We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
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Pure genius this is…
Barney Frank, the Democratic chairman of the House Finance Committee, said Mr Geithner should not to repeat the mistakes of his predecessor Hank Paulson, who “lost sight of the rest of the country and pissed them off entirely,” with his initial bank bailout.
Frank warned the Treasury Secretary that voters want to see fewer foreclosures and more bank lending to ordinary consumers before they support the rest of the financial rescue plan. “They understand the political need,” Mr Frank said.
The plan will help distressed homeowners get modified loans, subsidising lenders who cut interest rates. Mr Frank said the plan would aim ensure that such householders need pay no more than 31 per cent of their income on their mortgage.
Voters want to see fewer foreclosures and more bank lending to ordinary consumers. No doubt they do. I assume they also want more sex, better cars, more holidays and yet another Rocky movie to be made. Or maybe a Caddyshack remake.
So the political and financial elites decided that if more and more people could be made home owners, that would benefit both sections of said elite, or as I like to call them collectively, the Political Looter Class… tax money and government guarantees (which are not cost free) and, when necessary, actual threats to financial institutions that were reluctant to loan money to people who might well not ever pay it back, pushed the number of homeowners ever higher as ever more money was borrowed by John Q. Public and invested in mortgages. The political looter class was happy and so were the millions upon millions of people who voted for them again and again and again.
And of course why should everyone not be happy? A loan is a bank asset, right? And banks with more assets can lend more money, and that means even more people, voting people, can buy houses.
Well yes loans are a bank’s ‘assets’… but only if there is a realistic chance of that loan ever being paid off, otherwise it is in fact a liability (or more accurately, a loss, although through the mystical political arts it does not actually get called that as often as it logically should when the ‘loss’ is incurred by a member of a voting block the likes of Barney Frank, or for that matter, George Bush, wish to pander to). I only state this obvious fact because it does not seem obvious to the political section of the looter class. It was of course always obvious to the financial sector of the looter class, which is why all those ‘assets’ (which were actually liabilities) were wrapped up in complex financial packages and splendidly ‘securitized’ with the open connivance, indeed encouragement, of the political elite… and whilst there is absolutely nothing wrong with securitization per se, it ain’t quite so splendid when it is being used to spread what we now call ‘toxic debt’ throughout the entire financial system, making it enormously harder and often impossible to assess loan risk.
But to the entire political looter class, and I mean not just the elite elements but also including the millions and millions of people who took loans they could not repay and voted for the people whose regulations provided the perverse incentives for banks to loan money to them, the important things was to… keep lending. And this, boys and girls, is what we call a Credit Bubble. And why do we call it a bubble? Because when loans are given out at a rate greater than actual economic growth can support, the amount of loans (assets) that go bad increases because the increased lending was not supported by an increased ability to pay the loans back… and when that fact becomes clear, people with money suddenly stop lending… the ‘bubble’ bursts.
And when the state decides to fix that by motivating more people to borrow by reducing interest rates to almost zero, that of course makes no damn difference at all because lenders, not borrowers, are the ones suddenly back in touch with reality. And just because the government (i.e. central bank) says “the price of loans is 0.1%”, that actually does not mean jack shit, because the genuine price of loans has to include the premiums needed to cover bad debts. Moreover if it cannot be determined how risky it may be to lend due to the poisonous spread of toxic debt, it is safer to just hold onto the money rather that flush it down the toxic debt toilet.
And how are the political looter class trying to remedy this situation? Well they are trying to re-inflate the bubble with the extra added spice of making the secured assets (property) even harder to repossess (in effect un-securing questionable loans either by fiat or with money plucked from the government’s magic money tree). Pure genius.
And the next news item just around the corner? Think about US Treasuries… or ‘Junk Bonds’ as they will soon be known. ‘Screwed’ does not even begin to describe it.
There may be an interruption to the blog-flow/disturbance in the force as our switch over to a new CMS is imminent… hopefully.
Dave Cameron, the head of the non-conservative Tory Party, has addressed the great and ‘good’ at Davos, and as usual he says things that actually mean the opposite of the words looked at in isolation:
He will say: “We must stand up for business because it’s businesses, not governments or politicians, that create jobs, wealth and opportunity, it’s businesses that drive innovation, and choice, and help families achieve a higher standard of living for a lower cost. But we must also stand up to business when the things that people value are at risk. So it’s time to place the market within a moral framework – even if that means standing up to companies who make life harder for parents and families.
Translation: moral framework in fact means political control… whoever best has the ability to manipulate the political system can simply distort the market so suit their narrow needs. So when Dave Cameron says ‘moral capitalism’, he actually means ‘regulatory statism’ and ‘political manipulation’… in other words he does not actually want to change a damn thing.
And political manipulation is exactly how we ended up where we are now with banks and car companies being handed vast quantities of other people’s money: Neither moral nor capitalism, which sums up Dave Cameron’s ‘philosophy’ perfectly.
Vladimir Putin slapped down Michael Dell at the World Economic Forum in Davos and hopefully some wisdom will come from this.
Then it was time for questions. First up: Dell. He praised Russia’s technical and scientific prowess, and then asked: “How can we help” you to expand IT in Russia.
Big mistake. Russia has been allergic to offers of aid from the West ever since hundreds of overpaid consultants arrived in Moscow after the collapse of Communism, in 1991, and proceeded to hand out an array of advice that proved, at times, useless or dangerous.
Putin’s withering reply to Dell: “We don’t need help. We are not invalids. We don’t have limited mental capacity.”
Which demonstrates several things:
1. when a multinational company in effect offers to invest more in Russia (i.e “here are some assets, please confiscate them at your leisure like you did with those idiot western oil companies”), the kleptocrat-in-chief would rather pretend that his country is “not an invalid” in spite of copious evidence that Russia is an economic basket case. So yes, Vladimir Putin does indeed appear to have limited mental capacity even in his role as kleptocrat.
2. investors in Dell need to make sure that Michael Dell never ever has any say whatsoever is which places Dell invests the company’s money. Russia? Michael, are you out of your fucking mind?
A friend of mine suggested the theory that Putin was angry that Dell purchased Alienware. 
A large number of people, certainly the majority of the political looter class, think the best way to deal with the rapidly deepening economic crisis is via ‘stimulus packages’ with money plucked off the magic money tree… which is to say, by trying to re-inflate the credit bubble that actually caused the crisis. This is a bit like treating alcoholics by urging them to buy more whiskey.
So is this actually any more daft? Frankly I do not think so and it is at least a whole hell of a lot more funny.
The whole point of tolerance is to tolerate things you find repugnant. Tolerance does not mean acceptance however, so just because you tolerate something ignorant or repugnant, that does not mean you need to refrain from heartfelt criticism of it. However tolerance needs to be conditional: tolerance of intolerance is irrational when that the aim of that intolerance is to deny tolerance to you.
And so whilst I am ambivalent at best about bullfighting, and I did watched a few in my younger years, I found myself shouting “¡Olé!” after reading these remarks by an 11 year old matador Michelito Lagravere Peniche:
“The bullfighting opponents shouldn’t stick their nose in things they don’t like,” he said ahead of his record attempt. “No-one is forcing them to watch bullfights or to keep informed about them. It’s as if I told a boy who does motocross not to do it, it’s very bothersome.”
I would not mind if all bullfighting opponents did was to be vocal critics, but the moment they started to try and use the law to ban this ancient Mithraic sport, they crossed the line from being critics to being thugs.
There is a fascinating article in the Los Angeles Times written by Mickey Edwards, a Republican Party apparatchik of many years standing, called Reagan wouldn’t recognize this GOP. This was the ‘money quote’ for me:
Over the last several years, conservatives have turned themselves inside out: They have come to worship small government and have turned their backs on limited government. They have turned to a politics of exclusion, division and nastiness. Today, they wonder what went wrong, why Americans have turned on them, why they lose, or barely win, even in places such as Indiana, Virginia and North Carolina.
So George W. Bush and John “I support the Bailout” McCain represented the worship of… small government??? So presumably this ‘small’ government must have consumed a smaller portion of the national wealth when it left office compared to when it took office, right? I mean is that not surely the most direct and uncontroversial measure of the size of a government? Ok, 9/11 happened… so if we were to factor out all military spending, would that give us a smaller state at the end of the Bush presidency than at the start? I will leave you to guess the answer to that very simple question. And are there more regulations governing, well, almost everything, now compared when Bush took power? If there are more, then how is that either small or limited?
In America, government is … us. What is “exceptional” about America is the depth of its commitment to the principle of self-government; we elect the government, we replace it or its members when they displease us, and by our threats or support, we help steer what government does.
Of course this ‘us’ of whom he speaks are in reality the political activists who gain the support of a plurality to sanctify the latest looting schedules. His contempt for ‘ Joe the Plumber’ says it all. Joe was indeed one of ‘us’, one of the great unwashed who dared to fart loudly during the chorus of media hosannas surrounding Obama’s stately progress across The Blessed Land. Mickey Edwards on the other hand was a career politician who now lectures on Legislative Politics and International Affairs… in other words, he is about as much one of ‘them’ as you can get.
And there is nothing particularly ‘exceptional’ about his description of American government unless Mickey Edwards thinks most of the rest of the ‘first world’ are organised as feudal states. The ‘limits’ to government expressed in the sainted US Constitution may be still be a viable tool for securing thing like freedom of expression and the right to defend yourself, well at least somewhat, but they do less than nothing to make anyone secure in their property or in any way less vulnerable to the political looter class (whom Mickey Edward could identify by simply looking in a mirror) from using the political system to help themselves to other people’s money.
And that, my chums across the ocean, is exactly why you are just as totally fucked as the rest of us.
[E]verything the government is doing now is going to make the situation much, much worse. They’re trying to reflate this bubble. All along I knew that what would potentially be fatal wasn’t the recession itself but the government’s response. But what they’ve already done exceeds even my worst-case imagination.
– Peter Schiff
I know it is only January but this is a real contender for ‘Samizdata quote of the year’.
Our migration to the new CMS will not happen until next weekend, so you can enjoy your fix of spleenic rants and pro-liberty disgruntlements throughout the weekend uninterrupted.
We felt it was better to get it right than do it fast… plus I am told the stars will be more favourably aligned next weekend.
This weekend, if all goes well, the bloated monstrosity that is Samizdata’s back-end, all 11,000+ articles and 182,000+ comments (hopefully) will get dumped into a new CMS.
I fully expect all manner of server burps, devoured articles and comments and sundry debugging issues will crop up but we will try to keep the disruption to our crazed rants and your edification to a minimum. Wish us luck.
Just as Gordon Brown steers the UK full throttle into the ground for the most spectacular economic crash since the 1930’s, far from fighting the culture war in order to set the nation up for an alternative, yet again the utterly absurd David Cameron and his lemming-like party are bending over backwards to show that they represent kleptocratic continuity with the Labour Party.
Demos, a leading thinktank, is today launching a major project to develop “progressive conservative” policies. David Cameron, the Tory leader, will be speaking at the launch of the initiative, which will explore ideas such as how the market can be organised to alleviate poverty and what policies can bolster civic autonomy. Demos, which is independent but which used to be closely associated with New Labour, will have up to four staff working on the project, which will be funded by outside partners, but not the Conservative party.
[…]
As Tory leader Cameron has pledged to pursue “progressive ends”, such as social justice and poverty reduction, through “conservative means”. But this claim has been challenged by Labour and the Liberal Democrats who have questioned his credentials as a true progressive.
How “the market can be organised to alleviate poverty and what policies can bolster civic autonomy”… When politicians ‘organise’ markets, that is always high on political organisation and low on markets. And what policies can “boost civic autonomy”? Dave needs a think-tank to tell him that? Less state policies, taxes and interference generally. Anyone want to make a book on the chance Demos offers that up as a solution? Fat chance.
“But this claim has been challenged by Labour and the Liberal Democrats who have questioned his credentials as a true progressive.” This is like members of a cartel howling about other members competing with them as a way of hiding the fact there is actually no competition going on at all. Labour, the LibDems and the Tories make a fetish of the minor difference between each other to hide the fact there is actually very little between them.
My theory? They have no interest whatsoever in the traditional Conservative voter, whose ovine voting can usually be counted on anyway, but rather plan on gaining power via the strategy of simply waiting for Labour to lose rather than planning to pro-actively win themselves. Therefore they are working up policy statements calculated to appeal to the same Guardian reading looter class seeking more of the same only this time with ‘a sensible safe pair of hands’, to use nauseating Tory-speak.
A vote for the Tory party (I refuse to call them the ‘Conservative’ party) under Cameron is a vote wasted because even if they win, nothing changes. Even if you ‘win’, you lose. They are beyond salvage.
Want to vote? Then vote UKIP. I do not support all their policies but there simply is no meaningful choice any more and at least they have a more or less nationwide political organisation. Is a vote for UKIP a wasted vote? Well at least you will be wasting your vote on a genuine alternative rather than the illusion of change under ‘Dave’ Cameron and his dismal shower of ‘progressives’.
And if enough people do that then it was not a wasted vote after all.
A court in the Netherlands has ordered the prosecution of Geert Wilders, leader of the Freedom Party, for daring to express his opinions. Wilders is the author of Fitna, a critical polemic against Islam.
The three judges said that they had weighed Mr Wilders’s “one-sided generalisations” against his right to free speech, and ruled that he had gone beyond the normal leeway granted to politicians.
“The Amsterdam appeals court has ordered the prosecution of member of parliament Geert Wilders for inciting hatred and discrimination, based on comments by him in various media on Muslims and their beliefs,” the court said in a statement.
“The court also considers appropriate criminal prosecution for insulting Muslim worshippers because of comparisons between Islam and Nazism made by Wilders,” it added.
This judgement completely destroys the myth of both Dutch civil liberties and the nation’s reputed tolerance for differences of opinion. It seems you can have a difference of opinion just as long as it is not inconvenient to the state for you to express it. Yet again, the Dutch state proves that when the going gets tough, the Dutch state has a backbone of rubber.
So here is Fitna for you to watch. And to the authoritarian thugs in their court in Amsterdam… up yours.
And as a little bonus…
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We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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