Category Archives: Federal Reserve Bank

1 Reason The State Department Turned On #RexTillerson: He Tried Trimming Budgets & Getting Rid Of Deadwood

Business, Economy, Federal Reserve Bank, Free Markets, Government, Political Economy, Taxation, The State

The Economist notes that Rex Tillerson was a poor secretary of state—but not for the reasons I would advance.

One reason for their opinion is that, “Disastrously for morale, he declined to defend his own department when the White House proposed cutting its budget by 25% or more … Mr Tillerson squandered goodwill with a corporate restructuring that felt to many staff like an invitation to resign. At one point, outside consultants sent round a questionnaire asking: “To optimally support the future mission of the Department, what one or two things should your work unit totally stop doing or providing?” (“Trump Unbound: In foreign affairs, America just moved closer to one-man rule,” March 17, 2018.)

TILLESRSON TRIED TO CUT GOVERNMENT! Defending your employees, The Economist here equates with increasing or maintaining the budget for the department, it diplomats, envoys and other career and or deadwood staff.

State institutions are self-reinforcing and not amenable to reform; they grow through failure.

So while it would be nice if state institutions were able to reform, because of the structure of incentives, the state cannot be corrected. The incentive structure underlying state institutions is antithetical to reform.

To correct processes that may be killing people—affirmative action, when the subject of special privileges isn’t qualified—you have to cut budgets in the billions. This likely will never happen, in state institutions, because they don’t abide by the profit motive. So to express belief in this is to express belief in the possibility of the state fixing itself.

The libertarian grasps that the state grows through inefficiency. The more it bungles—the greater its budget will be. Economically, the state’s incentives are inverted.  A private company, on the other hand, grows through economic and performative efficiencies; by singles the customer. The state is the opposite. As a monopoly, it need please nobody. For example, the education system is a giant failure.  Will it be scrapped? Of course not. The system will reward itself with MORE, not less, funds to fix the problem.

This is a structural fact of the state.

Why can the state grow and prosper through inefficiency? Because it has access to the funds of an indentured third party, taxpayers, and has the promiscuous use of the printing press.

A private institution can come back from the abyss, because, economically, it will go bust if it doesn’t start pleasing customers. However, if, like the Florida bridge collapse, a private enterprise is working in tandem with the state, then taxpayers bail it out.

Profit is privatized, loss is socialized.

Most people no longer read or understand the economics of the state. Ten years ago, I had readers who had at least read Hazlitt’s Economics in One Lesson.

 

As I Said A Few Posts Ago Regarding Cyril Ramaphosa’s South Africa …

Economy, Federal Reserve Bank, Private Property, South-Africa

Via Zero Hedge comes the news that South Africa’s ruling African National Congress has just caused the Rand to plummet with the news that it will seek “constitutional changes for land expropriation (from whites) without compensation.” The ruling party, moreover, has decided that “the Reserve Bank must be wholly owned by the state.”

As my book, “Into the Cannibal’s Pot: Lessons for America From Post-Apartheid South Africa,” shows, the SA constitution already allows expropriation of private property, with only nominal compensation.

Facebook Friends were angry at me for raining on their parade, a few posts back, writing that the appointment of a new, South-African leader to head the dominant-party state was an insignificant game of musical chairs.

But already the news out of Cyril Ramaphosa’s South Africa is bad.

As for the alarm over the nationalization of the country’s Reserve Bank. Reserve Banks are private in name only. Who still pretends this is not the case? Central banks serve The State and are for The State and its cronies. Private shareholders are ensconced to put up a facade to the contrary.

UPDATED: ‘Continuity Candidate’ Jerome Powell To Chair The Federal Reserve System

Debt, Economy, Federal Reserve Bank, Inflation

Paul Volcker looks especially good right about now” given the appointment of “continuity candidate” Jerome Powell to chair the Federal Reserve Bank.

MORE:

“Paul Volcker Looks Pretty Good Right About Now” By Jeff Deist.

Trump Taps Jerome Powell to Chair Fed” @ CATO

UPDATE:

The Swamp Wins: Trump Nominates Powell to Replace Yellen“:

… in naming Powell, Trump is picking an Obama-appointed Fed Governor for his most important nominations is itself quite fitting. While we have long known that bad monetary policy is bipartisan, Powell’s nomination serves as a particularly useful illustration of how little has changed in Washington since the Bush Administration.

