Jack Ohman's Downsizing; Dwane Powell's Auto Bailout; Glenn McCoy's New Dummy; Pat Oliphant's Treasury Humor; Chad Lowe's A Clinton State Deparment; and, Walt Handelsman Conflict of Interest.

I've said very little about the economy or frugality lately, in part because I've been down-hearted about economic events and prospects, in part because I don't want to lecture people on how to act.

But, now that I'm in economic mode, I may as well give a thumbnail sketch of where I think the economy is going. I think we are in for a deep, dark recession that will not improve significantly until the middle or end of 2010. Or, rather, a recovery is likely to begin then if government intervention does not prolong the pain; government cannot shorten the recession but it can delay recovery. I think the next bubble to burst will be "the dollar bubble." By which I mean: the U.S. dollar is being massively devalued by such factors as deficit spending, jaw-dropping bailouts, hyper-production of currency...and it will significantly decline, resulting in severe inflation. The greenback is currently holding onto value because people (both domestic and foreign) are fleeing to it for safety. But the pyramid scheme that constitutes U.S. fiscal policy cannot maintain itself indefinitely any more than the housing market could. I give the dollar bubble about 6 months before it bursts.

If my analysis is correct, one of the most frugal things you can do right now is to spend greenbacks on any purchase you know will be necessary in the next year or so. Replace a failing stove, rebuild your car's engine, stock the pantry with 6 months food, reshingle the roof.... Again, if my analysis is correct, your dollar will buy more in tangible goods right this moment than it will in mid-2009. Perhaps considerably more.

An interesting read: historian Scott Reynolds Neslon suggests that we're not reliving the Great Depression...instead, we're reliving the Panic of 1873. (Hat tip to Angry Bear.)

Ken Gregg asks, Is J.K. Rowling a libertarian?

Benjamin Barton has a wonderful essay, "Harry Potter and the Half-Crazed Bureaucracy" (in Harry Potter and the Law (Jeffrey E. Thomas, ed., Carolina Press, 2006) on J.K. Rowling's "Harry Potter" books (tip of the hat to Volokh). The Rowling series certainly has captured the imagination of an entire generation, as few works have before. Rowling does not venture into fundamental principles as, for example, Ayn Rand had done in her fiction, but it is well worth considering the politics (or anti-politics) of the framework of Rowling's novels. For the complete essay, click here for html and here for .pdf. The abstract for Barton's paper states:



There has been a increasing number of posts by libertarians (see Patri Friedman, Brian Doss, Daniel D'Amico, and Natalie Solent, among others, for example) on the anti-state/Harry Potter/J.K. Rowling connection, and with good reason, as Benjamin's paper makes clear.

I've lately thought that someone should start keeping track of incidents of pets being killed by cops. J. D. Tuccille has made a start. Warning: don't read it if you love dogs and are easily upset.


Damn right, though I'd say the police still reach all too easily for their guns, period. Why the hell do they need to be armed when they are investigating a burglary (i.e., collecting evidence) or delivering tax documents? (Why are they delivering tax documents?) Let them learn to do their jobs without relying upon that lethal crutch, the authority that gets pulled out of the holster every time one of them "feels threatened."

Scott shares his analysis of the proposed auto-maker bailout:

I've been curious about the alleged "domesticity" of GM, Ford, and Chrysler and the "alienation" of "foreign" makers for some time. I have been generally aware that all three of the former are multinational corporations that source a significant portion of their vehicles and parts destined for the US market from foreign locations. Ford has major manufacturing operations in Canada, Mexico, the United Kingdom, Germany, Turkey, Brazil, Argentina, Australia, the People's Republic of China, and South Africa. GM currently manufactures cars and trucks in 34 foreign countries, and engine blocks have been made in Mexico for many years. Chrysler, even after the recent divestiture by Daimler-Benz, is still building vehicles in Argentina. I was also aware that several nominally Japanese manufacturers had factories and other operations located in the US.

I was quite astounded at the results of a little research on the latter subject. 8 foreign auto manufacturers have operations at 25 locations in 12 US states, and employ >49,000 US workers. BMW, Honda, Hyundai, Mercedes, Mitsubishi, Nissan, Subaru, and Toyota build virtually every car and truck that they sell in the US, in the US. Last I heard, the officers of those manufacturers were not queued up in DC, hat in hand, begging for handouts like incompetent fools. And what are the Senators and Congressmen of those 12 states (AL, CA, IL, IN, KY, MI, MS, OH, SC, TN, TX, VA) thinking? US auto sales are essentially a zero sum game. In a prospective bailout, every vehicle that GM, or Ford, or Chrysler sells domestically that they would not have sold without the award of stolen tax dollars, is a vehicle that one of those other 8 makers will fail to sell. Every job "saved" at a GM, Ford, or Chrysler US location will (all else equal) ultimately reflect in one of those other 49,000+ US jobs lost.

