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Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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I cannot claim to grasp much of the detail of all the drama now surrounding the EUro. This photo, taken by me yesterday, captures the feeling of it all quite well:
Click to get that bigger and more legible.
Is all this drama being cranked up to enable Cameron to take the credit from us Brits for bollocking up the Euro, and simultaneously to enable everyone else in EUrope to blame us? Just, as Americans say, askin’.
One little titbit of news that does strike me as particularly interesting is this, in the Wall Street Journal, about how various governments are quietly pondering EUro-alternatives. At the very least, someone at the Wall Street Journal is asking about alternatives.
It all makes me think of those bridges that Julius Caesar burned, so that his army then knew that they would either fight and win, or perish. Except that this time, various parts of the army are nipping back to the various rivers that they just might be wanting soon to be retreating across, and are quietly building bridges. Just as burning bridges changes the game, so does building them. Even thinking about building them changes things.
I greatly enjoyed this article by Kevin D. Williamson about Thomas Sowell. Sowell is now in his eighties. When somewhat younger, he looked like this:
Here is what is probably the key paragraph in Williamson’s Sowell piece:
Because he is black, his opinions about race are controversial. If he were white, they probably would be unpublishable. This is a rare case in which we are all beneficiaries of American racial hypocrisy. That he works in the special bubble of permissiveness extended by the liberal establishment to some conservatives who are black (in exchange for their being regarded as inauthentic, self-loathing, soulless race traitors) must be maddening to Sowell, even more so than it is for other notable black conservatives. It is plain that the core of his identity, his heart of hearts, is not that of a man who is black. It is that of a man who knows a whole lot more about things than you do and is intent on setting you straight, at length if necessary, if you’d only listen. Take a look at those glasses, that awkward grin, those sweater-vests, and consider his deep interest in Albert Einstein and other geniuses: Thomas Sowell is less an African American than a Nerd American.
My strong is Williamson’s italics.
I’d never thought of Sowell as being anything like this guy …
But yes, I guess maybe there is a resemblance. Here is link to a brief snatch of video of Moss saying something very Sowellish, about the importance of getting a good education.
By the way, I am not calling the actor and director Richard Ayoade a nerd. I don’t know about that. But I do know, as do all who enjoy The IT Crowd, that Ayoade’s TV creation, Moss, most definitely is a nerd, and a nerd first and a black man way down the list, just as Williamson says of Sowell.
Although, as a commenter said of this bit of video: “Richard has a bit of Moss in him.” A bit, yes. But what has really happened is, surely, that Ayoade was a nerdy kid, and has kept hold of it for comic purposes.
I suspect Sowell did something similar, and, as Williamson suggests in his article, in a more courageous and significant way. He too was a genuinely nerdy kid, who could understand truth better than he understood the demands of fashion. Then, when he got older and started to tune into the zeitgeist, he had to decide if he was going to shape up and get with the liberal (in the American sense) fashions of his time or stick with that truth stuff he had got to like so much. He stuck with the truth.
Also, I don’t believe Sowell would ever remove a water tank (see the second of the two video links above) and then be surprised that his plumbing no longer worked properly.
By the end, we may see profligate politicians hanging from lampposts. But there’ll be a lot of bad stuff, too.
– Instapundit
LATER:
But all joking aside, if the current profligacy continues, and America winds up in a Greece-style (or worse) collapse, politicians may not wind up hanging from lampposts (we don’t really do that here), but they will at the very least likely face the kind of investigations, prosecutions, and social opprobrium normally reserved for child molesters and Bernie Madoff types. I don’t think they fully appreciate that. If they did, they’d be acting differently.
Indeed. Press release from these guys:
Good luck with that.
Seriously, good luck with that.
I will try to be there.
Legitimately self-made African billionaires are harbingers of hope. Though few in number, they are growing more common. They exemplify how far Africa has come and give reason to believe that its recent high growth rates may continue. The politics of the continent’s Mediterranean shore may have dominated headlines this year, but the new boom south of the Sahara will affect more lives.
From Ghana in the west to Mozambique in the south, Africa’s economies are consistently growing faster than those of almost any other region of the world. At least half a dozen have expanded by more than 6 per cent a year for six or more years.
The Economist, 3 December, page 77. (Behind the magazine’s paywall, so thank me for typing it out for you). The magazine has a nice study of the continent, laying out the continued problems but also the many bright spots. There is a handy map showing which countries have the fastest and slowest GDP growth rates, with the fastest rates in black (Ethiopia, at 7.5 per cent), then red, lighter red, all the way down to the deadbeats, in white. Of course, in looking at percentage rises or falls in growth, it pays to remember that statistics can be highly misleading (hardly a surprise to any skeptics of government, of course) and it is easy to rise fast from a low base. But still, these numbers are indicative of a more positive picture.
Needless top say, Zimbabwe came at the bottom of the growth league. It remains a grim lesson in how collectivism, cronyism and debauchery of money spell disaster. If parts of Africa are beginning to understand the follies of this and start to make serious money, that is excellent news. For a start, refugees from the hellholes of the continent might, instead of entering sclerotic Europe, choose to make a life in a more congenial place elsewhere.
Of course, there have been false dawns before. But with the flood of money entering the continent from China (after all that commodity wealth), I have a feeling that the rise of Africa has some staying power, particularly given the young demographics. Of course, it could all be messed up from things such as a rise of global protectionism.
There is something about this story about bank debt buybacks that I don’t quite understand, although I have only had two cups of coffee as of the time of writing:
“European banks are turning to buying back their own debt in order to raise some of the billions in extra capital required by regulators. At least six major banks have launched debt buybacks in the last two weeks and investment bankers say more are likely.”
Okay, so if a bank has debt – ie, others are lending it money – and the bank buys back, or in other words, pays off some of that debt, like paying off a credit card, say, how is this raising capital? The bank is presumably paying the debt off with, er, what? Fairy dust?
“In Lloyds’ case, it will exchange bonds previously issued for new instruments that are compatible with new regulations. The move allows lenders to book profits and reduce the stock of non Basel III capital on their books without issuing new equity or offloading assets.”
This is not very clear. What is the defining characteristic of “Basel III capital” in this case?
Finally we get a glimmer of how this actually works:
“The capital raised in this way is likely to be in the hundreds of millions. It boosts earnings by realising “own credit” gains that are otherwise purely theoretical. The market price of banks’ debt has fallen dramatically in recent weeks, which enables banks to buy back their debt for an amount above the market price but below the cash they raised by selling the instruments, booking a profit.”
Now I understand – I think.
As usual, the CityAM publication has a blisteringly good item on the Eurozone’s latest absurdities today. It is become my daily morning read. The fact that several of its writers are friends and acquaintances is, of course, purely coincidental.
Incoming email from newly signed up Samizdatista Rob Fisher (who can only do emails right now) about how Oxfam is proposing a global shipping tax. Watts Up With That? has the story.
Says Rob:
This is extraordinary. Read the whole thing but in particular the money flowchart diagram.
Bishop Hill calls this Oxfam creating famine.
Says Anthony Watts:
These people have no business writing tax law proposals, especially when it appears part of the larder goes back to them. This is so wrong on so many levels.
Says Bishop Hill commenter ScientistForTruth:
These [snip – please tone down the language] are in principle no different from the pirates operating out of Somalia, wanting to skive money off international shipping. And just as Oxfam would be solicitous to ensure that no-one gets their hands on the dosh unless they sign up to an eco-fascist agenda, so the pirates will be sure to share the booty only with their mates.
I do enjoy those Bishop’s Gaff Bishop’s Rules bits in his comments section. Perhaps “what a bunch of total snips” will catch on as an insult.
Paul Mason, BBC Newsnight’s economics editor (and the guy who fronted that Keynes v Hayek radio show we’ve blogged about here), picks Detlev Schlichter’s Paper Money Collapse as one of his five economics books to give people for Christmas.
Mason begins his Guardian piece thus:
Two questions predominate in this year’s slew of books on economics. The first is the most obvious: how do we get out of this mess? It’s a question that has set authors along many roads but they all lead to the same destination: a bigger role for the state and the need for renewed international co-operation.
Which, alas, explains why Detlev Schlichter is so pessimistic about good sense prevailing in financial policy before ruin engulfs us all. The world’s rulers have pushed the world slowly but surely into a huge hole, and all that Mason’s authors (aside from Schlichter) can recommend is digging the hole ever deeper.
A “bigger role for the state” is not the solution to the world’s problems just now. That is the problem, and it has been for many decades.
At least Schlichter’s kind of thinking is getting around, and, as this piece by Mason proves, in some somewhat surprising places. Mason may not fully understand Austrian economics to the point of actually agreeing with it, but he does seem (as I said towards the end of this earlier posting) to respect it. He knows it is saying something important.
Schlichter has been unwavering in his pessimism about the world getting “out of this mess” and he is being proved more right with every week that passes. When total ruin does arrive, we can only hope that he and people with similar opinions to his will then be listened to rather more.
Reading this piece, linked to by Instapundit today, we see that politics in the USA, and in fact everywhere, is a trialogue rather than a dialogue. All parties to the trialogue (definitely including me) believe that the other two camps are wrong, and many in each camp believe that the other two camps are actually one camp.
The three camps are:
Camp 1: Capitalism is fine, so long as the government stays in charge of it and does a few more of the right things and a few less of the wrong things. The mixed economy is fine, if only we can just mix it right, and meanwhile preserve confidence that all will be well. No need for radical change. Trust us. No, we’re not convinced that’ll work either. Camp 1 is very powerful, very clever, very unwise. For now.
Camp 2: Capitalism is an evil mess. This crisis was caused by capitalism – naked, unregulated, unrestrained – being let loose by neo-liberal fanatics. What should be a poodle has become a wolf. Do whatever it takes to make capitalism a poodle again. Yeah, yeah, we need a bit of capitalism, to make stuff, but not nearly as much as we’ve been having lately. Anyone who gets in the way … boo! We hate you! No, we don’t think that’ll really work either, even if the people were willing to give it a go. They won’t, so boo! And if they did, it would fail horribly, and we’d have to blame capitalism even more. So … boooooo. Camp 2 is very stupid, but horribly numerous.
Camp 3: Capitalism would be great, but what we’ve had has not been capitalism – unregulated, unrestrained, as hoped for by us neo-liberal fanatics – but capitalism mixed with statism in a truly horrible way. What we’ve seen in the last few decades has been crony capitalism, capitalism with politicians in its pocket, so that whenever a big chunk of capitalism looks like failing, most notably a big bank, the politicians squirt more money at it. Which ain’t proper capitalism. Meanwhile, capitalism even of the crony sort makes better stuff. Capitalism, the real thing, should also be allowed to make better money, the kind that is allowed to fail if it does fail. The adjustment process will be horrific. No, we’re not sure that will work either. If we could do it, it would work great. But will we ever be allowed to do it? Camp 3 is right. But maybe not numerous enough or clever enough (maybe not wise enough) to win, and prove itself right. → Continue reading: The three way argument
People who know me are most likely sick of my ranting against the Economist magazine, but an article in the present edition deserves to be noted – as example of establishment statist folly.
Under the title of “Poor By Definition” we are told that the Chinese government has adopted an international measure of poverty (support for international government, European-world-whatever, is one of the defining features of the establishment to which Economist magazine writers belong) which will mean that one hundred million extra people will get various forms of government benefit. This is “good news” – “for them” and “for the economy”.
Let us leave the World Government (world definition of poverty, claim of entitlement…) stuff aside – like its support for the European Union, the international statism of the Economist is too demented (and too unpopular – outside a narrow international elite) to be worth further comment. I will just comment upon the social and economic claim being made in the article.
One hundred million MORE (not less) people getting various forms of government benefit is a “good thing”. Someone can only suppose it is “good for them” if they have ignored all the careful examination of what welfare dependence does, to individuals, families and whole communities. Works such as “Losing Ground” have been out for some time – but if the Economist magazine writers have not yet got up to speed with Aristotle and Cicero (who made similar points about the Greek and Roman worlds) it is perhaps too much to hope they would have read and understood more recent studies on how just handing out benefits undermines people – destroys families, undermines communities by destroying self help and mutual aid. And on and on – the growth of the “underclass” and the destruction of such institutions as the family among large segments of the population (the poor) all over the Western world, has been a central element of the history over the last 40 to 50 years – but the Economist magazine writers have totally missed it.
As for “good for the economy” this is the spend-our-way-to-prosperity fallacy that the Classical Economists (such as J.B. Say and Bastiat) thought they had killed off – but got a zombie rebirth with the influence of the late Lord Keynes. As Hunter Lewis points out in his “Where Keynes Went Wrong“, what we call “Keynesianism” (all the central fallacies) had been refuted long before Keynes was even born – even Karl Marx (not known as a hard core “right winger”) laughed at the absurdities of what is now called “fiscal and monetary stimulus”. However, neither the works of the Classical Economists or more recent works (such as those by W.H. Hutt.., Henry Hazlitt, Ludwig Von Mises and many others) have had any effects on the minds of the international elite – because they have never read such writers. Their education is confined to nonsense and, being intelligent (but not wise) and hard working people, they absorb the nonsense and it remains with them for the rest of their lives. They base all their policy opinions and proposals on a foundation of nonsense – which they learned (with great attention) in their early years. They are (falsely) taught that rejecting common sense is the mark of the “intellectual” (putting them above the common herd of humanity) – and so they reject common sense (basic human reason) with a passion, embracing the absurdities they are taught, perhaps, because what they are taught is absurd.
Lastly the Economist magazine article declares that the money is better spent on expanding welfare schemes than on Chinese banks. An odd statement considering that the Economist magazine has been the leading defender, in the English speaking world, of credit bubble banking and government bailouts. From the rather limited interventionism (corporate welfare) suggested by Walter Bagehot (third editor of the Economist and enemy of then Governor of the Bank of England who, quite rightly, thought that Bagehot’s suggestions would encourage all that was bad in banking) to the “unlimited” (their word – used repeatedly in articles) money creation (money creation from NOTHING) that the Economist magazine has supported in relation to bank bailouts in the United States and for bank, and national government, bailouts in the European Union. Again for the Economist magazine to attack money being thrown at the banks (anywhere) is very odd. The last demented spit of a demented article – the product of an intellectually bankrupt elite who are pushing the world towards bankruptcy. Not just economic bankruptcy – but social, cultural and moral bankruptcy also.
Paul Krugman:
“Although Europe’s leaders continue to insist that the problem is too much spending in debtor nations, the real problem is too little spending in Europe as a whole.”
Let us fisk this:
“The story so far: In the years leading up to the 2008 crisis, Europe, like America, had a runaway banking system and a rapid buildup of debt. In Europe’s case, however, much of the lending was across borders, as funds from Germany flowed into southern Europe. This lending was perceived as low risk. Hey, the recipients were all on the euro, so what could go wrong?”
Nice piece of snark, which I do not demur from.
“For the most part, by the way, this lending went to the private sector, not to governments. Only Greece ran large budget deficits during the good years; Spain actually had a surplus on the eve of the crisis.”
That may be true. I have not checked. However, the fact that Spain’s public finances went down the toilet so fast does not quite suggest that the Spanish public sector was a model of mean-minded prudence.
“Then the bubble burst. Private spending in the debtor nations fell sharply. And the question European leaders should have been asking was how to keep those spending cuts from causing a Europe-wide downturn.”
No, they should have been facing up to the fact that a vast number of mal-investments were caused by a decade of under-priced credit, and that there was no way that such a build-up of bad investments can be unwound painlessly. Seeking to hold off the pain by increasing public spending (and hence scaring the hell out of the global bond market) is hardly likely to achieve the desired effect.
“During the years of easy money, wages and prices in southern Europe rose substantially faster than in northern Europe. This divergence now needs to be reversed, either through falling prices in the south or through rising prices in the north. And it matters which: If southern Europe is forced to deflate its way to competitiveness, it will both pay a heavy price in employment and worsen its debt problems. The chances of success would be much greater if the gap were closed via rising prices in the north.”
That may be true in crudely political terms; after having enjoyed the fat years, those who have done so are not likely to enjoy a lean period. However…
“But to close the gap through rising prices in the north, policy makers would have to accept temporarily higher inflation for the euro area as a whole. And they’ve made it clear that they won’t. Last April, in fact, the European Central Bank began raising interest rates, even though it was obvious to most observers that underlying inflation was, if anything, too low.”
Well, it seems a bit glib to assume, as Keynesians like Professor Krugman do, that the inflation will prove to be temporary… Riiiight… One key problem for the eurozone, as he ought to know, is that labour markets in much of the region are so heavily regulated that getting a meaningful adjustment in wages and prices is hard, and yet this has to happen if countries such as Greece and Germany are to co-exist under the same currency area without strife. The same issue, of course, would apply if the whole region were to adopt, say, an inelastic system of real money instead of fiat money issued by a central bank or banks.
Another point for Professor Krugman to remember is that in some member nations, such as France, there has been double-digit percent unemployment for the young long before anyone had heard about sub-prime or credit crunches. And Europe’s record for wealth and job creation, compared to that of the US prior to the crunch, has been and remains lamentable.
James Taranto quotes Thomas Edsall, saying (among other things) this, about the kinds of votes that Democrats are now trying to get, and other votes that they are no longer bothering to try to get:
All pretense of trying to win a majority of the white working class has been effectively jettisoned in favor of cementing a center-left coalition made up, on the one hand, of voters who have gotten ahead on the basis of educational attainment – professors, artists, designers, editors, human resources managers, lawyers, librarians, social workers, teachers and therapists –
Edsall goes on to say that the whereas the Dems have now given up on the white workers, they are still eager to get all the non-white workers to vote for them.
One of the ways to understand the libertarian movement, it seems to me, is that it is an attempt to convert from their present foolishness all those “professors, artists, designers, editors, human resources managers, lawyers, librarians, social workers, teachers and therapists” whom Edsall so takes for granted. It gives them the “social libertarianism” that they are so wedded to (even if they often don’t get what this actually means), but it insists on the necessity of at least some – and in the current circumstances of economic crisis – a lot more – libertarianism in economic matters. Okay, libertarianism will never conquer these groups completely, but it threatens to at least divide them, into quite a few libertarians or libertarian-inclined folks and not quite so many idiots.
Also, demography is not destiny, when it comes to voting. People’s “interests” are not necessarily what many party political strategists assume them to be.
The thing is, it is entirely rational to vote for more government jobs and more government hand-outs (a) if you are at the front of the queue for such things, and (b) if the supply of such things is potentially abundant, or not, depending on how you and everyone else votes. But, if the world changes, and you find yourself at the top of the list to have your job or your hand-outs taken away from you, in a world which is going to take these things away from a lot of people no matter how anybody votes, it makes sense to ask yourself different questions, and to consider voting for entirely different things. Like: lots of government cuts, so that you aren’t the only one who suffers them, and so that the economy has a chance of getting back into shape in the future, soon enough for you to enjoy it.
The far side of the Laffer Curve is a rather strange place. Different rules apply.
Quite a lot of unemployed British people voted for Margaret Thatcher in the 1980s, because they reckoned that Thatcher was a better bet to create the kind of country that might give them – and their children and their grandchildren – jobs in the future and a better life generally. (Whether or not they were right to vote for Thatcher is a different argument. My point is, this is what they did, and they were not being irrational.)
There is also the fact that how you vote in such circumstances of national and global crisis will be influenced, far more than in kinder and gentler times, by how you think. For a start, how bad do you think that the national or global crisis actually is? If you think it’s bad, what policies do you think will get that economy back motoring again, in a way which has a decent chance of lasting? How you vote depends on how you think the world works. And how you think can change.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
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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