"Olympic Village: Athletes Impressed, Taxpayers Angry"

That title alone is all you need to read to understand the nature of the state, but here are the particulars:

Paid for, thank you very much, by the taxpayers of Vancouver. More than any other project in recent Olympic history, the $1 billion residential complex represents the risks that urban governments face when trying to host one of the world's biggest parties. The city planned to invest about $47 million in the project back in 2006. However, cost overruns and the recession forced Vancouver to step in and bail out the private developers who were charged with financing the project. The city avoided the humiliation of welcoming the world with a half-built Olympic Village, but at a great price: in early 2009, new Vancouver mayor Gregor Robertson declared that taxpayers were "on the hook" for the $1 billion project. "What ended up happening was that the city became a bank for private-sector development," says Mark Cutler, director of Olympic Village Development for the Vancouver Organizing Committee, the body that is operating the complex during the Games. (See what becomes of Olympic stadiums.)

"Bank"? A real bank doesn't want to lend if it thinks it won't get repaid. However, taxpayers as a "bank" fits with the denouement of the movie "The Night Stalker": toward the end, Kolchak finds a victim that the vampire was keeping alive. "His own private blood bank."

Pay very close attention: this is how the state invariably works. It doesn't want to kill you, at least not until you can be replaced. Remember what St. Frédéric taught us: "The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else."

When Salt Lake City began a second Olympics bid in the late 1980s, the contemptible Norm Bangerter, Utah's governor at the time, had no problem turning state taxpayers into human collateral. It was then that I learned that modern Olympics bids mean that developers get an implicit guarantee from politicians that taxpayers will pick up the tab for "cost overruns." What I didn't understand then is that when the state makes you pay for something against your will, you are most certainly human collateral: it isn't just your property being taken (or being promised by someone else to yet someone else), it's your very life being stolen, because you will never get back those moments you spent to acquire that property.

Those who don't understand that morality, or refuse to see it, should still be able to see the practical question: what possible motive do the organizers, developers and other Olympic affiliates have, then, to keep costs under control?

Robert Barney, director of the International Centre for Olympic Studies at the University of Western Ontario, has flatly said, "There has never been an Olympic Games that has made a profit...including federal allotments, municipal allotments, provincial or state allotments, it's always been that a debt has to be paid somewhere." His co-director, Kevin Walmsley, has said, "The Olympic Games are not a profit generator and never have been. What is always consistent is, there are always cost overruns." The facts prove them correct. Forget the lies that politicians, Olympics officials and developers feed us. Their accounting methods in the private sector would land people in jail for fraud.

I commented last October over at Alarming News:

Olympics are corporate welfare. Any infrastructure won't be built based on what actually people want and need, but on politics. If it's done in a free market, then businesses and "organizers" would be putting up their own money, and nobody would be forced into it. The reality, though, is that taxpayers are always implicitly put on the hook for any "cost overruns." They'll share in the debt, but not the profits.

Poor Rio. I hate to say "Better it happen to them than us," but how else can you put it?

Jamie, I've known enough to oppose Olympics since I was 12 years old, when I lived in Salt Lake City during the start of its ill-fated quest. No modern Olympics has ever made a profit, once all costs are taken into account. Check here:

MONTREAL, 1976: Debt: >1 billion (globe and mail; abcnews.com)
LAKE PLACID, 1980: Debt: $11 million
CALGARY, 1988: Debt: $910 million
BARCELONA, 1992: Debt: US$1.4 billion
SYDNEY, 2000: Games billed as self-financing by politicians were a $2.3-billion loss (Auditor General New South Wales Report on Sydney (2000) Olympics)
EXPO

The same link notes that:

Officially, Atlanta made US$10 million, but that excludes the US$1 billion taxpayers spent on infrastructure.

Utah tax revenues post-Olympics have fallen so far short of predictions that the state is facing a US$155 million shortfall, has slashed spending, dipped into emergency funding, and may have to order more employee layoffs. http://deseretnews.com/dn/view/0,1249,400008943,00.html

It's a very simple point of logic: if hosting an Olympics is such a great moneymaker for developers and city businesses alike, then why are taxpayers needed to guarantee it?

Bastiat wouldn't need to know anything else about our modern world to tell us the simple answer. He would reply, "Developers already know from past Olympics that they can't do it without taxpayers, whether to guarantee the debt or to pay for infrastructure. Do you not see it also?" The developers are just a modern form of protectionist, whom Bastiat described as petitioning to the government, "Thus, since everyone else uses the law for his own profit, we also would like to use the law for our own profit. We demand from the law the right to relief, which is the poor man's plunder."

Nassim Nicholas Taleb: not as powerful in prognosting the crisis as people think

My comments over at Three Sources about an interview with him:

All right, I finally read the interview. His powers of prediction are...overrated. He's correct about economists' and financiers' inability to predict the future, correct about debt, wrong about Iceland, incorrect about Canadian self-sufficiency, wrong about "developing a system," very wrong about the nature of human information, and utterly wrong about actively preventing "too big to fail."

"For the past decade, he's been warning that the global economy has become far more vulnerable to unpredictable events that can cause vast disruption."

That was no prediction, because such a "warning" is completely meaningless. What does it mean, exactly? He says economists as "no more reliable than astrologers," which is true, but his own "predictions" have all the precision of fortune cookies. When something happens to ripple through international financial markets, he pats himself on the back. That's a bunch of bull.

Of course the world economy, having grown so complex, is susceptible to "unforeseeable events that can cause vast disruption." Anyone can see that. But his prediction lacked any specifics

He was simply a stopped clock that was eventually right. Similarly, don't believe all this hype about Nouriel Roubini, who also didn't have these amazing powers of prognostication that the media would have you think. Mark Zandi of Moody's frequently provides soundbites, and too many in a way. He's made a career of predicting a recession every year since at least 1997, maybe before then. Of course these two would eventually be right if they keep predicting the same thing over and over.

As I said, he's correct that "Central bankers have no clue" and about economists' ability to predict the future. Anyone familiar with Hayek knows that, and why.

The Internet did not "bankrupt" Iceland, no more than it caused the tech bubble. The Internet was merely the conduit for information, not a cause. The British and Dutch governments were wondering as early as 2006 what would happen if Iceland's major banks couldn't cover British and Dutch citizens' deposits in Icelandic banks, because it was clear Iceland's equivalent of the FDIC, or the Icelander taxpayer, couldn't cover the deposits. If you want to talk about causes, William Butler and Anne Seibert released a paper in October 2008, originally done in April 2008 but kept secret, that explained Iceland's problems. They were already very well known. In short, its banking sector was simply too extended for the size of its economy, and policymakers tried to sustain the unsustainable.

He says Canada has "energy and minerals," is "not overspecialized" and "is self-sufficient." These could easily apply to the United States; why is Canada any better? Now, Canada, or any other nation, cannot be insulated from the world, nor should it want to be. Self-sufficiency is the road to ruin, as the Hawley-Smoot Tariff showed us. It's good to have a fallback position so you can have another way to trade your goods and services with others, like a trader who can switch to driving taxis, not to provide everything for yourself.

