What a World!

2010-07-27T18:29:00.002-05:00

What's Really Going On in the Economy: It's Worse than the 'Great Recession' of 2008

Consumer Metrics Institute is out with their latest numbers. It isn't pretty. As I have pointed out, CMI data is real time and light years ahead of the data put out by the government, it should be taken seriously as the best indicator of what is going on in the economy in terms of demand for capital goods in the consumer sector. Here's their latest:
Since last week our Daily Growth Index has weakened further, surpassing a year-over-year contraction rate of 3%. This daily measurement of on-line consumer demand for discretionary durable goods has now dropped to the lowest level it has recorded since late November 2008.

► The current contraction in consumer demand for discretionary durable goods has now extended for more than 6 months.

► The day to day level of the year-over-year contraction is now worse than a similar reading of the 'Great Recession' of 2008 was after 6 months. [Although the 2008 Recession did dip lower, it was recovering at this point in time due to Bernanke's money printing in late 2008 into early 2009-RW]

► Although this contraction has not yet reached the extreme contraction rates that were seen during 2008, after 6 months it has not yet formed a bottom. Furthermore, it is now likely to last longer than the 2008 event.
What's going on here can be understood in terms of Austrian Business Cycle Theory. The first leg of the downturn was reversed as a result of extremely aggressive Fed printing between late 2008 and early 2009. That money printing started to manipulate the economy higher in a distorted manner back into the capital goods sector.

The current second leg is the result of the money slowdown that began in early 2009. It isn't as "deep" because of the liquidations that occurred in the first leg of the downturn, e.g., a house in this short a time period doesn't go through foreclosure twice. The second leg is mostly about completely new liquidations that are occurring because of the propping up the Fed did with their brief late-2008, early 2009 printing.

See the lecture below by Roger Garrison, Professor of Economics at Auburn, for a great and entertaining exposition of how all this happens.

2010-06-23T21:02:00.001-05:00

How the Government Slowed Down the Gulf Cleanup

Tuesday, 22 Jun 2010 03:31 PM
Article Font Size
By: Ernest Istook
Our own government has quietly admitted that America needs foreign help to handle the oil spill — almost two months after pushing that help away.

Far more oil could have been intercepted before it fouled the Gulf Coast. So why hasn’t our government apologized?

By refusing foreign assistance, we banned both the latest technology and cleanup vessels that far exceed the capacity of America’s oil spill response vessels (OSRVs). We rejected ships with 10 times the capability of the vessels we used instead.

In a quiet announcement on June 18, the Federal On-Scene Coordinator (FOSC) finally agreed that we need help, describing a conclusion reached two days before:

“. . . the FOSC, in coordination with other federal agencies, determined on June 16, 2010, pursuant to 46 U.S.C. §55113, that there are an insufficient number of specialized oil skimming vessels in the U.S. to keep pace with the unprecedented levels of oil discharges in the Gulf of Mexico. Based upon this determination, foreign specialized skimming vessels may be deployed to response operations.”

Technically, the Jones Act remains unwaived and continues to restrict use of foreign vessels other than OSRV’s. Officials invoked only a limited exemption that was put into law after Hurricane Katrina.

By their delay, our bureaucracy and government regulation have made a horrible situation even worse. There were two weeks between the April 20 explosion on the Deepwater Horizon and the time when the first oil made landfall. And it was almost six additional weeks before specialized equipment from overseas was approved by our government for limited use.

The Dutch formally offered help on April 25. Not until June 14 did the U.S. State Department announce that some foreign help would be welcomed from the 17 nations who had been trying to assist.

We violated a basic rule of oil spills: “The key to avoiding catastrophic damage and extreme liability is a fast response.”

So what’s different about the foreign equipment that at long last is being deployed? Capacity, for one. They can do far more and do it more quickly.

To protect the North Sea — a major petroleum-producing area — Europe created cooperatives such as Norway’s Norwegian Clean Seas Association for Operating Companies (NOFO), assembling resources that far surpass America’s.

The largest American OSRV I’ve found has only a 4,000-barrel capacity. Compare that to Norway’s new cleanup standards, which state, “An active effort must always be made to achieve the largest possible tank capacity. Under no circumstances must the tank capacity for storage of recovered oil be less than 1,500 m³.” 1,500 cubic meters is 9,400 barrels. None of our U.S. oil recovery vessels appear to come even close to this standard.

The European Union maintains a multi-faceted inventory of OSRVs. The Netherlands alone lists 11 ships that exceed this 9,400-barrel capacity, including vessels like the Geopotes 14 that reportedly can pick up and contain 47,000 barrels at a time. That’s 10 times larger than any U.S. ship we’ve been using.

Collecting more oil in each run enables more time spent collecting oil and less time carrying oil back to a storage facility.

There’s another problem with how U.S. regulations are slowing down the cleanup. The Dutch are now providing skimmers that can be attached to American vessels. But because most of what’s skimmed is unavoidably water, not oil, they complain that America’s EPA standards won’t let them put back the water. Thus their tanks fill up with a mixture that is mostly water.

That mix is a serious problem. The Incident Commander, Coast Guard Admiral Thad Allen, told the media on June 11, “We have skimmed, to date, about 18 million gallons of oily water — the oil has to be decanted from that [and] our yield is usually somewhere around 10 percent or 15 percent on that.”

That means 85 percent to 90 percent of what is collected is water, not oil. If complaints are correct, then unless vessels can separate these at sea and discharge the water, most of what they haul back to a storage facility is water. That means six or seven trips to carry one full load of skimmed oil. Complaints are that our EPA says discharged water from the skimming cannot exceed 15 ppm (parts per million) of oil.

Radio Netherlands reported:

“The Americans don’t have spill response vessels with skimmers because their environment regulations do not allow it. With the Dutch method, seawater is sucked up with the oil by the skimmer. The oil is stored in the tanker and the superfluous water is pumped overboard. But the water does contain some oil residue, and that is too much according to U.S. environment regulations.