Of course, just as Trump received his loudest applause from Washington for doing his best impersonation of his two predecessors, the President is already being praised for making a “grown up” decision when it comes to the Fed.

It Takes A Village Idiot To Vote For Hillary

Donald Trump, Elections, Federal Reserve Bank, Foreign Policy, Hillary Clinton, Russia

“It Takes A Village Idiot To Vote For Hillary” is the current column, now trending on Townhall.com. An excerpt:

If you strapped Bill Clinton to a polygraph (or some lie detector that can’t be fooled by the Clintons)—I suspect he, too, might confess to a preference for Vladimir Putin over Barack Obama.

Mr. Clinton had been appropriately scathing, in 2008, about Obama’s mythical status in the media. A “fairy tale,” he called the current president.

However, his wife and her supporters on The Hill and in media have ruled that any remotely realistic utterance about the Russian president—such as that he’s a strong leader who’s popular with his people and acts in their interests—puts you outside the camp of the saints.

Mrs. Clinton is making it a habit to tell Americans what to say and how to think if they want to qualify as … Americans.

In particular, Hillary’s AltRight screed, best described on Twitter as the Control-Alt-Delete speech, focused on Mrs. Clinton’s crusade against deviationists. Provided by a twitter handle called “Hillary’s PR Team,” here’s a distillation of the interminable smear against Trump and his supporters, peddled as “substantive” by the moron media:

Prejudice and paranoia, hate groups, harmful stereotypes, hateful supporters, systemic racism, dark conspiracies, dark conspiracy theories, racist lies, bigotry, racist, white supremacist bigot, white nationalist leader, KKK, racially tinged rumors, Alex Jones. …

Yes, Hillary’s Control-Alt-Delete harangue began with the biggest deviationist of all, Donald J. Trump. Trump “disregards the values that make our country great,” fumed the fire-and-brimstone Mrs. Clinton on that occasion.

To his great credit, Trump flunked another test of “true American principles,” established by Hillary, following the NBC’s “Commander-in-Chief” forum, on September 7.

As the media reminds us, Trump disqualifies himself for the presidency daily. This time it was for speaking the truth about Putin at the forum. The Russian people’s approval of their president stands at 82 percent. But the correct American values, as decreed by our northeastern elites, depend on disparaging Putin and his people. After all, Russians are stupid. They need Clinton and her Radical Republican counterpart, Speaker Paul Ryan (or a color-coded revolution organized by both), to induct them into the American government’s ways.

Enforcer Hillary (and Speaker Ryan) was having none of it. A preference for the Russian president over our American president was plain “unpatriotic and scary,” to be stamped out and marginalized.

“Hillary Rodham Clinton,” argues historian Clyde N. Wilson, whose métier is American intellectual history, “is a museum-quality specimen of the Yankee—self-righteous, ruthless, and self-aggrandizing.”

Wilson uses the term Yankee “historically to designate a peculiar group descended from New Englanders, who can be easily recognized by their arrogance, hypocrisy, greed, lack of congeniality, and penchant for ordering other people around.”

By Yankee, Dr. Wilson does not mean “everybody from north of the Potomac and Ohio. The firemen who died in the World Trade Center on September 11 [commemorated this weekend] were Americans. The politicians and TV personalities who stood around telling us what we are to think about it are Yankees.”

In their journey from the “hyper-Calvinism of their early days,” to “their present atheism,” Yankees like Hillary have long ago replaced religious zeal with a progressive’s political fanaticism. And while they’ve “abandoned anything that might be good in their religion,” contends Wilson, bossy busybodies like Clinton have never given up the notion that “they are the chosen saints whose mission is to make America, and the world, into the perfection of their own image.”

Again, by continuously enforcing the “standard of all things American and good,” Hillary is not that different from her Republican colleagues. They, too, deploy the values cudgel as energetically, to whip the base into shape. Or, to read many of us out of the American family.

To compound his unorthodoxy, Trump failed to fall back on the American exceptionalism exemption, in judging the actions of American leaders—good by default—relative to other world leaders. At the “Commander-in-Chief” forum, Trump intimated that Mr. Putin’s transgressions were “no less troublesome than Mr. Obama’s transgressions.” Quite right. Ask the innocent victims of Obama’s energetic drone program ongoing: villagers in Pakistan, Afghanistan, Libya and Yemen. …

… Read the rest. The complete column is “It Takes A Village Idiot To Vote For Hillary.”  Read it on Townhall.com, where it’s trending.