Monthly Archives: March 2007

The Housing Bubble, and the Freedom to Fail

In the post “Ron Paul — Federal Reserve To Blame For Housing Bubble

Warbs noted that Ron Paul was blaming the fed for creating, and perpetuating the housing bubble, which is about to burst and deliver a big smackdown to the economy.

“When the bubble finally bursts completely, millions of Americans will be looking for someone to blame. Look for Congress to hold hearings into subprime lending practices and “predatory” mortgages. We’ll hear a lot of grandstanding about how unscrupulous lenders took advantage of poor people [ed: Chris Dodd is already doing it], and how rampant speculation caused real estate markets around the country to overheat. It will be reminiscent of the Enron hearings, and the message will be explicitly or implicitly the same: free-market capitalism, left unchecked, leads to greed, fraud, and unethical if not illegal business practices.

But capitalism is not to blame for the housing bubble, the Federal Reserve is. Specifically, Fed intervention in the economy– through the manipulation of interest rates and the creation of money– caused the artificial boom in mortgage lending.

The Fed has roughly tripled the amount of dollars and credit in circulation just since 1990. Housing prices have risen dramatically not because of simple supply and demand, but because the Fed literally created demand by making the cost of borrowing money artificially cheap. When credit is cheap, individuals tend to borrow too much and spend recklessly.

…

Unless and until we get the Federal Reserve out of the business of creating money at will and setting interest rates, we will remain vulnerable to market bubbles and painful corrections. If housing prices plummet and millions of Americans find themselves owing more than their homes are worth, the blame lies squarely with Alan Greenspan and Ben Bernanke.” – Ron Paul

Though Brad doesn’t quite agree with the entirety of Pauls comments, he goes on to note:

“Paul also points out the use of Fannie Mae and Freddie Mac to offload risk (which many investors consider to be implicitly guaranteed by the US Government). He doesn’t mention the use of derivatives to slice-and-dice the risk and further offload it onto the market, but his point still stands. The Federal Reserve has flooded the market with money, and that money has been chasing returns. Housing has been the “hot” asset class, creating an unsustainable bubble. When that bursts, it will be a lot worse than the tech stock bubble, because it actually hits people right at home.”

You flood the market with money, and you see what happens. The rich, who have the ability to move money around chasing these asset classes, get richer. They buy second homes or investment properties to ride the appreciation wave, increasing demand. The poor and middle class, who are just trying to get ahead, struggle to keep their incomes constant or rising relative to the cost of goods. And when housing becomes the asset class bubble, they get priced out of homes and lenders must resort to “creative” financing to allow them to buy. Then, when the returns on investment start drying up, the demand of speculators and investors dries up, and home prices collapse.

The bubble is bursting. The particular nature of the housing market, as a relatively illiquid asset, is making this occur more slowly than a stock bubble would occur. But it’s occurring nonetheless. Blame can be spread around, of course, especially to some of those subprime borrowers who purchased homes they cannot afford. But Ron Paul is right, it is clear that the Fed’s loose money policy created this bubble, and they deserve a great deal of blame when it bursts.”

I’m sorry, but the most basic market principle of libertarianism is that rational actors, will act with informed self interest, to produce optimal results in a market.

This isn’t anyones FAULT, but the people who bought houses they couldn’t afford; and the people who lent them the money to do so.

No-one was deceived by the fed, or the lenders. There’s no such thing as a predatory mortgage on a new house you can’t afford. Lenders aren’t trying to put people into loans they cant pay back, they LOSE money on foreclosures.

No-one was deceived by the fed keeping relatively loose money. The fed could have done whatever they wanted with interest rates; people were too caught up in the “gold rush” mentality to care. In fact, during this “boom” we’ve seen the fed put the biggest peacetime interest rate increases in place, month after month, (in 2000, and then again in 2002 and 2003), and all it did was slow things down slightly.

THere was no deception involved here, except self deception. Everyone thought they could keep surfing the wave; and they pretended that it would never reach the the shore.

As far as I’m concerned, none of this is a problem from a market standpoint. There is no point in this cycle where we could have legitmately said, “OK, now it’s time for the government to step in a do something”. This is just a natural economic cycle..

Or did people forget that markets have boom and bust cycles naturally; based on the psychology of the market?

Oh wait, yes, that’s right, they did.

So a bunch of sub-prime lenders are going to fail.

Oopsie…

That’s going to put pressure on a lot of major banks who invested, or underwrote those subprimes.

Oopsie…

A bunch of builders and contractors are going to go under now, because they were only in existence to take advantage of the bubble.

Oopsie…

A whole bunch of people are going to lose those houses they couldn’t afford; or the second or third houses they bought on spec, to try and sell for far more than they were worth in a rational market.

Oopsie…

None of these are BAD THINGS. Markets make mistakes, and this is the corrective mechanism. If you over invest in something shaky, you get what you deserve.

If you bought a house you couldn’t afford, because someone was stupid enough to give you a loan you couldn’t pay back, whose fault is that?

YOURS, that’s who.

If the lender who loaned you the money goes under, because you and all your neighbors default on his loans, whose fault is that?

HIS, that’s who.

You both made decisions, knowing what the consequences of those decisions could be, and willfully choosing to ignore them.

The most basic freedom of the market, is freedom to fail; because failure makes markets strong.

What we’re seeing right now, and will see over the next.. oh I’d say two years… is the principle of freedom to fail in action. People made risky gambles, and they lost; that’s what happens sometimes.

When the dust clears; you can bet that those involved won’t do that again… or at least the ones with any brains will anyway. The other idiots will be off looking for another boom to bust.

Now, what WOULD be a problem, is if, as Paul suggests (and I think it’s entirely likely); the government decides it “must do something”, to protect those fools from the consequences of their actions.

THAT, would be a BIG problem.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

NYPD Or CIA ?

Today’s New York Times reports that the New York Police Department engaged in a widespread spying program for almost a year prior to the 2004 Republican Convention:

For at least a year before the 2004 Republican National Convention, teams of undercover New York City police officers traveled to cities across the country, Canada and Europe to conduct covert observations of people who planned to protest at the convention, according to police records and interviews.

From Albuquerque to Montreal, San Francisco to Miami, undercover New York police officers attended meetings of political groups, posing as sympathizers or fellow activists, the records show.

They made friends, shared meals, swapped e-mail messages and then filed daily reports with the department’s Intelligence Division. Other investigators mined Internet sites and chat rooms.

From these operations, run by the department’s “R.N.C. Intelligence Squad,” the police identified a handful of groups and individuals who expressed interest in creating havoc during the convention, as well as some who used Web sites to urge or predict violence.

But potential troublemakers were hardly the only ones to end up in the files. In hundreds of reports stamped “N.Y.P.D. Secret,” the Intelligence Division chronicled the views and plans of people who had no apparent intention of breaking the law, the records show.

These included members of street theater companies, church groups and antiwar organizations, as well as environmentalists and people opposed to the death penalty, globalization and other government policies. Three New York City elected officials were cited in the reports.

This isn’t a new tactic for the NYPD, they used similar tactics back in the 1960s when they inflitrated anti-war and civil rights organizations and, in some cases, clearly provoked those groups into engaging in illegal activity that would then results in arrests.

There are several problems with what the police did here, but potentially the most damaging is the manner in which this type of surveillance can have a chilling effect on political speech and political action. If you oppose the powers-that-be and know that there’s a possibility that one of the people posing as your members may actually be a police informant, then it’s likely that you’ll be careful about what you say and when you say it.

Sounds like a perfect monitoring system for Big Brother to me.

The Damage To Society From Our “War On Terror”

One of the constant themes I point out in the War on (Some) Drugs is that the cure is worse than the disease. Nobody will claim that drugs haven’t been a catalyst for people to ruin their lives, and often dramatically alter the lives of those around them. However, the fact is that the methods we’ve used to prosecute the War on (Some) Drugs have damaged the rule of law and the relationship between an individual and government. Further, for all the cost, the no-knock raids, the destruction of 4th Amendment rights, we’re no closer to winning the War On (Some) Drugs than we were at day 1. In fact, it’s quite likely that if we had at once accepted the existence of drugs and focused our efforts on education and treatment, that we’d have a much better prognosis today?

Is it possible that we have the same problem in the War On Terror? Now, to some extent, the analogy is strained. After all, drug use is a victimless crime, terrorism is not. But I think it’s quite possible that the methods we use to fight the War On Terror are counterproductive, extremely costly with little return on investment, and will prove in the long run to be more destructive to American society than the terrorism it’s fighting. The Washington Post’s Zbigniew Brzezinski deftly argued this point in an op-ed yesterday.

But the little secret here may be that the vagueness of the phrase was deliberately (or instinctively) calculated by its sponsors. Constant reference to a “war on terror” did accomplish one major objective: It stimulated the emergence of a culture of fear. Fear obscures reason, intensifies emotions and makes it easier for demagogic politicians to mobilize the public on behalf of the policies they want to pursue.

Fear is a tool of control. It is one thing to ask a person to do what you wish. It is another to demand it. But pushing a person into fear is a way to make him eagerly do what you wish, thinking it was his idea all along. Through fear, you need not worry how a man carries the shackles you put on him, because he’ll volunteer to wear them. To be sure, there are things in this world worth fearing. But fear is not an excuse to suspend your rational ability. The man who asks you to cede your freedom in exchange for “freedom” is not to be trusted.

Fear has become the name of the political game, and the stakes are high. Unlike World War II, we’re not asked to ration sugar or observe meatless meals. Instead, we’re asked to suspend habeas corpus, willingly submit to National Security Letters and warrantless domestic wiretapping. Of course, we’re asked to provide implicit trust to the government to faithfully protect us, while acting as watchdogs to snitch on our untrustworthy family, friends, and neighbors at the first sign of wrongdoing. We’re watching as crucial controls on government, going back to the Magna Carta in 1215, are being removed.

The record is even more troubling in the general area of civil rights. The culture of fear has bred intolerance, suspicion of foreigners and the adoption of legal procedures that undermine fundamental notions of justice. Innocent until proven guilty has been diluted if not undone, with some — even U.S. citizens — incarcerated for lengthy periods of time without effective and prompt access to due process. There is no known, hard evidence that such excess has prevented significant acts of terrorism, and convictions for would-be terrorists of any kind have been few and far between. Someday Americans will be as ashamed of this record as they now have become of the earlier instances in U.S. history of panic by the many prompting intolerance against the few.

The time comes that I have to ask myself a simple question: Is it worth it?

What level of uncertainty of a terrorist attack should we allow in our lives in order to be certain that we’re not subjects of a police state? It has become a sad state of affairs when I’m more concerned that the actions of my own government will cause me trouble than the actions of extremists who have sworn an intent to kill me. In a world where we’re asked to submit to intrusive surveillance on a daily basis, and further to do so gladly and “for our own protection”, I wonder if it wouldn’t be better to simply take my chances without their blanket of security?

Might there be better ways of reducing terrorism than turning our own country into a prison, while engaging in a foreign policy which causes those who didn’t hate us 5 years ago to start? Nearly 40 years of effort have proven that our tactics in fighting a war on drugs have proven futile and counterproductive, while damaging American society in the process. Should we take a step back and evaluate whether our tactics fighting international terrorism have been futile and counterproductive, while damaging American society in the process?

Refuse to Serve? Protect Yourself!

Karolina Obrycka is a Chicago bartender. As a responsible bartender, she noticed that one of her patrons had a little too much to drink and refused to continue to serve him. This did not sit well with the customer 38 year-old Anthony Abbate who became increasingly belligerent to the point where he began attacking her. Surely the police who were present in the bar would come to her aid to protect her? Oh, did I mention that the man attacking her was an off duty police officer?

Here’s the video:

As it turned out, Anthony Abbate was not the only police officer in the bar that night; surely they would come to the woman’s aid? Investigators are now trying to determine if several other police officers threatened the bartender with false charges to keep her quiet. If this is true then these officers should all be hauled off to jail along with this Neanderthal.

This is not the first time Officer Anthony Abbate has been on the wrong side of the law. Back in 1992 he was arrested for drunk driving. The charges were dropped.

It seems to me that we should hold our men and women in blue to a higher standard instead of giving them a license to break the law. Whatever the penalty is for assault and battery (or any other crime) for a civilian should be doubled for anyone in law enforcement. This is truly disgraceful.

How Do Strippers Calculate VAT, Anyway?

It looks like reporting and paying taxes in the UK just got easier for strip clubs, and a lot harder for individual strippers.

He backed the chain’s argument that the self-employed dancers provide the entertainment on offer, rather than the club.

“The women are not employed by the club. They are all self-employed,” Mann said. “They pay a sum to the club which allows them to ply their trade for a session of eight hours.”

“Some of them will be those dancing on the podium. These proceedings do not, at least directly, concern that activity.

“The activities which concern me are those provided as a result of more direct engagement between the women and the customer.

“For a sum of money, the women can be engaged to perform private dances for the customer. A fee of 10 pounds is charged for a semi-nude dance; 20 pounds is charged for a nude dance. Each dance lasts for a ‘track’, about three minutes.

While this is mostly a post with the intent of talking about strippers, it does bring up some interesting (and flippant) questions. In practice, it will require strippers to register with the British government as sole-proprietor businesses, and thus to pay business taxes. But the determination of taxes owed becomes problematic.

How does a stripper calculate their VAT? My interpretation of a VAT is that you must charge the VAT on your services, but then you can be refunded the VAT on business inputs necessary in the production of your “services”.

So do you get refunded the VAT that you paid when you bought your stripping clothes? Do you have to pro-rate this against the number of semi-nude and nude dances you perform, since those clothes aren’t used in the nude dances? Do you get to refund the VAT from purchasing exercise equipment necessary to maintain your figure, as it is a crucial factor in your business? And how do you calculate “what yo’ momma gave you”?

VAT taxes on services are by definition difficult to understand. What are you adding value to? For a stripper, your dancing ability— and your ability to make customers think you actually care about them, since strippers are in the business of selling the illusion of intimacy— are a value added to your general sex appeal. So how do you value your sex appeal in the determination of how much value your talent adds?

These are crucial questions that need to be answered. To answer those questions, I think it’s time for some extensive field research into the subject!

Freedom Suffers Another Setback In Russia

The Soviet Union officially died in 1991, but Russia’s road toward freedom has always been a difficult one, and things became even more difficult when Boris Yeltsin was followed as President by former KGB officer Vladimir Putin. In the seven years since he became President, he has taken steps to consolidate power and eliminate rivals. The latest step came this week, when the Russian Supreme Court ruled that one of the last real opposition parties in Russia cannot participate in the next round of legislative elections:

Russia’s next parliament is likely to have no genuine opposition after a court in Moscow yesterday banned a leading liberal party from standing in elections.

Russia’s supreme court announced that it had liquidated the small Republican party, claiming that it had violated electoral law by having too few members. The party is one of very few left in Russia that criticises President Vladimir Putin.

(…)

Vladimir Ryzhkov, the leader of the Republican party, said yesterday that the ban was part of a Kremlin-inspired campaign to crack down on dissent. “This is part of the Kremlin’s policy of suppressing the opposition. It’s being done to prevent opposition parties from taking part in elections,” he told the Guardian. “This is the fate any opposition party in Russia.”

Mr Ryzhkov – one of a handful of independent MPs in the Duma, the lower chamber of parliament, and a leading Putin critic – said his party would appeal in Russia and to the European court of human rights.

It’s fairly easy to see what will happen next if Putin is successful in removing the last of the real opposition parties from the Duma. First to go, as Captain Ed points out, will be that inconvenient little provision of the Russian Constitution that prevents him from running for re-election. After that, the sky’s the limit.

It’s sad to think that the promising days of glasnost, and the spirit that was shown when the people rose up to put down a coup in the summer of 1991, are coming to this.

Defaming gun owners

“This year will go down in history. For the first time a civilized nation has full gun registration. Our police will be safer, our police more efficient, and the world will follow our lead into the future.” – Adolf Hitler, who instituted the first German gun laws just before Kristallnacht.

I’m not the biggest fan of Michelle Malkin, but she has a column in the Washington Times about the prejudice against gun owners:

Two weeks ago, the Roanoke (Va.) Times published an online database of registered concealed handgun permit holders in the paper’s community under the sanctimonious guise of “Sunshine Week.” The database included both the names and street addresses of some 135,000 Virginians with permits to carry concealed weapons. Columnist Christian Trejbal patted himself on the back for making it easy to snoop on the neighbors: “I can hear the shocked indignation of gun-toters already: It’s nobody’s business but mine if I want to pack heat. Au contraire. Because the government handles the permitting, it is everyone’s business.”

The Roanoke Times showed reckless disregard for the safety of the license holders and reckless disregard for accuracy. In his column, Mr. Trejbal admitted he knew some of the information he had obtained was inaccurate — but published it anyway: “As a Sunshine Week gift, The Roanoke Times has placed the entire database, mistakes and all [emphasis added], online at www.roanoke.com/gunpermits. You can search to find out if neighbors, carpool partners, elected officials or anyone else has permission to carry a gun.”

After an uproar among gun-owners, including domestic violence victims licensed to carry, the Times finally decided to yank the database. Mr. Trejbal seems not to feel much remorse: “Did we make it easier [to obtain the information]? Yes. But it’s still a public record.” Let’s review: He published a list he knew contained inaccuracies. His paper admits the decision endangered gun owners. He compiled a convenient shopping list for criminals — and smacked law-abiding gun owners in the face with his comparison of their choice to exercise their rights with sex offenders.

Law abiding gun owners compared get compared to sexual predators. These are law abiding citizens exercising their right. I don’t understand how people can conveniently overlook or ignore the Second Amendment as an individual civil liberty protected by the Constitution.

For The 9/11 “Truthers”

In the comments today, a commenter had this written to me:

Our best bet is learn how to get along with one another, Kevin, already setting an arbitrary litmus test to anyone who questions the veracity of the 9/11 myth,

Well, I’ve got some questions and some evidence that will debunk the so-called 9/11 “truth” movement.

First of all, to those who believe the United States Government was behind 9/11, I would like to know how the following government agencies and people could keep all of their employees, current and former, quiet about the conspiracy:

-FAA
-National Transportation Safety Board
-FEMA
-Department of Transportation
-NSA
-CIA
-United States Air Force
-New York National Guard
-New York State Guard
-New York/New Jersey Port Authority
-Department of Defense
-Department of Justice
-FBI
-BATF
-United States Army
-DIA
-New York City Police Department
-New York City Fire Department
-United States Army
-United States Air Force
-United States Navy
-New York state government
-All of the various former Bush cabinet officials that have left the government

These agencies and people and more were involved either in the supposed conspiracy or the investigation. If there is any evidence of a government conspiracy, why has no one in the above groups come forward with credible evidence exonerating Al-Qaeda and blaming the U.S. government?

