Who is afraid of the big, bad wolf of deflation? Not I – nor are people who pay attention worried about deflation…though there is a worry about what the pinheads in government and high finance might do about it:

Deflation is not a threat because deflation is here by any practical measurement. Deflation is also here by impractical measurements such as falling prices. See Humpty Dumpty On Inflation and Daniel Amerman vs. Mish: Reflections on the Great Inflation/Deflation Debate for a further discussion of a practical definition of deflation, a contraction of money supply and credit marked to market, not falling prices.

Moreover, deflation is not a threat in a second sense. Deflation is needed to purge the excesses of the last credit cycle. Attempts to defeat deflation by force will only prolong the agony while accumulating government debt, just as happened in Japan’s two lost decades.

Finally, deflation is not a threat in a third sense. Falling prices are a natural state of affairs because of rising productivity over time. Inflation is a direct (and unnatural) state of affairs caused by the Fed and fractional reserve lending…

…The Real Threat

We are already in uncharted territory, and the risk is what the Fed, Congress, the Treasury department, the Administration, and central bankers globally do to prevent something that needs to happen: the liquidation of malinvestments and debt.

Thus the “real threat” (and risk) is not deflation, but rather the foolish attempts by Keynesian clowns to circumvent what needs happen.

Japan is proof that such efforts are futile. Note that Japan is once again back in deflation, and all the government has to show for its efforts is debt equaling 150% of GDP. Falling prices, lower wages, lower asset prices, and especially debt liquidation are not to be feared, they are a necessary part of the healing process, lest the country stagnate for years.

We borrowed ourselves in to oblivion – over a 75 year period, though at times real wealth creation was enough for us to carry the debt, for a while. But the debt is now overwhelming – the $12 trillion of Uncle Sam’s debt is just a fraction of the debt we’ve built up. Estimates of the total amount owed – including private debt and the un-funded mandates of SS and Medicare/Medicaid – are in ranges of $70 to $100 trillion dollars. The bottom is out of the tub – we can’t borrow enough, now, to fuel enough growth to even service the debt, let alone pay it off…only a massive de-leveraging of the economy will do. In other words, we’re going to have to go through a sort of national bankruptcy.

A lot of banks are going to have to fail; a lot of assumptions about government spending will have to be changed; the manner in which we invest money will have to be corrected; our international trade relations will have to be adjusted to be morally sustainable…and we, the people, are going to have to admit the fact that the wealth we thought we had never really existed…it was all just paper, backed by nothing…we’ll have to get back to work, creating wealth and hunkering down while we do, because we still have to pay off our bond holders (which, fortunately, include a very large number of Joe Average Americans…especially of late, when a lot of us have bought bonds like no tomorrow – yours, truly, included – the bad news is that we’re going to have to pay off the Chinese, too…).

Balanced budgets, low taxes, no new indebtedness save for house purchases (and then only with good credit qualifications; and restrictions on the way home loans can be used so that our homes no longer become speculative chips in a game of financial roulette – no more, to put it bluntly, thinking of our houses as piggy banks to be drawn on for consumption). We’ll also have to start making, mining and growing much more of our own stuff – keep the money in the family, as it were. We can do this – if we genuinely work together…unfortunately, we’ve got a government which continues to have faith in fiat money, usury and class warfare…we’ll have to get rid of that, in the by and by.

Its just getting worse by the day – is there any depth he won’t go to? Will there come a point when he won’t crawl before our enemies? From NRO:

I’ve got to say, even for the Obama administration, this is a real shocker.

The Clinton State Department has decided to cut off all funding for the Iran Human Rights Documentation Center (IHRDC), which was compiling lists of protestors imprisoned in this summer’s unrest, as well as those who were killed in the crackdown.

IHRDC is what human-rights advocates should be: methodical, precise, and apolitical in their work. And yet, the Obama administration has, without explanation, cut off all federal funding to the group which has consistently fulfilled its mandate.

Anyone, across the political spectrum who has any interest in human rights in Iran keeps the IHRDC reports on their desks.

Why is he doing it:

From the link within the quote:

…Obama officials have argued publicly for a less-confrontational approach than Bush, in the belief that the Bush administration’s vocal support for democracy activists made them targets in Iran and stirred up fears of regime change.

Obama, you bloody fool! Idiot! Dunce! You want them to be afraid of regime change – its the only dratted way to get bloodthirsty thugs to listen to you.

For crying out loud, ditch this insane mantra that we’re hated because of Bush or because of what we’ve done – we’re hated for what we are.