In addition, Ford, at least, seems to be speaking out of both sides of its corporate mouth. They have clearly indicated that they think they can survive until 2010 (their apparent estimate of the duration of the current economic crisis). I suspect that Mullaly is only joining the other beggars in self defense, out of fear that otherwise GM and Chrysler will be awarded stolen tax dollars that Ford will be denied, which might indeed be a mortal blow. My challenge to anyone who actually wants to help the idiots at GM, Ford, or Chrysler survive is: "Not on on my dime, you don't! Go buy a car with your own money. Hell, buy three." Unfortunately, my ability to enforce that position is somewhat limited.

Another story I'm late catching (October 29th) ...and another reminder to never, never, never click on a link in an email:


Customers of other domain name registrars may be targeted next. Be alert.

Several days ago I wrote about the alleged stoning to death of a 13-year-old girl in Somalia who had sought protection from an Islamic Court after being gang-raped...only to have that Court sentence her, instead, as an adultress. I expressed skepticism about the account -- a skepticism that has grown with time and the continually evolving coverage of the story that 'broke' somewhere around October 27th.

Let me state at the outset, however, that I have no doubt militant Islamic courts would and do sentence females (and males) to death for transgressing moral and sexual laws -- that is, for victimless crimes. The officials of such courts are cold-blooded murderers who richly deserve what they mete out to others. My skepticism is not over the barbarity with which militant Islam treats women.

But the details of the teenager's stoning have never rung true to me and I suspect it is an urban legend in-the-making. And a powerful one at that. Across the Internet and around the world has sparked calls for intervention into Africa, denunciations of Islam, and been used to create sympathy for one side of the violent conflict in Somalia... On Nov. 11th, WorldNetDaily reported, Britain's MI6 intelligence service has identified a group that raises funds with impunity in London as the organization whose militia members in Somalia imposed a death sentence on a 13-year-old rape victim...MI6 has revealed that the group operates without restriction in London, funding the fierce guerrilla war against Somalia's long-time enemy, Ethiopia, which invaded Somalia last year. In order to know why the WorldNetDaily account is invoking MI6, I would have to subscribe to Joseph Farah's G2 Bulletin, which I am not willing to do. But I expect Farah is calling for MI6 to enforce domestic controls within Britain on those who allegedly funded the alleged stoning.

My skepticism is not merely or even primarily based on how the story is being used, however. I am skeptical for several other reasons.

[ Read the rest ... ]

An oldie but a goodie: H.L. Mencken's credo:

I believe that religion, generally speaking, has been a curse to mankind - that its modest and greatly overestimated services on the ethical side have been more than overcome by the damage it has done to clear and honest thinking.
I believe that no discovery of fact, however trivial, can be wholly useless to the race, and that no trumpeting of falsehood, however virtuous in intent, can be anything but vicious.
I believe that all government is evil, in that all government must necessarily make war upon liberty...
I believe that the evidence for immortality is no better than the evidence of witches, and deserves no more respect.
I believe in the complete freedom of thought and speech...
I believe in the capacity of man to conquer his world, and to find out what it is made of, and how it is run.
I believe in the reality of progress.
I - But the whole thing, after all, may be put very simply. I believe that it is better to tell the truth than to lie. I believe that it is better to be free than to be a slave. And I believe that it is better to know than be ignorant.

Hat tip to Ken Gregg.

This site pauses for a conspiracy theory moment...which doesn't mean the speculation isn't dead on. Sam writes,

I've got another pair of events glowing brightly on my coinkydink radar.

Yesterday it was all over the media that Mark Cuban, billionaire and Dallas Mavericks owner, has been charged with insider trading by the SEC. Those charges seem to relate to incidents that are four years old. Basically, at that time, the CEO of internet search engine Mamma.com emailed Cuban about an impending additional stock offering, hoping to get Cuban to increase his 6.3% stake. Cuban instead decided to sell his stock. The new offering would dilute the value, and apparently he wanted the liquidity more than the long term benefit (if any). My reaction is that this doesn't appear to be very topical, as the events have been known for some time. Also, without passing moral judgment on the event itself, it is inconceivable to me that this level of "insider trading" is not relatively common practice.

So what brought these charges on?

We come to the second event on my radar. Mark Cuban has recently sponsored a site named bailoutsleuth, which has a mission of exposing that information about the funds allocation of the 700BN Treasury bailout of Wall Street (et al) that the goobermint seems intent on withholding from US taxpayers (i.e., all of it). The site has already attracted quite a bit of attention and publicity. Could this be a factor in the timing of the SEC charges against Cuban? D'ya think?

