We Are Close to the Top of the Market

Here is The Economist‘s May 11 cover.

Uh oh.

Advertisements

Politics Is the Lowest Form of Human Activity

PROOF.

Thatcher Was No Friend of Capitalism and Freedom

After a week of Thatcher worship, it’s not too late to insulate ourselves against all the post-death propaganda.

Rothbard on Thatcher:

Thatcherism is all too similar to Reaganism: free-market rhetoric masking statist content. While Thatcher has engaged in some privatization, the percentage of government spending and taxation to GNP has increased over the course of her regime, and monetary inflation has now led to price inflation. Basic discontent, then, has risen, and the increase in local tax levels has come as the vital last straw. It seems to me that a minimum criterion for a regime receiving the accolade of “pro-free-market” would require it to cut total spending, cut overall tax rates, and revenues, and put a stop to its own inflationary creation of money. Even by this surely modest yardstick, no British or American administration in decades has come close to qualifying.

Greenwald on Thatcher:

Whatever else may be true of her, Thatcher engaged in incredibly consequential acts that affected millions of people around the world. She played a key role not only in bringing about the first Gulf War but also using her influence to publicly advocate for the 2003 attack on Iraq. She denounced Nelson Mandela and his ANC as “terrorists”, something even David Cameron ultimately admitted was wrong. She was a steadfast friend to brutal tyrants such as Augusto Pinochet, Saddam Hussein andIndonesian dictator General Suharto (“One of our very best and most valuable friends”).

Raimondo on Thatcher:

Thatcher’s effect on the British right seems, in retrospect, to have been minimal: she wanted to bring off a “free market” revolution in the British welfare state, but instead wound up merely speeding the country down the road to serfdom. Paradoxically, where she had her greatest effect was on the Labor Party: her greatest success was cementing the “Atlanticist” foreign policy consensus presently shared by all the mainstream parties.

Sun News Network Pleads for Government Intervention

As an example of how government regulation distorts markets and encourages waste, it is interesting to consider to Sun News Network, aka CNN (Canadian Neocon Network) or “Fox News North.”

This network is supposedly more populist and conservative-leaning than, say, CBC or CTV news networks. One would hope that a “conservatives-leaning” network would be more friendly to letting the market determine its own outcomes.

Yet Sun News Network is petitioning the CRTC to declare it a “must-carry” channel, so that all basic digital television packages must have it by default. This would add approximately 7 million Canadian digital TV subscribers who would receive the channel, and about seven total people who would become new viewers. Yet all the providers would have to allocate a portion of their subscription revenues to Sun News Network if they are forced to carry the channel. It is essentially a tax — forcing people to pay for a service they do not want.

It would be perfectly fine to negotiate with the television service providers directly. But note that the mandatory carriage channels are compulsory regulatory requirements. If I am Bell, Shaw, Rogers or whoever, I cannot offer television service without including the must-carry channels in the basic package. As a subscriber, one must get the basic package in its entirety before one can select other services to add.

Let’s put aside that it’s things like “must-carry” channels and other CRTC regulations that are causing people to drop their cable subscriptions en masse, although that is interesting. Instead, let’s focus on how to become a mandatory carriage channel, you have to jump through the CRTC’s CanCon hoops. That means having lots of Canadian content that no one watches.

So, Sun News Network invests large amounts of resources in producing Canadian content to become must-carry, which would automatically give them a huge boost in revenue. Since no one cares about Canadian content for the most part (particularly that of the neocon variety), this causes Sun News Network to lose a lot of money ($18.5 million last year). Losses are the result of consumers telling a firm that it is using resources inefficiently. Here we see that Sun News Network executives are throwing resources at uninteresting Canadian content that no one cares about, to satisfy government regulations. All so that they might win on the gamble that the CRTC can be convinced to coerce everyone else into subscribing to Sun News Network.

It is also interesting how Sun News defends its efforts by saying CBC and CTV’s news networks are must-carry, and they are profitable. A true market-friendly argument would instead contend that must-carry regulations should end entirely, not be expanded further. Service providers, responding to consumers, should decide what channels are offered — not a government regulator.

Read the original story at The Globe and Mail.

The myth of the “independent” central bank

The theater of Canadian politics never ends. Its inanity would be more embarrassing if every other country’s mainstream media were not basically just as bad.

The Canadian media was making a big deal yesterday about Bank of Canada GG Mark Carney hanging out with his friend, Liberal MP Scott Brison. OMG, was he going to join the liberal party? Was he arranging special favors?

Uh, maybe I’m missing something, but the whole thing just seems to be “business as usual”. High-level bureaucrats hang out with high-level legislators and high-level businessmen who are politically connected. They are often buddies. They hang out at dinner parties, or golf together. Their wives get together to gossip. Their kids go to the same private schools. Whatever. Seriously, follow any central banker around, and see who their friends are. It’s the same story for all of them.

Why does anyone care? Because it anything that threatens the myth that central banks are “independent” is a threat to the Establishment’s most important tool — the monopoly on money creation. So a story is created where there is none.

Well, much to the relief of mainstream economists, governments, and the sycophantic media everywhere, Carney has been cleared of any misconduct. He wasn’t seeking political office when he was staying at Brison’s summer home, smoking cigars, drinking scotch and discussing the best ways to exploit the rabble. So it’s cool. I guess.

But let’s be serious — does anyone who doesn’t have a PhD in economics and write economics textbooks really believe in the idea of “independent central banks”? I know a lot of people like to think the central bank only has the public interest at heart. They like to think none of the normal monopoly problems apply to central banks because central bankers are just so noble and wise. At least that is what the textbooks say, and the idea is key to the ultimate scam of monopolized money supplies.

So now the knaves who support central banking can say to anyone ignorant enough to listen: “Hey! Don’t worry! The central bank is totally independent! It’s looking out for us!”

Central banks are not independent, by any stretch of the imagination. Central banks exist to manipulate money supplies. If you think they do this for the “public interest,” you may also believe in things like Santa, decent highways in Saskyland, or the pantheon of Greek gods. To anyone who thinks “outside the box” in regards to this for two seconds, it becomes clear that the central bank benefits their scandalous stakeholders, like inefficient export industries, debt-laden governments, and inherently insolvent financial systems.

Talking about whether Carney and Brison hanging out together constitutes a conflict of interest is just so outside the realm of importance, there is no surprise that the national media focuses on this “scandal” — rather than the scandal of central banking as such. This is theater. It pretends to be newsworthy when it is truly pointless theatre for government and media to put the shucks on the Canadian rubes.

Carney is off to the Bank of England — Pray for England

Bank of Canada Governor and ex-Goldman bankster Mark Carney was selected to become the next Governor of the Bank of England. He will now be overseeing a central bank with nearly ten times the assets of the Bank of Canada. That is a big promotion in the world of central planners! Carney will now be able to create even larger disturbances in economic systems.

Truly, the worst rise to the top.

Good riddance, I say. Not that I expect him to be replaced with anyone much better. But there is always a chance.

I feel bad for England, though. They have no idea what they are getting themselves into (from Bloomberg):

Carney, who holds an economics degree from Harvard and a doctorate from Oxford University, swaps oversight of an economy which bounced back from the global recession without witnessing a single bank bailout for one which slipped back into recession in the second quarter and required multiple bank rescues.

Did you see what they did there?

Carney … swaps oversight of an economy which bounced back from the global recession without witnessing a single bank bailout for one which slipped back into recession in the second quarter and required multiple bank rescues.

Carney … swaps oversight of an economy which bounced back from the global recession without witnessing a single bank bailout … 

an economy which bounced back from the global recession without witnessing a single bank bailout …

without witnessing a single bank bailout

Excuse me? The banks that pushed for Carney to be their man in England have surely put the shucks on the rubes.

Of all the deleterious myths that persist about the Canadian financial system, none are more harmful or obnoxious than the bogus story that its banks never needed and/or never got a bailout.

Anyone who says this is simply lying or has no idea what they are talking about. Those are the only real possibilities. We have covered this at CMR previously, but let us quickly review.

The mainstream news doesn’t even try to deny it anymore. The Canadian banks got a bailout. Now they simply try to play down the significance of it. Even though it is was much bigger than anyone was led to believe.

So is this “no bailouts in Canada” proposition challenged by anyone in the UK? Carney is being sold on the pretense that there were no bailouts?   

(Side note: We could also mention that Canadian banks received assistance from emergency Federal Reserve lending facilities, which by itself is very interesting. We could also mention that rather material fact that Canadian banks are basically in a state of “perma-bailout” by virtue of the Canadian Deposit Insurance Corporation. The existence of the CDIC amplifies the level of risk banks are willing to engage in — it is classic “moral hazard.”)

So it would seem one is more likely to see bank bailouts with Carney, rather than less. That is precisely why the UK banking cartel wants Carney in this position.

Yet that is not the only reason citizens of the UK should worry.

Mark Carney is not only a believer in bailouts — he is a believer in Keynesianism and mercantilism. This means nothing more than this: he sees a connection between depreciating the currency and growing the economy. This he shares with nearly all central bankers (except, perhaps, those in Singapore): he regards a strong currency as harmful to “the nation”. Because when he talks about “the nation,” he is not talking about the consumers (i.e. everyone) who use their stronger currency to buy and invest in more goods. For men such as Carney, “the nation” instead refers to politically-connected export industries that are benefited by making it cheaper for foreigners to buy their stuff.

That being the case, Carney will tend to increase the money supply by adding assets to the central bank’s balance sheet whenever he thinks it’s a good idea. But this means prices must rise and debts will deepen. Britain already has big problems in these areas.

This should be the last thing someone in the UK should desire. The British pound has plummeted in value the last five years against stronger currencies like the yen. Here in Canada, it seems Carney’s manipulations have been obscured by strong demand for Canadian commodities, yet with the slowdown in Asia, Europe, and soon the US, I doubt this will persist. The Bank of Canada has been growing its balance sheet for nearly two years now, since offloading some of its emergency acquisitions during the financial crisis.

Also, it should be known that Carney likes to troll citizens whose currency he manages by blaming them for behavior that is strongly encouraged by his own central bank policies. What a jerk.

I am happy to see Carney go. While I am happy he no longer oversees the Canadian dollar, I am apprehensive about who his replacement will be. Most of all, I must also bemoan the lack of justice. Carney should be serving a prison sentence for counterfeiting, rather than getting $1 million a year to manipulate huge economies.

Worst Financial Reporting Ever, Revisited

(UPDATED!! See below.)

Longtime fans of CMR may remember a video clip we posted a long time ago, featuring the worst financial reporting ever courtesy of our own local CTV. It was really quite hilarious, if you like sick humor.

Since then, CTV has been systematically trying to remove all evidence of this clip from the internet. But it’s your lucky day! Because it has resurfaced on YouTube. Enjoy!

Just so this does not happen again, I am taking this opportunity to rip this clip so it will never be forgotten.

UPDATE: CTV desperately tries to hide the truth and again the video has been removed. But… it’s back!

 

%d bloggers like this: