top of the heap economically, and thus presumably, in technology and military power.

Things look rather different, however, if you consider rates of investment and growth. China, again according to the CIA, invested 54% of GDP in 2011, versus 18% in the European Union and 12% in the US. Converting those percentages to dollar amounts at purchasing power parity shows that China's total investment was $6.1 trillion in 2011, one third more than that of the US and the EU combined.

What does this mean for the future? The answer depends on how investments in China and the West are deployed. On the one hand, China, it is said, is a highly corrupt country where investment capital is channeled via government-controlled bank lending into all kinds of unprofitable businesses and infrastructure boondoggles, the loans being rolled over indefinitely, with new loans being made to cover business losses and infrastructure project overruns.

In the West, on the other other hand, we are supposed to have the most efficient and incorruptible capital markets, so our relatively low investment rate is more than sufficient to maintain competitiveness with China. Trouble is that China's economy grew at the astonishing rate of 9.2% in 2011, according to the CIA, whereas America's grew by only a paltry 1.5% in the same year, albeit a great improvement over the contraction of 3.5% in 2009.

A difference in growth rate of 8% in economies of comparable size, means a doubling of the one versus the other within a mere 9 years. Let me put that another way: in less than a decade, China's economy could be twice as large as that of the US, and equal to that of the US and the EU combined.

If the CIA and the US administration are not worried about that, then Western global hegemony will surely end sooner than later.

And even if the CIA and the US administration are thinking about it, what can they do about it?

One possibility is to emulate China, by redirecting 30 or 40% of the nation's GDP from consumption to investment.

But how?

China, it appears, ensures a massive rate of capital investment in two ways. First, through direct control of major industrial concerns, income from which can be reinvested, rather than paid out, in whole or in part, as dividends to investors, as would be the case with privately owned companies. Second, by printing renminbis, thereby imposing an inflation tax on workers, which can be directed through state-controlled banks into private or public investments. Such arrangements, we may call state-financed capitalism.

How, in the West, can a similar result be achieved? After the failure of the Soviet Union and Britain's post-war experiments with state ownership of the means of production, there is no faith in the West in the capacity of the state to run anything sufficiently well to generate consistent profits for new investment. Which leaves money printing and the inflation tax as the only apparent means to institute a system of state-financed capitalism in the West.

So how is the inflation tax to be deployed to this end?

One way is to print money and give it to those who will invest it. Europe's large scale investment in windmills and solar power is an example of this method in action. The result is to despoil the landscape with thousand of highly unprofitable windmills that do little to lift the GNP.

Backstopping banks and other entities that engage in risky financial engineering with massive public bailouts is another method of injecting capital into the private sector. But in this case the aim is merely to make up losses rather than to generate new profits, so the impact on the GDP must be limited.

Last, but not least, the Western states can use money printing to hold interest rates at or below the inflation rate. That is what they are doing and have vowed to continue doing. The result is essentially the same as that achieved by the Government of China. For those who wish to invest, capital is essentially free. The cost of borrowing is less than the rate of currency depreciation.

In the US, cheap credit in the early years of the millenium led to a property bubble, i.e., a consumption boom. However, since the property crash, the chief beneficiaries of cheap credit in the US appear to be corporations with plans for investment.

The risk remains, however, that cheap money will increasingly flow into the stock market, creating a financial bubble that will have the effect of directing resources into consumption, not productive investment. The creation of a climate of fear about investment must help prevent this. So bring on the crash books and wind-up the frenzy for "physical gold," the price of which can be deflated by financial manipulation at anytime to further enrich the financial corporations.

A further benefit of large scale money printing is that it makes it more difficult for China and other cheap labor exporters to the West to maintain their virtual currency peg against the dollar and the Euro. In other words, it allows Western wages to more rapidly approach parity with those of the Rest. Such wage reductions, create opportunities for import substititon in the West and hence promote investment. They also increase corporate profits, which increases the availability of capital for investment.

How successful this Western version of state-financed capitalism will be remains to be seen, but several major obstacles to its success are evident. One is the attitude of worker entitlement bred of decades of liberal-leftist propaganda, which generates huge resistance to economic adjustment to reality as abundantly demonstrated in Greece. Another is the attitude of ruling elites in the West who maintain a genocidal contempt for their own people, preferring to replace the indigenous working class with Third World immigrants less attuned than the native population to the rights of man. Such a neo-feudalist approach to leadership will result in increasing social unrest.