UPDATE: And he goes along with the Islamists and assorted tyrants in a new, UN “human rights” declaration which calls for restrictions on freedom of speech…geesh!

You expected something different?

..At town hall meetings across the country this past summer, the main topic was health care, but there was a strong undercurrent of anger over the way Congress rushed through passage of the stimulus, global warming and bank bailout bills without seeming to understand the consequences. The stimulus bill, for example, was 1,100 pages long and made available to Congress and the public just 13 hours before lawmakers voted on it. The bill has failed to provide the promised help to the job market, and there was outrage when it was discovered that the legislation included an amendment allowing American International Group, a bailout recipient, to give out millions in employee bonuses.

“If someone had a chance to look at the bill, they would have found that out,” said Lisa Rosenberg, who lobbies Congress on behalf of the Sunlight Foundation to bring more transparency to government.

The foundation has begun an effort to get Congress to post bills online, for all to see, 72 hours before lawmakers vote on them.

“It would give the public a chance to really digest and understand what is in the bill,” Rosenberg said, “and communicate whether that is a good or a bad thing while there is still time to fix it.”

A similar effort is under way in Congress. Reps. Brian Baird, D-Wash., and Greg Walden, R-Ore., are circulating a petition among House lawmakers that would force a vote on the 72-hour rule.

Nearly every Republican has signed on, but the Democratic leadership is unwilling to cede control over when bills are brought to the floor for votes and are discouraging their rank and file from signing the petition. Senate Democrats voted down a similar measure last week for the health care bill.

Has the GOP been pure as wind-driven snow on this issue from day one? No, not at all – to our shame. But we’re on the side of the people, now – the old ways of politics must stop. We need to have the government start working for us – and that means we need to know what they propose to do before they do it. In detail.

UPDATE: Sen. Durbin (D-IL) furious with a radio station for daring to state that Durbin was coming to town…

A bit hard for me to write as I burned my ring finger making the Mrs some fresh french fries (they came out good, though a bit “Mark” flavored, I guess). So, have at it…

Interesting:

The gubernatorial race in New Jersey has not changed fundamentally recently, no matter what you may read in poorly produced Associated Press stories distributed by the Democratic Governors Association, the Democratic National Committee or Gov. Jon Corzine’s (D) campaign.

I’ve become accustomed to crazy rumors and assertions at the end of campaigns, and most of them are baseless.

A couple of days before Election Day 2006, CBS executives planning the network’s coverage were in a frenzy about a possible Republican surge that challenged all of their assumptions about the election and disrupted their plans for election night. After checking around with reliable pollsters, I told them the sky wasn’t falling on Democrats.

In other years, when Republicans were headed for gains, I’ve heard late rumors about Democratic surges that were equally untrue.

This in response to a recent poll which showed Democrat Governor Corzine only 4 points back against Republican challenger Christie. It was a bit of a shocker, to be sure – here is Corzine, arguably the worst governor in the nation presiding over a collapsing New Jersey economy and a hopelessly corrupt New Jersey political system, and he’s only 4 points back? It was looking like proof that a Democrat in a safely “blue” area just couldn’t be defeated. One was forced to ask: what does it take to convince Democrats that their guy is a loser?

But, then, on thinking about it, there came the realization – people aren’t that stupid. I mean, it’d be different if Corzine had been a good governor mired in problems not of his own making…but its all him, and its all bad. Then when you look in to that recent poll, you’ll see what Rothenberg notes later in his piece – while the GOP support has slipped a little bit, Corzine’s support hasn’t risen at all. Its clear what is happening in NJ – given its a three way race, Corzine and his Democrats are hoping to pump up the Third Party in hopes of getting Corzine a win with 40% or less of the vote. Won’t work – while a lot of people are flirting with the Third Party, when it comes down to it people will want to be sure of getting Corzine out – and that means back to the GOP.

I expect that next month we’ll win NJ with about 45% of the vote – and that, along with what is shaping up as a landslide win in VA, will be the signal we need to really rip things up in 2010.

In the long run:

…says McLerran, “Global warming is only a theory. Declining fertility rates are fact that has already happened.” He cites the U.N. prediction on 2050 and adds, “Some demographers predict [population] will decline overall as soon as 2040.”

Demographic Bomb looks at Russia, for example, where the country could lose a third of its population within 40 years. And Moscow is concerned enough now to offer $9,000 to mothers for each child after her first.

