Tuesday, August 21, 2007

Housing Market Problems

Things are looking bleak.

High-Risk Credit

by Ron Paul

As markets went on a rollercoaster ride last week, our economy is coming close to a day of reckoning for loose credit policies being followed by the Federal Reserve Bank. Simply, foreign banks we have been relying on to buy our debt are waking up to the reality of much higher default rates than predicted, and many mortgage-backed securities have been reduced to “junk” ratings. Wall Street fears the possibility of tightening credit and the tightening of America’s belts. Why, they say, “if Americans spend only what they can afford, think of the ripple effects throughout the economy!” This is the cry, as the call comes for the fed to cut rates and bail out companies in trouble.

More inflation is, however, never the answer to inflation.

The truth is that business involves risk, and businesses that miscalculate risk should be liquidated, so their assets can be reallocated to businesses that correctly judge risk and make profits. Instead, the Fed has injected $64 billion into the jittery markets, effectively amounting to a bailout that keeps these malinvestments afloat, but eventually they will become the undoing of our economy.

In addition to the negative reactions in financial markets, many Americans have taken on too much personal debt owing to exotic mortgage products and artificially low interest rates. Unfortunately, these families are now in the position of losing their homes in unprecedented numbers as the teaser rates expire and the real bills are coming due.

The real answers are, and always have been, found in the principles of the free market. Let the market set the interest rates. If we had been functioning under a true and transparent free market system, we would not be in the mess we are in today. Government, like the American household, needs to live within its means to get back on stable fiscal ground.

We’ve been headed in the wrong direction since 1971. This week marks the 36th anniversary of Nixon’s decision to close the gold window, which convinced me to seek public office to call attention to the runaway money train that would come in the aftermath of that decision. The temptation to print and spend money with impunity, like the temptation to max out lines of credit, is too strong to for government to resist. While Nixon brokered exclusivity deals with OPEC to prop up demand for the tidal wave of green pieces of paper the Fed pumped into the markets, the world is tiring of marching to the beat of our drum in order to secure their energy needs. The house of cards Nixon built is now on the verge of collapsing on our heads, and on our children’s heads.

As the dollar weakens, it becomes ever clearer that we need a return to sound, commodity-based money for a secure future. Money based on real value, not empty promises and secretive backroom machinations, is the way to get out of the current calamity without causing even bigger problems.

Monday, August 20, 2007

Super short movie review


Uh, not so good.

I came into this thinking it'd be a somewhat original film. Turns out it's about some kids trying to get beer and get girls drunk enough to have sex with them. I somewhat knew it was going to be crude going into it, but I was hoping it wasn't going to operate under the flawed premise that teenagers being crude is inherently funny. This is nothing but an updated American Pie.

Don't get me wrong, Michael Cera really is quite talented and funny and the movie does have plenty of laughs, but the overall product is nothing new.

Well, maybe I was foolish for thinking this would be a little smarter than lol drinky and OMG BOOBIES.


Thursday, August 09, 2007

New song - Old songs

New stuff out from two excellent bands, the Broken Family Band and Okkervil River. The first video is from the new Broken Family Band album, Hello Love. The second is from last year's Okkervil River EP, The Presidents Dead. It's not what you'd expect from the current political climate though, it's actually completely sincere like most everything else Okkervil River does. As a bonus we'll add some Man Man because... well because Man Man and therefore awesome.

The Broken Family Band - Love Your Man, Love Your Woman

Okkervil River - The President's Dead

Man Man - Feathers and Engrish Bwudd (Live)

Tuesday, August 07, 2007

War and Economy

There is a keynesian myth that perpetuates that war is "good" for an economy.

There is no way one can logically show that taxation, inflation, slavery, destruction, and mass murder (A.K.A. war) is good for an economy. Such a notion is usually based on some drawn out version of Bastiat's broken window fallacy. Or one might say war is good for an economy in the same way a hurricane or tsunami are good for an economy.

The usual line of reasoning is that war helps motivate "industry" by employing tank builders and gun makers. And that the aftermath of the destruction of private property results in new industry from the rebuilding.

This, as Bastiat said, is what is seen.

But consider what is not seen. Those tank builders and gun makers could have been bakers and cabinetmakers. They could have been producing for the economy in an industry that has actual consumer demand. Remember, those tanks and guns are funded my tax dollars, money extorted from the public at the point of a gun. That same money could have been used on cakes and kitchen cabinets if it was not necessary to steal it for corporate mass murder.

And what of the destruction and re-building? It is true that in the wake of destruction new construction will ensue. Clearly money is given to builders who are rewarded for their work. But at what cost? Couldn’t that money given to the builders just as easily be given to a different professional?

In other words the man whose house is destroyed by a stray bomb needs to use his own capital to replace his house. And while that money is given to the building industry, it could have just as easily been given to the auto industry. Isn’t it true that in the case of the house the man has gained no new pleasure or satisfaction from the house? Didn’t he have a house to start with and is now only wasting his capital to replace it? Couldn’t he have used it to purchase something new altogether to satisfy his needs and preferences? So we see that while this destruction may help one industry in particular it does not help industry in general.

War is the culmination of everything evil in Man. It is the absolute corporate failure of humanity. It is the death of reason, civility, and charity. It has no redeeming qualities.

No. Not. One.

We'd know all this if we taught Mises (who was right) in our schools instead of Marx and Keynes (who were wrong). But then the State tends to like schools of thought that perpetuate the myth that *WE* need *THEM*.

Sunday, August 05, 2007

A few months a go Ron Paul had a little debate with Giuliani over foreign policy in the war with Iraq.

The crowd at the time was notably on the side of Rudy Giuliani.

Well the tides are changing...

Uploaded by krs601

He's more confident.
He's got a consistent message.
The Romneys and Giulianis have no answer.
They look befuddled.

And most of all, he's the same thing he's always been.