This goes to show you what sort of boot-licking, power hungry cowards rise to positions of prominence in American academia. No surprise he was recently named deputy chair of the New York Federal Reserve Bank.

I almost choked when I read Lee Bollinger’s op-ed piece in the Wall Street Journal advocating public financial support of the mainstream media. This is the Lee Bollinger who is the president of Columbia University and was recently named deputy chair of the New York Federal Reserve Bank. The article says more about the writer and the mainstream media than it does its subject matter. It is unbelievable and irresponsible that anyone in his position should seriously advocate subsidies for the press.

What Bollinger is saying is that he wants us to pay for news from journalists he thinks we should read, not what we think we should read. As a law professor he is an expert in first-amendment issues. If he is an expert then he is the exemplar of the problem with scholarship and intellectualism in America today. He obviously distrusts our ability to make choices about the news we wish to read; he is eager to supplant our judgment with his. If he believes that forcing us to pay for news services we don’t want is the key to constitutional freedoms and freedom of the press, then we are in trouble because he is in a position to do something about it.

He frames the debate in these terms:

We have entered a momentous period in the history of the American press. The invention of new communications technologies — especially the Internet — is transforming the human capacity to speak, perhaps as monumentally as the invention of the printing press in the 15th century. This is facilitating the largest and fastest expansion of global economic growth in human history. Free speech and a free press are essential to a dynamic economy.

At the same time, however, the financial viability of the U.S. press has been shaken to its core. The proliferation of communications outlets has fractured the base of advertising and readers. Newsrooms have shrunk dramatically and foreign bureaus have been decimated. My best estimate is that there are presently only a few dozen full-time foreign correspondents from the U.S. covering all of China, despite the critical importance of that nation to our future.

Let me translate what he is saying — competition thrives because of new media, yet because newspapers and television journalism have failed to innovate and keep up we must subsidize them, because their reporting is (was) better. He cites NPR, PBS, and BBC as the ideals of journalism. The common theme is that these services are all supported by government. Further, he suggests, we need, as an instrument of foreign policy, to compete with China’s CCTV and Xinhua News, and Qatar’s Al Jazeera. If the BBC is the standard, then I urge you to actually listen to it as it drones on about what is happening in the UN or Mali today.

Bollinger believes that press freedoms and government support are compatible, not antithetical. If anything in history is obvious, it is the fragility of freedom of the press. Of course, this is something Jefferson and Madison fully understood when they thought they nailed down press freedom forever. (Read more from mises.org)

US – 748 inmates / 100,000 people
Russia – 600 inmates / 100,000 people

This great Economist article speaks to the war on drugs, the absurdity of environmental law, governments arbitrary application of the law, and more.

“The more numerous the laws, the more corrupt the government.” ~Tacitus (ca. 56–ca. 117)

. . . Mr Norris opened his front door, and was startled to be shoved against a wall and frisked for weapons. He was forced into a chair for four hours while officers ransacked his house. They pulled out drawers, rifled through papers, dumped things on the floor and eventually loaded 37 boxes of Mr Norris’s possessions onto their pickups. They refused to tell him what he had done wrong. . . .

Mr Norris was 65 years old at the time, and a collector of orchids. He eventually discovered that he was suspected of smuggling the flowers into America, an offence under the Convention on International Trade in Endangered Species. This came as a shock. He did indeed import flowers and sell them to other orchid-lovers. And it was true that his suppliers in Latin America were sometimes sloppy about their paperwork. In a shipment of many similar-looking plants, it was rare for each permit to match each orchid precisely.

In March 2004, five months after the raid, Mr Norris was indicted, handcuffed and thrown into a cell with a suspected murderer and two suspected drug-dealers. When told why he was there, “they thought it hilarious.” One asked: “What do you do with these things? Smoke ’em?”

Prosecutors described Mr Norris as the “kingpin” of an international smuggling ring. He was dumbfounded: his annual profits were never more than about $20,000. When prosecutors suggested that he should inform on other smugglers in return for a lighter sentence, he refused, insisting he knew nothing beyond hearsay.

He pleaded innocent. But an undercover federal agent had ordered some orchids from him, a few of which arrived without the correct papers. For this, he was charged with making a false statement to a government official, a federal crime punishable by up to five years in prison. Since he had communicated with his suppliers, he was charged with conspiracy, which also carries a potential five-year term.