“Wierd Koops [head of the Dutch consortium, Spill Response Group Holland] thinks the U.S. approach is nonsense, because otherwise you would have to store the surplus seawater in the tanks as well.

“[Says Koops], “We say no, you have to get as much oil as possible into the storage tanks and as little water as possible. So we pump the water, which contains drops of oil, back overboard.”

“U.S. regulations are contradictory, Mr. Koops stresses. Pumping water back into the sea with oil residue is not allowed.”

He is not alone in criticizing America’s restrictions on the cleanup efforts. Several Democrats in Congress have joined the calls to get our bureaucracy out of the way.

Rep. Corinne Brown, D-Fla., said at a hearing, "We are in emergency mode; we need skimmers . . . There are small boats, I guess, but we need the big ones. I understand they are available in other countries."

We indeed need the big cleanup ships that America must get from overseas. Who knows how many livelihoods — and how much of the environment — would have been spared if our government had not drug its bureaucratic feet and invited them two months ago?

2010-06-22T18:32:00.000-05:00

I had to post this video of President Obama showing off his golf swing:

2010-06-09T21:29:00.000-05:00

2010-06-09T20:47:00.001-05:00

2010-03-12T19:40:00.000-06:00

Gold May Keep Rising Against Major Currencies - Barrons.com

2010-03-06T18:04:00.000-06:00

Gold May Keep Rising Against Major Currencies - Barrons.com

2010-03-06T17:59:00.001-06:00

Jim Rogers on China Opportunities, the Gold Standard and the Development of his Free-Market Financial Philosophy

2010-02-06T12:22:00.003-06:00

How not to explain the Section 1031 Exchange of Like-Kind Property

Take a look at this YouTube video. The lady explains that in a 1031 one "rolls the gain" over into a new property to defer the recognition of gain. Starting with a $500,000.00 property with $300,000 in "equity" -- which presumably is the original down payment and some as yet unrecognized capital gain -- she speaks of "taking all the equity" and rolling it into a new property. It certainly sounds like she is suggesting exchanging into a $300,000.00 property and paying off the $200,000 ("non-equity") mortgage on the relinquished property. But if you do that you will have received "cash boot" in the amount of $200,000.00 (represented by the forgiveness of the debt secured by the mortgage) which is as fully taxable as if you had actually received cash. To avoid this, one must replace the old debt with new debt (or cash) and exchange into a property worth at least $500,000.00. See my website for how to structure a 1031 exchange.

2010-02-06T11:17:00.000-06:00

This is good. Roll Tide!

2010-01-10T08:01:00.001-06:00

Bernanke Exposed:

2009-11-12T20:14:00.000-06:00

But then I sigh; and, with a piece of scripture,
Tell them that God bids us do good for evil:
And thus I clothe my naked villany
With old odd ends stolen out of holy writ;
And seem a saint, when most I play the devil.

Richard III in William Shakespeare's Richard III

2009-11-07T10:54:00.002-06:00

The Man Who Predicted the Depression
Ludwig von Mises explained how government-induced credit expansions led to imbalances in the economy.

2009-11-07T10:29:00.001-06:00

2009-11-07T08:22:00.000-06:00

2008-12-23T09:58:00.002-06:00

Summit 1031 Exchange - Information is Forthcoming

SUMMIT 1031 EXCHANGE

December 19, 2008

To All Customers of Summit 1031 Exchange:

In a prior website posting dated December 15, 2008, Summit Accommodators, Inc. ("SAI") reported it was experiencing significant financial issues, had ceased funding open exchanges, and had curtailed its daily operations until those issues could be addressed. This letter will provide you with updated information and report the actions SAI has taken to address and resolve its financial issues.

SAI currently has approximately $ 27,831,363.00 in open exchanges for customers of Summit 1031 Exchange ("Summit Customers"). However, the total cash in SAI's exchange funds related accounts is $ 13,600,212.88, which is a cash shortfall of approximately $14,231,151.00. Although SAI has other assets that it hopes will be sufficient to pay all Summit Customers, those assets are unfortunately illiquid at this time and not immediately available to fund open exchanges.

On December 19, 2008, SAI did the following to address these issues:

1) SAI filed a petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Oregon, Case No. 08-37031-rld11. All of SAI's assets, including the exchange funds, will be preserved intact pending decisions to be made by the Court. SAI's Chapter 11 bankruptcy attorneys are Susan S. Ford and Thomas W. Stilley at Sussman Shank LLP, located in Portland, Oregon. Summit Customers are listed as creditors in the case and are entitled to appear, be heard and file claims with the Court. You will receive further notices regarding SAI's Bankruptcy Case in the mail. Should you desire or require bankruptcy advice to protect your rights, you should contact a qualified attorney to assist you with this process.

2) SAI has replaced its existing management to provide transparency, independent decision-making and control. Tyrell B. Vance LLC, ("Vance") has been retained as SAI's Chief Restructuring Officer ("CRO") for all purposes in the Chapter 11 case. Vance is a recognized business crisis manager and court receiver in multiple jurisdictions with over 30 years of such experience. Effective immediately, Vance has been given independent authority to investigate all transactions and to manage SAI and all of its assets for the exclusive benefit of SAI and its creditors, specifically including all Summit Customers, until all debts are paid in full or all assets have been appropriately liquidated and paid to creditors, subject to the direction of the United States Bankruptcy Court. Vance will take possession of and preserve all exchange fund accounts maintained by SAI for Summit Customers. Vance will further assume control of SAI and all of its assets, books and records, and will have the power as CRO to propose a plan for SAI to pay creditors, to bring claims against third parties, and to do all other acts as may be necessary in the interests of SAI and its creditors or as ordered by the Court.

3) Vance as CRO of the Company has retained Obsidian Finance Group, LLC ("Obsidian") as financial consultants to provide advice with respect to all tax issues affecting Summit Customers and a plan to mitigate damages to the maximum extent possible of currently unfunded exchanges. In addition, Obsidian has been retained to review substantial real estate investments and recommend the best method to realize the value of such investments to satisfy claims. Obsidian is a national financial consulting firm, which specializes in distressed enterprises and assets.

