Whose picture should be on our currency?

Our currency in the U.S. (often known in the black community as "Dead Presidents") honors people who won wars.  Andrew Jackson killed a lot of Indians.  General Grant killed a lot of Confederates.  Franklin Roosevelt killed the economy. 

We should commemorate people who spread liberty and freedom. 

Don Boudreaux (who should be on a commemorative penny, at least) has come up with a list of people who we should honor on our Federal Reserve Notes and our debased coinage. 

Here's his list.  It's greatness.... !

$1 bill: George Washington.  For all of his flaws, Washington was not as mad for power as is the typical politician.  That character trait was enormously beneficial to the early American republic.

Ok.  Agreed.  They wanted him to be king, and he declined.  Although I sometimes think we would be better off with some hereditary despots who relied on promoting freed, as opposed to the current system of beauty contests. 

$2 bill: Henry Ford, for being such a pioneering and innovative producer.

I dunno.  Towards the end of his life, he became increasingly anti-immigrant, anti-Semitic, and anti-liquor, 3 concepts that I like a lot. 

$5 bill: John D. Rockefeller, Sr., for being such a pioneering and innovative producer.

He added hundreds of hours of light (via kerosene) at increasingly lower prices to the common man.  You could make the argument that Rockefeller saved the whales !!

$10 bill: Gustavus Swift, for being such a pioneering and innovative producer.

Ok.  Good choice. 

$20 bill: Norman Borlaug, for saving countless millions of people from starvation.

Excellent choice.  He developed new strains of wheat (and was harshly criticized by many on the left, because it would increase population!) and probably saved a billion (with a "b") lives. 

$50 bill: Sam Walton, for being such a pioneering and innovative retailer.

Wouldn't that make the Statists go just absolutely batshit crazy?  Sam Walton helped bring one million people per month out of bone-grinding poverty in China.  He did more than anyone in history to hold down inflation in the era of the Fed.  He's the reason the jeans I'm wearing now cost less than they did in 1977.  Here's why he deserved a Nobel !!

$100 bill: Benjamin Franklin, for his scientific achievements and his bourgeois wisdom.

Meh.  Interesting guy, but I'd rather see Calvin Coolidge (greatest president) get a spot. 

One-cent coin: Richard Sears, for being such a pioneering and innovative retailer.

Ok.  He changed the world. 

Five-cent coin: Steve Jobs, for being such a pioneering and innovative producer.

Well, he did more good than Roosevelt. 

10-cent coin: John Bogle, for inventing the indexed mutual fund.

Ok. 

25-cent coin: Milton Friedman, for teaching not only the general public, but fellow economists, economics.

HELL TO THE YES.  YES, YES, YES!!

50-cent coin: Gail Borden, for being such a pioneering and innovative producer.

Ok. 

$1 coin: Andrew Mellon, a productive financial genius

And the opposite side of the Andrew Mellon coin should show Franklin Roosevelt burning in hell.  Read Amity Shlaes great account of The Roosevelt-induced Depression "The Forgotten Man" for details of how FDR persecuted this great man. 

That's Don Boudreaux's list.  You probably have your own. 

A Question About "Quantitative Easing"

Ben Bernanke and the boys at the Federal Reserve have been printing an extra 85 billion dollars per month.  All in the name of "stimulus". 

North Korea has been printing a couple of million dollars per month.  In their case, it is called "counterfeiting". 

Both sets of printing press owners, Bernanke's and North Korea's, are churning out bills for themselves and their buddies - the people who get to spend them first. 

But let's assume that "stimulus" of this sort is a good thing. 

Does it matter where the stimulus is printed? 

A modest proposal for the Federal Reserve

I found this over at Cafe Hayek, written by Sheila Baer. 

Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore.


For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them.

So why not let everyone participate?

Yep.  Bernanke prints the money.  Loans the money to friends at Zero interest.  Friends of Ben invest it at a higher interest rate.  Then profit.  Then repeat, over and over. 

In the meantime, any money that you 99% suckers have saved becomes devalued. 

Seven, no wait, six or five, no, just four quotes on the incredible shrinking Republican budget cuts

Here are seven quotes on the incredible shrinking Republican budget cuts....actually, there are just four, but no one seems to be paying to real numbers these days. 

“Only in Washington can a budget that spends more than it did the year before, with a larger deficit, be portrayed as ‘cutting.’” - Rand Paul

The picture already emerging is of legislation financed with a lot of one-time savings and cuts that officially "score" as savings to pay for spending elsewhere, but that often have little to no actual impact on the deficit. As a result of the legerdemain, Obama was able to reverse many of the cuts passed by House Republicans in February when the chamber passed a bill slashing this year's budget by more than $60 billion.


...Instead, the cuts that actually will make it into law are far tamer, including cuts to earmarks, unspent census money, leftover federal construction funding, and $2.5 billion from the most recent renewal of highway programs that can't be spent because of restrictions set by other legislation. Another $3.5 billion comes from unused spending authority from a program providing health care to children of lower-income families. - Andrew Taylor, Associated Press

The numbers just keep getting smaller, don’t they? Republicans started the year demanding $100 billion in cuts. But it quickly turned out that when they said $100 billion, they were just talking hypothetically. Instead, they meant $100 billion on an annualized basis. The next we heard, Republicans were aiming to trim $61 billion. And not one penny less! Eventually, they agreed to a deal that they claimed cut $38 billion. But of that $38 billion, it turns out, the real cuts only add up to about $14 billion. Any bets on how many days before the cuts disappear entirely? - Peter Suderman, Reason Magazine

I do not grudge our loyal, brave people, who were ready to do their duty no matter what the cost, who never flinched under the strain of last week - I do not grudge them the natural, spontaneous outburst of joy and relief when they learned that budget cuts the hard ordeal would no longer be required of them at the moment; but they should know the truth. They should know that there has been gross neglect and deficiency in our defences; they should know that we have sustained a defeat without a war, the consequences of which will travel far with us along our road; they should know that we have passed an awful milestone in our history, when the whole equilibrium of The United States Of America  Europe has been deranged, and that the terrible words have for the time being been pronounced against John Boehner the Western democracies:


"Thou art weighed in the balance and found wanting."    - Winston Churchill

The picture of John Boehner came from ImpeachJohnBoehner.com

Ron Paul, the cost of diapers, and Ben Bernanke's toilet paper

Kimberly-Clark is about to raise the prices of diapers and toilet paper. 

DALLAS, March 17, 2011-Kimberly-Clark Corporation (NYSE: KMB) today announced that its baby and child care and consumer tissue businesses are notifying customers of plans to raise prices in North America during the second and third quarters of 2011. The company said the increases are necessary to offset inflationary pressure from higher raw material and energy costs.

Net selling prices in the U.S. and Canada for Huggies baby wipes and diapers, Pull-Ups training pants and GoodNites youth pants will increase on average between 3 and 7 percent, with implementation timing ranging from June 19, 2011 to August 17, 2011. In addition, net selling prices in the U.S. for Cottonelle and Scott 1000 bathroom tissue will increase approximately 7 percent, effective June 19, 2011. The price changes vary by brand and pack size. Kimberly-Clark's net sales in North America for these consumer products exceeded $4 billion in 2010.

Here's who the price increase is hitting the hardest, from a piece by Monika Diaz of WFAA:

DALLAS — A Dallas non-profit is keeping a close eye on the disposable diaper price hike soon to hit stores, and it worries it will hurt their budget.
"We can't afford to be hit," said Jeanne Reyer, executive director of Captain Hope's Kids.
Every week, the charity distributes 9,000 diapers to agencies that help homeless babies and toddlers across North Texas.
"We are spending nearly $7,000 in diapers a month," Reyer said.
Irving-based Kimberly-Clark Corporation announced it is going to increase its prices in North America for products including diapers, tissue paper and toilet paper.
For example, the cost of Cottonelle toilet paper will go up 7 percent; the price for Huggies diapers, baby wipes and and training pants will jump between three and seven percent.
Kimberly-Clark claims the hike is needed because of the rising costs for raw materials to make its products.
Other companies, including Procter & Gamble and Colgate-Palmolive, are also looking at rolling out price increases.

