Sometimes Labor is more liberal than Liberal

I hate the Labor party manifesto, and its general attitude towards seeking out "a balance" and compromising between thieves who want to steal your money to help the poor, and thieves who want to steal your money to help families, and thieves who went to steal your money to help Gaia.

But I'll always give credit where it's due. Hawke-Keating made some great achievements, by cutting income tax and deregulating our economy for the better. Howard wasted a decade fiddling around.

The new NSW Labor Premier Nathan Rees has seen the looming bankrupcty of their state, as predicted by the brilliant ex-treasurer Michael Costa in recent months, and has decided to stop the rot and cut off the looters from the public purse:

A FIFTH of NSW public service fat cats face the axe as NSW Premier Nathan Rees struggles to drag the state budget back into the black.

Mr Rees told a budget estimates committee hearing this afternoon the Government will slash 117 senior executive positions in the state's public sector, saving $120 million over four years.

...

Last month, Mr Rees announced $1.9 billion worth of payroll tax cuts, promised in the June state budget, would survive the mini-budget process, despite a projected $1 billion turnaround in NSW finances courtesy of the sluggish property market.

The public sector job cuts announced today amount to 20 per cent of NSW government senior executive positions.

Good.

Quote of the Day

From economist Arnold Kling:

"Instead of thinking of the pending bailouts and financial regulation as a new era of government supervisions of markets, think of it as preserving the system in which a Harvard elite controls other people's money. In fact, very little is likely to change. Reading the news stories about how Secretary Paulson plans to implement the bailout, it seems as though the same people will be in charge of the money. Print some new business cards, change the logo on the front from "Goldman Sachs" to "U.S. Treasury," and everything else continues as it was. It's just that it becomes a lot more difficult for ordinary people to opt out of using the elite's money management services."

The Wisdom of Reason Magazine

From Ron Bailey, editor of Reason Magazine:

Europe Under-Regulated Too?

As European stock markets tank, the Irish government guarantees bank deposits, the Benelux countries nationalize Fortis bank, Germany bails out Hypo Real Estate Holdings, and Denmark also guarantees bank deposits and dismally so forth, the question arises: Who knew that Europe, of all places, was so under-regulated?

Or maybe de-regulation is not the chief cause for the outbreak of financial chaos? Just wondering.

Our Prime Minister hates liberty

The sad reality has dawned on me. Kevin Rudd is much worse than John Howard.

During his 10 year as Prime Minister, Howard actually made very little moves to enhance freedom, deregulate and lower taxes, and he was actually responsible for establishing new bureaucracies, new welfare payments and doubling the number of public servants.

Perhaps he deserved to be thrown out after so long because he was just playing with the existing system and not cutting taxes or deregulating seriously. I could safely suggest it was because of our alarmist and hysterical media and opposition who predicted an apocolypse at any move towards freedom and deregulation. Howard faced the fiercest opposition for some small moves like privatising Telstra and trying to de-regulate (re-regulate) industrial relations slightly with WorkChoices.

But at least he never went about expanding the regulatory powers of ACCC, introducing FuelWatch, FoodWatch and other price controls, introducing new environmental regulations and carbon taxes. And despite not getting rid of the income tax, he would at least make big budget day announcements about reducing it gradually.

Howard always spoke favorably of all moves towards free trade, deregulation, lower taxes.

Rudd has never done such a thing. He has grudgingly endorsed cutting the number of public servants and deregulation, but in effect, he hasn't outlined one single way he will acheive this.

Today, he has revealed his socialist stripes in full activist mode, and blasted capitalism as a "greed is good" ideology. This is one of the most offensive speeches to come from a world leader, and is worthy of a thug-in-chief like Castro or Chavez:

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We’ve seen the triumph of greed over integrity; the triumph of speculation over value creation; the triumph of the short term over long-term sustainable growth,” Mr Rudd said.

“It is perhaps time now to admit that we did not learn thefull lessons of the greed-is-good ideology. And today we are still cleaning up the mess of the21st-century children of Gordon Gekko.”

Mr Rudd said such ideologues always argued that the market knew best except when there was a crash and then “the self-same ideologues argue, having privatised their profits, we should socialise their losses - and, by the way, having demanded lower and lower taxes all the way through”. [ !?!? just exactly which part of capitalism requests that private losses are socialised by the tax payer ?!?!]

“This culture was never challenged by a political and economic ideology of extreme capitalism,” he said. “And this crisis bears the fingerprints of the extreme free market ideologues who influence much of the neo-liberal economic elite. [ And of course government hasn't left its fingerprints on this mess and has made no mistakes at all ?!?!]