In view of these difficulties, it seems probably that rather than kickstarting a new round of investment, innovation and economic growth in the West, the Western version of state-financed capitalism will lead to more not less off-shoring and outsourcing of jobs and production, with a consequent reduction, not increase, in the economic output of the West. Moreover, it seems unlikely that the social conflict that current policy generates will be indefinitely contained. Instead, the US/EU seem headed for internal disintegration and a transition to a treasonous form of plutocratic tyranny.

U.S. Financial Collapse Is At Hand -- Or Not?

Yesterday we argued that the United States Government had no reason to destroy the US dollar through hyperinflationary money printing. But Paul Craig Roberts, Deputy Secretary to the US Treasury under Ronald Reagan, suggests that no reason for destroying the US dollar is required. Federal Reserve incompetence, US megalomania, and Wall Street greed have combined to create a situation in which the dollar will almost certainly lose its World reserve currency status and in the process much of its value.

Roberts' analysis begins with this question:

How can the Federal Reserve maintain [as it has promised to do for several years more] zero interest rates for banks and negative real interest rates for savers and bond holders when the US government is adding $1.5 trillion to the national debt every year via its budget deficits?

The answer, Roberts gives, is that it cannot do so for very long:

It will not be possible to continue to flood the bond markets with $1.5 trillion in new issues each year when the interest rate on the bonds is less than the rate of inflation. Everyone who purchases a Treasury bond is purchasing a depreciating asset. Moreover, the capital risk of investing in Treasuries is very high. The low interest rate means that the price paid for the bond is very high. A rise in interest rates, which must come sooner or later, will collapse the price of the bonds and inflict capital losses on bond holders, both domestic and foreign.

That the policy is feasible for the time being Roberts attributes to transient factors such as the current focus on the Euro and European sovereign debt and fear among private investors of the equity market, plus collusion by US banks, which "can borrow from the Federal Reserve at zero interest rates and purchase 10-year Treasuries at 2%, thus earning a nominal profit of 2%".

In addition, Roberts asserts, the US banks are keeping up the price of US Treasuries by selling interest rate swaps:

The big banks are positioned to make the Fed’s policy a success. JPMorganChase and other giant-sized banks can drive down Treasury interest rates and, thereby, drive up the prices of bonds, producing a rally, by selling Interest Rate Swaps (IRSwaps).

A financial company that sells IRSwaps is selling an agreement to pay floating interest rates for fixed interest rates. The buyer is purchasing an agreement that requires him to pay a fixed rate of interest in exchange for receiving a floating rate.

The reason for a seller to take the short side of the IRSwap, that is, to pay a floating rate for a fixed rate, is his belief that rates are going to fall. Short-selling can make the rates fall, and thus drive up the prices of Treasuries.

But everyone, including the US banks, Roberts asserts, have an interest in getting out of Treasuries ahead of the crowd when the exodus will become a deluge. What that means is that US Treasuries are bound to crash sooner or later and and, when they do, they will take the dollar with them.

A bond crash will cause a dollar crash because the Fed will be obliged to print dollars to buy up the bonds dumped. Trillions of these newly printed dollars will go to foreign sellers of US assets who will dump them on the foreign exchange markets, thus driving down the dollar's value.

In addition, Roberts suggests, it is not within US power to determine when a trickle of funds out of the bond market turns to a flood.The US, he says, is in the hands of foreign creditors who can unleash a tidal wave of US-dollar-denominated asset sales if sufficiently provoked.China, for example, could drop $2 trillion in US assets.

But, as Roberts admits, dumping US dollar assets will cost China dear, as those assets will lose much of their value before they have all been sold.What's more, dumping US dollar assets will drive down the US dollar renminbi exchange rate, thereby destroying China's largest export market and driving China into recession, if not a socially destabilizing depression.

As for the US banks, they can exit the US bond market without setting off a collapse provided that the Fed buys up the bank-owned bonds for its own portfolio. The dollars that the Fed needs to buy the paper will come back to it as the banks pay down the zero-interest Fed loans with which the bonds were initially purchased.

