Free Markets, Free People

Uncategorized

Podcast for 05 Jul 09

In this podcast, Bruce, Michael, and Dale discuss the meaning of the 4th of July, Honduras, and Sarah Palin’s resignation.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

More first hand coverage from Honduras

My colleague in Honduras, who sent me the material I posted yesterday, is back with more today. He’s also fine with using his real name. So please welcome Hector Figueroa for this guest post at QandO, with photos and news from yesterday’s march. (You may click on the thumbnail photos below for full-size versions.)

***************************

Hi Billy,

Aside from have heavy-normal work day here, I managed to be at this march for support to our new authorities. This march went on at larger cities around the country. Unlike the previous government, which ordered its employees to stop working and go march, these were the lucky that managed to leave work and be there.

I’ll grant CNN that they do have these aerials on their site.

Mine, of course, were a bit to be more terrestrial. And to me, it went as far as the I could see. Sorry for the size, this way you have both big and small.

HondurasMarch1Reduced

Por esto luchamos unidos. Mel y Chavez fuera!
For this we fight (the book is our Democratic/Republican/Representative Constitution). Mel and Chavez, get out!

HondurasMarch2Reduced

HondurasMarch3Reduced

Rich & Poor, Young & Old, Workers & Execs, Civilians & Military, Teachers & Students. WE ARE ALL UNITED!!!

HondurasMarch4Reduced

Every street was packed.

HondurasMarch5Reduced

Our newly appointed President and our hero, Armed Forces Commander.

{I did an extract from this photo showing more detail of the new president, Roberto Micheletti.}

HondurasMarchNewPresident

*********************************

Thanks to Hector for furnishing us with this first-hand account. I continue to hope for a resolution to this political crisis that reflects the wishes and needs of the Honduran people.

I would be suspicious of any political figure backed by the UN, Hugo Chavez, and Obama, when the people of his nation are mustering the sort of opposition shown above. It pains me to see Chavez threatening the use of force, especially since he probably perceives that neither we nor the UN will do anything about it if he does.

The UN has passed a resolution insisting that Zelaya be returned to office. Given the kind of opposition shown above, I think that was a short-sighted action. I consider the Obama administration’s position to be short-sighted as well, but given their record to date, it’s not surprising.

My own opinion, guided by my preference to believe my colleague on the scene (and other analysts and witnesses) over political and media hacks, is that removal of Zelaya was justified. I hope the Obama state department and various functionaries at the UN look more closely at Honduran law and re-evaluate their position. I’d particularly like to see a firm warning to Chavez to butt out.

“Revolutions happen when a system suffers a major loss of political legitimacy.”

Amir Taheri broaches a subject that I’m sure will sound over-the-top to many. He asks, “Is England on the verge of revolution?”

Given the way the British government increasingly treats their citizens as serfs, I’ve wondered if serious resistance to such treatment would build to significant levels. I’ve only had one brief visit to Britain, so I’m in no position to venture an informed opinion. But Taheri finds some evidence that a tipping point may have been reached:

“I do sense a revolutionary mood,” David Starkey, one of Britain’s foremost historians, told the BBC. “I won’t be surprised if we did end up having a revolution.”

The current scandals of British MPs are one of the main drivers of the mood. They seem to be blatantly abusing their offices to feather their own nests (shades of John Murtha, et. al.), and simultaneously becoming increasingly irrelevant and hapless to do anything constructive because of the shift of power to the EU. Taheri thinks this has a pretty dramatic effect on the British:

Every nation has a number of founding myths. Britain’s principal myth is that it is the birthplace of modern democracy and a land where the law is supreme. The shocking realization that “the mother of parliaments” may have been acting as the rudest of street sluts is not easy to stomach. Some of the same politicians who go around the world lecturing others, especially in the “developing world”, against corruption, have been exposed as practioners of petty larceny.

I’m no expert on the British character, but I would not expect such behavior by itself to drive a revolution. However, it has a synergistic effect with a shrinking economy and significantly higher unemployment, which Britain is suffering. No one likes it when they suffer while their political elites are prospering by playing fast and loose with the rules.

Taheri points to the unpopularity of the wars in Iraq and Afghanistan as additional factors. Given that we have plenty of war opponents here, and that Britain was one level removed from the responsibility for those wars, I suppose they probably have more.