Point number two, if the World Trade Center buildings were wired for demolition, how did they get past the 24-hour security? If the security helped, why has not anyone come forward with evidence implicating them?

Finally, some videos from a BBC documentary called 9/11 The Conspiracy Files that debunks various “truther” nonsense. h/t: QandO:

I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at IJ Review.com and Rare. You can also find me over at the R Street Institute.

Chavez To Disband Venezuelan Legislature

This can’t be good…

Venezuela May Eliminate Congress, Lawmaker Vivas Says

Venezuela may eliminate the National Assembly and transfer the powers of congress to community councils, congressman Dario Vivas said.

The councils, which the government began organizing this year, will replace some state institutions and shutting congress is “part of that debate,” said Vivas, who is president of the assembly’s committee on citizen participation, decentralization and regional development.

Vivas didn’t say when or how congress would be eliminated.

“We’re going toward a communal government, a communal parliament,” Vivas in an interview with Caracas-based Globovision television station today. “Those institutions that we consider to have completed their cycle will have to make way for decisions made by the communities.”

Viva La Revolucion!

I see the rule of law stands firm, as Chavez contemplates disbanding the legislature which has a check on his personal power, replacing them with community councils which I’m sure will be under his thumb.

We all see where this is going, it’s too bad that the Chavez apologists willfully ignore it.

Granny’s Got a Gun

NEW ORLEANS – Sixty-four-year-old Vivian Westerman rode out Hurricane Katrina in her 19th-century house. So terrible was the experience that she wanted two things before the 2006 season arrived: a backup power source and a gun. “I got a 6,000-watt generator and the cutest little Smith & Wesson, snub-nose .38 you ever saw,” she boasted. “I’ve never been more confident.” People across New Orleans are arming themselves — not only against the possibility of another storm bringing anarchy, but against the violence that has engulfed the metropolitan area in the 19 months since Katrina, making New Orleans the nation’s murder capital.

The number of permits issued to carry concealed weapons is running twice as high as it was before Katrina — this, in a city with only about half its pre-storm population of around 450,000. Attendance at firearms classes and hours logged at shooting ranges also are up, according to the gun industry.

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Some people are losing faith in the system to protect them.

Earnest Johnson, a 37-year-old chef who lives in Kenner, bought his first gun recently and visits a shooting range regularly. “Things are way worse than they used to be,” he said. “You have to do something to protect yourself.”

Kevin Cato, a 41-year-old contractor, bought a .45-caliber handgun for protection when he is working in some of the city’s still-deserted areas. “But it’s not much safer at home,” Cato said. “The police chased a guy through my yard one time with their guns out.”

link

It’s too bad that people are having to relearn this lesson again, but at least they are learning it and arming themselves. The government isn’t able to protect you. The only way to have the government guarantee your safety from criminals is to have a police officer in every home. Somehow I don’t think that’s a wise solution.

In any case, I think I’ll stop here because a picture is worth a thousand words, and I’d like to save myself the work:

Image Hosted by ImageShack.us

Westerman, an artist who lives in the city’s Algiers neighborhood, is prepared to use deadly force.

“I’m a marksman now. I know what I’m doing,” she said. “There are a lot of us. The girl next door is a crack shot.”

A pack, not a herd.

The Definition of An Earmark

During the Iraq Supplemental Bill debate, Congressman Jeff Flake (R-Arizona) was accusing the Democratic leadership of violating the House rules on earmarks. Check out the response by House Appropriations Committee chairman David Obey (D-Wisconsin).

I’m one of the original co-founders of The Liberty Papers all the way back in 2005. Since then, I wound up doing this blogging thing professionally. Now I’m running the site now. You can find my other work at IJ Review.com and Rare. You can also find me over at the R Street Institute.

First Rule Of Fight Club — Don’t Talk About Your National Security Letter

A story from the WaPo about the person who is fighting against the practices of issuing National Security Letters. While the author’s identity wasn’t publicized, the WaPo claims they’ve checked out his story. It’s chilling.

My National Security Letter Gag Order

Three years ago, I received a national security letter (NSL) in my capacity as the president of a small Internet access and consulting business. The letter ordered me to provide sensitive information about one of my clients. There was no indication that a judge had reviewed or approved the letter, and it turned out that none had. The letter came with a gag provision that prohibited me from telling anyone, including my client, that the FBI was seeking this information. Based on the context of the demand — a context that the FBI still won’t let me discuss publicly — I suspected that the FBI was abusing its power and that the letter sought information to which the FBI was not entitled.

Rather than turn over the information, I contacted lawyers at the American Civil Liberties Union, and in April 2004 I filed a lawsuit challenging the constitutionality of the NSL power. I never released the information the FBI sought, and last November the FBI decided that it no longer needs the information anyway. But the FBI still hasn’t abandoned the gag order that prevents me from disclosing my experience and concerns with the law or the national security letter that was served on my company. In fact, the government will return to court in the next few weeks to defend the gag orders that are imposed on recipients of these letters.

Living under the gag order has been stressful and surreal. Under the threat of criminal prosecution, I must hide all aspects of my involvement in the case — including the mere fact that I received an NSL — from my colleagues, my family and my friends. When I meet with my attorneys I cannot tell my girlfriend where I am going or where I have been. I hide any papers related to the case in a place where she will not look. When clients and friends ask me whether I am the one challenging the constitutionality of the NSL statute, I have no choice but to look them in the eye and lie.

I cannot see any way to justify this behavior by our government. I cannot reconcile these tactics with the principles of a free society. This falls right in with the quasi-suspension of habeas corpus.

Is there any conclusion to make other than the thought that our rights are simply not even a concern to our security apparatus?

Robert Mugabe: Africa’s Hugo Chavez ?

Robert Mugabe, Zimbabwe’s dictator, must be watching CNN or something, because he’s starting to take plays right out of Hugo Chavez’s playbook. Call this one the “taunt the West” play:

HARARE, Zimbabwe (Reuters) — Zimbabwean President Robert Mugabe vowed on Friday to survive any Western attempt to dislodge him from power.

Mugabe said Britain and the United States would never overcome the support he enjoys in his ruling ZANU-PF party, which led the former Rhodesia to black majority rule in 1980.

“Nothing frightens me, not even little fellows like Bush and Blair. I have seen it all, I don’t fear any suffering or a struggle of any kind,” Mugabe, 83, said to cheers from ZANU-PF supporters at a meeting in Harare.

“I make a stand and stand on principle here where I was born, here where I grew up, here where I fought and here where I shall die,” Mugabe said, accusing the West of sponsoring the opposition Movement for Democratic Change (MDC) to overthrow his government.

Sounds an awful lot like our buddy down in Caracas doesn’t it ?

In other news, though, it looks like pressure on Mugabe is increasing and that the people of Zimbabwe are reaching the point of being fed up enough to do something:

One of Zimbabwe’s top Roman Catholic clerics, Archbishop Pius Ncube of Bulawayo, on Friday repeated his call for mass peaceful protests to end Mugabe’s 27-year rule.

(…)

Ncube, who has used his archbishop’s pulpit to become one of Mugabe’s most vocal and fearless domestic critics, on Friday said again he was ready to lead mass peaceful protests.

“This dictator must be brought down right now by the peoples’ power but not in a violent manner. If we can get 30,000 people together Mugabe will just come down,” Ncube told a news conference. “I would put myself on the line.”

Your eminenence, you just might have to.

Congress Ignoring The Constitution, Again

I’ve been writing alot this week over at Below The Beltway about the bill currently making it’s way through Congress that would give the District of Columbia voting representation in the House of Representatives. The bill is being pushed by Democrats and some Republicans, and it’s also unconstitutional.

Today, the Wall Street Journal has an editorial about what it calls The D.C. Con:

If you’ve visited the District of Columbia, you may have seen the license plates declaring “taxation without representation.” This isn’t a gripe about taxes, which they love in D.C. It’s a complaint about the District’s lack of seats in Congress. The rest of the country might have more sympathy if D.C.’s politicians were seeking representation according to the U.S. Constitution.

That isn’t true of legislation poised to pass the House that would provide the 580,000 District residents with official representation in Congress. (They currently have a “Delegate” who has full committee rights and can vote on floor amendments as long as it doesn’t change the outcome.) Supporters claim the vote is about “democracy,” with Republican co-sponsor Tom Davis from nearby Virginia going so far as to suggest that residents of Baghdad have more rights than D.C. residents.

I am embarrassed to admit that Tom Davis is my Congressman. Embarrassed because he’s hatched this cynical deal, and embarrassed because the bill is so obviously unconstitutional that allowing it to pass without challenge would have the effect of saying that the words in the Constitution don’t really mean anything.

The argument against Constitutionality is fairly simple. Article One, Section Two of the Constitution says the following:

The House of Representatives shall be composed of Members chosen every second Year by the People of the several States, and the Electors in each State shall have the Qualifications requisite for Electors of the most numerous Branch of the State Legislature.

Article One, Section Three says the same thing about the Senate:

The Senate of the United States shall be composed of two Senators from each State, (chosen by the Legislature thereof,) (The preceding words in parentheses superseded by Amendment XVII, section 1.) for six Years; and each Senator shall have one Vote.

Plainly, only states can have voting representation in the House and the Senate. The District of Columbia is not a state, it is a district controlled by the Federal Government made up of territory originally ceded by Maryland and Virginia (Virginia’s portion was returned in the 19th Century and is now known as Arlington County, Virginia). While residents of the District now do have a significant degree of control over their affairs, the vestiges of the original plan remain in the fact that nearly all major legislation approved by the elected leaders of the city could be overturned by Congress if it desired.

Since the District of Columbia is not a state, it is not entitled to voting representation in Congress. In this way, it is in a similar position to the Territorial Governments that existed in the West in the 19th Century before statehood was granted. If you want to grant voting representation in Congress to the residents of the District, then the only option is to amend the Constitution, which was done in the 1960s to give residents of the District the right to vote for President and Vice-President.

Given the clear text of the Constitution, you might think this was a slam dunk and that this bill would be dead on the vine, but you’d be wrong.

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Ron Paul — Federal Reserve To Blame For Housing Bubble

I’ve been one of the doomsayers regarding America’s economy, with the impending collapse of the subprime lending market (which I think will create a nasty recession). As with any economic downturn, the government and the media will be looking for someone to blame. Ron Paul suggests that we place our sights directly on the Fed.

When the bubble finally bursts completely, millions of Americans will be looking for someone to blame. Look for Congress to hold hearings into subprime lending practices and “predatory” mortgages. We’ll hear a lot of grandstanding about how unscrupulous lenders took advantage of poor people [ed: Chris Dodd is already doing it], and how rampant speculation caused real estate markets around the country to overheat. It will be reminiscent of the Enron hearings, and the message will be explicitly or implicitly the same: free-market capitalism, left unchecked, leads to greed, fraud, and unethical if not illegal business practices.

But capitalism is not to blame for the housing bubble, the Federal Reserve is. Specifically, Fed intervention in the economy– through the manipulation of interest rates and the creation of money– caused the artificial boom in mortgage lending.

The Fed has roughly tripled the amount of dollars and credit in circulation just since 1990. Housing prices have risen dramatically not because of simple supply and demand, but because the Fed literally created demand by making the cost of borrowing money artificially cheap. When credit is cheap, individuals tend to borrow too much and spend recklessly.

Unless and until we get the Federal Reserve out of the business of creating money at will and setting interest rates, we will remain vulnerable to market bubbles and painful corrections. If housing prices plummet and millions of Americans find themselves owing more than their homes are worth, the blame lies squarely with Alan Greenspan and Ben Bernanke.

Paul also points out the use of Fannie Mae and Freddie Mac to offload risk (which many investors consider to be implicitly guaranteed by the US Government). He doesn’t mention the use of derivatives to slice-and-dice the risk and further offload it onto the market, but his point still stands. The Federal Reserve has flooded the market with money, and that money has been chasing returns. Housing has been the “hot” asset class, creating an unsustainable bubble. When that bursts, it will be a lot worse than the tech stock bubble, because it actually hits people right at home.

Much debate on this blog has gone on (and will again soon with the Point/Counterpoint feature) regarding the Federal Reserve and the money supply. Whether you believe in a backed currency or not, it is generally assumed that the quantity of money in a economy should be based on the productive ability of that country. If the money supply has tripled since 1990, I think this is far in excess of any productivity growth we’ve seen since then. Thus, we have inflation.

You flood the market with money, and you see what happens. The rich, who have the ability to move money around chasing these asset classes, get richer. They buy second homes or investment properties to ride the appreciation wave, increasing demand. The poor and middle class, who are just trying to get ahead, struggle to keep their incomes constant or rising relative to the cost of goods. And when housing becomes the asset class bubble, they get priced out of homes and lenders must resort to “creative” financing to allow them to buy. Then, when the returns on investment start drying up, the demand of speculators and investors dries up, and home prices collapse.

The bubble is bursting. The particular nature of the housing market, as a relatively illiquid asset, is making this occur more slowly than a stock bubble would occur. But it’s occurring nonetheless. Blame can be spread around, of course, especially to some of those subprime borrowers who purchased homes they cannot afford. But Ron Paul is right, it is clear that the Fed’s loose money policy created this bubble, and they deserve a great deal of blame when it bursts.

Dogs Begin Fleeing Venezuela

I guess it’s really starting to get ugly!

Stowaway puppy hunts home after surviving harrowing trip from Venezuela

An accidental stowaway from Venezuela, discovered in a ship container by dockworkers at Port Everglades, was being treated Tuesday for dehydration — and mange.

The caramel-colored mutt, a 3-month-old female, was found Thursday in the trailer-sized container among a shipment of tiles. The pup apparently survived a six-day passage from Maracaibo. And she was hungry.

“We opened the container and the dog started running out,” said dock supervisor Rene Pedraza. “Just started looking for food and water.”

Bobbi Miller of the West Palm Beach-based Chesed Foundation, an animal rescue group, took the dog, christened Lana, to a private Palm Beach County vet, who administered intravenous feeding Tuesday.

