Comments on Pro Libertate: Remembrance of Recessions Past

Sad as it may seem, universal frugality really wou...

2009-04-02T16:16:00.000-06:00

Sad as it may seem, universal frugality really would result in a depression. Mass production on the 20th century model, unfortunately, depends on pathological individual behavior for its survival.

In the late 19th century, the introduction of electrically powered machinery (what Mumford called the "neotechnic revolution") overcame the main rationale for the factory system: the need to economize on power from a single prime mover.

Had neotechnics lived up to their decentralizing potential, our economy would have developed into several hundred local industrial districts on the model of Italy's Emilia-Romagna region. Electrical power would have been integrated into craft production, with general purpose machinery frequently switching between products as orders came in, producing on a small scale for the local market.

Instead, the government intervened with the railroad land grants, tariffs and patents, etc., and made centralization artificially competitive. It gave the Dark Satanic Mills a new lease on life.

The industrial model that resulted, when electrical power was integrated into the factory system, was Sloanist mass production: extremely expensive, product-specific machinery that required large-batch production 24/7 to spread out the capital costs over as many units as possible. And with it came the imperative for the corporation to exert external control over the rest of society, to make sure the output was absorbed and the wheels could keep turning without a glut of rising inventory. That meant high-pressure marketing, planned obsolescence, consumer debt, and all the rest of it. As Huxley put it, "the more stitches, the less riches."

Overinvestment and underconsumption damned near killed state capitalism in the 1930s. What saved it was the world leaders helpfully blowing up most of the plant and equipment outside the U.S. in WWII, and pushing the rest button (at least until 1970 or so, when the old problems came back).

Since then, organized capital's been looking for one gimmick after another to dispose of surplus capital, in a way that won't increase output of goods in an economy where stagnant wages can't absorb what's already produced. The latest attempt was the ballooning of the FIRE economy over the past decade.

It hasn't worked very well. Before the downturn, industry could barely dispose of its output running at full capacity even when people maxed out their cards and tapped into home equity to replace everything they owned every five years. We'll never see that level of demand again, which means a lot of industrial capacity will turn to rust before long.

We need to backtrack to where we made the wrong turn over a hundred years ago. Not only a relocalization of manufacturing, but a renaissance of microenterprises in the informal and household economy, using spare capacity of ordinary capital goods most people own anyway (e.g., a microbakery using an ordinary kitchen oven, trading with market gardeners for veggies, eggs from the neighbor's chickens, a replacement part for the fridge custom machined in a backyard workshop, etc., with liquidity for the whole thing provided by a LETS system).

The funny thing is that, even though most people would consider material quality of life considerably improved under those conditions, it would be a disaster from the standpoint of the wonks in the Council of Economic Advisers. Paper GDP would drop through the floor. Heh heh.

Someone above said that maybe we should return to ...

2009-03-27T09:26:00.000-06:00

Someone above said that maybe we should return to those days. Don't worry. We are! The difference is that, way back when, the results of the American experiment of the democratic-republic were not yet in. Today, the results are in. This arrangement leads inevitably to state plunder and predation. If we grant power over ourselves to others, they will exercise it to loot us and strip our children of their future. We may be nearing a time when the whole thing comes down around their ears and a new generation takes on the challenge of liberty--without appointing overlords over ourselves.

For those that haven't noticed the painfully o...

2009-03-24T09:03:00.000-06:00

For those that haven't noticed the painfully obvious, the government has made it virtually worthless to save now.

Banks pay close to zero percent interest on CD and MM accounts. We all know where Treasuries are now. And even the dividend yield of the S&P has dropped by close to 25%.

All of this in the face of what could become a hugely inflationary environment...though the "official" word says No Inflation Worry.

But despite the above I am saving...more than before and like you wrote in your piece I am "preferr[ing] saving to spending, and self-reliant home production to the typical consumer lifestyle." Increasing the Do It Yourself projects, enlarging the gardens and even some bartering of my services for other's goods...staying as much "off the grid" of the government as I can reasonably accomplish.

There is SO much to respond to in this well writte...

2009-03-23T08:24:00.000-06:00

There is SO much to respond to in this well written article. But one thing DEMANDS I comment:

I love Frank Marino's music too!

In all probability, if the Federal Reserve's secur...

2009-03-22T16:38:00.000-06:00

In all probability, if the Federal Reserve's securities portfolio -- which now contains more junk than Treasurys -- were marked to market, the Fed's equity would be a big, fat zero. How is this entity with no actual wherewithal going to 'purchase' another $1.5 trillion worth of securities, an earnest visitor from Mars might wonder?

Imagine if you or I could write unlimited amounts of checks against our bank account, which is already overdrawn. But by law, it would be illegal to deposit or cash these checks. They would continue to circulate through the economy, just like coins or dollar bills do.

Likewise, when the Federal Reserve 'buys' $1.5 trillion of securities for the asset side of its balance sheet, it simply enters a corresponding $1.5 trillion bank deposit on the liability side, in the seller's bank account. The seller will write checks against this deposit, and the funds will circulate through the economy. But the freshly-created 1.5 trillion dollars can never be redeemed for the securities which allegedly, notionally 'back' it. Like all 'dollars,' they are perpetual and unredeemable liabilities of the Fed, which can't be 'cashed' into any tangible asset.

Ben Bankpanke and his glue-sniffing cohort, Timmy 'Jughead' Kitener, are running the biggest check-kiting operation in history, from our nation's capital of Ponzington, D.C. Their furtive money printing used to be done surreptitiously, in the form of periodic 'coupon passes' which only garnered the attention of the bond cognoscenti. But now these kinksters have come of the closet, announcing to the world that they're committing the monetary equivalent of auto-fellatio on a busy street corner in broad daylight.

When prices predictably explode, will President Obama appoint his horse to the Federal Reserve Board? How could we tell?

Sorry, but the U.S. is not a serious country no more. The authorities are mooning us, giggling helplessly as they huff more nitrous oxide. What, we worry?

Anon 616:Why would you want to name a killing mach...

2009-03-21T19:10:00.000-06:00

Anon 616:

Why would you want to name a killing machine paid for with stolen money after a stone fox?

mongol Doc Ellis 124

to omega man,i don't know if most folks would reco...

2009-03-21T07:16:00.000-06:00

to omega man,

i don't know if most folks would recognize the posterior if you replaced lincoln and roosevelt with it. however, it would be a great improvement. heck, they ought to name an aircraft carrier after her....

the USS Erin Gray. sounds kinda Shakespearean.

rick

Will & Friends,One lives in eternal hope that ...

2009-03-20T20:57:00.000-06:00

Will & Friends,

One lives in eternal hope that one of these days the so-called "profession" of "Economist" will be regarded with the same revulsion as "Vomit Taster" or "Auschwitz Camp Pediatrician."

The "Economists" are responsible for more human poverty and suffering over the past century than all the earthquakes, volcanoes and hurricanes combined.

I love that quote from Maggie Thatcher, "The problem with socialism is sooner or later you run out of other peoples money." (Thank you, Mr. dog-and-pony-show.)

I have another one from Winston Churchill, who one day, after the Parliamentary debate, found himself in the men's room with Prime Minister Clement Attlee. Atlee was at the first urinal, and Churchill moved down to use the last urinal. Said Attlee to Churchill: "Feeling rather stand-offish today, are we, Winston?" To which Churchill replied: "Not at all, Clem, it's just that whenever you socialists see something large and functioning smoothly, you want to nationalize it."

The present crew of Obama Socialists, unfortunately, are not even as smart as the British Socialists - they are spending other people's money (Ours!!) to nationalize businesses that are already dead and non-functioning, and will never get up or show signs of life again. The strangest thing, which would make Marx split a gut, is that we now have socialism for the capitalists - using the people's money to reimburse the fortunes of the thieves who robbed the people blind for 28 years, and then lost the loot somewhere between the stagecoach and the bank.

I used to call these people vampires, because they sucked the blood of a groaning humanity, but now they have become maggots, feasting on the already dead bodies of their victims.

Reminds me of the story of the guy (probably a Democrat,) who bought a donkey for $500, then the next gay it dropped dead. The vendor (must have been a Republican,) refused to give him his money back. A week later, they see each other and the vendor says, "What did you do with the donkey?" Buyer says, "Oh, I got $1,999 for it." "WHAT?" says the buyer, "For a dead donkey?" "Yeah," says the buyer, "I sold 2,000 raffle tickets at $1 each, and only the guy who won the donkey asked for his money back."

The economists surely have invented a name for this - probably something like: "The Negative Regression Quantum Validity Theory of Commoditization of Selected Posthumous Instances of Equus Asinus."

Folks, we are buying - without even giving our consent - trillions of raffle tickets for an already-dead donkey.

Yours in stunned disbelief,
Lemuel Gulliver.

@Omega Man do those old Scorpions albums have Uli ...

2009-03-20T15:29:00.000-06:00

@Omega Man do those old Scorpions albums have Uli Jon Roth on the axe? A smoking guitar player but unknown.

Will receives +2 kudos for referencing both Michea...

2009-03-20T13:04:00.000-06:00

Will receives +2 kudos for referencing both Micheal Schenker and Erin Gray in the same paragraph. I still have that MSG album somewhere, along with all the old Scorpions albums. Awesome stuff. Hey Will: who do you think had cooler rock-n'-roll hair: Klaus Meine, or Winston Churchill? It's a toss-up.

As for Erin Grey...I still have vivid mental images of her turning away from the camera and walking away wearing those skin-tight silver pants. A glorious thing, watching Wilma Deering walk away. I'd like to sand down the busts of Abraham Lincoln and TR on Mt. Rushmore and replace them with a sculpture of Erin Gray's silver-clad caboose circa 1980. Imagine that next to Jefferson. What say you? That's one public-works earmark I'd like to see some South Dakota congressman sneak onto the "stimulus" package. (Insert 'Erin Gray' and 'stimulate package' pun here.)

Did you know that in 1980 the Dep't of the Interior had Gil Gerrard's chest-hair forest declared a national park? Tragically, this once-vibrant ecosystem was decimated by the Great Gil Gerrard Chest-Hair-Forest Fire of 1982, caused by careless campers. Only an oversized medallion of the pointy-arrow 'male' symbol remained between the pectoral mountains. But restoration efforts are underway. Ladies, commence the swooning! Buck Rogers In The 25th Century Which Sure Looks A Lot Like 1980!

Here's one of the worst of the Keynesian "solution...

2009-03-20T09:29:00.000-06:00

Here's one of the worst of the Keynesian "solutions" suggested: this writer suggests they punish savers by taxing bank deposits!

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article5469589.ece

While everyone was distracted by the AIG circus H....

2009-03-20T03:49:00.000-06:00

While everyone was distracted by the AIG circus H.R. 1388 the GIVE act has passed. This is the mandatory service for all young people. If you have any children in teenage years you should know about this. Also S.277 The Serve America act is up next. Let's see if the Obamanites are ready to put their money where their mouth is and serve the collective. Also is that 2400% tax increase on loose tobacco only in Michigan or nationwide? Lastly here is a fun quote from Maggie Thatcher "The problem with socialism is sooner or later you run out of other peoples money."

Although I haven't personally seen either of the p...

2009-03-20T00:43:00.000-06:00

Although I haven't personally seen either of the propaganda pieces mentioned, I would hazard a guess that neither Newsweek nor The New York Times offered any advice on what you're supposed to do the day after you run out and spend all your money on fake vomit, cinnamon-flavored dental floss, and cheese that comes in a spray can.

If Henry Hazlitt were alive today, I don't know what he'd say. Then again, maybe I do.

Just over a year ago, I told my mom what was comin...

2009-03-19T23:56:00.000-06:00

Just over a year ago, I told my mom what was coming down the pike with the economy. She replied, "I don't know why each generation spends their lives scrimping and saving, when the government is just going to take it in the end."

My grandparents' life savings was plenty good enough to last my grandmother the rest of her life after my grandpa died.....until the inflation of the 70's came along and destroyed it. And now, the same thing is happening to my parent's life savings.

Luckily, in the early 60's when it was announced that the minting of silver money was to cease, my grandparents began "hording" (providentially) all the silver that passed through their hands. They managed to fill three or four gallon jars with it before it stopped circulating, which they buried in the back yard. My parents and grandparents let me and my sister in on the plan, and required us to memorize where the stashes were located. I was only 11 years old in 1964, so I was very proud that they thought I was responsible enough to keep such an important family secret. At any rate, when the silver price rose so high in 1979 and 1980, my grandma sold most of it to keep herself going, since her life savings were shot.

Just before my wedding in early 1980, she said to me one day, "Hold out your hands." She poured all the silver coins I could hold into my hands, which were excitedly forming a nice, big cup (!), and said, "I will sell that silver, and the proceeds from it will buy you two airline tickets for a Hawaii honeymoon."

Thank the Lord for silver linings.....

erin gray.man. one of three people who need to ea...

2009-03-19T23:43:00.000-06:00

erin gray.

man. one of three people who need to eat in my kitchen.

rick

Talk about a blast from the past. I haven't seen o...

2009-03-19T20:53:00.000-06:00

Talk about a blast from the past. I haven't seen one of those five pound boxes of bootleg Velveeta in years! Does satangov still pass those out to po' folks? Ohh that's right poor people are expected to stay out of societys face and go die since Ronnie Raygun and the neo-nazi conservatives strangled government in the bathtub. They had to do something about Sheenequa the welfare queen and her Cadillacs sittin' on triple gold Daytons. Welfare is only for corporate pimps not poor schleps! Aww Shucks all this nostalgia I'ma cut the front out of my bib overalls and let my potbelly boiler hang free and pack a fresh bowl of Borkum-Riff before that 2400% tax increase on class J loose tobacco kicks in. Yeee Hawww! Have a better one.

Will, I had a crush on Erin Gray too; so you're no...

2009-03-19T18:31:00.000-06:00

Will, I had a crush on Erin Gray too; so you're not alone.

My wife and I have been saving a bit too but you know, things have changed so much since my grandparents were around we are finding it difficult to live as thrifty as I remember them doing. Sure everything costs more but things just don't last like they did then and aren't as easy to fix. Often times, more expensive to fix than to buy new. This isn't an excuse but rather something I've become painfully aware of as I and people I know, need to replace things purchased only a few years ago. It's a sad cycle we ride.

I too remember late 70s and early 80s and how alth...

2009-03-19T17:45:00.000-06:00

I too remember late 70s and early 80s and how although my family didn't have a lot we never went without. My dad worked in a dowel mill in western Maine while my mom worked at the front desk, on the weekends, at the local hospital. Despite theses humble occupations all six of their children attended a variety of private parochial schools. My dad eschewed all forms of debt ( outside of the house mortgage) and never spent a dime on buying anything new. His view was that second hand will do just fine. Although my parents avoided taking advantage of any government handouts I do remember on a few rare occasions ( like Mr Newberry) enjoying fine slices of yummy orange colored govt cheese. Ahh the memories.

As an individual who remembers the aftermaths of t...

2009-03-19T14:26:00.000-06:00

As an individual who remembers the aftermaths of the early thirties and the needs of "victory" gardening as the recession continued 'til after the 2nd WW... Maybe we all should get back to the years gone by... I still live by the caveat from my parents "waste not want not"...

I'm a few years younger than you, Will, but I can'...

2009-03-19T14:23:00.000-06:00

I'm a few years younger than you, Will, but I can't remember every going without during the late 70s to mid 80s either. And yet I know my parents had to sacrifice a lot. I do recall several times when my father was laid off from the steel mill in Indiana, and my mother went to work for peanuts as a nurse aid. Looking back, I keep thinking I should remember going without, but nope. Mom and Dad provided wonderfully throughout it all. Come to think of it, I do remember some yummy government cheese and butter a few times.

Ahh this brings back memories of good times. Grand...

2009-03-19T13:37:00.000-06:00

Ahh this brings back memories of good times. Grandparents were farmers from Illinois and did all the canning and mason jarring of food. Grandpa worked for the railroad for 30 some odd years and grammaw survived on his pension when he passed on. To survive Depression ver. 2.0 will take community and family. Everything the government gets it's corrupt incompetent hands on will turn to a heaping pile of manure, even the nimrods realize this. Just read a disturbing article about H.R. 645 National Emergency Centers Act and it brought to mind a quote by Lily Tomlin "it's going to get alot worse before it gets worse."