John Tamny Believes The Mad Dream of Libertarian Ideology

Briggs forgets his limitations

"[A]s humans we’re free to do anything we want so long as our actions don’t infringe on the freedoms of others. ... [W]e as Americans have infinite natural rights."

-- John Tamny (link)

Just taken at face value the statements are a self-contradiction because the first logically excludes the second.

To qualify the range of permissible action is to limit the range, which therefore cannot be infinite, by definition. In fact, the very resort to so qualifying the range in the first place is a sort of back-handed compliment to the limitations which the underlying order places on all the constituent elements of the world.

Conservatives recognize in the underlying order the divine, which is the basis of the rights. Accordingly the rights themselves have limitations, just as also do we. As surely as our common end is the grave, no one is at liberty to shout "Fire!" in a crowded theatre and to hope to escape arrest. The right to free speech is not absolute.

And to qualify infinite natural rights as somehow American reminds one of nothing so much as the unreflective boosterism of the by-gone era of manifest destiny.

Conservatives recognize their own limitations. Libertarians do not. Therefore the latter are dangerous, especially at the movies.

The Next Bailout: Think Fed Leverage at 53:1 is Bad? Try the FHA at 417:1.

So says Fortune (link), or else it's curtains for Ginnie Mae:

The second catalyst [for government support of housing to decline] is the FHA, which looks increasingly like it will need a bailout. In its annual report to Congress, released a few weeks ago, the FHA reported estimated economic net worth of $2.6 billion backing $1.078 trillion insurance in force, for a capital ratio of just 0.24% (or 417x leverage). One year ago, the capital ratio was 0.50%, and in 2007 it was 6.4%.  The FHA's annual report claims it's adequately capitalized, but this conclusion relies on home prices not falling at all from here. ...

The government will have to pony up to recapitalize the FHA. FHA mortgages are fed into Ginnie Mae MBS, and Ginnie Mae MBS are explicitly backed by the full faith and credit of the United States government. So if the FHA runs out of funds, the government will have little choice but to step up. To do otherwise would be a default – not out of the question these days, but not very likely either.

FHA and VA loans fill void left by private lending

Dr. Housing Bubble weighs in with the big picture (link):

The trend for lower home prices has been baked in for nearly a year now. Last summer we had a mini burst of buyers thanks to artificial tax credits and low interest rates. I still view the current market as being designed for the nothing down leverage happy mentality that is present in our society. You have a large number of buyers purchasing homes with 3.5 percent down FHA mortgages and the default rates are soaring in this category. ...



Over half a decade ago I knew the bigger issue would be the cognitive dissonance that would linger from a post-bubble world. Many now realize that what occurred in the housing market was a once in a lifetime spending binge induced by debt. Yet some still think those days are only around the corner. The global debt crisis will not allow that. This is why most of the mortgage market is now dominated by the government. How many foreign governments or investors are going to trust Goldman Sachs or Morgan Stanley when they drop by their door steps with new mortgage backed securities? I think some have learned their lessons well and the data reflects this.


The housing market was bound to have a day of reckoning and it looks like it is slowly unraveling. It was simply impossible to have a shadow inventory growing with banks just ignoring the reality. We are now going into year five of the housing bubble bursting. You have millions of those in foreclosure who have not made a payment in one to even two years.


Ultimately the burden falls largely on the middle class. The Federal Reserve has a primary mission to protect banks. That is their bottom line. They are not looking out for the best interest of homeowners or working Americans. For the cost of the bailouts and shadow loans, they could have paid off close to every mortgage in the country. Yet even principal reductions were never on the radar because to do that, it would be to admit a financially broken system. Instead they opted to give out $7.7 trillion in backdoor loans to banks and forced the public to deal with “free market” solutions. An interesting situation no doubt but the problems we are now facing are based on this two-tiered system.



Confounded Interest points out (link) just how high the FHA default rates are:

As of October 2011 17.02% of FHA loans were at some stage of delinquency. The serious delinquency rate is 9.05%.


Clearly another government sponsored enterprise is repeating the mistakes of the past as we speak, having destroyed its capital base with non-performing loans swelling its balance sheet. FHA obviously should require down payments which are much higher than 3.5 percent in order to strengthen its bottom line, but it's probably too late to avoid bailing it out for the mistakes it has already made.

Talking Tough While Armed Is Now A Crime of Violence in Hutaree Verdict

Nevermind no actual crime of violence ever occurred.

The plea bargain merely establishes that this poorly advised misguided soul mistakenly agrees that intemperate talk of a plot while armed is itself a crime of violence.