As his legal bills exploded, Mr Norris reluctantly changed his plea to guilty, though he still protests his innocence. He was sentenced to 17 months in prison.

. . . .

Justice is harsher in America than in any other rich country. Between 2.3m and 2.4m Americans are behind bars, roughly one in every 100 adults. If those on parole or probation are included, one adult in 31 is under “correctional” supervision.

. . . .

The system has three big flaws, say criminologists. First, it puts too many people away for too long. Second, it criminalises acts that need not be criminalised. Third, it is unpredictable. Many laws, especially federal ones, are so vaguely written that people cannot easily tell whether they have broken them.

In 1970 the proportion of Americans behind bars was below one in 400, compared with today’s one in 100. Since then, the voters, alarmed at a surge in violent crime, have demanded fiercer sentences. Politicians have obliged. New laws have removed from judges much of their discretion to set a sentence that takes full account of the circumstances of the offence. Since no politician wants to be tarred as soft on crime, such laws, mandating minimum sentences, are seldom softened. On the contrary, they tend to get harder.

. . . .

“I don’t think this is fair,” said the judge. “I don’t think this is what our laws are meant to do. It’s going to cost upwards of $50,000 a year to have you in state prison. Had I the authority, I would send you to jail for no more than one year…and a [treatment] programme after that.” But mandatory sentencing laws gave him no choice.

Massachusetts is a liberal state, but its drug laws are anything but. It treats opium-derived painkillers such as Percocet like hard drugs, if illicitly sold. Possession of a tiny amount (14-28 grams, or ½-1 ounce) yields a minimum sentence of three years. For 200 grams, it is 15 years, more than the minimum for armed rape.

. . . .

In Alabama a petty thief called Jerald Sanders was given a life term for pinching a bicycle. Alabama’s judges are elected, as are those in 32 other states. This makes them mindful of public opinion: some appear in campaign advertisements waving guns and bragging about how tough they are.

. . . .

In 2006 Georgia Thompson, a civil servant in Wisconsin, was sentenced to 18 months in prison for depriving the public of “the intangible right of honest services”. Her crime was to award a contract (for travel services) to the best bidder. A firm called Adelman Travel scored the most points (on an official scale) for price and quality, so Ms Thompson picked it. She ignored a rule that required her to penalise Adelman for a slapdash presentation when bidding. For this act of common sense, she served four months. (An appeals court freed her.)

. . . .

There are over 4,000 federal crimes, and many times that number of regulations that carry criminal penalties. When analysts at the Congressional Research Service tried to count the number of separate offences on the books, they were forced to give up, exhausted. Rules concerning corporate governance or the environment are often impossible to understand, yet breaking them can land you in prison.

. . . .

“You’re (probably) a federal criminal,” declares Alex Kozinski, an appeals-court judge, in a provocative essay of that title. Making a false statement to a federal official is an offence. So is lying to someone who then repeats your lie to a federal official. Failing to prevent your employees from breaking regulations you have never heard of can be a crime. A boss got six months in prison because one of his workers accidentally broke a pipe, causing oil to spill into a river. “It didn’t matter that he had no reason to learn about the [Clean Water Act’s] labyrinth of regulations, since he was merely a railroad-construction supervisor,” laments Judge Kozinski.

. . . .

Some prosecutors, such as Eliot Spitzer, the disgraced ex-governor of New York, have built political careers by nailing people whom voters don’t like, such as financiers.

. . . . (Read more from economist.com)

* People are surprised by recent bad news in the housing market, but they’ve got much further to fall. It’s government stimulus propping up prices.

* Renting vs. owning.

* Dollar made low against Yen. Would have fallen further if Japan’s central bank didn’t make easing announcement. This drove up precious metals.

* WSJ article about Peter Schiff portrays him as charlatan, ignores his accurate predictions: worst recession since Great Depression, over 10% unemployment, housing bubble would burst, 30% drop in real estate prices, Fannie and Freddie would go bankrupt, many leading banks would fail, government would bail them out, 1-2 trillion dollar a year deficits.

* Bernanke reiterates commitment to inflation. Gold and silver responds.

* Deflation fears misplaced.

* Some economists (Roubini) are now increasing their prediction of a recession. Duh.

* Gold stocks & the WSJ interviewer’s interest in Peter’s crib

Government agents can sneak onto your property in the middle of the night, put a GPS device on the bottom of your car and keep track of everywhere you go. This doesn’t violate your Fourth Amendment rights, because you do not have any reasonable expectation of privacy in your own driveway — and no reasonable expectation that the government isn’t tracking your movements.