But to me, the main point was captured in the quote I used for the title. Revolutions can only happen when a sufficient numer of the people no longer believe their government is legitimate. It’s very unlikely for one single incident to cause such a shift in thinking. It more of a water-torture, drip, drip, drip process. Items such as the apparent politically-motivated dropping of charges against a serious example of voter intimidation are examples of incidents that don’t look that major on their own, but every one of them risks convincing another small set of citizens that their government isn’t playing by their own rules, and no longer cares about the welfare of the nation as a whole.

I choose that particular incident because erosion of confidence in the rules surrounding the ballot box are particularly damaging to the legitimacy of the government. I’ve talked to people who are convinced that our elections are a sham and participating in them is not only a waste of time, but actually bad because it gives a facade of legitimacy to what they perceive as an illegitimate process.

I’m not advocating revolution, but it’s worthwhile to point out that the ultimate check on an abusive, out-of-touch government is revolution. I don’t see it as a bad thing for our political elites to understand that their authority and ability to abuse us is not infinite. Since Britain is a few steps further along the path that Obama seems determined to take us, I hope our elites pay some mind to what might lie at the end of that path.

(Found via Instapundit)

Podcast for 29 Mar 09

It’s a full crew on the podcast today, and Billy Hollis and Jason Pye join Bruce, Michael and Dale to discuss the country’s headlong rush to statism.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

Quote Of The Day

From, of all people, Paul Krugman (discussing the AIG debacle specifically and financial policy generally):

This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers. And that leaves it with no ability to counter crude populism.

Uh, I guess the honeymoon is over?!

~McQ

Of Course, You Can’t Believe A Thing The Senate Republicans Say

They yelled, they screamed, they hopped up and down on one leg and told us how bad this 410 billion dollar spending bill was and how it was “business as usual’ (something they should certainly know about) that increased the spending level 8% and was full of 9,000 earmarks. And they condemned the Democrats and said they were spending the country into bankruptcy. They claimed that the best way to continue the spending was to keep it at this year’s level and that would save 250 billion dollars.

In the end, 8 Republican senators voted for the bill. That’s right, 8. Specter and Snowe were consistent – they’ve never seen an outlandish and wasteful, pork packed, deficit-funded spending bill they didn’t like.

Who else joined them? Why Mississippi Sens. Thad Cochran and Roger Wicker; Alabama Sen. Richard Shelby; Tennessee Sen. Lamar Alexander; Missouri Sen. Kit Bond and Alaska Sen. Lisa Murkowski. The cloture vote passed handily even with three Democratic senators voting against it.

So what do we get for the debt?

All kinds of goodies:

$1.8 million for “Swine Odor and Manure Management Research.”
$200,000 for “Tattoo Removal Violence Prevention Outreach Program” to get rid of gang tattoos.
$75,000 for the “Totally Teen Zone” that encourages teenagers to play Wii and X-Box, listen to a DJ, and eat at a snack booth.
$473,000 National Council of LaRaza.
$400,000 “to combat bullying.”
$50,000 for midnight basketball through the “At the Park After Dark” program in Los Angeles.
$5.8 Million for the “Ted Kennedy Institute for the Senate… for the planning and design of a building and an endowment.”
$1.762 Million for “Honey Bee lab” research.
$215,000 for PhD’s to learn to write press releases. It funds a program at “Stony Brook University to teach scientists how to communicate with press.”
$1.5 Million for the scandal-ridden Alaska Sea Life Center to study seals.
$250,000 for Maine Lobster research earmarks.
$2 million for “the promotion of astronomy in Hawaii.”
Senator Reid earmark to make “Nevada eligible for the Pacific Coastal Salmon Recovery Fund.”
$4.4 million for “Center for Grape Genetics” & “Center for Advanced Viticulture and Tree Crop Research”
$657,000 for “Brown Tree Snake Management in Guam”
$480,000 for “Urban Horticulture”
$1.75 million for “Mammoth Springs National Fish Hatchery, complete visitor center.”

Per the Heritage Foundation, when combined with the trillion dollar stimulus bill, Congress has just increased discretionary spending by 80% in one year.

