“What we have is an unequal distribution of capitalism.” — Rush Limbaugh on the problem of world inequality.
Posted by gregransom on 01/25/2009
David Warsh takes a look.
Posted by gregransom on 01/25/2009
A short and mostly accurate history of “mainstream” thinking on fiscal and monetary policy.
Posted by PrestoPundit on 01/21/2009
That’s essentially what the Clinton/Bush housing loan manipulation program was all about. Once again we see that “good intentions” without a thought for consequences are an excellent way to make the world a worse place.
In order to “help” minorities Clinton, Bush and the Congress created a massive financial crisis — and destroyed the credit ratings of thousands of minorities. Good work, guys.
Posted by PrestoPundit on 01/20/2009
I’ve got my “Taking Hayek Seriously” blog and web site up and running again, after struggling with software problems.
My first posting is on Hayek and Keynes.
Posted by PrestoPundit on 12/29/2008
All you need to know to understand the current economic bust in 36 little articles:
- Mark Thornton, “The Housing Bubble in 4 Easy Steps”
- Gerald O’Driscoll, Jr. “To Prevent Bubbles, Restrain the Fed”
- James Gwartney, “On The Fed and Greenspan”
- Michael Lewis, “Inside the Wall Street Doomsday Machine”
- John Taylor, “An Empirical Analysis of What Went Wrong” (pdf)
- OC Register, “How Subprime Lending All Started in OC”
- Peter Wallison, “Goverment Policies and the Financial Crisis”
- Jim Grant, “Is the Medicine Worse Than the Illness?”
- David Rose & Larry White, “We Can’t Spend Our Way Out of This Quagmire”
- Arnold Kling, “Why Credit Default Swaps?”
- Mike Shedlock, “Krugman Still Wrong After All These Years”
- Steve Sailer, “Predatory Mortgage Lenders”
- The Wall Street Journal, “Lender Lobbying Blitz Abetted Mortgage Mess”
- Russ Roberts — “How the Government Stoked the Mania”
- Anonymous, “A Worm’s-Eye View of Wall Street”
- The NY Times, “Inside Washington Mutual”
- Mike Shedlock, “Time to Break Up the Credit Rating Cartel”
- William Black, “Fiddling While Rome Burns”
- The Washington Post, “The Crash: What Went Wrong”
- Lawrence White, “What Really Happened”
- The NY Times, “White House Philosophy Stoked Mortgage Bonfire”
- Martin Baily, et al, “The Origins of the Financial Crisis”
- Steve Sailer, “The Diversity Recession”
- Richard Wagner, “A Remarkable Question”
- George Selgin, “Guilty as Charged”
- Gerald O’Driscoll, Jr. — “Subprime Monetary Policy”
- Steve Sailer, “Karl Rove — Architect of the Minority Mortgage Meltdown”
- Lawrence White, “How Did We Get Into This Financial Mess?”
- Warren Coats, “The D E Fs of the Financial Markets Crisis”
- Arnold Kling, “My Planned Oral Remarks on Freddie & Fannie”
- Mike Shedlock, “Time to Break Up the Credit Rating Cartel”
- John Cassidy, “Anatomy of a Meltdown”
- William Black, “Adam Smith Was Right About CEO Incentives”
- Sebastian Mallaby, “Blaming Deregulation”
- The WSJ, “The Weekend That Wall Street Died”
- Tyler Cowen, “Bailout of Long-Term Capital”
- Arnold Kling, “Testimony on the Collapse of Fannie Mae & Freddie Mac” (pdf)
- Robert Higgs, “Lucas and the Fed”
- Wikipedia, “The Greenspan Put”
The Mises Institute also has a good compendium of articles on the current crisis collected at The Bailout Reader. And REASON magazine has one here. See also The Housing Bubble Hall of Shame, Mortgage Fraud Blog, HousingBubbleBust.com, The Mortgage Lender Implode-O-Meter, The Home Builder Implode-O-Meter, The Hedge Fund Implode-O-Meter, and The Bank Implode-O-Meter.
And for the best continuing analysis of the meltdown see: Calculated Risk, Mish’s Global Analysis, EconLog, Cafe Hayek,Mises Institute, The Mark Levin Show, Division of Labour, Peter Schiff, The Austrian Economists, The Cato Insitute, The Heritage Foundation, and American Enterprise Insitute.