But if we get hyperinflation and Canada will be the best place to be, how much more overloaded will its socialized health care system be? As the signs say, where will Canadians go for health care if they don't want to die waiting in line?

He's wrong about "developing a system." Anyone familiar with Hayek (namely the concepts of spontaneous order and knowledge being distributed throughout society) will understand why this line of thinking is as bad as central planners' belief that they can steer an economy in the right direction. It's flatly impossible for him, or any group of people, no matter how smart, to regulate things as he dreams.

For all his well-regarded philosophy, he doesn't understand that human information, as a whole, is imperfect. That's the nature of our existence, and unavoidable. Austrian economics explains that market processes exist as the mechanism by which we eliminate errors (q.v. Hayek's "Competition as a Discovery Procedure") and approach the harmony of supply with demand. Some people will have better information, not necessarily scientific facts as Hayek explained, but knowledge of time and place. Israel Kirzner developed his concept of the entrepreneur as someone who has better information and will put it to use, expanding on Schumpeter's concept of the risk-bearer.

And how does he plan to prevent things from becoming "too big to fail"? The free market tempers the size of a firm by allowing it to fail when overextended, which then becomes a warning to others. But he's talking about an active regulation, which is done only through government -- which would rely on imperfect bureaucrats and economists whose track record is abysmal.

I'm not impressed.

Anything the government can do, the free market can do better, part III

Shucks, Mike, your kind words are much appreciated. For a couple of years I haven't blogged as often as I'd like, but I do what I can. I started reading Billy's blog after his first link to me a few years ago. He's taught me a lot, not always directly, but he got me thinking through certain assumptions I clung to, which nearly all young Americans develop in a public education. They essentially boil down to this one: "But at minimum, don't we need government for ___?" It's a problem that many "libertarians" have.

In recent comments I linked to something that I was meaning to blog about for months, but I kept forgetting. I almost never listen to Rush Limbaugh's show, but I had the day off and was driving to meet someone for lunch. He talked about this story of rebuilding Polihale State Park's access road, which was destroyed by flooding. Hawaii's state government said it would cost $4 million and require two years of construction, and there was no money for it. Locals, then, did it in eight days and at their own expense. So much for two years!

Was it all out of charity? No, as the article clearly states. Business owners got involved because repairing the road was to their benefit -- decreased visitors, or none at all, meant they weren't making money. And so what if they had that motive? It was their money. Better that they invest their own, rather than the immoral situation of everyone having to pitch in for something not everyone would equally benefit from.

It's reminiscent of when Donald Trump was so disgusted with the lack of progress in rebuilding Central Park's Wollman skating rink that he spent his own money to do it. Six years and $13 million later, the city government just couldn't get anything right. A big problem was the insistence on using freon, supposedly for energy savings, rather than the salt water systems that have worked so well for years (like at Rockefeller Center, which to my knowledge has never failed to open its rink during the winter).

Trump devoted an entire chapter of The Art of the Deal to this:

I never had a master plan. I just got fed up one day and decided to do something about it....

I knew nothing about building ice-skating rinks, but I did know something about construction. If it took me two and a half years to put up a major skyscraper, surely it was possible to build a $2 million ice-skating rink in a matter of months.

Yet no rational person should be surprised that his project succeeded so well, and the first time around. He had his money and reputation on the line. "If I failed--if I was even one day late, or one dollar over budget--my plan was to pack my bags and take the next plane to Argentina. There was no way Ed Koch or anyone else would ever let me live it down." Trump explained how he asked around to learn who was the absolute best, most trusted company in rink construction. He didn't bother with soliciting bids from contractors.

The city government, on the other hand, knew that even if voters remembered news reports, who could be blamed and ousted? The city commissioned a report that itself took 15 months to complete, and in the end no one responsible for the fiasco was ever named. Trump had already offered to take over the project, always at his own expense, with the promise that any profits would be donated to charity. What was there to lose, and who could lose?

Union workers, that's who could lose, and the city council members who received their generous campaign donations. That's no small reason why public projects are inevitably constructed so slowly and shoddily; the rest is pure incompetence. When I lived in Utah, Syncrete was an infamous example of government's desire to "experiment," since, after all, it's someone else's money being risked.

Syncrete proved to be less than the superior surface it was advertised to be, and the freeway surface began crumbling shortly after the project's completion. In the end the UDOT tore out the syncrete and admitted that the experiment had been a failure.

"Less than the superior surface it was advertised to be"? That's putting it mildly. The stuff immediately started falling apart as if it were styrofoam, for crying out loud. I was young then, but old enough to understand the TV news showing these chunks all over the road. Who knows how many windshields were cracked because some semi kicked them up like any common rock.

By contrast, as I keep mentioning, I come home to a private road so excellently constructed that it's been years -- before I moved into the neighborhood -- since its last paving. Similarly, I don't remember exactly when my neighbor across the street had his driveway repaved, maybe a couple of years ago. I came home from work one day and saw it was just finished. Compare that to the week it takes just to fill in a couple of potholes on the typical public road, or the months it's taken to redo Route 6 in Putnam County.

If you scroll near the end in these comments, I was telling our new liberal troll about the pedestrian bridge near the Metro-North train station at Chappaqua. Since it began last year, I can't help but notice how slowly it's going. Since it's a public project, there's no incentive for it to be done quickly or efficiently.

An example in my county is the Tappan Zee Bridge, the biggest joke in Westchester next to Andy Spano's "governance." The bridge opened in 1955 and, I recall, cost $500 million (approximately $4 billion in today's dollars). It's not even six decades old yet is already falling apart. Even the second London Bridge, surely built with inferior technology and materials, lasted over 130 years before it needed replacing.

Instead of repaving, raised metal plates are used for repairs, such utter crap that they don't even rise to the level of "makeshift" or "jury-rigging." I drive across the bridge once in a while, and I can assure you that 1.5 inches wreaks havoc on your car, no matter what "ramp plates" are claimed to use. The ramps up and down make the surface effectively sinusoidal. The amplitude is relatively small, certainly, but at vehicular speeds it's jarring enough that you must slow down. And that slows down the driver behind you, the one behind him, and so on.

This is a bridge where a simple repair has caused one-hour delays, stretching 13 miles back into Rockland County. The repair crews closed two of the four Westchester-bound lanes just to repair one pothole, and in the middle of the morning rush hour! Oh, and in case you don't notice it from the article, the crew didn't even fill in the pothole: they put another metal plate over it!

Update: look here to see what the plates look like, and here for a picture of them installed. You really have to drive over them to experience how terrible they are. And who is surprised that there are "cost overruns"?

This would have never happened in a free market, which is based on freedom and competition, not politics and favoritism. Someone else would have started building a competing bridge, and the better one would be getting all the business. At the very least, the bridge's owner-operator would have done such a repair only until after rush hour, or late at night, and certainly not by putting another damn metal plate over it.