“Free market ideologues who have a naive belief that unrestrained markets are always self-correcting and that markets left to themselves will always achieve optimum outcomes.” [ Since when is the U.S Housing market, and the banking system unrestrained and regulated l ?!?!]

Just how socialist is America ?

I'm not sure what the "Freedom Index" is based on, but where else in the world does the government grant itself the power to run financial markets ?

And this is despite the restraints clearly spelt out by their constitution, which forbids government from doing just about everything it gets away with today.

This bail out will be the nail in the coffin for American liberty. You could call it the New New Deal, a profound change in the nature of American markets, a severe blow to the principles of free markets, the emergence of widespread moral hazards, corruption and conflicts of interest in Washington.

Reason Magazine has a devastating summary of what shall come to pass once the bail out has been approved, and the sheer recklessness of the current crop of American politicians who are backing it, including both Obama and McCain. This first paragraph alone will have you reeling in shock:

The Senate is overly fond of referring to itself as the “world’s greatest deliberative body.” Barely 48 hours after the House rejected the Treasury’s bailout plan, the august body took a previously passed House bill mandating that insurance companies cover mental health benefits, added in the core $700 billion bailout, laced in money for rural school districts and disaster relief, expanded FDIC deposit insurance coverage, and topped it off with over $150 billion in old and new tax breaks for businesses, individuals in high-income states, individuals living in states without an income tax, and various interests such as wooden-arrow makers and film production crews. GOP Leader Mitch McConnell, almost choking back tears after the Chamber passed the 451-page monster, said it was the Senate “at its finest.”

The Age of Pericles this ain’t.

Now I'm usually the last person to claim conspiracy and corruption behind unwise or unpopular government actions, especially in Western democracies. I would have typically suggested incompetence, inability and a misunderstanding of economics is behind the abysmal state of public education and health.

But the banking and finance industry has no right to call itself a free market. It is a cartel, operating through lobbying efforts, political favors and by institutionalising their interests and profitability in government (see The Fed, the Community Reinvestment Act, the FDIC, the SEC, the NRSRO).

We are definitely approaching "peak insanity":

Let’s remember, this is one of those rare cases where the “victims,” the bankers and investment bankers, are the very people who made the mistakes. It is possible that, absent government intervention, we can get through this upheaval with no one else actually getting hurt. This isn’t like the former Enron employees who lost their life savings through no fault of their own. This is financial institutions failing because of the very specific mistakes they made.

....

Remember, wrongdoing at Enron wasn't uncovered by regulators. It was uncovered by the market, as analysts realized that much of the company’s story was fiction. Markets with free flows of information are the best guard against meltdowns. The slightly less free market we are entering will make them more common.

Also, while I have no real reason to question Hank Paulson’s motives in his rampant cheerleading for a bank bailout, I would feel a whole lot better if he weren’t sitting on a few hundred thousand options to buy shares in Goldman Sachs.

Blog List added in sidebar

I will build the list up when I have time later.
Enjoy !

Yeah, what he said !

I try to keep a cool head and clean language when writing. But Tex at WhackingDay deserves recognition for his excellent summary of the hyped-up presidential elections:

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My message to the world: shut up and get a fucking grip will you?

In the worst presidential choice Americans have faced since Nixon diced with McGovern, Sarah Palin gets picked as McCain's veep candidate, causing complete and utter derangement in leftists the world over.

Meanwhile, conservatives are hyperventilating themselves to death over Obama supposedly going to turn America into the USSR.

For fucks sake you tools: calm down . Does anybody with an ounce of common sense think McCain is remotely capable of being an effective president? Do any of you Obama-The-Messiah crowd actually have any idea on how this "change" bullshit will manifest itself?

Here's the horrible truth people, and there's no way out of it:

Both of these morons will fuck the USA royally in their upcoming term.

Either way, we're going to get an economically incompetent clown who will do nothing to reverse Dubya's appalling financial direction, and someone who will fight the war against terror in a completey half-arsed manner which will achieve little except costing the USA a lot more money and soldiers' lives.

But hey, let's not worry about this stuff eh? It's clearly much more important to talk about Obama's stage props at the convention, or who Trig Palin's real mother is, or if Obama is "really a Muslim", or all those non-existent books Palin didn't ban, or some 5-second soundbite of some candidate saying something stupid. You partisan types can wank yourselves to death over believing this choice in November actually matters.

So, blogosphere and media, unless you have something substantial to say about how the candidates actually differ, in actual real policy and results terms, then SHUT THE FUCK UP you fucking tedious useless arsecunting wankers.