And they advise us that more trillion dollar deficits and possibly more stimulus is on the way.

But don’t worry about inflation, they have everything under control.

Don’t worry about transparency either. Mr. “The Public Will Have 5 Days To Look At The Bill Online” Obama plans on signing the bill tomorrow. The man who dishonestly characterized this bill as “the last administration’s business” as an excuse to duck his campaign promise of no earmarks, will again duck his campaign promise of legislative transparency.

Best government ever.

~McQ

Dead Ed, the Collapse, and eBay Saves Us All

My first reaction to Pres. Obama’s speech last night was depression.  Here were the Democrats giving the president standing O’s for completely converting the Republic into a social democracy.  I mentioned that on Facebook, and one of my readers said it reminded him of Amidala’s line from Star Wars Episode III:  “So this is how liberty ends…with thunderous applause.”

But on more careful review, I find that I am not, in fact, depressed over the long-term.  Indeed, last night’s speech seems to me not to herald the beginning of a new era for big government and socialism, but rather the last gasp of a dying ideology.

We are, I think, at the cusp of a new era, but it isn’t the one that Pres. Obama and his acolytes in the Congress are thinking it is.  Neither the Democrats nor the Republicans, it is clear, have any idea about what is happening.  Very few people do.  I am going to try and explain something very complicated, and do so very simply, and as briefly as I can.  So, with the realization that all simplifications are inevitably wrong in some particular, let me explain.

“Ed’s dead, baby.  Ed’s dead.”*

We stand now, I think, in a very historically similar position to the one described by Barbara Tuchman, in the beginning chapter of her monumental work on the outbreak of Word War I, The Guns of August:

20 May 1910:  The past passes in review

20 May 1910: The past passes in review

So gorgeous was the spectacle on the May morning of 1910 when 9 kings rode in the funeral of Edward VII of England that the crowd, waiting in hushed and black-clad awe, could not keep back gasps of admiration. In scarlet and blue and green and purple, 3 by 3 the sovereigns rode though the palace gates, with plumed helmets, gold braid, crimson sashes, and jeweled orders flashing in the sun. After them came 5 heirs apparent, 40 more imperial or royal highnesses, 7 queens, and a scattering of special ambassadors from uncrowned countries. Together they represented 70 nations in the greatest assemblage of royalty and rank ever gathered in one place and, of its kind, the last. The muffled tongue of Big Ben tolled 9 by the clock as the cortege left the palace, but on history’s clock it was sunset, and the sun of the old world was setting in a dying blaze of splendor never to be seen again.

Four years later, the world order of 1815-1914 was drowned in fire and blood.  The Age of Royalty was over, and the Age of Democracy had begun.  I believe that Pres. Obama’s speech of last night may very well be the historical equivalent to Edward VII’s funeral.

Ever since it began in late 2007, a blog called Fabius Maximus has been arguing that we are watching the decline and fall–indeed, collapse–of our current economic and financial system.  A précis of the argument can be found here, and a more comprehensive archive can be found here.  Just as the black-clad crowds lining the streets of the capitol of the British Empire on the morning of May 20, 1910 might have found it inconceivable that their generation would witness the collapse of both the European geopolitical regime, and, ultimately, the British Empire itself, so it may be inconceivable to us that we are witnessing the collapse of the Post-WWII economic and political regime.  But I believe it is nevertheless true.

“MONEY! Doesn’t it make you feel good just to say that, Jerry?”

Let me start by explaining what money is.  Money is a medium of exchange, that is, it is an object of some kind that I can exchange for goods and service, rather than trying to barter with people to obtain what I need.  It may consist of elaborately carved cowry shells, tiny beads painstakingly stitched to strips of leather, round pieces of metal with the image of guys named Julius or Claudius hammered into them, or little pieces of high-quality paper that say “Federal Reserve Note” on them.

But whatever it is, money has certain minimal characteristics.  It must be convertible, i.e., if I do a job for you, I have to be willing to accept it as payment, and whoever I buy bread or clothes from has to be willing to accept it in exchange, too.  It also has to be difficult to replicate, so that when I accept it, I am reasonably assured that it is the genuine article.

Get 'em while they last.

Get 'em while they last.

