The only possible reaction to this:

The Supreme Court upheld a U.S. government crackdown on profanity on television, a policy that subjects broadcasters to fines for airing a single expletive blurted out on a live show.

In its first ruling on broadcast indecency standards in more than 30 years, the high court handed a victory on Tuesday to the Federal Communications Commission, which adopted the crackdown against the one-time use of profanity on live television when children are likely to be watching.

The case stemmed from an FCC decision in 2006 that found News Corp’s (NWSA.O) Fox television network violated decency rules when singer Cher blurted out an expletive during the 2002 Billboard Music Awards broadcast and actress Nicole Richie used two expletives during the 2003 awards.

No fines were imposed, but Fox challenged the decision. A U.S. appeals court in New York struck down the new policy as "arbitrary and capricious" and sent the case back to the FCC for a more reasoned explanation of its policy.

The FCC, under the administration of President George W. Bush, had embarked on a crackdown of indecent content on broadcast TV and radio after pop star Janet Jackson briefly exposed her bare breast during the 2004 broadcast of the Super Bowl halftime show.

Before 2004, the FCC did not usually enforce prohibitions against indecency unless there were repeated occurrences.

By a 5-4 vote and splitting along conservative-liberal lines, the justices upheld the FCC’s new policy under the Administrative Procedure Act.

Even with a new depression in the offering, the case for optimism remains strong:

Should users of marijuana come out of the closet? Is it time for a drugs users parade?

Did you know that the United States of America, the Land of the Free, puts a larger portion of its population behind bars than any country on earth? Thanks in large part to the War on Drugs, Americans lock more of their own in cages than do the thuggish Russians or those "Islamofascist" Saudis. As it happens, American drug prohibition and sentencing policies hit poor black men the hardest, devastating already disadvantaged black families and communities—a tragic, mocking contrast to the achievement of Obama’s election. Militarized police departments across the nation month after month kick down the wrong doors, terrify innocent families, shoot lawful citizens, and often kill the family dog.

(...)

Marijuana is neither evil nor dangerous. Scientists have proven its medical uses. It has spared millions from anguish. But the casual pleasure marijuana has delivered is orders of magnitude greater than the pain it has assuaged, and pleasure matters too. That’s probably why Barack Obama smoked up the second and third times: because he liked it. That’s why tens of millions of Americans regularly take a puff, despite the misconceived laws meant to save us from our own wickedness.

The Atlantic Monthly’s Andrew Sullivan has been documenting on his blog the stories of typical, productive Americans—kids’ football coaches, secretaries of the PTA—who smoke marijuana because they like to smoke marijuana, but who understandably fear emerging fully from the "cannabis closet." This is a profoundly necessary idea. If we’re to begin to roll back our stupid and deadly drug war, the stigma of responsible drug use has got to end, and marijuana is the best place to start. The super-savvy Barack Obama managed to turn a buck by coming out of the cannabis (and cocaine) closet in a bestselling memoir. That’s progress. But his admission came with the politicians’ caveat of regret. We’ll make real progress when solid, upstanding folk come out of the cannabis closet, heads held high.

So here we go. My name is Will Wilkinson. I smoke marijuana, and I like it.

Beware of the "green new deal", it maybe even worse than the original version:

Myth: Everyone understands what a green job is.

Reality: No standard definition of a green job exists.

Myth: Creating green jobs will boost productive employment.

Reality: Green jobs estimates include huge numbers of clerical, bureaucratic, and administrative positions that do not produce goods and services for consumption.

Myth: Green jobs forecasts are reliable.

Reality: The green jobs studies made estimates using poor economic models based on dubious assumptions.

Myth: Green jobs promote employment growth.

Reality: By promoting more jobs instead of more productivity, the green jobs described in the literature encourage low-paying jobs in less desirable conditions. Economic growth cannot be ordered by Congress or by the United Nations. Government interference - such as restricting successful technologies in favor of speculative technologies favored by special interests - will generate stagnation.

Myth: The world economy can be remade by reducing trade and relying on local production and reduced consumption without dramatically decreasing our standard of living.

Reality: History shows that nations cannot produce everything their citizens need or desire. People and firms have talents that allow specialization that make goods and services ever more efficient and lower-cost, thereby enriching society.

Myth: Government mandates are a substitute for free markets.

Reality: Companies react more swiftly and efficiently to the demands of their customers and markets, than to cumbersome government mandates.

Myth: Imposing technological progress by regulation is desirable.

Reality: Some technologies preferred by the green jobs studies are not capable of efficiently reaching the scale necessary to meet today’s demands and could be counterproductive to environmental quality.

De beste zin van vandaag komt van Geert Noels:

Door de schuldboost van de overheid is de totale schuld van de VS nu bijna 4 maal de omvang van de economie. Voor de afschaffing van de Gouden Standaard zie je schuldgroei tov economische groei die stabiel en evenwichtig is. Erna merk je op dat er steeds hogere kredietgroei nodig is om een unit economische groei te creëren. Nu “Keynes” als oplossing prediken, is zoals Vodka als oplossing voorstellen voor het probleem bij de jeugd van breezers. 

George Carlin on religion:

When it comes to bullshit, big-time, major league bullshit, you have to stand in awe of the all-time champion of false promises and exaggerated claims, religion. No contest. No contest. Religion. Religion easily has the greatest bullshit story ever told. Think about it. Religion has actually convinced people that there’s an invisible man living in the sky who watches everything you do, every minute of every day. And the invisible man has a special list of ten things he does not want you to do. And if you do any of these ten things, he has a special place, full of fire and smoke and burning and torture and anguish, where he will send you to live and suffer and burn and choke and scream and cry forever and ever ’til the end of time!

 

But He loves you. He loves you, and He needs money! He always needs money! He’s all-powerful, all-perfect, all-knowing, and all-wise, somehow just can’t handle money! Religion takes in billions of dollars, they pay no taxes, and they always need a little more. Now, you talk about a good bullshit story. Holy Shit!

But I want you to know something, this is sincere, I want you to know, when it comes to believing in God, I really tried. I really, really tried. I tried to believe that there is a God, who created each of us in His own image and likeness, loves us very much, and keeps a close eye on things. I really tried to believe that, but I gotta tell you, the longer you live, the more you look around, the more you realize, something is fucked up.

 

Something is wrong here. War, disease, death, destruction, hunger, filth, poverty, torture, crime, corruption, and the Ice Capades. Something is definitely wrong. This is not good work. If this is the best God can do, I am not impressed. Results like these do not belong on the résumé of a Supreme Being. This is the kind of shit you’d expect from an office temp with a bad attitude. And just between you and me, in any decently-run universe, this guy would’ve been out on his all-powerful ass a long time ago. And by the way, I say "this guy", because I firmly believe, looking at these results, that if there is a God, it has to be a man.

