Recession Watch: July

[innonimatu]

The point you miss is that every monetary arrangement other than a semi autonomous central bank performs substantially worse in the long run than a semi autonomous central bank. So there is nothing in the world you can point to and say "see, this has a better record."

A bold statement. Just wait and see what happens in the EU, where a central bank was enshrined as semi-autonomous of governments (governments only appoint one member of the bard each, and do not set policies). I dare guess that if governments don't intervene and put an end to that "autonomy" the Euro will end in a couple of years.

 

[Princeps]

Legitimacy doesnt arise from legal tender laws, it arises from people voluntarily choosing the type of commodity that they wish for trade.

Nonsense. Again, there is no natural law that says consensual activity is somehow inherently legitimate. Enforced public law is the source of legitimacy, not libertarian natural rights delusions.

Further, not only is the fiat money system inherently built on property confiscation, it also is the source of the business cycle, the reason why we even have this thread and others like this on this forum.

Nonsense again. Before the fiat monetary system, the world used to have much worse and frequent depressions. After the fiat system, no reasonably well managed country has fallen into depression.

 

[Cutlass]

In the 70s the developed nations did not come anywhere near depression.

 

[mrt144]

You can't separate the good ones from the bad ones by that method.

In some ways we can. Businesses that present too much of a credit risk aren't going to be lent money if safe returns can be had elsewhere or if sitting on cash loses money hand over fist. In almost every single case so far, the way that companies have tried and failed to avoid bankruptcy is by writing non subordinated notes at high interest rates to cover what they believe is a 2-3 year patch. But in most cases more debt is a problem because the fundamental business is unsound and they fold anyway.

This is should be clear that credit facility liquidity isn't the issue we should be tackling, rather credit quality and debt burden is.

 

[Cutlass]

But there are a lot of basically sound and well run companies that are credit dependent. Simply because that is the way the business was built.

 

[mrt144]

But there are a lot of basically sound and well run companies that are credit dependent. Simply because that is the way the business was built.

When we're talking billions of dollars in losses jeopardizing loan covenants, I think there are tiers of credit dependency. CIT's bonds and Office Max's Net 30 are two different beasts.

 

[knez]

And I would rather not argue with communists. Since that is clearly what you are, there isn't a lot of point. Capitalism is inherently unstable. If you knew me better, you would know that I am at heart a cynic. I don't love the Fed, I just accept it as the least bad of a bad range of choices.

is not
capitalism with fractional reserve banking (without or with central banks (for making things just a bit worse )) is

Without legitimate money, electronic funds transfer becomes close enough to impossible and international trade drops substantially as a result. Even national trade would be reduced significantly. Fiat currency is what has made your present quality of life possible.

What standard would you prefer over fiat? Do you want gold? Or silver? This instantly makes anyone who owns gold or silver to be very rich, because the price of whichever metal chosen would jump extremely high in order for it to equal the value of currency in circulation.
Or do you have some other magical system that is better than fiat and precious metals.

so what?

Legitimacy doesnt arise from legal tender laws, it arises from people voluntarily choosing the type of commodity that they wish for trade.

Further, not only is the fiat money system inherently built on property confiscation, it also is the source of the business cycle, the reason why we even have this thread and others like this on this forum.
http://mises.org/rothbard/newlibertywhole.asp#p174

 

[Cutlass]

is not
capitalism with fractional reserve banking (without or with central banks (for making things just a bit worse )) is

I don't understand what you are trying to say. Capitalism pretty much requires fractional reserve banking. It's one of the major places that capitalists get their capital from. But yes, capitalism without central banks is inherently unstable. Central banks, run correctly, somewhat reduce the instability. Without central banks the instability is maximized.

 

[PiMan]

Are you actually going to respond? Explain why I am wrong?
Or are you just going to pretend it is obvious?

so what?

Fiat is currency being valuable on its own merits, gold standard is currency being valuable because of how much gold in the country. Why does anyone advocate something so arbitrary as gold?

 

[Snorrius]

A bold statement. Just wait and see what happens in the EU, where a central bank was enshrined as semi-autonomous of governments (governments only appoint one member of the bard each, and do not set policies). I dare guess that if governments don't intervene and put an end to that "autonomy" the Euro will end in a couple of years.

Seems like you are more and more enlightened by the Revelations of Snorrius' Prophecies .

 

[Princeps]

Rothbard explains it well:
http://mises.org/rothbard/newlibertywhole.asp#p26

No he doesn't. What a moron this Rothbard is.

I'll rebuke some of his tedious nonsense.

The central thrust of libertarian thought, then, is to oppose any and all aggression against the property rights of individuals in their own persons and in the material objects they have voluntarily acquired.

I don't exactly what he means by "voluntarily acquired". All property is based on violent enforcement, the restriction of some people at to the benefit of others. There is nothing voluntary about it, just as there isn't anything voluntary about any law.

Private property is public policy.

While individual and gangs of criminals are of course opposed, there is nothing unique here to the libertarian creed, since almost all persons and schools of thought oppose the exercise of random violence against persons and property.

Except libertarians, many of whom insist that they can claim violently enforced exclusivity to "their" land and wealth, and even shoot anyone who violates this supposed "natural right".

In the libertarian society there would be no "district attorney" who prosecutes criminals in the name of a nonexistent "society,"

What a moron. Society is two or more individuals associated in some manner of political and economic arrengement. This means that the whole world is essentially a large society and that there are societies within societies, some larger other smaller. Society is hardly nonexistent, while the idea of a sovereign individual, the main libertarian delusion, is certainly pure nonsense.

The victim would himself decide whether to press charges.

Um, they don't?

Moreover, in the system of criminal punishment in the libertarian world, the emphasis would never be, as it is now, on "society's" jailing the criminal; the emphasis would necessarily be on compelling the criminal to make restitution to the victim of his crime.

So libertarian justice is about simplistic revenge?

While all punishment should above all serve as deterrence, I view imprisonment in three ways, i.e. the protection of the society from the criminal and the protection of the criminal from his own behaviour and retribution of others outside. Period. I don't see the victim's retribution as having any thing to do with imprisonment or any other punishment. Personal vengeance is a mental problem, not a justification for state-sponsored or private prosecution (but perhaps a justification for therapy for the victim).

The present system, in which the victim is not recompensed

Yes, the victim is oftentimes compensated. Although in too many cases they're not.

but instead [p. 46] has to pay taxes to support the incarceration of his own attacker

No. He or she pays taxes to keep society safe from dangerous individuals and to protect those dangerous individuals from themselves and outside retribution.

— would be evident nonsense in a world that focuses on the defense of property rights and therefore on the victim of crime

No. It wouldn't, beucase prisons are as old as society. It wouldn't suddenly become nonsense to protect society, to provide deterrence to crime and shelter for criminals, because these are generally accepted notions.

Furthermore, while most libertarians are not pacifists, they would not join the present system in interfering with people's right to be pacifists.

I'd argue that they would because like all political arrengements, the libertarian regime would be based on violent enforcement of certain rules. But anyway, the concerns of a tiny minority such as dogmatic pacifists are my least concern.

Thus, suppose that Jones, a pacifist, is aggressed against by Smith, a criminal. If Jones, as the result of his beliefs, is against defending himself by the use of violence and is therefore opposed to any prosecution of crime, then Jones will simply fail to prosecute, and that will be the end of it. There will be no governmental machinery that pursues and tries criminals even against the wishes of the victim.

Yes, and the rapist/murderer/car-robber/fraudster would be free to go. What a great idea! Let him go and continue his destructive behaviour just because of the ideals of some absurd pacifist.

No. The enforcement of law should not depend on the permission of the victim. Proper procedures should be followed regardless, because the criminal can still pose a danger to others and to himself. Therefore, if proven guilty, the criminal should be imprisoned for the security of the society and his own safety and rehabilitation.

For libertarians regard the State as the supreme, the eternal, the best organized aggressor against the persons and property of the mass of the public

The state (which the libertarians use as a sort of blanket term for all human politics they don't like) is indeed eternal and the best organized aggressor against persons. But the political nature of humanity is inescapable. The state as an institution is merely an extension of this fact. State is not inherently exploitive, but, yes, it is violent. But violence is not inherently evil, but inevitable, because all rules, policies and regulations require that they're enforced through some kind of a mechanism.

