The Re-re-re-invention of Socialism

It has been in the works for some time. The process of the umpteenth Socialist transformation may be close to completion in the US, where the Democratic Party has been taken over by postmodern, hard, pragmatist reds.

The Dutch Labor Party on the other hand has just woken up to the need for a new coat - the old Liberal gown now all worn out. Leftist political ideologues have been overheard pleading for a return to old-fashioned, red authoritarianism. But this transformation is still an ongoing process at this point in time.

The metamorphosis was also on the agenda Monday night when the Dutch Labor leader and the Finance Minister, Wouter Bos delivered the so-called Den Uyl Oration (Den Uyl being the Dutch Barack Obama, a Socialist firebrand dating back almost four decades). The speech offers a rare insight into the statist, Socialist mindset.

He dealt with the temporary adoption of Liberalism by the Left, now with thinly veiled distaste referred to as Neo Liberalism. Obviously the Left have been wearing the Liberal coat much longer, but it didn't come to the Netherlands before Bill Clinton and Tony Blair toted it as "the third way".

The Labor leader enjoyed brief popularity last year when the voters credited him with "having saved the banking sector" after he nationalized and bailed out a number of banks considered too big to fail.  He and his party are now at an all time low in the polls.

Bos refers to the market in terms of an out of control monster: "Third way progressives fell asleep with the markets tamed, but woke up when the monster had broken its chains" (I kid you not).

Bos has accepted the Obama as the ideological leader of New Old Labor movement after Obama "proved that transnational corporatism (globalism) is man-made and makeable; it's not a natural process and unavoidable as Neo Liberals have been falsely telling Social-Democrats for years". Apparently Bos just figured out that the regulation of markets is a distinct possibility and politicians can dictate what bankers may earn, without capitalism crashing down to earth in shock. Principle is a stranger to these pragmatists.

The same is apparently true of the "Neo Liberal" plea for limited govenment, known in continental Europe as the Anglo-Saxon model. The Scandinavian system is paraded out, proof positive that big government, economic growth, wealthspread and sustainability are all possible at the same time. So, there are alternatives to the Neo Liberal model (as we've also seen in China where mega economic growth is unconcernedly combined with a communist dictatorship).

You might be excused for concluding that Bos is pleading for a return to classical, red, state intervention. But that isn't the case. According to Bos that would be "substituting one failure for another". Rather, he's proposing the erection of a protective barrier between the private and the public sector.

At this point the analogy hits the circus world: the market behaves like a wild, performing animal; you may think you have it under control, but at some point it's bound to act in accordance with its nature. A motte-and-bailey may in the end offer more security than regulation.

In its zeal to tame the beast, the state finds it easier to deal with larger corporations. Therefore rules and regulations have consistently punished small to medium sized businesses to a larger extent than bigger ones. It has created a convergence of interests of the state and big business, which Mussolini defined as corporatism, or fascism.

Bos blames the present crisis in third-way-ism on the contemporary form of cut-throat capitalism, which has more to do with mergers, shareholder value and take-overs, than with entrepreneurs and human resources.

But as Ann Coulter points out in "Can't We At Least Get a Toaster" this "risk-free Clintonian state capitalism" is the product of the third way, rather than unadulterated laissez faire capitalism.

Throughout every bailout, congressional Republicans were screaming from the rooftops that this wasn't capitalism. It was "Government Sachs." As Rep. Spencer Bachus (R-Ala.) put it, the same rules that apply to welfare mothers "ought to apply to rich Greenwich, Conn., investors who are multimillionaires." But Wall Street raised a lot of money for the Democrats, so Clinton bailed them out, over and over again. Before you knew it, once-respectable Wall Street institutions were buying investment products even more ludicrous than Mexican bonds: They were buying the mortgages of Mexican strawberry-pickers.

It's the same story, over and over. State interventionism creates a monster, calling for more interventionism. Symbol for all that, stands the greedy banker's bonus, and banks not in the service of the "real economy" but as moneymakers in themselves, as Bos puts it.

Bos never gets concrete anywhere, so it's still a matter of conjecture what this motte-and-bailey between the public and the private sector will turn out to be. The entire history of progressivism warrants utmost prudence and vigilance. Ignore the latest transformation at your peril.

Bos' conclusion is sure proof that Liberalism has been abandoned: in the past he would have thought twice of indulging so freely in unfettered elitist moralism. He concluded his speech, expressing the need of instilling into the elite (they wear this now as a badge of honor), a sense of service and civic duty towards public interests. He even sounds ominous when classical progressivism gets a hold on him: "our desire to lift up man extends to the elite as well."

Update:

Sure enough, last night from the Socialist Party (Maoist) convention platform it was announced that it and (new) Labor have committed themselves to a government coalition. As the hated NeoLib feathers are being shed entire new combines enter the horizon. The SP is much more populist, less elitist, and deeper red. The time will tell what horrors this marriage of convenience will produce.

Related posts:

- NRC: "Dutch support for Obama plan to restrict banks"
- DutchNews: "Labour leader Bos leaves 'the third way'"
- Politeia: "The New New Left: the Return of Authority"

Playing Dice With Liberty (I): Questions to Our Leaders

A post under the title "Financial Journalists in Crisis: Did We Fail?" has been up on the main page for the better part of this week. It shows a video produced by the European new media service, EUX.TV.

It announces the upcoming convention "Covering The Crisis"  of the European Journalists Centre (EJC) to be held on November 9 and 10 in Brussels.  The aim appears to be a rare bout of professional introspection.

