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Inflation Is a Giant “Skim” on the American People | Mises Wire

Posted by M. C. on August 19, 2023

Inflation created by central banks allows government to ALWAYS have the money it wants—and be first in line to get it.

https://mises.org/wire/inflation-giant-skim-american-people

Charles A. Smith

The price of a McDonald’s hamburger in the United States has inflated 3.75 percent annually over the last seventy years. McDonald’s has grown from a tiny hamburger stand in Des Plaines, Illinois, to the second largest fast-food chain on earth. Scale economies alone (never mind process and productivity improvements) should’ve allowed the price of a burger to decline materially over this period.

Why didn’t it? What forces and institutions have conspired to inflate the cost of a simple meal by more than thirteen times over two generations? Many Mises Wire readers know the answer, but few Americans are economically astute enough to understand or describe what Vladimir Lenin called the “surest means of overturning the existing basis of society.”

Simply put, inflation is a giant “skim”—perpetrated in a symbiosis of money creation by bankers and government-affiliated central bank bureaucrats, the two institutions with the power to create money from nothing. Inflation creates a nice, cushy existence for each group. And the bankers and bureaucrats always get their money.

If steady price deflation were operative—as is the case in a properly functioning consumer economy, where productivity improvements flow into lower consumer prices—the world would be quite different today and far more difficult for bankers and bureaucrats.

With steadily falling prices, bankers must do proper credit analysis. They must set aside ample reserves and generally run their institutions more conservatively. Credit analysis is far more difficult in deflation as borrowers must continuously sell more goods to service their loans rather than relying on boosting prices. Secured loans become problematic as pledged assets devalue. Banking generally becomes a lot more work—and more risky. The period of 1865 to 1910 in the United States was a perfect example of this sort of environment. Record bank failures and enormous financial volatility accompanied steady deflation and one of the greatest periods of economic prosperity and innovation in our nation’s history.

In short, deflation creates risks for banks, so banks conspire with the government to create enough money so they don’t have to deal with it. The “balls to the wall” and “heads I win, tails you lose” practices we’ve become familiar with in banking today are both allowed and inspired by the permanent inflationary regime.

The other major inflation conspirator (and greatest beneficiary) is government. Think of inflation as oxygen for politicians and carbon monoxide as a public vote cast to raise taxes. Steady (2 percent, say?) inflation creates a reliable ratcheting effect on every taxpayer in the land, and a nice, smooth, foamed runway for bureaucrats. And should our benevolent leaders decide the inflation/tax runway isn’t wide enough or smooth enough? They simply borrow the difference (i.e., the deficit) and inflate that away too!

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The Flowering of Mediocrity

Posted by M. C. on August 19, 2023

What happened, however, was that huge numbers of people sought power as the only transcendent good; and given the normal distribution of most human qualities such as talent, it was inevitable that most people who sought (and achieved) power were mediocrities.

Theodore Dalrymple

When someone is said to be lacking in ambition, it is usually meant as a criticism, as if people had a transcendent moral duty to be ambitious. How else but by ambition will mankind advance?

I grant that ambition is sometimes, or often, necessary, but it is a virtue, like bravery, that is not self-standing. To be brave in a bad cause is worse than to be cowardly in the same cause. And it hardly takes much historical knowledge to realize that ambition can be the closest ally of monstrous evil.

If everyone were ambitious, what a terrible world it would be! The constitution of human society requires people of very different qualities, the unambitious as much as the ambitious. In some respects, the unambitious, those who are not driven to achieve anything, are fortunate: They are not tortured by the idea that they must improve on what they have already done, that they must forever go onwards and upwards. They can be content with their lot in a way that the ambitious never can be.

Of course, such contentment has not had good press; but that is because writing is always done by the ambitious, as history is usually written by the victors. The dilemma is posed in the following fashion: Is it better to be a discontented man or a contented pig? The “correct” answer is contained in the way the question is phrased; for who would say it is better to be a pig than a man? (I leave aside the question of the pig’s actual level of intelligence and self-consciousness.)

