The Future Imperfect?

Waving Goodbye to Hegemony

By Parag Khanna

Turn on the TV today, and you could be forgiven for thinking it’s 1999. Democrats and Republicans are bickering about where and how to intervene, whether to do it alone or with allies and what kind of world America should lead. Democrats believe they can hit a reset button, and Republicans believe muscular moralism is the way to go. It’s as if the first decade of the 21st century didn’t happen — and almost as if history itself doesn’t happen. But the distribution of power in the world has fundamentally altered over the two presidential terms of George W. Bush, both because of his policies and, more significant, despite them. Maybe the best way to understand how quickly history happens is to look just a bit ahead.

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The Business of Walking Away

By Mike "Mish" Shedlock

Previously I discussed the psychology of walking away in 60 Minutes Legitimizes Walking Away, Changing Social Attitudes About Debt, and a Crash Course For Bernanke.

This post will address the business of walking away.

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Inflation Warning

The Financial Times reports the following story:

IMF head in shock fiscal warning

The intensifying credit crunch is so severe that lower interest rates alone will not be enough “to get out of the turmoil we are in”, Dominique Strauss-Kahn, the managing director of the International Monetary Fund, warned at the weekend.

In a dramatic volte face for an international body that as recently as the autumn called for “continued fiscal consolidation” in the US, Dominique Strauss-Kahn, the new IMF head, gave a green light for the proposed US fiscal stimulus package and called for other countries to follow suit. “I don’t think we would get rid of the crisis with just monetary tools,” he said, adding “a new fiscal policy is probably today an accurate way to answer the crisis”.

My comment: The "shocking" part for me in this article is that the IMF MD is calling for defecit spending, interest rate cuts and more monetary inflation. This is what got the global economic landscape into the trouble it is in today! Watch your local Central Bank for rate cuts when it is actually supposed to be increasing rates. Deja vu anyone?

It's like a Doctor prescribing IcyHot/Deep Heat for Jock-Itch !

Zimbabwe Economics

by Bill Bonner

Bill Clinton should have gone to the Alps. Instead, the poor man went to the piedmont...to the aid of his wife in South Carolina.

At the annual Davos, Switzerland, conference of celebs, power-brokers, and do-gooders, Clinton was always a hit. In Carolina, he was a flop.

If he’d been in Davos, he might have given the meeting some of the magic of the old days. Every year, the movers and shakers gather to tell each other how to make a better world. Most just blather in a way that began naïvely, early in their careers, soured into cynicism in middle age, and finally becomes merely stupid. Some probably still think they can improve things. A few probably succeed.

But this year’s meeting seems to have had a defeatist tone to it. Probably because the news was bad.

Last Sunday, it was discovered that a young man at an old bank had managed to get himself into $50 billion worth of positions – most of them losing positions. This was more than half of the value of all of France’s gold and currency reserves. It was more than the entire value that had been built up by the bank over decades. How could it happen? What was wrong? How could banks be so fragile...and what could you think of the whole world’s financial system when it was built with bricks that cracked up so readily?

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War vs. Peace

By Lew Rockwell,

There are many reasons why Ron Paul is a great hero, from his leadership against the recession-causing Fed to his opposition to income-tax theft. But this illustration, and thanks to David Kramer for sending it, sums up the most important reason we love and admire Ron, and despise his neocon opponents.

Money and the Economic Crisis

Money: Pathology and Reality

Recent daily articles on Mises.org and LewRockwell.com have addressed the economic downturn, and the unbearably bad response from Washington and the Fed. These people have learned all the wrong lessons from the Great Depression. There is nothing that the planners won't consider at this point: wage and price controls, floods of new money, exchange controls, protectionism, hundreds of billions in public works – you name it.

The good news is that all the literature necessary to combat this nonsense is in print. The Austrian perspective is there to make sense of the current economic mess.

HERE ARE ALL THE RECOMMEND BOOKS

(NB: I'll be making an effort to add as many of these books listed to my list of E-Books, which can be downloaded in PDF format) Note: DONE !!! :-)

Economic Stimulus Concerns

By Ron Paul,

This past week in Washington there has been much talk about the economy. It seems by their actions the leadership and the Fed is finally willing to admit we have a problem, and we need to do something about the economic mess we are in. This is a good thing. However, they are still not being honest about the root cause of our impending crisis and want to deal only with symptoms, not the disease.

There are some positive aspects of the highly lauded economic stimulus package that has been negotiated. I am in favor of taxpayers getting some of their money back, however temporary tax cuts and one-time rebates will not “fix” the economy. What we desperately need right now is real deep significant tax cuts that are enabled by big spending cuts and reduction of government waste that is so rampant. Unfortunately, too many in Washington still believe we can spend our way into prosperity, which does not work and never has.

Countries build wealth through robust economic environments, in which jobs are created and businesses can operate at a profit and grow. When taxes bleed away profits and burdensome regulation hamstrings operations, our businesses and our jobs go overseas. The United States must foster a competitive business environment once again.

There are a few ideas out there for economic stimulus that I do support, such as making permanent President Bush’s tax cuts. I have also signed on as one of 49 original cosponsors of the Economic Growth Act of 2008 which will provide actual economic stimulus through private sector tax relief and job-creating business incentives. This plan features :

• Full immediate expensing for major business asset investments
  


• Reducing the top corporate tax rate from 35% to 25% to be aligned with average rates in Europe
  


• Indexing the capital gains tax for inflation
  


• Cutting and simplifying the corporate capital gains rate
  
  

Enactment of these dramatic tax cuts will free up money so employers can start hiring again. I would like for the unemployed to have the satisfaction of having a job again so the standard of living of the American family will go up. And even more than a one-time miniscule rebate check, I want you to keep more of your own money in the first place.

Sending out checks and cutting interest rates yet again is merely a shot in the arm when in actuality, the economy needs major surgery. I look forward to working with my colleagues in Congress to provide major tax relief to the American people.

What You Should Know About Inflation

I have added "What You Should Know About Inflation" by Henry Hazlitt to the list of Educational Economic E-Books, which you can download in PDF format.

Just right-click on the link and "Save Target As..."

A quick overview of the book and what it's about:

The book's title—What You Should Know About Inflation—only hints at the extent of the issues that Hazlitt addresses. He presents the Austrian theory of money in the clearest possible terms, and contrasts it with the fallacies of government management. He takes on not only the Keynesians but also the monetarists, as well as anyone who believes that government debt accumulation and manipulation of interest rates are harmless.


So this book is about far more than inflation. He touches on a wide variety of macroeconomic topics, any area of economic policy that is related to the monetary regime, including budget and trade issues, as well has the economic history of inflation.


Neither does he neglect the moral cost of inflation:


It is not merely that inflation breeds dishonesty in a nation. Inflation is itself a dishonest act on the part of government, and sets the example for private citizens. When modern governments inflate by increasing the paper-money supply, directly or indirectly, they do in principle what kings once did when they clipped coins. Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water. Notwithstanding all the pious pretenses of governments that inflation is some evil visitation from without, inflation is practically always the result of deliberate governmental policy.


Particularly interesting is the final section of the book in which Hazlitt critiques various proposals for monetary reform and then presents his view.


What is Hazlitt's own idea for monetary reform? He wants competitive monies, which he believes will be based in precious metal. He doesn't demand that governments get out of the monetary business altogether but merely that government permit everyone to choose to use any money and make any form of contract.


Hazlitt lays out a scenario that he believes will lead to a 100 percent gold standard rooted in private coinage. In effect, he argues that private markets can do for money what private services have done to a whole host of government ones: outcompete and displace them. It is a challenging thesis, particularly because it doesn't depend on any reform other than freeing the market.

• What Inflation is
• Some Qualifications
• Some Popular Fallacies
• A Twenty-Year Record
• False Remedy: Price Fixing
• The Cure for Inflation
• Inflation Has Two Faces
• What 'Monetary Management' Means
• Gold Goes With Inflation
• In Dispraise of PAper
• The Cure for Inflation
• Inflation and High Costs
• Is Inflation a Blessing?
• Why Return to Gold
• Gold Means Good Faith
• What Price for Gold?
• The Dollar-Gold Ratio
• Lessons of the Greenbacks
• The Black Market Test
• How to Return to Gold
• Some Errors of Inflationists
• Selective Credit Control
• Must We Ration Credit?
• Money and Goods
• The Great Swindle
• Easy Money = Inflation
• Cost-Push Inflation?
• Contradictory Goals
• Administered Inflation
• Easy Money has an End
• Can Inflation Merely Creep?
• How to Wipe Out Debt
• The Cost-Price Squeeze
• The Employment Act of 1946
• Inflate? Or Adjust?
• Deficits vs. Jobs
• Why Cheap Money Fails
• How to Control Credit
• Who Makes Inflation?
• Inflation as a Policy
• The Open Conspiracy
• How the Spiral Spins
• Inflation vs. Morality
• How Can You Beat Inflation?
• The ABC of Inflation

You can also purchase the paperback version here.

Enjoy!!!

The great fiscal stimulus package ... of 1929

Stephen W. Carson

Is the myth of the "do nothing" Herbert Hoover dying? Michael Kitchen at MarketWatch writes:

...Herbert Hoover -- only nine months into his presidency -- assembled leaders from the public and private sectors to create an economic-stimulus package. Among the measures, Time magazine reported at the time, was a promise from Congress to offer bipartisan support for a tax-cut package. The proposal called for $160 million in tax relief -- only about $22 billion if adjusted against the gross domestic product at the time, and therefore much smaller than the plan under consideration here in 2008. Read Time's original coverage of the plan.

Also on the table was an assurance from the Federal Reserve that it would provide cheaper credit.

Has someone been reading Rothbard? [Thanks Digg]

Ron Paul... Dirty Secrets from the Past !