The matter struck me, because the press in general on almost every issue earned themselves a huge #fail tag for non-achievement over the last couple of years. But those members of the press corps, reporting on financial and economic issues are probably the least guilty of professional sell out. Nevertheless, it is them doing the self critique. Remarkable!.

Around the 1.50 mark the video shows an unspecified pundit stating:

"We've heard from every Head of State and Government Minister that we would reform Capitalism. This [speech] came from the persons who were responsible for this mess we're in."

The question who or what actually triggered the opportune crisis may never be answered and it is perhaps immaterial, given that the subprime mortgage situation was a bubble waiting to explode in our faces. But that's just one of the questions hardly ever posed, let alone answered.

Of course, as the journalist in the video states, we've all heard our respective Heads of State's and Government Ministers' comments, particularly in the run up to the last G20 summit in Pittsburgh, but perhaps we never took their assertions all that literally (unless you are a Socialist, in which case it must have sounded like collectivism come true!).

Nevertheless, the 800 pound gorilla this commentator set loose into the room cannot be whiped under the carpet.
 
Our leaders' comments to bring down - or "reform" - the capitalist system invite a very serious charge of treason against them. Of course most people are too 'ideologically evolved' to see the problem here, but it is nevertheless very fundamental (not to say, existential).

An exaggeration then? (Treason, indeed!) But here's the thing ...

Without going too deep into the field of epistemology, this is how the human mind works: concepts are formed from percepts, and concepts are expressed in words. Words are not rough approximations! A word has a very specific meaning. Language is not just a means of communication, it is also a convention which allows us to perform complex procedures, from neuro surgery to rocket science.

Technically, the expression of a concept into words is not the same as a definition, but the term will do for the moment to re-acquaint ourselves with absolutes. We need to get back using language with the respect it deserves! Find out the meaning of a word, before using it!

Reverting to cognition, this process is done by an individual. The individual is therefore the basic universal unit. It is the result of that natural process, derived from a higher power which we may call God, or Nature, if you are an atheist.

This is nothing less than the foundation of Western civilization: the all important primary, individual rights  derived from Nature, or bestowed upon us by God, who made us equal (it is no coincidence that it is individualism and reason that are most under assault!). This brings us to secondary rights.

On the political level primary rights lead to the rule of law and limited government in the service of individual voters whom they represent. 

Individual property rights, and rights to the fruits of one's labor form the economic basis of what Carl Marx pejoratively termed, Capitalism. 

To deny this system like collectivists and statists of various hue do, or to criticize it to the point of wanting to "reform" it, as our own leaders take the liberty to do, is not without consequences for our rights and how we organize the world.

A clarification would be in order before we embark any further upon this subtle shift from individual liberty to submission to the whole. What would this "reform" entail and from who or what do you derive the authority to do so? Furthermore:

- Do you still recognize individual rights? Or are you advocating collectivism under your leadership: special prerogatives and privileges for certain groups of people based on gender, race, religion or cultural identity, bestowed upon them by the Government?

- Are you still the servants of the people? Or are you a member of an oligarchy who know better what's good for us; and do we owe you gratitude for all the positive rights that you in your goodness, will bestow upon us through the Government?

- Do you still respect our economic rights to property, and mutually beneficial interaction and trade? Or will we keep a current account with the Tax Department through which you will determine the value of our labor and services under considerations of "social justice"?

To be continued. 

- Posters by "The People's Cube": Liberty and Tea Party Posters - Complete Collection - Free Downloads - 

What They Don't Teach in School and the Media Won't Tell

On Labor Day 2009, when discerning Leftists are removing themselves as far as possible from the original red folklore dating back to 1889, it is perhaps a good opportunity to expunge a few political fairy tales.

Of course Leftism has not ceased to exist: it has taken distance from the “Cuban jackboot” as some Dutch Social Democrat just expressed it - epitomizing duplicity, and the use of terror against its own people as part of 'Socialist theory' - it has reinvented itself and taken on the Postmodernism mask, a guise few as yet are able to recognize for what it is.
But the time of the classical Left versus Right alignment in politics is well and truly over! In fact, it never existed in the way most observers understood it.

Ever since Europe at the beginning of the last century was confronted with a false dilemma, the choice between either Fascism or Socialism, people have been misled by Rightist and Leftist ideologies that are together responsible for the loss of over 110 million souls - and counting.

What was cleverly and purposely left out of that equation was Liberty. Then - as today - the “capitalist system” is said to have failed. But Liberty is unlike any other political and social system: not only has it lifted humanity out of poverty and enslavement, it is also our birth right! As such to speak of a mere 'system', hardly defines the width and depth of the underlying philosophical principles.

To explode yet another myth, the political domain of Liberty is not situated roughly somewhere between the extremes of the Left and the Right. Both Left and Right deal in collectives: either social or economic class, or ethnic, cultural or religious groups. Liberty - the home of individual rights - is situated at the opposing end of that spectrum, standing firm for true universal equality of all individuals, irrespective to which group one 'belongs'.

Liberty is a corollary of the inalienable rights bestowed upon man by God or by nature. Rights are not generously shared out (or forfeited) by the State for good or bad behavior, but are inherent in the nature of humans as rational beings (this is why collectivists like to deny the existence of reason itself (“just a Western social construct,” or hold that man on the contrary, is a creature of passion).