The ambitious tend to regard the unambitious as wallowing in the swill and mud of ordinary existence. They have the contempt for the unambitious that the intellectual often has for those who’ve never read a book. No doubt this picture is sometimes true: One meets people whose steel-plated complacency repels. But this complacency is far from confined to the unambitious; it is found among the ambitious who have succeeded triumphantly without any particular talent. It is often written on their faces, as unmistakably as hardship is written on other faces.

My thoughts turned to the question of ambition when I considered our gardener in France, who comes twice a week. He is a man in his 50s who has always lived alone and who refuses all payment more than 50 percent higher than the minimum wage, though we would be prepared to pay him more.

To see him work is a rare pleasure. He obviously loves what he does. He works fast, efficiently, and with an aesthetic sense. You soon realize that supervision of his work would be an impertinence. Seeing him from the corner of your eye, however, you see that he never lets up. If he says he has worked three hours, he has worked three hours, with no time off for mooning or coffee breaks.

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Disaster Relief Plane Flies Over Hawaii On Way To Ukraine

Posted by M. C. on August 18, 2023

Babylon Bee

Article Image

U.S. — According to sources, a plane carrying emergency supplies and $10 Billion in disaster relief flew over the Hawaiian island of Maui on its way to Ukraine.

Island residents were at first delighted to see the disaster relief plane on the horizon until they saw it adjust its course to avoid the heavy smoke. “Where are you going?! Help us!” said a mother of four who had become homeless overnight when the fires took her home.

Upon seeing the chaos below, the aircraft’s pilot reportedly muttered to himself. “Hmm, I wonder why we aren’t going there. Oh well! Ukraine, here we come!”

The crew aboard the disaster relief plane reportedly took exciting photos of the Hawaiian destruction that they agree will make for a great addition to their disaster scrapbook.

At publishing time, the pilot had been awarded the Presidential Medal of Freedom for expertly navigating the plane around the pillar of smoke that rose up from the smoldering ruins of Maui like a furnace, saving the aircraft from being covered in soot.

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“It’s not an endlessly expanding list of rights — the ‘right’ to health care, the ‘right’ to food and housing. That’s not freedom, that’s dependency. Those aren’t rights, those are the rations of slavery — hay and a barn for human cattle.”

Posted by M. C. on August 18, 2023

P.J. O’Rourke

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Hawaii Electric, While Failing to Act on Fire Prevention, Had Cozy Ties to Regulators

Posted by M. C. on August 18, 2023

Despite years of Maui wildfire warnings, the Hawaii utility giant punted on action and spent more on lobbying than prevention.

We are from the government and we are here to take your money.

https://substack.com/inbox/post/136176348


Hawaii state government officials and Hawaii Electric Co. were both acutely aware of the wildfire threat in Maui. Yet state regulators did not force action to mitigate the threat, and Hawaii Electric, the largest utility interest in the state and the island’s largest publicly traded company, did little to address the problem.

The two interests are deeply entwined, ethics and business records show.

Every member of the Hawaii Public Utilities Commission, which regulates Hawaii Electric, has financial or previous professional ties to the company.

Instead of action on wildfire upgrades, Hawaii Electric splurged on peddling influence with regulators and politicians while singing its own virtues in splashy corporate marketing materials. The company even sponsored a documentary this year on Hawaiian television devoted to mitigating the impact of climate change.

After a series of Mauii wildfires in 2019, Hawaii Electric, state records show, spent only $245,000 on wildfire-specific upgrades and mitigation efforts on the island through 2022. That amount pales in comparison to the tens of millions of dollars paid out in dividends and executive compensation over the last four years.

Put another way, ethics records show Hawaii Electric spent $437,252 on lobbying state officials, including utility regulators, since 2019, far more than it spent addressing the Maui wildfire threat.

While the cause of the deadly fire last week is still under investigation, mounting evidence suggests that HEC’s equipment was at fault. On the morning of the fires on August 8th, Shane Treu, a Maui resident, was awakened by howling winds, stepped outside and took a livestream video of downed power lines igniting dry grass on a road in Lahaina.

Critics have noted that the burn progression, witness accounts, and other videos point to downed power lines as the most likely cause of the fire. Whisker Labs Inc., which monitors electrical grid activity, reported that power outages from Hawaii Electric coincide with the first reports of the Maui fire.

Hawaii Electric also failed to turn off sections of its power grid during the wind storms last week, a precautionary measure adopted by other utilities in states with high fire risks, such as California.

Hawaii Electric, in response to a request for comment, noted that it spent $84 million on general maintenance and tree work in Maui since 2018. The company spokesperson did not directly address questions about delays in wildfire-specific upgrades and its own wildfire mitigation plan.

The Hawaii PUC did not respond to a request for comment.

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How Will America’s Borrow and Spend Politicians Pay for an Imperial Foreign Policy?

Posted by M. C. on August 18, 2023

Today the military does more to protect wealthy allied states than to protect the US. Policymakers should drop social engineering as foreign policy and again make defense of America and Americans the top priority of the Department of Defense.

Doug Bandow

Doug Bandow

During the Cold War Republicans took the lead in pushing for ever-increasing military outlays. Pushing expenditures upward was one of President Ronald Reagan’s priorities and led to constant battles with the Democratic House. Today, however, GOP members are pushing on an open door.

Last year Congress passed a record $858 billion Pentagon spending bill. This number didn’t include important national defense expenditures, such as for nuclear programs, which lie within the Department of Energy. When a few Republicans pushed for cuts during the January speakership stand-off, Democratic as well as GOP hawks vilified the holdouts.

Virginia’s Abigail Spanberger, a CIA officer turned legislator warned of multiple Armageddons: “As the Chinese Communist Party is increasing its military spending, Ukraine is under siege, and Iran and North Korea are watching, cutting our nation’s defense spending is shortsighted and dangerous.” Tom Malinowski, a progressive Democratic member ousted in 2022, was similarly splenetic: “You can say all day to these people that if we gut defense spending and withdraw from global leadership, Putin and Xi Jinping will win, but they honestly don’t care.” Biden spokesman Andrew Bates contended that “This push to defund our military in the name of politics is senseless and out of line with our national security needs.”

Such hysterics ignore reality. The US spends far more than its chief antagonists. The disparity grows vastly larger when outlays by Washington’s allies in Asia, Europe, and the Middle East are included. America is the most secure great power ever, with oceans east and west and pacific neighbors north and south. The right question to ask is: Why do Americans spend so much to defend allies who spend so little?

After all, Russia has yet to best Ukraine while studiously avoided war with the US. The Europeans are more than capable of containing Moscow. China suffers from multiple weaknesses and does not threaten America militarily. Instead, Washington is attempting to impose its will on Beijing thousands of miles from home. Better for friendly states in the region, led by Japan, to steal China’s anti-access/area denial strategy for their own defense. Iran and North Korea would face destruction if they attacked America and can be contained by their neighbors, most important, respectively, Saudi Arabia and Israel, and South Korea.

Defense has been the federal government’s most essential responsibility since the Founding. But when the Founders talked about such things, they meant protecting the American people, their lives, liberties, constitutional system, and territory. Alliances were a means to an end and, as George Washington famously warned, should not turn into permanent attachments: “nothing is more essential than that permanent, inveterate antipathies against particular nations, and passionate attachments for others, should be excluded.”

Treating military alliances as foreign welfare wouldn’t matter so much if the US Treasury was bulging, filling with cash faster than Congress was spending the funds. Alas, the federal financial cupboard is bare. Presidents and legislators of both major parties have pushed outlays and deficits ever upward, squandering the spoils.

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Indonesia Delays $20 Billion Climate Plan

Posted by M. C. on August 18, 2023

Indonesia needs billions of U.S. dollars in investment to shift away from coal the country doesn’t have. The wealthy international partners in the JETP have pledged half of the $20 billion investment while the other half is expected to come from large banks under the Glasgow Financial Alliance for Net Zero.

These countries sign on to keep the other sweetheart deals coming. They have no intention of spending their own money for climate change. With a little pleading they know the New Green Deal AOCs will eventually pay up, or rather YOU will pay up.

https://www.zerohedge.com/energy/indonesia-delays-20-billion-climate-plan

Tyler Durden's Photo

by Tyler Durden

Authored by Tsvetana Paraskova via OilPrice.com,

Due to disagreements over policy, the cost of funding, and legal hurdles, Indonesia, the largest economy in Southeast Asia, is delaying the start of a $20 billion climate investment plan as part of a deal signed with the United States and other wealthy nations last year.

The investment plan, in its draft, is not expected to be launched until later this year, because it would need unspecified “additional data” to be included, Indonesia said on Wednesday, as carried by Bloomberg.   

At the end of last year, Indonesia, the world’s top coal exporter and heavily reliant on coal for power generationsigned an agreement to launch a Just Energy Transition Partnership (JETP) co-led by the U.S. and Japan and including Canada, Denmark, the European Union, France, Germany, Italy, Norway, and the United Kingdom.

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Burning The Last Man

Posted by M. C. on August 17, 2023

I know what you’re thinking, $51 million to Maui, $13 Billion more for Ukraine, seems a wee bit unbalanced. But you’re thinking about it all wrong.

And if a few thousand Americans have to be charred, again, for the next transition to the new and improved world the social engineers working for the Internation financial cabal controlling everything desire for themselves, they won’t even think twice about it, again.

https://thegoodcitizen.live/p/burning-the-last-man

Good Citizen

Joe Biden doesn’t care about Hawaii. Why should he? A man who doesn’t know what day it is can hardly be bothered to wipe the drool off his chin from the blue polyester beach chairs of Delaware’s most exquisite resorts. He need not concern himself with a thousand charred Americans.

It’s not historically unusual for Presidents to shrug about a thousand charred Americans. Democrat socialist hero FDR didn’t care about a thousand sailors charred in nearby Pearl Harbor. He actually spent nine months doing everything possible to help get them charred. “The war begins tomorrow, gentlemen.”

  • 6 Dec. – the war cabinet: FDR, top advisor Hopkins, Stimson, Marshall, Secretary of the Navy Knox, with aides John McCrea and Frank Beatty “deliberately sat through the night of 6 December 1941 waiting for the Japs to strike.” (Infamy ch 16 sec 2)

President Richard Cheney didn’t care about a few thousand charred Americans on September 10, 2001. There was a $2 Trillion DoD pilfering to hide and a prewritten Patriot Act that needed passing. “Are our Saudi friends in position? Good, place the thermite charges, gentlemen.”

Papa Dementia’s handlers don’t care about Hawaii or a thousand charred Americans. Why should they? The people of Hawaii will vote Democrat, consistently, forever, no matter what happens to them. They aren’t losing any votes over some silly infernos. Even the charred Americans will have no trouble voting in 2024, for whichever puppet is put forth with (D) beside its name.

Ring doorbell video footage could emerge of Oprah, Hillary, Hunter, Schumer, and Pelosi, hiking around Lahaina with that wet poodle Wasserman-Schultz following on a leash pouring gallons of petrol and tossing Molotov Cocktails and Hawaiins will still vote for the party on board with the WEF-UN global domestic terror agenda.

You will acknowledge the climate agenda for our great resent or we have ways of making you burn.

I know what some of you are thinking. All this caustic and callous language in the aftermath of a horrific tragedy is in bad taste and should warrant an apology, sincere or performative, or a coupon for half-off good citizen salt.

Not today, kids.

Don’t shoot the messenger. You knew what you were signing up for here.

Yes, people are dead, but I didn’t light them on fire. I didn’t send them fleeing into the ocean off Maui. Or into the seas off Rhodes, Corfu, Sicily, all fires started by record high temperatures from climate change men with matches and lighters.

But lo and behold what just came off the X wires! What if I’m wrong?

Hiding in plain sight: they can’t help making confessions.

See, they do care! They really do care! And as an act of caring so so much, they’ve offered victims of the Maui infernos $700.

I know what you’re thinking, $51 million to Maui, $13 Billion more for Ukraine, seems a wee bit unbalanced. But you’re thinking about it all wrong.

Because when you do think about it, $700 could rent each household a cadaver dog for a day to help locate the bone fragments of loved ones.

Not the Bee headline: FEMA rents cadaver dogs to families of missing Maui victims. $51 Million for victim families sent from Treasury Account FEMA 001 to Treasury Account FEMA 002.

If the people of Maui want more federal assistance, these days there are really only three ways to go about succeeding and it’s not that difficult:

  1. Start a Go-Fund-Me for Hunter’s offshore shell companies with a designation for 10% for the “big guy”
  2. Declare war on Russia
  3. Become a Purple state

Option three will require the importation of rational-thinking humans, by the millions and there’s no time for that.

Option two is dangerous and could see Hawaii wiped off the map.

Option one seems the quicker and less painful way to go.

What did Hawaiians really lose after all, other than their loved ones?

All that beautiful beachfront property was such a waste in the hands of locals.

What were they doing with it that was so special?

Exhibiting their pride in culture, heritage, and historical traditions and joyously sharing it with the world while providing small businesses the opportunity to flourish off tourism creating thousands of jobs?

Pffff. What good does that do for ze forse industreeeel revolushun?

How does that help Blackrock or Vanguard?

Build Back Better can’t happen without a lot of wholesome destruction and devastation.

Times a’ wastin’ people. The earth is dying. We need those 15-minute smart cities up and running pronto!

But not on the third most expensive beachfront property in the world after Monaco and Malibu.

Lahaina will have to be built back better somewhere else, maybe moved south and inland, away from the marmalade sands and blue waters perfect for the big-shot developers that fill DNC coffers. They have to get something for their “donations” after all.

The sooner any valuable American property turns to ash and dust the sooner insurance companies can rip off property owners, and benevolent Billionaires like Oprah and Data Zuckerberg can swoop in and add to their thousand-acre portfolios of ancient sacred Hawaiian lands.

Paradise is no place for the feudal classes anyway. They don’t know how to enjoy it like the Oligarch class does.

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Zelensky holds court with Ukraine’s most notorious neo-Nazi

Posted by M. C. on August 17, 2023

Western media has dismissed evidence of neo-Nazi influence in Ukraine by citing President Zelensky’s Jewish heritage. But new footage published by Zelensky shows the leader openly collaborating with a fascist ideologue who once pledged to “lead the white races of the world in a final crusade…against Semite-led Untermenschen.”

Ukrainian President Vlodymyr Zelensky has uploaded a video to his Telegram channel showing him holding court with one of the most notorious neo-Nazis in modern Ukrainian history: Azov Battalion founder Andriy Biletsky.

On August 14, just over an hour after Secretary of State Anthony Blinken announced another $200 million in military aid to Kiev, Ukrainian President Vlodomyr Zelensky published the video depicting what he called an “open conversation” with Ukraine’s 3rd Separate Assault Brigade.

“I am grateful to everyone who defends our country and people, who brings our victory closer,” Zelensky wrote, following his encounter with the unit on the outskirts of Bakhmut.

While casual Western observers might not have realized it, the brigade Zelensky was addressing is actually the newest iteration of Ukraine’s neo-Nazi Azov Battalion. 

“The 3rd separate assault brigade, excellent fighters,” Zelensky wrote days after the consultation, in a Twitter post which also alluded to a separate meeting with the Aidar Battalion, another neo-fascist outfit that has been accused of war crimes by Amnesty International. “They have stopped the enemy from advancing towards Kostiantynivka and pushed the occupiers back up to 8 kilometers.”

But the group’s origins are no secret. Describing their most recent rebrand in a YouTube video released in January, the unit explained: “Today we officially announce that the SSO AZOV is expanding to a brigade. From now on, we are the 3rd separate assault brigade of the Ground Forces of the Armed Forces of Ukraine.”

Ukraine’s 3rd Separate Assault Brigade fighters perform a fireside fascist salute in a video announcing their re-formation.

Like its predecessor, the unit is led by Andriy Biletsky, who founded the Azov Battalion and has long served as a figurehead for the closely-aligned National Corps political movement.

But in spite of Biletsky’s rich Nazi pedigree, the video Zelensky published shows him sharing a moment of bonhomie with a white nationalist militant who has described Jews as “our enemy,” or as the “real masters” of the oligarchs and craven politicians that have corrupted Ukraine.

“How could I be a Nazi?” Zelensky asked on the eve of Russia’s intervention, pointing to his Jewish heritage. “How could a people who lost eight million lives fighting Nazis could support Nazism?” 

Perhaps the question needs to be asked again of the Ukrainian president following the tribute he paid to his country’s top neo-Nazi ideologue.

Ukraine’s Jewish leader meets “The White Leader”

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Doug Casey on How Economic Witch Doctors Convince Everyone They’re Neurosurgeons

Posted by M. C. on August 17, 2023

Economics is taught in colleges as if it were a subdivision of mathematics. It’s not. It has only a limited amount to do with mathematics. Rather, it’s a division of philosophy. It’s a moral study that looks at how people relate to one another in the material world.

Anything by Murray Rothbard, Thomas Sowell, or Walter Block is on the list. They’re all sound, clear, and cogent writers. I think you’ll find stuff by Larry Summers, Paul Krugman, or Joseph Stiglitz unhelpful in understanding how the world works. They’re only celebrities.

https://internationalman.com/articles/doug-casey-on-how-economic-witch-doctors-convince-everyone-theyre-neurosurgeons/

by Doug Casey

Economic Witch Doctors

International Man: The average person doesn’t care about economics. But to the extent that he does, he only reads mainstream publications like The Economist and editorials in The New York Times.

In these publications, the average person will find so-called economists advocating upside-down and destructive concepts like negative interest rates, banning cash, debt-fueled consumption, government spending, and rampant money printing as the cures to economic ailments.

And if those methods don’t work—or inflict damage—the establishment economists’ response is to simply call for more money printing, more debt, and even lower interest rates.

What’s your take on conventional economic thinking and methods?

Doug Casey: Frankly, most “economists” today are only political apologists masquerading as economists.

An economist is somebody that describes the way the world works—how people go about producing, consuming, buying, selling, and living their lives. That’s not, however, what most of today’s PhD economists do. Instead, they prescribe the way they would like the world to work and tailor theories to help politicians demonstrate the virtue and necessity of their quest for more power.

As a result, legitimate economics barely exists today. What passes for economics has a very bad reputation, and it’s well deserved. Economics has become degraded. It’s not quite a laughingstock like gender studies, but it’s on a level with political science—which isn’t a science at all.

Every individual has vastly differing likes and dislikes and wants and needs. But these so-called economists like to treat people as if they were standardized atoms. They think they can manipulate people as if they were chemicals and treat the economy as something they can heat up or cool down. And they’re the ones who decide what the masses need.

Economics has become an excuse for central planning, and economists have become social engineers.

Economics is taught in colleges as if it were a subdivision of mathematics. It’s not. It has only a limited amount to do with mathematics. Rather, it’s a division of philosophy. It’s a moral study that looks at how people relate to one another in the material world.

Economics has been turned into the handmaiden of government in order to give a scientistic justification for things that the government—which naturally seeks more power for itself—wants to do.

In fact, every person should be his own economist. That’s because you owe it to yourself to understand the way the world works and to understand human action, to use Mises’ phrase.

International Man: Mainstream economists are obsessed with complicated models and charts as they try to maximize GDP.

By contrast, free-market Austrian economics is not focused on how to centrally plan the economy but rather on human action in the face of scarcity.

Austrians aren’t concerned with complicated models because they believe it is impossible to quantify the actions and preferences of billions of individuals.

Which do you think is more useful and why?

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