 

No woman could or would ever fuck things up like this. So, if there is a God, I think most reasonable people might agree that he’s at least incompetent, and maybe, just maybe, doesn’t give a shit. Doesn’t give a shit, which I admire in a person, and which would explain a lot of these bad results.

 

So rather than be just another mindless religious robot, mindlessly and aimlessly and blindly believing that all of this is in the hands of some spooky incompetent father figure who doesn’t give a shit, I decided to look around for something else to worship. Something I could really count on.

 

And immediately, I thought of the sun. Happened like that. Overnight I became a sun-worshipper. Well, not overnight, you can’t see the sun at night. But first thing the next morning, I became a sun-worshipper. Several reasons. First of all, I can see the sun, okay? Unlike some other gods I could mention, I can actually see the sun. I’m big on that. If I can see something, I don’t know, it kind of helps the credibility along, you know? So everyday I can see the sun, as it gives me everything I need; heat, light, food, flowers in the park, reflections on the lake, an occasional skin cancer, but hey. At least there are no crucifixions, and we’re not setting people on fire simply because they don’t agree with us.

 

Sun worship is fairly simple. There’s no mystery, no miracles, no pageantry, no one asks for money, there are no songs to learn, and we don’t have a special building where we all gather once a week to compare clothing. And the best thing about the sun, it never tells me I’m unworthy. Doesn’t tell me I’m a bad person who needs to be saved. Hasn’t said an unkind word. Treats me fine. So, I worship the sun. But, I don’t pray to the sun. Know why? I wouldn’t presume on our friendship. It’s not polite.

 

I’ve often thought people treat God rather rudely, don’t you? Asking trillions and trillions of prayers every day. Asking and pleading and begging for favors. Do this, gimme that, I need a new car, I want a better job. And most of this praying takes place on Sunday His day off. It’s not nice. And it’s no way to treat a friend.

 

But people do pray, and they pray for a lot of different things, you know, your sister needs an operation on her crotch, your brother was arrested for defecating in a mall. But most of all, you’d really like to fuck that hot little redhead down at the convenience store. You know, the one with the eyepatch and the clubfoot? Can you pray for that? I think you’d have to. And I say, fine. Pray for anything you want. Pray for anything, but what about the Divine Plan?

 

Remember that? The Divine Plan. Long time ago, God made a Divine Plan. Gave it a lot of thought, decided it was a good plan, put it into practice. And for billions and billions of years, the Divine Plan has been doing just fine. Now, you come along, and pray for something. Well suppose the thing you want isn’t in God’s Divine Plan? What do you want Him to do? Change His plan? Just for you? Doesn’t it seem a little arrogant? It’s a Divine Plan. What’s the use of being God if every run-down shmuck with a two-dollar prayerbook can come along and fuck up Your Plan?

 

And here’s something else, another problem you might have: Suppose your prayers aren’t answered. What do you say? "Well, it’s God’s will." "Thy Will Be Done." Fine, but if it’s God’s will, and He’s going to do what He wants to anyway, why the fuck bother praying in the first place? Seems like a big waste of time to me! Couldn’t you just skip the praying part and go right to His Will? It’s all very confusing.

 

So to get around a lot of this, I decided to worship the sun. But, as I said, I don’t pray to the sun. You know who I pray to? Joe Pesci. Two reasons: First of all, I think he’s a good actor, okay? To me, that counts. Second, he looks like a guy who can get things done. Joe Pesci doesn’t fuck around. In fact, Joe Pesci came through on a couple of things that God was having trouble with.

 

For years I asked God to do something about my noisy neighbor with the barking dog, Joe Pesci straightened that cocksucker out with one visit. It’s amazing what you can accomplish with a simple baseball bat.

 

So I’ve been praying to Joe for about a year now. And I noticed something. I noticed that all the prayers I used to offer to God, and all the prayers I now offer to Joe Pesci, are being answered at about the same 50% rate. Half the time I get what I want, half the time I don’t. Same as God, 50-50. Same as the four-leaf clover and the horseshoe, the wishing well and the rabbit’s foot, same as the Mojo Man, same as the Voodoo Lady who tells you your fortune by squeezing the goat’s testicles, it’s all the same: 50-50. So just pick your superstition, sit back, make a wish, and enjoy yourself.

 

And for those of you who look to The Bible for moral lessons and literary qualities, I might suggest a couple of other stories for you. You might want to look at the Three Little Pigs, that’s a good one. Has a nice happy ending, I’m sure you’ll like that. Then there’s Little Red Riding Hood, although it does have that X-rated part where the Big Bad Wolf actually eats the grandmother. Which I didn’t care for, by the way. And finally, I’ve always drawn a great deal of moral comfort from Humpty Dumpty. The part I like the best? "All the king’s horses and all the king’s men couldn’t put Humpty Dumpty back together again." That’s because there is no Humpty Dumpty, and there is no God. None, not one, no God, never was.

 

In fact, I’m gonna put it this way. If there is a God, may he strike this audience dead! See? Nothing happened. Nothing happened? Everybody’s okay? All right, tell you what, I’ll raise the stakes a little bit. If there is a God, may he strike me dead. See? Nothing happened, oh, wait, I’ve got a little cramp in my leg. And my balls hurt. Plus, I’m blind. I’m blind, oh, now I’m okay again, must have been Joe Pesci, huh? God Bless Joe Pesci. Thank you all very much. Joe Bless You!

When I first saw the movie I was greatly moved and impressed. Jeffrey Tucker is also impressed but keeps his distance:

I finally saw Missing, a 1982 film about political violence in Chile, staring Jack Lemmon and Sissy Spacek. It won an Oscar, was nominated for many more, and won 8 other awards at various film festivals.

It has to be one of the most effective film attacks on the military state I’ve ever seen--the nightmare of random violence is overwhelming--the effect of which is to make it impossible to ever think a kind thought about General Pinochet and his regime, the rule of which is made out to be the reincarnation of Hitler complete with concentration camps and mass killing.

All very compelling and effective except for one thing: it subtlety portrayed communists as angels and the driving force for right-wing violence as capitalism. It was not overt but there are a enough scenes in which the screenwriters tip their hand.

A youth speaks of the glorious things that the Allende regime was doing: "They were trying something new," that newness being the very old racket called socialism. The U.S. ambassadors are seen as mouthpieces for American business interests, and in a ridiculously cliché way. Yes, there was a dearth of consumer goods, we are informed, and yes, after the coup there are more products on the shelves to dazzle the disgusting minds of materialists. But otherwise the image you get of the pre-Pinochet regime is that it was creating a heavenly utopia of poetry, art, and universal love - the very enactment of Woodstock in Latin America.