This situation resulted from loans of exchange funds made by SAI over a period of time ending in approximately the year 2006 to Inland Capital Corporation ("Inland"), which in turn loaned funds to various entities and individuals that were involved in real estate investments located primarily in central Oregon. Inland is owned by the same persons who own SAI. The members of the entities and the individuals to whom Inland made loans are in most cases one or more of the owners of SAI.

Although liquidity was not an issue for many years and much of the outstanding loan balance from Inland to SAI was repaid, the recent crisis and downturn in the formerly profitable real estate market caused the entities and individuals who owe Inland to be unable to repay loans in a timely manner, which in turn caused Inland to be unable to repay SAI. The current amount owing from Inland to SAI is approximately $13,706,557.21. The existing real estate investments will be made available to repay the loan balance and satisfy claims, in addition to any and all other available assets and resources of SAI. However, it will unfortunately take time to determine, realize and reduce the value of such assets to cash to pay Summit Customers and creditors. SAI is hopeful that its assets will be sufficient to satisfy all customers' and creditors' claims, and is committed to doing so under the independent direction and control of Vance, as CRO, and the United States Bankruptcy Court.

SAI deeply regrets the distress and detriment that Summit Customers are currently experiencing. The foregoing actions have been voluntarily taken by the existing management to assure Summit Customers that SAI is committed to complete transparency regarding these issues, to ensure that all of its actions will be exclusively for the benefit of Summit Customers and creditors, and to eliminate any uncertainty that SAI's assets will be preserved.

Phone: 800.909.1031

Summit 1031 Exchange - Information is Forthcoming

2008-12-23T09:55:00.000-06:00

Summit 1031 Exchange - Information is Forthcoming

2008-11-25T15:01:00.001-06:00

2008-02-18T13:50:00.000-06:00

2007-12-24T17:52:00.000-06:00

2007-12-15T14:38:00.000-06:00

2007-12-07T16:30:00.001-06:00

2007-10-26T12:31:00.000-05:00

2006-12-24T18:20:00.000-06:00

Libertarian or libertarian? - Commentary - The Washington Times, America's Newspaper
My friend, Bruce Bartlett, calls for a policial organisation in favor of liberty.

2006-12-20T21:36:00.000-06:00

Climate ideology control -- The Washington Times

2006-12-06T19:27:00.000-06:00

Philadelphia Inquirer | 12/05/2006 | Roots of debacle in Iraq are in neocon ideology

2006-08-22T12:53:00.000-05:00

Federal Appeals Court: Driving With Money is a Crime

Just so you will know. Forfeiture gone wild.

2006-08-17T09:48:00.000-05:00

Internal Revenue Bulletin - August 14, 2006 - Notice 2006-67This is the IRS' explanation of how the GO Zone Bonus Depreciation rules work. Especially important is the active conduct of business rules and the recapture provisions.

2006-08-06T17:52:00.000-05:00

The neocons' next war

2006-04-22T11:40:00.000-05:00

Bending Starker Exchange Rules Can Be Risky Business

This from the Washington Post.

2006-02-14T09:17:00.000-06:00

IRS Publication 4492 Gives Information for Taxpayers affected by Katrina: "http://www.irs.gov/pub/irs-pdf/p4492.pdf "

2006-02-14T09:13:00.000-06:00

IRS Extends Hurricane Losses Deadline

WASHINGTON_The IRS on Friday gave people hit by hurricanes last year an extra six months to decide whether to claim losses related to the disasters on 2004 or 2005 tax returns.

Taxpayers living in regions of Florida, Alabama, Mississippi, Louisiana and Texas hit by hurricanes can claim unreimbursed losses on their 2005 tax returns, or they can claim the losses by amending their 2004 tax returns.

The deadline for amending the previous year's return is now Oct. 16, extended from April 17. The decision does not extend the regular tax return filing deadlines.

The IRS instructed taxpayers to write, in red ink, the name of the hurricane on top of their tax forms. The tax agency also has a special publication and a disaster hot line, 1-866-562-5227, to help taxpayers who suffered losses in the hurricanes.

2006-02-12T09:44:00.000-06:00

Nice interview with the 93 year old Milton Friedman

2005-12-29T21:07:00.000-06:00

Sobran Column --- Remembering Gene McCarthy

2005-12-29T20:59:00.000-06:00

Session shows what ails Congress

Typically fine reporting from Robert Novak.

2005-12-25T10:58:00.000-06:00

In Hoc Anno Domini

Vermont Royster's annual Christmas message.

2005-10-18T19:13:00.000-05:00

In Sign of Conservative Split, a Commentator Is Dismissed - New York Times

Bruce Bartlett gets some publicity for his upcoming book on the Bush presidency.

2005-10-17T19:27:00.000-05:00

OPENING ARGUMENT: Does Miers Have What It Takes To Excel On the Bench? (10/17/2005)

Stuart Taylor in the National Journal has a good summary of the Miers nomination: quite a "Bush-lite" action.

2005-10-10T19:17:00.000-05:00

Wall Street Journal -- John Fund on the Trail I hired John Fund for one of his first jobs out of school, and I trust his judgment. Interesting take on Harriet Miers. Read and weep for the prospects of restoring the lost constitution.

2005-09-19T22:01:00.000-05:00

Katrina exposes the Republicans as socialists

Bush tries to out-do FDR domestically.

2005-09-06T11:21:00.000-05:00

An Unnatural Disaster: A Hurricane Exposes the Man-Made Disaster of the Welfare State

2005-09-06T11:13:00.000-05:00

Hurricane Katrina triggers time extension relief. The relevant IRS Rev. Proc. is here. (pdf file)

The relevant material begins on page 1073 and provides for an 120 day extension to either the 45 day or 180 day deadlines.