Want to dig a bit deeper? What to understand the economics behind the boom and bust cycle? Well, this is your chance. Here’s how. Read one or two of these books and articles by Friedrich Hayek or these essays by Roger Garrison or this book and these articles by Gerald O’Driscoll or this book by Henry Hazlitt, or any one of these books and articles
by a variety of other authors. Read some of this stuff and trust me, you will be smarter than a smarty pants macroeconomist in the Ivy League. Don’t have time for the long stuff? Here are some shorter things for beginners or those just pressed for time:
- Roger Garrison — “Business Cycles”
- Roger Garrison — “Capital Based Macroeconomics”
- F. A. Hayek — “Can We Still Avoid Inflation?”
- F. A. Hayek — “The Pretense of Knowledge” — Hayek’s Nobel lecture
Watch Fred Thompson explain how the Keynesian economics of Bush and Obama will save America:
And see Dan Mitchell explain the wonders of Keynesian economics in this video:
Read about how Hoover-Roosevelt and the Federal Reserve created the Great Depression:
- Jim Powell, “Tough Questions for the Founders of the New Deal”
- Burton Folsom, Jr. New Deal or Raw Deal, chapter 1.
- Jim Powell, “How FDR’s New Deal Harmed Millions of Poor People”
- Amity Shlaes, The Forgotten Man.
- Murray Rothbard, America’s Great Depression (pdf).
- Ivan Pongracic, Jr., “The Great Depression According to Milton Friedman”
- Price Fishback, “Did Keynesian ‘Stimulus’ End The Great Depression?”
- Lawrence Reed, “Great Myths of the Great Depression”
Posted by PrestoPundit on 12/04/2008
I’ve read about as much about Barack Obama as anyone in the country. A
lot of people claim they don’t know who Barack Obama is. Well, I think
I can give you a good idea who Barack Obama is.
[NOTE: This posting on Barack Obama will always be on top, and always subject to continous extension and revision. I’ll be taking a break from daily blogging here at PrestoPundit, extending into the new year. Any blogging between now and when I return will done over at the Mises Economics Blog where I will post occasionally on the economic crisis and the economics of Friedrich Hayek.]
Here are a number of things you need to consider.
Obama’s driving ambition as a young man was to be a professional basketball player,
and his identity was wrapped up in that dream. Obama was a failure in
this endeavor. Obama came to blame his failure on structural
racism, explaining his failure on his coach’s “white” game, which prevented Obama from playing his own “black” game. He then turned to politics, and put his identity and ambitions into America’s vibrant racialist, socialist political subculture. (All of this is in Obama’s memoir. Try this. Go read it.)
2. Obama idealized his father as a politician, and
he especially idealized his father’s cocky and outspoken socialist
idealism. But in his mid-20s Obama realized that Barack Obama, Sr. was
a broken political failure — a failure in large part due to his own
arrogant and outspoken opposition to the capitalist and pro-Western politics of
the Kenyan leadership. Obama came to adopt the political philosophy of
Saul Allinsky, who advocated hiding one’s true socialists beliefs and working instead to advance a radical
socialist agenda incrementally in the language of local cultural identities and economic interests.
3. A constant refrain in Obama’s life
is his skill at being a chameleon, putting up a false front and telling
made up stories, to ingratiate himself with others.
4. Obama’s relatives on his mother’s side come out of a natural resource extraction business, the oil business in Kansas. And when Obama came of consciousness his step-father also worked in an extraction business. Oil again. Early in his life Obama, growing in Third World Indonesia with something of a Third World Indonesian’s world view, Obama seems to have equated capitalism and the inequality of capitalism with the wealth disparity created by unequal control of the wealth from oil. We know that Obama’s mother was hostile toward American’s in the business of oil, and both his grandmother and grandfather seemed hostile to or alienated from the values of oil patch Kansas. If oil = capitalism, we get a better sense of Obama’s life long commitment to socialism and sharing the wealth.
Let’s take a closer look at these items.
of the central mysteries of about Obama is why the man is filled with
so much rage and anger — rage and anger which fills the pages of his
memoir, often (falsely) voiced through the words of other characters in
the book, who witness to the fact that they themselves never in fact
voiced such anger or felt such anger.