And here's the reaon for all of this misery, as explained by Dr. Ron Paul.  Ron Paul's political opponents paint him as naive, out-of-the-mainstream, an extremist, and overly pessimistic. 
They call him Dr. No. 
But he's almost always right. 
This is an excerpt from his book The Revolution: A Manifesto:

When the Fed intervenes like this, increasing the money supply with money and credit it creates out of thin air, it causes all kinds of economic problems.  It decreases the value of the dollar, thereby making people poorer.  and in the long run even the apparent stimulus to the economy that comes from all the additional borrowing and spending turns out to be harmful as well, for this phony prosperity actually sows the seeds for hard times and recession down the road. 

First, consider the effects of inflation, by which we mean the Fed's increase in the supply of money, on the value of the dollar.  By increasing the supply of money, the Federal Reserve lowers the value of every dollar that exists. 

(That's why the government is trying to get you out of dollars, and into purchases of things they want you to buy.  Like purchasing all the houses that they're stuck with from their Community Reinvestment Act/Fannie/Freddie real estate debacle, or purchasing cars and trucks from those new auto companies they acquired.  They are honest to God trying to get you to spend money by announcing that your money will soon be worth less.  Good God in heaven.)

If the supply of Mickey Mantle baseball cards were suddenly to increase a millionfold, each individual card would become almost valueless.  The same principle applies to money: the more the Fed creates, the less value each individual monetary unit possesses.  When the money supply is increased, prices rise -  with each dollar now worth less than before, it can purchase fewer goods than it could in the past.  Or imagine an art auction in which bidders are each given an additional million dollars.  Would we not expect bids to go up?  The market works the same way, except in a free market there are numerous sellers instead of the one seller in an auction. 

All right, some may say, prices may indeed rise, but so do wages and salaries, and therefore inflation causes no real problems on net. 

This misconception overlooks one of the most insidious and immoral effects of inflation: its redistribution of wealth from the poor and middle class to the politically well connected.  The price increases that take place as a result of inflation do not occur all at once and to the same degree.  Those who receive the new money first receive it before prices have yet risen.  They enjoy a windfall.  Meanwhile, as they spend the new money, and the next wave of recipients spend it, and so on, prices begin to rise throughout the economy - well before the new money has trickled down to most people. 

The average person is now paying higher prices while still earning his old income, which has not yet been adjusted to account for the higher money supply.  By the time the new money has made its way throughout the economy, average people have all this time been paying higher prices, and only now can begin to break even.  The enrichment of the politically well connected - in other words, those who get the newly created money first: government contractors, big banks, and the like - comes at the direct expense of everyone else.

These are known as the distribution effects, or Cantillon effects, of inflation, after economist Richard Cantillon.  The average person is silently robbed through this invisible means and usually doesn't understand what exactly is happening to him. 
And almost no one in the political establishment has an incentive to tell him. 

And that, ladies and gentlemen, is why the price of diapers and toilet paper is going up.  There isn't a long-term shortage of wood pulp, paper, or anything else.  There's an increase in the money supply.   Ben Bernanke is printing it. 
If you caught someone in your home stealing 3-7% of your savings, I hope that you would shoot him, or at least knock him in the head, "civility" be damned. 
Nobody voted for this, nobody is debating it.  The Fed is paying off Washington's debts by printing more money.  It doesn't hurt the rich that much, since they typically get to spend the funny money first, and it's a horrible burden on the poor. 

If current trends continue, we won't have to worry about the high cost of Kimberly Clark's toilet paper.  Ben Bernanke's will be a lot less valuable. 

Pics came from here and here and here. 

PORKULUS SAVES 55 JOBS ! GIVE US MORE ! GIVE US MORE !!!!!

From Patterico's Pontifications:

9/16/2010

Your Stimulus Dollars at Work: $2 Million Per Job

It’s the largest city audit of stimulus dollars to date, and the results aren’t pretty:

CITY CONTROLLER RELEASES AUDITS OF HOW LOS ANGELES HAS USED FEDERAL STIMULUS MONEY
$111 Million in ARRA Funds Has Only Created 55 Jobs So Far
Continuing her efforts to ensure that taxpayer money is spent efficiently and effectively, City Controller Wendy Greuel released two audits today of how the City of Los Angeles has used American Recovery and Reinvestment Act (ARRA) funds. The audits looked at the how the two departments that have received the largest amount of ARRA funding so far – the Department of Transportation (LADOT) and the Department of Public Works (DPW) – have used those funds and how many jobs were created. Los Angeles becomes the largest City in America to conduct an audit of how ARRA funds have been expended.
DPW has received $70.65 million and created or retained 45.46 jobs, though they are expected to create 238 jobs overall (the fraction of a job created or retained correlates to the number of actual hours works). LADOT has been awarded $40.8 million and created or retained 9 jobs, though they are expected to create 26 jobs overall. Overall, the Departments have received $111 million in federal stimulus funds out of the $594 million the City has been awarded so far and created or retained 54.46 jobs.

$111 million for 55 jobs. That’s $2 million per job.
Even if you look at the number of jobs they expect to create (”or save”), it’s only 264. $111 million for 264 jobs is about $420,454 per job.
Hey, can you guys create a 56th job for me? I could use $2 million.
Failing that, can you return my tax dollars that you wasted?

Next time you hear The Teleprompter Jesus talking about how many jobs have been created or saved with Porkulus money, remember this.  Think of how many jobs you could "create or save" with $2,000,000.00   Probably a lot more than ONE. 

You can get the T-shirt here. 

On devalued currency

Here's an old one dollar bill from the 1920's.  It's a "silver certificate", meaning that you could swap it for one dollar's worth of silver.  The current one dollar bills couldn't be swapped for enough silver to fill a gnat's rear end.  Our government has printed too many of them. 

See this picture of Andrew Jackson?  In 1905, a $20.00 bill could be swapped for $20.00 worth of stuff, including gold. 
If you made the foolish decision to save a $20.00 bill from that era, it will now only purchase 5% of what it could in 1905.

This hundred dollar bill will only do the job once done by a $5.00 bill.  The Federal Reserve system, created in the early 1900's to stabilize our currency, has succeeded in destroying 95% of our currency's value. 

And if you've got any of these, you might want to spend them now.  If current trends continue, they're going to have to print enough of them for all of us. 

This is a variation of a chain email sent to me by The Whited Mama. 

An Open Letter to all of my co-workers

This is a letter I sent out to all of my Jukt Micronics co-workers last week.

I have a new project: I'm going to take some time off work to publish a book.

I have the talent and the track record and I’m certain it will be a success. I'm asking each of Jukt Micronics' 500 employees to lend me $50. I will repay the entire amount ($25,000) in 10 years. Of course, it will be a zero-interest loan. And I will pay you back only if I sell my book. But if I sell nothing, you get nothing.

Some of you may try to refuse, not understanding that my project will create economic wealth. The publisher will earn a profit, I’ll buy a new laptop, hire a professional typist, buy plenty of paper, eat at restaurants near my house, and hire a contractor to add a decent office to my home. Add the income tax from all these jobs to the taxes generated by the sale of my book, and this will be a win/win/win for industry, government, and most of all, me.

Besides, our book industry must be competitive. I've read that many French authors who writes on the same subject as me receive subsidies from their government. It would be unjust and suicidal for our industry not to subsidize me, too. Our country won't be what it is today if we don't unite and protect working families who produce Free Market Rants.

You still refuse? You say you prefer to put your $50 in a safe investment, earning an eight-per-cent compounded annual return that will add up to $108 in 10 years, instead of your original $50 that I’m offering to give you back in ten years? You say it’s more important for you to keep this money for your daughter’s college tuition than to use it to further my career and stimulate the economy? I don’t get it.

But it doesn’t matter what you think. You have no choice. My good friends who are trying to stimulate the economy by "saving and creating jobs" are going to withold the money from your checks. If you refuse, they'll send you to jail. My friends in the Democratic and Republican Parties think it’s a good project, and so should you. After all, who are you to know what to do with your money? You're the one who didn't get us into this mess, not the people who did and who are now trying to get us out of it.

Thanks for your willingness to help,

The Whited Sepulchre

Shamelessly ripped off from a French letter to the editor of a Montreal newspaper. A coat of Whitening to Don Boudreaux for posting an English translation.

Bernie Madoff vs The U.S. Dollar - which was the worst investment?

Now we're getting somewhere.
Ron Paul has made a motion for Congress to consider allowing alternative currencies in the United States.




Why is this a good thing?
We in the U.S. now have what is called a "fiat" currency. A fiat, according to these folks, is "a command or act of will that creates something without or as if without further effort".

In other words, all those pictures of dead presidents printed on greenish paper in your purse or wallet or checking account? They're only worth something because our government has declared that they are worth something, and must be accepted for all debts, public and private.

But that sounds like a reasonable system, doesn't it? What would happen to retail cashiers if they had to have registers with 3,682 different bill and coin slots? What would happen to pricing? Exchange rates? Wouldn't things get complicated?

Yes, having only one type of currency in circulation is convenient. But who controls the amount of this fiat currency in circulation?

Senators who have to be re-elected every few years. Representatives who believe that their congressional district is somehow special, and needs money. Presidents who want to send the kids off to Foreign Adventures in a sandbox somewhere on the other side of the world.

Our government spends more than it takes in because they know if they get in trouble, they can always print more money.
Here's a chart showing the number of dollars printed, in billions, ever since the creation of The Federal Reserve. Note the Obama uptick on the far right. A 2009 dollar is now worth a 1913 nickel.

This devalued crap was printed to pay off government debts.

The Federal Reserve was created to stabilize the money supply. The dollar has lost 95% of its value since then. Things have less value as they become more common.

What do you think this new mega-increase in the money supply will do to the price of eggs and butter and beer?

(A special prize will be given to the first reader to email me an editorial blaming these upcoming price hikes on GREEDY CORPORATIONS.)

And why can our government get away with this? It's because our currency doesn't have a competitor. If someone owes me money, I'm required to accept Obamabucks as payment. (Or Bushbucks, Clintonbucks, Reganbucks, Bernankebucks, Greenspanbucks, etc. I'll be fair.)

What would happen if some banks were once again allowed to print their own currency, the way many banks did prior to the government monopoly? (One of our worst presidents once made it illegal to own gold, BTW. Statists hate, hate, hate competition.)

What would happen if some of these banks had honest managers/owners, and conscientious boards of directors, and they vowed to keep their money supply at a constant level?

Whose currency would you prefer? The system run by these hypothetical banks, or the system currently overseen by Reid, Pelosi, Obama, Bernanke and Company?

People would start asking if there's anything worse than losing 95% of value. Taken as a whole, even Bernie Madoff's investors fared better than that.

End The Fed, by Congressman Ron Paul - Pure, Undiluted Greatness

I got an advance copy of a long-awaited book in the mail today. Here's one of the opening paragraphs.

"....After all is said and done, the Fed has one power that is unique to it alone: it enables the creation of money out of thin air....Given that money is one half of every commercial transaction and that whole civilizations literally rise and fall based on the quality of their money, we are talking about an awesome power, one that flies under cover of night. It is the power to weave illusions that appear real as long as they last. That is the very core of the Fed's power.
As President Obama said of the economic boom that went bust: "I think it's important to understand that some of that wealth was illusory in the first place."
Exactly.

Those are among the opening paragraphs of Ron Paul's new book "End The Fed". I'm about halfway through my advance copy (I LOVE my new status as a member of the fourth estate), and so far, the book is pure, undiluted greatness. Brilliant.


When I get through reading a good book, there are markings on about 10% of the pages. By the time I got a few pages into "End The Fed", I was losing the ability to distinguish between the good, the great, the superlative, and the immortal passages that should be tattooed on Ben Bernanke's nether regions.
There's no point in underlining and highlighting in a book when it inspires this kind of frantic vandalism:


Here are a few of Dr. Paul's comments on the Fed's practice of pumping money into the economy whenever it suits them:


"It is and should be a mainstream cause to end the power and secrecy of the Fed. It's my own view that ending the Fed would address the most vexing problems of politics of our time. It would bring and end to dollar depreciation. It would take away from the government the means to fund its endless wars. It would curb the government's attacks on the civil liberties of Americans, stop its vast debt accumulation that will be paid by future generations, and arrest its massive expansions of the welfare state that has turned us into a nation of dependents....Essentially you take away from the government the capacity to expand without limit. It is the first step to restoring constitutional government. Without the Fed, the federal government would have to live within its means. It would still be too big and too intrusive, just like all state governments are today, but the outrageous empire at home and abroad would have to come to and end."


This little snippet got 3 stars in the margin:


"Even the Fed itself claims that part of its job is to keep inflation in check. This is something like the tobacco industry claiming that it is trying to stop smoking or the automobile industry claiming that it is trying to control road congestion. The Fed is in the business of generating inflation.....the entire reason for the Fed's existence is to generate more (inflation), not less of it.
What the largest banks desire is precisely what we might expect any large corporation to desire: privatized profits and socialized losses. The profits come from successful loan activities, sometimes during economic booms. But when the boom turns to bust, the losses are absorbed by third parties and do not affect the bottom line. To cover losses requires a supply of money that stretches to meet bankers' demands.....
Whenever instability turns up, so do efforts to socialize the losses."

Paul goes on to explain the history of the Fed, and how its stated goal was to stabilize the money supply. But then,


"In practice the reality has been much different. One only needs to reflect on the dramatic decline in the value of the dollar that has taken place since the Fed was established in 1913. The goods and services you could buy for $1.00 in 1913 now cost nearly $21.00. Another way to look at this is from the perspective of the purchasing power of the dollar itself. It has fallen to less than $.05 of its 1913 value. We might say that the government and its banking cartel have together stolen $.95 of every dollar as they have pursued a relentlessly inflationary policy."


Dr. Paul gives us a chapter on his intellectual influences, and gives some credit to his grandmother, who knew her Bible well. Shortly after the end of WW2, prices were rising because of inflationary war financing, causing Grandmother Paul to remember Genesis 47:15, a passage describing Joseph has become Pharaoh's Bread Czar:

"So when the money failed in the land of Egypt and in the land of Canaan, all the Egyptians came to Joseph and said, 'Give us bread, for why should we die in your presence? For the money has failed.' "
Our current problem was well established, even in ancient Egypt. Debased currencies fail. Governments cannot manage money.

That's my new favorite Bible verse. Genesis 47:15.
Dr. Paul also discusses FDR's ham-handed attempts to eliminate competitors of Fed Funny Money:

"Roosevelt, by executive order (6102) in 1933, confiscated all gold held by private citizens, with a few minor exceptions such as numismatic (collector) coins, and levied severe penalties on those who disobeyed. The penalty (for owning gold) was $10,000 and/or ten years in prison. In today's money, that's more like $400,000. It was a rather bold, arrogant move from which much harm has come."

And then he writes:

Before gold became legal in 1975, many gold bugs were buying it. I purchased my first gold shortly after the breakdown of the Bretton Woods Agreement. The law was circumvented by buying numismatic coins (any coin dated 1947 or older was considered a numismatic coin). Mexico accommodated American citizens by minting the beautiful Mexican 50 peso, weighing 1.2 ounces, and placing the date 1947 on it.

I love it. I've read through chapter 3, but will probably finish the book tonight.
You must own this book.
Sometime soon, when we're assured of the official on-sale date, we're going to have the Tarrant County Libertarian Meetup at the Border's Books at Hulen and I-30 in Fort Worth. This book will be the topic for discussion.
Stay tuned.

Cash For Clunkers - Name That Economic Fallacy !

This is from John Stossel's ABC News blog. (The essay, not the picture.)

I've never seen this guy on TV since I don't watch much that isn't Tivo'd, but I'm a fan of his editorials, books, and website. It's sort of like being a fan of Winston Churchill's paintings, or Billy Bob Thornton's music. Here's Stossel on the Cash for Clunkers program:

Because sometimes, one billion isn’t enough.
The Obama Administration’s “Cash for Clunkers” program offers to buy used cars for $3,500 -$4,500 with taxpayer money. The government then destroys the “inefficient” used car. Not surprisingly, a lot of people want to sell their junk cars to the government. So many, in fact, that the $1 billion program has already run out of money.
Now it appears that Congress will ask not just for another billion, but another TWO billion. Look how generous Congress is with your money!

The idea is that by destroying used cars, people will buy new cars, which creates jobs. But this commits the “broken window fallacy”. That $3 billion taken from taxpayers to, essentially, destroy used cars now cannot be put towards college, or a new home, or new clothes, or anything else. Some used cars are no longer available for poor consumers to buy. If the “new car” market is helped by “Cash for Clunkers”, every other market is hurt because that $3 billion cannot be spent on anything else.

Here's Stossel's concise explanation of the Broken Windows fallacy, from an earlier post:

Economists call this the "broken window fallacy." In the 19th century, French economist Frederic Bastiat illustrated it with the story of a boy who breaks a shop window. At first the townspeople lament the loss, but then someone points out that the shopkeeper will have to spend money to replace the window. What the window maker earns, he will soon spend elsewhere. As that money circulates through town, new prosperity will bloom.
The fallacy, of course, lies in the fact that if the window had not been broken, the shopkeeper would have "replaced his worn-out shoes … or added another book to his library." The town gains nothing from the broken window.
This logic is lost on the stimulus promoters. I'm surprised they don't suggest that we prevent recessions by breaking lots of windows.

This is similar to the forklift program we took advantage of at my employer, Jukt Micronics. The government gave us a huge rebate in exchange for trading in our old planet-warming forklifts for new ones that also warm the planet, but not as quickly. That was their logic, anyway.

Which finally gets me to my point. We're dealing with a group of Chicago machine politicians who are looting The Treasury and giving the money to their contributors - in this case, the UAW and the Big 3 auto makers. They use the wholesome, environmentally-friendly bullshit to convince The Sheeple that this isn't a scam.

But isn't it an article of faith in the Mommy Party that we need fewer cars on the road and more use of public transportation?

Instead of the Broken Windows fallacy, that would make it a case of Anarchic Hand Syndrome.

Or perhaps Craniofacial Duplication.

And what if the money to repair the Broken Windows doesn't exist, and has to be printed on the spot? Instead of the Broken Windows fallacy, isn't this the Monopoly Money fallacy?

Anyway, I know something is wrong here, but what is it?

The Broken Windows Fallacy?

Anarchic Hand Syndrome?

Craniofacial Duplication?

or The Monopoly Money Fallacy?

Sometimes things are so wrong, one explanation can't cover it.

Why I Am A Libertarian, Part 3, Childhood Reading Edition

Because of reconnecting with old friends on Facebook, I'm doing a series of posts about what makes someone go from political near-apathy to rabid Libertarian. I feel the need to explain myself.

Sarah Jean Cartledge (sp?), my fifth grade teacher at North Sunflower Academy, required us to read Harold Keith's "Rifles For Watie".

It's the story of a kid named Jeff who goes to fight for the Union army during the Civil War. Jeff is eventually asked to infiltrate the enemy lines and become a spy inside the Confederate army. Here's a section that describes Jeff's first Confederate payday:

"....each trooper received a month's salary, too. Jeff looked curiously at the crisp, new green banknotes, two fives and five ones.
"Know what I'm going to buy first?" Jeff said to Hooley, later. "There's a man selling ginger cakes up on the street. I'm going to buy me a whole dollar's worth. Come on, Hooley, I'll buy you a chunk, too."
Promptly they found the vendor. He was a big, bare-headed fellow, who had built himself an oven in the hillside next to the town blacksmith. He was standing behind a three-foot square of freshly baked brown gingerbread, fanning the flies off it with one hand. The hot, sweet smell was overpowering. Jeff slid off Flea Bite (his horse).
"Give us a dollar's worth of that," Jeff said, waving his one-dollar bill proudly.
The vendor extended his dirty hand, plucked the bank note away, laid it on the square of gingerbread and, cutting around it neatly with his bowie knife, hewed off a piece exactly the size of the bank note and handed it to the surprised Jeff. Then he pocketed the bill. Thus Jeff learned for the first time of the weak buying power of Confederate paper money.
Hooley laughed uproariously as Jeff broke off half his small piece and handed it to him. Jeff grinned ruefully. "I guess that's what Pa meant when he told me once that money is the measure of value."

When I read this in the early 1971, bread sold for .25 cents per loaf. The idea of only getting a dollar bill-sized piece of bread in exchange for a greenback seemed ridiculous.
I don't know why, but that passage from "Rifles For Watie" has always stuck with me.

Flash forward to the year 2009. Take a one dollar bill into Starbuck's and see how much bread or pastry it will buy.
Is it because bread is scarce? Is there a huge demand driving the price up?
Nope.
It's because our government is financing its goofy-assed spending habits by printing money.

With the exception of the Ron Paul splinter of the Daddy Party, the Libertarians are the only ones who have consistently protested against this kind of taxation without legislation.

Jeff couldn't buy very much bread with his paycheck because the Confederate government was financing almost everything with printing presses instead of silver and gold. (Plus, most outsiders knew that the Confederacy was doomed.) Today, a Confederate one-dollar bill has no value to anyone but collectors.

So keep saving U.S. dollar bills. In 140 more years, if people start collecting them, they might once again be worth what they were in 1971.

But in the meantime, don't plan on buying very much bread with them.

Audit The Fed. Sign up here.

Money supply chart came from here.

The Latest Sin Tax

A few weeks ago I posted a bet about the price of Coca-Cola in one of our warehouses.

In short, because of the porkulus plan, increased spending, and the Teleprompter Jesus pumping more money into the system, do you think the price of soft drinks in this machine will double in less than a year, or will it take more than a year?

This is good news for those of us who took the "under".

Unfortunately.

There are some bets you don't want to win. We're still holding steady at .50 cents.

End The Fed Rally - Dallas Texas, April 25 2009

I went to the Dallas "End The Fed" rally in Downtown Dallas this afternoon.
The biggest surprise was my friend John Jay Myers, who is running for Dallas City Council. (Here he is sounding off at an earlier meeting, objecting to Dallas building a half -billion dollar hotel.)


I already knew John to be a very smart man, but had no idea he could work a crowd like he did this afternoon. As soon as the YouTube of this event goes up, I'll post it here. Plus, I'll put up other pictures as quickly as people send them to me.

Here's a hypothetical question that I spent a lot of time pondering while listening to other speakers and waving my Tarrant County Libertarian sign in front of The Temple Of Baal.

Assume someone is a counterfeiter, and a very good one. No one can tell the difference between this counterfeiter's product and the paper money rolling off the presses at the Fort Worth Bureau Of Engraving And Printing. Let's assume that there is no difference other than point of origin.

Why is it illegal for the counterfeiter to print and spend his homemade money? Who is harmed by it? As long as it can't be distinguished from the genuine article and is still accepted by merchants, doesn't it serve the same purpose?

Couldn't you even say that it stimulates the economy?