You would swear from the film that some two-headed serpent arrived to the country to destroy the glorious garden: the two heads being U.S. military might plus capitalism. A quick look at Wikipedia confirmed my own suspicions that something is wrong with this picture. This Allende guy nationalized industry, seized land, centralized and nationalized education and health care, gave out welfare to political friends, and inflated the money supply, leading to a crashing of the entire economy, massive debt and default, 140% inflation, empty grocery stores, and a revolt by every property owner and business interest in the country.

Are we supposed to believe that there was no violence involved in all of this? No human suffering? I don’t find that credible. Even if everything in the film is true about Pinochet, one would like to know the fullness of truth here. I don’t know. But the experience of watching prompts me to reflect on how intriguing it is that both left and right see only immorality and criminality in other people’s ideologies.

The dynamic between right-wing and left-wing violence is impossible to untangle to the point that blame can be definitively established. In case after case, the right (whether interwar Italy, Chile in the 1970s, Israel or the U.S. today) says it was protecting the country against a left-wing threat, and there is probably truth in that but to what extent is that real prospect of communist violence used as a cover for a power grab? The left (you fill in the countries) says it was protecting people against a right-wing threat, and there is probably truth here too but to what extent is the prospect of violence used as a cover for another power grab?

When Clinton in the U.S. was running things, we received a long series of press releases on how the FBI was protecting us against gun-totting neo-Nazi skinheads plotting attacks against women and minorities. When Bush was running things, we received a long series of press releases on how the regime was continually involved in stopping violence plotted by Islamic extremists who plotted to bomb subways and airplanes and wreck out way of life.

The upshot of all this propaganda is that we should be grateful and subservient to the regime above all else. By the time you find out the threat was exaggerated or even invented, no one is interested in it anymore, and there were in the meantime 10 other claims of impending violence.

In this way, the left and right work hand in hand to do the thing the state wants most: expansion, regardless of the cultural and political climate. Where should the libertarian stand in this? We should oppose all violence and be skeptical of any claim from anyone in charge of our lives and property. We should be willing to believe the worst of right-wing states or left-wing states. And we should avoid, insofar as it is possible, feeling affection for any regime or fully believing any claim from ideologically blinded partisans of one state or another.

...om The Flemish Beerdrinker te zijn:

1. Bier is goed tegen hartinfarcten
Een bierdrinker loopt 40 tot 60 procent minder risico op een hartinfarct dan geheelonthouders. Een halve liter bier per dag geldt als maatstaf.

2. Bier beschermt je tegen een beroerte
De bestanddelen van bier voorkomen dat je bloed gaat klonteren.

3. Bier is goed voor je bloeddruk
Artsen uit Nederland en van de universiteit van Harvard hebben aangetoond dat een gematigd bierverbruik je bloeddruk onder controle houdt.

4. Bier kan diabetes verhinderen.
Bierdrinkers hebben zelden te kampen met suikerziekte (diabetes mellitus).

5. Bier verbetert je geheugen
Bierdrinkers maken minder kans op Alzheimer en dementie.

6. Bier bezorgt je stevige knoken
Bier heeft een positieve invloed op je beendergestel en beschermt tegen osteoporose.

7. Bier laat je langer leven
Wie een of twee glazen bier per dag drinkt, leeft langer.

8. Bier is goed tegen diarree
De microculturen in bier bestaan uit azijn- en melkzuren. Deze stoffen beperken de cultuur van darmkiemen die diarree veroorzaken.

9. Bier helpt tegen stress
Vorsers van de universiteit van Montreal hebben vastgesteld dat een paar glazen bier per dag de druk op het werk doen afnamen. Niet-drinkers zouden met meer stress te kampen hebben.

10. Bier voorkomt nier- en galstenen
Finse onderzoekers beweren dat het magnesiumgehalte in een halve liter bier het risico op nierstenen met 40 procent doet afnemen.

11. Bier helpt tegen slaapstoornissen.
Hop is een natuurlijk kalmeringsmiddel. ’s Avonds een glas bier drinken blijkt een afdoend slaapmiddel te zijn.

12. Bier kan je beschermen tegen kanker
Bier bevat polyfenolen die de groei van tumoren in toom houden.

13. Bier zorgt voor een reine huid
Bepaalde vitaminen in bier regeneren de huid en zijn goed voor de opbouw van pigment. Je huid wordt gladder en meer flexibel.

14. Bier is goed tegen verkoudheden
Wie warmt bier drinkt, is minder snel verkouden. Warm gerstenat bevordert de bloedsomloop en de ademhaling, helpt tegen gewrichtspijn en versterkt je immuunsysteem. Tip: verwarm een fles water in een bain-marie en leng aan met vier lepels honing.

15. Bier beschermt zwangere vrouwen
Een gebrek aan folic-zuur (een vitamine van de B-groep) kan een oorzaak zijn van vroeggeboorte en misvormingen van de foetus. Een liter bier bevat meer dan onze dagelijkse behoefte. Alcoholvrij bier is bijgevolg een aanrader voor zwangere vrouwen.

16. Bier scherpt de eetlust aan
De bestanddelen van hop, het koolzuur en de alcohol in bier stimuleren de spijsverteringssappen en stimuleren de eetlust.

17. Bier voorkomt maagzweren
Anderhalve liter bier per week remt de aangroei van bacteriën (helicobacter pylori) die een ontsteking van de maagwand kunnen veroorzaken waardoor het risico op maagzweren afneemt.

18. Bier is een snelle dorstlesser
De bestanddelen van bier zorgen er voor dat je dorst sneller gelest wordt dan wanneer je een glas helder, fris water drinkt.

19. Bier helpt je afvallen
Studies tonen aan dat mensen die - weliswaar met mate - bier drinken, minder overgewicht vertonen dan niet-drinkers. Bier bevordert immers de stofwisseling. Een glas bier bevat bovendien minder kalorieën dan bijvoorbeeld eenzelfde hoeveelheid appelsap.

20. Bier zorgt voor mooier haar
Bier bevat mineralen en vitaminen die je haar verzorgen. Een ’bierspoeling’ geeft je haar meer kracht en volume. En geen paniek: de biergeur is na enkele minuten vervlogen.

Bryan Caplan summarizes Rothbards position:

(Rothbard) begins by ridiculing leftists’ decades of contradictory complaints about capitalism: "Stagnation; deficient growth; overaffluence; overpoverty; the intellectual fashions changed like ladies’ hemlines,"(...)

Then Rothbard gets down to business.  He defends the benefits of economic growth and technology against radical Greens, and takes a proto-Simonian position on natural resource scarcity.  He then explains how private property gives incentives for conservation and discovery.  A corollary is that expanding the scope of private property would solve many environmental problems. 