Collectivists may spun fairy-tales of their hives having a 'living group soul', assuredly a collective - the modern equivalent of the totalitarian tribe - has neither a mind nor a brain, let alone a soul. That is the prerogative of creatures with self consciousness.

Rather than being on the Left or Right side of the political spectrum, the relevant question politicians ought to answer is, do you unconditionally uphold the freedoms of the individual, or should they submit to the will of the collective? In other words, do you swear to uphold the negative rights that represent the narrow boundaries within which the State may act? President Obama would beg to differ, but it's the positive rights of the 'nanny state' that are the velvet chains by which Governments secretly re-shackle the citizens to their collective.

The current Government interventions in the financial systems might well represent a coup toward a new, Pragmatist form of transnational collectivism, and whether it is Left, Right or center, is frankly immaterial. The difference between Hitler and Marx is the collective of choice: ethnic Socialism versus world Socialism.

Most politicians these days subscribe to Pragmatism. It is a basically amoral, relativist philosophy in that it does not recognize any 'right' or 'wrong' way per se of taking care of business: what counts is the expedient in relation to a specific case, in this particular moment in time. To whose and what end we can only guess: this type of politician seldom specifies anything beyond vacuous sound waves like “Change” and “Yes, we can,” the precise meaning of which is in the eye of the beholder.

The result is a cacophony of cognitive dissonance and an ideological hotchpotch in which we find the unpalatable, putrefied remains of the Communist command economy, as well as elements of free market capitalism, all held together by ligaments that have more in common with corporate Fascism than anything else.

The financial sector especially finds itself in a Fascist limbo: not altogether nationalized, but up for commandeering whenever the State sees fit - on behalf of the tax payer, of course, who wasn't asked for his opinion to begin with. It's back to the future once again: the financial sector may well end up like one of these obsolete utilities we just got rid of.

Related, recently diagnosed by Dr Sanity:

- "Capitalism and the Culture War Being Waged Against It"
- "The Nub of the Crux of the Gist of the Problem"
- "Liberal Amnesia = Hysterical Amnesia"

- Filed on Articles in “The Case for Neo Communism” -

The Conservative Moral Capitalist March

The official website ... make it happen!

Stop Blaming Capitalism!

- Yaron Brook's Call to Action - March 2009 (Part 1 of 2)


- Yaron Brook's Call to Action - March 2009 (Part 2 of 2)


- Yaron Brook on Sacrifice


- Yaron Brook on Glenn Beck


More video material of the Ayn Rand Institute.

Two Quotes on Capitalism

In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated. (...) Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors, and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state. (...) “The time for enlightenment has come. (...)

Russian Prime Minister Vladimir Putin in a speech delivered at the opening ceremony of the World Economic Forum in Davos, Switzerland, 2009

- Caption: "Look to the West", by Nathan Struttman (Quent Cordair Fine Art, Napa) -

If one wishes to advocate a free society - that is, capitalism - one must realize that its indispensable foundation is the principle of individual rights. If one wishes to uphold individual rights , one must realize that capitalism is the only system that can uphold and protect them. (...) Individual rights are the means of subordinating society to moral law. (...) It was with the destruction of individual rights that the destruction of freedom had to begin. A collective tyranny dare not enslave a country by an outright confiscation of its values, material or moral. It has to be done by a process of internal corruption. Just as in the material realm the plundering of a country's wealth is accomplished by inflating the currency - so today one may witness the process of inflation being applied to the realm of rights. The process entails such a growth of newly promulgated "rights" that people do not notice the fact that the meaning of the concept is being reversed. Just as bad money drives out good money, so these "printing-press rights" negate authentic rights.

Ayn Rand, "Man's Rights" from "The Virtue of Selfishness", reprinted in"Capitalism: the Unknown Ideal"

- Caption: Cover design of "The Virtue of Selfishness", by Nick Gaetano (Quent Cordair Fine Art, Napa) -

Hurray! It's the Weekend of Capitalism!

Say what you will, call him names! A lame duck, yes mistakes have been made, the rules of laissez-faire capitalism were violated, but right now it is he who stands between prosperity through free market principles, and the forces of Statism, who wish to reduce the financial sector to a tragic shadow of its former self, a mere government utility!

While experts in the US are still trying to figure out what happened, some Europeans already knew before the event: it's capitalism, stupid! Isn't the cause of crime, the law? Now is the time for the coup of state, let the ax fall on the evil system!

- Caption: "Sunriser II", by Bobbie Carlyle -

Here are two opinions: one by the most underestimated US President in history, George W. Bush - and an article by Objectivists Yaron Brook and Don Watkins on the Op-Ed page of the Ayn Rand Center for Individual Rights: a urgent plea for the separation of Economy and State. Europeans are urged to take note of a field virtually unknown to them. But first, the news:

CNN: "Bush ready to defend free-market principles during summit"

(...) President Bush signaled that he's ready to defend Western-style capitalism and free-market principles during what will be one of his last appearances on the world stage. (...) As leaders of the world's 20 largest economies, dubbed the G-20, gather in Washington, some European leaders are pushing for global financial regulation. (...) >>>

Wall Street Journal: "The Surest Path Back to Prosperity - 'If you seek economic growth, social justice and human dignity, the free-market system is the way to go'," by George W. Bush

As we have seen in recent months, financial turmoil anywhere in the world affects economies everywhere in the world. And so this weekend I'm going to host a Summit on Financial Markets and the World Economy with leaders from developed and developing nations that account for nearly 90% of the world economy. The leaders attending this weekend's meeting agree on a clear purpose -- to address the current crisis, and to lay the foundation for reforms that will help prevent a similar crisis in the future. (...) the actions taken by the U.S. and other nations are having an impact. Credit markets are beginning to thaw. Businesses are gaining access to essential short-term financing. A measure of stability is returning to financial systems.