While, for all I know, the US plan for global financial hegemony may result in the mother-of-all financial collapses, I don't see that that is by any means certain or even likely. By maintaining zero interest rates the US Fed is enabling America's largest corporations to acquire control of much of the World's business, agricultural and real estate assets at zero cost. And if something goes wrong in the process and the dollar collapses in a new gigantic financial crisis, the US will come out of it, as Nazi Germany did after the great inflation, with a vastly more competitive, highly capitalized industrial sector well placed to capture an increased share of World markets.

Jeremy Scahill Charges Barak Obama With Mass Murder

The Real Crash -- Postponed

Crash books are fun. One gets to gloat over the losses of dopes who invested in Tech stocks, social media, read estate or whatever it is that's going to crash and leave you in the position to cash your "physical gold" and buy up cool real estate, yachts, whatever, for pennies on the dollar.

Peter Schiff's latest, The Real Crash, America's Coming Bankruptcy---How to Save Yourself and Your Country, follows up on his Crashproof. How to Profit from the Coming Collapse. The "coming collapse," being, we learn from The Real Crash, yet to come. That's the great thing about writing crash books, if events prove you wrong, just advance the crash date and rewrite, as Batra did with his The Crash of the Millenium, Surviving the Inflationary Depression, an update on The Great Depression of 1990. Who knows? One day you might get it right.

Which is not to say that these books are worthless. Batra is no mean economist and well worth a read. Schiff's latest is of some interest. The crash yet to happen does not loom large. Instead, the book consists mainly of chapters setting forth a libertarian position on diverse topics including: why the US income tax is (a) a bad thing, and (b) unconstitutional; why college education is (a) absurdly overpriced, and (b) a bad bargain for most students; and why social security is a scam.

As for the crash, Schiff, like most crashologists, anticipates a hyperinflationary destruction of savings and the disruption of trade and industry as the result of incontinent government deficit spending financed by money printing. In short, Schiff predicts that the US Government, in collaboration with the US Federal Reserve, is about trash the dollar.

But trashing the national currency overnight is not a thing to be done lightly. The destruction of savings violently antagonizes a large part of the population, thus creating a potentially revolutionary situation. The case of Wiemar Germany illustrates the point. Middle class resentment over the destruction of all savings during the hyperinflation of 1920-23 created an environment in which a nationalistic "savior" was bound to thrive. Adolph Hitler made full use of the opportunity.

Wiemar Germany is also instructive of the conditions that may cause a democratic government to destroy the currency. Germany financed its participation in WW1 largely through borrowing. After the war, Germany was obliged by the Versailles Treaty to pay gigantic war reparations to the victors, payments to be made in gold. These bills were unpayable, so the government did what may have seemed the only thing possible: it printed money.

The results of the consequent inflation were threefold. First, it freed the government of its obligation to holders of government bonds, the people who had financed the war: they were left holding bonds redeemable by the government with worthless paper. Second, it freed industry, which needed to retool for export rather than war, to slough off their creditors with worthless paper. Third, it effectively cut wages to the subsistence level.Workers received a barrow-load of paper money, which by the time it was wheeled to the store, barely sufficed to purchase a basket of groceries.

Thus Germany's great inflation was not the result of irrational or irresponsible government action. It was a necessary result of the terms imposed on Germany by the victors of World War 1. The consequences, Hitler and World War 2, can be blamed on the stupidity and vindictiveness of the Allies, whose view was well expressed by Eric Campbell-Geddes, Britain's First Lord of the Admiralty, 1917-1919, when he said "We shall squeeze the German lemon until the pips squeak."

Other hyperinflations have had different causes. For example, in Zimbabwe, the Government of the tyrant Robert Mugabe engineered a hyperinflation with the sole apparent objective of impoverishing the middle class, whose wealth was transferred to Robert Mugabe and his cronies. The project was a success because Mugabe was and remains an absolute dictator.

America's position is very different from that of either Wiemar Germany or Mugabe's Zimbabwe, and if anyone wishes to convince the world that the US is about to embark on a dollar-destroying hyperinflation, they need to explain why. That reckless money printing will be undertaken by the US Government out of, well, recklessness, seems highly unlikely.