Quote of the Day – Hand of the State Edition

I believe that markets move in and out of balance on varying temporal horizons naturally. They overshoot and undershoot but become excessive in nature in a systemic way only when they are deliberately distorted.


Intervention in or manipulation of markets by the state is such a distortion. Its acts postpone the day of reckoning for years or even decades. It creates (a) false sense of equilibrium that ultimately gives way to disequilibrium and heightened instability. We have not experienced free markets — that is, the invisible hand — for decades. The recent failure of markets to predict uncertainty was not a failure of free markets but a failure of fiat money and socialism.

Ben Davies, CEO – Hinde Capital, London.
Fall Dinner Meeting of the Committee for Monetary Research and Education
Union League Club, New York
Thursday, October 21, 2010

Quoted in full at No Quarter

The whole speech is worth your time.

The Hell with a $9.50 Minimum Wage!

This is REAL vote-buying! (Courtesy of Unix-Jedi via email.)

Barack Obama Advisers Unveil Economic Stimulus Plan

Democratic presidential hopeful Barack Obama unveiled an economic stimulus plan sunday that he said would provide tax relief for middle income families and help jump start an economy he said was showing signs of slowing.The plan, which would immediately inject $75 billion into the economy and retain $45 billion in reserve to be used over the next three months if necessary, was presented Sunday by Obama advisers Gov. Tim Kaine of Virginia, former Clinton Commerce Secretary Bill Daley, and economic adviser Austan Goolsbee.

Only in Washington D.C. can a person simply wish $120 billion into existence, and (with a straight face) say that they’re holding “$45 billion in reserve” because they’re not handing it out right away. It’s the vote-buying equivalent of saying that a 5% spending increase is really a 4% budget cut because the original request was for a 9% increase.

What chutzpah! And they say Obama has no experience!

The plan, they said, is one Obama would not only enact if elected, but one he is asking Congress and the president to pass now.

So that Bush can veto it. Or not. (See update below.)

Obama’s plan would provide immediate tax relief and help offset a coming economic slowdown being signaled, he believes, by the recent .3 percent jump in unemployment rates, advisers to the campaign said Sunday.

A 0.3% increase on a current unemployment rate that is about 5% – a rate that prior to the Bush administration translated as “full employment.”

Obama supporter Gov. Tim Kaine of Virginia said the plan addresses both long-term growth and immediate concerns, and shows Obama understands the importance of education, technology, and a thriving small business sector.

Wait… How does giving out $75 billion in tax refunds (with another $45 billion in reserve) equal understanding “the importance of education, technology, and a thriving small business sector”? The recipients are going to study up on which big-screen TV they’re going to buy from the local Big-Box store?

The main difference between Obama’s plan and that being offered by his chief rival for the Democratic nomination, Sen. Hillary Clinton, is that Clinton’s plan would not be able to kick in immediately.

What, she’s not offering more bucks per vote?

Obama’s stimulus plan has four components to prevent recession:

1. Cut $250 checks for some 150 million low and middle income workers and send them out. If needed, send out an additional $250 per worker, totaling $500 for these workers

2. Likewise, send $250 to seniors earning under $50,000 as a Social Security supplement, and and prepared to send out a second $250 payment

“Need” being determined by how well Obama is doing in the primaries?

3. Establish a $10 billion fund to help “responsible” families avoid foreclosure. The money would be given to homeowners who did not lie about their incomes and were “mindful of personal responsibility.”

As determined by some harried Federal contract employee? Who is responsible for all of this? Do we get another billion-dollar bureaucracy to administer this program?

4. Provides money to state and local governments hardest hit by housing crisis to prevent them from slashing infrastructure and other important state spending.

5. Expand unemployment insurance.

What, Obama’s not going along with Edwards’ $9.50/hr minimum wage initiative?

Asked how Obama would pay for the package, Goolsbee said the point was to get the money immediately into the economy, and that while it could increase the deficit in the immediate term, macro macro economic experts agreed it would prevent a costly recession in the long-term.

Then why not send out $1,000 checks? $10,000 checks? After all, we must avoid a costly recession!

The advisers said the $45 billion reserve could be used to offset the possible effects high oil prices could have on the proposed breaks.

“Economic stimulus.”

Riiiiighht!

Pull my other leg.

UPDATE: (*sigh*) $250? Hell, let’s go for $800! And Bush (last I checked) isn’t even on the ballot!

Now I’m with Milton Friedman when it comes to tax cuts (never oppose them, ever), but tax “rebates” is another topic. Hey, if Congress wants to give me $800 of my money back, I’m fine with that, I still need to buy a scope for my long-range rifle. But apparently tax cuts aren’t immediate enough. It’s not acknowledgment that the .gov took too much of our money last year and now needs to give some of it back, it’s just a “temporary correction” they’ll tax as income next year.

But why do I think that the legislation is going to carry a name like “The Obama-Clinton-Edwards Economic Stimulus Package”?

Quote of the Week:

Science may be the noblest endeavor of the human mind, but I believe (though I cannot prove) that the most crippling and dangerous kind of ignorance in the modern West is ignorance of economics, the way markets work, and the ways non-market allocation mechanisms are doomed to fail. Such economic ignorance is toxic, because it leads to insane politics and the empowerment of those whose rhetoric is altruist but whose true agenda is coercive control. – Eric S. Raymond

OK, So I Lied

Not really, though. I’m buried in work, but I found this over lunch and had to post it.

‘Bankrupt’ Forces may shut 5 bases
Internal reports say $500M shortfall may cause closures from Winnipeg to Labrador

Chris Wattie
National Post

Tuesday, February 24, 2004

Canada’s army, navy and air force are facing a funding shortfall of up to half a billion dollars, defence sources told the National Post, and the military is recommending drastic measures to make up the difference, including closing some of the largest bases in the country.

The federal government is stalling the release of internal documents that outline the looming financial crisis, but military sources said the reports indicate that in the fiscal year beginning on April 1, the air force expects to be $150-million short of funds needed to fulfill its commitments, the navy will be $150-million shy of its needs and the army will be as much as $200-million short.

The figures were submitted to General Ray Henault, the Chief of Defence Staff, last month by the heads of the land staff, the maritime staff and the air staff in anticipation of this year’s defence budget.

The military sources, who spoke on condition of anonymity, said the reports foresee a situation so dire that they recommend curtailing operations, dry-docking ships and mothballing vehicles or aircraft and closing at least four Canadian Forces bases.

Unless additional funding is awarded by the government, the air force is suggesting closing bases at Goose Bay, Nfld., Bagotville, Que., North Bay and Winnipeg, the sources said.

Further, the air force report says that unless its fleet of ageing CC-130 Hercules transport planes is replaced or modernized, the main transport base at Trenton should be closed within 10 years. “There won’t be enough Hercs flying by then to justify keeping that base open,” one air force source said.

The navy predicts it will not be able to live up to treaty obligations to NATO and other alliances and cannot carry out enough patrols of Canadian waters to comply with agreements with other government departments such as Immigration Canada or Fisheries and Oceans.

“We will not be able to meet our domestic defence obligations,” one naval officer said.

The army is said to be in the worst financial state of all three branches of the Canadian Forces. “Everyone knows that the army’s broke and has been for a couple of years,” said one military source familiar with the reports.

Colonel Howard Marsh, a former senior army staff officer now working as an analyst for the Conference of Defence Associations, said he was not surprised by the size of the shortfall.

“This is a look forward … at what they need in order to keep the army going,” he said. “Nobody has ever seen a bankrupt military in a developed country…. This year I predict we will see that in Canada.”

Col. Marsh said the military is saddled with ageing bases and increasingly dilapidated buildings that are fast reaching the point of collapse. “What they’ve been doing, year in and year out … is not replace or repair those buildings, or buy new equipment,” he said.

“The average age of the equipment in the Canadian Forces is over 20 years and it hasn’t been well-maintained.”

The Liberal government reduced defence spending by 23% and cut the number of regular military personnel to approximately 60,000 from 80,000 between 1993 and 2000. There were 120,000 people in the Canadian military in 1958.

In 2003, the defence budget was increased $800-million to $12.7-billion, the single largest increase since the Liberals came to power. But that still left the total below that of 1991, when the Mulroney Conservatives committed troops to the Gulf War and the defence budget stood at $12.8-billion.

Jay Hill, the Conservative defence critic, said the reports outline the result of more than a decade of Liberal cuts to the Canadian Forces.

“They shouldn’t even be in this position,” he said. “They shouldn’t be having to look for nickel and dime savings when the government is blowing hundreds of millions on sponsorship programs.”

Mr. Hill called on the government to make the three reports available immediately. “This flies in the face of this Prime Minister’s stated commitment to being open and transparent,” he said.

The Department of National Defence has refused to make public the annual reports, known as command impact assessments.

Defence officials this week turned down a request by the National Post and the influential defence publication Jane’s Defence Weekly to see the reports under access to information legislation.

Judith Mooney, the director of access to information for the Department of National Defence, said the reports will not be made public for another three to five weeks because they are considered “draft” documents.

“I exercised my discretion to withhold the documents until the [Defence] Department’s business-planning process is complete, at which time they will be released,” she said.

Ms. Mooney could not say when exactly the reports would be released, but indicated they would be available by the end of March.

Although that would delay them until after the release of the federal budget, which is expected on March 23, she said David Pratt, the Defence Minister, was not involved in the decision to withhold the reports until then. Mr. Pratt did not reply to repeated requests for comment on the reports.

In previous years, the assessments have been made public.

This year’s reports paint a picture even more bleak than last year’s, which said the military would be unable to sustain itself without additional resources or a reduced workload.

They were the basis for a story last year in Jane’s Defence Weekly, the prestigious London-based magazine, which caused a furor in Canadian and NATO defence circles. Under the headline “Running on Empty,” the story said the army, navy and air force did not receive the money they needed.

The article said the navy asked for an additional $50-million to bridge the funding gap, but received only $6.7-million. The air force expected a $104-million shortfall but received about $7-million. The army had a larger gap between what was expected of it and the funding available, and received $85-million in extra money.

Major-General Terry Hearn, the chief of finance for the Canadian Forces, acknowledged the military has had “issues” with funding over the past four years.

But he said the department is implementing a long-term plan to stabilize its finances. “We’ll become sustainable over the next couple of years,” he said. “We have long-term strategies to deal with these issues … [but] we’re not going to solve them next year.”

Peter Stoffer, a New Democrat MP whose Nova Scotia riding includes a large military base, called the government’s refusal to release the reports “very suspicious.”

“If anyone out there honestly believes that access to information will be any easier under this government, they are fooling themselves,” he said. “They say one thing and do another.”

Yet Canada’s Auditor General Sheila Frasier has reported that implementing registration of all long-guns and all firearms owners (and failing) had cost, as of April 2002, $629 million. The projected cost through 2005? One BILLION.

Yet the Canadian military is sorely underfunded. Think that money might have been better spent?

Another Opportunity for Free Enterprise and the Internet

JoinTogether.org continues to be an unending font of material for me. In this piece they report that More Newspapers Banning Gun Classifieds. This happened here in Tucson a couple of years ago. The result? UsedGunsTucson.com (currently defunct as of 2017), a web-based classified system for people buying and selling their firearms privately. At no cost, mind you. This guy runs the site on his own dime. And I’ve used it. It works quite well.

I hope others establish sites like this to replace their newspaper classifieds.