- Caption: "Refuge" by Perrin Sparks -

(...) we must recognize that government intervention is not a cure-all. For example, some blame the crisis on insufficient regulation of the American mortgage market. But many European countries had much more extensive regulations, and still experienced problems almost identical to our own. History has shown that the greater threat to economic prosperity is not too little government involvement in the market, it is too much government involvement in the market.

We saw this in the case of Fannie Mae and Freddie Mac. Because these firms were chartered by the U.S. Congress, many believed they were backed by the full faith and credit of the U. S. government. Investors put huge amounts of money into Fannie and Freddie, which they used to build up irresponsibly large portfolios of mortgage-backed securities. When the housing market declined, these securities, of course, plummeted in value. It took a taxpayer-funded rescue to keep Fannie and Freddie from collapsing in a way that would have devastated the global financial system.

- Caption: "We the Living", by Nick Gaetano -

There is a clear lesson: Our aim should not be more government -- it should be smarter government. All this leads to the most important principle that should guide our work: While reforms in the financial sector are essential, the long-term solution to today's problems is sustained economic growth. And the surest path to that growth is free markets and free people.

In the wake of the financial crisis, voices from the left and right equate the free-enterprise system with greed and exploitation and failure. It's true this crisis included failures -- by lenders and borrowers and financial firms, and by governments and independent regulators. But the crisis was not a failure of the free-market system. And the answer is not to try to reinvent that system. It is to fix the problems, make reforms, and move forward with the free-market principles that have delivered prosperity and hope to people all across the globe. (...)

Nations that pursued other models have experienced devastating results. Soviet communism starved millions, bankrupted an empire, and collapsed as decisively as the Berlin Wall. Cuba, once known for its vast fields of cane, is now forced to ration sugar. While Iran sits atop giant oil reserves, its people cannot put enough gasoline in their cars.

The record is unmistakable: If you seek economic growth, social justice and human dignity, the free-market system is the way to go. It would be a terrible mistake to allow a few months of crisis to undermine 60 years of success. (...) >>>

Give Bush a buzz z

- Caption: "The Anchorage" by Bryan Larsen -

Ayn Rand Center for Individual Rights: "Stop Blaming Capitalism for Government Failures", by Yaron Brook and Don Watkins

Speaking of the financial crisis, French president Nicolas Sarkozy recently said, “Laissez-faire is finished. The all-powerful market that always knows best is finished.” Sarkozy was echoing the views of many, including president-elect Obama, who assume that the financial crisis was caused by free markets--by “unbridled greed” unleashed by decades of deregulation and a “hands off” approach to the economy. And given this premise, the solution, they say, is obvious. To solve this crisis and prevent another one, we need a heavy dose of Uncle Sam’s elixir: government intervention. (...)

But while capitalism may be a convenient scapegoat, it did not cause any of these problems. Indeed, whatever one wishes to call the unruly mixture of freedom and government controls that made up our economic and political system during the last three decades, one cannot call it capitalism. (...) Take a step back.

- Caption: "Lunch Break" by Quent Cordair -

In the lead up to the “Reagan Revolution,” the explosive growth of government during the ’60s and ’70s had left the American economy in disarray. A crushing tax burden, runaway inflation, brutal unemployment, and economic stagnation had Americans looking for an alternative. That’s what Reagan offered, denouncing big government and promising a new “morning in America.” (...) Bush Jr., often laughably called a champion of free markets, presided over massive new governmental controls like Sarbanes-Oxley and massive new welfare programs like the prescription drug benefit.

None of this is consistent with capitalism. (...) The government’s job under capitalism is single but crucial: to protect individual rights from violation by force or fraud. America came closest to this system in the latter half of the nineteenth century. The result was an unprecedented explosion of wealth creation and consequent rise in the standard of living. Even now, when the fading remnants of capitalism are badly crippled by endless controls, we see that the freest countries--those which retain the most capitalist elements--have the highest standard of living.

Why then should capitalism take the blame today--when capitalism doesn’t even exist? (...) Consider the current crisis (...) the driving force is clearly government intervention: the Fed keeping interest rates below the rate of inflation, thus encouraging people to borrow and providing the impetus for a housing bubble; the Community Reinvestment Act, which forces banks to lend money to low-income and poor-credit households; the creation of Fannie Mae and Freddie Mac with government-guaranteed debt leading to artificially low mortgage rates and the illusion that the financial instruments created by bundling them are low risk; government-licensed rating agencies, which gave AAA ratings to mortgage-backed securities, creating a false sense of confidence; deposit insurance and the “too big to fail” doctrine, whose bailout promises have created huge distortions in incentives and risk-taking throughout the financial system; and so on. In the face of this long list, who can say with a straight face that the housing and financial markets were frontiers of “cowboy capitalism”? (...)

- Caption: "Cityscape Texture Study II", by Bryan Larsen -

This is just the latest example of a pattern that has been going on since the rise of capitalism: capitalism is blamed for the ills of government intervention--and then even more government intervention is proposed as the cure. The Great Depression? Despite massive evidence that the Federal Reserve’s and other government policies were responsible for the crash and the inability of the economy to recover, it was laissez-faire that was blamed. Consequently, in the aftermath, the government’s power over the economy was not curtailed but dramatically expanded. Or what about the energy crisis of the 1970s? (...)It’s time to stop blaming capitalism for the sins of government intervention, and give true laissez-faire a chance. Now that would be a change we could believe in. >>>

Wall Street Journal have a touching short documentary on the Great Depression up on their video archive ...



Art in this post by the Quent Cordair Fine Art Gallery for Romantic Realism

Update: Soeren Kern has the semi pan-European position ... they propose to rule the world by committee ... take note of this: "today’s European leaders are about as interested in solving global problems as was Otto von Bismarck, who devoted his life to empire-building and the practice of Realpolitik. Today’s European leaders are trying not only to revive the Roman Empire in the form of a unified Europe, but they are also seeking to rebalance global power in such a way that places Europe at the top of the international pecking order" ... read it all:

The Brussels Journal: "Europe Is Obama’s First ‘Global Test’"



- Filed in "The Ethics of Capitalism" -

How Do You Spell 'Redistribution of Wealth'

This guy is rich ... very rich! Never, ever in the history of mankind has there been a more insidious and anti-human system than Socialism. And he dares talk of "failed economic policies" ...!

After countless failed experiments, bankrupt economies, over 100 million dead, and unmeasurable quantities of ruined lives, hey presto ... the next generation of Socialist hopefuls report for duty.

Albert Einstein called it the definition of stupidity: repeating the same thing over and over, each time expecting another outcome. In an upcoming post on collectivism and coercion we'll be explaining the Socialist addiction as follows:

Socialists are followers of the grand philosophical family of Subjectivism. That is the notion that thought creates reality (as opposed to, reality existing independent of consciousness). They lack the mental tool that would enable them to come to the conclusion, that the problem lies in what they perceive as the solution: collectivism, i.e. statism.

This is why Socialists keep on believing that they will perform better than the previous bankrupt lot. This leads to an endless procession of Socialists, blaming so-and-so who must have deviated too far from the ideal, promising they will do a better job of imposing it this time around.

Enter Barack Obama in the heartland of the only opposing philosophy, the United States of America ... and this is his egalitarian tax plan for the least statist nation on earth:

Tax Prof Blog: "WSJ: Obama's Tax Cut for 95% of Americans Is an Illusion"

Editorial in today's Wall Street Journal: Obama's 95% Illusion; It Depends on What the Meaning of "Tax Cut" Is:

One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today.

It's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut." (...) >>>

read it all, or watch the vids:


.


Oh, and after we've cleared up what's the definition of an election bribe, we can ponder the logic of taxing a successful plumber and handing the proceeds over to a failed one.

Related:

- Friends of ATR: "Obama Campaign Releases Fraudulant Tax Calculator"



- Filed on Articles in "The Pomo White House" -

We Are All Socialists Now

"Government is not the answer to our problems; government is the problem."
--Ronald Reagan
________________________________________________________________

An article on Yahoo!News, "On crisis, Europe to US: 'I told you so'" chronicles the European statists' Schadenfreude over the Obama talking point that American laissez-faire deregulation is to blame for the current financial crisis. German en French subjectivists are falling all over each other to get to the mic first and point the finger. Really?

Could it perhaps be Bill Clinton's third way mixed economy, that forced banks to behave like 'social security outlets' by compelling them to act in a way that is alien to their nature, i.e. eyes firmly fixed on the bottom-line, that is the architect of this fiasco? Another Social Democrats success story, Jimmy Carter laid the groundwork. John McCain warned early for the collapse, Obama now says "he wrote a letter ..." while he was up to his eyeballs involved in ACORN, a main contributor to the Fanny Mae and Freddie Mac scam (study the "Just Say No Deal" flow chart and weep). Or watch this short vid, "What Just Happened?"

Now that the system is blowing up, the statists (see them scramble for default position) point the finger at Capitalism, which is to blame. It is a darned gotzpah!

It's always the same tired trick and it keeps on giving. When will we learn?! Force your ideology on a self-sustaining system and when it breaks down because of it, blame the system and shout 'I told you so, it needs more revision and supervision! That will prevent me interfering in the future!'

Deontology does the rest for a clear conscience: our intentions are so ethical because for the common good, that we are a priori absolved for adverse consequences ... the perpetual 'get out of jail card'.

Blaming the' fallibility' of markets is like blaming the weather for storms. We will see much more of that: the Left are always prepared to establish the Socialist Utopia on the smoldering ruins of whatever crisis (induced or otherwise) - the reason why revolutions were incited in the first place. Entire tribes of community organizers, eh ... agitators were insinuated to bring them about.

The statist is so focussed on the evil of free markets and the benevolence of the state that he cannot see what's in front of his nose: that he and his cures are the problem. But that very thought is so alien, that it simply doesn't occur to him.

So now he goes on pumping public money into the system in order to send a message of stability and confidence. What he is actually signaling is that the system is so broke that it needs more and more medicine.

As usual THEY and their quack remedies are the problem, not the weather! For Heaven's sake, stop burning our money!

Believers of free people in a politeia which they own, had better be on red, hot alert the coming months. If we know our statists, they wouldn't be half the collective they are, if they didn't try to pull a fast one.

... oh, and for the record ...

