They never retire

In the last few days I have been browsing many UK newspapers, and I keep seeing quotes all over the place such as the following (I am sure you have seen them too):

"No serious economist is worried anymore about inflation."

"The problem is deflation, not inflation."

"We need to reflate, rather than worry about inflation."

This is despite growing inflation, and the Austrian analysis (which predicted this crash in detail), that if we keep going as we are, with ever-decreasing interest rates, increased government borrowing, and increased government spending on white elephant projects, then inflation or stagflation, or possibly hyper-inflation, is a dead certainty, even in the heart of a depression.

I'm going to nail my colours to this. Come back in three years time to make me eat my own hair if it ain't so. Though I am only an armchair economist, so what do I know?

What is a much more interesting question, however, is what all of these "serious" (i.e. Keynesian) economists will do, if they are wrong, and inflation becomes a real monstrous problem. Will they resign their fat lucrative positions within the heart of the exploitative class?

To ask the question is to know the answer, for we know exactly what they will do. They will invent a bodyguard of plausible excuses as to why they were right all along, and keep taking their salaries, thus proving Rothbard's Law that nobody ever retires. No matter how wrong.

Let the battle commence. Set your alarms for three years time.

Will somebody please make Peter Schiff U.S. President?

Are you still in the dollar? Well, get out while you can. Why? Check out the full running of both videos below for the full real picture on the U.S. economy:

Part I:



Part II:

Sometimes the economic beauty contest gets us into an ugly mess

As the Mises blog pointed out, there was a very strange article in "The Independent" today by an HSBC bank economist, which discusses Ludwig von Mises. Feeling very proprietorial about anything Austrian reported in English newspapers, I dropped my own comment onto the article, which I've placed below, though the earlier comment by Professor Roger Garrison is much better. I suppose we ought to tip our hats to any Keynesian economist even daring to mention the dreaded word "Mises", but no wonder HSBC have started to come under severe financial stress today if this article indicates the quality of their economists:

Posted by Jack Maturin | 27.10.08, 15:59 GMT

The markets didn't fail, Stephen, the central planning commissar at the heart of the socialist central planning board system, Alan Greenspan, failed. The Bank of England, the European Central Bank, and all the other socialist money planning boards also failed, after taking his lead. But just what has "the market" to do with any of these heavily interconnected socialist institutions?

Posted by R. W. Garrison | 27.10.08, 10:34 GMT

The real Keynesian beauty contest was played out between Greenspan himself and traders in securities markets. The traders had to guess what interest rate the central bank was going to target next; and Greenspan had to guess what guesses the traders were making. We had a long period (roughly 2003-2005) where the guessing was mutually reinforcing--and mutually comforting. The trouble was that this ethereal interest-rate equilibirum was at odds with the interest rate that the market (sans central-bank interest-rate setting) would have sustained. The current financial collapse is a dramatic demonstration that the Federal Reserve's interest rates were in fact unsustainable. This, in essence, in the Mises-Hayek theory. The market can allocate resources over time--better than any other known economic system. The Keynesian beauty contest comes into play only when a Big Player (the central bank) distorts the market mechanisms--and when one of the beauties is Alan Greenspan.

Turning Japanese

Pressure is growing from society's debtors and borrowers (the majority of voters) for their debts to be liquidated via printing press counterfeiting. Which is nice.

Eminent voices within the Bank of England's circle of friends are now calling for zero per cent interest rates.

Obviously this bid for debt destruction via the the machination of the printing press is appalling for creditors and savers (the minority of voters), therefore destructive of long term wealth and capital creation, but what the heck. Whatever the United Kingdom's voters want the United Kingdom's voters will get, even if it is absolutely the wrong thing to do. Thus, the God of Democracy is revealed in his full majesty.

Yes, you might argue that a man dying of thirst in a desert is willing to sell a gold bar for a glass of water, regardless of the long-term investment consequences, but we are about to start exchanging investment gold for opiate poison. Even the Chicagoan monetarists saw what happened to Japan when the zero per cent experiment was tried there, but no doubt there will be a whole host of excuses and tinkerings to "make it work better", this time, based upon "what we learned" from Japan.

You would also have thought that Keynesians and their ridiculous counterfeiting ideology were destroyed by their stagflation play book in the 1970s. But no; they're still with us, having crawled back out of the woodwork. These same Big Government idiots who got us into this mess and who failed to predict the consequent worldwide meltdown when their Keynesian confidence trick failed, still think that they possess the right to lead us into another calamitous set of Big Government policy initiatives which will make everything even worse.

Whereas those who predicted exactly what would happen (i.e. the Austrians) are to have their solutions completely sidelined. What can you do?

I know. To hose down the debt even quicker, why don't we just print ten million pounds for every man, woman, and child, in the United Kingdom, and then get everyone to collect it from their local post office this Friday? That way we'll all be rich before the weekend and none of us will ever need to borrow anything from a bank, ever again. Whoopee!

For an even cheaper solution, all we need to do is authorise everyone in the country to add an extra zero to every bank note they currently have in their possession. Actually, let's make it two zeroes! No, people might be worried about getting their fingers a little bit inky. The even easier solution is just to add ten million pounds to everybody's bank accounts, silently and electronically, to avoid any fiddling about with any messy paper or ink.

You see, AngloAustria has the answers. And with absolutely no pain whatsoever. After all, if creating fictitious money out of thin air is good enough for the Bank of England to solve global problems, it ought to be good enough for everyone else to solve their own local problems, surely?

Just ask Robert Mugabe:Or even better, just ask one of his country's billionaires about how it feels to have been made so rich by their glorious socialist leader:

Serves him right: George Osborne fighting for his political life

First, let's get one thing straight. I despise and loathe Peter Mandelson with a passion that is only surpassed by my feelings of uttermost revulsion for Gordon Brown. But there are some things that are sacrosanct in life, even for the cockroach scum layer that call themselves "public service" politicians.

One of these things that must be kept sacrosanct, unless we are to descend into a moral abyss even deeper than the one we are in, is the keeping of things to yourself that are told to you in confidence. Yes, there will be spills. That is the nature of the human condition. But writing down what you have just heard and then telling the first journalist you come across, hardly qualifies as a "spill".

So when George Osborne, the politically non-existent shadow chancellor, revealed that the prince of darkness (now known as Lord Voldemort of Hartlepool) had been "dripping poison" about Gordon Brown, at a private meal Osborne and Mandelson shared together, just days before Mandelson's ennoblement and reincarnation as a third-time-lucky cabinet minister, I wondered just how long it would be before the Universal Goddess of Just Desserts got her own back on Osborne, a slimy Bilbderberger of the first water.

The Goddess very rarely fails to disappoint. Now she has Osborne twisting in a macabre dance for his "political life", by revealing to the world that he is up to his own filthy eyeballs in sleaze.

It couldn't have happened to a nicer snivelling tell-tale wretch. Did Osborne really believe Peter "Machiavelli calls me Nemesis" Mandelson wouldn't be able to stage-manage a snake-hissing revenge? In the caustic words of Hermione Granger, "What an idiot!".

To have even failed to cover his tracks, and to have so easily enabled Mandelson to work out who had spilt the beans, qualifies Osborne as a hopeless second rater, as well as a rotten snitch.

So let's hope that Cameron does the decent thing, drops Osborne from the First XI, and appoints William Hague as shadow chancellor to start taking Alistair Darling and Gordon Brown to task for the appalling Marxist mess that they are currently hatching within the body of the British economy.

No, please don't take this as support for the Tories. They are no better than Labour. But I'll take anything, at the moment, to undermine the British people's confidence in this increasingly Marxist state.

Heffer alert: MPs must stop serving their own interests and start serving ours

A splendid article by Simon Heffer, in the Torygraph.

