Are Tax Cuts Really Just Undemocratic Exploitation?

Will Wilkinson, the vice president for policy at the Niskanen Center, does not like the tax bill just passed by Congress. Writing in The New York Times, he finds the legislation ‘notably generous to corporations, high earners, inheritors of large estates and the owners of private jets.’
Wilkinson has discovered a surprising source for the legislation he dislikes so much. It is none other than the libertarian idea, promoted by Murray Rothbard and Ayn Rand, that taxation is theft. Under their theory of ‘absolute’ property rights, taxation was ‘morally criminalized.’ Democratic majorities, in this view, cannot override property rights.
Wilkinson rejects this account. ‘The idea that there is an inherent tension between democracy and the integrity of property rights is wildly misguided.’ Democracy is a means for the poor and middle class to protect themselves from exploitative elites. Democracy is a relatively recent innovation; in pre-democratic states, ruling elites exploited the ‘lower orders.’ Those not in the ruling elite need the redistributive democratic state for protection.
The fault is no doubt mine, but I find Wilkinson’s line of thought difficult to follow. How does the thought that taxation is morally wrong underlie a tax bill? If you reject taxation, would you not oppose taxes rather than enact new taxes? Perhaps what Wilkinson has in mind is this: in present circumstances, Republicans under nefarious libertarian influence could not proceed all the way to abolition of taxation. The best they could manage is not to tax the well-off as much as Wilkinson thinks appropriate.

This post was published at Ludwig von Mises Institute on 12/21/2017.

Trump & Company Channel Ayn Rand

Ayn Rand made her mark by writing and lecturing on a philosophy called Objectivism. It’s a philosophy that flips upside down everything that most Americans hold dear. Under Objectivism, greed is good, selfishness is noble, helping one’s fellow human beings is for suckers and an outright evil. The philosophy also holds that big government is bad and obscenely rich corporate titans are the real heroes of society. (See related articles below.) The Koch brothers’ network of billionaires has been financing the proliferation of Rand’s books into high schools and colleges for decades.
Trump is the personification of the Ayn Rand creed and his elevation from reality TV host to the Oval Office is valid proof that the Kochs and their ilk have spent their money wisely.
Trump’s gilded mansions and lifestyle are also mother’s milk to the one percenters he has packed into his cabinet. And their spouses. His excesses makes theirs seem routine.
In the same week that Hurricane Harvey was about to leave a large swath of Texas looking like a third world disaster, Louise Linton, the wife of the U. S. Treasury Secretary, was bragging in a post about her designer clothing as she disembarked from a U. S. chartered plane with her husband after an official business trip. Linton flouted her #hermes, #valentino, #roulandmouret, and #tomfordsunnies attire. When a female reader responded in a post: ‘glad we could pay for your little getaway,’ Linton berated her in a subsequent post for being ‘adorably out of touch,’ and bragging about how much more in taxes Linton and her husband pay. (Linton apologized after the story went viral.)

This post was published at Wall Street On Parade on August 31, 2017.

The Death Of America’s “Common Man”

America’s Common Man exists no more – gone and forgotten. Once he was lauded as the salt of the earth – our country’s embodiment of what made us special, of what made the great democratic experiment successful, of what made of the United States the magnetic pole for the world’s masses. Politicians paid their rhetorical respects, poets exalted him in paeans of praise, Aaron Copeland composed an ‘Fanfare to the Common Man’ suite. It was an honorable term, an affective shorthand for the Working Man, the Artisan and the Shopkeeper, the clerk. All now passed from our language and from our consciousness. Instead, we are offered the ‘hard working middle class people who pay their taxes, obey the law and worry about their children’s future.’ The linguistic dross of the hackneyed stump speech.
Loss of the Common Man is not due to progressive economic realities and a naturally evolving political culture. More educated Americans are caught in the grip of long-term stagnation than ever before, they have less likelihood of social mobility than ever before, more have every reasonable expectation that their children will be worse off than they are, more are politically marginalized by a party system that serves up a restricted menu of options which effectively disenfranchises 25% or so of voters. The Common Man has lost the attention as well as the concern of the country’s elites. He has been marginalized in every respect but one – he is sovereign audience for a pop culture that provides a heady brew of distractions. In that realm of fantasy he reigns supreme while the serious action which shapes his life takes place elsewhere.
Today, to call a person common is an insult, just as we have degraded the term working class. The connotations are heavily pejorative -they’re failures, they’re losers, they had the American Dream within reach but lacked the will and the spirit to grab it. It is natural, and just, that they should live out their lives on scant rations. It’s their own fault. This Victorian ethic grounded in Social Darwinism has now been restored as part of the national creed. Fitted out in the post-modern fancy dress of market fundamentalist economics, Ayn Randish homilies of narcissistic ego-mania, and a parade of revivalist Christian sects that mix New Age Salvation with balm for anxious egos, this beggar-thy-neighbor ideology dominates our public discourse. It has put on the back foot those who still adhere to the enlightened humanism which propelled progressive thinking and policy for a century.
All this is no accident. Powerful interests have orchestrated a relentless campaign for more than forty years to reconfigure American life in accord with their reactionary aims and principles. This is now obvious to anyone who cares to look. The key questions are: why have so few cared to look, and why the ease with which the crusade has won converts, fellow travelers and the acquiescence of the country’s elites.

