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“The Federal Reserve…along with other central banks, is a legal counterfeiter.” Paul Kasriel, economist at Northern Trust, the US bank. He is in favour of all this “quantitative easing”, by the way, but he is far too honest an economist not to identify what that euphemism actually stands for. And he predicts that it certainly will trigger inflation later on. April 2nd, 2009 | 5 comments - (Comments are closed)
 It has been clear to me for some time that support for capitalist wealth creation was no longer acceptable. The foolishness of our Austrian economic based opposition to massive politically directed transfers of ordinary people’s money to failed bankers, non-viable unionised car makers and anyone else who has political connections is clearly futile. This is the way of the future and we might as well get used to it while there is still any real money left to be redistributed. Let the printing presses roll and lets re-inflate that credit bubble! Fly me to the moon, my darling, fly me to the moon… on a massive gravity defying credit bubble! As a consequence, as soon as I can get our technical guru to make the changes, we will be changing the name of this blog to ObamaBrownData, not as catchy as Samizdata I grant you, but it more fully represents the paradigm shift that all thinking people have now undergone and this blog is no exception. The world is rotating around the Gordon Brown/Barak Obama Axis now. So please all of you… go rotate. We must learn to accept the wisdom and judgement of our political masters, sanctified by democratic processes, and realise that we are all dependent on the regulatory welfare state now. I will be signing up for as many state aid programmes as I can find and anyone who wants to advise me how to get on the gravy train, please let me know. All these years denying myself the largesse of our beneficent Big Brother has left me with a poor grasp of how to best benefit from the system. As Frederic Bastiat said, “The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else”, well everyone will include me now… and the Samizdatistas… or Obamabrownistas as we will now be known. Point me to the trough, I repent my foolish ways and have a lot of catching up to do. April 1st, 2009 | 21 comments - (Comments are closed)
Two splendid snippets facing each other in today’s print edition of the Times. First Chris Ayres’s Los Angeles notebook:
And more substantially, Daniel Finkelstein on anti-capitalists:
He is really not doing them a disservice. The common motivation is a sort of snobbish distain about vulgar ways of enjoying the material world; and the same thing finds its head in the circles of power, too, as a sort of neo-puritan obsession with work, regulation and oversight of individuals to make sure that no-one is getting away with the sin of unapproved lifestyle. April 1st, 2009 | 16 comments - (Comments are closed)
My post below on the experience of Scottish banking before 1845 – when the rules were changed by the-then UK government of Robert Peel – elicited a lot of great comments. It turns out that the Lawrence White paper that I mentioned had been savaged fairly thoroughly by Murray Rothbard. Rothbard’s paper is immensely detailed and shows what a thorough economic historian Rothbard was. Briefly put, he says that White has misinterpreted the Scottish banking experience by not distinguishing between free banks that operated 100 per cent reserve requirements linked to gold, and those that were simply free banks without such specie requirements. (Rothbard was an advocate of such metal-backed money). This inevitably raises that old friend of ours, fractional reserve banking, which Rothbard described as essentially a fraud. Now in trying to make up my mind on FRB, it seems to me that so long as the holder of bank notes is made aware that the note has been issued by an FRB, rather than a 100-percent reserves one, then what is the problem? It is a bit like the argument about limited liability corporations that vex some libertarians such as Sean Gabb of the Libertarian Alliance. Surely, if I transact with a LL company and knowingly do so, then such consent is what counts. LL companies could, conceivably, exist even without special government legislation, although they might not last as long as LL firms do now. (Here is a rejoinder to Gabb on LL). Same with FRB: if there is commercial deposit insurance and customers know the score, I fail to see why the existence of fractional banking should necessarily lead to disaster. Or is there something I am missing in this debate? At first blush, some might consider all this to be a bit arcane. It is anything but. Explaining how banks work now, and how they can be made to work much better as a result of competition and basic rules, will go some way, I hope, to destroying misconceptions. Such misunderstandings that exist at the moment only play into the hands of those who want to bring the free market order down. Such as those folk protesting at the G20 summit in London today. I will be in the area on business. I might take some photos and post them up later if they are any good. Update: I was in the Docklands area. Nothing much going on while I was there. April 1st, 2009 | 49 comments - (Comments are closed)
March 31st, 2009 | 8 comments - (Comments are closed)