For nearly all of recorded history “money” has been synonymous with gold or silver.  And right up till the late 18th century, it was more or les the perfect money.  It was intrinsically valuable, in that raw silver or gold was as easily convertible as hammered or minted coins.  It was also practically impossible to counterfeit, the best efforts of alchemist to convert dross into gold notwithstanding.  It was also relatively rare, and it difficult to obtain new supplies of it without intensive–and extremely expensive–mining operations.

Additionally, there simply wasn’t much to buy.  Most people grew their own food, produced their own clothes from flax or wool, and built their own houses by hand.  Money was essentially a luxury, and it bought mainly luxury goods for fat cats.  Kings could raise and equip armies with it.  Merchants could buy nice clothes. But for the most part, money was a tool for use by the rich, and by the relatively few urban dwellers.  And, as such, gold or silver was perfect for that level of economic activity.

By the 19th century, though, there were lots more things to buy, and lots more city dwellers, and that trend was increasing rapidly.  Hard money became…problematic.  The thing about having a hard currency based in gold or silver is that, at the end of the day, whether you run a fully convertible gold standard, or some sort of fractional reserve system, the size of the money supply is always constrained by the amount of gold or silver on hand.

If the economy takes off on a tear, it’s extremely difficult to expand the money supply to meet the demand.  When the supply dries up, the economy just shudders to a quick stop, because nobody has enough spare money to fund more expansion.  So the economy collapses until it reaches equilibrium with the available money supply, and the cycle starts again.  Look at a chart of US economic activity in the 19th century and you see it’s a system of booms and busts, which were far steeper than any we’ve seen since the depression.  So the fundamental problem with a gold standard is that it’s relatively inflexible when used by a vibrant, diverse economy.  When everybody needs gold, and the demand is unpredictable, gold is very difficult to use unless you’re willing to live with severe booms and busts.

The Great Depression was the death knell for the gold-based world economic system.  Those nations that jettisoned gold the fastest, recovered the most.  Of course, WWII intervened in the depression, so it took a decade or so to get back to the business of commerce–as opposed to the business of building things to kill Nazis.   But, by 1944, everyone–on the Allied side, at least–had recovered enough breathing room to meet at Bretton Woods, NH, and hammer out a new economic system.

What they came up with was a system of fiat currencies, all freely convertible in the FOREX market.

Now, governments could adjust their money supplies appropriately by printing more money or less of it, and taxing their populations more leniently or more severely, as needed.  This is the system most of us have grown up with…and it’s dying.

It’s dying because of something innate in human nature that the gold standard was better equipped to deal with:  the urge to loot the system.

It’s an urge that has always been there.  Sometimes it has been the result of intentional government action to cheapen the currency.  If you were, say, the king of Persia, you didn’t need to consult the priests of Ahura Mazda to know that if you changed from using 10 grams of gold per coin, to using only 9 grams per coin, you could stretch your gold supply by 10%.  You could then take the extra gold, and buy yourself a nice hat.  Or use the extra gold to make one.  Whatever.

Of course, people would notice this pretty quickly, and items that used to cost 9 gold pieces would cost 10 pieces–inflation!–but because gold had an intrinsic value, the same weight of gold could be exchanged.  It was still pernicious, of course, but because gold had an intrinsic value–and because the supply of gold was relatively inflexible–it wasn’t usually seriously pernicious.

Sometimes, the urge to loot the system has been done by private individuals, who figured out that if they shaved a bit off the edges of their gold pieces, they could accrue enough gold shavings to buy themselves a nice hat, too.  This, by the way, is why when we began minting coins instead of hammering them out. They were minted with milled edges, making shaving attempts immediately obvious.

By the 19th century, the looting attempts became widespread, populist movements, like the “Free Silver” movement.  At the time, gold was real money.  If you took a bunch of gold to a Minting facility, the mint would return you an equal weight in gold coins–minus a nominal minting fee.  After huge silver deposits were discovered at places like the Comstock Lode, populist agitation began for minting silver in the same way, at a ratio of 20 ounces of silver for 1 ounce of gold.  The massive amount of silver floating around would, of course, have made this an extremely inflationary policy, and the farming and borrowing interests would have benefited by paying off bills for less than they had borrowed…enabling themselves to use the extra saving to buy a nice hat.

But during the First Age of Money, the looting was always constrained by the fact that gold had an intrinsic value, and that the supply of gold was inelastic.  There were, therefore built-in constraints to the looting impulse.

When the Bretton Woods Agreement launched the Second Age of Money, it solved the problem of the inelasticity of the money supply, and enabled monetary authorities to fine-tune the money supply in response to economic activity.  That was a good thing in the sense that it flattened–although did not eliminate–the business cycle fluctuations.

But the bad thing was that it completely removed any physical restraint on the money supply.  It depended on governments and monetary authorities to exercise self-restraint, rather than impersonal, externally imposed constraints.  The result has been 65 years of continually expanding credit, more or less constant inflation to a greater or lesser degree, and unrestrained spending and borrowing.

Governments–and their democratic (small “d”) constituencies quickly learned that they could loot the system.  Social insurance, medical care, military expansion…whatever the Big Idea of the minute was, we could have it.  And if we didn’t want to pay the taxes to the government to pay for it–and, mostly, we didn’t–we could simply borrow it.  We could obtain a whole bunch of little green pieces of paper now in exchange for a promise we’d pay back more little green pieces of paper sometime in the future.  In the meantime, we could buy all the hats we wanted!

But now, we are obligated to pay back various people about fifty trillion pieces of green paper.  Unfortunately, the entire household worth of everyone in the country is worth about forty trillion pieces of green paper.

How can the current economic and financial system possibly be considered solvent at this point?  How will re-expanding the cycle of debt re-invigorate it?

No, we’ve had our fun.  We got to loot the system for 65 years.  Now, the hat bill is coming due.

I suspect we’ll pay the hat bill the same way that Germany repaid their war reparations debt after WWI.  “Hey, you remember that reparations bill for 3 billion marks that we’re supposed to pay next week?  Yeah.  I just wanted to let you know that we’ve sent that order off to the printers, this week, and we should have that printed up for you by Tuesday.”

The result was massive hyperinflation, the collapse of credit, and 5 years of compete economic stagnation, serious economic pain, severe unemployment…and the ability to start over in the mid-20s with a clean balance sheet.  Clean enough, in fact, that by 1936 Germany had more or less completely emerged from the Great Depression, while the employment rate in the United States hovered at around 18%.

What Pres. Obama is proposing may result in nothing more than additional spending that helps bring about the collapse of the Post-WWII economic regime, while at the same time providing–temporarily–a social safety net that will provide some help as we pass through a difficult transitional period.

“I was there at the dawn of the Third Age of Mankind…”

OK.  Maybe it’s not that grandiose, but I think we are seeing the dawn of the Third Age of Money.

No one in the government realizes how the economic world is changing.  So their proposed solutions are likely to be exposed over time as ineffective and, perhaps even counter-productive.  The credibility of governments around the world is now invested in staving off an economic collapse.   When their failures become evident, and their “solutions” are exposed as fantasies, that credibility will collapse.  Who will want to buy government bonds, or use worthless government money?  Who will trust the governments who lead us into the economic abyss?

Unfortunately, rather that realizing that we are entering a transition, and trying to discover how to shepherd us through that transition, they are invested in preserving the dying system of government-regulated money supply and credit.  And even if they realized that we were in a transitional period, they would still do nothing about it because it would require voluntarily releasing their power over the economy.

Governments have always been in charge of money; determining what money is, how it will be exchanged, how new money will be created, etc.  In part, this is traditional, in that only government had the resources and ability to fund and oversee mining and exploration activities, regulate what legal tender consisted of, and all of the other monetary functions.  There simply were no other large organizations in existence to perform those tasks.

It wasn’t until the 17th century that organizations began to emerge that could begin performing those tasks, and not until the 18th century that it became practical.  Private money of various types began to sprout up everywhere.  18th-century America was, for a time, replete every decent-sized bank issuing its own currency based on deposits.

Eventually, the Federal government cracked down on that private money, not so much from jealousy of the government’s role as the issuer of currency, but because private banks suffered from the same tendency to loot the system, issuing more and more inflated currency until it was worthless, and they ended up wiping out their depositors in the collapse as their obligations came due.  There were some solid money banks of course, but the spectacular failures of so many private currency attempts led the government to tax them so heavily that private currency issuance became uneconomic. Governments may not have been perfect, but the constraints of the gold system meant that they didn’t fail as completely and spectacularly as private banks did.

What was missing in private currency of the time, and what has been missing in the current post-WWII financial system is feedback.  Yes, there is some, but it takes a long time to filter into the monetary authority, and is derived indirectly from statistics on economic activity, rather than by any sort of direct observation.  The Fed raises interest rates today, for instance, and it takes around eight months to observe the indirect effects of the monetary policy change.   This is why the role of the Fed, has often been described as steering a car by looking through the rear-view mirror.  Based on seeing where you’ve been, you make decisions about where you must go.  That may be a form a feedback, but it is so separated in time from the inputs that it’s an inherently unstable system.

By the same token, what killed depositors in banks that issued private money was a lack of feedback.  It wasn’t possible to see that bankers were looting the system in time to withdraw your money.

We call this lack of feedback asymmetrical information.  We’ve never been able to even approach the ability to have full information about what a bank or government is doing that may affect the money supply, or economic activity as a whole.  We’ve never been able to see all sides of the story, as it were.  So, we’ve had to more or less leave it in the hands of government, simply because governments have been the only organizations with the size and scope to reduce, even partially, the problem of feedback.

So, it seems pretty hopeless, doesn’t it?  The financial world we’ve grown up with is collapsing under the sheer weight of looting.  If governments can’t do it, and a return to the gold standard can’t do it, then where are we?  At the edge of another dark age?

Not quite.

I foresee the rise of private money once again, and returning in such force as to negate the government’s role in the economy.  In fact, the pieces for creating the Third Age of Money are already there.

Your new ATM

Your new ATM

The Internet will be the platform for the new money.  But it’s just the platform; the communications media.  The actual objects that make up the Third Age of Money will almost be located in cyberspace.

First, there is encryption.  In the not-too-distant future, you will go online with a persona, i.e., an online identity with a unique, highly encrypted digital signature.  No more logging in with different user names and passwords at 100 different web sites.  Your persona will be uniquely identified as you through the use of 4096-bit or 8192-bit public key encryption.  Your persona will be impossible to forge or duplicate.  It will be unique.  Your “bank” and your “money” will be similarly encrypted.

Second, is your ATM/debit card.  It won’t be exactly the same, of course.  It will be far more secure, probably through the use of biological identification systems to verify authorization, such as retinal scans.  It will be linked directly to your persona’s bank account.

Third, is the ability of all the major banks and credit card companies to do online transactions, and to convert one system of private money to another at a publicly known exchange rate.  So, you can pay directly to your account–or withdraw from it–in Discover Dollars, or MasterBucks, or Credit Suisse Francs.  Or perhaps there might even be a universally acknowledged unit of currency–the “Credit”–that all the private companies agree to use.

But, the most important element of creating a reliable private money system that is resistant to looting the system is feedback. The reduction of asymmetrical information.  And that exists, too.  eBay has been using it for years.  Indeed, in no small way, the system implemented by eBay may be a key element of our future.

Imagine a system where, every time I do business with your persona, I rate your reliability, and it doesn’t matter of the persona is an individual or a bank…or a government.  Every day, millions of people who do transactions in MasterCard can rate the reliability and value of the MasterBucks system.  Private companies like Standard and Poors or Moody’s would not only rate MasterBucks, but consumers would rate the reliability of S&P or Moody’s judgments.

And not only are the bank’s persona’s being rated, but your persona is as well, by every one who does business with it.

Put them all together and you have a secure form of private money that’s convertible, impossible to forge, and is subject to constant feedback about its value and performance.  Does MasterBucks have too high a debt ratio or too much exposure to non-performing loans at MasterCard?  No problem.  It’s instantly convertible to Credit Suisse Franks.  And the conversion rate lowers MasterBucks reliability ratings even more, signaling the company to correct its course, or lose its depositors.

Think of the implications this has for taxation, especially income taxation.  Keep all your money in Credit Suisse Francs, say, and the US government will never even be able to see a record of your deposits or withdrawals.  How will they track your income?  And who will want to pay governments that failed to prevent the collapse for…well…anything?  Who will accede to the demand for money by governments that repudiated their debts, and destroyed the life savings of millions?

I can foresee huge implications for the future that are very pro-liberty.  In the long term.  In the short term, though, if I’m right, and the current financial system is collapsing we will be in for a very rough decade or so.  Very rough indeed.

_________________

*Apologies to Quentin Tarantino.

Presidential Anecdotes

In honor of Presidents Day, The Corner has a couple of posts about an underappreciated president, Calvin Coolidge. I like “Silent Cal” too, and there are a couple of anecdotes (hopefully not apocryphal) that I particularly like.

A lady was seated next to President Coolidge at a dinner party and chattered at him all night. He said nothing. Towards the end of the evening the woman told Coolidge she had a bet with a friend that she would be able to get Coolidge to say more than two words during the dinner party. He looked at her and said “You lose.”

The second one I found in the out-of-print book Presidential Anecdotes. President Coolidge and the First Lady were visiting a large chicken farming operation, and were being taken on separate tours. In the breeding area, the manager mentioned that each rooster was used to service a hen several times a day. The First Lady told the manager to please tell that to President Coolidge.

The manager did so. President Coolidge replied “Same hen every time?” The manager said, “No, different hen every time.” Coolidge then said “Make sure you tell that to Mrs. Coolidge.”

***Update*** I just discovered that there’s a new edition of the book Presidential Anecdotes. I have the 1981 edition, and it was updated in 2007 up through Bill Clinton.

Where Do These People Come From?

The arrogance of “art” or the artist, if you prefer.

Val Kilmer is thinking about running for governor of New Mexico. Says Kilmer:

He told The Hill at Monday’s Huffington Post party at the Newseum that he has been approached to run for the highest office of the state where he owns a ranch and has family roots.

“Actually, they’ve asked me to run for governor,” he said, not specifying who “they” are. “People seem to want me to.”

I bet I can name one group who doesn’t want you.

Veterans. Specifically, Vietnam veterans.

Why you may ask?

Read this from an interview in Esquire where the interviewer is asking Kilmer how he relates to the characters he plays:

[Klosterman]: You mean you think you literally had the same experience as Doc Holliday?

Kilmer: Oh, sure. It’s not like I believed that I shot somebody, but I absolutely know what it feels like to pull the trigger and take someone’s life.

[Klosterman:] You understand how it feels to shoot someone as much as a person who has actually committed a murder?

[Kilmer] I understand it more. It’s an actor’s job. A guy who’s lived through the horror of Vietnam has not spent his life preparing his mind for it. He’s some punk. Most guys were borderline criminal or poor, and that’s why they got sent to Vietnam. It was all the poor, wretched kids who got beat up by their dads, guys who didn’t get on the football team, couldn’t finagle a scholarship. They didn’t have the emotional equipment to handle that experience. But this is what an actor trains to do. I can more effectively represent that kid in Vietnam than a guy who was there.

Pompous ignorance. And the absolute certainty this poseur displays is laughable. He knows “absolutely” what it feels like to pull the trigger and take someone’s life” although he’s absolutely never done it.

And he “understands it more” than a combat veteran what it is like to have been in combat.

He crowns his burst of ignorance with a stereotypical but untrue characterization of a group he obviously knows nothing about. The disrespect he displays is both disgusting and inexcusable.

Let’s see, he played a fighter pilot once, didn’t he? Well let’s plop his rear-end in an Airbus A320 over the Hudson River at about 2500 feet, kill both engines and see if he can “effectively represent” former fighter pilot Sully Sullenburger, shall we?

Piece of cake, right?

Whatever happened to actors like Henry Fonda who when given an Oscar I believe, said, and I paraphrase, “I don’t know what all the fuss is about. I just pretend to be someone who really did something”.

That’s you, Kilmer!

New Mexicans, I love you, but if you ever elect this trumped up fraud to the governor’s office, I can promise you I will never, ever again step foot in NM for the rest of my natural life. And I’ll do everything I can to persuade others never to do so either. In fact, for all I’ll care, La Raza can have you.

Signed: Some poor borderline criminal punk who volunteered to go to Vietnam.

[There, I feel better.]

~McQ