2005-09-02T20:45:00.000-05:00

Check out Fred Smith's plea to Lousiania to shape up its act.

2005-08-22T21:46:00.000-05:00

Federal Reserve Bank of Minneapolis - Consumer Price Index Calculator

Let's see now. A $100 bill would buy about $20 in 1971 goods; about $5 in 1913 goods (the year the Fed was created). Not a great track record. It is reasonably clear why the savings rate is near zero: persons who save the monetary unit have their savings wiped out.

2005-08-06T10:33:00.000-05:00

Jude Wanniski: "Starvation and Death in Niger"

2005-08-01T08:21:00.000-05:00

1031 Question

The question is: Can a piece of property identified and contracted for, but not yet closed on, be used in the exchange of the proceeds from the sale of an original property which would be sold after the date of the new properties contract but prior to the closing on the new property?

Yes. The dates of the contracts are not relevant. The relevant dates are the dates of transfer of title of the respective properties. As long as prior to the closing on the relinquished property an exchange agreement is executed calling for the proceeds of the first closing going to the qualified intermediary and then a second closing within 180 days from the first whereby the funds are paid into closing and the exchangor receives the repalcement property, the requirements of the safe harbor regulations are met.

2005-07-26T14:43:00.000-05:00

John G. Roberts and the New Federalism: William J. Wadkins Jr.

Roberts will get skewered over this. It will be interesting to see if he can face this issue straight on: Such as "Well, Senator So and So, are you suggesting that the commerce clause which to quote the constitution gives Congress the power 'to regulate commerce with foreign nations, and among the several states, and with the Indian tribes' grants Congress the right to regulate non-commerce, not among the states?"

2005-07-25T09:14:00.000-05:00

OpinionJournal -- Who Will Judge the Inquisitors?
John Roberts isn't the only one who should come in for questioning.

BY RICHARD A. EPSTEIN
>

2005-06-30T21:50:00.000-05:00

FindLaw's Writ - Dean: The U.S. Supreme Court's Holding in Kelo v. City of New London An Interview that Reveals an Insider's Perspective

2005-06-24T17:35:00.000-05:00

To Confirm Their Judge, Republicans Abandoned Their Ideas Interesting take on Janice Rogers Brown (of Luvene, Alabama).

2005-05-23T16:21:00.000-05:00

LOCO-FOCO: Library of Economics and Liberty

I have been asked about the name of my boat, Loco-Foco. Its roots lie in the factionalism of the old Jeffersonian Democratic party: the group standing opposed to special privilege and funny money.

2005-04-01T11:19:00.000-06:00

Internal Revenue Bulletin - January 31, 2005 - Notice 2005-3

Here is link for 1031 exchangors who had their exchanges affected by Hurricane Ivan -- or one off the other recent hurricanes -- in reference to the IRS extending the 45 and 180 deadlines for identifying and closing on replacement property. It provides for at least a 120 day extension.

2005-03-19T10:40:00.000-06:00

Catastrophic success Read and weep. Michael Lind deconstructs Wolfowitz.

2005-03-17T20:17:00.000-06:00

Wolfowitz at the World Bank Great analysis by Wanniski:

Memo To: Website Fans, Browsers, Clients
From: Jude Wanniski
Re: A Perfect Fit

If you really don’t know what the “World Bank” is all about, you would think that President Bush was joking in nominating Paul Wolfowitz to be the new president of the Bank, replacing Jim Wolfensohn. One of the chief architects of the Iraq war, Wolfowitz is a political theorist, a 61-year-old man who spent most of his adult life at blackboards and lecterns teaching students about international politics. He may know how to operate an Automatic Teller Machine when in need of ready cash, but he knows absolutely nothing about banking. Wolfensohn, who was a New York investment banker before President Clinton named him to the post a decade ago, at least knows something about banking. His partner in New York, to which I suppose he will return, is Paul Volcker, the former chairman of the Federal Reserve, our nation’s central bank. Wolfie the Warrior, by contrast, is the lifetime sidekick, even protégé, of Richard Perle, probably the most important intellectual in the service of the military-industrial complex. If you want to know how Professor Wolfowitz got the job, follow the money.

That’s what the World Bank is all about. It was created as an adjunct of the United Nations at the end of World War II, along with its brother institution, the International Monetary Fund. On paper, its function was to lend money to developing countries to help them grow. Its real job has been to serve the interests of the major money-center banks and the multinational corporations who make the big bucks in World Bank development projects. The Bank, which is really a “fund,” persuades a poor country like Ghana, for example, to build a new industrial complex in order make stuff for export. It will lend the money to Ghana -- which it gets from global taxpayers including you and me -- and arrange for the complex to be built by one of the favored corporations in the military-industrial complex. The list always includes Bechtel Corporation, Halliburton, and Kellogg Brown & Root, a division of Halliburton. These outfits go in and build the projects because the locals have no expertise.

In my January 23 memo in this space, ”Confessions of an Economic Hit Man,” , I remarked on the recent book by John Perkins, who explains in some detail the mechanics of this gigantic money machine. It not only promotes unnecessary industrial complexes in Ghana, which rust away in bankruptcy when they prove to be uneconomic. The aim of the military-industrial complex is not only “industrial,” but also military. The name most closely associated with Halliburton, of course, is Vice President Cheney, who was Defense Secretary in the first Gulf War, with Paul Wolfowitz even then at his side (urging all-out war with Iraq even after Saddam put up the white flag and retreated to Baghdad before the war began!!) Rats.

The name most associated with Bechtel is George P. Shultz, once its top dog, now a mere director. Shultz was Treasury Secretary under Richard Nixon (helping talk him into floating the U.S. dollar), Secretary of State under Ronald Reagan, and currently a member of the Defense Policy Board, which until last year Richard Perle chaired.

