You better believe it. If they can. There’s is so much money and power behind keeping the corporatist boondoggle going it is hard to see how the Ex-Im dragon could be slain for good. (It can be slain however.) The corporations are for it. The unions are for it. The President is for it. The Democrats in Congress are for it. Many of the Republicans in Congress are for it.
Who’s against it? The taxpayers, a few modern liberals like Ralph Nader, and some scrappy freemarketeers.
But we are darn scrappy.*
The Ultimate Crony Capitalist State is feeling a bit unstable right now. Instability is the great enemy of the Chinese Communist Party. The market mechanism continues to bleed through all across the Chinese economy and Beijing is getting (more) nervous. The state “capitalism” miracle is looking a lot less miraculous these days.
The Chinese stock market is off over 20% since mid June. (Though still up more than that for the year.) A property bubble continues to pop. Exports have slowed. Change is in the air. Of course it’s been in the air before.
Now it looks like China may have deployed its own version of the “Plunge Protection Team” to hold back reality. Thing is reality is reality.
The reason we had the Crash in 2008 was because the Fed kept rates too low for too long. In response to the tech implosion and then the 9-11 attacks Allan Greenspan and the FOMC panicked and ended up inflating a worldwide housing boom which morphed into the disaster (to put it mildly) which is the Great Recession. There’s more to it than that but that’s basically what happened.
Consider now that Ben Bernanke (and Janet Yellen) have kept interest rates much lower for even longer than Greenspan did.
The periphery of Europe has been eroding for a long time but things are speeding up. Think of Greece as a headland crumbling into an unrelenting and angry financial sea.
So the people will decide. That’s good I suppose. Is the EU about to retreat from its frontiers? Will the Greek people capitulate? What will equity and debt markets do? Which country is next? If you have the answer to any of these questions please feel free to contact me in short order.
The principal author of our current economic ills doesn’t seem to know history any better than monetary policy.
When the Obama administration announced that it was planning to replace Alexander Hamilton on the ten dollar bill with an unspecified woman, former Fed Chairman Ben Bernanke leapt into the fray. He said he was “appalled” by the decision since Hamilton “was without doubt the best and most foresighted economic policy maker in US history.” He proposed that Andrew Jackson be removed from the twenty dollar bill instead.
A New York Sun editorial on June 23 dryly noted that Hamilton was the author of the Coinage Act of 1792, which represents the very sound money that Bernanke has done everything in his power to destroy. The Sun, however, tempered its criticism with the following comment: “We understand that there are serious persons who reckon Hamilton, who was notoriously partial to federal power, would not have opposed the idea of fiat paper money. This point has been marked for us by no less a scholar than the journalist and historian Myron Magnet…. Let us stipulate Mr. Magnet’s point.”
Let us not stipulate Magnet’s point, because it is incorrect. Hamilton condemned paper money not backed by gold or silver as an evil. Here is what Hamilton actually said: “The emitting of paper money by the authority of Government is wisely prohibited….Though paper emissions, under a general authority, might have some advantage…, yet they are of a nature so liable to abuse—and it may even be affirmed, so certain of being abused—that the wisdom of the Government will be shown in never trusting itself with the use of so seducing and dangerous an expedient…. The stamping of paper is an operation so much easier than the laying of taxes, that a government, in the practice of paper emissions, would rarely fail…to indulge itself too far in the employment of that resource…even to [ the point of creating]…an absolute bubble.” [ Report to the House of Representatives, Dec 13, 1790]
HERE are the companies which are part of the U.S. Coalition for TPP.
HERE are the amounts the companies gave to members of the US Senate in the run up to the ultimate vote.
We are seeing an interesting shakeout this Congress There is a new generation of leaders in Washington who, for the most part, do actually want to shrink government. This stands in contrast with the old school Republicans who really have very little interest in reining in Washington. In fact in most cases the latter group has NO interest in reining in Washington.
This is an interesting tack.
At a dinner at the organization’s annual Atlas Summit, this year in Nashua, New Hampshire, the organization “dishonored” those who use government to enrich themselves at the expense of taxpayers and competitors as well as those with political power who empower these cronies. TAS CEO Aaron Day explained the origins of the contest. Nick Sorrentino, a contest advisor and operator of the againstcronycapitalism.com website, gave the keynote address documenting the current crony plague. And TAS scholar Edward Hudgins announced the winners. (Pictured at right.)
Yeah, the reckoning has been coming for a very long while. The Fed is out of control and lost. The stock market as it is is not sustainable. Many other markets are in the same boat.
Any market which reflects the wants and desires of the rich (aka those closest to newly “printed” money) is pretty much in a bubble. Art, wine, etc. Even residential real estate in places like London and New York are bubblicious.
It isn’t going to keep going. When this bubble bursts there will be serious dislocation economically and politically.
Below Marc Faber opines on Carl Icahn’s comments.
As governor of Wisconsin Scott Walker has seen more than his share of challenges for the period he’s held the office. Through elections, recalls, an army of state workers invading the state capital and demanding his head, he’s stayed pretty cool. He also won. It appears that he knows how to make decisions and how to see things through. But he has no national economic experience.
What does he believe? What would he do? We have a few clues.
One of them is which economic thinkers Walker has been talking with.
Rumor has it John B. Taylor, prominent economist at Stamford and the Hoover Institution and the governor have been sharing ideas.
What then do we know about Taylor?
TTIP (TransAtlantic Trade and Investment Partnership), TPP (TransPacific Partnership), TPA (Trade Promotion Authority, aka fast track authority), so many acronyms. It’s almost like they are confusing on purpose.
Think of the TTIP as the TPP for Europe.
Open this industry up. I don’t mean “deregulation” like in the 1970s. I mean let’s examine why it took forever for Virgin to get routes within the USA. (A fantastic airline by the way. I encourage anyone with the opportunity to fly Virgin to do it. It’s almost pleasant.) Let’s make it easier for international carriers to do business here. Let’s stop protecting the legacy carriers and start getting some of those lay down seats on domestic flights.
As the great economist Murray Rothbard observed, cartels and monopolies don’t last very long unless they are protected by the government.
I have long been a fan of Professor Williams. His arguments are compelling. He is an enemy of crony capitalism and friend of liberty. If you don’t know him I highly encourage you to read his work.
The attached interview is a very worthwhile listen.