Boston Globe: "Frank's fingerprints are all over the financial fiasco"

Take that!

Related:

- Morning Bell: "Here they go again"
- The Lighthouse: "The Lightness of Being Socialist"

- Filed on Articles in "The Economics and Monetary Dossier" and "The Ethics of Capitalism" -

The Bother with the Bailout Bill

The text of the Bailout Bill in PDF format by Fox News.

World is shocked, shocked ... House Reps throw out corporate social security act!


Video archive material on hearings: Democrats blocking Republican calls for regulation of Fannie Mae and Freddie Mac.

The video shows what no one wants to learn: the way to hell is paved with good intentions; but the effect of selfish capitalism means prosperity for all! Point being, a system that works, in tandem with the right philosophy based on the real reality (as opposed to a perceived, or wished one) takes courage - isn't for the meek or the feeble of spirit ...

Dr Sanity: "CAPITALISM IS GOOD FOR THE SOUL-- IF YOU HAVE ONE

Until we get that (Barack), engineering and regulating will lead to more failures, crisis and mayhem!

(For your own good and) for morality read fifty times "The Fable of the Bees:"

The Grumbling Hive: or, Knaves Turn'd Honest

A spacious Hive well stock'd with Bees,
That lived in Luxury and Ease;
And yet as fam'd for Laws and Arms,
As yielding large and early Swarms;
Was counted the great Nursery
Of Sciences and Industry.
No Bees had better Government,
More Fickleness, or less Content.
They were not Slaves to Tyranny,
Nor ruled by wild Democracy;
But Kings, that could not wrong, because
Their Power was circumscrib'd by Laws. >>>

Here's the best explanation yet.

But here's the thing:

Real Clear Politics: "In Times of Crisis, Trust Capitalism", by Joseph Calhoun

The US government (...) claim this intervention is urgently needed and if we don’t act, the consequences are dire. Dire, as in New Depression dire. Have these supposed experts on capitalism forgotten how it really works?(...) There is not a shortage of capital for well run financial companies. There is, however, a shortage of capital for companies that have acted irresponsibly with investor capital in the recent past. For some reason, our political leaders believe this is a failure of the market, but isn’t this what should be expected from rational investors? (...) The biggest bank failure in the history of the United States happened last Thursday night and by Friday morning, it was business as usual. (...) The taxpayers didn’t lose anything and depositors didn’t lose anything, only investors. That is how capitalism works in case everyone has forgotten. The “crisis” we face today is not a creation of the market. (...)

There has been much commentary recently about the role of Fannie Mae and Freddie Mac in the creation and expansion of the sub-prime mortgage market which many believe to be the cause of this mess. That criticism is certainly warranted, but little attention has been paid to the real culprit – the Federal Reserve.

There has always been a stigma attached to borrowing directly from the Fed and for good reason. If a bank can’t get other banks to lend it money, that tells the market something about the condition of the bank in question. Last August, Bernanke convinced three large banks to borrow at the discount window in an effort to remove that stigma. When that didn’t work, he concocted a scheme to allow banks to borrow from the Fed in anonymity via a mechanism he called the Term Auction Facility. (...) Banks will not lend to each other because they don’t know which ones are really in trouble. The rise in inter-bank lending rates is a rational market response to a lack of information.

Furthermore, why pay those inter-bank rates when the Fed or ECB is offering easier terms? These opaque lending facilities are just part of the problem created by the Fed and Treasury. (...) Now markets are waiting on pins and needles as the politicians haggle over the details of the latest bailout attempt by the Fed and Treasury. This has introduced another roadblock to the re-capitalization and reorganization of the financial industry. Companies that are in need of capital are waiting to see if the plan will bail them out of their difficulties. If Hank Paulson is willing to pay an above market price for their bad loans, why should they dilute their equity now? (...) Why take Tony Soprano terms when Uncle Sam is willing to let the taxpayer take the hit for you?

(...) This plan short circuits the capitalist model which would allow the stronger, well-run institutions to gain market share and/or expand profit margins. The long-term effect will be to lower the overall return on capital in the financial services industry. The government apparently believes that the key to economic recovery is to allocate limited resources in an inefficient manner. Does that make sense? (...) The Fed is the one keeping the market from functioning. The Treasury does not need to enter the market for it to start functioning; the Fed needs to leave the market.

Paulson has said that the cause of the current problems is the housing deflation, but that ignores the elephant in the living room. The housing bubble, which was concentrated in a relatively small number of states, was caused by the reckless actions of the Greenspan Fed. The consequences of that bubble have been exacerbated by the Bernanke Fed. (...) We got into this mess because we tried to avoid the consequences of the Internet bubble. We will only make things worse by trying to avoid the consequences of the housing bubble. We are not on the verge of a new depression. (...)

Investors who made mistakes in these markets should be held responsible and those who navigated the Fed-distorted market should be rewarded for their wisdom and prudence. Enacting the Paulson plan will not allow that to happen and our economy will suffer for it in the long run.

The Japanese tried to prop up failed banks in the aftermath of the bursting of their twin bubbles and the result was 15 years of stagnation. Why are we emulating a strategy that is a demonstrable failure? A better alternative would be to allow capitalism to work as it should and stop the interventions of the Fed in the money market. Trust capitalism. It works. >>>

There have been interviews today with a few very experienced traders who went through all the financial crises in current history. They said the following: "Banks do not lend each other- have no trust, what they need are intermediaries, so-called clearing houses." This is apparently normal practice, but investment banks do not like it because they'll make less money in that way. He ended by saying that the turning point has probably been reached.