To answer this mystery,
the first thing to know about Barack Obama is that Obama idealized
Julius Irving and his driving ambition as a boy emerging into manhood
was to be a basketball star and eventually a professional basketball player.
His high school friends report that Obama was a “basketball-obsessed boy”.
But the other thing to know about Obama is that from the point of view
of his own self image and ambitions, he was a spectacular failure as a
What I’m suggesting, and what I believe, is
that to understand Obama you need to understand the effect his failure
as a basketball player had on this young man attempting to develop a
sense of self during his most sensitive teen age years.
The center stage of Obama’s anger, his friends report, was the basketball court,
where Obama constantly nursed a sore butt from repeated long sessions
warming the bench as a non-starter who rarely played during games. For
example, Obama didn’t play in the final championship game until the
contest was already decided, and Obama score a mere single basket in
that game, a basket with utterly no significance to the outcome of that
Obama came to blame his failed career as a basketball
player on “structural racism” on the part of his coach, who Obama
charged with playing a “white” game (despite the fact that four of his
starters where non-white) instead of his own “black” game.
If Sen Obama did show flashes or anger or hurt, according to team-mates
and friends, it sprang from his lack of minutes on the basketball court
rather than his angst as a young black man in a multi-racial society.
TO BE CONTINUED — NOTES:
For most of their high school years, [Obama’s best friend Greg] Orme and Obama lived and loved
basketball, even if their hours of practice never translated into much
playing time on game day ..
Dan Hale, the 6-foot-7-inch star center of the 1979 Punahou basketball
team, said Obama’s depiction of Hawaii as a place where race really
mattered hardly resonates with him.
“I was certainly oblivious to a lot of what he references,” Hale
said in an interview. “If you look at our teams, that year I was the
only white guy on the starting five. You had three part-Hawaiians, one
Filipino and me.”
But Hale said he is still enjoying the novelty of a famous
classmate. “It’s good for me, pre-Alzheimer’s, to try and remember this
stuff,” he said, struggling to recall something other than Obama’s love
for basketball and his improbable hook shot.
Others are more skeptical that the boy known as Barry felt the angst
described by Barack. Furushima said that many of her classmates have
expressed dismay at Obama’s rendering of the past.
“We are just such a mixed-up bag of races. It was hard to imagine
that he felt that way, because he just seemed happy all the time,
smiling all the time,” she said. “We have so many tones of brown here.
If someone is brown, they can be Samoan or Fijian or Tongan. I can’t
tell if someone is Fijian or black.”
His middle school yearbook captures the multiracial mood that many
Hawaiians say has always defined the “Aloha spirit.” In front of a
chalkboard with “Mixed Races of America” written in a student’s hand, Obama waved the peace sign for the camera.
On the lower half of the seventh-grade page is the same group, under
a heading of “Useless Races in America.” The joke, it seems, is on
“In Hawaii, our diversity defines us, it doesn’t divide us,” said
Rep. Neil Abercrombie (D-Hawaii), a close friend of Obama’s father in
graduate school in the early ’60s. “We all come from so many
backgrounds, we have to get along.”
Obama’s teammates for the most part are careful not to judge an old
friend, even if his memories of racial attitudes at Punahou differ from
their own. “I would never say, ah, that didn’t happen,” said Hale. “But
I was pretty wrapped up in my own world back then.”
If Obama did show flashes of anger or hurt, according to friends and
teammates, it sprang from his lack of minutes on the basketball court
more than his angst as a young black man in a multiracial society ..
Through the haze of the ’70s, they recall only the “rat baller” who was always up for a game.
Of course, Obama embraced the image of the athlete, dribbling a ball
to school and between classes. It was also how he wanted to be
On his senior yearbook page, he left behind these words: “We go play hoop.”