Finally, Rothbard turns to pollution.  Here he departs from almost every other environmental economist, left and right, by calling for outright bans on air and noise (!) pollution.

Rothbard then attacks Friedmanite proposals for pollution taxes or tradable permits, and suggests that technological progress could cope with a total pollution ban.

It’s about time:

The number of millionaires in America is dropping fast, from 9.2 million at the end of 2007 to 6.7 million at the end of 2008, as is the number of "affluent households" (with a net worth between $500,000 and $1million), from 15.7 million to 11.3 million. Those were year-end numbers, and as the stock market has dropped significantly since then, these numbers have likely dropped further too.

In a related news item, the number of billionaires globally is also declining fast, from 1,125 to 793, and those that still are billionaires have in most cases seen their net worth drop significantly. For example, Bill Gates net worth has dropped $18 billion, while Warren Buffet has lost $25 billion. The collective net worth of billionaires dropped from $4.4 trillion to $2.4 trillion, both as a result of the lower numbers of billionaires and the lower average net worth among billionaires.

This illustrates a rarely noted phenomenon: economic downturns tend to be associated with falling inequality, while booms are associated with rising inequality. Inequality reached the highest level ever in U.S. history in 1928, only to shrink dramatically during the Depression. It then reached new highs in 1999, and then later (after having briefly declined in 2001-02) in 2006. In other words, inequality tends to peak during financial bubbles, and then decline after those bubbles burst.

That is hardly a coincidence. Asset owners tend to be wealthier than others, almost by definition, and when asset prices rises relative to goods prices, this will inevitably mean that the rich will become relatively richer. Moreover, during cyclical peaks profits in general and financial sector profits in particular tends to peak as well, something which will enable executives and financial sector employees to receive really fat bonuses, thus increasing inequality in labor income as well.

Alas:

The bad news for the majority of non-wealthy people is that the decline in inequality that we are now seeing will entirely be a result of the rich becoming less rich. It won’t mean that the poor and the middle class will become richer (...).

Robert Higgs writes:

My old friends Jeffrey Rogers Hummel and David R. Henderson continue to argue that the Fed had little or nothing to do with fueling the housing bubble during the first five or six years of the present decade. Their latest article along these lines appears in Forbes. This is the third rendition of their argument that I have read, and I am no more persuaded now than I was previously.

Hummel and Henderson base their argument mainly on the claim that the Fed was not an engine of inflation between 2001 and 2006 because the rate of growth of the monetary base and the rate of growth of various monetary aggregates were declining during that period. Indeed, they were declining. Computing the rates of growth for the December value relative to the preceding December value, I find the rates to be as follows for the monetary base: 2001, 8.7%; 2002, 7.5%; 2003, 5.8%; 2004, 5.0%; 2005, 3.6%, and 2006, 2.9%. The rates of growth of M2, computed on the same basis, were as follows: 2001, 10.3%; 2002, 6.3%; 2003, 5.0%; 2004, 5.7%; 2005, 4.0%; and 2006, 5.4%.

It does not follow, however, that simply because these (and other monetary) rates of growth were declining, the Fed bore no responsibility for fueling the housing bubble. If we begin at a high rate of growth, as indeed we did in 2001, then rates may fall and still be "inflationary" in their effect on certain asset markets. Consider, for example, that during the entire period from the fourth quarter of 2000 to the fourth quarter of 2006, real GDP rose by only 14.9%, whereas during the same period (December-to-December monthly figures being used) the monetary base increased by 38.3% and M2 by 42.7%--or, by 2.6 times and 2.9 times as much as real GDP, respectively.

In pondering the Hummel-Henderson thesis, I keep coming back to various analogies, such as this one: I walk onto the street and I’m hit by a car going 50 mph; the next day, I walk out and I’m hit by a car going 45 mph; and, being a slow learner, I walk out during the next three days and I’m hit in daily succession by cars going 40 mph, 35 mph, and 30 mph. After five days, I am pretty nastily banged up, but Hummel and Henderson come along to comfort me by informing me that my being hit repeatedly cannot actually have hurt me because each day the car that hit me was going slower than the one that hit me the day before.

Hummel and Henderson also continue to endorse Alan Greenspan’s story that the real culprit was a surge in foreign savings that was invested in large part in housing-related securities, such as Fannie and Freddie’s bonds. I confess that I have never understood this story. In order to invest in securities of any kind, foreigners need to acquire dollars. And all dollars ultimately come from the Fed, because every dollar consists of either a circulating Federal Reserve note or a dollar deposit account subject to a variety of Fed controls. Was the Fed really powerless to "sterilize" the inflow of foreign savings? Or did it simply not attempt to offset this inflow, which it might have done by, for example, selling securities on the open market or by increasing required bank-reserve ratios?

Watch him here explain all the mechanisms that lead tot the great financial crash, in 2006!

And then this. Arthur Laffer (of the famous Laffer-curve) makes a fool of himself, Ben Stein (conservative economist and christian fundamentalist) argues that the subprime loans are a tiny tiny problem, and another analyst predicts that the housing market will have a good year in 2008. Priceless.

No, not Iraq, not Afghanistan. The war on drugs. And the stupidity continues, with huge costs. From the Financial Times:

How much misery can a policy cause before it is acknowledged as a failure and reversed? The US “war on drugs” suggests there is no upper limit. The country’s implacable blend of prohibition and punitive criminal justice is wrong-headed in every way: immoral in principle, since it prosecutes victimless crimes, and in practice a disaster of remarkable proportions. Yet for a US politician to suggest wholesale reform of this brainless regime is still seen as an act of reckless self-harm.

Even a casual observer can see that much of the damage done in the US by illegal drugs is a result of the fact that they are illegal, not the fact that they are drugs. Vastly more lives are blighted by the brutality of prohibition, and by the enormous criminal networks it has created, than by the substances themselves. This is true of cocaine and heroin as well as of soft drugs such as marijuana. But the assault on consumption of marijuana sets the standard for the policy’s stupidity.

Nearly half of all Americans say they have tried marijuana. That makes them criminals in the eyes of the law. Luckily, not all of them have been found out – but when one is grateful that most law-breakers go undetected, there is something wrong with the law.

Harvard’s Jeffrey Miron published a study denouncing drug prohibition in 2004. He noted that more than 300,000 people were then in US prisons for violations of the law on drugs – more than the number incarcerated for all crimes in Britain, France, Germany, Italy and Spain combined. Today the number is higher – according to some estimates, nearly 500,000. The far larger number of people who have been convicted, at any point, of a drugs offence face permanently impaired employment prospects and all manner of other setbacks: in the US, once a criminal always a criminal.