I'm sick and fucking tired of listening to your idiot, insubstantial, blithering, childish partisan crap about nothing. There are real issues at play in an American presidential election, so why do all you fucking fools concentrate on the goddamned circus as if it actually matters?

Bailout was defeated by Congress ! Suck on that Rudd !

Victory for free markets today, as the proposed $700b Wall St bailout was voted against by Congress.

This is despite many meddling world leaders, eager to look concerned and discuss government actions and put forward new interventions and proposals at each concerning development, put forward supportive statements suggesting the bailout is vital to stability.

One typical example is our dud PM, Kevin Rudd, who was disappointed by the fact that American tax payers were not robbed of a further $700b USD. An online video just showed him looking "deeply concerned and distressed", so my mood is further improved at seeing this thieving bureaucrat have his hands slapped as government was blocked from picking yet another pocket.

Stock markets have obviously been hammered, but this is going to speed up the recovery instead of prolonging it. Bad investments were made over the past decade, we must live with it and liquidate them before moving on. This means pain in one way or another. Government cannot, and should not even think about, waving its magic wand to "stimulate or stabilise financial markets".

Its a shame so many people were caught unaware by this collapse, people who had their life savings and superannuation in shares (down nearly 40% in the last 12 months) or property (only starting to come down now). But we live in a financial system where the central bank is a monopoly, and sets the rule of the game.

And here is the problem with the system:

They tell us we can only use Australian dollars as a medium of exchange, to settle payments and debts, to save money, to bank, to earn, to trade with.

Central banking, via fractional reserve, accomodates the banking cartel to expand credit at a sharp pace, and the supply of money continues to double every decade. This is concealed sneaklily by government engineered statistics relating to CPI and GDP, to reassure us that the economy is healthy when a terrible storm is brewing.

And it should be no surprise that as the storm strikes, it is central banks and the US government who make the biggest noise and try to rush through legislation to give them new expanded powers. I guess its a way of distracting attention from the serious issues that should be discussed, and the media are all too happy to dance to their tune.

The New New Deal, socialism wins in America

The US government is doing the unimaginable and going ahead with a $700b+ bail-out package of troubled Wall St giants. The cost will actually go into the trillions, as the $700b limit is on the rolling size of the fund, which can be used to purchase up to $700b of mortgage related, "illiquid" (i.e garbage) assets at a time, and then sell them off on the market.

Basically, the U.S taxpayer has to open their pockets and fund the loss on these crappy assets that sit on the balance sheets of a whole lot of banks who made the stupid decisions in the first place.

This is the biggest nationalisation in American history and is an affront to freedom, capitalism and the constitution (where does it mention Congress having the power to buy mortgage related assets)

How did this come to pass ? There was a massive public uproar over this proposal and it looked like a few brave congressman and senators would resist this unprecedented expansion of government. But of course, the Dems could easily be bought by inserting their populist agenda into the details of the bail-out package. Just staple on some limits on CEO salaries, a moratorium on foreclosures and other sweeteners for home owners and presto, it looks like a "balance was struck".

The idiotic media commentary has been enthusiastic for this scheme, and as usual, very myopic and focussed only on the hear and now. Here are some problems, and predictions I have about this disaster, that the media should take heed of.

• This is not going to end the credit crunch. This is going to cause it to spread, so that even the credit rating of the US government will be brought into question. Sovereign US debt has never been backed up by any tangible assets like gold bars, its always been resting upon "the full faith and credit of the US government". And there is no way that such an empty guarantee will maintain a AAA credit rating in the coming years.
• This will boost the sharemarket - for the coming week. Volatility will remain, many more companies will collapse. The bear market is far from over.
• This will absolutely destroy the US dollar. Where is the US government getting the trillions of dollars to fund this scheme when they are already running a massive deficit ? Creditors will soon question the ability of the US government to repay its obligations and dump their holdings of US dollars.
• This will be very inflationary, as the Fed and Treasury will try to expand the supply of money and credit, and the price of all real assets, in terms of $US, will shoot up. Watch gold in particular. Oil may suffer downwards effects of an impending global economic slowdown, but gold will only go up in inflationary environments.
• This will NOT be the last bail out, this will NOT bring stability to financial markets.
• The US government will be unable to pay for its massive budgets, and will need to slash expenditure. Abolishing social security and medicare are the only viable options, as well as cutting back on their military expenses, which include operating bases in 130 different countries.

The parallels with this story and with Atlas Shrugged are too strong to ignore. Socialism is here and the U.S.S.A will collapse as a super power if they do not end the statism in Washington and return to their tradition as a free, capitalist society.