Miscellany: 7/04/14 Happy Fourth of July!

Quote of the Day

As far as the laws of mathematics refer to reality, 
they are not certain, 
and as far as they are certain, 
they do not refer to reality.
Albert Einstein

Via FEE and Lawrence Reed

On this Day Was Born Our Last Great President



Remembering the Greatest Generation

Adams via Lawrence Reed

Tom Brokaw is fond of referring to the combatants of WWII as the "greatest generation", but the first was truly the greatest, whom not only persevered against all odds against one of the greatest imperial powers ever to give birth to a great country, but devised an incredibly flexible, robust, and stable government with checks and balances that has set the standard for democratic republics. The genius of the Founding Fathers, polymaths  like Jefferson and Franklin, Adams, Hamilton, and Madison, has never been equaled, in my opinion. Lawrence Reed singled out Adams and Jefferson, leaders of the first 2 great parties whom clashed in the election of 1800 and died within hours of each other on the golden anniversary of the Declaration. I decided to add Madison given his status as Father of the Constitution.

Jefferson via Lawrence Reed

Madison via here

Image of the Day: Oxymoronic Signs

Via We the Individuals

At the Theaters: A New Movie Debunking the "Progressive" Leftist Critique of America in Schools and Colleges



What the Fed Giveth, It Taketh Away

My retirement accounts hit a nominal all-time high yesterday. But I don't really feel all that richer, because of the effects of inflation. I'm reminded of that everytime I pass a gas station with posted prices inching ever higher or see Walmart's latest meat special pushing $10/lb. In fact, I've been more conservative with my retirement money than I should have been under start-and-sputter Obamanomics, mostly aided by unprecedented easing by the Fed. The Fed has painted itself into a corner with its reckless policy; whereas some growth has occurred, it's more despite the Fed than because of it, and certain not due to broken window fallacy fiscal policy.

What do I mean by painting themselves into a corner? Well, for one thing, the Fed knows that the fiscally irresponsible Congress and President have loaded so much national debt on the American people, that debt service costs will explode as new or rolled forward debt is issued, assuming a return to mean interest rates; it has a vested interest in maintaining some inflation since old debt is degraded--and in a deflationary environment, the burden of debt will effectively increase because taxpayers will have to pay it off in more expensive dollars.

The second point is that I'm very worried about investors have piled into corporate bonds, desperately looking for extra yield and safety vs. the stock market. If and when interest rates hike, prices will plunge and who's going to buy as investors make a run on corporate bonds? The big question is: will the Fed step in as a buyer of last resort to head off a panic? A bond panic will cause massive havoc on Wall Street as businesses with significant debt facing skyrocketing debt service expenses and/or locked out of credit markets.

A third problem is that Fed policy has actually led companies to consume vs. grow capital organically. For example, a company can artificially boost its earnings per share simply by buying back stock. Companies are not investing (as a whole) in new productive capacity for next-generation products, and a lot of that has to do with uncertainty over long-run government and monetary policy.

A fourth problem is that many emerging market debts are financed at a positive offset to American interest rates. This means if the Fed has to raise rates to defend against inflation--which risks triggering a domestic recession--overseas markets may well catch the flu trying to service and obtain new debt at higher rates.

From the Mises Economics Blog:

The Dow Jones Industrials just closed above 17,000 for the first time ever. Since its high in 2000, the Dow is up 45%. Over the same period the CPI is up 40%. Nearly all of the gain in the stock market is just because of prices going up, not because of real economic growth. In fact, if you factored inflation out of your stock returns over the past 14 years, you earned a miserly 0.2% per year.

In new stock market highs, the Fed giveth and taketh away http://t.co/w4yKRtOHky
— Ronald Guillemette (@raguillem) July 4, 2014

Against the Emerging American Monarchy

One of the best interview clips I've heard in months; if King Obama continues on his current patterns of lawlessness, it may spark rebellion or even secession...



Time to Privatize the USPS...

HT Drudge Report: USPS Worker Caught Throwing Packages into a Ravine



Facebook Corner

Via Cato Institute

Unaccountable personal decisionmaking, universal recognition of negative rights, voluntary moves, contracts and associations #LibertyIn140
— Ronald Guillemette (@raguillem) July 5, 2014

(Ron Paul). What would you replace our failing monetary system with? Share and learn more: http://bit.ly/1rtQB2V #freemarkets
So many things to disagree with in this thread. No, inflation and deflation were not out of hand before the Fed: "From 1776 to 1912 (136 years), the value of the dollar, relative to the Consumer Price Index, increased by 11%...Then after The Fed's creation, from 1913 to 2008 (95 years), the value of the dollar, relative to the Consumer Price Index, decreased by 95%." We saw periods of mild inflation and deflation reflecting relative supplies of gold; the issues we've seen in terms of bank stability have more to do with anticompetitive unit banking restrictions and irrational asset backing regulation--e.g., Treasury notes while the US was attempting to retire its debt. I think we'll eventually see reintroduction of some asset-backed, convertible currency; there is only so far you can manipulate currency and hard asset markets.

(Jeffry Tucker). This article is so disgusting actually, as arrogant as it is ignorant. All the wrong people are rallying behind it. http://topinfopost.com/2014/06/30/ultra-rich-mans-letter-to-my-fellow-filthy-rich-americans-the-pitchforks-are-coming
I totally believe that this accidentally rich bozo was a self-admitted "mediocre student". He hasn't even learned from his own experiences. Like Warren Buffett, he panders to the left wing, telling them what he thinks they want to hear. I wonder if this guy is a closet crony like Buffett: making big money off rail transport of oil because of bureaucratic inertia over pipelines, wind power because of Big Green federal subsidies, not to mention a sweet deal with GS in the aftermath of the economic tsunami, when GS got fully reimbursed on AIG swaps liabilities, while auto bondholders got pennies on the dollar at the expense of lower-standing crony unionists in a clear violation of the rule of law. 

Don't get me wrong; I don't believe in the Politics of Envy; these pieces of work are entitled to their profits and their crackpot political opinions. But spare me the condescending, pandering populist hype. This guy doesn't mention at all hiring minimum wage workers, but he has no problems telling other business owners, hard-pressed to earn profits, that it's for their own good he wants to raise their costs. The idea that raising the minimum wage, maybe 2% of the labor force, is part of the Seattle growth story is preposterous; all he's really doing is the Bastiat notion of "things unseen", less skilled/experienced workers shut out of the labor market, which doesn't make the front page.

More Marriage Proposals









Political Cartoon

Courtesy of Henry Payne and Townhall

Musical Interlude: My Favorite Vocalists

Dan Fogelberg, "Go Down Easy"