That is the bizarre — and scary — rule that now applies in California and eight other Western states. The U.S. Court of Appeals for the Ninth Circuit, which covers this vast jurisdiction, recently decided the government can monitor you in this way virtually anytime it wants — with no need for a search warrant. (Read more from time.com)

Use garages.

One of the sacred cows of statism is the idea that government needs to protect us from predatory price-cutting. Large corporations, according to this argument, have big advantages in the marketplace. They can cut prices, drive out their competitors, then raise prices later and gouge consumers. Antitrust laws are needed, so the argument continues, to protect small businesses and consumers from those corporations with large market shares in their industries.

The story of Herbert Dow, founder of Dow Chemical Company, is an excellent case study for those who think predatory price-cutting is a real threat to society. Dow, a small producer of bromine in the early 1900s, fought a price-cutting cartel from Germany. He not only lived to tell about it; he also prospered from it.

. . . .

For Dow Chemical to become a major corporation, it had to meet the European challenge. The Germans in particular dominated world chemical markets in the 1800s. They had experience, topflight scientists, and monopolies in chemical markets throughout the world. For example, the Germans, with their vast potash deposits, had been the dominant supplier of bromine since it first was mass-marketed in the mid-1800s. Only the United States emerged as a competitor to Germany, and then only as a minor player. Dow and some small firms along the Ohio River sold bromine, but only within the country.

About 30 German firms had combined to form a cartel, Die Deutsche Bromkonvention, which fixed the world price for bromine at a lucrative 49 cents a pound. Customers either paid the 49 cents or they went without. Dow and other American companies sold bromine in the United States for 36 cents. The Bromkonvention made it clear that if the Americans tried to sell elsewhere, the Germans would flood the American market with cheap bromine and drive them all out of business. The Bromkonvention law was, “The U.S. for the U.S. and Germany for the world.”

Dow entered bromine production with these unwritten rules in effect, but he refused to follow them. Instead, he easily beat the cartel’s 49-cent price and courageously sold America’s first bromine in England. He hoped that the Germans, if they found out what he was doing, would ignore it. Throughout 1904 he merrily bid on bromine contracts throughout the world.
A Visit from the Cartel

After a few months of this, Dow encountered in his office an angry visitor from Germany—Hermann Jacobsohn of the Bromkonvention. Jacobsohn announced he had “positive evidence that [Dow] had exported bromides.” “What of it?” Dow replied. “Don’t you know that you can’t sell bromides abroad?” Jacobsohn asked. “I know nothing of the kind,” Dow retorted. Jacobsohn was indignant. He said that if Dow persisted, the Bromkonvention members would run him out of business whatever the cost. Then Jacobsohn left in a huff.

. . . .

Dow, however, was determined to compete with the Bromkonvention. He needed the sales, and he believed his electrolysis produced bromine cheaper than the Germans could. Also, Dow was stubborn and hated being bluffed by a bully. When Jacobsohn stormed out of his office, Dow continued to sell bromine, from England to Japan.

Before long, in early 1905, the Bromkonvention went on a rampage: it poured bromides into America at 15 cents a pound, well below its fixed price of 49 cents and also below Dow’s 36 cents. Jacobsohn arranged a special meeting with Dow in St. Louis and demanded that he quit exporting bromides or else the Germans would flood the American market indefinitely. The Bromkonvention had the money and the backing of its government, Jacobsohn reminded Dow, and could long continue to sell in the United States below the cost of production. Dow was not intimidated; he was angry and told Jacobsohn he would sell to whomever would buy from him. Dow left the meeting with Jacobsohn screaming threats behind him. As Dow boarded the train from St. Louis, he knew the future of his company—if it had a future—depended on how he handled the Germans.

On that train, Dow worked out a daring strategy. He had his agent in New York discreetly buy hundreds of thousands of pounds of German bromine at the 15-cent price. Then he repackaged and sold it in Europe—including Germany!—at 27 cents a pound. “When this 15-cent price was made over here,” Dow said, “instead of meeting it, we pulled out of the American market altogether and used all our production to supply the foreign demand. This, as we afterward learned, was not what they anticipated we would do.”

Dow secretly hired British and German agents to market his repackaged bromine in their countries. They had no trouble doing so because the Bromkonvention had left the world price above 30 cents a pound. The Germans were selling in the United States far below cost of production, and they hoped to offset their U.S. losses with a high world price.