Strict enforcement, Mr Miron explained, has reduced drug use only modestly – supposing for the moment that this is even a legitimate objective. The collateral damage is of a different order altogether. Violence related to drug crimes has surged in Mexico and in US cities close to the border, giving rise to renewed interest in the topic. Thousands are thought to have been killed by criminal gangs competing for the trade.

Many users also die because of tainted drugs, or because they share needles – consequences again of prohibition. There is an obvious national security dimension as well: in countries such as Colombia and Afghanistan, the huge surplus derived from prohibition supports terrorists.

The consequences of prohibition corrupt governments everywhere, and the US is no exception. Since a drug transaction has no victims in the ordinary sense, witnesses to assist a prosecution are in short supply. US drug-law enforcement tends to infringe civil liberties, relying on warrantless searches, entrapment, extorted testimony in the form of plea bargains, and so forth. Predictably, in the US the hammer of the law on drugs falls with far greater force on black people: whites do most of the using, blacks do most of the time.

(...)

For now, outright legalisation of marijuana, let alone harder drugs, is difficult to imagine. Even gradual decriminalisation – a policy that maintains prohibition but removes it from the scope of the criminal law – seems unlikely, though perhaps not unthinkable. A new study by Glenn Greenwald, a writer and civil rights lawyer, looks at Portugal’s policy of decriminalisation. He judges it a success: “While drug addiction, usage, and associated pathologies continue to skyrocket in many European Union states, those problems – in virtually every relevant category – have been either contained or measurably improved within Portugal since 2001.”

Somebody in the White House should take a look. This national calamity is no laughing matter.

Johann Hari writes:

In 1991, the government of Somalia - in the Horn of Africa - collapsed. Its nine million people have been teetering on starvation ever since - and many of the ugliest forces in the Western world have seen this as a great opportunity to steal the country’s food supply and dump our nuclear waste in their seas.

Yes: nuclear waste. As soon as the government was gone, mysterious European ships started appearing off the coast of Somalia, dumping vast barrels into the ocean. The coastal population began to sicken. At first they suffered strange rashes, nausea and malformed babies. Then, after the 2005 tsunami, hundreds of the dumped and leaking barrels washed up on shore. People began to suffer from radiation sickness, and more than 300 died. Ahmedou Ould-Abdallah, the UN envoy to Somalia, tells me: "Somebody is dumping nuclear material here. There is also lead, and heavy metals such as cadmium and mercury - you name it." Much of it can be traced back to European hospitals and factories, who seem to be passing it on to the Italian mafia to "dispose" of cheaply. When I asked Ould-Abdallah what European governments were doing about it, he said with a sigh: "Nothing. There has been no clean-up, no compensation, and no prevention."

At the same time, other European ships have been looting Somalia’s seas of their greatest resource: seafood. We have destroyed our own fish-stocks by over-exploitation - and now we have moved on to theirs. More than $300m worth of tuna, shrimp, lobster and other sea-life is being stolen every year by vast trawlers illegally sailing into Somalia’s unprotected seas. The local fishermen have suddenly lost their livelihoods, and they are starving. Mohammed Hussein, a fisherman in the town of Marka 100km south of Mogadishu, told Reuters: "If nothing is done, there soon won’t be much fish left in our coastal waters."

This is the context in which the men we are calling "pirates" have emerged. Everyone agrees they were ordinary Somalian fishermen who at first took speedboats to try to dissuade the dumpers and trawlers, or at least wage a ’tax’ on them. They call themselves the Volunteer Coastguard of Somalia - and it’s not hard to see why. In a surreal telephone interview, one of the pirate leaders, Sugule Ali, said their motive was "to stop illegal fishing and dumping in our waters... We don’t consider ourselves sea bandits. We consider sea bandits [to be] those who illegally fish and dump in our seas and dump waste in our seas and carry weapons in our seas." (...)

No, this doesn’t make hostage-taking justifiable, and yes, some are clearly just gangsters - especially those who have held up World Food Programme supplies. But the "pirates" have the overwhelming support of the local population for a reason. The independent Somalian news-site WardherNews conducted the best research we have into what ordinary Somalis are thinking - and it found 70 percent "strongly supported the piracy as a form of national defence of the country’s territorial waters." During the revolutionary war in America, George Washington and America’s founding fathers paid pirates to protect America’s territorial waters, because they had no navy or coastguard of their own. Most Americans supported them. Is this so different?

Ralph Raico quotes Noam Chomsky:

In the "City of God," St. Augustine tells the story of a pirate captured by Alexander the Great. The Emperor angrily demanded of him, "How dare you molest the seas?" To which the pirate replied, "How dare you molest the whole world? Because I do it with a small boat, I am called a pirate and a thief. You, with a great navy, molest the world and are called an emperor." St. Augustine thought the pirate’s answer was "elegant and excellent."

Ine Roox bespreekt nieuw boek van Lode Delputte over Cuba:

Op Cuba wordt elk eigen initiatief gefnuikt, wat de passiviteit bij de bevolking in de hand werkt. Het eiland was voor de revolutie van Fidel Castro en de zijnen al bijzonder ontwikkeld. Maar de razendsnelle vooruitgang die Cuba had gekend, sloeg achteraf om in stagnatie.

Erger dan de veelbesproken bloqueo, het Amerikaanse handelsembargo tegen Cuba, is de grote inefficiëntie van de landbouw op dit tropische eiland waar werkelijk alles bloeit. Liefst 86 procent van de voeding op Cuba wordt ingevoerd. Dat de Verenigde Staten de belangrijkste voedselimporteur zijn, toont wat vurige retoriek werkelijk waard is.

Eric Crampton again:

Klein says economic crisis is exactly what the elites need to help push us to further deregulation, weakening the state in favour of markets. Higgs warns rather that crisis is the health of the state. He provides a wealth of historical evidence making his case. The only real world case that might fit a Klein story is New Zealand in 1984; of course, she has the sign wrong on the normative aspect. Higgs is right today. Why a banking insolvency crisis turns into crackdowns on tax havens makes sense in a Higgs story. Think the G-20 Cartel is worried about the productive squirreling off their resources onces the bill comes round to pay for the the cartel’s profligacy?

From Eric Crampton:

Lots of chatter on the libertarian blogs about whether we’re in an Atlas moment, how sales of Atlas Shrugged are peaking, and how folks finally might be coming round to rejecting the moochers and embracing their inner Galt.

Here’s some fun, courtesy of Google Insights.

"Ayn Rand" versus "Karl Marx"

The two lines show us search trends over the last 12 months on the terms "Ayn Rand" (red) and "Karl Marx" (blue). Scales are normalized as a proportion of all searches, with 100 being the largest number of searches. Marx is by far the more popular search term.

Where are folks most interested in each? Well, Google’s Search Insight tells us that too. Maps below show search intensity on Karl Marx (in blue) and on Ayn Rand (in red).