Likewise, Portugal’s government is considering charging higher pension payments to those who have fewer than two children. Japan, which has the world’s lowest birth rate outside of Europe, 1.25, has a whole ministry devoted to reversing its decline.

In China, the government publicly defends its one-child-per-family rule, but the municipal administration of Shanghai is encouraging families to have two or more as it prepares to care for its aging population.

Germany is closing hundreds of schools a year, the film reports, and next door, one expert says in Demographic Bomb, it’s conceivable that some day in the near future there will not be a single person left in France of pure French descent.

As for the United States, its population continues to grow only because of immigration or the higher fertility of recent immigrants from Mexico. Native American fertility rates have been falling for decades and according to the film, the impact has already been felt economically.

The anti-religious already have a word for us concerned about this issue: We’re “natalists” who are fanning fears, trying to get women barefoot and pregnant and are, of course, racists worried there won’t be enough white babies. Actually, we’re worried there won’t be any babies, at all – well, that is an exaggeration…we know there will be Christian babies, Jewish babies and Moslem babies. Among those who are actually religious, babies continue to be made – because when you have faith in God, you welcome life with open arms. Its when you don’t believe that you start hunkering down and being worried you won’t have enough for your self. We are more than willing to re-inherit the earth and start all over again.

On the other hand, demographic catastrophe will set off wars and cause untold poverty. We’d rather avoid that, if possible…and this means we have to find ways to get unbelievers to believe. For a couple centuries now the left, in various guises, has tried to talk everyone in to thinking that religion is what makes life miserable…actually, its what makes life possible. Take it away and leave the human being naked in the public square, enslaved to the flesh, and he’ll start lavishing funds on a dog and taking swank vacations and wondering why he’s not happy…

Life is a wonderful thing – if only we can convince the unbelievers.

The first step in an attempt to suppress us, boys and girls:

The Federal Trade Commission will try to regulate blogging for the first time, requiring writers on the Web to clearly disclose any freebies or payments they get from companies for reviewing their products.

The FTC said Monday its commissioners voted 4-0 to approve the final Web guidelines, which had been expected. Violating the rules, which take effect Dec. 1, could bring fines up to $11,000 per violation. Bloggers or advertisers also could face injunctions and be ordered to reimburse consumers for financial losses stemming from inappropriate product reviews.

The commission stopped short of specifying how bloggers must disclose conflicts of interest. Rich Cleland, assistant director of the FTC’s advertising practices division, said the disclosure must be “clear and conspicuous,” no matter what form it will take.

Its always to protect us, right? Next they’ll be doing it “for the children”. The government just can’t stand this free marketplace of ideas. And so: we need a blogging amendment to the Constitution…some words to the effect of “hands off” to any government busy bodies who want to hamper us with regulations. You catch a blogger engaging in fraud, and I’ll be the first to demand his punishment…but if you haven’t got evidence, then go pound sand.

UPDATE: DanaLoesch nails it:

The blogosphere polices itself rather well and those who lack transparency in marketing lose their audiences and the community isn’t above cannibalizing one of their own for the sake of keeping the practice pure. We don’t need bureaucrats dictating our own content policies. Granted, there are some who aren’t as transparent as others, but they’re usually not skilled enough to disguise it. I myself receive free items regularly and it’s always been my own personal policy to disclose this, which I have. I’ve refused offers from companies who’ve suggested that I act otherwise. I created this self-policing policy because I, like most other bloggers, realize that our reputations are virtual currency.

We bloggers can’t make the slightest error without someone gleefully jumping all over it. This has made me cautious, careful of sources and, in addition, a much better writer than when I started. We don’t need the FTC to protect us – in the blogsphere, we are the most savvy, skeptical and mercilessly scrutinized group on earth.

…oh, there’s some words I want to use…

President Barack Obama will not meet the Dalai Lama during his five-day trip to the U.S. capital beginning on Monday, the first time in 18 years the exiled Tibetan leader has visited Washington without seeing the president.

For crying out loud, at least for once side with right and decency….

Then follow along with Obamunism…which is just warmed-over New Dealism:

If anyone in Washington were to be so wacky as to seek to extend the pain of a recession, what course would they follow? On Page 26 of “America’s Great Depression,” Rothbard presents that very catalog of idiocy.

“Here are the ways the adjustment process can be hobbled:” he writes.

“1) Prevent or delay liquidation. Lend money to shaky businesses, call on banks to lend further, etc.

“2) Inflate further. Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Further credit expansion creates more malinvestments, which, in their turn, will have to be liquidated in some later depression. A government ‘easy money’ policy prevents the market’s return to the necessary higher interest rates.

“3) Keep wage rates up. Artificial maintenance of wage rates in a depression ensures permanent mass unemployment. Furthermore, in a deflation, when prices are falling, keeping the same rate of money wages means that real wage rates have been pushed higher. In the face of falling business demand, this greatly aggravates the unemployment problem.”

In addition to “minimum wage laws,” don’t we now have “living wage” ordinances, “project labor agreements,” and, for our unionized government employees, “automatic step and seniority raises” in addition to cost-of-living adjustments that boost the pay of government employees as well as welfare recipients … even when the cost of living is falling?

“4) Keep prices up,” Rothbard continues, cataloguing precisely the wrong things to do if you want a recession to end. “Keeping prices above their free-market levels will create unsalable surpluses, and prevent a return to prosperity.

“5) Stimulate consumption and discourage saving. We have seen that more saving and less consumption would speed recovery; more consumption and less saving aggravate the shortage of saved-capital even further. Government can encourage consumption by ‘food stamp plans’ and relief payments.”

Note that “America’s Great Depression” was published in 1963. How’s Rothbard doing at predicting Obamanomics, so far? (About the only thing he seems to have missed are “Cash for Clunkers” and the fledgling “green jobs” boondoggle.)

Government “can discourage savings and investment by higher taxes,” Rothbard continues, “particularly on the wealthy and on corporations and estates. As a matter of fact, any increase of taxes and government spending will discourage saving and investment and stimulate consumption, since government spending is all consumption. …

“6) Subsidize unemployment: Any subsidization of unemployment (via unemployment ‘insurance,’ relief, etc.) will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available.”

We got in to this mess because of massive government interference in the market – by direct subsidy of failure, or by setting up the regulatory system in favor of a few, large corporations with strong political connections. We can’t get out of this mess by the same means – in other words, what government corruptly created, government cannot corruptly cure.

There is, though, a government effort to be made, here: we can eliminate taxes and regulations which hamper new start ups or the expansion of existing firms…especially in mining, farming and manufacturing; we can provide credit for people who are willing to put their own sweat equity in to such start ups; we can allow the “too big to fail” concerns to fail, as they deserve; and if anyone really has a hankering after government spending, then we can use it to do things like finance the building of high speed rail, improvement of ports and other such hard infrastructure programs which are not bridges to nowhere of Congressional pork. Finally, and most importantly, the government can balance the budget – regardless of how much alleged pain it costs: we cannot afford any longer to steal from the future to buy votes in the present.

Our economy is not the failure of the free market – its the failure of a Big Government which has interfered in one stupid way after another…which has injected purely political considerations in to areas where economics and/or morality are supposed to rule. Government’s job is to protect us from invaders, defend us from domestic criminals and ensure that each American gets a fair shake – anything out side those areas is fraught with risk and should be avoided. If it is felt to be unavoidable, then when government does go in to matters of economics or morality, it should farm out the execution of the effort to private entities (so, government paid health care should be handled by charity hospitals; government aid to education should go directly to parents and students to spend as they see fit; etc, etc, etc).

We can keep at this, and continue to flounder, or we can change course – and become prosperous, again.

A word of warning about socialism:

Yet let no one think that all the socialist groups or factions that are not communist have, without exception, recovered their senses to this extent either in fact or in name. For the most part they do not reject the class struggle or the abolition of ownership, but only in some degree modify them. Now if these false principles are modified and to some extent erased from the program, the question arises, or rather is raised without warrant by some, whether the principles of Christian truth cannot perhaps be also modified to some degree and be tempered so as to meet Socialism half-way and, as it were, by a middle course, come to agreement with it. There are some allured by the foolish hope that socialists in this way will be drawn to us. A vain hope! Those who want to be apostles among socialists ought to profess Christian truth whole and entire, openly and sincerely, and not connive at error in any way. If they truly wish to be heralds of the Gospel, let them above all strive to show to socialists that socialist claims, so far as they are just, are far more strongly supported by the principles of Christian faith and much more effectively promoted through the power of Christian charity. – Pius XI, Quadragesimo Anno

But don’t get too cocky, Capitalists – while making money is fine, you have a moral obligation to (a) make it by licit actions (so, no, its not ok to invest in pornography and abortion mills) and (b) share your surplus with those who have less (for the super rich, this might mean a mere million dollar yacht, rather than the ten million dollar one..and you give the rest away; you get the picture).