Relevant and even prescient commentary on news, politics and the economy.

You’ve Already Seen These Questions

You’ve Already Seen These Questions

  1. Why is it that no existing society, nor society that ever existed, has arrived at universal prosperity, considering that in all times, and in all societies, excepting only the very barbarous, a few years would naturally have led to it?
  2. How is it that notwithstanding the unbounded extent of capital, the progressive improvement and wonderful perfection of machinery, canals, transportation, and all other things that either facilitate labour or increase its produce; that the population instead of having its labours abridged, works more hours per capita than it did years ago?
  3. Why has society never arrived at the enviable situation of universal abundant leisure, although so immediately within its grasp?

A Few Questions

A Few Questions

  1. What constitutes the wealth of a nation?
  2. What is the source of all wealth and revenue?
  3. Does the method by which one receives income — whether wage, rent, profit or interest — indicate the ultimate source of the value represented by it? 
  4. Do stores of money, machinery, manufactured goods or produce represent reserved surplus labour?

Reichtum ist verfügbare Zeit und nichts weiter

Reichtum ist verfügbare Zeit und nichts weiter

How it started (Charles Wentworth Dilke, 1821):

THE PROGRESS OF THIS INCREASING CAPITAL WOULD, in established societies, BE MARKED BY THE DECREASING INTEREST OF MONEY, or, which is the same thing, the decreasing quantity of the labour of others that would be given for its use; but so long as capital could command interest at all, it would seem to follow, that the society cannot have arrived at that maximum of wealth, or of productive power, when its produce must be allowed to perish.

When, however, it shall have arrived at this maximum, it would be ridiculous to suppose, that society would still continue to exert its utmost productive power. The next consequence therefore would be, that where men heretofore laboured twelve hours they would now labour six, and this is national wealth, this is national prosperity. After all their idle sophistry, there is, thank God! no means of adding to the wealth of a nation but by adding to the facilities of living: so that wealth is liberty––liberty to seek recreation––liberty to enjoy life––liberty to improve the mind: it is disposable time, and nothing more. Whenever a society shall have arrived at this point, whether the individuals that compose it, shall, for these six hours, bask in the sun, or sleep in the shade, or idle, or play, or invest their labour in things with which it perishes, which last is a necessary consequence if they will labour at all, ought to be in the election of every man individually.

THE CULT OF THE VICTIM

On March 15, 2019 a gunman opened fire on worshipers at two Christchurch, New Zealand mosques, killing 50 and wounding around as many. Survivors of gunshot wounds often have traumatic injuries that require multiple surgeries and leave them severely disabled for life. Before embarking on his rampage, the alleged gunman broadcast over the internet a “manifesto” outlining the motive for his deed. In his manifesto, the alleged perpetrator claimed to have had “brief contact” with “Knight Justiciar” Anders Breivik, the convicted Norwegian mass murderer, and to have taken “true inspiration” from Breivik’s “2083” manifesto. Indeed, the Christchurch massacre would fit the definition of a copycat crime in terms of motive, manifesto and mass murder.

Breivik plagiarized approximately 15,000 words of his manifesto from a pamphlet on “Political Correctness” by William S. Lind. In turn, the alleged Christchurch killer “plagiarized” his deed from Breivik. On his March 17 traditional RIGHT webcast, Lind spent a little over 16 minutes talking about the Christchurch rampage. Not surprisingly, neither he nor his interlocutors mentioned the Oslo precedent.

So what did Lind say about the Christchurch terror attack?  Did Lind take moral responsibility for the consequences — even unintended — of his words?

Project Perjury

Project Perjury

The Washington Post has a story about the Erie, Pennsylvania postal worker who claimed to not have not recanted his fantasy about overhearing a conspiracy to backdate ballots. For some unknown reason Project Veritas thinks the audiotape of the postal worker’s interview with investigators from the Post Office Inspector General’s proves the opposite of what it does. There is no coercion in the interview. The investigators repeatedly advise Hopkins of his right to not speak to them and his right to have a lawyer present. And in no uncertain terms, he recants his affidavit story, even claiming he didn’t read what the Project Veritas lawyers had written for him to sign.

Of course, the MAGA cultists commenting on the Youtube audio are aghast that an investigator would ask courageous whistleblower questions in a way that makes him think twice about what he had sworn to in an affidavit. I would copy and paste the Washington Post article here but I don’t want to violate copywrite. I’m sure it will show up in the comments.

“I don’t know about the two gentlemen you mentioned.”

“I don’t know about the two gentlemen you mentioned.”

Rudy Giuliani and Steve Bannon join a long list of people Donald Trump doesn’t know about.

Igor Fruman and Lev Parnas

“I don’t know those gentleman. Now, it’s possible I have a picture with them because I have a picture with everybody. I don’t know them, I don’t know about them, I don’t know what they do.”

Jeffrey Epstein

“I knew him like everybody in Palm Beach knew him, I was not a fan of his, that I can tell you.”

Michael Flynn

“It now seems the General Flynn was under investigation long before was common knowledge, It would have been impossible for me to know this.”

Roger Stone

“The Masque of the Red Death” by Edgar Allan Poe, 1842

“The Masque of the Red Death” by Edgar Allan Poe, 1842

The red death had long devastated the country. No pestilence had ever been so fatal, or so hideous. Blood was its Avatar and its seal — the madness and the horror of blood. There were sharp pains and sudden dizziness, and then profuse bleeding at the pores, with dissolution. The scarlet stains upon the body and especially upon the face of the victim were the pest ban which shut him out from the aid and from the sympathy of his fellow-men. And the whole seizure, progress, and termination of the disease were incidents of half an hour.

But Prince Prospero was happy and dauntless and sagacious. When his dominions were half depopulated, he summoned to his presence a thousand hale and light-hearted friends from among the knights and dames of his court, and with these retired to the deep seclusion of one of his crenelated abbeys. This was an extensive and magnificent structure, the creation of the prince’s own eccentric yet august taste. A strong and lofty wall girdled it in. This wall had gates of iron. The courtiers, having entered, brought furnaces and massy hammers and welded the bolts.

They resolved to leave means neither of ingress nor egress to the sudden impulses of despair or of frenzy from within. The abbey was amply provisioned. With such precautions, the courtiers might bid defiance to contagion. The external world could take care of itself. In the meantime it was folly to grieve or to think. The prince had provided all the appliances of pleasure. There were buffoons, there were improvisatori, there were ballet-dancers, there were musicians, there was Beauty, there was wine. All these and security were within. Without was the “Red Death.”

Ponzi Finance II: quid pro quo

The real story revealed by the New York Times Trump tax returns bombshell is not that Donald Trump paid no taxes in 10 out of 15 years or that he paid $750 in 2016 and 2017. The real story is that he doesn’t have net income to service his debt. There is nothing inherently illegal about that. He did it before in the 1980s and when real estate prices stopped rising in 1990, his creditors were left holding the bag.

Hyman Minsky wrote about Donald Trump’s investment strategy in a 1990 talk, “The Bubble in the Price of Baseball Cards.”

One of the puzzles of the 1980s was the rapid rise in the financial wealth of Donald Trump, author of The Art of the Deal, and what else. Trump’s fortune was made in real estate. Many large fortunes have been made in real estate, since real estate is highly leveraged. Two factors made Trump somewhat unique — one was the he developed a fortune in the period of high real interest rates, and the second was that the cash flows on most of Trump’s properties were negative.

Trump’s wealth surged because the market value of his properties — or at least the appraised value — was increasing faster than the interest rate. Trump obtained the funds to pay the interest on his outstanding loans by increasing the draw under what in effect was a home equity credit line. The efficiency with which Trump managed these properties was more or less irrelevant — hence Trump could acquire the Taj Mahal in Atlantic City without much concern about the impacts on the profits of the two casinos he already owned. Trump was golden — he had a magic touch — as long as property prices were increasing at a more rapid rate than the interest rate on the borrowed funds.

The puzzle is that the lenders failed to recognize that the arithmetic of his cash flows was virtually identical with that of the developing countries; in effect Trump was Brazil in drag. In the short run Trump could make his interest payments with funds from new loans — but when the increase in property prices declined to a value below the interest rate, Trump would become short of the cash necessary to pay the interest on the outstanding loans.

The increase in U.S. real estate prices in the 1980s was regional, and concentrated in the Northeast and in coastal California; for the country as a whole, real estate did not increase relative to the price level. The regional dispersion in the movement in real estate prices more or less paralleled the changes in personal income. Real estate prices dipped in the oil patch, climbed modestly in the rust belt, and surged in those areas that benefitted from the rapid increases in incomes in banking and financial services — sort of a derived demand from the financial success of Drexel Burnham. In effect, those individuals with high incomes in financial services — and with the prospect of sharp increase in incomes — set the pace for increases in real estate prices

 

“Constitutionalism”

Democratic Despotism:

“We find latent in their conception of law— and some have been publicly preaching this view— that law emanates solely from the will of the majority of the people, and can, therefore, be modified at any time to meet majority wishes. This doctrine is absolutely totalitarian, and is contrary to our basic conceptions of the source of law. We have seen that our political system is predicated on the doctrine that there are some immutable laws of nature and certain other divinely sanctioned rights, which the Constitution and our tradition recognized as being above and beyond the power of the majority, or of any other group of individuals or officials of the Government. There are, also, other rights, which because of man’s historic experience, that are specifically protected by the Constitution, and which can only be modified under the prescribed method set forth in the Constitution; and, consequently the majority- will is not free to modify them as it pleases, but only in the circumscribed manner prescribed by the Constitution. That is why our system has been characterized as a government of laws, not of men. That is the distinction between impersonal law and personal law. Americanism is the system of government by impersonal law: totalitarianism is the system of government by personal law.” (emphasis added) — Raoul E. Desvernine, vice-president of the American Liberty League, Democratic Despotism. 1936 (cited in “Business Organized as Powerr: The New Imperium in Imperio” see also “Constitutionalism: Political Defense of the Business Community during the New Deal Period.”)

“Business Organized as Power”:

“As stated in its constitution, the [American Liberty] League’s purposes were, among others,  “to defend and uphold the Constitution of the United States,” “to teach the necessity of respect for rights of persons and property,” “to encourage and protect individual and group initiative and enterprise, to foster the right to work, earn, save and acquire property, and to preserve the ownership and lawful use of property when acquired.” To win these goals the League went further than any previous liberty-loving, liberty-saving organization in our history. Crucial to its functioning was the National Lawyer’s Committee, a group of some 58  prominent attorneys, which issued reports or opinions in advance of Supreme Court decisions, opinions setting aside with solemnity and erudition one after another of the entire New Deal legislative mélange. The League went still further: this private court having, for example, formally declared the Wagner Labor Relations Act unconstitutional, openly advised employers to ignore its provisions.”