So, in lots of the developing world, we’re seeing lots of searches on Marx and very little on Rand. Rand only registers in the Philippines. In the US, Rand beats Marx by a small margin; same in India. In Canada, Marx beats Rand; same in Norway and New Zealand and ... pretty much every country that makes the top ten in searches on Ayn Rand. The green bars show searches for "Atlas Shrugged". Only in the US and India do searches on Rand beat searches on Marx.

Search Insights is powerful enough for us to drill down onto country-specific searches. So, we find in Canada, that Rand beat Marx from mid June 08 through August 08, but Marx wins just about the rest of the time. This one shocked me: the proportion by which Marx beat Rand in Ontario matched that in Alberta. Only in British Columbia, Canada’s "loonie left coast", did Rand beat Marx. In Manitoba, ancestral home of Barbara Branden, Rand didn’t show up at all.

We can drill down even further. Marx beats Rand by a larger majority in Edmonton than in Calgary; Edmonton is the seat of government and sometimes is disparaged as Redmonton. Turns out it’s just a matter of degree.

In book sales, Atlas beats Das Kapital. The paperback edition of Atlas is currently #29 in Books at Amazon; Capital is at #5,213. I’d love to know what the rank movement is since a year ago, but I don’t know how to access historical Amazon data. Sales of both certainly seem to be up, but I can’t compare trends without a decent handle on base rate sales from a year or two ago.

So, Randians, be a bit careful about calling this a Randian moment. Economic crisis seems to intensify interest in alternatives at both poles, at least as evidenced by Google search trends. You can, of course, object that maybe all the searches on Marx are to find out just how Marxist Obama really is: it’s Objectivists doing the searches. There certainly are a lot of searches on Marx + Obama, but I can’t evaluate the searchers’ normative assessments of any such link. I’ve tried adding a few disambiguating terms like evil or bad to add to the searches; doesn’t seem to affect much. If you can think of better ways of disambiguating, I’d love to see the results!

Not change we can believe in:

There are many different places were you can dowload your free copy of "An Inquiry into the Nature and Causes of the Wealth of Nations", as it’s auther is dead for over 200 years now and his works are not copyrighted anymore. But not on Scribd:

Dear Irdial-Discs,

We have removed your document "An Inquiry into the Nature and Causes of the Wealth of Nations" because our text matching system determined that it was very similar to a work that has been marked as copyrighted and not permitted on Scribd.

Like all automated matching systems, our system is not perfect and occasionally makes mistakes. If you believe that your document is not infringing, please contact us at copyright@scribd.com and we will investigate the matter.

As stated in our terms of use, repeated incidents of copyright infringement will result in the deletion of your Scribd.com account and prohibit you from uploading material to Scribd.com in the future. To prevent us from having to take these steps, please delete from scribd.com any material you have uploaded to which you do not own the necessary rights and refrain from uploading any material you are not entitled to upload. For more information about Scribd.com’s copyright policy, please read the Terms of Use located at http://www.scribd.com/terms

Jason Bentley

Directory of Community Development

jason@scribd.com

Dan toch geen internetafsluiting bij illegaal downloaden in Frankrijk. Consumenten hebben ook zo hun rechten:

Tegen alle verwachtingen in heeft het Franse parlement vandaag een controversiële wet verworpen die toestaat dat de internetverbinding wordt afgesloten van surfers die illegaal films en muziek downloaden. Eerder op de ochtend had de Senaat de wettekst wel goedgekeurd.

In afwezigheid van een groot deel van de meerderheid, werd de tekst verworpen met 21 stemmen tegen 15. Enkele kamerleden van de rechtse meerderheidspartij UMP stemden voor, maar twee van hen stemden tegen, samen met de oppositie.

Neen tegen zware straffen
Vooral het feit dat de senatoren het illegaal downloaden extra zwaar wilden bestraffen, zette de kamerleden aan tot een neen-stem. Zo stond in de tekst dat de ’internetpiraat" van wie de verbinding wordt afgesloten, zijn abonnementskosten moet blijven betalen. De verbinding kon voor een periode van twee tot maximaal twaalf maanden worden afgesloten.

De Franse regering verdedigde de oorspronkelijke tekst, die van Frankrijk een pionier in de strijd tegen het illegaal downloaden zou hebben gemaakt.

Wii voor vrouwen:

Steven Gjerstad en Veron Smith write:

The 2001 recession might have ended the bubble, but the Federal Reserve decided to pursue an unusually expansionary monetary policy in order to counteract the downturn. When the Fed increased liquidity, money naturally flowed to the fastest expanding sector. Both the Clinton and Bush administrations aggressively pursued the goal of expanding homeownership, so credit standards eroded. Lenders and the investment banks that securitized mortgages used rising home prices to justify loans to buyers with limited assets and income. Rating agencies accepted the hypothesis of ever rising home values, gave large portions of each security issue an investment-grade rating, and investors gobbled them up.

But housing expenditures in the U.S. and most of the developed world have historically taken about 30% of household income. If housing prices more than double in a seven-year period without a commensurate increase in income, eventually something has to give. When subprime lending, the interest-only adjustable-rate mortgage (ARM), and the negative-equity option ARM were no longer able to sustain the flow of new buyers, the inevitable crash could no longer be delayed.

The price decline started in 2006. Then policies designed to promote the American dream instead produced a nightmare. Trillions of dollars of mortgages, written to buyers with slender equity, started a wave of delinquencies and defaults. Borrowers’ losses were limited to their small down payments; hence, the lion’s share of the losses was transmitted into the financial system and it collapsed.

During the 1976-79 and 1986-89 housing price bubbles, the effective federal-funds interest rate was rising while housing prices rose: The Federal Reserve, "leaning against the wind," helped mitigate the bubbles. In January 2001, however, after four years with average inflation-adjusted house price increases of 7.2% per year (about 6% above trend for the past 80 years), the Fed started to decrease the fed-funds rate. By December 2001, the rate had been reduced to its lowest level since 1962. In 2002 the average fed-funds rate was lower than in any year since the 1958 recession. In 2003 and 2004 the average fed-funds rates were lower than in any year since 1955 when the rate series began.µ

(...)

With home price increases out of the CPI and the price-to-rent ratio rapidly increasing, an important component of inflation remained outside the index. In 2004 alone, the price-rent ratio increased 12.3%. Inflation for that year was underestimated by 2.9 percentage points (since "owners’ equivalent rent" is about 23% of the CPI). If home-ownership costs were included in the CPI, inflation would have been 6.2% instead of 3.3%.