This post was published at Zero Hedge on Jun 26, 2017.

Alan Greenspan, Sellout

Sebastian Mallaby is the Paul A. Volcker Senior Fellow for International Economic Relations at the Council on Foreign Relations. One can be sure, then, that his new comprehensive book, The Man Who Knew: The Life and Times of Alan Greenspan, reflects an Establishment point of view. As if this were not enough to tell us where the book is coming from, Mallaby informs us that he had Greenspan’s full cooperation in writing it. ‘This book is based on almost unlimited access to Alan Greenspan, his papers, and his colleagues and friends, all of whom were generous in their collaboration.
Though the book is hardly a panegyric to Greenspan, Mallaby views his subject with considerable favor. Nevertheless, the book contains ample material for a more severe verdict: Greenspan abandoned the free market convictions he effectively defended early in his career as an economist. To uphold economic truth was not the path to the power and influence Greenspan sought; and he readily adjusted his beliefs to fit with his ambitions.
Greenspan attached himself to Ayn Rand’s inner band of disciples; but his adherence to free-market economics did not stem from his alliance with Objectivism. Greenspan learned economic theory from Arthur Burns at Columbia University. For Greenspan, like his mentor Burns, statistics had primary importance: economic theory emerged from discerning patterns in the data and was strictly subordinate to its empirical sources. ‘Burns was the chief heir to Wesley Mitchell’s empiricist tradition, and his influence restrained any enthusiasm that Greenspan might have felt for the new trends that had begun to stir in economics. … Even the cleverest econometric calculation was limited because yesterday’s statistical relationships might break down tomorrow; by contrast, finer measures of what the economy is doing are more than just estimates – they are facts.’

This post was published at Ludwig von Mises Institute on April 21, 2017.

Greenspan on Gold: Three Stages

“When our friends get elected, they aren’t our friends any more.” — M. Stanton Evans
My deceased friend Stan Evans became deservedly famous for this law of politics.
This law applies to high-level appointments.
Back in the days when I was starting out in my career, Alan Greenspan wrote an article for Ayn Rand’s Objectivist newsletter. It was pro-gold standard. It has been reprinted all over the Web. Back then, only a handful of us knew about it. I reviewed it in 2007 here:
personally launched the modern era of extreme intervention by the Federal Reserve in order to stop a collapse in the stock market. That took place in the second month of his chairmanship at Federal Reserve. It was in late October, 1987. The American stock market had dropped by 20% in one day. Around the world, other markets had dropped by a comparable percentage. No one knew why then. No one knows why now.
Greenspan and the Federal Reserve Open Market Committee intervened the next day to inject fiat money into the banking system in order to stop the collapse. That was the beginning of what became known as “Greenspan’s put.” Stock market investors knew from that point on that the Federal Reserve would not allow the market to fall significantly. That carried through right until Bernake’s intervention in 2009.

This post was published at Gary North on February 18, 2017.

The Great Gatsby and the Fed

Even the most innocent novel can give its reader a fresh perspective on the economy during the author’s time. Economic writings and economic conditions often inspired great writers who, in turn, allowed us to contemplate either a glimpse or a detailed picture of economic reality. Stendhal was influenced by Malthus, Flaubert by Bastiat, and Ayn Rand by Mises. Other novelists faithfully described the economic times of their lives. mile Zola, for instance, brilliantly accounts for the French 1882 financial crisis in his novel L’Argent (1891) and unconsciously exhibits the evils of fractional reserve banking.
Just as Zola’s L’Argent, so too F. Scott Fitzgerald’s The Great Gatsby (1925) is a product of the business cycle. Some have interpreted Fitzgerald’s novel as an indictment against capitalism. It is not. It has been said that Gatsby is a product of alcohol prohibition, but Gatsby is also the unfortunate product of the Federal Reserve’s expansionist monetary policy. The ‘constant flicker’ of the American life described by Fitzgerald in his celebrated novel is no less than the artificial boom driven by the Fed during the roaring twenties.
Inequality and the Fed during the Twenties The Franco-Irish economist Richard Cantillon was among the first to notice the redistributive effects of monetary creation. Cantillon observed that the first to receive the newly created money saw their incomes rise whereas the last to receive the newly created money saw their purchasing power decline as consumer price inflation came about.

This post was published at Ludwig von Mises Institute on Feb 18, 2017.

Kunstler’s Forecast 2017: The Wheels Finally Come Off

‘There is no other endeavor in which men and women of enormous intellectual power have shown total disregard for higher-order reasoning than monetary policy.
– David Collum
American Notes
Apart from all the ill-feeling about the election, one constant ‘out there’ since November 8 is the Ayn Randian rapture that infects the money scene. Wall Street and big business believe that the country has passed through a magic portal into a new age of heroic businessmen-warriors (Trump, Rex T, Mnuchin, Wilbur Ross, et. al.) who will go forth creating untold wealth from super-savvy deal-making that un-does all the self-defeating malarkey of the detested Deep State technocratic regulation regime of recent years. The main signs in the sky, they say, are the virile near-penetration of the Dow Jones 20,000-point maidenhead and the rocket ride of Ole King Dollar to supremacy of the global currency-space.
I hate to pound sleet on this manic parade, but, to put it gently, mob psychology is outrunning both experience and reality. Let’s offer a few hypotheses regarding this supposed coming Trumptopian nirvana.
The current narrative weaves an expectation that manufacturing industry will return to the USA complete with all the 1962-vintage societal benefits of great-paying blue collar jobs, plus an orgy of infrastructure-building. I think both ideas are flawed, even allowing for good intentions. For one thing, most of the factories are either standing in ruin or scraped off the landscape. So, it’s not like we’re going to reactivate some mothballed sleeping giant of productive capacity. New state-of-the-art factories would require an Everest of private capital investment that is simply impossible to manifest in a system that is already leveraged up to its eyeballs. Even if we tried to accomplish it via some kind of main force government central planning and financing – going full-Soviet – there is no conceivable way to raise (borrow) the ‘money’ without altogether destroying the value of our money (inflation), and the banking system with it.

This post was published at Wall Street Examiner on January 1, 2017.

Ray Dalio Praises Trump: Predicts “Huge” Changes; It Will Be “Glorious To Be Rich”

In one of the most euphoric praises for Donald Trump and the president-elect’s fledgling administration to date, overnight Bridgewater founder Ray Dalio said economic changes under the Trump administration may be more dramatic than shifts from ‘the socialists to the capitalists’ in the U. K., U. S. and Germany from 1979 to 1982, and predicted that “we are about to experience a profound, president-led ideological shift that will have a big impact on both the US and the world.”
Comparing Trump to Margaret Thatcher, Ronald Reagan and Helmut Kohl, Dalio said the incoming administration may have a much bigger impact on the U. S. economy than can be measured by tax changes and fiscal spending. The Trump era could ‘ignite animal spirits’ and attract productive capital.
In his summary of Trump’s economic policies, Dalio urges readers to read Ayn Rand “as her books pretty well capture the mindset. This new administration hates weak, unproductive, socialist people and policies, and it admires strong, can-do, profit makers. It wants to, and probably will, shift the environment from one that makes profit makers villains with limited power to one that makes them heroes with significant power.”
The shift from the past administration to this administration will probably be even more significant than the 1979-82 shift from the socialists to the capitalists in the UK, US, and Germany when Margaret Thatcher, Ronald Reagan, and Helmut Kohl came to power. To understand that ideological shift you also might read Thatcher’s ‘The Downing Street Years.’ Or, you might reflect on China’s political/economic shift as marked by moving from ‘protecting the iron rice bowl’ to believing that ‘it’s glorious to be rich.’ He adds that the “shift by the Trump administration could have a much bigger impact on the US economy than one would calculate on the basis of changes in tax and spending policies alone because it could ignite animal spirits and attract productive capital. Regarding igniting animal spirits, if this administration can spark a virtuous cycle in which people can make money, the move out of cash (that pays them virtually nothing) to risk-on investments could be huge.”
Regarding attracting capital, Trump’s policies can also have a big impact because businessmen and investors move very quickly away from inhospitable environments to hospitable environments. Remember how quickly money left and came back to places like Spain and Argentina? A pro-business US with its rule of law, political stability, property rights protections, and (soon to be) favorable corporate taxes offers a uniquely attractive environment for those who make money and/or have money. Looking at foreign policy under Trump, Dalio predicts that “we should expect the Trump administration to be comparably aggressive. Notably, even before assuming the presidency, Trump is questioning the one-China policy which is a shocking move. Policies pertaining to Iran, Mexico, and most other countries will probably also be aggressive.“

This post was published at Zero Hedge on Dec 20, 2016.

If Trump Nominates John Allison as Bank Supervisor at the Fed, It Will Be a Triumph for Charles Koch and the Loony Ideas of Ayn Rand and Greenspan

On December 4 the Wall Street Journal reported that President-elect Donald Trump was considering the following three individuals for Vice Chairman of the Federal Reserve for Bank Supervision: John Allison, the long serving head of BB&T bank and a Board Member of the right-wing Cato Institute which was half owned by the Koch brothers for decades; Paul Atkins, a consultant, former member of the Securities and Exchange Commission and a Visiting Scholar at the right-wing think tank, the American Enterprise Institute, which has heavy ties and financial backing from the Koch brothers. Also under consideration, and as far removed as one could possibly get from the other two, Thomas Hoenig, Vice Chair of the Federal Deposit Insurance Corporation and the former President of the Federal Reserve Bank of Kansas City.
Thomas Hoenig would deliver America from the stranglehold of the Ayn Rand lunatic fringe and the libertarian propaganda swamp that the Federal Reserve’s been thrashing about in since Ayn Rand’s devoted disciple, Alan Greenspan, chaired the Fed for a staggering 18 years, through four Presidents, from 1987 to 2006. Atkins would dig the Ayn Rand swamp deeper while Allison would try to elevate it to become the formal creed of every college and university in America – something he and the Koch brothers are well on their way to doing already.
Charles Koch and his related foundations have famously funneled tens of millions of dollars into the economic programs at public universities, frequently mandating the approval of faculty hires and curriculum to push free markets and deregulation. In partnership with that effort, the bank that Allison formerly headed from 1989 to 2008, BB&T, was providing lavish gifts to the schools while mandating that Ayn Rand’s book, Atlas Shrugged, be taught and distributed to students.
So who exactly was Ayn Rand? The book that best connects all the pieces of Ayn Rand’s philosophy to today’s right wing free markets mantra, is Ayn Rand Nation: The Hidden Struggle for America’s Soul by Gary Weiss.

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

Ayn Rand Institute on Trump

One Small Step for Dictatorship, by Onkar Ghate; posted at the Ayn Rand Institute site.
There are many points on which I agree with the author. Instead of writing these again, I will offer that my agreement can be found in this post, beginning with the section entitled ‘The Next Four Years’ and continuing through the end of the post. To summarize: I don’t really know what Trump will do on many topics; I do know he will do many things that both libertarians and objectivists will agree are harmful to liberty; I agree that the danger is in what follows Trump more than the danger of Trump himself.
At the same time, there is much that I take exception to in this opinion piece. In the interest of (reasonable) brevity, I will expand only on two points.
Myths, Misunderstandings and Outright lies about owning Gold. Are you at risk?
On November 8, 2016, the United States took its first step toward dictatorship.
Ghate offers that it is not that Trump will act the dictator; it is the reasons people voted for Trump that lead him to this statement. I suggest: whatever one believes to be the reasons people voted for Trump, it doesn’t square that his election represented the ‘first step toward dictatorship.’

This post was published at Lew Rockwell on November 26, 2016.

Sorry, Krugman: Austerity Is Good for the Economy

Paul Krugman again went after Germany on August 26 in his New York Times column, “Germany’s Drag.” After the German government posted a 1.2 percent of GDP fiscal surplus for the first half of 2016 – way above the IMF forecast of 0.3 percent – it seems as if Krugman couldn’t contain himself anymore. He claimed that “what we’re seeing in elite circles is a very belated but still welcome realization that monetary policy badly needs an assist from fiscal expansion.” However, there are two evil opponents of more government spending: The Republican Party in the US, led by Paul Ryan (the “hard-line, Ayn Rand-loving and progressive-tax-hating conservative”), and Germany.
However, his critique of the German austerity measures seems rather dubious, considering that European countries with budget surpluses or small deficits have clearly done better than countries with high deficits since the economic crisis. One just needs to look to countries such as the United Kingdom, Ireland, or even Spain – the countries that reduced their deficits significantly in recent years – and compare them with Greece or Portugal. One will easily discover which policies worked better. Also, Scandinavian countries, which Krugman is generally very fond of, have consistently posted small deficits or even surpluses in the past, as well. In 2015, Norway reached a surplus of 5.7 percent of GDP and Sweden had a balanced budget. But strangely enough, the great, socialist Nordic countries don’t count here for Krugman. Still, there seems to be a clear correlation between economic growth and low deficits, as can be shown in the following graph.

This post was published at Ludwig von Mises Institute on September 6, 2016.

Koch Fronted Regulatory Hit Woman Edges Closer to Seat on SEC

Democrats sitting on the U. S. Senate Banking Committee at Tuesday’s confirmation hearing to take testimony from President Obama’s two nominees for the Securities and Exchange Commission (SEC) must have felt like they were having an out of body experience – listening to the human personification of billionaire Charles Koch’s money aping his Ayn Rand, anti-regulatory double-talk from a witness seat. What had to be particularly nauseating to them was that this nominee was sent to them by President Obama who ran as a Democrat on a platform of hope and change. While the political makeup of the SEC is prescribed by law, so that one of these two nominees had to be a Republican, why pick this particular Republican?
On October 20, 2015, President Obama announced that his nominee to fill a Republican seat on the SEC would be Hester Peirce, a Senior Research Fellow and Director of the Financial Markets Working Group at the Mercatus Center at George Mason University. According to SourceWatch, the Mercatus Center ‘was founded and is funded by the Koch Family Foundations.’
The Board of the Mercatus Center looks like a Koch brothers’ fan club. Charles Koch, Chairman and CEO of Koch Industries, sits on the Board as does Richard Fink, Executive Vice President of Koch Industries, a sprawling oil, lumber and commodities trading company that is majority owned by Charles and David Koch who each have a net worth currently estimated by Forbes at $42.3 billion.
Also on the Mercatus Board is Brian Hooks, President of the Charles Koch Foundation, and Manuel H. Johnson, a former professor at Koch-funded George Mason University where he held the Koch Chair in International Economics.

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

Ten years after the Greenspan Fed

Ten years ago this week, Alan Greenspan left his post as head of the US Federal Reserve, facing disgrace among hard money advocates, which largely persists to this day.
However gold investors can learn an important lesson from how little influence Greenspan, one of the gold standard’s most eloquent backers, had during his 18-year tenure. A lesson that provides important clues as to future central bank monetary policy and its effect on precious metals prices.
That Greenspan was, and remains, a hard money advocate, is beyond doubt. His landmark article ‘Gold and Economic Freedom,’ which was published in The Objectivist , an Ayn Rand-backed newsletter, fifty years ago this June, makes the case for a gold standard in layman’s terms, better than anyone before or since.
‘Gold and economic freedom are inseparable,’ wrote Greenspan. ‘The gold standard is an instrument of laissez-faire (capitalism) and … each implies and requires the other.’
Greenspan’s advocacy of the gold standard was a hugely controversial position in the 1960s and 1970s and remains so to this day. That this is so is in an illustration of the economics profession’s almost total support for policies that have turned all Western nations into de facto state-run economies.
Why did Greenspan compromise?
That Greenspan compromised his views on gold is well-known. During his time there, the US Federal Reserve spawned a series of bubbles, that sowed the seeds of the financial crisis of 2007-2008, as well as of instabilities that remain in the system to this day.

This post was published at GoldSeek on 3 February 2016.

Why The Government Hates Gold

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. – Ayn Rand, ‘Atlas Shrugged’
I don’t know about anyone else, but I find it ironic that Alan Greenspan, the guy who inflated the fiat currency and debt bubble – the Great U. S. Ponzi Scheme, was a disciple of Ayn Rand before Henry Kissinger got ahold of him and turned him inside-out.
I wanted to post an article that I read back in 2007 which shed even more light on the truth about what was unfolding economically in the United States:
There are few things that federal big spenders hate more than gold. Why? Because they know that, historically, gold has provided the best means by which people could protect themselves against the ravages of a rapidly depreciating currency.

This post was published at Investment Research Dynamics on December 30, 2015.


Jeff interviews Roslyn Ross, author of the book ‘A Theory of Objectivist Parenting’, topics include: objectivism, Atlas Shrugged, there can not be a healthy relationship between a government and a citizen, epistemology and abstraction, objectivist parenting, parenting with respect from birth, building a trusting relationship with your child, avoiding emotional repression, self medication vs spicing your life, Ayn Rand, the prolongation of childhood, raising children in reality, we feed fantasy to our children and exclude them from the world, bringing your child into actual life with you, moving to Nicaragua, Nicaragua is peaceful and cheap and much more…

The Dollar Vigilante

This post was published at Dollar Vigilante on SEPTEMBER 6, 2015.

Michael Hudson’s New Book: Wall Street Parasites Have Devoured Their Hosts – Your Retirement Plan and the U.S. Economy

The riveting writer, Michael Hudson, has read our collective minds and the simmering anger in our hearts. Millions of American have long suspected that their inability to get financially ahead is an intentional construct of Wall Street’s central planners. Now Hudson, in an elegant but lethal indictment of the system, confirms that your ongoing struggle to make ends meet is not a reflection of your lack of talent or drive but the only possible outcome of having a blood-sucking financial leech affixed to your body, your retirement plan, and your economic future.
In his new book, ‘Killing the Host,’ Hudson hones an exquisitely gripping journey from Wall Street’s original role as capital allocator to its present-day parasitism that has replaced U. S. capitalism as an entrenched, politically-enforced economic model across America.
This book is a must-read for anyone hoping to escape the most corrupt era in American history with a shirt still on his parasite-riddled back.
Hudson writes from his most powerful perch in chapters describing how these financial parasites have tricked our society into accepting them as a normal, productive part of our economy. (Since we write about these thousands of diabolical tricks four days a week atWall Street On Parade, poignant examples came springing to mind with every turn of the page in ‘Killing the Host.’ From the well-placed articles in the Wall Street Journal toa front group’s pleas for more Wall Street handouts in a New York Times OpEd, to thedirty backroom manner in which corporate speech was placed on a par with human speech in the Supreme Court’s Citizens United decision, to Wall Street’s private justice system and the Koch brothers’ multi-million dollar machinations to instill Ayn Rand’s brand of ‘greed is good’ in university economic departments across America – America has become a finely tuned kleptocracy with a sprawling, sophisticated public relations base.
How else to explain, other than kleptocracy, the fact that Wall Street’s richest mega banks collect the life insurance proceeds and tax benefits on the untimely deaths of their workers – all codified into law by the U. S. Congress – making death a profit center on Wall Street. Or, as Frontline revealed, that two-thirds of your 401(k) plan over a working lifetime is likely to be lost to financial fees.
Hudson writes: ‘A parasite’s toolkit includes behavior-modifying enzymes to make the host protect and nurture it. Financial intruders into a host economy use Junk Economics to rationalize rentier parasitism as if it makes a productive contribution, as if the tumor they create is part of the host’s own body, not an overgrowth living off the economy. A harmony of interests is depicted between finance and industry, Wall Street and Main Street, and even between creditors and debtors, monopolists and their customers.’
What has evolved, says Hudson, is that Wall Street banks have ‘become the economy’s central planners, and their plan is for industry and labor to serve finance, not the other way around.’
To gloss over the collapse of this depraved economic model in 2008, Hudson says these Wall Street central planners simply depict ‘any adverse ‘disturbance’ as being self-correcting, not a structural defect leading economies to fall further out of balance. Any given development crisis is said to be a natural product of market forces, so that there is no need to regulate and tax the rentiers.’