In a free market, one private party contracts with another, and each side has to eat any "overruns" on his end. Thus it's to both sides' benefit that the contracts is negotiated honestly, with all expected costs and timetables taken into account.

The central planners, though, are as stupid as ever. They're looking to build a new bridge. Of course, it's easy for anyone to advocate building an entirely new one when it's not his money at stake:

Mark Kulewicz, director of traffic engineering and safety service at the Automobile Club of New York (the local affiliate of the AAA), advocated a new bridge as follows:

Instead of spending $1 billion to patch up a bridge that is already straining to handle the region's growing traffic volume, why not avoid all those years of messy construction delays and invest $4 billion in a modern structure that can serve more commuters, and in new ways?

Actually, the plan announced last September was for a $6.4 billion bridge, which tells us we should count on at least $10 billion before it's done.

Ask yourself: what could the free market do for $4 billion? What could it have done for the $286 billion highway bill, which Congressional Democrats are aiming to increase to $400 billion with its successor?

Update: here's a Times article that puts the total cost of a new bridge, plus expanded train and bus lines, at $16 billion:

Officials also looked at the possibility of rehabilitating the current bridge, which was built 52 years ago, but [State Transportation Commissioner Astrid Glynn] said that was a costly and complex project.

And $16 billion for the replacement is not costly?

Liberals make it self-evident, that they are lying cowards

So my resident troll "DocWashboard" keeps repeating the same lies, ignoring the world around us that proves "Anything government can do, the free market can do better." Well, as a veteran of Usenet flamewars, and BBS flamewars before then, I love few things better than laying down the smack on such morons.

For the umpteenth time, I've challenged him on what he dare not include in his replies, because he knows I fisk every single word he writes. Do you see how liberals try to "reason"? I use quotation marks because you can't call it true reasoning: when confronted with facts that prove them wrong, liberals deny them and attempt to obfuscate the discussion. They have no grasp of reality and refuse to view the world outside of their warped concepts. The sad part is that this one knows it only too well. He knows he's a liar, he knows he's a hypocrite, he knows he's a coward, and he'll use all three simultaneously by making vague replies in the hope he can't be pinned on anything, although his nature is that he can't help lying about what anyone has said.

Even the arch-liberal of liberals, John Maynard Keynes, was smart enough to say, "When the facts change, I change my mind. What do you do, sir?" Clearly, my latest troll just sticks his head in the sand -- or is that up his ass? I've had to change my mind; I admit it freely. One can see that by looking at my earlier blog entries. But I'm not a hypocrite: I won't attempt to whitewash history by deleting or modifying them, instead leaving them as evidence of my evolution into a free man.

Anything government can do, the free market can do better, part II

Over at QandO, McQ blogged about New York City forcing a tobacco shop owner to remove its $9000 coffee machine, because the shop doesn't have a food license.

Skorj left a comment, "I think it’s totally reasonable that the government can impose safety regulations, including requiring food handlers’ certs, whenever food would pass between you and a stranger – even in a soup kitchen."

No. Not even that much, as I pointed out in my reply: "Skorj, if you don’t like how someone prepares your food, then you have the freedom not to go there. However, someone else may not mind, so don’t infringe on their freedom to do business with whom they want."

Regular commenters Steverino and looker, for all their talk against big government, don't see that they still don't mind feeding the beast. Being state-worshippers, they advocate standards: government-enforced standards. As I said a few nights ago, you don't have to be Paul Krugman to worship the state. You need only believe the falsehood that we need government to accomplish certain (good) things. Their argument is that the private sector can't enforce standards, which in and of itself is true. The private sector has no power to force a business to close. Private citizens cannot legitimately make a shopkeeper cease business, or imprison and/or fine him if he does anyway.

But their fallacy is that since the private sector cannot do something, then government must. This is not true in the least. They also don't understand my point about not forcing standards on anyone. The private sector's powers are to let competition and consumer choice work unhindered so that standards can come into existence on their own. It would mostly be a matter of trust: sellers would have earned reputations, good or bad. Also, within the private sector, it's perfectly possible for a trusted entity be relied on for judging others, even though it doesn't have the force of government. McQ kindly reminded us of Underwriters Laboratories, and I pointed out McAfee's website certification.

My key rebuttals:

Most establishments are clean enough, but not because of law. It’s because our wealth, courtesy of capitalism, allows us to be clean without much cost, and it’s to a restaurant’s best interest to maintain a reputation — or at least not develop a bad one. Most everyone in New York heard about that KFC with the rat problems. The government didn’t need to shut them down, because they’d have shut down from a lack of business.

...

Cleanliness is a good thing. A government that tries to enforce “cleanliness” via arbitrarily standards is not a good thing. But I already knew you worship at the feet of the state. You might talk a good line on this and that, but in the end you rely on what law provides you.

...

It’s [government] not enforcing standards. It’s the myth that the standards can be enforced all the time. So people grow reliant, and they presume that any place they walk into will be ok. More often than not, they’ll be fine. It’s that occasional occurrence, however, that proves the state’s inability to protect us.

The problem with your reliance on government-set standards is a form of the so-called “market of lemons.” Akerlof’s basic argument applies here in the sense that government enforces — or pretends to enforce — a minimum standard of quality. You’re now expected to assume that any given food handler is clean, however, you don’t really know that. Government has said, “Any used car sold must be in certified good mechanical condition,” but buyers can no longer properly judge what’s worthwhile and what is not. They can’t tell if a seller is pulling a fast one, unless they inspect for themselves.

Look at the outbreaks the FDA failed to prevent. Do you understand now why they occurred? Because people gave trust that was not truly earned, and some died because of it. “The government wouldn’t allow this to be sold if it weren’t safe.” Instead of checking how and where a toy was made, parents bought all the toys with lead-containing paint. The plain fact is that government cannot enforce the “standards” you cling to, which creates (in food, transporation and a host of other things) a false sense of security.

...

In a free market, sellers of goods and services would be too scared to give anything but their best. They wouldn’t dare let anything slide. They would compete not on the basis of meeting some standard set arbitrarily by a government official, but on the basis of reputation: which one is setting the highest standard (service, trustworthiness, etc.) becomes the standard by which everyone else is measured.

My employer is one of the most respected firms in the financial industry, and we exceed every “standard” the government sets for transparency and accountability. That’s because we want to compete so effectively that we’ll be considered THE standard.

But as I said, when you have government supposedly enforcing standards, it can never do so as effectively as the free market. Government’s “standards” are set by politics and ignorance, by the bureaucrats who make arbitrary decisions and/or don’t know the industry. The “standards” are met without too much difficulty by many participants (this truism is proven by modern history), thus making “standard” a very low bar to clear. It might put enough fear into food handlers, but fear of government punishment is never as great as fear of losing your customers. If you really were in the restaurant industry, you’d know that a place needs a helluva track record to be shut down. Otherwise, well, fines may be issued but are rarely publicized more than obscurely.

The Old West is popularly imagined as a violent society, but it was actually a very polite one. If you shoed someone’s horse poorly, no one would trust you anymore unless you redeemed your name, or unless you charged so little that a customer knew he would get what he was paying for. Even then, you might get shot by someone’s friends if your customer got thrown after his horse lost a shoe. There were no “standards” enforced, so every seller of goods and services was extremely careful to do a good job.

There was a lot of dancing around the fundamental issue of freedom, which I brought us back to:

How is it YOUR right, or anyone else’s, to prevent that transaction? You’re being nothing more than a busy-body, trying to save the buyer from himself. It’s his right to be stupid: you can try to persuade him from something that harms himself and no one else, but you have no right to force him.

Looker asked, "who has the authority to tell you to cease and desist in a completely government free market." It's easy to figure that one out. My reply:

The individual has the authority, either by not returning or not going there in the first place.

As an individual, you have the power to shut down any business — to the extent of your own business with it, and that should be the extent of the “authority.” Do you see that what you and Steverino are advocating is that one person or a few individuals can act on behalf of “society,” forcing a business to shut down just because some people don’t think it’s good enough? Neither of you have yet addressed the fundamental question: by what right can you to force people to do business only by your standards and not their own? If they agree to a peaceful, private transaction that harms no one else, what is it to you?

You argue, in essence, that people might not know a place is dirty. What, though, if someone fully knows what he’s buying and wants it anyway? Whether he’s ignorant or deliberate, you can try to persuade him, but do not force him. If he refuses, then what is it to you? It’s not harming you or anyone else. Let him go his own way and don’t lose any sleep.

There are people who can’t sell particular kinds of meat, or even butcher it for their own use, because of “health codes.” Unfortunately it’s been argued on the basis of “religious freedom,” instead of on the basis of freedom, period.

...

Without health codes, people would scrutinize establishments more carefully. They’d rely on newspaper reviews and Zagat ratings, perhaps late night news segments about the latest dirty restaurant.

Do you see the paradox that Michael and I have been trying to tell you? When government enforces standards, it in fact does not make anyone implicitly trustworthy, but rather makes it dubious that any given entity is truthfully adhering to the standards. Government can never be effective in making sure everyone follows the rules. There are health code violators no matter what government tries, just like it can never rid the road of bad (let alone drunk) drivers.

Looker also asked, "Can we really go back, especially in the case where many people can be, for want of a better term, poisoned, to Caveat Emptor?" I replied affirmatively:

We not only can, but we must. It’s the only way for a free people to live. And it won’t be some Stone Age world; you’re just not giving capitalists enough credit. It would be an opportunity for the smart ones to bill themselves as the cleanest operations.

I’ve seen signs in Third World fast food joints touting their “Clean restrooms,” and they were. In fact, they were in better condition than most in the States. We take such things in the U.S. for granted, not because of laws, but because our greater wealth already made possible what laws later mandated.

Now, “caveat emptor” is half inaccurate because it implies that sellers may suffer no consequences. Buyers should beware, but as I’ve been pointing out, a free market has solutions for people who harm others. If you sell me a pie that you advertised as “cherry” but it contains small stones, then regardless of what “warrant of merchantibility” laws are on the books, I regard it as implicit that the pie won’t break my teeth.

I will again quote Bastiat:

Do those worshippers of government believe that free persons will cease to act? Does it follow that if we receive no energy from the law, we shall receive no energy at all? Does it follow that if the law is restricted to the function of protecting the free use of our faculties, we will be unable to use our faculties? Suppose that the law does not force us to follow certain forms of religion, or systems of association, or methods of education, or regulations of labor, or regulations of trade, or plans for charity; does it then follow that we shall eagerly plunge into atheism, hermitary, ignorance, misery, and greed? If we are free, does it follow that we shall no longer recognize the power and goodness of God? Does it follow that we shall then cease to associate with each other, to help each other, to love and succor our unfortunate brothers, to study the secrets of nature, and to strive to improve ourselves to the best of our abilities?

Liberals need only speak or write to prove their stupidity

Look here for one of my favorite hobbies: giving a smackdown to a liberal turd who has no brains, has no balls, and has no grasp of reality.

Over at ThreeSources, Silence was silenced by my simple exposure of his state-worshipping. This liberal "DocWashboard" (who uses other handles to sockpuppet) just couldn't leave it alone, and that's when I have fun.

How to liberals lie with statistics

The classic can't hold a candle to liberals' tricks. An occasional commenter at my friend Karol's blog linked to perhaps the most dishonest "study" I've ever seen. My reply:

Stop trying, Toowoozy. You keep failing.

1. You're engaging in the same old fallacy that because country X's population lives to only __ years, that country Y's greater longevity means it has superior health care. It's a fallacy because it assumes every cause of death is preventable and/or treatable. Notice something at the top of the chart? "All causes." So this "study" is just another way of presenting what we already know: American life expectancy is lower because of higher homicide rates.

Try a study that is restricted to natural causes, and adjust for Americans' higher-fat, higher-cholesterol diets. Oh, that can't be done? Well, coincidentally, neither can socialized medicine -- effectively, that is.

2. Presumably he's talking only about South Korea, but to call it just "Korea" is idiotic.

And now the biggie:

3. He's a liar. He so massaged the statistics that they're meaningless.

a. He's using males against the entire population's life expectancy. We already know that American men, on average, die a bit younger than the average life expectancy for both men and women. American women have a life expectancy of about two years more, as I recall, so it's not surprising to see numbers that show American men don't live as long as the average.

To put it in simple terms for you, let's say Jack died at 78, Jill died at 80. This study would look at Jack only, then say "American health care is inferior because Jack didn't live until the average of 79!"

b. He doesn't need to use "per 100,000 males" for this kind of average. He could have easily had it "For each average male." However, he needs this lie to inflate his numbers.

According to his own numbers, it comes to 0.06397 years per American male. That's 23.35 days. The "best" country on his list, Japan, therefore comes to 13.55 days per male.

So this study proves "nothing" except that when it comes to dying, there's more gender equality in other countries.

And you're welcome for the free lesson on how to look past statistics.

Then my P.S.:

Just saw that I forgot one last thing:

You now see (or SHOULD see) that the putz is lying about his data. But let's assume he wasn't. Let's give him the benefit of the doubt, shall we?

His "study" would be comparing the average of 100,000 individuals to the average of that particular population. The difference would be...zero. ZERO. Do you understand that?

Always be skeptical of data that purports to prove something. I don't even ask people to trust things that I cite. Never take anything at face value, or anyone at his word, and especially question hard some clever new "analysis."

Anything government can do, the free market can do better

That is, anything peaceful. Government will always have comparative and absolute advantage in aggression (e.g. wars and conscription, subjecting people to "law enforcement" when they have committed no crime, and seizing people's homes).

When it comes to creating prosperity and promoting true peace (as opposed to military stalemates), the free market does it just fine on its own, because it works purely according to what individuals want and their subsequent voluntary exchanges to attain their own individual happiness. The alternative, government, works purely by forcing people against their will: decisions are made arbitrarily, and whether they are done with caprice or careful calculations, whether they are based on politics or intentions of the greatest benevolence, they are ultimately immoral for forcing the individual against his will.