The State! Always and ever the government and its rulers and operators have been considered above the general moral law.

ZING! Here we are again. The "general moral law"?

What "general moral law"? Who enforces this law? Who wrote this law? Just as there isn't any "natural law", or "celestial law", there is no "general moral law". These are merely fabrications, the delusional platonic nonsense of the needy and solipsistic.

No. People have always believed that there are some people who we can trust with powers that are above the avarage citizen. Why should the rights and responsibilites of all people be uniform? I thought libertarians hated uniformity?

But many times, people have grabbed these powers by undemocratic means and seperated themselves from any accountability to the public. In such cases, the regimes that these people impose should be considered private states, not public states.

The "Pentagon Papers" are only one recent instance among innumerable instances in history of men, most of whom are perfectly honorable in their private lives, who lie in their teeth before the public.

The imperialism of the United States is an example of private abuse of power at the cost of the public. It is not an example of public victimization of other nations. Likewise, most regimes in history, the vast majority of kingdoms and totalitarian states, have been ruled by unaccountable private regimes, when they engaged in the terror and aggresson that they did.

In short, private crime is, at best, sporadic and uncertain;

There is no reason to assume that private crime wouldn't become systematic and certain if it would be allowed to fester. In fact, organized private crime is not a new thing at all. The reason why private crime is sporadic and uncertain is precisely because of the public laws against it.

 

[JerichoHill]

"Abolish" is the word I used. Yes, I advocate getting rid of the Fed altogether. Let the streets run red with the blood of technocrats!

Yes. The US functioned much better when it did not have a central bank but 30 some odd independent state banks ::

 

[Naskra]

Yes. The US functioned much better when it did not have a central bank but 30 some odd independent state banks

Yeah, right, we can all be historical banking re-enactors.

 

[JerichoHill]

By the way, this thread is about economic data on the current recession watch. NOT a debate about libertarianism or copy and pasted misunderstood mises postings. Take those elsewhere

 

[JerichoHill]

Yeah, right, we can all be historical banking re-enactors.

Umm, Do you know the history of decentralized central banking in the 1800s prior to the Fed? It was awful.

 

[Naskra]

Umm, Do you know the history of decentralized central banking in the 1800s prior to the Fed? It was awful.

There are plenty of crazies in this thread. No one has suggested a revisiting past failures.

 

[Princeps]

action against the initiators of violence is legitimate. It is not pacifistic by itself.

If there is no regard for context, no, then initiation of violence against violators of restrictions is not leigimate.

Ownership is formed through homesteading

Only if homesteading laws exist and they're enforced in practice. In a democratic government, the people decides whether to recognize this form of property acquisition.

You apparently still insisit that there is somekind of a pre-political set of rules that are inherently correct and self-evident. This is not the case. Homesteading is not somekind of a natural right and it doesn't make legal property.

or makes a voluntary transaction or contract with some other owner.

Transactions and contractual exchanges are not always voluntary. A party in the exchange that has more market power can often preasure the other side (workers, serfs, peons, small businesses etc) to concede to unfavourable contracts or arrengements.

In the first case a person mixes uses labour on an unowned object, and becomes its just owner That is not exploitative, when there is no coercion.

There is coercion. It's obvious and that you deny it, is ridicolous. The owner has to enforce or hire someone to enforce his exclusivity to the item or land, i.e. he has to enforce restrictions on others.

As the alternative of someone else owning it is inherently violent, requires the initiation of force, to take something that belongs to someone else, his labour and its product.

Violence is not inherently evil, for example if it is used with popular mandate to puruse improvement to the conditions of the majority. Violence, when employed to protect the privileges of the few, i.e. the property of a super rich elite at the cost of others, is in my opinion evil.

One other thing, while kingdoms certainly could be private(which is indeed a good thing, as makes them incentives to decrease waste and increase capital value, unlike with public property),

Ah. I see that you're spouting this moronic Hoppean nonsense. No. Kings and monarchs had no incentive whatsoever to "decrease waste and increase capital value" in their kingdoms. After all, kings lived a seperate life that was greatly privileged and unalterable by the population. Furthermore, they were above the persecution of the public, while public representatives are not. And yes, democratically elected leaders have the incentive to "decrease waste and increase capital value" because after all, they live in their country and depend on the support of the public.

totalitarianism surely is not.

First of all, most of the kingdoms were totalitarian. And of course it is a private statist ideology. That is obvious.

As the central ideology of it is socialistic,

No. All totalitarian states were ruled by a narrow group of people, a crime family of sorts.

the idea of state serving the citizens' needs is inherent in it.

As propaganda. But not in reality. Just take a look at the spending priorities of the NS Germany and Soviet Union.

In fact. Totalitarianism is precisely the reverse that you claim it to be. Totalitarianism is the total subjugation of the people to the (private) state in all aspects of life whether personal or public. Hence it's called totalitarianism.

Hitler, Stalin, Mussolini, Mao couldnt sell the state to someone else,

And Kings could?

Of course they could sell out their subjects and power to others in the regime and to foreign interests. Actually, this is sort of what happened. The Soviet elite in Russia didn't really change, they sold their power for property and personal wealth granted by foreign powers.

they only could administer it, be the CEO, but the owner itself didnt really exist.

They controlled it, they owned it.

 

[JerichoHill]

Back to statistics and not debate on past stuff

 

[Integral]

I'll have a post on regional data soon - many of the indicators worsened from June to July. Housing data will be trickling in this week and next week.

Second-quarter GDP will be released next Friday, incorporating new comprehensive revisions to the national income and product accounts. Basically, the new revisions should make the advance estimates somewhat more reliable.

 

[Kerozine]

Recession over, Bank of Canada says

The recession is over, the Bank of Canada said in its quarterly Monetary Policy Report released Thursday.

After shrinking since the last quarter of 2008, the Canadian economy will grow by an annualized rate of 1.3 per cent in the current quarter, the bank said.

Bank of Canada governor Mark Carney said Canada is on track for an economic recovery.Bank of Canada governor Mark Carney said Canada is on track for an economic recovery. (CBC)"We are on track for the recovery both in Canada and globally," Bank of Canada governor Mark Carney told reporters.

However, unemployment will continue to rise, he said.

For many Canadians, "it's not a recovery until they start getting their jobs back. And on that score, we could still be in for a long wait," Avery Shenfeld, CIBC economist, said in a report published Thursday.

"Don't break out the champagne yet," said Patricia Croft, chief economist of RBC Global Asset Management.

The return to growth after three quarters of decline signals the end of the recession, defined as two consecutive quarters of shrinkage.

Growth will accelerate through late 2009 and by the first half of 2010, the Canadian economy will be booming along with four per cent growth. But that will begin to taper off to less than three per cent by the last half of 2011, the bank said.

Carney said consumer spending and housing are pulling the growth, especially in the U.S. But there is a "speed limit" to that kind of growth, and the economy will hit it after the burst in 2010, he warned.

The bank said in its report that "stimulative monetary and fiscal policies, improved financial conditions, firmer commodity prices, and a rebound in business and consumer confidence are spurring domestic demand growth."

"However, the higher Canadian dollar, as well as ongoing restructuring in key industrial sectors, is significantly moderating the pace of overall growth."

The loonie was up 1.14 cents to 92.17 cents US, which may have been a reaction to the bank's forecast.

The economic outlook is not much changed from its April report, although it says "the growth profile is slightly altered by a faster rebound in domestic demand," the bank said.

It projects that real gross domestic product, a measure of the economy, will fall 2.3 per cent this year, then grow three per cent in 2010 and 3.5 per cent in 2011.

Its 2009 forecast is in line with other projections, but it's more bullish about 2010 than many other projections.

However, the economy will not reach capacity, when supply and demand are in balance, until 2011.

Carney said the prospect of "extreme financial risk from beyond our borders" is no longer an issue, but the recovery is not certain.

Inflation, which has fallen with energy prices, will not increase to the target rate of about two per cent until the second quarter of 2011.

But "significant upside and downside risks remain to the inflation projection," particularly from the volatile loonie, the bank said.

The bank will set policy to ensure the inflation target is met, Carney said.

Source: http://www.cbc.ca/money/story/2009/07/23/bank-canada-economy-recovery.html

A whaaaaaaaaa?