Hugo Chavez was reported to label the dog a greedy capitalist, when it was revealed that Lana’s first words when exiting the container were “Yo quiero Taco Bell”.

The U.S. Attorneys Fight: It’s Gonna Go Nuclear

According to The Politico, both Republicans and Democrats see advantage to be gained the coming confrontation over the U.S. Attorney firings:

The White House and the Democrats who run Congress both see political advantage in the ongoing fight for public testimony by presidential advisers about the controversial firing of eight U.S. attorneys. And both have settled on what they believe will be durable messages for a potentially protracted confrontation, although one that is likely to stop short of a historic conflagration at the U.S. Supreme Court.

The Republican mantra on Capitol Hill can be summed up this way: “Democrats can’t legislate, so they want to investigate.” The gist of the Democratic talking points is: “Republicans want to hide from the truth.”

(…)

For Democrats, the brouhaha is a chance to revel in their new power, an ability to spotlight an embarrassing issue for an administration obsessed with secrecy.

So, it’s just like a lot of Washington “scandals.” Everyone agrees that nothing illegal happened, but both sides are willing to fight because they see advantage to it.

One Republican official said the president’s supporters are thrilled to see him on the offensive. “Our base is excited again,” the official said. “We’re back on our toes and off our heels. Everybody agrees we handled it wrong, but so what? So you’re going to make this a constitutional crisis?”

At the moment, that would appear to be the case.

Injunction issued against COPA

The Child Online Protection Act has been struck down by U.S. District Judge Lowell Reed:

Sexual health sites, the online magazine Salon.com and other Web sites backed by the American Civil Liberties Union had challenged the law on grounds it would have a chilling effect on speech. Joan Walsh, Salon.com’s editor in chief, said the law could have allowed any of the 93 U.S. attorneys to prosecute the site over photos of naked prisoners at Iraq’s Abu Ghraib prison.

“The burden would have been on us to prove that they weren’t” harmful to minors, Walsh said Thursday.

In his ruling, Reed warned that “perhaps we do the minors of this country harm if First Amendment protections, which they will with age inherit fully, are chipped away in the name of their protection.”

Well, the law wasn’t enforced as it was, but the judge is absolutely right in his opinion.

H/T: Reason: Hit & Run

Romney cutting ties

Rocky Anderson, the mayor Salt Lake City, called for Bush’s impeachment recently. Anderson doesn’t hide his political beliefs, a quick look at his endorsements in the last election will tell you where he is on the political spectrum, specifically the endorsement from the Democratic Progressive Caucus.

Mitt Romney apparently has a friendship with Anderson, who endorsed Romney during his run for Governor in 2003:

“People often say I’m a Massachusetts-type Democrat. To me, that’s a compliment,” Anderson said in the spot, which ran in heavily Democratic Massachusetts. Anderson then urged viewers to “take it from this liberal Democrat: If you want an amazing leader, vote for Mitt Romney.”

In 2003, after he became governor, Romney returned the favor, making a television ad in support of Anderson’s campaign for a second mayoral term.

Romney now says his backing of the Anderson was limited to his dealings with him in putting on the Olympics and that he never endorsed Anderson’s social views.

I just find this funny. Romney is having so many problems trying to prove that he is “the conservative” in the race for the GOP Presidential nomination, but his past statements and actions constantly come back to haunt him.

Hotline has the video of Romney’s endorsement of Anderson.

Another School Free Speech Case

This time, it’s developing in Illinois:

A Neuqua Valley High senior has gone to federal court seeking the right to wear an anti-gay T-shirt to school next month on the day after a national event in support of gays is scheduled in schools.

Heidi Zamecnik, 17, is asking the court to order her school and Indian Prairie District 204 to allow her to express her anti-gay beliefs on April 19, the day after the 11th annual “Day of Silence” is scheduled to protest harassment of gays in schools.

According to the Web site www.dayofsilence.org,students and teachers across the country plan to observe the day in silence “to echo” the silence that gay students face all the time.

The lawsuit filed Wednesday on behalf of Heidi and an NVHS freshman did not state what written message they planned to wear on T-shirts.

(…)

During her first two years of high school, the Naperville resident did not outwardly object to the “Day of Silence,” in which students wear pro-gay messages on T-shirts. But in her junior year, Heidi wore a T-shirt the day after a “Day of Silence.” It read in part, “BE HAPPY, NOT GAY.”

That day, April 26, 2006, Dean of Students Bryan Wells told Heidi to remove the shirt or leave because her message offended others, according to the suit. When she refused, her mother was called.

Whether you agree with the message or not, this is clearly pure and outright supression of speech based on it’s content. At the same time that the school is permitting, if not encouraging, one form of speech, it is telling another student that she cannot voice a contrary opinion. It’s a bad idea and, more importantly, it’s unconstitutional.

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