Beyond the stereotypes, basketball was one place where questions of
race didn’t dominate. Obama threw himself into the game. “He was what I
would call a ‘Basketball Jones,'” says Chris McLachlin ’64 who coached
the lanky teen during his senior year on the Varsity team. “That’s a
person who lives, eats, and sleeps with their basketball: they dribble
it to school, they dribble it between classes, they shoot baskets on
Middle Field during lunch. And Barry had that real love and passion for
Bobby Titcomb ’80, a commercial fisherman and
airline employee, remembers his family driving to the Ke’eaumoku
Foodland after school, and “there would be Obama dribbling his ball,
running down the sidewalk on Punahou Street to his apartment, passing
the ball between his legs. I mean, he was into it.”
played back-up forward as the team’s sole left-hander. He was regarded
as a fierce competitor. “He had this double pump,” says teammate Alan
Lum. “He’d clutch the ball, jump and stay up in the air and pump the
ball and shoot while you were coming down. So if you were smart, you’d
jump two seconds after he did and maybe you’d have a chance.”
not a starter, Obama had presence. “He was a leader on the court,” says
Lum. “He would call people on it if they were doing something wrong. He
would question coaches. A lot of things he did, he did for the right
reason; a lot of questions he asked I was thinking in my mind, but he
was strong and confident enough to ask them. I respected him for that.”
Amid the rigors of competition, the team also found time for
fun. They worshipped Dr. “J” Julius Erving, who revolutionized
basketball with his dazzling dunks and aerial pyrotechnics; they went
to see “Star Wars” at the Cinerama Theatre; they suited up to the
driving beat of the Rolling Stones (Obama was in charge of pre-game
music). Before Thurston Athletic complex was built on campus, the team
held shooting practice at Blaisdell Arena and Darin Maurer remembers
hauling the guys around in his brown Volkswagen van. They would stop by
Mr. Burger at the corner of University and Dole for plate lunches and
burgers while grooving to the sounds of Earth, Wind and Fire, Stevie
Wonder, and Fleetwood Mac’s “Rumors.” “I still think of Barry when I
hear Stevie Nicks today,” Maurer laughs.
In Obama’s senior
year, the Varsity Basketball team overpowered Moanalua High School 60 –
28 to win the State championship title. Coach McLachlin describes the
1979 lineup as “one of my best teams ever,” but Obama seemed to find
his real stride elsewhere.
A keen basketball player, Sen Obama highlights in his book the
feelings of alienation caused by “always playing on the white man’s
court – by the white man’s rules. If the principal, or the coach, or a
teacher wanted to spit in your face, he could, because he had the power
and you didn’t.”
But that’s not the Barack Obama, nor
the Hawaii of the 1970s, recalled by his friends, teachers and
team-mates. They remember instead the summer of 1978 when “easy-going
Barry” was in constant search of a basketball game, strutting around
the island as if he owned it, dribbling a ball from school to the
golden sands of Waikiki beach as he belted out Earth, Wind and Fire
songs in a distinctive, gravelly voice.
Furushima, 46, a close friend of Mr Obama, recalls: “We’re just such a
mixed-up bag of races, it was hard to imagine that he felt that way
because he just seemed happy all the time. Smiling all the time.”
Flicking through an old school yearbook, full of pictures of a grinning
Obama, she added: “You see he talks in his book about race and stuff,
and we all have the same reaction: we’re all so surprised that he had
any sort of anguish at all. You can see we had so many tones of brown.
If someone is brown, they can be Samoan or Fijian or Tongan. I can’t
tell if someone is Fijian, or black.”
“Barry had no personal reference for his blackness. All three of us
were dealing with it in different ways,” Peterson recalled. “How do we
explore these things? That is one thing we talked about. We talked
about time. We talked about our classes. We talked about girls. We
talked specifically about whether girls would date us because we were
black. We talked about social issues. . . . But our little chats were
not agonizing. They were just sort of fun. We were helping each other
find out who we were. We talked about what we were going to be. I was
going to be a lawyer. Rick was going to be a lawyer. And Barry was
going to be a basketball player.”
Obama’s interest in basketball had come a long way since his absent
father showed up and gave him his first ball. Now it was his obsession.
He was always dribbling, always playing, either on the outdoor courts
at Punahou or down at the playground on King Street across from the
Baskin-Robbins where he worked part-time. He was a flashy passer with
good moves to the basket but an uneven and unorthodox jump shot,
pulling the ball back behind his head so far that it almost disappeared
behind him. Basketball dominated his time so much that his mother
worried about him. In ninth grade, at least, he was the naive one,
believing he could make a life in the game.
In Tony Peterson’s senior yearbook, Obama wrote: “Tony, man, I sure
am glad I got to know you before you left. All those Ethnic Corner
trips to the snack bar and playing ball made the year a lot more
enjoyable, even though the snack bar trips cost me a fortune. Anyway,
great knowing you and I hope we keep in touch. Good luck in everything
you do, and get that law degree. Some day when I am a pro basketballer,
and I want to sue my team for more money, I’ll call on you.”
Obama’s coach testifies to Obama’s obsession with basketball, and Obama’s problem with the fact that he didn’t get much playing time.
Basketball was another route into black culture for Obama. This was the era of
Julius Erving, better know as Doctor J, a dazzling star who played the game
with both ferocity and grace, and whose signature was the Tomahawk dunk. In
his memoir, Obama remarked that half his white basketball friends ‘wanted to
be black themselves – or at least Doctor J’.
Unfortunately for Obama, the Punahou coach, Chris McLachlin, was a
traditionalist who emphasised the fundamentals of the game, rather than
Obama’s flamboyant ‘street’ style. Obama, who protested that this was a
‘white’ method of play, was kept on the bench by McLachlin much of the time.
‘He was on a real stacked team, one of the best teams I have ever had,’
McLachlin, currently recovering from a stroke, told me as we sat in his living-room,
a stone’s throw from Punahou. ‘He would have started on any other team in
the state. He was that good. Played forward, he was a smasher, driver,
post-up, rebounder kind of guy. Also very good at one-on-one moves, very
creative. He just loved the game, would play it 24/7 if he could. One of
only a handful of kids I’ve ever coached in 38 years of coaching who would
dribble his basketball around with him during school. First to arrive at
practice, last one to leave.’
There was a hint of regret in McLachlin’s reminiscences. ‘The older I got the
wiser I got,’ he said. ‘At the time, I was very much a proponent of more
organised, structured systems. If he’d been with me later, he would have
found a lot more playing time because later in my career I think I did a
better job of finding a niche for those guys who liked to be more creative
on the floor.’
Those close to Obama say that the clash still rankles with him.
2. His father’s outspoken politics — and his deep professional failure.
Obama idealized his father, and modeled his early life after the
outspoken socialist ideals of his father. And then, when his father
died, and Obama soon thereafter traveled to Kenya, he discovered the
truth about his father. His father’s outspoken socialist views —
presented in a direct attack against the views of Kenyatta and Mboya
had helped destroy his career.
Obama, Sr. was outspoken, opinionated and massively self assured,
all who knew him report. And what he was most opinionated and self
assured about was the socialist and African Nationalist future needed
But Obama’s sharp tongue soon got the better of him. In 1965, Obama
published an article in the East Africa Journal in which he criticized
the government’s approach to economic planning. At the same time tribal
rivalries that had been muted in the interests of independence, were
beginning to assert themselves, pitting Kenyatta’s Kikuyu loyalists
against the Luo tribe of which Mboya and Obama were part. And Obama,
had something pointed to say about that, too – that unqualified men
were taking the best jobs.
“His friends tried to warn him,” Auma
Obama said in her brother’s book, “but he didn’t care. He always
thought he knew what was best, you see.”
Obama’s star began to
fall; he was sidelined to a job in the Ministry of Tourism. Frustrated
that his skills were not being used, he began to drink more heavily and
had a series of alcohol-related car accidents, one of which resulted in
the death of another driver.
“He was a terrible driver,” said Ochieng. “He would get very excited and zoom like Mr. Toad.”
the Kenyatta regime became the subject of increasing controversy, Obama
found many of his colleagues distancing themselves from him. He, in
turn, took his anger out on his wife, according to several of his
friends, and his marriage began to deteriorate.
“Kenya changed a
great deal between 1963 and 1970,” said David William Cohen, former
director of the International Institute at the University of Michigan
and a professor of African history. “Anyone brought into the government
with idealism in those early years either exploited the situation, or
was completely frustrated. Obama did just what other frustrated
intellectuals did at the time, which was to stay in the bars until
their minds go to rot.”
appears that Obama Jr. has actually drawn certain useful lessons from
his father’s failure. The younger Obama is abstemious, cautious, and,
while he talks a lot, he seldom says anything that anybody who
disagrees with him can understand.