With nominal interest rates around 6% and inflation around 6%, the real interest rate was near zero, so household borrowing took off. As measured by the Case-Shiller 10 city index, the accumulated inflation in home-ownership costs between January 1999 and June 2006 was 151%, but the CPI measured a mere 23% increase. As the Federal Reserve monitored inflation in the early part of this decade, home-price increases were no longer visible in the CPI, so the lax monetary policy continued. Even after the Fed began to slowly raise the fed-funds rate in May 2004, the average rate remained low and the bubble continued to inflate for two more years.

Capitalism: 200 years of success, but after one bad year we want to throw it away.
Aid: sixty years of failure and the only thing we want is more of it.

Dambina Moyo:

 Let’s take the capitalistic system for a second. It’s quote, unquote, not working now. We have centuries of evidence that it generates wealth and delivers jobs, and yet here we are after one bad year and we’re ready to throw the baby out with the bathwater. So I find it quite worrying that we can look at aid—after sixty years and one trillion dollars that haven’t worked in Africa—and we still don’t question the system.

Read the whole thing:

Dambisa Moyo’s prescription for economic sustainability in Africa—which includes cutting off all aid within five years—might seem insane if the statistics weren’t so grim: despite one trillion dollars in western aid over the past sixty years, the economic lot of the average African has only gotten worse. Most Africans now live on one dollar per day, and sub-Saharan Africa remains the poorest region in the world. Despite a deluge of aid between the years of 1970 and 1998, poverty on the continent skyrocketed from 11 percent of the population to 66 percent, which means over six hundred million Africans are now impoverished.

(...)

Systematic western aid, Moyo argues in Dead Aid, has essentially turned Africa into one giant welfare state. The unending stream of money has created a situation where governments aren’t accountable to their citizens: since they don’t depend on tax revenue, leaders don’t think they owe their people anything—and the people don’t expect anything from their leaders. Moreover, says Moyo, since the money flows virtually no matter what, tyrants like Robert Mugabe of Zimbabwe (three hundred million dollars in foreign aid was sent to Mugabe in 2006 alone, says Moyo) often pilfer it and buy foreign goods, or stow it in foreign bank accounts where it does nothing to help the country. Furthermore, aid stamps out entrepreneurship. Moyo offers the example of an African mosquito net maker. When aid arrives in the form of a hundred thousand mosquito nets, the net-maker is out of business, and one hundred and sixty people (employees and dependents) are now aid-dependent. This, she says, is not a sustainable model.

Calories from carbs: bad, calories from fat: not so bad:

Gary Taubes, a correspondent for Science magazine, contributed to the Atkins Diet craze with his New York Times article several years ago, "What If It’s All Been a Big Fat Lie?." He then spent the past several years expanding on that article, and the result Good Calories, Bad Calories, a book of some 600 pages (nearly 70 of which are the bibliography).

Taubes has several overarching themes; he contends, for example, that eating refined carbohydrates is what makes you obese, and that refined carbohydrates contribute to many of what used to be called "diseases of civilization" (such as heart disease, which seems to have been less common in traditional cultures that ate less processed food, including Northern cultures that ate almost exclusively meat).  (These arguments are still controversial, although new evidence continues to support them.)

The most important theme, however, suffuses the entire book: bias in scientific inquiry. 

Most of the chapters are headed by bias-related quotations, such as this from a 1921 book on philosophy of science: "In reality, those who repudiate a theory that they had once proposed, or a theory that they had accepted enthusiastically and with which they had identified themselves, are very rare.  The great majority of them shut their ears so as not to hear the crying facts, and shut their eyes so as not to see the glaring facts, in order to remain faithful to their theories in spite of all and everything." Or this quotation from a 1950 Fields Medal winner: "The thing is, it’s very dangerous to have a fixed idea. A person with a fixed idea will always find some way of convincing himself in the end that he is right."

Why is Taubes so interested in bias?  For several decades, it has been the conventional wisdom that dietary fat (and especially saturated fat) contributes to obesity, heart disease, and cancer.  Judging from Taubes’ exhaustive research -- indeed, I’d be surprised if any other book examined bias within a particular scientific field in such detail -- the conventional wisdom was based on unreliable and slender evidence that, once established and institutionalized in government funding, set a pattern of confirmation bias by which further research was judged (or ignored).  To take several examples (the book is full of many more):

• Researcher Ancel Keys is perhaps the most important figure behind the origins of the dietary fat hypothesis.  Two of his most famous studies found a strong correlation between diet and heart disease in a handful of countries, but he cherry-picked the countries to analyze, omitting countries that would have undermined or even eliminated the correlation entirely. (pp. 18, 31-33).
  
• Dietary researchers tended to ignore -- or refused to allow publication of -- studies showing that diet, cholesterol, and heart disease were not even correlated (pp. 27, 35), or even that low cholesterol raises other risks of death (in several studies, people with low cholesterol and/or people who ate low-fat diets were more likely to die of cancer, see pp. 37, 54, 71, 81).  As for cholesterol-lowering diets (which may include lots of polyunsaturated fat, and hence are different from low-fat diets per se), dietary researchers tended to rely on one positive result from a Helsinki study, while ignoring a politically incorrect result from a clinical trial in Minnesota (in which 269 mental patients assigned to a cholesterol-lowering diet died, compared to 206 in the control group). The Minnesota result wasn’t even published for 16 years; Taubes asked the researcher why, and got the response: "We were just disappointed in the way it came out."  (pp. 37-38).
  
• Similarly, in 1961, a conference of the Association of American Physicians included a presentation showing that in comparing heart disease patients in New Haven to a healthy population, the diseased patients were much more likely to have high triglycerides than high cholesterol, thus implicating high carbohydrate diets (which elevate triglycerides).  One of the researchers told Taubes, "It just about brought the house down.  People were so angry; they said they didn’t believe it."  Despite this result, later studies funded by the National Institutes of Health would completely ignore triglycerides, focusing only on cholesterol levels. (pp. 157-60). 

Meat: bad for the climate it seems, but good for your health.

Walter E. Williams:

Poor people are far better served in the market arena than the political arena. Check this out. If you visit a poor neighborhood, you will see some nice clothing, some nice cars, some nice food, and maybe even some nice homes—no nice schools.

Why not at least some nice schools? The explanation is simple. Clothing, cars, food, and houses are allocated through the market mechanism. Schools are allocated through the political mechanism. By the way, if you are a member of a minority, it is in your interest to minimize those decisions over your life made in the political arena, where the majority rules.

I’m not sure what to think about the "mark-to-market"-controversy, but one thing is clear since Enron. Don’t trust the managers. In any case, here are some pretty good arguments in favor of the mark-to-market rules:

(T)he Financial Accounting Standards Board voted - by one vote - to relax accounting standards for certain types of securities, giving banks greater discretion in determining what price to carry them at on their balance sheets. The new rules were sought by the American Bankers Association, and not surprisingly will allow banks to increase their reported profits and strengthen their balance sheets by allowing them to increase the reported values of their toxic assets.