Instead, the Germans were befuddled. They expected to run Dow out of business; and this they thought they were doing. But why was U.S. demand for bromine so high? And where was this flow of cheap bromine into Europe coming from? Was one of the Bromkonvention members cheating and selling bromine in Europe below the fixed price? The tension in the Bromkonvention was dramatic. According to Dow, “The German producers got into trouble among themselves as to who was to supply the goods for the American market, and the American agent [for the Germans] became embarrassed by reason of his inability to get goods that he had contracted to supply and asked us if we would take his [15-cent] contracts. This, of course, we refused to do.”

. . . .

More Price-Cutting

The confused Germans kept cutting U.S. prices—first to 12 cents and then to 10.5 cents a pound. Meanwhile, Dow kept buying cheap bromine and reselling it in Europe for 27 cents. These sales forced the Bromkonvention to drop its high world price to match Dow and that further depleted the Bromkonvention‘s resources. Dow, by contrast, improved his foreign sales force, often ran his bromine plants at top capacity, and gained business at the expense of the Bromkonvention and all other American producers, most of whom had shut down after the price-cutting. Even when the Bromkonvention finally caught on to what Dow was doing, it wasn’t sure how to respond. As Dow said, “We are absolute dictators of the situation.” He also wrote, “One result of this fight has been to give us a standing all over the world. . . . We are . . . in a much stronger position than we ever were.” He added that “the profits are not so great” because his plants had trouble matching the new 27-cent world price. He needed to buy the cheap German bromides to stay ahead, and this was harder to do once the Germans discovered and exposed his repackaging scheme.

The bromine war lasted four years (1904–08), when finally the Bromkonvention invited Dow to come to Germany and work out an agreement. Since they couldn’t crush Dow, they decided to at least work out some deal so they could make money again. The terms were as follows: the Germans agreed to quit selling bromine in the United States; Dow agreed to quit selling in Germany; and the rest of the world was open to free competition. The bromine war was over, but low-priced bromine was now a fact of life.

Dow had more capital from the bromine war to expand his business and challenge the Germans in other markets. For example, Dow entered the dye industry and began producing indigo more cheaply than the dominant German dye cartel. (Read more from thefreemanonline.org)

Short version: They ignore their intellectual property (which is NOT property), and let fans do their thing.

I remember flying from Seattle to Las Vegas, the night before a Dead show, with a plane full of Deadheads. The guy next to me said he was “Jonesin’ for some Hornsby” (Bruce Hornsby, who played over a hundred shows with the Dead, from 1988 until founder Jerry Garcia’s death in 1995). My fellow passenger proceeded to pull down a suitcase from the overhead compartment; it was filled with cassette tapes — all labeled and sorted by concert date and location.

Did this taping hurt album sales? No. It served as free marketing for the band. And as David Meerman Scott and Brian Halligan point out in their new book, Marketing Lessons from the Grateful Dead: What Every Business Can Learn From the Most Iconic Band in History, the band went as far as to set up special sections for tapers in 1984. These sections were behind the band’s mixing board and would form a “forest of professional-grade microphones rising to the sky.”

So if there were all these bootleg tapes floating around, has anyone been buying Dead albums? I guess so: the band has had 19 gold albums, 6 platinum albums, and 4 albums that have gone multiplatinum.

In their punchy little book, Scott and Halligan point out that the Grateful Dead turned the “the-band-tours-to-support-the-album” concept completely on it’s head. For the Dead, the concerts are the experience they are selling. The scarce good is that particular night’s performance, and the band makes each performance radically different. The band in its various forms has done over 2,300 shows, and no 2 are alike. Not only have the song lists been different each night, but the band plays different versions of all the songs. Instead of only touring periodically in support of a new album, the Dead has toured constantly.

Committed Deadheads have followed the band around to see hundreds of shows. In some cases these fans support their Dead habit by selling merchandise or food items in the parking lot, and this activity is endorsed by the band. Like Amazon with its affiliate program, the Dead supports anyone who sells band merchandise. (Read more from mises.org)

Lecture from last summer @ Iowa City public library. Sorry for the poor quality.

I’m also categorizing this under war on commerce, because government run insurance kills business opportunities for entrepreneurs who might insure profitably by actually measuring risk.

In Wilkinson County, Miss., a home has been flooded 34 times since 1978.