It was not just the voice, said Neil Abercrombie,
who went on to become a congressman from Honolulu, but Obama’s entire
outsize persona — the lanky 6-foot-1 frame, the horn-rimmed glasses,
the booming laugh, the pipe and an “incredibly vital personality. He
was brilliant and opinionated and avuncular and opinionated. Always
opinionated. If you didn’t know him, you might be put off by him. He
never hesitated to tell you what he thought, whether the moment was
politic or not. Even to the point sometimes where he might seem a bit
discourteous. But his view was, well, if you’re not smart enough to
know what you’re talking about and you’re talking about it, then you
don’t deserve much in the way of mercy. He enjoyed the company of
people who were equally as opinionated as he was.”
Posted by PrestoPundit on 11/20/2008
No one can be surprised that a messiah figure promising change beat a senator flailing at earmarks. No one cared about John McCain’s earmarks, my friend. No one was inspired by his insistence that Barack Obama was an “honorable” man or assured by his dismissal of “some old terrorist,” named William Ayres.
They were inspired instead when the “warrior princess” began to fight the real battles the tired, old soldier was unwilling to engage.
While Sarah Palin called out the “old terrorist,” McCain smiled and shrugged. While Palin fought to make drilling for oil the legitimate issue it was, McCain insisted he knew more about ANWR than Alaska’s governor and clung to his PC opposition. And, in an attempt to further demonstrate his magnanimous reach across the aisle, he vowed to include the genius Al Gore on any Global Warming initiative his administration might advance. Inspiring.
While people were given an opportunity to vote on how they actually felt about men marrying men and women marrying women in three states, McCain was reluctant to mention the issue. Loathe to defend the sanctity of marriage between a man and woman? Unwilling to expose his opponent’s radical opposition against giving the people a vote? Remarkably, both Florida and California went for Obama and against homosexual marriage. Did those voters know where Barack stood on this issue? Did they understand his stated intention to overturn the Defense of Marriage Act in order to usher in homosexual marriage state by state? Who would have told them except Obama’s opponent, John McCain? But marriage was not worth fighting for. The important issue was earmarks, my friend … earmarks.
While a huge percent of Americans–Democrats, Republicans and Independents alike–continue to oppose amnesty and benefits for illegal aliens, John McCain refused to make it a campaign issue. Do the citizens of the United States know Obama supports driver’s licenses for illegals? Medical benefits? Open borders? Do they know that of the so-called 44 million uninsured, millions are illegal immigrants? No, because McCain refused to mention it. He was more concerned about demonstrating his compassion to illegals than defending his country against their overwhelming demands.
When an attendee at a Wisconsin McCain/Palin rally stood up to declare, “I’m mad! Fight for us!” McCain delivered his trademark Beavis and Butthead laugh, offended at the challenge, not even comprehending the gravity of the moment. The nation at crisis, he thought the race was about him.
“Fight with me!” McCain famously urged at the Republican Convention, but we quickly discovered he perceived the fight to be for his shot at the presidency, not the preservation of the union. If he had really understood the dangers, how could he have remained cavalier and unserious about so many important issues?
A loss for McCain meant a return to the rich privileges of the Senate, a beautiful, millionaire wife and plenty more opportunities to fight earmarks and reach across the aisle. While the nation reels from his weakness, we were the ones who lost, not he.
As McCain met with the president-elect this week, speculation grows on a cooperative, bipartisan effort to bring citizenship and benefits for illegal immigrants. And since all campaign promises are off and the great compromiser still boasts of supporting leftist Supreme Court Justices David Souter and Ruth Bader Ginsburg we can likely look forward to seeing him champion more bad nominees, more illegal immigration, more foolish global warming initiatives and more attention-getting gimmicks to demonstrate his maverick madness.
I voted for him out of self-preservation, but I would not have been proud of my candidate if this misguided lion lacking courage had made it to the White House. Still, I fear he will do more damage outside the White House than inside, and that, my friend, is a bi-partisan reach we could live without.
Posted by PrestoPundit on 11/13/2008
EVERY DAY. Hoover did everything he could to interrupt the healthy self-coordination of trade and commerce — and then posed as the poster boy of the “free market.” All in one swoop Hoover helped to destroy the market — and the reputation of idea of the free market. Bush has been doing the same.
Hoover’s anti-coordination, anti-market policies are well known. If you “don’t know much about history” or you are still caught up in the bogus myth of Hoover propagated by grossly dishonest Democrat journalists and historians 40 years ago, you might start with this eye opener.