Via the ever-upbeat Monty at Ace of Spades, this Hernando de Soto article is worth your time. He outlines six specific developments that have destroyed the clarity and reliability of information in the global economy, and then concludes:
If we can agree that the recession wasn’t about bubbles but about the organization of knowledge, we can move on to restoring the systems that allowed the global economy to expand more in the last 60 years than in the previous 2,000.
We are now staring at a legal and political challenge. A legal challenge because American and European governments allowed economic activity to cross the line from the rule-bound system of property rights, where facts can be established, into an anarchic legal space, where arbitrary interests can trump facts and paper swirls out of control. The rule of law is much more than a dull body of norms: It is a huge, thriving information and management system that filters and processes local data until it is transformed into facts organized in a way that allows us to infer if they hang together and make sense.
Mainly, though, it’s a political challenge. Politicians must raise the financial crisis to commanding heights, where the entrenched institutional problems of a failing order can be addressed. Markets were never intended to be anarchic: It has always been government’s role to police standards, weights and measures, and records, and not condone legalized sleight of hand in the shadows of the informal economy. To understand and repair one of mankind’s greatest achievements—the creation of economic facts through public memory—is the stuff of nation-builders.
I’ve seen up close what this economic confusion looks like. An Afghan government entity wants some construction done, and has a project with a U.S. entity. At a meeting, the U.S. representative states that there are some approval hoops for the project funding that are delaying commencement. The Afghan rep. says, ‘Fine, but could you at least put a ditch at the property boundary? If you don’t then locals will move in, park livestock, and commence to make ownership claims.’
Not only should we avoid investing in things we don’t understand, we should identify politicians trying to do incomprehensible things and run them out on their ear the next election cycle. Stated another way: go write some software. You’ll appreciate immediately the need to remove complexity wherever possible. Complexity is not your friend, though it may be the business model of someone else.
If I say that mine is the majority opinion, that makes me correct.
If I clutter a federal argument with local points, I can point fingers at the opposition.
If I claim to confront ‘some actual realities’, and then slander the Founders, that makes me sound cool.
By spinning a ‘demography is destiny’ argument onto ‘Whites’, then I can project a paranoid narrative onto them.
We Holy Progressives gave you a black President to purge your raaaaacist hearts, but, in your fallen Whiteness, you perversely rejected Holy Progress and somehow became more raaaaacist.
Strangely, fear-mongering is an evil weapon only used by conservatives.
If I can build an argument that liberty is against the self-interest of Americans, that will make me sound cool.
No matter how many times I characterize protecting the integrity of the vote as conservatives trying to disenfranchize voters, I still get a chuckle.
The debt ceiling fiasco may be a turning point.
In closing, I must sound a shrill alarm that the end of the Progressive Era nearly makes me wet myself.
Let’s be clear: President Obama has orchestrated this unnecessary drama for the specific political purpose of causing a crisis that he — with the willing assistance of the liberal media — hopes to blame on Republicans.
U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will drop after rallying within 1.4 percent of a three-year high, as President Barack Obama and Congress failed to reach an agreement on raising the federal debt limit, intensifying concern the nation will default.
S&P 500 futures expiring in September declined 1.1 percent to 1,326 at 12:13 p.m. in Tokyo. Dow Jones Industrial Average futures lost 133 points, or 1.1 percent, to 12,488.
The Japanese Nikkei index lost 82 points. The Chinese Hang Seng was down 175 points. Meanwhile, Harry Reid — who has been worse than useless in this phony crisis — now says he has a plan:
The Senate’s top Democrat rolled out a plan Sunday night to raise the nation’s debt limit – in a way he said even Republicans could not refuse.
Senate Democratic boss Harry Reid proposed slashing $2.7 trillion in spending and raising the debt ceiling through 2012 to avoid a market meltdown.
The offer “meets Republicans’ two major criteria: It will include enough spending cuts to meet or exceed the amount of a debt ceiling raise through the end of 2012, and it will not include revenues,” Reid said in a statement.
“We hope [House] Speaker [John] Boehner will abandon his ‘my way or the highway’ approach, and join us in forging a bipartisan compromise along these lines,” Reid said.
The accusation that Boehner is the obstacle to a “bipartisan compromise” is laughable. The GOP leadership very much wants a deal, but Obama and Harry Reid’s Democrat majority in the Senate refuse to play ball.
For two years, Obama, Reid and Nancy Pelosi acted as if they could spend infinite money with no regard whatsoever to the effects of deficit spending. Now — with Obama looking for something he can score a “win” against the GOP — suddenly they’re all about the balanced approach.
It boils down to this: The president wants his $2.4 trillion debt limit increase all at once, without any guarantees that we’re going to cut more than $2.4 trillion in spending. The administration says they have to have it all upfront so we don’t have to deal with this again until after the next election. You heard the president say that himself on TV the other night.
We’ve seen this coming all year long. But here’s the challenge: To stop him, we need a vehicle that can pass in both houses. . . .
The White House has never gotten serious about tackling the serious issues our nation faces — not without tax hikes — and I don’t think they ever will. . . .
So today, everyone will be watching Wall Street. And if you’ve got your 401(k) or other retirement investments in stocks . . . well, see, what happens to your money is of no interest to the Democrats. All they care about is politics.
Gold hit a record high above $1,620 an ounce on Monday . . . over fears of a possible U.S. debt default as the debt ceiling talks in Washington stalled.
We live up in the woods near South Mountain, east of Hagerstown, Maryland, and my wife has a rooster and some hens in the backyard which provide us with eggs. So I was working here in my basement office at home, a little after midnight, when my 18-year-old son Bob comes running in the door and yells for his twin brother: “Jim, get your gun! It’s a possum!” And out the door they went. A half-hour later, they returned safely and successfully. The possum? Not so much.
It’s obviously hereditary. I call ’em Bo and Luke.
You definitely ought to hit the tip jar. I’ll buy ’em some more shells.
My wife and I have six children, which is three times the national average in the U.S. People often ask, “Are you Catholic?” No, we’re proudly Protestant. Yet one cannot ignore the fact that, almost alone among major Christian denominations, the Catholic Church has a well-developed pro-life, pro-family doctrine as part of its basic belief system. It is lamentable that Protestants — even conservative denominations — have not followed suit, insofar as I think that the 1968 encyclical Humanae Vitae, for example, has proven quite literally prophetic in its forecast of the social consequences of what has been called the Contraceptive Culture. (See “The Pill at 50: Unhappy Un-Birthday.”)
One obviously need not be a Catholic to see this, nor even a Christian, because every man may examine the facts for himself. And strangely, most people remain utterly unaware of the dire results of a collapsing birth rate. If you’ve read Mark Steyn’s America Alone or Pat Buchanan’s The Death of the West, you know what I’m talking about. But those are political books by conservatives, and the arguments made by Steyn and Buchanan are apt to be rejected by those who aren’t interested in politics, or who don’t share the conservative views of the authors. In the same way, religious arguments about sexual matters are likely to be rejected by people who aren’t religious.
The important thing to understand is that there are no inexorable trends in human affairs that we are powerless to resist. Men make trends, and not the other way around. Change begins with one person — and that person is you. Do not ask what government can do. Do not ask what your neighbor or your church can do. Instead ask yourself, “What can I do?” And whatever that is, do it.
Don’t look at me. I’ve got six kids — certainly I’m part of the solution, not part of the problem.
We begin this week’s roundup of Rule 5 linkagery with one of the stranger links I’ve ever seen. Without further ado, courtesy of The POH Diaries, Hilary Duff owling.
More conventionally, Randy’s Roundtable has Sara Jean Underwood and Lisa Marie Scott, Eye of Polyphemus fakes us out with Laura Croft, but Fishersville Mike fills that particular niche in the Rule 5 linkosphere for us instead with Jessica Alba. A View From The Beach offers Angelina Jolie because she eats crickets, and also puts us some science about the slut gene. Jake Finnegan offers us a look into one possible (and horrible) future with Burkalesque Babe Heather Mitts.
Thanks to all for their linkagery. For next week’s Rule 5 Sunday, please do not send your links to the same e-mail address as the FMJRA or delays/omissions may ensue. Instead, send your snooch links to Rule 5 Wombat by July 30 for proper, er, handling.
If you’ve been reading blogs for the last couple of years, there is an air of predictability as the political theater moves forward.
Via BlogProf, we have the weekly GOP address, where Rep. Jeb Hensarling (R-TX) lays everything out in smooth, even tones:
Also trying to sound reasonable, and failing, we have Elizabeth Drew in the New York Review of Books: “What Were They Thinking?” If you want a target for a lengthy fisk, this article affords nearly five thousand words of cherry-picked, reasonably toned finger pointing. A few introductory points:
The President argued that it’s critical to make cuts that will “get our fiscal house in order,” so that the American people and the politicians would accept the idea of new programs leading to growth and more jobs. But there are numerous indications that the public is ready for such programs now, and serious analysts see no reason why he should not also be taking such steps now, even if this increases the deficit in the short run. But that would be at odds with Obama’s current self-portrayal. People who are looking for work, or worried about their unemployment insurance, or getting their kids to college, may not be impressed with the argument that they must be patient while the President adjusts his fiscal image in time for the 2012 election.
So, calling the good President’s bluff, what cuts? There remain substantial differences between three crucial items here: sound waves emitted by the Presidential mouth, budgetary plans available for public scrutiny, and historical events. If we had a dollar for every swell sounding platitude departing the President, the whole country could retire outright. Perhaps his lack of real-world business experience is an impediment.
The Republicans, with Alice in Wonderland logic, termed any elimination of a tax break a tax increase. Moreover, the breaks included in the tax code were there because they had been sponsored by an important member of Congress, or supported by a powerful lobby on behalf of one interest or another. After the President, in a press conference in late June, inveighed against tax breaks for corporate jets, the industry quickly insisted that such a change would cost jobs.
Alice, you see, was actually a plumber in disguise. If the market is a pipe, and economy is some working fluid, then taxation is an orifice that may have some utility, unless it Progressively becomes a clenched sphincter:
Emphasis mine in this next bit:
The Tea Party’s strength was larger than its numbers—about eighty in the House and as few as four in the Senate—because the entire House Republican freshman class and some more senior members were sympathetic to its views, and because the ghost of Bob Bennett now haunts many Republicans. Bennett (still alive), a solid conservative three-term senator from Utah, was, astonishingly, rejected for reelection last year by the Utah Republican caucus for having been insufficiently pure in his conservatism. (His vote in 2006 against a constitutional amendment to ban flag-burning was seen as heresy.)
If Bob Bennett could be dumped, no one was safe. Boehner himself was facing a possible primary challenge. Some Tea Party members dug in on the debt ceiling because they, too, feared attacks or challenges, principally from people who would accuse them of not forcing sufficient cuts or of failing to keep their pledge not to raise the debt limit.
Safe from what, precisely? We have a population, from which is drawn a subset of citizens to trudge into Congress and make laws. The 2010 election (and, one prays, the 2012 election as well) formed a strong, Constitutional signal about the will of the people: we want responsible government. A President running amok is at least showing signs of being brought to heel. What is unsafe about the Constitutional design working as intended? Not that this is time for high fives, mind you, but we should be cheered that the exceptional notion of liberty and self government at least affords an appearance of working.
Read the whole thing for a peek into a sadly diseased Progressive mindset.
Also in need of help is Adam Liptak at the NYT. “The 14th Amendment, the Debt Ceiling and a Way Out”:
The provision in question, Section 4 of the amendment, was meant to ensure the payment of Union debts after the Civil War and to disavow Confederate ones. But it was written in broader terms.
“The validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion,” the critical sentence says, “shall not be questioned.”
The Supreme Court has said in passing that those words have outlived the historical moment that gave rise to them.
“While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War,” Chief Justice Charles Evans Hughes wrote for the court in 1935, “its language indicates a broader connotation.”
In recent weeks, law professors have been trying to puzzle out the meaning and relevance of the provision. Some have joined Mr. Clinton in saying that it allows Mr. Obama to ignore the debt ceiling. Others say it applies only to Congress and only to outright default on existing debts. Still others say that the president may do what he wants in an emergency, with or without the authority of the 14th Amendment.
This is the usual idiotic argument of staring so closely at single clauses as to see whatever you want in them, at the expense of the broader scope of the Constitution. How can anyone seriously argue that the Executive branch can ingore Congress’s power of the purse? Maybe the Supreme Court can poke the Congress, if the Congress is so freaked out as to pass wantonly irresponsible legislation. Recent history has shown that the more likely case is that Congress blows off budgeting entirely, and the Federal Reserve waters down the dollar to taste.
Having said all that, the fundamental rock-scissors-paper arrangement of federal power has got to be inviolate, or we’re just another dictatorship.
Finally, Ezra Klein opens his mouth and justifies not having the WaPo cluttering my driveway. “A small deal won’t cut it”, is his title. That’s what she said. Nancy Pelosi, that is. On the topic of the debt ceiling. No double on-tawdry here. Someone has whispered to Excitable Ezra that there is a market filled with ravenous capitalists who are waiting to eat the U.S. credit rating. Possible side effects include Ezra having to get a real job (just kidding) and some of his patrons looking bad for re-election.
And Congress, unfortunately, has made that job a lot harder. A year ago, the market didn’t question our ability to raise the debt ceiling, nor our ability to come to a deficit deal in some reasonable period of time. Standard & Poor’s didn’t even think we should mix the two issues together. “It’s best practice for governments to enact [deficit] reforms … using the broader and longer-term perspective occasioned by debate on the budget proposal as a whole,” wrote the credit-rating agency. Plus, the debt ceiling had to be raised this year, but the deficit was a long-term problem that we had, at the least, “three to five years” to address.
Again, Ezra is either too witless or too cunning to look at the broader picture. The problem isn’t new. The irresponsibility didn’t grow overnight. The overreach is a bi-partisan product of decades of neglect. Ezra: the old days are gone, man: people in office are going to have to face an informed electorate. Finger-pointing, blaming Congress, Bush, Wall Street, rating agencies, &c is just passé. No one wants to hear it. We want to hear how responsible officials are going to make the budget fit the existing tax receipts.
And, from almost 30 years ago, we have this relic of Stacy’s brief flirtation with Brit pop:
