Saturday, October 10, 2009

Where Are The Posts?

Yes, friends. is slowing down. I'm at the culmination of a decade long project in my personal life and my efforts there have taken away any time for blogging.

But, remember, the point of Scarecrow For President was to share an idea. So, until time allows me to return to regular blogging, I am re-posting the original idea of SFP. See you soon! SB

A modest proposal for American lovers of liberty: for the 2012 presidential race, instead of choosing a candidate, let's create one.

Let's create a candidate who believes in significantly smaller government, a non-interverntionist foreign policy, free trade, sound money, and civil liberties. Let's give this candidate no voting record or political past that can be mined for personal attack, no personal life that needs to be "vetted", and the ability to speak eloquently on our behalf without ever making a gaffe. Let's make the candidate neither black nor white, man nor woman, young nor old, but instead, a perfect blend of whatever the voter wants it to be.

Let's give our candidate the power to present libertarian ideals to America and the world without attaching itself to an ultra-specific platform. Let's not give our opponents any opportunity to pick apart the obscure details of specific policy proposals. Let's remove the temptation to bicker amongst ourselves over differences that are quite trivial when compared to our shared principles.

Let's create a fictitious candidate who "runs" on the Internet via Facebook, Blogger, MySpace, Meetup, LinkedIn, Google and whatever else comes along. Let's continue using the Internet to make the case for less government and more liberty as we have so effectively done for a decade, but also announce that we support Scarecrow For President. In so doing, Scarecrow will come to represent us in a way that a politician never can.

2008 showed that libertarians are numerous enough to make some noise in the national election. Let's start now with our 2012 campaign, but rather than hitching our wagon to Ron Paul, the Libertarian Party, or anyone else whose very identity can be made into a straw man by the media and our political opponents, let's run an actual straw man, and force the political machine to engage our ideas, rather than our standard bearer.

Tuesday, September 29, 2009

To Audit the Fed

Barry Ritholz on auditing the Fed:

While I have been critical of the Federal Reserve (especially the Greenspan years), my beef with them has been their judgment and decision-making process. Congress, on the other hand, is a whole different matter. Its not their judgment, but rather, the fact they are owned not by the American people, but by lobbyists, and corporate interests. They have become structurally deformed.

If the Fed has been a major source of problems, Congress is much worse. They were the great enablers of the crisis, readily corruptible, bought and paid for by the banking industry. I find Congress to be the worse of two evils — lacking in objectivity, incapable of producing legitimate regulatory review.

If the Fed is Wall Street’s bitch, then Congress is the Street’s whore.

Tom Woods on the Fed:
Perhaps the most frequent of the claims is that a genuine audit would jeopardize the alleged independence of the Fed. Congress could come to influence or even dictate monetary policy.

This is a red herring. The bill is not designed to empower politicians to increase the money supply, choose interest-rate targets, or adopt any of the rest of the Fed’s central planning apparatus, all of which is better left to the free market than to the Fed or Congress. It seeks nothing more than to open the Fed’s books to public scrutiny. Congress has a moral and legal obligation to oversee institutions it brings into existence. The convoluted scenarios by which merely opening the books will lead to an inflationary catastrophe at the hands of Congress are difficult to take seriously.

Moreover, try to imagine a Fed chairman doggedly seeking to maintain the value of the dollar even if it meant refusing to monetize a massive deficit to fight a war or “stimulate” a depressed economy. It is not possible.

If there is any truth to the idea of Fed independence, it lay in precisely this: the Fed may reward favored friends and constituencies with trillions of dollars in various kinds of assistance, while keeping the public completely in the dark. If that is the independence we’re talking about, no self-respecting American would hesitate for a moment to challenge it.

This idea of opening up the Fed's books is a good one, but it won't happen, at least not in any reasonable way. I'm inclined to agree more with Ritholz. Washington is incapable of positive improvement.

As will all things on the national political scene, Scarecrow's message is: nice try, now do you see that Washington is hopeless and must be abandoned?

Monday, September 28, 2009

Plaxico and Teddy

I seem to remember that 40 years ago, Ted Kennedy managed to kill someone, a small detail that the authorities on the Kennedy payroll in Massachusetts seemed to forget when they charged him with a misdemeanor for "leaving the scene of an accident."

That Kennedy received a recent near-million-dollar burial of which the extravagance exceeded that of someone from an actual royal family tells us that the political classes are being held to much different standards than someone who actually is a valuable member of society. (Catching the winning touchdown pass in the Super Bowl is a much greater and more socially-useful feat than ramrodding God-awful bills like "No Child Left Behind" and worse into law and tom-catting with Christopher Dodd through the District, and having sex with a bimbo on a sailboat in full view of the rest of the world.)

The political classes – and especially the New York City political classes – protect their own. When the city collapsed financially in 1975, it turned out that city officials were selling municipal bonds to pay off previously-issued municipal bonds, an act that clearly broke a host of fraud statutes. However, no one went to jail despite the fact that the city officials clearly were engaged in a financial swindle that would dwarf even what Bernie Madoff did 30 years later.

From Free Plaxico Burress at LewRockwell.

Spot on. Athletes are scorned for making so much money, but everyone who tunes in and pays does so voluntarily. Not so with a politician.

Saturday, September 26, 2009


From a new mongraph, Economic Contractions in the United States: A Failure of Government, by George Mason prof Charles K. Rowley.

"[W]e suggest that the current economic recession, like the extended Great Depression of 1929-1939, represents a failure of government, and of state capitalism [defined as a "heavily-regulated, mixed economy, with governments at national, state and local levels that engage in production, distribution, regulation and coercive wealth transfers, as well as serving as an often uneven-handed referee." P. 56.] that is its creation, certainly not a failure of laissez-faire capitalism." (p. 2)

"The American national myth that FDR and the New Deal ‘pulled the US out of the Great Depression' does not stand up to an examination of the facts." (p. 20)

"The market chaos that ensued [in 2008] can be regarded as the outcome of rational behavior in a dysfunctional state capitalist environment." (p. 60)

"State capitalism rather than laissez-faire capitalism is the primary source of the moral failings which are now the object of populist anger that is being fueled, ironically, by the very politicians who were the chief culprits in stoking the house-price bubble that caused the financial crisis." (p. 61)

"The financial crisis of 2008 in the United States was primarily a failure of government: poor monetary policy, poor fiscal policy, and poor microeconomic policies." (p. 87)

Tuesday, September 22, 2009

Yes, Megan, there is a villain.

Megan McArdle:

the search for a villain behind the crisis will ultimately be fruitless. There are two basic narratives of what happened. The first is that bankers had bad incentives: they took massive risks because the profits were so good in the up years that it was worth the risk of the bad, or because they could pass the risks onto some other sucker, or they thought Uncle Sugar would bail them out. The other narrative is that bankers had bad information: they didn't understand the risks they were taking.

I've always preferred narrative B, because Narrative A doesn't make much sense. The CEOs of big banks lost vast sums of money, and their jobs, most of their social status, and so forth. They held onto the worst tranches of their securities, which implies they didn't know how badly they were going to blow up. Etc.

I find it vastly more plausible, if not so comforting, to believe that systems can occasionally produce bad results even if the incentives basically point in the right direction. The FICO score revolution was valuable, but we took it too far. The money sloshing around US markets disguised the problems, because people who got into trouble tapped their home equity, or in a pinch, sold the house at a tidy profit. Everyone from borrowers to regulators was getting the same bad signal, that their behavior was much less risky than it actually was.

Not quite. There is a very clear villain at the root of this: The Fed. Remember - they don't set interest rates, they target them. The market sets interest rates, but the Fed manipulates the market immensely to achieve their target.

The market wanted interest rates to rise in 2002 - 2004, but the Fed flooded the economy to make sure it didn't happen. Financial players responded quite rationally.

The trouble is: we were headed either for massive inflation (remember $5 gas in summer 2008)? or a crash. The Fed took their foot off the pedal and we got a crash.

Monday, September 21, 2009

Friday, September 18, 2009

Something Is Up

Mild upheaval comes and goes. People get angry. People get really angry. People get violent. People vote. Life goes on. It's all just part of the news cycle.

I think what's happening right now is a bit bigger than any upheaval I've seen in my lifetime. We've got millions of seething mad people. They're mad that Washington is spending extreme amounts of money and laying the tab on working people and their children.

The response? "All these protesters are racist and can't stand a black president."

It's that willingness of those in power or in favor of those in power to just blow off all these angry people that makes me think something is up. Angry people don't like being ignored. They will only get angrier. Hopefully they can channel that anger into productive activity that might actually lead to freedom, rather than the violence, which just plays right into the government's hands.

Thursday, September 17, 2009

Little Green Footballs

Don't know if any of you read this popular neocon blog. It's been interesting to watch its evolution.

Little Green Footballs rose to prominence post 9/11 as a hardline supporter of the "War on Terror." Now it spends more than half its posts criticizing the Tea Parties and the Evangelical Fundamentalist wing of the Republican Party (yesterday he posted the infamous and hysterical Kirk Cameron and a banana video).

Bush's most ardent supporters like LGF find a kinship with Obama more than with the sea of angry protesters. The antiwar left has turned out not to be antiwar at all, just anti-Bush. Bush's old friends and Obama's current friends are uniting against a coalition of the evangelical anti-Obamas and the libertarian-leaning Ron Paul folks.

American democracy always moves towards equilibrium, so eventually the anti-government movement will need to find a coalition to join if they want to win the offices. Hopefully they don't. Hopefully they will come to see that their means will never be achieved by playing in the political process, and instead will realize that their numbers are already large enough to initiate a successful nationwide secession from Washington.

But who knows? There is so much rampant militarism in the Tea Party movement -- what a mess America appears if you just look at the political side of it.

Excuse me while I head off to my favorite business blogs so I can read the thoughts of good people doing good things.

Wednesday, September 16, 2009

Now Carter Is In On the Racism Meme

The left is all-in now on this protesters-are-racist thing. I'll be interested to see where this goes.

And if you're a conservative protester, thank you for trying to stand up against a tyrannical state. When you start to feel discouraged, remember that there is another strategy that is more likely to get the federal government out of our hair, but a critical mass of us must be on board and willing to take the plunge together.

Monday, September 14, 2009

Old White Men Wielding Martinis and Wearing Dickies

"I am a citizen of the United States of America. Our government has been overthrown. Our elected President has been exiled. Old white men wielding martinis and wearing dickies have occupied our nation's capital."
--Opening sentences of Stupid White Men by Michael Moore.

There's been an exceptional amount of hand wringing over the behavior of conservatives these days. Wilson's "You Lie!" outburst, the summer of angry town halls, the big demonstrations in Washington and across America.

Obama's defenders are pushing a meme in response that this is all just racism against a black president, coming out in more socially acceptable forms, that when conservatives yell "You Lie!" in their heart, they're calling Obama the N word.

As evidence, the left notes that anger of this sort was absent when Bush dramatically increased the power and scope of the federal government, or even when Clinton was in office.

While I'm sure there are thousands of differing motivations behind all the anti-government activism out there, I think the big difference between now and previous administrations isn't the President's race, it's the availability of social organizing tools on the Internet.

I put Moore's quote atop this post to show that spitting anger at the government and questions of its legitimacy aren't the sole province of the right. In a democracy, whoever loses feels unrepresented. That's the way it is.

In the past, we could kvetch about it to our friends and neighbors, and write a book if we had access. Now, with Facebook, Twitter, Meetup, and the like, it's much easier to organize a crowd and feel like we're doing something.

I will be interested to see what happens when these millions who are protesting, who are doing just what their public school teachers told them democracy was all about, learn that their efforts haven't swayed Washington even a little.