Archive for February, 2009

The degeneration of Britain

Wednesday, February 25th, 2009

Three facts that have recently been in the news:

  1. The reversal of the Flynn effect.  The British youth of today really are dumber.
  2. Violence, drunkenness, laddie, and home invasion burglaries, where drunken lads smash into someone’s house and terrify the inhabitants.  The British crime rate is about double the US crime rate, and threatens everyone, whereas the US crime rate is very low outside areas with large numbers of protected minorities.
  3. Cowardice and surrender by the British army – for example humiliating capitulations in Basra, Helmund province, and the Persian gulf.

I conjecture a common cause for all three:  About a quarter of British children lack a natural father, about half lack a natural father at some stage, a problem caused by welfare and easy out divorce laws with that favor women leaving their husbands.  Also, there are few male authority figures in primary and secondary education, a problem worsened by dumbing down and feminizing traditionally male subjects such as maths and science in an effort to close the achievement gap between boys and girls.

Bastard children tend to be stupid and violent:  Mothers nurture, fathers discipline.  Not “Fathers traditionally discipline, Mothers  traditionally discipline”, but rather natural fathers, (not step fathers) are innately inclined to discipline, mothers innately inclined to nuture.

Bastard male children tend to be unmanly.

The reason that lack of father causes criminality and cowardice is obvious:  Why should it cause stupidity?  I conjecture that the close presence of a powerful authority who is smarter and wiser than you pressures you to keep up mentally, exercising your mind, just as the close presence of an athletic peer would pressure you to be more athletic.  Also the efforts to reduce the boy girl gap in maths achievement are likely to have a direct detrimental effect on IQ test scores for both males and females


The run begins on Europe

Monday, February 23rd, 2009

Moody’ issued a warning on European banks, which implies that the smart money is moving out of the worst affected banks: Eastern European banks, and Western European banks with a lot of exposure to Eastern Europe.This, in turn, is putting pressure on European government bonds, as speculators doubt that European governments will be able to bail out their banks, or will go broke attempting to do so – the most fragile European regimes are facing increasing reluctance to buy their bonds, resulting in higher interest rates. A couple of days ago, the leaders of Europe met to solve the crisis, and issued a communique full of good intentions. I interpret this communique as saying that they intend to keep on doing all the disastrous bad things that led to this crisis, only even more so:

Leaders from eight European countries called for regulating financial markets and hedge funds, investment funds that typically lead to aggressive financial strategies.

German Chancellor Angela Merkel, who hosted the summit, said all financial markets, products and participants that pose a major risk must be regulated.

Ms. Merkel also called for world economies to coordinate in establishing sanctions for tax shelters and regions where financial deals are opaque.

And calling for someone else to clean up the resulting mess:

“We decided that the international institutions should have at least $500 billion to enable them not just to deal with crises, but to enable them to be able to prevent crises,” said Gordon Brown. We have also decided we want to see a greater role for the World Bank in helping the poorest countries of the world.

Bond markets are still giving rather low probability for the chance of a governmental financial collapse.  I find these low rates surprising.   At present you can buy insurance that a European government will pay its bills over the next five years at about one fortieth the face value of the bill, which seems mighty cheap – unless of course one suspects that if governments are not paying, neither will the insurer, in which case it is mighty expensive.

Chinese becoming wealthy, Americans ceasing to be

Sunday, February 22nd, 2009

Captain Capitalism explains why Chinese are becoming wealthy, and Americans ceasing to be.

Headless body in Gutless press

Thursday, February 19th, 2009

Mark Steyn ridicules the mainstream press’s fear of Islam:

the killing of Aasiya Hassan seems to have elicited a very muted response.

When poor Mrs. Hassan’s husband launched his TV network to counter negative stereotypes of Muslims, he had no difficulty generating column inches, as far afield as The Columbus Dispatch, The Detroit Free Press, The San Jose Mercury NewsVariety, NBC News, the Voice of America, and the Canadian Press. The Rochester Democrat & Chronicle put the couple on the front page under the headline “Infant TV Network Unveils The Face Of Muslim News”.

But, when Muzzammil Hassan kills his wife and “the face of Muslim news” is unveiled rather more literally, detached from her corpse at his TV studios, it’s all he can do to make the local press — page 26 of Newsday

The lesson of Japan’s failure

Thursday, February 12th, 2009

Ten years ago, Japan had a banking crisis very like the one we just had.  It was discovered that financiers and big businessmen had blown staggering sums of money, whereupon the government massively intervened to keep those that had screwed up from losing their jobs.

The Japanese economy has been stagnant ever since, even though, or perhaps because, the government has poured huge amounts of “stimulus” over the economy, so much “stimulus” that the Japanese government is now approaching bankruptcy.

President Barack Obama correctly observed:

There are two countries who have gone through some big financial crises over the last decade or two. One was Japan, which never really acknowledged the scale and magnitude of the problems in their banking system and that resulted in what’s called “The Lost Decade”. They kept on trying to paper over the problems. The markets sort of stayed up because the Japanese government kept on pumping money in. But, eventually, nothing happened and they didn’t see any growth whatsoever.

Obama then proceeds to explain why we are going to do what failed for Japan:

we want to retain a strong sense of that private capital fulfilling the core — core investment needs of this country.

No we don’t. We want to retain a strong sense that businessmen who succeed, win, and businessmen that foul up, lose their shirts. It is not capitalism when the capitalists are kept in power by the state.

To work, capitalism has to be run by people who are smart.  The entrepreneur unites other people’s money and other people’s labor, to create value.  The Wall Streeters revealed themselves to be idiots who massively subtracted value.

Similarly General motors, who managed to destroy the amazing sum of about four hundred billion dollars of value over the last decade.

The big factor in downturns is that people attempt to continue saving, while holding back from investing, whereupon the economy bogs down, thus the big factor is distrust of financial intermediaries.  In this sense, recessions are largely supply side problems rather than demand side problems. In the last three years, vast numbers of financial intermediaries have been revealed as untrustworthy and incompetent.

In Japan, in a similar crisis thirteen years ago the insiders were revealed to be incompetent and corrupt. In a similar response, the Japanese government intervened to protect insiders from the consequences of exposure, keeping them in charge of other people’s wealth.

This in Japan as here led to massive decline in investment and demand, to which the Japanese government responded with “stimulus” – building bridges to nowhere, paving rivers, and so on and so forth.

This led to a massive increase in Japanese government debt, now the highest in the world, but failed to cure the recession.  The government could manufacture demand, but not supply.

Japanese government debt is the highest in the world not because no other government was prepared to borrow so much, but because all other governments that attempted to borrow as much, have gone bust.

Bridges to nowhere will not fix the supply side problem, and tax cuts can have only limited effectiveness. Rather, a new crop of productive entrepreneurs must arise, the creation side of capitalism’s creative destruction.  But in a world of bailouts, the way to success is connections, political correctness, and getting on with the rest of the elite, which gives us the sort of capitalist establishment that got us into this mess.

The banks that were run by bankers of the Ebenezer Scrooge type, who accepted CRA with the same enthusiasm as they turned up at their dentist for a root canal, tended to be taken over by banks of the Washington Mutual type, who were rewarded for their political correctness in embracing CRA with genuine enthusiasm, by regulatory favor in their takeovers.  And that crowd, the Washington Mutual sort, is the crowd that is still in charge, government guaranteed to be in charge.  We need a finance sector run by the likes of Ebenezer Scrooge, and an automobile industry run by the likes of Hank Rearden.  To get that, badly run businesses have to go bankrupt, and their assets need to be auctioned off at the block.

Smoot Hawley again

Tuesday, February 3rd, 2009

One of the several government actions that so greatly prolonged the great depression was Smoot Hawley.  The Becker Posner blog reports that the democrats want do do FDR all over again – meaning do the great depression all over again.

The cause of the crisis

Monday, February 2nd, 2009

In numerous posts, I have argued that CRA affirmative action caused the economic crisis that is happening now.  Vdare provides a far better post than any of mine, giving us case histories and numerous horror stories of bank?s proudly pissing away stupendous amounts of money, and boasting of their wonderful CRA compliance in so doing.

The bank?s boasts of trillions of dollars gives the lie to the much repeated claim that CRA was tiny, supposedly much too small to cause a world economic crisis.

Israel did not win

Monday, February 2nd, 2009

After the recent war in the Gaza strip, Hamas declared victory, and Israel declared victory.

What do they teach small boys in school today?  When I was in school, the first thing I learned is that the fight  is not over till the winner can make loser cry “uncle”.

Hamas has not been destroyed, nor coerced.  They continue to rocket Israel.  Since they are religious fanatics, nothing short of Roman methods can force them to cry “uncle”.  People who rocket one, have to be killed or driven out of rocket range.

Their recent war was not war, but theater.  In war you keep going till one side loses and one side wins.