What material difference such talk makes whether armed with a "gun" or merely with one's two arms is now brought into question. The 2nd Amendment is what is under attack here, in order to get at the 1st.

He should get a new lawyer.

The Detroit Free Press has the best coverage (link) of the plea bargain reached with Joshua Clough, 29, who is set to spend five on ice and testify against his brethren:

Joshua John Clough, 29, formerly of Blissfield Township, pleaded guilty today to the use of a firearm during, and in relation to, a crime of violence. ...

Clough went on to admit that, as part of their plot, the Hutaree conducted military-style training in Lenawee County, where they engaged in weapon proficiency drills, patrolling and reconnaissance exercises, and demonstrations on how to assemble and use explosives.

Clough admitted that around Feb. 20, 2010, he participated in a Hutaree training exercise that focused on an upcoming, covert reconnaissance exercise, which was scheduled for April 2010.

During this training, Clough used and carried a firearm.

Perhaps the NRA should take up the case and argue that carrying a firearm is a form of speech, which it most certainly is. Just ask anyone deterred from a crime by the sight of one, as happens everyday.

Unemployment Under Obama is Over 8 Percent for 34 of 35 Months in Office

(source)

George Will, Free Trader, Labels Herman Cain Entrepreneurial Charlatan, Disrespectful

Yeah, after Cain has withdrawn from the race.

Coward.

Here.

Obama Must Be Crackin' a Cold One Tonight: Herman Cain Finished Off in Record Time

The very likeable black Republican with the easily understood tax proposal was neutralized in record time by making him very unlikeable with half of the electorate.

It isn't just that our politics have degenerated into playing the race card, but also the gender card.

Herman Cain didn't help himself when on top of inspiring no confidence on some of the issues he mismanaged the lynching. The thing is, no one expected it would be a female lynch mob, probably Herman most of all. Men are stupid that way. That Herman should have known the Obama m/o in Illinois only demonstrates another disqualification for the big leagues.

What was he thinking?

The LA Times has the story of the end of the Herman Cain for president campaign here.

"In God We Trust" Passed the US House 396-9 on November 1

Even liberals like Nancy Pelosi, Jan Schakowsky, and Barney Frank voted FOR it, along with a boat load of other Democrats and Republicans.

This mostly blue map shows the very few pockets in red which voted against the national motto, as reaffirmed, supported and encouraged by House Continuing Resolution 13:

Here are the nine members of the US House who just had to vote AGAINST it, all Democrats except for Amash, last pictured (MI-3): Ackerman (NY-5), Honda (CA-15), Stark (CA-13), Judy Chu (CA-32), Scott (VA-3), Johnson (GA-4), Cleaver (MO-5), and Nadler (NY-8):

The Nation's Motto Dates to 1814 and the Fourth Stanza of a Song We Still Sing

Oh! thus be it ever, when freemen shall stand

Between their loved home and the war's desolation!

Blest with victory and peace, may the heav'n rescued land

Praise the Power that hath made and preserved us a nation.

Then conquer we must, when our cause it is just,

And this be our motto: "In God is our trust."

And the star-spangled banner in triumph shall wave

O'er the land of the free and the home of the brave!

Not quite "Then conquer we must"

(see it here)

The Feeble-Minded, Libertarian Crank, Rep. Justin Amash Can't Encourage "In God We Trust"

The text of the bill he voted against reads as follows:

Resolved by the House of Representatives (the Senate concurring), That Congress reaffirms ‘In God We Trust’ as the official motto of the United States and supports and encourages the public display of the national motto in all public buildings, public schools, and other government institutions.

There is nothing binding in this resolution whatsoever.

It does not require the motto be displayed, anywhere. It merely supports the motto and encourages its display where and when it happens. A wise man, even an atheist, would regard this as a mere trifle, a sop to the parochial interest of an unenlightened but harmless population, a one-off costing nothing to a politician with any sense.

But Amash still couldn't stomach it. Prudence is not a subject of the law schools, which know with Socrates that virtue cannot be taught, but especially to the ilk it attracts.

That said, it is sheer misrepresentation for Amash to say, “There is no need to push for the phrase to be on all federal, state, and local buildings.”

The bill pushes nothing, unless you're an over-sensitive freak, an un-American ideologue like Justin Amash.

George Washington, on the other hand, not only found it unobjectionable but recommended for the mere American politician to cherish and respect religion and morality:

Of all the dispositions and habits, which lead to political prosperity, Religion, and Morality are indispensable supports.—In vain would that man claim the tribute of Patriotism, who should labor to subvert these great pillars of human happiness, these firmest props of the duties of Men and Citizens.—The mere Politician, equally with the pious man, ought to respect and to cherish them.—A volume could not trace all their connexions with private and public felicity.—Let it simply be asked where is security for property, for reputation, for life, if the sense of religious obligation desert the oaths, which are the instruments of investigation in Courts of Justice? And let us with caution indulge the supposition, that morality can be maintained without religion.—Whatever may be conceded to the influence of refined education on minds of peculiar structure.—reason and experience both forbid us to expect, that national morality can prevail in exclusion of religious principle.—

I have seen no evidence that Justin Amash cherishes or respects religion and morality as a politician, nor that he understands their priority over him as a Christian legislator and American, which he claims to be.

Rather is it evident that his loyalties are to a narrowly conceived creed of a different kind.

The do-gooder's work is never done.

Ratio of Employed to Population at 58.5 Mired at Levels from Early 1980s

up-to-date through 11-30-11

The Fed's Dollar Swap Operation in Europe is a Sign of the Desperation of Monetarism

So says Jeffrey Snider, here:

Rising credit equals rising economic activity, so the advancement of the banking system necessarily and uniformly leads to advancement in the real economy. This is a pervasive belief that is accepted in too many places without critical questioning, especially in the political arena.

As I (and many others) have said numerous times, it is a deliberate prevarication. The Fed and central banks around the world coordinate dollar swap lines to save the banking system from its umpteenth moment of illiquidity simply because the banking system, through credit creation, equals control over the economies those central banks are supposed to serve. ...

The Fed, the economics profession and the financial media spread the idea that this unfettered credit creation paradigm is part and parcel to the basic economic philosophy of capitalism. It is not. Capitalism represents the free expressions of a free society, so leeching onto it achieves another shortcut to allow free people to accept a degree of economic central control. ...

The central control of modern economics seeks to control credit independent of actual demand; indeed, it seeks to create demand from nothing.

If a housing bubble achieves the philosophical aims of "stimulating" the economy to some predetermined target or range, then the political aims of the central bank are fulfilled no matter how shortsighted that may be. ...

The detachment of credit money from actual money demand to engage in productive transactions is both the glaring difference between capitalism and monetarism, and the ultimate weakness of superimposing the latter on the former. ...

As the façade plummets to earth in the messy aftermath of what it, not capitalism, has wrought, the central authorities cling desperately to their system. It matters little if bailing out the eurodollar market for the fifth time actually advances the real economy. All that matters is that the tools for maintaining the elitist utopia are preserved for future use. They just want us to accept that they know better, having already crowned themselves Lords of the global economy.

Obama Hasn't Had One Week of Initial Claims for Unemployment Below 375,000

By the only measure that counts: The seasonally-adjusted 4-week moving average.

LOOK IT UP: here.

The ONLY time it got that low was ONE week in February of 2011.

Every other single week has been HIGHER. In fact, I count just 13 weeks in the below 400,000 category for Pres. Obama, all of which have occurred in 2011. By contrast, Pres. George W. Bush had 318 weeks below 400,000.

Obama's entire presidency to date, nearly three years, is defined by doing NOTHING about unemployment at catastrophic levels: WORKERS COVERED BY UNEMPLOYMENT INSURANCE UNDER OBAMA HAVE DECLINED BY 8 MILLION.

President Obama is an unmitigated disaster to the American worker, who suffers silently because of Obama's policies.

Is Limbaugh High on Painkillers Again?

After telling us repeatedly in recent weeks that the banks were NOT bailed out, today, 45 minutes into the show, Rush Limbaugh is quoting approvingly from Dan Hannan here at the UK Daily Telegraph, telling us capitalism hasn't been practised here for three years, what with all the bailouts and the like.

Talk about turning on a dime.

Rush's defense of the banks has been that American banks didn't need bailouts (TARP), took them and paid them back because they were intimidated by the Feds.

This continues to misrepresent TARP, and miss the scope of the bailouts, which were a series of massive, sustained behind-the-scenes loan operations at rock-bottom rates in the trillions of dollars. TARP was a puny fraction of the total loaned by the Federal Reserve.

The same pattern is now repeating in the EU crisis, with the Fed loaning dollars ultra-cheap to EU banks.

This is not a free market in banking, and it hasn't been since 1913.

Taxpayers shouldn't be backstopping any banks, who have been cut loose by Republicans and Democrats to play with your money, your bonds and stocks, and your mortgages. When they succeed, they pocket the profits. When they fail, you pay.

You are subsidizing the success of the business model of the banks, and accepting the risk for its failure. 

Rush appears to be too goofed up to grasp this, besides the fact that to do so means to repudiate the accomplishments of Republicans like Phil Gramm and Newt Gingrich, whose power and influence were exercised to pass the legislation in the 1990s which has brought us to this pass.

It's Not the Fed's Job to Bail Out Europe's Banks and Governments

So says Kevin Williamson, here:

"Congress should make it clear — today — that the Fed’s mandate does not extend to bailing out Europe’s banks and Europe’s governments. This is especially true after the secrecy and unaccountability with which it conducted the $7.7 trillion shadow bailout on top of TARP."

A voice of sanity.

Occupy LA: 30 Tons of Trash and Treason. Tea Parties: Zero Trash and 100 Percent American.

Occupy LA's used props 2011

Michigan Tea Party 2009

Most American Banks Are Paying More at the Discount Window Than EU Banks For Swaps

Swap lines for EU banks are now discounted to 0.58 percent. The European Central Bank gives us euros as collateral, and we give them dollars at that rate.

Most American banks are paying much more for dollar loans, either 0.75 percent or 1.25 percent, at our own discount window. Seasonally adverse conditions allow some US banks to borrow at 0.25 percent. 

The reason the EU gets such a break? Maybe because the EU is in big, big trouble, Trouble with a capital "T".

See the discount window data, here.

h/t Mish

Bank Bailouts Were a Comprehensive Assumption of Costly Downside Risks by the State

In other words, a form of fascism.

So says Steve Waldman at interfluidity.com, here:

Cash is not king in financial markets. Risk is. The government bailed out major banks by assuming the downside risk of major banks when those risks were very large, for minimal compensation. In particular, the government 1) offered regulatory forbearance and tolerated generous valuations; 2) lent to financial institutions at or near risk-free interest rates against sketchy collateral (directly or via guarantee); 3) purchased preferred shares at modest dividend rates under TARP; 4) publicly certified the banks with stress tests and stated “no new Lehmans”. By these actions, the state assumed substantially all of the downside risk of the banking system. The market value of this risk-assumption by the government was more than the entire value of the major banks to their “private shareholders”. On commercial terms, the government paid for and ought to have owned several large banks lock, stock, and barrel. Instead, officials carefully engineered deals to avoid ownership and control.

The New Global Fascist Order Slashes Dollar Borrowing Costs, But Not For You

It's not fascism when WE do it.

As reported here:

The U.S. Federal Reserve slashed the cost of emergency dollar loans to foreign banks as the world’s major central banks took coordinated action to prevent Europe’s debt crisis from triggering a global liquidity crunch.

The moves were announced in statements issued simultaneously by the U.S. Federal Reserve, the European Central Bank, the Bank of England, the Bank of Japan, the Bank of Canada and the Swiss National Bank. ...

“Global central banks are opening the spigots and the casualty has been the dollar,” said Kathleen Brooks, research director at Forex.com.

“The extension of the dollar swap lines essentially means that dollars will be available cheaply and on request for the next 15 months to Europe’s troubled financial sector, which will probably greedily eat them up after being starved of much-needed dollar funding since the summer.”

Meanwhile the US consumer's liquidity crisis continues apace:

hours worked remain flat year over year;

real wages have declined nearly 2 percent year over year;

housing values have declined $6.6 trillion since 2006;

owners' equity in real estate is down $6.9 trillion since 2005;

household net worth is down $5.55 trillion since 2006;

unprecedented unemployment above 8 percent has continued for 33 months straight;

the US dollar has declined 27 percent in value in ten years;

debt delinquency rates are running at 10 percent;

open credit accounts have declined by 23 percent since 2008;

the annual percentage rate on the average credit card is nearly 15 percent;

a three year new car loan will cost you nearly 4.5 percent;

a 30 year mortgage will cost you 4 percent, if you can get one;

and the bank pays you doodily squat on your savings.

But if you're a European bank, the US Federal Reserve is making a gift of loans at just 0.58 percent:

The new [dollar swap] pricing will be applied to operations starting on Dec. 5. Seven-day loans would carry an interest rate of about 0.58 percent, down from 1.08 percent, based on the current one- week OIS rate of 0.08 percent.


The bankers' bank has picked its winners again. And you aren't one of them.

Household Debt Declines One Half of One Percent, Headlines Scream "Consumers Deleverage"

What a crock!

Total household debt fell $60 billion quarter over quarter to $11.66 trillion. Big whoop!

Examples here and here.






Does this look like a dramatically improving picture to you?!

(source)

Newt Gingrich Supported Government Compulsion on Healthcare in 2005

The left is all over it, here.

Capt. Terrell: "Doin' right ain't got no end."

Newt: "[W]e have no room in this society to have a free rider approach if you’re well off economically to say we’ll cheat our neighbors."