The great Johnny Rotten

As I used to be a left-wing anarchist, many years ago, greatly influenced by the punk music revolution of the 1970s, and particularly by John Lydon Esquire, it was a great surprise to me a few years ago when I woke up one day to realise that I had journeyed around the entire discworld of politics, via communism, socialism, conservatism, and classical liberalism, all the way around to the other major form of anarchism; the anarcho-capitalist kind.

It would seem Mr Lydon has been on the same journey, hence his alleged recent support for Austrian Ron Paul, his reported libertarianism, and his splendid series of adverts, recently, for Country Life butter.

Watch the first twenty seconds of this embedded YouTube video to catch his great anti-nationalist and possibly anti-subsidy dialogue:

Q. Do I buy Country Life butter to support our hard-working British dairy farmers?

A. No. It's their career choice!

BTW, you may have noticed above that I didn't include "fascism" when described the Great Circle political journey I have been on. I didn't need to. It's automatically included within "socialism".

What causes recessions, then?

The great Michael S. Rozeff explains.

Quantum of Solace

Thank the Lord that the new James Bond film is coming out soon, to offer us some temporary relief from the idiocy of world government. Yes, I know, James Bond is an agent of world government, and Ian Fleming helped create the CIA, etc, etc.

But please, give me a break. I also watch Top Gear and Doctor Who on the BBC, I believe one of the greatest radio programmes of all time was the Hitchhikers' Guide to the Galaxy, from the BBC, and that Bonson Jorris is mostly a good person, despite his recent statist piffle about Keynesian pump-priming.

None of us is perfect, and I will continue to enjoy watching James Bond films for hopefully some time to come (until possibly the dreadful day comes when they cast an American in the title role). On that day, citizens, there truly will be a revolution.

And of course, it is the fine scripts, talented direction, and intense acting skills that draw me to this most successful of film franchises. It is nothing to do with anything else.

That ol' canard again - Public sector workers pay taxes

Oh dear. Another highly intelligent man, Philip Johnston, has fallen for that old canard that public sector workers pay taxes. In an otherwise splendid article, he takes the public sector to task for their gold-plated pensions, which are paid for by the increasingly poor host they feast upon: Financial crisis: Why should I pay for MPs to have a comfortable retirement?

Although I'm expecting the usual dreary responses from retired civil servants, most of whom seem to think that their "taxes" keep the rest of the economy afloat, here was the necessary Maturin Towers response:

---

Posted by Jack Maturin on October 20, 2008 11:23 AM

Public sector workers do not pay taxes. This is an accounting fiction promulgated by the governments to fool the rest of us into paying for these parasites.

Yes, it's a difficult sleight-of-hand to spot, but it can be revealed via a simple scenario.

Imagine that everyone stopped paying taxes. Now ask yourself what would the wages of any full-time public sector worker be?

The answer is of course, "absolutely nothing". Real taxpayers, of course, would all be better off, subject to other distortions such as those private companies that do all of their work for the public sector. If you follow the logic through, however, it does eventually become absolutely clear. Public sector workers do not pay taxes. And the more someone derives their income from the public sector, the less tax they pay.

If most people ever realised this, then there would probably be an instant revolution. So it is no wonder they hide the fact that public sector workers do not pay taxes, using the magical fiction of gross and net wages.

We ought to be ashamed of ourselves for continually falling for this simple trick.

---

UPDATE: I did get lots of people with sidling remarks about how public sector workers pay tax, but none who would take me on directly, as they probably knew deep down the weakness of their position, however, I did eventually get the usual chippy state drone, as below:

---

Posted by Teacher. on October 20, 2008 2:39 PM

"We ought to be ashamed of ourselves for continually falling for this simple trick."
Posted by Jack Maturin on October 20, 2008 11:23 AM
Report this comment

No, you ought to be ashamed of yourself for failing to point out that without public servants there would be no-one to look after your kids while you are at work all day. Or save your life if you are ill. Or put out your house as it burns to the ground. Or cut you out of the wreckage of your car.

I am one of these people and this week, just like every other, I will work in excess of 50-60 hours.

During those hours, I will work harder than many 'private sector' workers.

I know, I used to be one of them.

---

Oh dear, what a terrible shame. Still no answer as to my question of public sector workers paying tax, just sanctimonious drivel, but I felt it worth a response anyway. Here is my reply:

---

Posted by Jack Maturin on October 20, 2008 5:29 PM

Posted by Teacher. on October 20, 2008 2:39 PM

“No, you ought to be ashamed of yourself for failing to point out that without public servants there would be no-one to look after your kids while you are at work all day.”

Oh dear, I have struck a nerve. I actually prefer to have my children educated at school, rather than merely “looked after” while I go out earning taxes for the government.

That’s why my children have never been to a government school to have their heads filled with Guardian reader nonsense, and for as long as I can afford it, while I remain in this God forsaken socialist client-state country, and while the taxes I must pay allow me any freedom of spending of any kind, I hope that remains the case. If only they would pay me back what I am forced to pay in taxes for government children warehousing facilities, I would be able to afford an even better education for my children.

“Or save your life if you are ill.”

If the NHS is so good, “Teacher”, allow people to opt out from it with all of their NHS contributions via their taxes paid back to them. Let’s bet on how many people stick with this dirty, chippy, dangerous doctor service if given the freedom to escape it. I would be out of the NHS like a shot. I predict that it would not last one year, without its tax-funded status, where we are forced to pay for it whether we want it or not.

“Or put out your house as it burns to the ground.”

Again, give me the option to get out of paying for local authority fire services, and allowed to pay for privately-provided services or contribute towards local volunteer services with no input from the state, then I would take it.

“Or cut you out of the wreckage of your car.”

Ditto for all rescue services. There is no technical reason why the AA or the RAC or even Green Flag couldn’t provide private road rescue services, and no reason why private ambulances and para-medics couldn’t attend accidents to whisk people to clean safe private hospitals. It is only the monopoly tax funding of state fire services which guarantees their role at car traffic accidents. Get rid of this status, give us our money back, and I’ll take a bet with you that the AA and the RAC would be able to cope.

“I am one of these people and this week, just like every other, I will work in excess of 50-60 hours.”

This is another reason I use private education services. The teachers there are not so stressed, have more energy because they are working less hours, and are far less angry and chippy, therefore not passing their negative energy and their endless socialist propaganda onto the children under their care. Thank you for confirming why I would be a fool to let my children fall under the care of a government teacher.

“During those hours, I will work harder than many 'private sector' workers.”

Oh dear, you really are suffering from martyr syndrome.

“I know, I used to be one of them.”

Well, without knowing your personal details it’s hard to work out why you felt the need to move to a job where you had to work harder and do more hours, so let’s not go there. But I think we can still agree on one thing.

Whether or not we can agree on any of the points above, and I suspect not, it still remains the case that you do not pay tax. If you think you do, just answer my original question in my original post, rather than piling in with all of this sanctimonious invective.

If you think that public sector workers would have any income, if everyone stopped paying tax, please enlighten me as to how this would be possible? If you could then let me know how I could stop paying your wages, I would be doubly pleased. I have no wish to employ you in any capacity whatsoever. That I am forced to employ you, and pay you a salary, via the state taxation machine, I consider an outrage.

---

That should get a response! :-)

Pip pip!!

---

It did get a response, but not the one I expected. A gentleman of quality writes:

---

Posted by alex on October 20, 2008 6:56 PM

Posted by Jack Maturin on October 20, 2008 5:29 PM

I salute you sir, thx for that and well said.

--

The pleasure was all mine! ;-)

Ambrose Evans-Pritchard: Do our rulers know enough to avoid a 1930s replay?

Ambrose Evans-Pritchard article, here.

Maturin response:

Jack Maturin on October 20, 2008 at 09:28 AM

Do our rulers know enough to avoid a 1930s replay? Short answer: No. Long answer: So far they have done almost everything exactly wrong. The interesting question is why do they keep doing everything so exactly wrong?

Unlike most business page writers, Ambrose, you are at least brave enough to land punches on the governments, the regulators, and the central banks, that have deliberately caused this mess with their loose credit creation policies to soak up the short-term applause of the voters. So I congratulate you for that.

But what governments ought to have done here is absolutely nothing. The asset bubbles created by all of the central banks, but particularly by Greenspan with his ridiculously low Fed interest rates, need to burst. The Swedish Central Bank may give Central-Bank-Loving Paul Krugman a Nobel Prize in Economics, to try to hide this necessity, but it will do them no good.

Trying to prevent this recession, as governments feel compelled to do under voter pressure, will not stop these implosions, only delay them. The longer the implosions are delayed, the longer the recession will be.

It would have been better to take all the pain in one or two years, and get it over with.

But what we are seeing with fools like Darling, Cooper, and Brown, are deliberate actions to delay the pain of short, sharp, quick, and necessary recession, because they have to hold an election within two years.

In attempting to push off the worst effects for several years, to try to stage-manage some desperate election win, with occasional flowerings of hope where some scape-goat group will be blamed for the mess they have themselves created, they have turned this necessary recession into an unnecessary depression.

Tackling this recession needed braver actions and deeds. Anyone can spend everybody else's money. But the bravest action and deed here would have been to do absolutely nothing; to let Northern Rock go bust, to let Bradford and Bingley go bust, and to let HBOS go bust.

The cards could then have fallen on the table where they would, to then get picked up by the survivors.

But the short-term horizon of all politicians has encouraged them to go for short-term patches which have looked good in next day's newspapers, but which have created inevitable and terrible long-term consequences.

This is why governments keep getting these things exactly wrong, why they got it exactly wrong in the 1930s, and why they are getting it exactly wrong now.

And forget Galbraith. The only book Ben Bernanke and Mervyn King need to read on this is "America's Great Depression" by Murray Rothbard, and the only web sites they need to visit are the Mises Institute and Lew Rockwell web sites. Everything else is just statist lies, propaganda, and stupidity.

This is also why the short-term patches aren't working. In the thirties, the only people who knew what was happening were the isolated and obscure professor and student pair of Ludwig von Mises and Friedrich von Hayek.

Now the markets are reading the Mises Institute web site each day. They now know almost instantly why each government intervention will fail. I am only half-joking when I say that I expect this web site to get banned, probably under counter-terrorism laws.

I hope you continue to be brave enough to keep pointing these faults of the state out to the British people, Ambrose, despite the governmental pressure that you will no doubt be subjected to, if you do.

So best of British luck to you.

JJ on October 20, 2008 at 10:07 AM

Jack Maturin - It's a shame that your views on this have no voice in British politics or in the British MSM. We need a Lew Rockwell or Peter Schiff in Britain spelling things out loud and clear. I would suggest that more than 90% of the population do not even know that there is an alternative route out of this mess.

Jack Maturin on October 20, 2008 at 11:07 AM

JJ - Jeff Randall sometimes comes close to being a British Peter Schiff.

So take note Telegraph business writers, especially Edmund Conway and Roger Bootle! If you want to get Jeff Randall's pay cheque - and don't pretend you don't - start cloning Peter Schiff instead of Paul Krugman.

If you want a fiscal comparison, just examine what cloning David Letterman did to Jonathan Ross's pay cheque! $-)

Peter the Rock on October 20, 2008 at 12:22 PM

Jack Maturin
on October 20, 2008
at 09:28 AM
AND
David Goldsby
on October 20, 2008
at 11:20 AM

Good one you guys, seems you have the measure of it. I can only agree that Austrian economics makes the greatest sense. However, maybe we need to consider not just the economic theory, but the political animal that drives it, and that includes the cabal of banksters who are politically driven too in so far as they will do anything to maintain the current fiat system. History teaches that there is not one example of a successful fiat currency system, they all end in hyperinflation and systemic collapse. I do believe that we are facing this end whatever the masters do. I am not alone in this view. The answer eventually will be in gold because it is the only currency which does not have a counterparty. There was a great article on Market Oracle about this:
http://www.marketoracle.co.uk/Article6860.html

Jack Maturin on October 20, 2008 at 01:11 PM

Peter the Rock - "However, maybe we need to consider not just the economic theory, but the political animal that drives it, and that includes the cabal of banksters who are politically driven too in so far as they will do anything to maintain the current fiat system."

For the fullest analysis of this, Peter, the only book you need read is "Money, Bank Credit, and Economic Cycles" by Jes�s Huerta de Soto.

The hardcopy book is best, but you can read the entire thing online for free, via the following fully-indexed PDF link:

=> http://mises.org/books/desoto.pdf

That might be a bit of a monster to start with, so for an easier start, you could try Murray Rothbard's following books, all of which explain the numerous symbiotic links between the gangsters and the banksters:

"The Mystery of Banking"
=> http://mises.org/Books/mysteryofbanking.pdf

"What Has the Government Done to Our Money"
=> http://www.mises.org/books/whathasgovernmentdone.pdf

"The Case Against the Fed"
=> http://mises.org/books/fed.pdf

That should be enough to keep you going. Essentially, just read Rothbard and you won't go far wrong. Though of course, that's not what 99% of other economists would say, all of whom have been brainwashed in the Central Banking School of Keynes.

All Keynesians should try reading the books above, and then attempting to refute them. Good luck. I did. I failed. And had to become an Austrian as a result. Most just ignore Austrianism and hope it will go away, so they can keep picking up their salaries paid to them for holding orthodox Keynesian views.

Most of Rothbard's prolific life's works can be found online, here:

=> http://mises.org/literature.aspx?action=author&Id=299

David on October 20, 2008 at 02:26 PM

Well said Jack Maturin 9.28.

Why is the imperative nowadays to do something, anything, just to appear to have some control?

This lot and their economic advisers have done more than enough damage over the past 11 years to last us into the next generation and beyond.

Cut taxes, but leave the recession to unwind the damage done by the last eleven years of mismanagement, and hope to avoid further damage.

Jack Maturin on October 20, 2008 at 02:55 PM

David on October 20, 2008 at 02:26 PM

"This lot and their economic advisers have done more than enough damage over the past 11 years to last us into the next generation and beyond."

That was merely an hors d'oeuvre. Wait until the stagflation they have been creating with their recent stupid government interventions really starts to kick in.

We ain't seen nothing yet.

But picking up Richard Vine's point, at least "Quantum of Solace" is coming out soon to take our minds of this continuing government idiocy.

The bloodletting to continue

The spiralling interventions of government continue apace, all of them exactly the wrong thing to do and each of them increasing the time span of the oncoming depression. This time, Badger "Wag The Dog" Darling has announced that "he" is going to spend "his" way out of this depression, while at the same time failing to realise entirely that this kind of reckless abandonment of all reason, and the printing of many more pounds out of thin air, is going to make things much worse.

Although it is now too late for the full Austrian solution, i.e. for governments to have done absolutely nothing, there is still time for them to stop dancing to the tune of these incomprehensible interventions.

Alas, they have fallen into the Keynesian trap of thinking that reality stops when you aggregate people into collectives. When a single private man falls on hard times, the sensible advice would never be for him to increase his credit card debt, to go on an endless consumer blowout, and then to hope that something will turn up. But when you aggregate this single man into millions of people, as when represented by a government, it suddenly becomes exactly the thing to do. After all, don't we owe it to ourselves?

So why has this all of this intervention suddenly become so de rigeur? Because Paul Krugman, the recent Nobel prize winning economist, and virtual embodiment of the Great Ass himself, John Maynard Keynes, has said that it is so. Don't stop for a moment, however, to wonder who just awarded him his Nobel prize, i.e. the Swedish Central Bank, and why they did so at such an appropriate time. Just keep dancing to this Pied Piper's merry flute and get on with printing a few hundred billion pounds more to ensure that this necessary market recession, liquidating bad debt, turns into an unnecessary government depression, fed by bad debt. When it is finally all over in five or ten years, possibly after a bloody war, tell the world that this blood letting solution to feed the leeches really was the cure.

Even Bonson Jorris has fallen for this "wag the dog" confusion. In a recent article, the Great Blond One posited a whole heap of piffle, balanced on particularly shaky stilts, that the way out of this depression was for government to spend, spend, spend. In failing to see that it was government capital projects in the United States, in the 1930s, that lengthened the depression, rather than shortening it, he has fallen into the fiscal trap of the Keynesians who no doubt plague his London mayoral offices, especially the visiting sort from the Torygraph's business pages. You might forgive Bonson for banging on about the wonder's of the Hoover Dam, for he is hardly known for his great economic insight, however, you might have thought that a regular reader of the Lew Rockwell column might have actually figured it all out by now, that the government is the problem, rather than the solution.

So what's the Maturin plan? Well, aside from doing absolutely nothing, so that the free market can finally get to work correcting all of the exploded asset price bubbles, initially fed by massive government tampering with the money supply, they could also help by cutting spending and by cutting taxes. This would mean that the least useful people in society, i.e. government bureaucrats, many of whom are actually harmful to the economy (e.g. non-job equality directive regulators), can then be directed to socially necessary tasks by the free market. As the burden of these parasites will have been lifted from upon the backs of the productive, the producers will then be able to get on with the job of best directing scarce resources into the most socially useful areas and away from government waste and misdirection; although I would settle for Darling to just do absolutely nothing, if that's all I am to be offered.

However, to just print even more useless coloured bits of paper and then to hand them to the grim faced dullards who infest Whitehall, to then waste upon their empire-building Big Brother schemes, is to pile error upon error, in a veritable Tower of Malinvestment. In the words of Jeremy Clarkson, we are ruled over by imbeciles.

And so the madness continues.

Deepest Oxfordshire awaits!

Not only is the Good Professor attending "Liberty 2008", in London, his extended tour of England takes in one other date. For those who live anywhere near God's own Kingdom of Oxfordshire (hopefully to be a Hoppeian city state at some point in the future, with Henley On Thames as its southernmost bulwark), Der Hoppemeister will also be speaking at Balliol College, as a guest of the Oxford Libertarian Society, at 8pm on Thursday, 23rd October. Details here:

=> http://users.ox.ac.uk/~chri2998/index.html?termcard.html

Alas, a prior engagement means I myself will struggle to attend, due to some nonsense I have to attend in London, though I will be there at "Liberty 2008".

I must say, however, that it's also very nice to see that the banner of the Oxford Libertarian Society includes as its first three "Talking Heads", Uncle Murray, F.A.Hayek, and L.v.Mises.

Splendid! I am not the only lunatic in England with arrestable Austrian tendencies! And only 30 miles away, too! Marvellous.

Mervyn King deploys new tool - Moral hazard!

The corridors of mafia power in England are beginning to reverberate with the idea of extremely low central bank interest rates, and the concomitant high inflation that this will automatically generate. According to the Torygraph, Bank of England insiders are considering slashing their rates to 2% or lower.

Whether this will mean Mervyn "Moral Hazard" King will be hoist by his own petard, we will see, but it seems the dubious practices of Helicopter Bernanke and the Japanese play book are all the rage in Threadneedle Street.

Not that any of it will do any good, of course, as they discovered in Japan when they tried zero per cent interest rates a few years ago. Because nobody suggesting any of this, including Edmund Conway or Roger Bootle of the Torygraph, have any idea of real economics. For that, they ought to read Frank Shostak, but hey ho, what does real economics have to do with the fairy tale world of the Keynesians?

Even the Golgafrinchams, of the Hitch Hikers Guide to the Galaxy, had better ideas than this. Yes, it was rather silly of them to adopt the leaf as legal tender, two million years ago, but burning all of the world's forests to increase the value of each individual remaining leaf did at least have a certain "commodity money" logic to it.

Rolling forwards to today's Earth, the easing of credit to solve the problem of too much easy credit makes less sense than refusing to invent the wheel because you can't decide what colour it should be.

But then who are the foolish ones? The panicking lizards in the mafia central banks, mafia government treasuries, and mafia-licensed newspaper business sections, or the dumbed down huddled masses in taxpayer land for allowing these panicking lizards to be their rulers? You decide.

Der Hoppemeister coming to England

The Good Professor will be speaking at Dr Sean Gabb's "Liberty 2008" conference, here in England, at the National Liberal Club in London, on the 25th and 26th of October. Details here:

=> http://www.libertarian.co.uk/conferences/conf08brochure.htm

You will recognise me there, too. I'll be the one holding a well-thumbed copy of "Democracy: The God That Failed" and a large autographing pen.

I may also wear a carnation and a bowler hat, just in case the book doesn't give it away.

UPDATE: In case you are wondering about the importance of the Good Professor to this blog site, you may like to check out our founding rules, here, particularly founding Rule Number One.

Is communism better than democracy?

Word reaches Maturin Towers that the Chinese government are edging towards democracy.

First, let me lay my cards down on the table. I considered it a tragedy in Eastern Europe when the USSR collapsed and the state-educated masses missed the opportunity to create a thousand Lichtensteins and went instead for western European-style democracy, with many of the parasites who had infested the communist halls of power hardly needing to bother to change either offices or jobs, as a new democratic bureacracy replaced on old communist bureaucracy, with the European Union standing in the wings ready to amalgamate these bureaucracies under its super-state wing.

Could the same be about to happen to China? Have the party bosses seen the writing on the wall? Have they seen that they will lose all of their parasitic privileges if the market economy of China keeps progressing at its fantastic rate? Is the only way they will keep these privileges via the means of instituting a process of western-style democracy? Would the alternative be the sloughing off of big government in China and its replacement by a true free market order, unless the communist big government can replace itself with a democratic big government before that can happen?

In short, as far as economic and social freedom goes, is it better that China remain communist, with a hated but clearly demarcated element of robbers who are tolerated but kept confined within their strictly demarcated lines by a productive population who otherwise ignore them, or would it be better for China if it became democratic, and then fell under Bastiat's illusion that everybody can prosper by robbing everybody else, via the broken mechanism of western-style democracy?

In short, is communism better than democracy, because under communism we can see who the bad people are, and then ignore them, whereas under democracy, the bad people can more easily pose as being part of the people, while still retaining their parasitic privileges?

It would be interesting to see what Professor Hoppe thinks? In fact, I may just email him to find out! :-)

Bravissimo, El Duce!

The banks have mostly collapsed and have been mostly nationalised, inflation is zooming upwards, as are the jobless figures, we stand on the brink of the biggest recession since the 1930s, and yet Gordon Brown is hailed internationally as a global hero.

Welcome to the topsy turvy world of socialist Britain. I would hate to see what would have happened if he had been a failure.

Socialism is the answer!

Socialism has cocked up again, as it always does. What's the answer? More socialism! Although there are many out there who know that this is utter nonsense, there are still too many "believers in freedom" who think that the current crisis is down to capitalism and that the banks represent the purest of the pure capitalists.

If only we had a 3-D chamber filled with an artificial intelligence projection of Uncle Murray Rothbard to correct these mistaken fools. He would tell them, in his spiritual projection, that the banks are the most socialist part of the free market, and are perpetually bankrupt. It is only government socialist favour that keeps them running and whenever the real free market ever gets close to catching them out, as it has recently, it is only further government favour which stops this permanent bankruptcy from destroying them.

In any other industry, let us say the rapidly burgeoning personal warehousing industry, it would quite rightly be considered totally illegal if I were to warehouse some furniture for a period, while I took a two year contract in Dubai, and the warehousers were to "lend" out my furniture for a rental fee in the hope that the borrowers returned it in good nick before I got back. Bankers, however, can do this, with our money, because they have bought this privilege from Leviathan. In return, they must obey Leviathan's rules, and most importantly of all, they must lend Leviathan whatever money Leviathan desires for its wars and its welfare programs.

This was at the heart of Alistair Darling's recent Freudian slip, "if we let the banks go bust, they will be unable to lend anything to us". The "us" he was talking about was the British government, rather the people of Britain. This inability for governments to borrow on the bond market is what governments are running scared of and why they refused to let the most profligate banks go bust. Because they knew that the day of reckoning would come too close for comfort, with an end to fiat currency and easy government borrowing following closely behind. Nobody in the mafia wants to tax their serfs too directly, because they would have immediate tax revolts on their hands. It is far easier to push the spending bills into the future via the government-bank-bond-borrowing scam. If you were immoral, would you give up a credit card where someone else keeps having to pay the bills and who can't figure out where the bills are coming from?

It is therefore our mission as Austrians, and believers in freedom, to keep ramming home this message, that this entire mess is down to government, government privilege, and democratic socialism, rather than freedom, liberty, and private property capitalism. It is disheartening, I know, but we must keep plugging away. Otherwise we will let these idiots keep wrapping our lives, and the lives of our children, in downwardly spiralling socialist/fascist chaos.

Hence, my latest post on the Torygraph's comment pages:

Posted by Jack Maturin on October 14, 2008 1:06 PM

Posted by Neil Jones on October 14, 2008 11:29 AM

Neil, it's getting to the point where it's hardly worth bothering trying to point out the lack of the Emperor's clothes. Most of the people here aren't interested in hearing your accurate analysis. They just want to blame someone, and most have so much socialism ingrained within them, that they just cannot bring themselves to blame the government.

The terrible shame of it is that we cannot divorce ourselves completely from these people and let them sink in the morass of their own bone-headed socialism. Alas, they will try to drag us down with them, so I suppose we must persevere and keep repeating ourselves until we are blue in the face. So let me try again too (though it will almost certainly do our cause no good.)

This is all the fault of Brown, Bush, the Federal Reserve, the Bank of England, and every other politician and central bank in the world.

To puff up the reputations of their politicians they have been flooding the world with easy credit for decades now, and have destroyed the value of money. What we are now seeing is the inevitable consequence. Yes, the banks can take some part of the blame because they have been the willing servants of the counterfeiting politicians, buying up government bonds and using government-granted fractional reserve rights to issue yet more easy credit.

But all of this has been managed and strictly regulated by socialist planning boards (a.k.a. central banks) and it is to their door that we should all be running with pitchforks and torches, demanding recompense.

That we are now turning to the same people who deliberately caused this mess, to agrandize their power, is an indictment upon us as to our ongoing stupidity. Their answer is for us to heap even more pelf and power upon them, and to make us even more socialist, when it is financial socialism that has caused this disaster and will continue to make this disaster get worse. Check out the fifth commandment in Karl Marx's Communist Manifesto. Herr Marx is adamant that socialism will not be achieved until the state has taken over the banking system. His disciple, Gordon Brown, is now close to achieving that goal.

We ought to be ashamed of ourselves, especially those of us who support his measures whilst also preaching a belief in freedom. We are heading into a dark age of socialist totalitarianism and chaos. Let us hope that it is such a disaster that it ends quickly. But I fear socialism will once again destroy a myriad lives first, before we can excorcise this ravenous beast now that it is among the chickens that have come home to roost.

Well Neil, I'm trying. Though I don't think it will have done much good. Please keep up the good work. Personally, I'm beginning to lose my morale in the face of this blind socialist orthodoxy. But as Ludwig von Mises used to say, "Tu ne cede malis" - Never give in to evil.

Pip pip!!

UPDATE: Further post added to the Torygraph thread:

Posted by Jack Maturin on October 14, 2008 5:40 PM

davey on October 14, 2008 4:25 PM

"Neither I nor anyone else has a bloody clue what has been going on, what is going on or what is the remedy for all this."

Professor George Reisman knows what's going on. He even has a solution.

Who is George Reisman? Arguably the greatest economist alive today, perhaps second only in recent history to the late great Murray Rothbard, and a fellow student, along with Uncle Murray, of the greatest economist who ever lived, Ludwig von Mises (though I'll accept Aristotle or Thomas Aquinas if we can discuss it over a large G and T).

Check out the following link if you want to find out what we should do, taking you to an article he wrote back in March predicting this entire crisis, what our leaders would do, why it's the wrong thing to do, and what the right thing to do is: link

Rocks and hard places - Inflation accelerates

If you read this article, you will see that the principal qualification to get a government sinecure position within a central bank is to become a master in the art of double-think.

For with interest rates being cut worldwide and taxpayers' loot being used to bail out government-bond-buying banks, central bank officials are saying that the markets will recover. However, without pausing for breath, they also tell us that (CPI) inflation will "undershoot" their 2% targets, due to slowing markets.

Which is it, guys? Are markets recovering or are they receding? Pick one.

Expect inflation to keep on rising. Expect a recession. Welcome to the Keynesian alternative reality of stagflation. Yes, I know this is impossible under the central tenets of Keynesianism, but the double-thinkers managed to survive this shattering conclusion in the 1970s. Expect them to survive it again, because the answer is always the same: No matter what happens, keep increasing easy credit.

(Incidentally, and in a very brief nutshell, RPI is the old retail prices index, which includes various long-term elements such as mortgage payments. RPIX is the RPI without mortgage payments, and CPI is the rate which excludes long-term items. Governments have recently preferred the CPI because it has provided lower figures. Expect them to choose, for what I am sure will be perfectly legitimate reasons, whichever of the other two figures drops significantly below CPI, if either of them does. What is the real rate of UK inflation though, outside of statistics provided by the UK government? Who knows. My best guess is around 10% and rising. For the US, I would use the True Money Supply produced by the LvM Institute. If anyone knows of a similar measure for the UK, I would be glad to hear about it.)

Retaliation in early

Gordon Brown's spin team have been working overtime. As well as pumping him up to be a master of the universe, they have provided him with a way out if it all gets too much.

Apparently he is edging ever closer to becoming permanently blind in both eyes.

Hopefully the end to this stalinist monster can't be too far away now. Let's just hope the British people aren't fooled by this master of the universe stuff. If they are, expect his remaining eye to enjoy a spectacular recovery.

What was the problem?

In interview after interview, many business leaders in Britain have been saying things like, "it's not been that bad, we're expecting a tough Spring 2009, but the fundamentals are actually okay". This happened tonight on the Jeff Randall show, with Phillip Green. So why the "enormous panic" of governments? Are businesses running down the roads complaining about lack of credit? Are people falling off rooftops because they can't get mortgages? Not round my way, they're not. You can still get credit if you really need it. The only problem is that you need to prove you are credit worthy and you need to pay a premium (thus fulfilling the old rule that if you want to borrow money, you have to prove you don't need it).

So what was the "Big Panic" that caused all of these European governments to fleece their taxpayers of cash, to ensure that banks can now lend these taxpayers their own cash back to them, but at interest?

Surely it's not because governments are worried about not having their bonds bought up by banks, is it? Surely it's not because if that doesn't happen, then governments will have to pay for all of their spending plans with real direct taxation, which taxpayers would revolt over? Or even worse, they would need to print money up directly to pay for spending, thus causing immediate and obvious inflation?

No, it couldn't be either of these reasons. I must be imagining it. Let's borrow a few hundred billion via bonds then, to support these banks, so they can buy these bonds to prop up government spending without taxation. We owe it to ourselves.

Flash Gordon - Saviour of the Universe

Not content with saving Britain from the collapse of capitalism, His Majesty Gordon Brown, saviour of the universe, today announced that although this is a global problem imported from America and in no way due to himself or his actions over the last 11 years, he is going to save the rest of mankind from themselves via the heroic action of spending everybody else's money.

This king of the impossible will save every one of us, every man, woman and child, by the actions of his mighty hand and with a mighty flash of inspiration.

Yes, he's going to copy Warren Buffett's investment strategy with Goldman Sachs and apply it to the entire world. What a man! What courage! Surely this plan and this man can never fail, one who is so pure in heart? Yes, I do believe he has found the holy grail. He has found a way to bring Karl Marx's ten commandments, first seen in Communist Manifesto, into the fresh air of day, particularly commandment five, once held to be an impossible act. Comrade Flash Brown surely is a genius.

If you don't believe me, check these commandments out, along with their Maturin Towers comments:

1. Abolition of property in land and application of all rents of land to public purposes - Eminent domain has now reduced property ownership to mere rent application from the state

2. A heavy progressive or graduated income tax - I don't think we need to examine this one in any detail whatsoever

3. Abolition of all rights of inheritance - Still working on this one, but a 40% tax will do for the moment

4. Confiscation of the property of all emigrants and rebels - Especially Icelandics via the use of terrorism laws

5. Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly - Everything Brown has been doing in the last week

6. Centralization of the means of communication and transport in he hands of the state - The continued heavy funding of the BBC and the state licensing of all other media outlets and telecoms industries with the exception of the Internet, but fear ye not, that won't be much longer in coming

7. Extension of factories and instruments of production owned by the state; the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan - Also known as the EU common agricultural policy

8. Equal obligation of all to work. Establishment of industrial armies, especially for agriculture. - When we say "all", we obviously don't include any of our clients, just the taxpaying serfs who will be made to fund the whole kaboodle

9. Combination of agriculture with manufacturing industries; gradual abolition of all the distinction between town and country by a more equable distribution of the populace over the country. - Hence the town and country planning act

10. Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production, etc. - Just about there, with a few pesky private schools still left

Yes, we're nearly there. All we need is a bit more EU power, and a bit more of Gordon's brilliance, and we shall have fully arrived at the communist state of Karl Marx's dreams. The tricky one was always step five, but now that has been taken care of, the rest will fall like skittles. Well done, Gordon.

The lights are going out all over Britain

Another interesting piece by Jim White, in the Telegraph, suffering the dreadful fate of being commented upon by an unrelenting mono-maniac, yours truly. Mr White posits that along with all the austerity measures that "normal" people are going to have to make in the next few years, local councils are going to be a bit less profligate too, and push less useless glossy magazines through our letter boxes. Well, I wasn't too sure about this point, while agreeing with most of the rest of what he had to say. Plus, I like to have a bit of fun every now and again, especially to avoid trying to explain central banking again, for the 101st time, to all those people on the Torygraph staff who think the "free market" has failed:

Posted by Jack Maturin on October 13, 2008 7:54 AM

I wouldn't be so sure about the end of "free" council glossy magazines. Our lords and masters, in the ruling mafias of this country, pass all of their costs onto taxpayers, so why should they worry if the taxpayers are short a few quid? If the serfs won't pay up, they can be dragged down to the county court by the mafia Stasi boys in blue and then made to pay, at gunpoint, if necessary.

Actually, I think it's an outrage that you dare suggest that our glorious "public servants" should be made to suffer for the mistakes of the "evil" private sector. Why should they? It's not their fault now, is it?

No, they should keep their fat non-job salaries and even fatter final salary pensions, for doing little all day (when they're not having a duvet day) except harrassing the rest of us with their petty-fogging rules and taxes.

They deserve the very best for their endless dedication to themselves and their own pet whims, and their ability to retire at 50, along with their fat pensions, due to "stress". It's a hard life trying to appear to be busy when in fact doing nothing of any use whatsoever. I salute them, and all of their equality directives.

Pip pip!!

Nationalisation of banks should be strictly temporary - Yeah, right!

The Torygraph's leader writers appear to have fallen hook, line, and sinker, for the usual mafia bilge that more mafia control is required. Here is their appallingly stupid leader piece: Nationalisation of banks should be strictly temporary.

Here is the Maturin Towers response:

Posted by Jack Maturin on October 12, 2008 10:31 AM

Dear Lord, when will the cabal who write the Telegraph leaders finally get it? Of course nobody has behaved rationally in the last few years, and this includes any Telegraph leader writer who has borrowed against the increasing price of their property to fund consumption activities.

The reason nobody has acted rationally is nothing to do with the free market. It has been entirely due to the profligate way in which centrally planned government-run banks, particularly the Fed and the Bank of England, have been flooding their economies with credit created out of thin air.

Via the mechanisms of artificially-low interest rates and open market operations, these government planning boards have fooled everyone else into thinking they were wealthier than they truly were, via these acts of monetary destruction.

If you or I were to do what they have done, we would quite rightly be called criminals and counterfeiters.

In creating all of this extra fiduciary media, from thin air, they have benefitted their ruling governments which have been able to spend without taxing, and borrow without consequence, with all government bonds eventually being soaked up via open market operations.

This has then brought us to this dreadful state of affairs, along with all of this counterfeit cash being leveraged by the fractional reserve system, which governments also fully approve of and regulate.

Please, please, please, Telegraph leader writers, do not be fooled by too many cosy lunches with Treasury mandarins and Bank of England officials. If you want to see where the problems are coming from, just look at these civil servants and know your enemy.

To suppose that the same people who deliberately created this mess for short-term political advantage are going to do anything else except make it even worse, for short-term political advantage, is to make yourselves fools for believing them.

You really are better than that. So please stop preaching that this is the fault of the free market. What we have is financial socialism dictated over by central bank planning boards. What they propose is even more socialism.

Do you really think that this is going to lead to anything other than more chaos, less freedom, and greater wealth destruction? You obviously never learned the lessons of the Soviet Gulag if that is what you sincerely believe.

Pip pip!!

Gordon Brown with siren suit and cigar

The dreadful Edmund Conway, Keynesian extraordinaire, writes Torygraph articles so thoroughly full of wrong-headed nonsense that I can barely bring myself to get to the end of them, but they're still worth flogging through if you want to hear the mafia view on what should be done.

Matthew d'Ancona, on the other hand, because he has more of a political bent, is more easily able to see through the hubristic cloud of Gordon Brown and spot him for the gangster that he is. He has written an excellent piece, in the Torygraph, which was good enough to force me to add a comment, as below. As usual, I struggled to get it in under the 4,000 character limit, but I made it in the end:

Posted by Jack Maturin on October 12, 2008 9:01 AM

The people of Britain deserve Gordon Brown if they are foolish enough to be impressed by his current manic-depressive hubris. As the man who told us he had abolished boom and bust, he is, along with Alan Greenspan, George W. Bush, and Ben Bernanke, one of the main culprits in this entire disastrous affair.

They have presided over easy credit for the last ten years, that is, the creation of new "money" out of thin air, to help fund their "NICE decade”, to fool voters into thinking these men were beneficent gods rather than feckless wasteful idiots. And now the chickens are roosting, instead of these men owning up to their stupidity, they are thrashing around trying to blame everyone else, with the exception perhaps of Alan Greenspan; as a former believer in the gold standard, he is probably wise to keep his mouth shut.

His decade-long deluge of new government-issued money, particularly following the dot com crisis, leveraged by the government-regulated fractional reserve system, fooled the rest of us into thinking we were wealthier than we truly were. This confusion of money as a source of wealth as opposed to merely being a medium of exchange, enabled a wasteful smorgasbord of debt-ridden partying. This malinvestment of metaphorical bottles of booze at this “NICE decade” party, is now being liquidated, when it could have been spent instead on productive items. We have consumed this wealth and it will never come back. We ought to learn to get over it.

Where some of us bought easy-credit booze, by sucking up equity from our houses, and drinking ourselves into a happy oblivion presided over by the mighty Bush and Brown, we should have bought shovels and pick-axes instead. Now all we have left in our possession is a cold bath full of empty bottles worth tuppence ha’penny each, rather than a busy shed full of productive capital equipment.

That is the problem. Useful capital has been malinvested in leisure goods with little liquidation value, when it could have been spent on productive goods with high productive capacity. That is where the money has gone. The drinks have run out and all the impotent governments of the world can do is to threaten to nationalize the off-licenses that sold us the booze. Yes, at gunpoint, the off-license owners may hand over a few more bottles to keep the party going a little longer, but then they’ll run out again due to the immutable laws of supply and demand; ask Zimbabweans about that.

Before then, of course, the mafia government gun men will come up with yet more Byzantine rules as to who gets what, though most of the goodies will still somehow manage to find their way to their friends, despite all of these rules.

So what should our overlord mafia bosses do?

Absolutely nothing. They should have let the bubble burst with Bear Stearns and let that go under. That would have encouraged the others to sort themselves out. Yes, this is an enormous bubble and its natural implosion would have caused a lot of pain and a lot more bankruptcies, but this endless propping up of the bubble by the idiots in government who caused this mess, through their issuance of easy central bank credit, will cause a lot more pain over a lot more years.

As the great Jim Rogers has said, they can still choose to do nothing. Of course they won’t. They will intervene endlessly, just as the fool F.D.R did, and turn this necessary recession into an unnecessary depression. If we are fooled by these gangsters into believing that this really had nothing to do with them and that they are the best people to sort it all out, then all of their investment in government education will have finally paid off, especially their provision of thousands of government jobs for Keynesian economists trained at government-worshipping economics schools and their government licensing of the Keynesian-dominated financial press.

We will have become the stupidest people in history. Well done Gordon Brown.

Pip pip!!

The ultimate answer is not 42

No, the ultimate answer is "we need a greater injection of liquidity". Check out these questions, as asked of Ben Bernanke recently, and let's see what his answers were:

(Q1) What do you do if the economy slows down? (A1) We need a greater injection of liquidity

(Q2) What do you do if the economy overheats? (A2) We need a greater injection of liquidity

(Q5) What do you do, Mr Bernanke, if the cerebrospinal fluid in your brain cavity is beginning to decrease in pressure due to your lack of sleep caused by your utter incompetence and fecklessness? (A5) We need a greater injection of liquidity

You see, the answer always fits. No matter what the problem, the answer is always to counterfeit a few billion dollars more. And so, when we are in the middle of the greatest financial crisis since 1929, which even Mrs Miggins in her pie shop knows was caused by too much "liquidity" (a.k.a. counterfeiting) created by "The Undertaker", Alan Greenspan, the answer is to "increase liquidity".

The gangsters and banksters who run the nascent socialist/fascist world state must think we're a bunch of muppets if they think we're going to fall for this ongoing nonsense. I think even Mrs Miggins is beginning to realise that the Emperor really is wearing no clothes.

But where are the American revolutionaries to kick the Emperor off his throne? Alas, I fear a decade or two of state centralisation and increasing repression will be needed before such men and women are driven forward. However, in the meantime, I think it is fairly clear that the intellectual high ground occupied for nearly a century by the Keynesians and the central bankers, has at last been ceded. They are all obviously a bunch of panicking idiots who have no clue what they're doing, no idea of the unforeseen consequences they are stimulating, and absolutely no Plan B to fall back on, aside from the gun and the gulag, if Plan A fails (as it surely will).

And so now it is the time for the Austrians to take that ceded ideological ground. Our ultimate victory will then simply be a matter of time, and the number of professors the Ludwig von Mises institute can massage into the economics chairs of the world's major universities, to help destroy the breeding grounds of the Keynesian socialists. Yes, it's a long play. But ultimately I think the only play that can work. Let's take on the Gramscian/Fabian marxists at their own game. The truth will out. Eventually.

There's Hope: This time there is a difference

In the post below, I was forced to take the trademark Ron Paul Cassandra position, which often gives Austrianism a bad name, because although we have a much better prediction record than any other school of economics (especially Ron Paul), everyone hates hearing bad news.

However, there is hope this time round, in the Great American Depression, Mark II. In the first one, in the 1930s, there were only two men in the world who knew what was going on. Both were Austrian emigres; F.A.Hayek in London and L.v.Mises in Geneva. Both probably expected their classical liberal ideas to die with them, as the world was awash with Keynesianism, later to spawn such fools as John Kenneth Galbraith and James Gordon Brown. Both men were also lucky to escape the scourge of Nazism, though their Germanic accents will still have isolated them in a world deeply afraid of "The Germans".

Fortunately, both men made it through World War II unscathed, and able to publish their "radical" ideas, such as the rather risque thought that the granting of unlimited credit to feckless fools is perhaps not the best use of scarce resources.

Their intellectual offspring now number in the tens of thousands. And there is no way that any of us will allow the mafiosi gangster and bankster socialist scum, who currently plague the world, to get away with their current gigantic world wide heist.

Yes, they'll fool most of the people, especially with the help of their licensed friends in the mainstream media, but they haven't fooled us. And although it will be a long road to rid them from the world, I hold a genuine hope that their days are numbered. There are simply too many people around who know what they're doing, to get away with it any more.

Friday, October 3rd, 2008: The Depression Starts Here

Oh dear, it's Cassandra time again. Nobody wants to hear it, nobody wants to believe it, and the reaction is to want to shoot the messenger; however, Ladies and Gentlemen, lest we should ever forget it, Friday, October the 3rd, 2008, shall from this moment henceforward be known as the official start date of the Great American Depression, Mark II.

The U.S. government had the chance to do the best thing it could, i.e. absolutely nothing, but blew it. It could not help itself but to take just one more enormous congressional swan dive into the pork barrel.

The resulting train wreck will be clear for all to see. Though many will, of course, choose not to see it, and pile on even more stupid and criminal interventions in the hope that one last Keynesian heave will do the trick.

They will fail. The American Empire is over. The dollar is dead. It is merely a question of how long it takes everyone else to notice, and whether or not we can avoid this leviathan dragging us into a cataclysmic and senseless world war in its final death throes or propelling us into the clutches of an appalling fascist world government.

What an absolute disaster.

J.K.Rowling: Just what the heck is going on?

Who is the greatest liberatarian evangelist of modern times? Is it Murray Rothbard? No. Not enough people have read the master's works (though they will, eventually, in the same way that Aristotle is still read). Is it Ayn Rand? No. She's just too mad, too statist, and most of her readers are already members of the converted sect of freedom.

In fact, there can only be one winner, in my humble opinion. And that is J.K.Rowling. Why? Because she has emotionally hooked millions of young impressionable readers on a world in which the state is evil, and in which the individual is sacrosanct. She has painted an effective picture of a world which in part succeeds because it has a commodity money and a private education system, and which in part fails because it has an overly bureaucratic ministry of magic which is peopled by stupid and wicked government "fonctionaires" (Percy Weasley, Cornelius Fudge, and Mafalda Hopkirk, to name but a few), who are easily turned by vindictive governmental self interest.

An overly mighty ministry of magic is also easy prey for the sauronic/hitlerian Lord Voldemort, who easily bends its usurpation of natural rights for his own power-crazed Machiavellian ends.

In the final book, state education is also made compulsory (which is painted to be the embodiment of all evil), and the heroic freedom-loving state renegades (such as Harry Potter, who has personally suffered many petty abuses of over-mighty tyrannical government), finally triumph against the odds, while fighting for freedom and individuality in the face of the overwhelmingly powerful Death Eaters, who, dare I say it, represent what in our world would be a collectivist socialist/fascist orthodoxy.

In short, the entire Harry Potter series, although perhaps meanly and small-mindedly vindictive against business people living in Surrey, is perhaps the greatest literary exemplar written since "Lord of the Rings", to have thoroughly poisoned the well of statism in the minds of perhaps billions of children around the world. So well done, Ms Rowling. I am truly grateful.

And to round off the deal, who can also forget perhaps one of the greatest examples of evil ever written, the sweetly officious Dolores Umbridge, a pure Kafkaesque nightmare of saccharine mixed with dullard officiousness and a bureaucratic mendacity framed in a totality of utterly diabolic reptilian-minded viciousness. In fact, the perfect model for all bureaucrats, of all stripes, everywhere. F.A.Hayek would have been proud. And I am sure L.v.Mises would have been quite happy too.

So, aside from the Surrey bashing, just what the hell is going on with J.K.Rowling giving Gordon Brown £1 million pounds, to help boost the Labour Party? Is he not the perfect real-life example of an utterly useless and dangerous Cornelius Fudge? Arrogant, conceited, pompous, stupid, evil, blind, and willing to bend every law and every moral precept to advance both himself and his own self-obsessed idiotic world view; yes, this is that man. So just why is she giving this fool the means to wrap the rest of us in ever more socialist chains? Why is she helping him build a world in which a future real-life Voldemort can take over the world?

Is she schizophrenic? Did all those years of being a welfare queen ruin her mind? How can she write such a fine libertarian diatribe against the abuses of government, while at the same time financially supporting (with the proceeds of the diatribe) a government which aims to crush the rest of us in the same way that Voldemort's Death Eaters wished to crush the free peoples of the wizarding world, via the over-weening abusive power of the state? She apparently earns £3 million pounds a week, and is one of the world's richest women. Is her guilt of this ruining her mind?

In short, just what the heck is going on? If anyone has any answers to this bizarre conundrum, then I am all ears. Please let me know. Especially if your name is J.K.Rowling.

And please Jo, please don't give me any crap about living on welfare. I grew up living on welfare. But I got over it. It would be nice if you could too. And if you are feeling really guilty about having all of that money, then I know a nice man who could take it off your hands to help make you feel better about the insanity of it all. But please, whatever you do, please stop giving money to the Labour Party. You really are better than that.

Give it to the Ludwig von Mises Institute instead, or Lew Rockwell, the true fighters for freedom in this increasingly statist world. Don't just write about freedom being better than statism. Help make it happen.

Heffer Alert: Conservatives have a long way to go to be judged a government-in-waiting

Simon Heffer, in the Torygraph, is perhaps one of the least worst writers in the UK MSM, and generally provokes me into making some kind of comment to his thought pieces. Today was no exception. He wrote an interesting article, which you can find here.

This was my comment:

Posted by Jack Maturin on October 1, 2008 8:11 AM

In "Communist Manifesto", Karl Marx lays out ten aims necessary to build a socialist world. The fifth aim is the "centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly."

In other words, exactly what Gordon Brown is doing with Northern Rock and Bradford and Bingley, and exactly what George Bush intends to do with his creation of a "Bad Bank" for mortgage-backed securities.

This bank will be funded by the pillage of the hapless American taxpayer to get political elites around the world off the hook of their own naked greed for power and expropriated wealth.

Contrary to what the Keynesian pump-prime socialists and the Chicago monetarist socialists believe, the cause of the 1929 Wall Street crash was the creation of the Federal Reserve in 1913 and its then constant printing of money out of thin air for 16 years, fooling everyone into making endless malinvestments during the 1920s.

The subsequent cause of the 1930s depression was the stupidity of presidents Hoover and Roosevelt in then failing to allow prices of goods and labour to drop, to clear and correct the crash, first by banning corrective pricing processes, such as shorting, and later by the instigation of endless government interventions to prop up market prices pumped out by the Fed's expansionary bubble. Sound familiar?

The cause of our current malaise was the action of Alan Greenspan and the Federal Reserve, in 2001, in their endless printing of money out of thin air following 9/11, by setting interest rates to 1%. This was much lower than the prevailing inflation rate and thus encouraged bankers to malinvest by lending this ongoing deluge of "free" paper money to house owners, thus pushing out another massive speculative price bubble in the world housing market.

We are experiencing the inevitable bursting of this paper bubble, instigated by incompetent government; the worst thing we can allow is this same incompetent government to manage the consequences. If we do allow these stupid people to once again prevent prices from dropping and clearing, through myopic interventions such as the ban on shorting, last seen in 1929, we will have another depression on our hands. These economic numskulls are attempting to use the same play book as 1929; we will therefore get the same result if we fail to stop them.

By propping up bank share prices and house prices, and intervening to prevent the "natural" tendency of these prices to drop, now that Greenspan's bubble has burst, they are sleepwalking the rest of us into disaster.

The initial failure of the bail-out was thus a marvellous piece of news, and the best thing that government can do in a situation like this. That is, absolutely nothing.

We will suffer some short-term pain, yes, especially the masters of the universe like Goldman Sachs and JP Morgan. However, let them pay for their foolishness and let them get blown away by the process of the free market. If government does nothing, it will all be over quickly.

Alas, by hook or by crook the governmental power elites of the world will get this stupid measure through in the next few days, thus ushering us in another long-term and far more painful depression, by saving their government-bond-buying friends in Wall Street and sticking it to the rest of us in the process.

We will be paying for this largesse for decades. Expecting to retire at sixty with a decent nest egg? Think again. They are now trying to ensure that you will be working till you drop, unless you are within the magic circle of government and its friends.

In putting guns to people's heads and pushing these terrible measures through, Hank Paulson, Ben Bernanke, George Bush, and Gordon Brown will be doing the glorious work of Karl Marx, as directed by their master in "Communist Manifesto", by furthering the advancement of world socialism.

Welcome to the Road to Serfdom.

Fortunately, to cheer me up, there are some rather discerning folks out there who appreciate such raw Austrianism:

Jack Maturin 8.11

Good post Jack. It is also suggested in some quarters that Fannie Mae and Freddie Mac etc, were leant upon by that pinko disaster Clinton on 'racist grounds'! Aparently, their protests that mortgages were aplied to people, whatever their colour, gender, religeon etc on the same basis, finances and perceived ability to repay, wasn't good enough! It is alleged that they were told to increase their mortgage exposure to ethnic groups, if they had to take milk tokens as income to do so, so be it. If they didn't get ethnics onto their bookds however, they'd be prosecuted under federal laws and do time in Federal Pens!
Posted by Mike on October 1, 2008 11:32 AM

Though I like this comment even more!

Jack Maturin 08:11

Brilliant comment!
Posted by davey on October 1, 2008 9:39 AM

Obviously a splendidly discerning fellow.