UPDATE: Today's Naked Capitalism, a highly recommended site, has a post entitled "More to the Mark Cuban Insider Trading Indictment Than Meets the Eye?" The post states, A reader e-mailed to point out that Cuban had started campaigning for greater transparency in the bailout process (see here and here and here) and suggested the indictment was related. Normally I'd dismiss that sort of thinking as paranoid, except this reader has been very close to the bailout process, not merely on a first name basis with some of the names you saw in the paper during key initiatives, but actively advising them. My take is that based on previous conduct of this Administration, he thinks it is quite plausible that this move is retaliation. Naked Capitalism also suggests another matter for which Cuban's prosecution may be retaliation.

I missed this when it happened last week. After an investigation by The Washington Post revealed that McColo Corp., an Internet hosting company in northern California, was being used to host spam servers, the companies that provided McColo's connections to the Internet pulled the plug. Spam activity immediately dropped by 40% to 67% according to various estimates.

The McColo servers weren't sending the spam. Instead, they were hosting the web pages of the phony on-line pharmacies and such that spam victims would be tricked into visiting. (By "hosting" I mean selling server space and bandwidth to the baddies. McColo, like any other hosting company, did not create the content of these web sites. Their culpability lies in not shutting down these scam sites when it was brought to their attention...repeatedly.)

I gather that McColo's customers also included the control sites for various bot networks...and when those went offline, the bots on millions of zombie computers stopped sending spam.

I (and others) predicted years ago that the U.S. "CAN-SPAM" Act would be useless; it would simply cause spam to be sent from offshore servers or zombie computers. It's been almost five years, and despite an occasional prosecution, spam is still abundant. Now, through a private investigation and private action, we enjoy a huge (though temporary) reduction in spam volume.

Yes, temporary. Spammers will move their sites to new hosting services. But every step that makes it more costly or more difficult to send spam -- or to sell hosting space to spammers -- makes the enterprise less profitable. And that, not the huffing and puffing of politicians, is what will someday make the problem go away.

Update: Okay, I spoke too soon. It seems the feds aren't completely useless.

This was predictable: when you offer bags of federal bailout money to banks, everyone wants to become a bank (or at least be treated like one):

Insurance companies: Genworth Financial, Lincoln National, Aegon NV, and Hartford Financial.

Cities: Philadelpha, Phoenix, Atlanta, and San Jose. No, they haven't applied to become banks, they just want some of the bank bailout money. Just like GM, Ford, and Chrysler.

American Express has already become a bank, commercial lender CIT has applied, and GMAC is inquiring.

Ken Gregg offers a thoughtful evaluation of a libertarian figure that loomed large in the late 19th century: Henry George. (For photo, click here. For a centralized source of his writings and material about George, click here.)



Henry George (9/2/1839-10/29/1897) was born in Philadelphia, the second of ten children of a poor, pious, evangelical Protestant family. His formal education was cut short at 14 and went to sea as a foremast boy on the Hindoo, bound for Melbourne and Calcutta eventually making a complete voyage around the world. Three years later, he was halfway through a second voyage as an able seaman when he left the ship in San Francisco and worked at various occupations (including gold mining) and eventually went to work as a journeyman printer and occasional typesetter before turning to newspaper writing in San Francisco including four years (1871-1875) as editor of his own San Francisco Daily Evening Post. George's experience in a number of trades, his poverty while supporting a family, and the examples of financial difficulties that came to his attention as wage earner and newspaperman gave impetus to his reformist tendencies. He was curious and attentive to everything around him. (See Henry George's papers available for free online from the New York Public Library.)

"Little Harry George" (he was small of stature and slight of build, according to his son) was fortunate in San Francisco; he lived and worked in a rapidly developing society. George had the unique opportunity of studying the change of an encampment into a thriving metropolis. He saw a city of tents and mud change into a town of paved streets and decent housing, with tramways and buses. As he saw the beginning of wealth, he noted the appearance of pauperism. He saw a degradation forming with the advent of leisure and affluence, and felt compelled to discover why they arose concurrently. As he would continue to do as he struggled to support his family in San Francisco following the Panic of 1873.

Dabbling in local politics, he shifted loyalties from Lincoln Republicanism to the Democrats, and became a trenchant critic of railroad and mining interests, corrupt politicians, land speculators, and labor contractors. He failed as a Democratic candidate for the state legislature, but landed a patronage job of state inspector of gas meters (which allowed him time to write longer expositions).

As Alanna Hartzok has pointed out, Henry George's famous epiphany occurred



His son, Henry George, Jr., said



Over the next several years, George devoted his time to the completion of his major work. In 1879, finding no publisher, he self-published Progress and Poverty (500 copies), and issued the following year in New York and London by Appleton's after George transported the printing plates to them. The plates were then taken by Appleton's and the book soon became a sensation, translated into many languages and assured George's fame, selling over 3 million copies.

At the heart of his critique of Gilded Age capitalism was the conviction that rent and private land-ownership violated the hallowed principles of Jeffersonian democracy and poverty was an affront to the moral values of Judeo-Christian culture. Progress and Poverty was “an inquiry into the cause of industrial depressions and of increase of want with increase of wealth.” In the fact that rent tends to increase not only with increase of population but with all improvements that increase productive power, George finds the cause of the tendency to the increase of land values and decrease of the proportion of the produce of wealth which goes to labor and capital, while in the speculative holding of land thus engendered he traces the tendency to force wages to a minimum and the primary cause of paroxysms of industrial depression.

The remedy for these he declares to be the appropriation of rent by the community, thus making land community owned and giving the user secure possession and leaving to the producer the full advantage of his exertion and investment. This notion of the single tax (the term which the successful attorney and free-trade advocate, Thomas G. Shearman (who, along with C.B. Fillebrown, led the more hard-core, pro-free market position within the single tax movement--although later to falter), gave to George's solution.

George moved his family to New York in 1880 due to the demands as writer and lecturer. In 1881 he published The Irish Land Question, and in 1883-4 he made another trip at the invitation of the Scottish land restoration league, producing on both tours a strong international interest in his ideas. In 1886 he was the candidate for the United labor party for mayor of New York, and received 68,110 votes against 90,552 for Abram S. Hewitt (Democrat), and 60,435 for Theodore Roosevelt(Republican). In 1887, George founded the Standard, a weekly newspaper (1887-92). He also published Social Problems (1884), and Protection or Free-Trade (1886), a radical examination of the tariff question, An Open Letter to the Pope (1891), a reply to Leo XIII's encyclical The Condition of Labor; A Perplexed Philosopher (1892), a critique of Herbert Spencer and, finally, his The Science of Political Economy (1897), begun in 1891 but uncompleted at his death, when he was running for Mayor of New York one final time.

George's legacy has been long and vibrant over the last century, leading to utopian communities, legislators, economists and political activists of all sorts. This is a mixed legacy which one can argue both positive and negative influences. But it cannot be ignored.

Ken Gregg takes issue with libertarians who approve of Homeowner Associations....

Michelle Boorstein's article in the Washington Post (09/2005), "Homeowners Groups Fight to Stay Afloat," brings up an ongoing problem with the federally-encouraged quasi-municipalities commonly known as homeowner associations (HOAs): liability

Hidden Lake's problems mirror those cropping up at first-generation, association-run communities across the country as they deal with aging infrastructure and outdated or poorly written covenants that make it impossible to enforce rules, increase dues to cover rising costs or resolve disputes.

Today, with 80 percent of homes being built in such communities -- a percentage an industry group estimates to be even higher in the Washington area -- an entire body of law and expertise has sprung up to deal with such problems. Governing documents have grown from three pages to the size of telephone books, states have passed laws giving homeowners associations power to collect dues and place liens on homes, and real estate agents in many places are required to inform buyers about what they're getting into.

While I realize that HOAs are a popular idea with some libertarians, they are statist to the core. (Please see Spencer MacCallum's essay "Land Policy and the Open Community: The Anarchist Case for Land-Leasing versus Subdivision." at the Libertarian Nation site.) There are far better social mechanisms. (Please see Spencer MacCallum's article "From Upstate New York to the Horn of Africa" in Liberty 05/2005.) There are many problems with HOAs which I find are of great concern and this article illustrates the short-term orientation of the bulk of HOAs: that of under-capitalization (one which most HOAs are dealing with now) which leaves them with a multigenerational transfer problem. HOAs have little capacity to evolve over time to allow second generation ownership without a significant loss of value and opportunity to maintain the capital to keep their homes, roads and parks going and allow change for the next generation of owners. Same problem as other municipalities. The only difference is that the others are recognized as state creations.

As Dr. Allan Carlson says in ""Baily Park" or "Greater Pottersville"?":

Even worse, it turns out, are the Neighborhood or Homeowner Associations, a new kind of informal governance that has recorded rapid growth at the same time as suburban family life has declined. A product of the 1960's, Homeowner Associations now embrace 50 million Americans. Using restrictive covenants and liens-on-homes to enforce their wills, these Associations are--in analyst Spencer MacCallum's words--far more "arbitrary, unresponsive, and dictatorial" than Zoning Boards in their control over the lives of residents. Commonly prohibiting everything from home offices to swing sets and picket fences, Homeowner Associations--in one critic's words--provide neither liberty, nor justice, nor domestic tranquility.

Ted Rall - Obama Inherits Bush's Police State
Joel Pett - How Bad Is It?
Matt Davies - "Like a Rock"
Chip Bok - They're Not Leaving Him Much...

And today's special target, Treasury Secretary "Bazooka" Paulson:
Gary Varvel - The Traffic Cop
Bruce Beattie - I Love Improv
David Horsey - Today's Quiz