Over at Three Sources, a commenter going by "Silence Dogood" defended government as able to provide the infrastructure that makes the free market possible. This is not so, and I refuted his arguments one by one, demonstrating that everything he credited to government could be supplied and supplied better by a free market.

Old Ben must be rolling in his grave at someone using his pseudonym. Like most people, "Silence" doesn't believe that it's possible for a free market to provide things like roads and other infrastructure. He outrightly refuses to believe it, not even giving the free market a chance. Now, you don't have to be Paul Krugman to worship the state; it only requires a belief that certain things -- good things -- can result only from government's direction. As Bastiat put it:

Do those worshippers of government believe that free persons will cease to act? Does it follow that if we receive no energy from the law, we shall receive no energy at all? Does it follow that if the law is restricted to the function of protecting the free use of our faculties, we will be unable to use our faculties? Suppose that the law does not force us to follow certain forms of religion, or systems of association, or methods of education, or regulations of labor, or regulations of trade, or plans for charity; does it then follow that we shall eagerly plunge into atheism, hermitary, ignorance, misery, and greed? If we are free, does it follow that we shall no longer recognize the power and goodness of God? Does it follow that we shall then cease to associate with each other, to help each other, to love and succor our unfortunate brothers, to study the secrets of nature, and to strive to improve ourselves to the best of our abilities?

And then over at Karol's, one of her guest bloggers was, shall I say, unfortunate enough to talk about credit default swaps when he doesn't really know how they work. He was even more unfortunate to talk about "reforms" and creating "transparency" in financial exchanges -- via government, so I had to set him straight. Let me just say that I know a thing or two about CDS: they're not the maligned financial instruments so many people think they are, nor are they traded with very little information. A specific CDS implicitly requires the buyer to know what he's getting into. Now, there have been cases of fraudulent misrepresentation with some Collateralized Debt Objects, but that's entirely different.

Re-read what Bastiat said above, and think of how Wall Street began. There was no law to tell certain stock traders what to do, so how did those individuals know to congregate and formalize their association? Or was it, in fact, that God has given us the ability to think, to reason, and that humans for thousands of years have been able to trade and associate voluntarily without needing overlords to direct us?

Government's record is that of the anti-Midas touch, continually ruining everything it meddles with, from charity to the financial system. In the event it ever "fixes" something, look for how it created the problem in the first place. Even then, the solution will never be as effective as keeping government at bay and letting the free market clean up the mess that the state created.

Prices are not rationing, not in any way

It's bad enough that liberals believe that "the price mechanism is a form of rationing goods and services," leading to their argument that health care can't be worse if government rations it. (Note that some liberals deny that government-run health care will be or will require rationing, demonstrating that one side is lying, and the other is a bunch of fools.) We have enough of these idiots in the world. We don't need twits like McArdle, who dare to call themselves "libertarian," who also believe that prices are rationing.

The plain fact is that prices are not rationing. I always meant to link to my comment at QandO a month ago but never got around to it. I reproduced it here, which you should check out for my latest exposé of McArdle's idiocy.

Slightly clarified, let me explain that it is a pure fallacy that a price system is "still rationing."� Prices allocate who gets goods and services, but that is not the same as "rationing." Rationing implies an attempt at equal shares, whether an individual's consumption over time or a population's aggregate consumption, whereas allocation can and often is unequal. Rationing is a system that forcibly controls demand, no matter that buyers are able and willing to pay what suppliers ask. By contrast, allocation by price means that whoever has the ability and willingness to pay (that is, for what sellers have and at their asking price) will buy what he wants, based purely on his own perception of his needs and desires.

Now, any distribution of goods and services by government depends 100% on rationing. There's no way about it, because government creates nothing on net. As Bastiat taught us 160 years ago, it can produce nothing except by taking an equal amount from the private sector. So government's resources are finite by definition, and because government distributes on the arbitrary basis of politics rather than someone's ability and willingness to pay, government must try to institute some sort of rationing system so that supply does not exceed demand.

We can see how well that works with Social Security and Medicare, which the NCPA reported two months ago have "unfunded liabilities" of $107 trillion, as of 2009! The NCPA reported in 2008 that the unfunded liabilities were $101.7 trillion then. Year-on-year, the unfunded liabilities grew at over a third the size of the current U.S. economy. This, clearly, is not sustainable. But did we really expect government to be "efficient" when it steals from Peter to give to Paul? At some point Peter will have to be taxed more, and/or Paul will have to accept less.

It would be nice to live in a world of infinite resources, but we don't. Given the choice between government choosing how much to give me, and the freedom to pay for it myself, there's no question for me: as someone who is an economic producer, I'd much rather depend on myself. At least it's up to me to develop my talents to improve my situation in life and afford more (including health care). Therefore I have influence over how much I earn, perhaps not complete influence, but I can't say I have any influence at all over how much a bureaucrat will decide to give me.

I make no excuses whatsoever for liking that "money talks."� It's precisely how people can get the resources they need badly and when they need them, instead of waiting for "their turn." This summer, both my wife and I had to go to the doctor for insect bites. My wife's developed a bacterial infection, and some bug gave me a virus that left me lethargic with terrible chills. We've never had anything like those before in our lives, but no matter, we paid cash. Because the doctor required payment, it allocated his limited time only to those who deemed it worthwhile to pay his fees. Quite modest fees, too. Thinking about his costs of taxes, paying the staff, maintaining the building, I wonder how much he really made. But it was clearly a beneficial trade for him, and for us. Government could never perform such a marvelous feat.

Imagine if (when?) Obama and Co. get their dream of an Canada-like system with 100% government-provided health care and a ban on private care. It was patently obvious to me at 17 years old, when the Clintons were pushing for universal health care, that everyone would want a doctor's appointment for the slightest cough, since "after all it's free." Meanwhile, "saving money in the system" -- like Obama's recent rubbish of "rewarding doctors for quality, not just the quantity, of care that they provide" -- will mean government reducing what it pays to health professionals, driving them out of the health care system into other jobs, further reducing supply and increasing wait times.

But no matter, right? Just wait your turn for a "free" appointment. We can look at the present UK system for how we'll develop: in some cases, that appointment will only be with your undertaker. "The doctor will not be seeing you now...or ever."

"1 gallon of chocolate milk, 1 gallon of normal milk, 3 dozen donuts, 3 cases of mountain dew, and 2 packages of cookies"

Remember who I called the welfare state's new posterwhores? Maybe they haven't been supplanted today, but they've certainly been equaled. Good lord.

A friend just told me that his wife was grocery shopping, and the fat woman ahead of her in line was buying all those things enumerated in the title. With food stamps. I don't know how long ago it started, but the old stamps have been phased out in favor of debit cards, because supposedly "we the people" don't want people to feel "ashamed" for being on "public benefits." That's just the thing, they should feel ashamed. They should feel lower than scum to spend so much as a penny of other people's money that wasn't willingly given.