Extraordinary as the damage may be, even more extraordinary is that an insurer has paid claims every time, required no flood proofing, never raised premiums after a claim and vowed to continue insuring the house. Forever.

The home’s value is $69,900. Yet the total insurance payments are nearly 10 times that: $663,000.

It’s no surprise that the insurer faces huge financial problems.

The insurer? The federal government. (Read more from usatoday.com)

Bureaucratic management at its finest. I can hear the rebuttal of my socialist friends now: “If we don’t like the way the government does flood insurance, we can vote them out. If it’s a corporation, we’re stuck.”

FOX & ABCNNBBCBS: MOSQUE AT GROUND ZERO! MOSQUE AT GROUND ZERO! THE EERANIANS AR COMIN TO GIT YOU!

Pretty pathetic. I think the imminent economic crash will fix any recruiting shortages.

This is an absolutely fascinating interview. Mr. Gatto was the New York State 2009 public school teacher of the year.

Mr. Gatto quit as a public school teacher in order to stop harming kids. He had discovered that institutional schooling is designed to prevent the natural genius of children from emerging. Public schools impose a state of permanent incompletion to our kids, by teaching habit-training, not intellectual development. The power elite deliberately suppresses independent and critical thinking, to make us obedient citizens and consumers. Gatto, author of the best-selling Weapons of Mass Instruction, Dumbing Us Down, and The Underground History of American Education, discusses how the twenty elite boarding schools teach their students according to ancient principles, and homeschoolers and unschoolers are doing the same.

Gatto’s website

* Bond Fund manager and Freddie/Fannie-guaranteed mortgage holder Bill Gross advocated the Freddie/Fannie bailout. He has recently suggested government should 100% nationalize Freddie and Fannie, and allow everybody to refinance at a lower rate.

* Bill Gross argued this would stimulate consumer spending and thereby the economy. Of course, what our economy needs is more savings, not spending.

* Real Estate prices are still too high and should never have been propped up. They need to come down. Artificially high prices for homes deprive more productive endeavors of resources.

* Do not buy Government Motors IPO. Some profit might be made by those with good timing, but they will go bankrupt again. The bailout prevent the restructuring they needed. They company is not run to produce good cars at a profit. It is run to serve labor.

* Dollar strengthens despite bad news based on weakness in stocks. Old habits (like buying dollars on bad news) die hard.

* Congressional Budget Office increases deficit estimate, but the estimate remains complete bullshit. Nothing to do with reality.

* Big Media (Robert Reich) continues to sing the praises of debt, and demonize saving.

* Peter’s predictions about Freddie and Fannie come true.

* Refinancing homes at (artificially suppressed) lower rates is creating a ticking time bomb for banks who will be holding 30-year paper. Once the paper becomes worthless there will be rampant bank failures.

* NY Times publishes BS article about why we won’t have a recession. Sheer propaganda. The implicit argument is that a zero Fed rate will avoid a recession. This is nonsense.

* Bonds remain overpriced, as Americans who attempt to save decide to lend money to the government. Inflation will punish bond-buyers.

* A better scheme for unemployment benefits would be an initial lump sum. This would avoid the disincentive to work. Of course, we’d all be better off if people decided for themselves whether or not to buy unemployment benefits, creating a market for various flavors of unemployment insurance.

* Peter has bet against the advice he gives. If the government actually followed his advice, it would undermine his investments.

* The sooner the crash happens, the better, because the longer the malinvestment persists, the more effort it will take for the economy to restructure.

Erik Prince, the founder of the notorious security company Blackwater/Xe, has left the United States and is settling with his family in Abu Dhabi, the capital of the United Arab Emirates.

Prince, 51, personally is not facing any criminal charges for now, but his company, now known as Xe Services LLC, has been implicated in a series of scandals related to its operations in Iraq, Afghanistan, and elsewhere, court documents say. (Read more from presstv.ir)

President Barack Obama Friday sought to rally support around the government intervention to keep General Motors and Chrysler afloat.

Obama, speaking during visits to GM and Chrysler plants in Michigan, sought to highlight the benefits to workers at the now-revived companies to blunt criticism of the federal bailout, one of the most frequently criticized actions of his presidency so far. (Read more from rttnews.com)

Reaction #1:

B-R-O-K-E-N W-I-N-D-O-W F-A-L-L-A-C-Y !!!!!!!!11

Reaction #2: