Free kibbles

ECONOMY:

New home sales fell an unexpected 12.4 percent in July. The central planners were wrong again. They're always wrong. They can never be anything but wrong.

How "regime uncertainty" - the uncertainty over what policies government will implement and what effect they will have on business - effect business.

Nine economic principles necessary to understand economics. This one is arguably the one that's most under fire in the modern world:

"6. People are Rational. This is a lot more controversial than it should be. When we say that people are rational, we mean that they will tend to do things that they expect to provide them with net benefits. We don’t mean that they will always make the right decision, that they have complete information, or that they will never make mistakes. We mean that they have goals, they tend to choose the means that they believe are appropriate to achieve them, they respond to incentives, and they learn from mistakes."

Everybody makes mistakes, but if you make a mistake in a system of voluntary exchange, only you and the people around you suffer. When central planners make mistakes, and since central planners know less about your wants and abilities than you do every decision a central planner makes is a mistake, everybody suffers with the possible exception of the central planner and his cronies.

FEDERAL RESERVE:

The Fed doesn't have a clue. Really.

"Before the meeting, officials at the Federal Reserve Bank of New York, which manages the Fed's portfolio, had grown concerned, according to people familiar with the matter. The Fed's portfolio of mortgage-backed securities was about to begin shrinking much more rapidly than anticipated, as low mortgage rates led more Americans to refinance their mortgages. That in turn meant the mortgage-backed securities held by the Fed were being paid off. 

The size of the Fed's portfolio has become one of the central bank's major monetary tools. A shrinking portfolio in the face of slowing economic growth was unwelcome to many officials, including New York Fed President William Dudley. It amounted to prematurely applying the brakes.

The New York Fed's markets chief, Brian Sack, had been revising up his estimates of how much the portfolio would contract. In a memo circulated by Mr. Sack's group a few days before the meeting, the estimate was revised up again. In March, the group projected the portfolio would contract by a bit more than $200 billion by the end of 2011. In a memo circulated by Mr. Sack's group a few days before the meeting, the estimate was revised to up to $340 billion. In addition, about $55 billion in debt issued by the mortgage giants Fannie Mae and Freddie Mac that the Fed held would likely be paid off. Taken together, it represented a potential 20% drop in the Fed's holdings in 18 months' time"

They are always surprised at the consequences of their policies. This is the fatal conceit of central planners.

EDUCATION:

Government school plans to tag children with RFID chips. We did this to ourselves.

HEALTH CARE:

"AIDS and HIV: Lies, Cover-up, Deception, Profits and Genocide"

Never allowing a crisis to go to waste, government is using the egg salmonella issue to push for more central planning of our food supply. As we know, government uses every power it obtains against the people. Like we need more swat teams invading food suppliers. Our food supply is already lower quality, more expensive and more disease-prone that it would be in a system of voluntary exchange, and centralizing more power over it will make things worse.

"Inquiring minds are asking exactly how many eggs were originally found to be contaminated, leading to this recall and media hysteria. Given the history of these events, we suspect it is not dissimilar to the Chilean grape scare of the 1980's in which two grapes in Chile were found to be "tainted" with Cyanide, leading to a nationwide panic surrounding imported fruits.

It should be noted that the author had soft-boiled eggs, and mopped up his egg yolks with toast for the last two days. Symptoms to look for, as reported by the mainstream media, have yet to surface. Of course, this could be due to the fact that we prefer to eat eggs originating from free-range, vegetarian fed chickens that were bred on small farms."

Which is what almost everybody would eat if government hadn't already taken so much control of our food supply.

"As to the issue of increased regulation about which the commissioner, and undoubtedly larger food manufacturing plants, are anxiously interested, it is important to point out that the FDA does have authority to inspect the facilities, specifically the two main facilities where this salmonella crisis originated. But guess what? They never did:

The Food and Drug Administration, which has responsibility for the safety of whole eggs, had never inspected the two Iowa-based facilities at the heart of the massive recall that began 10 days ago. Nor had the U.S. Department of Agriculture or the Iowa Department of Agriculture and Land Stewardship. In the case of Wright County Egg, the company had a history of labor and environmental infractions, including one that stemmed from workers handling manure and dead chickens with bare hands.

"It is shocking that nobody was in these facilities, but it also illustrates that egg-laying facilities have fallen into the crack between the government agencies that are responsible for food safety," said Caroline Smith DeWaal, director of food safety at the Center for Science in the Public Interest, an advocacy group."

How many times are we going to fall for this scam? This is what invariably happens when government takes over responsibility for safety instead of producers in a competitive marketplace. The problem isn't too little government power. The problem is far too much government power.

"For those following the economic crisis and the BP oil disaster, it should all make sense. Just as the SEC failed to enforce existing laws to stop market manipulation and prevent extreme leverage in the system, and as Minerals Management Service regulators failed to inspect the Deepwater Horizon oil rig, the FDA failed at their job.

Yet, in all three cases, the bureaucrats in power, rather than admitting their own failures and turning in their resignations, hit the mainstream media news channels and tell us the problems could have been prevented with more legislation."

Don't forget the mine collapse in West Virginia and every other disaster in areas regulated by government. Think about it. The marketplace least regulated by government is the internet, therefore there are no disasters on the internet. Another lightly regulated market is high tech. There's no disasters in high tech. The marketplace doesn't allow them. Government creates the environment that leads to disasters.

FOREIGN POLICY:

Recommended reading of several books about blowback.

LOCAL:

Montgomery Co. stole money from taxpayers at the point of a gun, taking that money out of the productive economy, it wasted a bunch of it on bureaucracy and vote buying, and now it's giving a smaller portion of that money to city governments who will waste more of it on bureaucracy and vote buying before they finally inject it into the unproductive, political economy into projects people won't pay for voluntarily, which means they don't produce wealth, all in the name of economic stimulus. Only an evil or deluded person would think this provides stimulus compared to allowing (I hate that word) the people to keep their own money and use it as they choose to in the productive, private economy. The private economy, because it is funded by voluntary exchange, creates wealth. The political economy, because it's funded by theft at the point of the government's gun, always destroys wealth.

MISC:

The Art of the Steal: How government and its cronies use the police power of government to rob people blind.

Author exposes owners of the Florida Marlins for lying about how much money they make in order to get taxpayers to fund a stadium.

"It’s also noteworthy that the Marlins’ fraud was not uncovered by any traditional bastion of establishment “journalism,” but by Internet-based reporting, not just from Passan but the sports blog Deadspin, which obtained and published financial statements for a number of MLB clubs including the Marlins. (Funny how Congress and the media never has time for stuff like this, but they have inexhaustible interest in the personal drug habits of baseball players.)"

Not so funny.

Marketing lessons explain why the Grateful Dead was the most popular touring band of all time. Hint: they didn't hide behind intellectual property.

"The uninitiated wouldn't associate the Grateful Dead with finance or commerce or business practices of any sort. But this impossible-to-categorize, San Francisco Bay–area band is, in its various iterations, the most successful touring band of all time.

By no means the best instrumentally or vocally, the band built its success on an approach to the music business that was 180 degrees from their competitors. While other bands posted signs at the entrances to concert venues saying, "Recording and photography of tonight's performance is strictly prohibited," the Grateful Dead encouraged fans to record their concerts and shoot pictures of the show."

The result was unlimited free marketing for the band, and it paid off.

This is a great point: the free market is not something anybody has to take on faith; it's an empirical measurement. There's nothing invisible about the free market. Prices are exact. Quantities are exact. Voluntary exchanges are unequivocal. If people want to buy a product at the offered price, they buy it. If they don't want to pay that much for the product, they don't. Compare this to government enforcing regulations and setting prices such as the minimum wage.

Germany's industrial rise was largely because it had no copyright laws.

"Indeed, only 1,000 new works appeared annually in England at that time — 10 times fewer than in Germany — and this was not without consequences. Höffner believes it was the chronically weak book market that caused England, the colonial power, to fritter away its head start within the span of a century, while the underdeveloped agrarian state of Germany caught up rapidly, becoming an equally developed industrial nation by 1900.

Even more startling is the factor Höffner believes caused this development — in his view, it was none other than copyright law, which was established early in Great Britain, in 1710, that crippled the world of knowledge in the United Kingdom."

I don't find this astonishing at all.