The woman had to pay a dime over the total (I guess her card didn't have enough of a balance), apologizing, and the checker said, "It all spends the same." Only to them. Thieves and those they trade with don't care where the money comes from. They never once consider, or if they do they dismiss it, that it's not at all "the same" to us who labor and have part of it stolen to be given as faux "charity."

This reminds me of something I forgot to mention from last year. Three Hispanic women were ahead of me in line at the grocery store, and they spoke exceedingly little English. They must have swiped their card a dozen times, at one point even insisting the cashier punch in the numbers, but it was always declined. This wasn't just swiping a card and getting a read error, either: this was swiping the card, then waiting 10 seconds to get the "Declined" message. So this took a very, very long time, and I didn't notice how, but they eventually paid some other way.

The cashier was so patient throughout. When it was my turn, I asked her what was the three's problem. She explained that their card, a food stamps debit card, had only $4 left. And the putas actually asked why it had so little left!

Yeah. America, "what a country" indeed.

Another MSM lie: "Stocks end mostly higher after Fed assessment"

As I've pointed out before, the mainstream media spins any economic news as the end of the world while a Republican is in the White House, and it glosses over bad economic news or rewrites it as "Not too bad" once a Democrat takes over.

Today's headline "Stocks end mostly higher after Fed assessment" is so utterly dishonest, as is customary with anything from the MSM. If this had been several months ago, the headline would have read something like, "Stocks lose rally steam after Fed announcement." Let's take a look at what really happened:







The plain and simple fact is that once the Fed made its announcements, stocks dipped. The only reason the NASDAQ and S&P 500 ended higher than their opening is because, unlike the DJIA, they didn't dip enough to erase the gains from earlier. They didn't crash, but the NASDAQ and S&P 500 indices closed at around 1% from today's peaks, and the DJIA closed nearly 1.5% off its peak.

Despite all this, the meaningful indicators are of movements in U.S. bond markets. For example:



This tells you something. The Fed released a statement today at 2:15:

The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.

Investors overall clearly didn't believe that, evidenced by the sudden afternoon spike in the 10-year's rate. For months now, I've been pointing out that the Fed is creating money out of thin air to inflate the money supply, which inevitably results in inflation. We're in trouble, but most Americans have no idea what's coming.

Indeed, "prices of energy and other commodities have risen of late." I pointed out three months ago that the Fed's pumping of new dollars into the economy is the reason, the only significant reason, that this is happening.

Who doesn't love a good stimulus, other than John Q. Taxpayer?

Two hundred million dollars to "create" 500 jobs. But what's $400K per job when we can all feel good about it? John Q. Taxpayer's feelings don't count, though.

Think about it. If this were a loan, then if each job generated $40K of economic activity annually, it would take only 10 years for this cockamamie idea to break even. Think of what the $200 million could do to create real work, not dream jobs for ultra-rich and their lackeys who use the power of government to redirect money their way. I have no problem with the mere fact of people amassing and keeping wealth, but I do have a problem with them forcing me into it (the force being the government spending). I never invested in this project and probably would never want to, and by definition, whatever is left of a "market" in this country also didn't want in.

The truly tragic part is what I've been pointing out, that all this "stimulus" spending isn't being funded by taxpayer dollars, or even by true borrowing of money that already exists. The Federal Reserve keeps creating new dollars out of thin air for the federal government to borrow. In the end, this spaceport will be paid for by everyone, the "inflation tax": the value of our dollars will decrease, but the ones mostly hurt are those of us who save for the future. Inflation has a lesser impact on those who spend their earnings quickly.

For once, a good court ruling

The headline "California high court says bank doesn't have to pay $1 billion for overdraft fees" is actually incorrect. The court ruling is that Bank of America doesn't have to reimburse the overdraft fees that they charged their customers.

If people's accounts are overdrawn, then the bank is perfectly entitled to charge fees as previously agreed, which usually means the fees are deducted from the next credit to the account. There's absolutely no basis to question this. It doesn't matter that these disabled and/or seniors are "poor": an overdrawn account means that they're using money that doesn't belong to them, and the bank will charge a fee. The money belongs to the other depositors at the bank. The fee is partly to discourage overdrafts, and partly to compensate for the managers' time in reconciling accounts. The bank is entitled to charge that fee based on the agreement the customers voluntarily accepted when opening the accounts. As with all things, if you don't like the conditions, then take your business elsewhere.

This all started become some twit evidently saw new money in his account, which he should have realized was more than what ought to have been. Instead of notifying the bank of a probable error, he was stupid enough to debit more than what he really had. It reminds me of the idiot family that went to an ATM that suddenly started spitting out tens of thousands of dollars. Instead of bagging and returning it, they treated it as having fallen from heaven and started spending it all. But don't be fooled: banks will track down the error, and the family was caught and ordered to pay it back. I can't find an article on that American family, but here's one in England that similarly burned through other depositors' money, and they were properly jailed for it.

It may start with a bank's error, but a bank's error does not force people to act irresponsibly. Some might say this "disabled man" had cause to complain, because the bank charged him a fee after reversing their error. However, he made the serious error: he should have double-checked how much his account should have, rather than treating it like Christmas.

When liberals want to make things "fair," watch out

It goes without saying that it's unfair for the self-employed to pay taxes on their own health insurance, while businesses get tax breaks. But "unfair" is seen differently by different people. What's truly unfair ends at that comma: that anyone should be coerced into giving up his property involuntarily, for the support of others favored by the government.

Now, what is the Senate Finance Committee looking to do about this "unfairness"? Well, to finance all the new health care proposals, they need to raise hundreds of billions a year in new taxes, and one way is to taxing businesses on what they pay for health insurance. Obama again shows his complete hypocrisy. He's leaning toward this, yet he denounced McCain in last fall's debates, because McCain proposed this but offset by an individual tax credit (i.e. the government invents a convoluted way to charge you less, or take your money and return it to you, so that you feel grateful).

A child might compare this to Morgana, Ali Baba's servant, who saw a mark on their door and so similarly marked all other doors on the street. A thinking, comprehending mind would realize that this is looking at two men, one with both of his legs and another with only one, and that "making it fair" means cutting off one of the first man's legs.

Nothing could better epitomize Harrison Bergeron's world.

Krugman's latest hypocrisy

(The following is adapted from an e-mail I sent to Don Luskin, with a few additions and deletions.)

Coming across Krugman's latest -- the same old hackery -- was unintentional. I rarely read his columns anymore, and certainly not at lunchtime lest they turn me into a bulimic. I have a new tagline for his columns and blog: "Hypocrisy purer than Vermont maple syrup."

The minute he started talking about executives getting paid too much, I knew he'd never, ever mention Robert Rubin. I even Ctrl-F'd to make sure; it's not there.

Of course, Krugman has to create a strawman, and I'd lay odds he knows he did, about bankers' pay being "a reward for their creativity — for financial innovation." This is utter BS. Sandy Weill contributed immensely, unquantifiably to the American economy by running a supercompany that helped people grow their wealth, "creatively" or not. Rubin, on the other hand, took $115 million over a decade so he could direct Citi to increase risk-taking in 2004-2005.

So how many strawmans can he create in the same breath? "Still, you might argue that we have a free-market economy, and it's up to the private sector to decide how much its employees are worth. But this brings me to my second point: Wall Street is no longer, in any real sense, part of the private sector." So Wall Street can't pay people what they're worth because the government stepped in, using force to dictate terms of compensation. Is Krugman unaware of his absurd circular logic here, or was it deliberate because he couldn't otherwise make the argument?

Then as if to demonstrate his utter cluelessness, he writes, "Claims that firms have to pay these salaries to retain their best people aren't plausible: with employment in the financial sector plunging, where are those people going to go?" Unemployment may be high overall, but valuable people always have options. A few months ago, I was being courted by a major private bank. They were excited to find me, because of my experience combined with strong tech skills. It would have been a very senior position -- would have been, because I turned it down. It's not the first time I've been recruited, but this time was tempting: the big role came with total compensation double what I'm currently making. However, I'd rather stay where I am, because asset managers are historically more stable than banks. After a couple of bad quarters, new staff could be the first to be downsized. Most importantly, I'm loyal to my boss, who's become a good friend as well as a mentor. I'm hesitant about working for someone new, someone who I might find I cannot trust. You also never know when you start somewhere and are sabotaged or made to be the fall guy for a boss' mistake.

And I'm not the only one who gets calls from recruiters. My friends at work do, too, and we choose to go or stay depending on what's offered. Then again, we have skills that are in demand, even during a recession, unlike dime-a-dozen types like, oh, a newspaper reporter.

I suppose it's too much to expect that a tenured economics professor would ever understand the nature of competition. He and his Princeton colleagues don't have to worry about "So it's eat, drink and be merry, for tomorrow you may be sacked" and can pretty much do what they want, whereas most of the rest of us actually have to continue producing value to keep our jobs.

Nationalizing the banking industry: don't say I didn't warn you

Americans are more likely to listen to the likes of George Stephanopoulos analyzing Obama's style and glossing over the typical lack of substance, ignorant of what Obama and Geithner are actually proposing.

The bottom line: the Treasury wants the power to take over any non-bank "financial institution" that it says is in need of saving. With this power, it can renegotiate and even nullify contracts (not just with employees, but business partners, so who will want to enter into contracts anymore?). The feds can also seize any and all assets to sell to competitors. Think of how dangerous this tyranny is. Remember how Chuck Schumer caused a bank run on IndyMac with comments he sent out one Friday afternoon? That will pale in comparison to what will be possible. Nothing will stand in the way of a federal bureaucrat at the Treasury who has a beef with a financial institution, or who wants to punish a single shareholder. Nothing will stand in the way of the feds keeping "we the people" in line.

I wrote on February 19th, talking about those liars Greenspan and Bernanke: "Mark my words here: as bad as it is now, we haven't yet seen how finance will become politicians' ultimate weapon to stifle dissent and ensure obedience. Under such a system, much like in African dictatorships, any suspicion that you're not loyal, have mocked or derided a politician, etc., means blacklisting. Financial blacklisting. That means an inability to deposit savings, get a loan, or transmit money electronically. It's not impossible to live that way, but most people don't have the stomach and would rather lick the hands that feed them. Be watchful, for I believe in the coming years we'll see (and most won't realize until too late) what "the mark of the beast" is. Without control of the financial infrastructure, how else could the tyranny of the last days prevent (most) people from engaging in commerce sans the mark?"

I started warning shortly after AIG was taken over by the feds that this was a prelude to nationalization. I also explained how a country can be taken over, quietly and from the inside, as the feds are doing now.

I've warned about Tim Geithner from the beginning.

I warned that, after Hank Paulson said the Treasury was dropping plans to buy "toxic assets" in favor of "injecting capital" into banks in exchange for direct equity stakes, the feds' goal all along was nationalization.

I've exposed the feds' lies and hypocrisy in using certain accounting trickery, which in the private sector would be fraud.

I've warned about scare tactics to make Americans think government intervention is necessary, like "$550 billion was pulled out money markets in just a few hours on September 18th!!!" (Paul Kanjorski, quoted in the second article I linked to, has been spreading this myth, as has conservative shill Diana West.)

Stay strong and vigilant. It's coming.

When the feds came to nationalize AIG, I was silent because they weren't my insurer.

When the feds came to nationalize the top banks, I was silent because I didn't care about Wall Street.

When the feds came to nationalize American automakers, I was silent because I drove a Japanese car.

When the feds came to drive health insurers out of business with a government-run plan, I was silent because I paid out of pocket anyway.

Now they've nationalized everything, doling out only what they say we need, and I am just a worker ant for the state whose job is to stay silent.

[edited the last line to fit better]

Obama and Geithner's "Money PPIP"

So far, it looks like the White House couldn't make up its mind what to tell Martin Crutsinger about the name of the new bureaucratic boondoggle. This version of his article calls it the "Public Investment Corp." This version calls it the "Public-Private Investment Program."

I prefer "PPIP" because it sounds like the 1986 comedy with Tom Hanks and Shelley Long, so named because the lead characters keep pouring money into a house that's falling apart. The federal government is simply pumping our money into sustaining companies that should be allowed to fail, and propping up asset values that need proper valuation. Once more, the government has been behind everything that precipitated this mess, from instituting mark-to-market accounting at the worst time possible to "rescue" efforts like TARP and PPIP that prevent us from placing true values on these assets.

Few realize how government has sparked the "crisis" and is purposely continuing it. I've written about this across many posts over several months, but I'll put it all here; just follow my explanation for each link in the chain. Right when markets panicked and CDOs and other securities plunged in value, the feds deliberately imposed mark-to-market so that banks' balance sheets would be impacted negatively -- and banks are forced to cease lending if their net assets became negative. The assets are deemed worthless, though, only because TARP and the like are discouraging people from sitting down and determining a real value (as opposed to a bureaucrat's politically motivated guess). Let's say an asset on the market is worth 1 cent on the dollar, and an investor might buy it at 10 cents in the hope it will eventually be worth 50. But the feds are talking about buying it at 70 (easy when taxes always come from other people!), so how can anyone determine the true value? Why would anyone bother?

See, it's all "legal" when the feds create a shadow holding company to hide AIG's bad assets on another ledger, the same fraudulent practice that got Enron and WorldCom in trouble. When it comes to mark-to-market, however, banks must list all assets on their balance sheets, thus assuming all liability for losses! So when one doesn't have positive net assets so it can lend under FDIC rules, the feds so graciously step in with a cash infusion (courtesy of everyone who doesn't make a living via government, in the form of taxes and inflation). Now PPIP will "help" banks by effectively whiting-out these assets, putting taxpayers even more on the hook for the initial purchase plus any future losses. The circle is complete.

I've explained before that "There's plenty of investable money around the world, but no one wants to sink it in *these* securities. They're really that bad. Even Warren Buffett wants the federal government to bail things out, instead of seizing a profit opportunity and jumping in himself. Surely he could put up a 'mere' $1 billion without blinking, but he's smart enough to recognize that the possible returns aren't worth the current asking price." Why do so few see the warning sign that when the private sector is staying away from buying these assets, maybe they're not such great deals? Now, a lot of these assets are worth next to nothing and even zero, but some still have value. Who's to say that a particular security, comprised of notes from such-and-such a neighborhood, isn't a good return in the end? Actually, none of us can -- unless you're well-connected with the government, none of us can really tell if any given neighborhood has people who will get a housing bailout!

Note that I was wrong, though, about the source of the funding for all these programs. However, last September I (and most people) just couldn't imagine the initial $750 billion TARP, then the $787 billion "stimulus," the $1.2 trillion the Fed recently announced it will create, and now the new $1 trillion so that the Treasury can buy up "toxic assets" under PPIP/PIC. Every new dollar that the feds are spending can come only from whatever new money the Fed can create. There just isn't enough of a tax base; there just isn't enough money to borrow.

Trillion, billion, the prefix to the "illion" has sadly lost all meaning. This is pure insanity, and with Obama and Geithner accelerating what GWB began, things will stop only with a disastrous crash.

Update: what irony in Christina Romer's misuse of "silver bullet." Over time, it's been twisted into the simple meaning of something that will work effectively. Proper usage refers to killing an otherwise invulnerable creature (like vampires in old pre-Stoker folklore, or Wolfman in modern monster tales). Romer said, "I don't think Wall Street is expecting the silver bullet," so Wall Street had better beware.

The truth about AIG's payments to "foreigners," and Glenn Beck is a moron

Conservatives are up in arms about AIG paying tens of billions to foreign banks. Conservatives are wont to do that when they think wealth is leaving the country. Glenn Beck blathered, in a perfect impersonation of protectionist Pat Buchanan:

GLENN: $58 billion has gone to foreign banks. Now, why isn't America outraged by that? Because America doesn't know that fact. America isn't talking about that fact. If we would have let AIG fail, then these other banks would have had to come to us and said, hey, what are you going to do on these. And we would have then had to have the discussion, do we send money over to France, do we send money over to Germany, do we send money over to England? And that we couldn't have won. The people in Washington, they would have never gotten that past you.

STU: We're not that into stimulating.

GLENN: We're not that into stimulating. We're not into shifting wealth from our continent to other continents.

STU: That's where we draw the line.

GLENN: That's where we draw the line.

STU: Of all the stuff we do, that's where we draw the line.

Beck is nothing more than a 21st century mercantilist, who thinks that keeping "wealth" within one's country is the way to prosperity. He doesn't understand that international trade, from goods to financing, allows everyone to prosper. He doesn't even understand that when he talks about "wealth," he's confusing it with "money."

As I explained first here, AIG paying foreign banks was not money laundering. Does Beck even know what money laundering is? He obviously doesn't understand what AIG was doing.

Like any insurer, AIG writes lots of policies. But AIG's unprecedented woes are because, unlike most insurers, it sold a lot of policies, specifically credit default swaps, that it couldn't cover. Its people knew they couldn't cover them, actually: they figured that while the economy was good, and bank revenues and tax receipts stayed high, AIG could collect nice premiums and not have to pay out relatively much. But despite their stupidity, the fact remains that AIG had to meet its contractual obligations to everyone, regardless of nationality. No money was being "hidden" at any time, so there was no money laundering done.

It's immoral to make the U.S. taxpayer pay for AIG's massive losses, but I'm putting that aside here to talk strictly about the nature of AIG's debts. AIG just happened to owe more to foreign banks than it did to American ones, that's all. If the bailout had been accomplished privately, AIG still would have had to pay foreign firms. Can you imagine if AIG had paid American creditors first, and foreign firms with whatever was left (if anything)? Any firm who does this will find its reputation quickly shot to hell, and it would soon cease doing business internationally. Foreign firms and governments would start retaliating by pulling business from the United States, exacerbating things for everybody.

Were it UBS that owed tens of billions to non-Swiss banks in a similar situation, would Beck be so adamant about defending it if it said it wouldn't pay American creditors?

I didn't think so.

The silliness and waste of the modern "Tea Party" protests

Fifteen days ago, in the midst of many Americans talking about mailing tea bags and beatifying Rick Santelli, my friend Billy Beck wrote:

"The tea-bag protest is a fabulous thing,..."

It's rubbish. I guarantee you: everybody talking about this is going to make sure the monster is fed next April 15th and they cannot wait to get in line and vote again.

And he is correct. As if to prove it, Bryan Pick at QandO wrote about Brad Warbiany's idea to minimize automatic withholding, in an effort to "starve the beast."

Brad has been a friend for several years, but certain things must be said here. I left a comment in reply to Bryan that is also for Brad and anyone else who thinks this "protest" will work -- who thinks this "protest" is anything like the Boston Tea Party.

Bryan, don't take too much offense here, but I'll ask bluntly: are you, or are you not, still going to "catch up" by April 15th on what the feds say you "owe"?

If you are, then your "protest" amounts to nothing. Just what do you think you'll accomplish by "postponing" anything? Lack of tax revenue has never stopped the federal government from its real spending. The several so-called "shutdowns" were about budget disagreements on how much to tax and how much to borrow, not an actual lack of revenue.

Regardless of which party controls what branch, the Fed will simply create more money and buy as many U.S. Treasury securities as needed for the feds to keep spending. This means we all will pay via inflation, on top of taxpayers still catching up at the end. So your efforts amount to little children trying to hold their breath at the dinner table. (Not to say the feds are our rightful parents or guardians, but my point is about the efficacy of your method.) You can "protest" until your faces turn blue, but you'll still be all paid up by April 15th.

What difference does it make if your Uncle Sam molests you at 11 p.m. or 4 a.m.? He's patient. He knows you'll eventually submit, and he knows that every applicable November, your siblings will always agree with your parents that Uncle Sam can keep coming over with the specific intent of molesting you (if you follow the analogy, I'm saying Americans just keep voting for the representatives and their bureaucrats who will keep taxing us and spending our money).

Grimshaw is correct. If you want a real protest, then millions indeed must start withholding. This requires a wee bit more resistance than most people are willing to put forth, but that's what it's going to take to change the system.

"We must all hang together, or assuredly we shall all hang separately." The few, like Wesley Snipes and Richard Hatch, are easily taken out.

I also made a quick followup:

Let me put it this way, saying nothing more.

Was the Boston Tea Party at all about postponing buying the tea? How did it get the attention desired?

Because liberals deserve no mercy

Check out the latest.

Credit goes to my friend Billy Beck for the original wording: people are too cowardly to go to your door and steal your property themselves. They'd rather vote "peacefully" (when it's not peacefully at all) to rob you, under the guise of a "government."