This makes no sense, for three reasons.

1. Investors and regulators are not idiots. They know what the accounting rules are. If banks claim they were forced to mark their assets down to “fire-sale” prices, investors can look at the facts themselves and apply any upward corrections they want. Now that banks will be able to mark their assets up to prices based solely on their own models, investors will the downward corrections they want. It’s a little like what happened when companies were forced to account for stock option compensation as expenses; nothing happened to stock prices, because anyone who wanted to could already read the footnotes and do the calculations himself.

However, the situation is not symmetrical, and the change is bad for two reasons. First, fair market value (”mark to market”) has the benefit of being a clear rule that everyone has to conform to. So from the investor’s perspective, you have one fact to go on. The new rule makes asset prices dependent on banks’ internal judgment, and each bank may apply different criteria. So from the investor’s perspective, now you have zero facts to go on. It’s as if auto companies were allowed to replace EPA fuel efficiency estimates with their own estimates using their own tests. We all know the EPA estimates are not realistic, but we can find out exactly how they were obtained and make whatever adjustments we want. If each auto company can use its own criteria, then we have no information at all.

Second, this takes away the bank’s incentive to disclose information. Under the old rule, if a bank had to show market prices but thought they were unfairly low, it would have to show some evidence in order to convince investors of its position. Under the new rule, a bank can simply report the results of its internal models and has no incentive to provide any more information.

So what we get is less information and more uncertainty. That was all reason number one.

2. Between the two options, this is the unsafe choice. Accounting in general is supposed to embody a principle of conservatism. Given plausible optimistic and pessimistic rules, you are supposed to choose the pessimistic one. But think about what happens here. Let’s say the bank has to mark to market, but it turns out the economy recovers and the asset increases in value. In this scenario, the writedown reduced the bank’s capital, so it had to get more. When the asset recovers, the bank is profitable and can buy back the shares it sold.

In the opposite scenario, the bank marks to its own imagination, but in reality the market price was the long-term price. At some point in the future, the bank will have to write down that asset, but it may not have the capital to absorb that writedown, in which case it will fail.

The choice is between the risk of raising too much capital and the risk of not raising enough capital. FASB chose the latter.

3. Mark-to-market is a red herring to begin with. Accounting rules are much more complex than “all assets must be marked to market” and “all assets can be marked to model.” There are different types of assets (Level 1, 2, and 3); different types of impairments to asset values (temporary and other-than-temporary); different accounting impacts (some writedowns on the balance sheet affect income statement profitability, some don’t); and, most importantly, different ways of holding assets. How a bank accounts for an asset depends in part on whether it says that asset is held for trading purposes, is available for sale, or will be held to maturity. Wharton has a high-level discussion of some of these issues, but if you really want to understand them you should read Sections 1.B-D of the SEC’s study of mark-to-market accounting, which I helpfully summarized for you in an earlier post.

The SEC’s conclusions were, in short:

• Most bank assets are not marked to market to begin with, and half of the ones that are marked to market are the type that don’t affect the income statement.
• Marking assets to market had only a very small impact on bank capital through September 2008.
• The bank failures of 2008, including Washington Mutual, were not caused by marking assets to market (increasing loan loss provisions were a bigger culprit). In each case, stock prices started falling before the banks took writedowns, implying that investors already knew something was fishy before the accountants did anything.

I don’t know any of the back-room dealing, but it seems like the banking industry is taking advantage of the confusion to push through a change it wants, because it will make it easier for banks to massage their balance sheets and harder for investors to see what is really going on.

Leverage of banks did not significantly increase over the past 15 years (for commercial banks it actually slightly went down), so could not be the cause of the crisis:

The attached graph shows leverage ratios for Commercial and Investment Banks over time. There’s a little jump at the end for investment banks, and I suspect a lot of that was due to the fact that as the Asset Backed market shut down mid 2007, all the stuff coming on their books they used to sell, they had to keep.

Note that many people say leverage caused the bubble. Only in a certain sense. Home buyers were too leveraged (no money down). Any owners of these assets were implicitly too leveraged by owning them. Basically, if the base constituents of the portfolio is leveraged, everything above it is too. But strategically, at corporate level, the Assets to Liabilities ratio was not a major player in this crisis. And, of course, no bank should ever own investment grade securities trying to make money on the spread.

Stefan Karlsson writes:

(T)he ECB decided to lower its refinancing rate to 1.25%, the lowest level ever. The cumulative 300 basis point cuts in the last 6 months is its most aggressive easing ever. Yet it is still under constant attack from certain pundits who claim they should have been even more aggressive, pointing to central banks like the Federal Reserve, the Bank of England and the Swiss National Bank that have lowered short-term rates to near zero and at the same time initiated various "quantitative easing" schemes.

It is true that compared to many other central banks, the ECB has been relatively moderate in its inflating. But that only reflects how inflationist these other central banks have been-not any kind of deflationist bent from the ECB.

-With regard to interest rates, the current refinancing rate is the lowest ever in the history of the ECB and it has been reduced at a much faster pace than anytime before in the history of the ECB. Moreover, short-term rates are actually a lot lower than the refinancing rate. Money market rates are closer linked to the ECB overnight deposit rate, which is 1 percentage point lower. So for many of the most important short-term rates, the ECB is already pursuing a Zero Interest Rate Policy.

-With regard to money supply, after reaching a low of 0.2% in August 2008, the 12 month growth rate of M1 has accelerated sharply, to 6.3% in February 2009 (Note that these numbers exclude the effects of Slovakia’s adoption of the euro in January 2009, and the similar inclusion of Cyprus and Malta in January 2008), mostly as a result of the aforementioned aggressive interest rate cuts. Note also that this 6.3% gain has come entirely in the last 6 months. The 6 month growth rate is as high as 13.3%, compared to a slight contraction during the 6 months ending August 2008. The 3 month growth rate is even higher, 15.7%.

-With regard to price inflation, it is true that it has fallen quite a bit (To 0.6% in March). The 12 month rate might even fall further in the coming months. But price inflation is not a leading indicator, it is usually a lagging and at best a coincident indicator. Today’s relatively low price inflation is the lagged effect of the stagnant money supply the euro area had early in 2008, as well as the effect of the sharp drop in global commodity prices between July and November 2008.

Thus, the characterization of the ECB as "deflationist" or "hard money" is simply not true-at least not in the absolute sense of the word.

Herman Verbruggen ("Markske" uit FD De Kampioenen) over de film die er niet komt:

De Kampioenen gaan voor kwaliteit...

René Vandereycken geklopt op eigen terrein.