Shultz also introduced Governor George W. Bush to Condoleezza Rice, who in turn introduced Paul Wolfowitz to Governor Bush back in 1999. Shultz of course knew at the time that Wolfie and Perle and their neo-con Cabal were planning a war in Iraq, and we know nice, little “doable” wars (Wolfie’s word), are meat and potatoes for the military-industrial complex. Instead of squeezing nickels and dimes out of the taxpayers to persuade Ghana to build a steel mill it doesn’t need and can’t run, even little wars run into the billions. And everyone gets into the act. The arms makers who produce airplanes, tanks, guns, jeeps and humvees get to blow up a country (like Iraq) and Bechtel and Halliburton come in right behind to rebuild it. In announcing the Wolfowitz appointment today, President Bush said the World Bank is a big organization and Wolfowitz has experience running a big organization, the Pentagon!! As far as the military-industrial complex is concerned, Wolfowitz did a FANTASTIC job. He was only expected to plan for a $30 billion war and he screwed up so badly that it is now a $200 billion war, and counting. Anyone who can screw up that badly deserves a promotion, to the World Bank.

So you see it doesn’t really matter that Wolfowitz doesn’t know the first thing about banking or the economics of development projects. He will sit behind the biggest desk at the Bank and take the telephone calls from the Big Banks and the Multinationals, telling him what to do, and providing him with experts like John Perkins, who did the actual dirty work as an economic hit man, and now writes his confessions. When the White House needs a big favor for one of its big hitters, it need only put in a call to Wolfie, who will throw the right switch. That’s exactly the way it worked with Jim Wolfensohn these past ten years, and if you don’t believe me, look around and you will note how many poor countries got poorer during his reign, and how many big bucks were made at Bechtel and Halliburton.

There will of course be complaints from various global diplomats about the obvious incompetence of Wolfowitz, just as there were puzzled head-scratchings around the world about the incompetence of Condi Rice as Secretary of State or John Bolton as UN Ambassador. But money talks in all the places where the directors of the World Bank live, and they will be advised to clam up by the local military-industrial money machines. Perle will also have his pals at The Weekly Standard and Fox News speculate that when Condi is President, Wolfie will be her veep (which is how it happened we've seen talk of Condi for President in 2008). Nor can we expect any complaints from Congress, because in one way or another there is too much money at stake, too many reputations looking toward bigtime lobbying jobs when its time to give up a seat in Congress.

If this seems harsh, as if I’m writing about something new under the rocks on which our Uncle Sam perches, I suggest you read my 1978 book, “The Way the World Works,” which describes how the British Empire worked in exactly this fashion. My best example was the first multinational corporations, the British railroad builders. Once they ran out of places to build rail lines in the U.K., they persuaded Parliament to promote railroads in the colonies, and were enormously successful in talking the Raj into criss-crossing India with railroads in the mid-19th century. It was one thing in England, where the companies could only build where there was a clear sign the line would be profitable, because it was their own money at risk. In India, the locals borrowed the money from the Bank of England and hired the builders to put in rail lines that couldn’t possibly be profitable. India was burdened with debts from these schemes well into the 20th century.

Even after it gained independence in 1948, India was persuaded by British and American economists to keep tax rates high and to devalue the rupee, to keep them poor and unable to compete with the big guys. Who did the British and American economists work for? Why the World Bank, of course, and also the IMF, whose job is to go into the poor countries when they can’t pay back their loans, and lend them the money to do so -- as long as they agree to raise taxes again, devalue their currency, and build new industrial complexes that are constructed by Bechtel and Halliburton.

So you see why it makes perfect sense to have Wolfowitz at the World Bank. He’s terrific at doing wars, and wars are much more profitable than nickel-and-dime industrial projects. That’s the way the world works. Always has been.

* * * * *

2005-03-01T19:54:00.000-06:00

From the Wanniski website:

Henry Louis Mencken (1880-1956)

No one ever went broke underestimating the intelligence of the American people.

Freedom of press is limited to those who own one.

Those who can -- do. Those who can't -- teach.

Imagine the Creator as a low comedian, and at once the world becomes explicable.

Nature abhors a moron.

Say what you will about the Ten Commandments, you must always come back to the pleasant fact that there are only ten of them.

Marriage is a wonderful institution, but who would want to live in an institution.

Theology is the effort to explain the unknowable in terms of the not worth knowing.

Every decent man is ashamed of the government he lives under.

Hanging one scoundrel, it appears, does not deter the next. Well, what of it? The first one is at least disposed of.

Injustice is relatively easy to bear; what stings is justice.

It is hard to believe that a man is telling the truth when you know that you would lie if you were in his place.

Capitalism undoubtedly has certain boils and blotches upon it, but has it as many as government? Has it as many as marriage? Has it as many as religion? I doubt it. It is the only basic institution of modern man that shows any genuine health and vigor.

Jury - A group of 12 people, who, having lied to the judge about their health, hearing, and business engagements, have failed to fool him.

...the great artists of the world are never Puritans, and seldom respectable. No virtuous man--that is, virtuous in the Y.M.C.A. sense--has ever painted a picture worth looking at, or written a symphony worth hearing, or a book worth reading...

The trouble with Communism is the Communists, just as the trouble with Christianity is the Christians.

The cosmos is a gigantic flywheel making 10,000 revolutions per minute. Man is a sick fly taking a dizzy ride on it.

Faith may be defined briefly as an illogical belief in the occurrence of the improbable.

A man full of faith is simply one who has lost (or never had) the capacity for clear and realistic thought. He is not a mere ass; he is actually ill. Worse, he is incurable.

In this world of sin and sorrow there is always something to be thankful for. As for me, I rejoice that I am not a Republican.

Remorse--Regret that one waited so long to do it.

...school teachers, taking them by and large, are probably the most ignorant and stupid class of men in the whole group of menial workers.

Democracy is also a form of worship. It is the worship of Jackals by Jackasses.

One seldom discovers a true believer that is worth knowing.

Suppose two-thirds of the members of the national House of Representatives were dumped into the Washington garbage incinerator tomorrow, what would we lose to offset our gain of their salaries and the salaries of their parasites?

We must respect the other fellow's religion, but only in the sense and to the extent that we respect his theory that his wife is beautiful and his children smart.

Conscience is the inner voice that warns us somebody is looking.

A poet more than thirty years old is simply an overgrown child.

A man may be a fool and not know it -- but not if he is married.

Truth would quickly cease to become stranger than fiction, once we got as used to it.

Democracy is the art of running the circus from the monkey cage.

The basic fact about human existence is not that it is a tragedy, but that it is a bore.

2005-03-01T18:24:00.000-06:00

John Fund on the Trail

"High Taxes Wither Away
Former communist countries lead the way in abandoning progressivity."

Don't hold your breath, but an interesting story.

2005-02-26T17:12:00.000-06:00

Buchanan on the Bush 2nd Inagural Speech

2005-01-14T17:15:00.000-06:00

GOP willing to take hike for reform

Novak writes that Sen. Lindsey Graham's proposal to raise the social security tax as part of a compromise in order to secure some private accounts is getting legs. Once again the stupid party is about to get rolled.

2005-01-06T19:51:00.000-06:00

The Shady Origins of Social Security
1/6/05

This is important stuff. More later. As I have time.

2005-01-04T18:34:00.000-06:00

A state of chaos-- Sidney Blumenthal paints an ugly picture of an ugly situation

2004-12-18T08:54:00.000-06:00

Reason: Making A Federal Case Out of Almost Everything: It's time to rediscover constitutional limits

2004-12-14T13:11:00.000-06:00

The Drug War Toll Mounts

Excellent quick summary of the drug war insanity:

The Drug War Toll Mounts

by Radley Balko

Radley Balko is a policy analyst for the Cato Institute.

In Washington, D.C., a 27-year old quadriplegic is sentenced to ten days in jail for marijuana possession, where he dies under suspicious circumstances. In Florida, a wheelchair-bound multiple sclerosis patient now serves a 25-year prison sentence for using an out-of-state doctor to obtain pain medication. And in Palestine, Texas, prosecutors arrest 72 people -- all of them black -- and charge them with distributing crack cocaine. The scene bears a remarkable resemblance to a similar mass, mostly-black drug bust in nearby Tulia five years ago.

These examples aren't exceptional. They're typical. America's drug war marches on, impervious to efficacy, justice, or absurdity. Drug prohibition was nowhere to be found in Election 2004. There was no mention of it in the debates, the conventions, or the endless cable news campaign coverage.

In some ways, that was a blessing. Campaign discussion of drug prohibition has too often focused on which candidate took what drugs when, and who was more sorry for having done so.

While it's refreshing that we've moved beyond apologies, it's also true that under the laws many of today's politicians support, a kid who experiments with illicit drugs the same way many of them once did may not get the chance to finish school or go to college, much less run for political office.

The number of policymakers who've dared to question any aspect of the drug war could comfortably fit on the back of a pocket-sized edition of the Bill of Rights. This needs to change. America should reexamine its drug policy.

Today, federal and state governments spend between $40 and $60 billion per year to fight the war on drugs, about ten times the amount spent in 1980 -- and billions more to keep drug felons in jail. The U.S. now has more than 318,000 people behind bars for drug-related offenses, more than the total prison populations of the United Kingdom, France, Germany, Italy, and Spain combined.

Our prison population has increased by 400 percent since 1980, while the general population has increased just 20 percent. America also now has the highest incarceration rate in the world -- 732 of every 100,000 citizens are behind bars.

The drug war has wrought the zero tolerance mindset, asset forfeiture laws, mandatory minimum sentences, and countless exceptions to criminal defense and civil liberties protections. Some sociologists blame it for much of the plight of America's inner cities. Others point out that it has corrupted law enforcement, just as alcohol prohibition did in the 1920s.

On peripheral issues like medicinal marijuana and prescription painkillers, the drug war has treated chronically and terminally ill patients as junkies, and the doctors who treat them as common pushers. Drug war accoutrements, such as "no-knock" raids and searches, border patrols, black market turf wars and crossfire, and international interdiction efforts, have claimed untold numbers of innocent lives.

For all that sacrifice, are we at least winning?

Even by the government's own standards for success, the answer is unquestionably "no." The illicit drug trade is estimated to be worth $50 billion today ($400 billion worldwide), up from $1 billion 25 years ago. Annual surveys of high school seniors show heroin and marijuana are as available today as they were in 1975. Deaths from drug overdoses have doubled in the last 20 years.

According to the Office of National Drug Control Policy, the price of of a gram of heroin has dropped by about 38 percent since 1981, while the purity of that gram has increased six-fold. The price of cocaine has dropped by 50 percent, while its purity has increased by 70 percent. Just recently, the ONDCP waged a public relations campaign against increasingly pure forms of marijuana coming in from Canada.

So despite all of the money we've spent and people we've imprisoned, despite the damage done to our cities and the integrity of our criminal justice system, despite the restrictions we've allowed on our civil liberties, despite the innocent lives lost and the needless suffering we've imposed on sick people and their doctors -- despite all of this -- the drug trade isn't just thriving, it's growing. Illicit drugs are cheaper, more abundant, and of purer concentration than ever before.

Like alcohol prohibition before it, drug prohibition has failed, by every conceivable measure. Isn't it about time for America to take a hard look at its drug policy?

2004-12-07T19:28:00.000-06:00

Bush dons fake uniform. What are his handlers thinking? This is getting wierd.

2004-12-02T12:50:00.000-06:00

Peggy Noonan deconstructs Dan Rather

2004-12-01T20:02:00.000-06:00

The Real Crimes of the UN in Iraq
Looking the Other Way

By KATHY KELLY
Shortly before sunrise, this morning, a small band of us gathered at a busy Chicago intersection and unfurled vinyl banners bearing enlarged pictures of Iraqi children. One banner called for an end to US warfare in Iraq. On my banner was Johan, smiling wanly, a 14 year old child who weighed 75 pounds shortly before she died of cancer in the oncology ward of a Baghdad hospital on September 21, 2003. As our banners flapped in the wind, I tried to compose a letter in my head to her teenage brother, Laith, who recently wrote to tell me how much he misses her.
Had Johan lived in a country that wasn't reeling from 13 years of economic sanctions, she might have survived childhood leukemia. She is one of hundreds of thousands of children who died while economic sanctions and war shattered Iraq's health care delivery system.

Writing my mental letter, I thought of the Rev. Dr. Martin Luther King's words of comfort to bereaved parents of four little girls who were murdered when the Birmingham Baptist church was bombed on September 18, 1963. A former member of the Ku Klux Klan was convicted of the crime. Addie, Carol, Cynthia and Carole had been praying inside the church.
"These children-unoffending, innocent, and beautiful-were the victims of one of the most vicious and tragic crimes ever perpetrated against humanity." Dr. King said. But he offered comfort. "In a real sense," he continued, "they have something to say to each of us in their death. . .they did not die in vain. . .Indeed, this tragic event may cause the white South to come to terms with its conscience."

This morning, columnists in major US papers will continue alerting US people to possible wrongs, even crimes, committed by UN officials in the course of the "oil for food" program which coordinated and monitored sales of Iraqi oil, while economic sanctions ravaged Iraq. These economic sanctions constituted the most comprehensive state of siege ever imposed in modern history. It's not likely that Saddam Hussein ever missed a meal, but children, hundreds of thousands of children, suffered gruesomely. Their suffering and death can be likened to child sacrifice, certainly the most egregious instance of child abuse in modern times. They'd committed no crime, yet they were brutally--and lethally--punished for the government of the country into which they were haplessly born. You aren't likely to find this story in the current exposés of UN wrongdoing.

In fact, many UN officials tried valiantly to put an end to the economic sanctions. Hans von Sponeck and Denis Halliday resigned their posts and crisscrossed the globe educating people about the effects of the economic sanctions which Halliday termed "genocidal." UNICEF's Executive Director, Carole Bellamy, held a 1999 press conference to announce the release of a "Situation Analysis of Women and Children in Iraq" which carefully explained that the economic sanctions contributed to the "excess deaths" of over 500,000 Iraqi children, under age five. Not one US television network aired coverage of the press conference. Only two of 50 leading US papers reported the actual shocking number of one half million "excess deaths" of children. The Wall Street Journal asserted that it was all Saddam's fault. The New York Times echoed this in an 800 word story quoting Jamie Rubin of the State Department questioning the study's methodology.

The sanctions punished children while Saddam's regime profited through smuggling: Many Westerners who traveled to Iraq tried to communicate this to people in their home locales. The smuggling and the rake-offs were no secret, especially in the final years of the sanctions when there were many reports of lucrative kickbacks and inflated prices. Many witnessed the sanctions actually strengthening Hussein's control, as the regime became the only source of food and stability for an increasingly desperate and disempowered population.
The children were punished. When the pictures of those little ones, writhing in pain, wrinkled with wasting, desperate and bewildered, ...held by equally despairing and tortured parents...when those pictures were held up, sometimes as we fasted, sometimes while we were being led off in plastic handcuffs, sometimes at press conferences in front of the UN in Baghdad, sometimes in the middle of Basra cesspools and cemeteries...when those pictures were held up, many people looked the other way.

When I try to understand why columnists in far away places wouldn't take on the story of these worthy victims, I try to remember that there are many worthy victims and one person can't undertake care and concern for every devastating, brutal injustice. Pick your battles. But I can't for the life of me understand how a steady stream of columns have appeared on op-ed pages, in the NYT and other papers, alerting us to possible crimes committed by UN officials in the course of the "oil for food" program while there has been no mention of the crime of child sacrifice in Iraq.

The concern generating reams of verbiage at this point is that UN officials may have looked the other way as Saddam Hussein and a number of collaborators pocketed rake-offs in underhanded dealings using profits from Iraqi oil sales. I'm not equipped to comment on those charges. But is there no columnist who will remind us that 500,000 children under age five died as the US used the UN to wage economic warfare against children?

Let's consider the UN workers who stood a chance of getting food and medicine into Iraq were they to look Iraqi families straight in the eyes and say, "sorry, we'll have to prevent these contracts from going through because you, in your pitiful weakness, can't prevent the dictator that rules you from getting rake-offs on the deal. We can't compromise our principles...
They looked the other way. I looked the other way myself. We in our delegations looked the other way even as we knew that normally we'd be hopping mad and demonstrating in front of any government bastion that inflicted so much fear on its people...but that would have been the wrap-up for our entry into neighborhoods, families, hospitals, schools, ... it was a trade-off.
King said, "And so I stand here to say this afternoon to all assembled here that in spite of the darkness of this hour, we must not despair. We must not become bitter . . . Somehow we must believe that the most misguided among them can learn to respect the dignity and the worth of all human personality." But this said, what words of comfort can I offer to Johan's brother Laith? I can tell him where we stood this morning, and whose picture I held. People looked.

Kathy Kelly is a co-coordinator of Voices in the Wilderness, a campaign to nonviolently resist U.S. militarism at home and abroad. Her book, Other Lands Have Dreams: Letters From Pekin Prison, will be published in the spring of 2005 by CounterPunch Books / AK Press. She can be reached at kathy@vitw.org

2004-11-29T09:04:00.000-06:00

Raich v. Ashcroft - A Guide to the Supreme Court Case: "Raich v. Ashcroft - A Guide to the Supreme Court Case"

Oral argument today in Raich v. Ashcroft, the California medical merijuana case. Here is an opportunity for the Court to do something right. A reasoned decision reigning in the Federal government just might be a first step toward lessening the unreasoning hysteria surrounding the drug war.

2004-11-28T11:31:00.000-06:00

Toronto Sun Columnist: Eric Margolis - Ukraine flirting with a civil war

Understanding what is going on in the Ukraine. Solution: Decentralization (i.e., secession).

2004-11-27T12:57:00.000-06:00

Leithner&Company Pty Ltd - The Leithner Letter

Poor Principles, Phony Recoveries and Festering Problems

Follow the links.

2004-11-22T21:58:00.000-06:00

Urban Legends Reference Pages: Politics (H. L. Mencken)

The larger the mob, the harder the test. In small areas, before small electorates, a first-rate man occasionally fights his way through, carrying even the mob with him by force of his personality. But when the field is nationwide, and the fight must be waged chiefly at second and third hand, and the force of personality cannot so readily make itself felt, then all the odds are on the man who is, intrinsically, the most devious and mediocre — the man who can most easily adeptly disperse the notion that his mind is a virtual vacuum.

The Presidency tends, year by year, to go to such men. As democracy is perfected, the office represents, more and more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron.

2004-11-03T09:12:00.000-06:00

Dick Morris -- How were the exit polls so wrong?

Interesting analysis. Curious commentary last night as all the pundits "knew" the results and spent at least the early evening explaining the Bush "defeat."

2004-11-02T21:23:00.000-06:00

Alexander Cockburn and Jeffrey St. Clair: How Bush Was Offered Bin Laden and Blew It My favorite commie journalist exposes how "war was in the cards." Reminds one of FDR.

2004-11-02T19:44:00.000-06:00

H. L. Mencken, "The Politician Under Democracy" (1926), quote courtesy of Tom DiLorenzo at www.lewrockwell.com:

"He is a man who has lied and dissembled, and a man who has crawled. He knows the taste of boot-polish. He has suffered kicks in the tonneau of his pantaloons. He has taken orders from his superiors in knavery and he has wooed and flattered his inferiors in sense. His public life is an endless series of evasions and false pretenses. He is willing to embrace any issue, however idiotic, that will get him votes, and he is willing to sacrifice any principle, however sound, that will lose them for him. I do not describe the democratic politician at his inordinate worst; I describe him as he is encountered in the full sunshine of normalcy."
"They are men who, at some time or other, have compromised with their honor, either by swallowing their convictions or by whooping for what they believe to be untrue. They are in the position of the chorus-girl who, in order to get her humble job, has had to admit the manager to her person. . . . He becomes a coward and a trimmer ex officio. . . . Thus the ideal of democracy is reached at last: it has become a psychic impossibility for a gentleman to hold office under the Federal Union, save by a combination of miracles that must tax the resourcefulness of God."

2004-10-05T14:43:00.000-05:00

Loco-Foco returns to the water.

2004-10-05T14:42:00.000-05:00

Laissez-Faire received substantial damage but floats and the motor cranked right up.

2004-10-05T14:29:00.000-05:00

Pool at Atlantis needs a little cleaning. Gulf is flat, ready for fishing.

2004-10-05T14:28:00.000-05:00

Banned in Orange Beach.

2004-10-05T14:27:00.001-05:00

Flora-Bama

2004-10-05T14:27:00.000-05:00

Tacky Jack's

2004-10-05T14:26:00.001-05:00

Panama Mac's

2004-10-05T14:26:00.000-05:00

View from the South.

2004-10-05T14:21:00.000-05:00

Finally got to Atlantis. All is well.

2004-10-05T13:46:00.000-05:00

Loco-Foco is rescued by barge and crane. It floated and started right up. Little damage to the boat. Extensive damage to lift and docking.

2004-10-02T11:48:00.000-05:00

Saddam as the Twentieth Hijacker

Bovard exposes some of the usual, shameless lies which were told by our Leader leading to the war on Iraq, or rather, "terror."

2004-09-30T12:06:00.000-05:00

Dead End in Orange Beach. House posted as condemned.

2004-09-27T09:43:00.000-05:00

I am still not allowed into Florida, but here is a shot from the State Line. Atlantis is the building on the right just past the condo under construction. Supposedly, all is well there. Looks like the road could stand a little work.

2004-09-24T15:47:00.000-05:00

I never got across the Alabama line into Florida to check on Atlantis. Alabama State Troopers have blocked the exit from Alabama until further notice. This seems pretty unreasonable as the area cannot be reached from Pensacola because the roads are impassible.

2004-09-24T15:24:00.000-05:00

Legacy Key condominium in the background, again on Old River.

2004-09-24T15:20:00.000-05:00

Broadmoor Condominium took a beating.

2004-09-24T15:19:00.000-05:00

Island Royale in pretty good shape.

2004-09-24T15:18:00.000-05:00

These houses are on Old River, again on Perdido Key, Alabama.

2004-09-24T15:17:00.000-05:00

About a 35 foot boat across the road from Cotton Bayou.

2004-09-24T15:16:00.000-05:00

More houses on Perdido Key.

2004-09-24T15:15:00.000-05:00

One of the beach houses on Perdido Key, Alabama, gutted by Ivan.

2004-09-24T15:13:00.000-05:00

In the background is what is left of the dry dock storage facility at Zeke's Landing. Most of the boats look ok.

2004-09-24T15:11:00.000-05:00

On the way to the Florida state line, this is Perdido Place, which is similar in construction to Atlantis -- looking good.

2004-09-24T09:23:00.000-05:00

Here is a clearer picture of the Flora-Bama. View is from the Gulf facing north. Water on other side of the road is Old River. Panama Mac's is across the street pass the SUV. I have a condo just east of here in Florida which I hope to visit today for the first time. Will post photos.

2004-09-24T08:47:00.000-05:00

This is the Gulf down West Beach at the bridge/cut for Little Lagoon.

2004-09-24T08:46:00.000-05:00

This is Mikee's, about two blocks north of the beach.

2004-09-24T08:45:00.000-05:00

This is the Crystal Beach condo. It is across from Hwy 161 in Orange Beach, about 1 mile south of my place, but on the Gulf itself. Built in the late 90s. I think this is about where the center of Ivan came ashore.

2004-09-24T08:43:00.000-05:00

East Beach Blvd., Gulf Shores