Another in The Netherlands pointed out that propping up Fortis Bank with a relatively vast amount has failed. Stocks plummeted 23,5% today in spite of it. He said that "this must run its course".

The above may be an indication that the rebellious House Republicans may be right, specifically considering the astronomic amount of money involved. Perhaps this shake out (or correction) must be allowed to run its course. Bailouts stand symbol for distrust in markets. Per above article here too, "Trust capitalism. It works."

- Filed on Articles in "The Economics and Monetary Dossier" -

First Euro Bank Nationalized

The British press (Yahoo!News UK & Ireland) was the first early this morning to announce what has been negotiated behind closed doors all weekend without so much as a by your leave: the Belgian, Dutch and Luxemburg governments pumping 11.2 billion Euros worth of tax payers' money into an over greedy and over prestigious bank, for years high in overdrive on testosterone: Belgium 4.7 billion Euros, the Netherlands 4.0 billion and Luxembourg 2.5 billion.

Mind, unlike Fannie Mae and Freddie Mac this was not a bank force-fed by politically correct government policies (and their community organizing enforcers) on quotas of toxic loans! The bank went down because its eyes were not on the bottom line, but indulged in irrational behavior, notably in buying the unaffordable Netherlands major bank - ABN AMRO - out of old world prestige. Investor confidence simply collapsed, shedding three quarters of the value.

The contrast with the US could not be greater. Whereas swathes of the Republican Party as well as a number of Democrats had qualms about handing over vast amounts of tax payers money to market parties, the silence in Europe is deafening. While the bailout bill is hugely unpopular in the US, the Netherlands only Libertarian magazine today sings the praises of the Fortis deal, calling it "a good move" (link in Dutch).

- Cartoon by Gary Varvel - more on Townhall -

The idea you see, that government money is brought up by all of us - the tax payer - refuses stubbornly to sink in. This is the defining difference between the US and Europe. Whereas Americans own their politeia and their politicians are voted in to handle the business of government on their behalf, in Europe the shoe is on the other foot.

Like the Old Testament Jews wandering in the desert, fighting to shed the mind-set of slaves and to become a free people, Europeans are wandering the continent in blind servitude to the state under a inequitable social contract: freedom in lieu for a risk-free life under a cheese-dome. The wards-of-state find their system vastly superior, not realising that that is precisely what betrays their inferiority: the inability to accurately assess value.

Yahoo!News UK & Ireland: "Benelux Governments Rescue Fortis", by Antonia Van De Velde and Marcin Grajewski

Benelux financial group Fortis underwent a shotgun nationalisation on Sunday after emergency talks with European Central Bank President Jean-Claude Trichet to prevent U.S.-style financial contagion engulfing one of Europe's top 20 banks. The Belgian, Dutch and Luxembourg governments agreed to inject 11.2 billion euros (8.9 billion pounds) into the banking and insurance company, which will sell the parts of Dutch bank ABN AMRO that it bought last year, precipitating its troubles. (...)

Trichet, who as ECB head is responsible for safeguarding financial stability in the euro zone, joined Belgian PM Leterme and Dutch Finance Minister Wouter Bos in Brussels in a frantic drive to secure the future of the cross-border group. The presence of the ECB chief -- unprecedented in a commercial bank rescue -- underlined the seriousness of concern for the integrity of the euro zone's financial system. (...)

Fortis' size, with 85,000 staff worldwide, and its cross-border structure made it too big to be allowed to fail. Its nationalisation dwarfs Britain's state takeover of fallen mortgage lender Northern Rock last year. Fortis Chairman Maurice Lippens, accused by shareholders of concealing the bank's troubles for too long, resigned.

Fortis' precursors traded with Catherine the Great and financed the U.S. purchase of Louisiana from Napoleon. Its main constituent bank, Societe Generale, was the chief financier of the industrialisation of Belgium and the Netherlands. BNP Paribas and ING Group declined comment on reports that they had bid for all or part of Fortis. (...)

New Fortis CEO Filip Dierckx joined the Belgian and Dutch finance ministers and central bankers meeting with Trichet at the Belgian parliament. Dierckx inadvertently gave an insight into rescue plans when a document he took into the meeting was photographed by Reuters. It listed a range of options including "Fortis sells its stake in ABN AMRO for x billion euros to xx" and "governments of Belgium and Luxembourg to invest xx billion euros in Fortis". Fortis' portfolio of structured credit would be written down by an unspecified number of billions of euros, it said. There was no confirmation of any write-off in the official statement.

(...) The problems at Fortis, whose shares dropped by a third last week on investor concerns about its liquidity and funding, stem from last year's 70 billion euro purchase of ABN with partners Royal Bank of Scotland and Spain's Santander. Fortis has been weighed down by its 24 billion euro outlay for ABN in a market that is neither conducive to more capital increases nor willing to pay for the assets it wants to sell.

Its shares plummeted more than 20 percent to 15-year lows on Friday despite a statement that its position was strong and a pledge to expand asset sales to as much as 10 billion euros. The group's market capitalisation slumped from 50 billion euros after the ABN purchase to just 12 billion euros on Friday. The stakes were high in Belgium, where Fortis is the biggest private sector employer and more than 1.5 million households, roughly half the country, bank with the group.