This post was published at Wall Street On Parade By Pam Marte.

Ayn Rand & Murray Rothbard: Diverse Champions of Liberty

Differences and Similarities
No one should attempt to treat Ayn Rand and Murray N. Rothbard as uncomplicated and rather similar defenders of the free society although they have more in common than many believe. As just one example, neither was a hawk when it comes to deploying military power abroad.* There is evidence, too, that both considered it imprudent for the US government to be entangled in international affairs, such as fighting dictators who were no threat to America. Even their lack of enthusiasm for entering WW II could be seen as quite similar.
And so far as their underlying philosophical positions are concerned, they both can be regarded as Aristotelians. In matters of economics they were unwavering supporters of the fully free market capitalist system, although while Rand didn’t find corporations per se objectionable, arguably Rothbard had some problems with corporate commerce, especially as it manifest itself in the 20th century. One sphere in which they took very different positions, at least at first glance, is whether government is a bona fide feature of a genuinely free country. Rand thought it is, Rothbard thought it wasn’t. Yet the reason Rothbard opposed government was that it depended on taxation, something Rand also opposed, so even here where the difference between them appears to be quite stark, they were closer than one might think.

This post was published at Acting-Man on August 28, 2015.

SoT #52 John Embry: The Public Has Been Set Up For Slaugher – It Doesn’t Have A Chance

One of the things that has bothered me a lot is the cognitive dissonance amongst – not the public, the public doesn’t have a chance, they’re being lied to constantly by the media – but what I find distressing is the cognitive dissonance amongst financial professionals. – John Embry on Shadow of Truth
The precious metals sector has been under violent manipulative attack since gold and silver peaked in price in 2011. The western Governments and Central Banks had no choice but to attack real money because it would be the only way that they could continue implementing their ultimately catastrophic monetary policies in order to prevent systemic collapse.
But as Ayn Rand asserted a long time ago, you can ignore reality but you can’t ignore the consequences of ignoring reality. It is likely that the move by the Chinese to begin devaluing their currency is an acknowledgement of this reality and it represents China’s attempt to get a head start on the rest of the world in order to minimize the consequences it will suffer relative everyone else.

This post was published at Investment Research Dynamics on August 13, 2015.

Shorting The Buyback Contradiction

‘To arrive at a contradiction is to confess an error in one’s thinking; to maintain a contradiction is to abdicate one’s mind and to evict oneself from the realm of reality’ ? Ayn Rand The positive short?term price action of buybacks lures unsuspecting investors on the promise that such a shell game is sustainable. Many on Wall Street support such activities as it promotes rising stock prices, ultimately bolstering their wallets. However, clear?headed reason would argue that unless one is an executive whose compensation is tied to metrics influenced by the effects of share buybacks, there are few instances that support this use of corporate resources.
Those who promote buybacks base their support on the fact that fewer shares outstanding, a by?product of the share repurchases, produces more earnings per share (EPS) as the numerator in the EPS equation is unchanged while the denominator is smaller. In ‘Corporate Buybacks; Connecting Dots to the F?word’ we point out that most investors fail to consider the use of assets required to execute the buyback and the current valuation of those companies. Even more worrisome they fail to fully understand the implications of spending corporate capital to repurchase (often expensive) shares instead of investing it in the future growth of companies. The obscured shortcomings of share repurchases actually highlight a blatant contradiction. Share repurchases boost EPS, making valuations appear cheaper, however at the same time they reduce the ability of companies conducting such buybacks to grow future earnings. Recognition of this circumstance presents significant opportunities for those willing to embrace the ‘realm of reality’. This article uses logic and mathematical analysis to demonstrate the serious price distortions share buybacks are creating and offers specific trade recommendations to capitalize on those distortions.

This post was published at Zero Hedge on 07/30/2015.