Those good people at the Institute of Economic Affairs have put this fine study of free banking, as it existed in Scotland until the middle of the 19th Century, back into print. It is examined in great detail, with lots of figures and examples of how these banks operated, how many bank failures there were, and so forth. There are a few equations but nothing that should faze all but the most mathematically challenged. Historical scholarship of this detail and depth is vital. It is as vital, in fact, as those studies that showed that in Victorian Britain, before the Welfare State came along, Britain already had an extensive network of mutual aid societies. Without this historical memory, it becomes easier for politicians to sell the lie that the solution to X or Y lies in ever bigger government. Readers can either read the pdf for free or, if it is tough on the eyesight, as it is for me, readers can get a publication-on-demand sorted out for just £10. I do not suggest that free banking is necessarily the panacea for the current troubles. But it seems to me that a point lost on the anti-globalistas as well as many of the other critics of the current financial system is that they fail to grasp how banking, as it is practised in most instances today, has deviated from a genuine example of laissez faire capitalism. What we need is sound money, administered by banks operating under the constant blast of competition in proving the soundness of that money. When you think about it, it is not very hard to grasp the idea, is it? March 31st, 2009 | 30 comments - (Comments are closed)
The President of France is threatening to walk out of the G20 gabfest this week if the countries cannot agree on stricter regulation of the world’s financial markets. Of course, Mr Sarkozy buys into the fantasy that what has happened shows the failure of “unregulated capitalism”. If only he would walk out of the conference, which is likely to involve further layers of largely useless and counter-productive rules and meaningless communiques, not to mention disrupt London, provide a focus point for tens of thousands of anti-globalistas, and cost Londoners a ton of money in policing and disruption. Go on Sarko, do it for les enfants. March 31st, 2009 | 10 comments - (Comments are closed)
Reported by Lucy Bannerman in today’s Times:
In a previous post about loss of nerve in our public services I said, referring to instances in which firemen and policemen had “broken procedure” to save life, that despite their personal courage “institutional gutlessness surrounded them, was embarrassed by them, and will kill off their like eventually. Poisoned soil does not long give forth good fruit.” Seems like the poison has worked its way well in. Note: I do not know whether the Colly family could have been saved had the attempt been made while Mrs Colly was still alive to scream for someone to save her kids. A spokeswoman for the South Yorkshire Police said, “The senior officer in charge is confident we handled this incident as professionally as possible. In a situation like that you could end up with more deceased bodies than you had in the first place.” One of the lesser known sights of London is the Watts Memorial in Postman’s Park. I gather it featured in the film Closer, starring Natalie Portman and Jude Law. No, I am not being funny, suddenly veering off into a travelogue in the middle of a post about the deaths of a family. I wish there were something to laugh about. The memorial was set up by a Victorian artist, George Frederick Watts, to commemorate those who died saving others. It consists of hand made plaques each bearing the name of a person who sacrificed his or her life and a brief citation. Very quaint they are, with their crowded lettering with the extra-large initial capitals and little swirly plant motifs and curlicues in the corners. Even the names are quaint, laboriously given in full. Police Constables Percy Edwin Cook, Edward George Brown Greenoff, Harold Frank Ricketts and George Stephen Funnell are among them. I wonder what PC Percy Edwin Cook, for instance, who perished when he “Voluntarily descended high tension chamber at Kensington to rescue two workmen overcome by poisonous gas” would have made of his successors in the South Yorkshire force. Perhaps the police spokeswoman was right. Perhaps if health and safety had been less comprehensively assured and the Colly incident handled rather less professionally, we would have ended up with more than the three “deceased bodies” – no, make that four, when you count the child expected to be born in two weeks – that we did end up with. Still, more than four dead bodies is quite a lot and quite unlikely, I cannot help thinking. And I also cannot help thinking that there is more to this than just counting the dead under different scenarios. If the critically injured five year old girl does survive she will be burdened by more than just the fact that her family died. She will eventually have to know that those who might have answered her mother’s last desperate appeal were held back on grounds of “health and safety.” Not theirs, obviously. UPDATE: Other accounts give the spelling of the family name as “Colley”. They confirm that the police actively prevented rescue attempts. FURTHER UPDATE: There is a thoughtful discussion in the comments regarding several moral and practical questions, and whether the press accounts are to be trusted. Quite possibly not. Yet I must add that if the South Yorkshire police are trying to convince me that they are not abdicating responsibility in order to follow rote “health and safety” procedure (as commenter “sjv” put it), then best not claim, as they appeared to in the Mail report linked to in the word “other”, that the reason they will not tell us exactly how long elapsed between the arrival of the police and the arrival of the firemen is “‘data protection’ rules.” March 30th, 2009 | 72 comments - (Comments are closed)
“It is perfectly possible for inertia to be beneficial and an improvement, if the alternative is poorer. It is the same fallacy as the claim of the current Government concerning the current economic crisis, that ‘doing nothing is not an option’.” – Former England rugby player and man of firm views on the sport, Brian Moore. Now a television commentator and newspaper pundit, Mr Moore sees parallels between the rule changes in rugby – some of which have been a retrogade step, in his view – and the reaction of certain governments to the credit crisis. March 30th, 2009 | 3 comments - (Comments are closed)
I must say it is about time that we found out what the South Park kids made of the bailout. This is probably not entirely work-safe. March 30th, 2009 | One comment - (Comments are closed)
I would not want to get on the wrong side of this scribe when words don’t fail him:
Thus does Matthew Parris muse upon the oratical inadequacies of Prime Minister Gordon Brown. If Brown is now the main object of your rage and loathing, then read the whole thing. You will surely enjoy it greatly. But what matters to me is not whether Brown is now a doomed and hopeless failure, for clearly he is. But how much more of my country will he quadruple-mortgage? How much more of my country’s earth will he scorch? And, later, how much of the Labour Party as a whole will he take with him into the history books and nowhere else? Not that much more, not that much more, and the more the better, is what I am now hoping (against hope) for. Now is as good a time as any to confess that I was one of those people who used once to accuse Samizdata sage Paul Marks of not “getting” New Labour. My problem was that I did really believe (and do still believe) that when Blair said that he was not in favour of wrecking my country’s finances, he did truly mean it. Time and again, Blair outfaced his party with that very proclamation. I don’t believe in ruining Britain, he would shout at his massed ranks of idiot followers. So fire me, he kept saying. And the massed ranks of idiots, despite being enraged by this exasperatingly sensible talk, kept not firing him. My problem was not that I was wrong to notice these protestations of fiscal virtue, or wrong to consider them significant. Where I went wrong was in understanding their actual impact. I didn’t think that Blair was ushering in any sort of libertarian nirvana, no way. Nor was I relaxed about the damage being done by Blair to the legal system and to the criminal law and to the regulatory regime. Europe was, as it remains, a continuing disaster. But at least, I thought, this time around Labour will not smash up everything economically. But actually, the whole Blair “political achievement” made it possible for Labour to break Britain with a ferocity and completeness that has no parallel in recent British history. The more we trusters trusted Labour not to scorch Britain’s earth, the more earth they were able actually to scorch, and this scorching, of course, continues. Old-style socialists were not trusted, and as soon as the danger signs appeared, as they inevitably did as soon as each successive attempt at a socialist-inclined government had got its flamethrowers working and scorching, voters and investors reacted accordingly. This time around, too many (me included) thought that it would be different, until such time as even we could not doubt the unique scale of this particular disaster. To the precise degree to which we thought things would be better this time, they were actually worse, and it was cause and effect. Did Blair do this on purpose? As the catastrophe started to unfold, did he realise what he had done, sticking his killer grin on the front of the latest and greatest Labour assault on Britain’s economic viability? Did he care? Does he care? Frankly, I don’t care. I now, still, regard Blair more as a destructive force of nature rather than as a deliberately evil man, but in practice, what does it matter? What matters, as we have become used to hearing as other pettier disasters have unfolded in recent years, is to make sure that nothing like this can ever happen again. The point is not just that Brown has been and is still a catastrophe. That’s a given. The point to ram home, now and for as long as his name is ever remembered, is that Tony Blair was also a catastrophe, and arguably a much bigger one. For without Blair, there could have been no Brown. Burying the Labour Party for ever, as it deserves, does not merely mean keeping the horrid memory of Brown and his cloth-eared blunderings alive. It means remembering how Tony Blair made those blunderings possible. So, let us learn the big political lesson of this catastrophe, to ensure that, indeed, the catastrophe can never happen again. And it is this. When the Labour Party sounds bad, it is bad. When it sounds good, it is even worse. Only the idiots in the Labour Party now can be blamed for Brown, and not even they really voted for him. But they did allow him to clamber unopposed into the driver’s seat of the wrecking and burning machine, and for that they all deserve their particular places in hell. But many more Brits voted for Blair, because they thought that even if things were not automatically going to get any better (as the idiots were singing – remember that?) then at least, fiscally speaking, they wouldn’t get that much worse. Clearly Britain will never “vote Brown” in the future, any more than it did this time around for Brown himself. But Britain did “vote Blair”, and this it must never do again. March 29th, 2009 | 20 comments - (Comments are closed)
I came across this fine tribute website to John D. MacDonald, the writer of many crime/mystery novels, most of which were set in the area around Florida, the Bahamas and Caribbean. If you have not come across his writings, which are a sort of mixture of Lee Child, with a twist of Raymond Chandler, a shot of Ian Fleming, a light coating of Eric Ambler and a tincture of Robert Parker, then you should correct that oversight. One thing I love about these old 1950s and 1960s novels is the artwork on the covers. I love those “pulp” covers with pictures of hot dames, tough private eyes, guns, boats, gambling cards with smudges of coffee or whiskey on them. There is a whole genre of design and artwork that went into making these covers that deserves more credit than it usually gets. Even today, the MacDonald books, especially his Travis McGee stories, which later got a hilarious echo in the crime capers – also set in southern Florida – of Karl Hiaasen – read as freshly and sharply today as when they were first written. Reading them makes me want to jump on a plane and head on down south for a spot of marlin fishing off the Keys. Bliss. March 29th, 2009 | 9 comments - (Comments are closed)
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