(...) Financial players around the world were hoping that U.S. lawmakers would finally sign off on a deal to create a $700 billion (381.4 billion pound) government fund to buy bad debt from ailing banks in a bid to stem a credit crisis threatening the global economy. (...) >>>

Related:

Yesterday in "Credit Cruch Critical for Survival Capitalism" we remarked that under pressure, politicians would resume the default positions of their natural philosophical alignment ... enjoy David Cameron ...

Yahoo/ITN: "Cameron slams 'banker bashers'"

- Filed on Articles in "The Ethics of Capitalism" -

Credit Crunch Critical for Survival of Capitalism

Who needed further proof that the current notions about the political spectrum are a myth, here it is. The financial crisis is interesting in that is leads to political players reverting to their default attitudes towards individual freedom and the role of the state. In French President Nicolas Sarkozy we find a prime example. Be prepared for the shake-out to produce more revealing knee-jerks in the coming weeks and months.

At the root of the false spectrum is the public relations stunt that was sprung by the Left after World War II with the annihilation of the ultra Right, in the defeat of National Socialist Germany. Myth-making, PR stunt, are two ways of putting it; another is defining it as 'actively altering the perception of reality'. (Only this has to be done artfully and in a coordinated fashion; not like some amateurs who are currently trying to paint Sarah Palin simultaneously as the hot and gullible hayseed, Ellie Mae in a postmodern rendition of the sixties TV series The Beverley Hillbillies, and as a gun-toting, Bible-thumbing, reincarnation of the Puritan niece of Oliver Cromwell - all at the same time.)

That aside, the dialectic myth sprung on us was that on the Left we have the humane, altruistic Socialists, whereas the Right consists entirely of vile egoistic Capitalists preying on the good hearts of the poor masses. In this dichotomy we find in Adolf Hitler the arch Wall Street Capital C Capitalist of all time; and 'third way' small l liberals as a compromise between the two polar systems, somewhere in the middle of the spectrum. There is obviously something wrong with this skewed picture.

Both Left and Right are two branch departments of the same collectivist school of thought, that demands the individual to subordinate to the collective body (group, state, race, social class, nation, etc.). Although they often subscribe to the oxymoron of regulated free-market capitalism - neutrally described as 'best practice' - a majority of European Christian Democrats are at core of that ilk. The same is true of American paleo conservatives. Which stands to reason, because the structure of collectivism is religious thought stripped from the finer theological ethics, and God replaced by whatever was taken to animate and embody the collective. This is why these ideologies often take the shape of pseudo religions, rather than political systems.

Without going at this time in to the core fallacy lurking on the bottom of this Kantian/Hegelian pond (we have done that in these pages more often than we care to remember) - this world view on the political level translates into statism, collectivism and anti-capitalism; in variations and intensity it is also suspicious, critical or downright hostile towards reason, science and technology. It is in effect directly opposed to modern thinking. Philosopher and historian Isaiah Berlin coined the term, the Counter-Enlightenment.

Capitalism and free-markets are the political and economical consequences of the ethics of individual Free Will, the use of reason as the source of knowledge, and the assurance that the universe is knowable. The USA is the only country founded on these basic philosophical principles, democracy is the social translation. This Postmodern cartoon shows it is precisely that which anti-modernism opposes.

Let me at this point take the opportunity to clarify the European versus the American alignments. There are European Libertarians seriously misaligning, declaring for the crypto Socialist Obama and the severely radicalized Democratic Party, unaware that the defenders of free-markets are located at the Republican side of the aisle.

Reverting to French President Nicolas Sarkozy, even though without doubt a true philamerican, the Financial Times article "Sarkozy sets out bigger state role" is evidence that he remains at heart a statist (Gaullist) with a thin veneer of Liberalism which is shed at the first sign the principles are called upon. While singing the praises of Capitalism, he's calling for the chutzpah that is European 'self-regulation,' to be jettisoned in favor of outright state-regulation.

The coming months are critical. The crisis offers an opportunity to those who had to swallow and gag back free market capitalism for the sake of 'best practice', but who remained emotionally as well as culturally collectivist thinkers. Old ideals may well be revived. Bets are on for who'll be the first to drop the n word of nationalization into the discourse.

These true believers do not want to know that it's their own interventionism that caused the markets to fail, and when they did, it's the markets that were at fault (read "Blame Fannie Mae and Congress For the Credit Mess" and Carpe Diem: "Flashback to the 1990s: Origins of the Credit Crisis" by Dr. Mark J. Perry). Before anything else, this circular, truly banal argument needs falsefying.

- Cartoon by Michael Ramirez -

The current credit crunch will be used as an excuse to unleash a whole new generation of big government regulation on to the free world, putting it in retrograde as it is digging in. Of all the markers required for global Fascism we come up short but one or two ... nothing a protracted recession can't cure (posting will follow shortly). We can even venture a guess what the neotot system will be called: New Capitalism, or alternatively True Capitalism, entirely Islamic banking compatible.

Already the drones are buzzing that "this is obviously the end of capitalism as we know it--it doesn't work". The coming weeks and months will see defining moments in the unrolling of our future in which Hegel's 'world historical figures' will play their part: the ethics of the Enlightenment versus the next failed attempt at Building the Collective Utopia (after over 110 million deaths, this time they'll get it right ... for our own good, of course).

- Update - Yahoo!UK & Ireland: "Government to nationalise Bradford & Bingley" -

- Filed on Articles in "The Dystopia of Paradise" and "The Economic and Monetary Dossier" -