Dershowitz on Lerner's Revocation of the 5th Amendment.

Where Is My Charmin?

There is an inevitable cost to government control of industry. From Associated Press: 

CARACAS, Venezuela (AP) — First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities — toilet paper.

Blaming political opponents for the shortfall, as it does for other shortages, the embattled socialist government says it will import 50 million rolls to boost supplies.

Blaming others for your own mistakes sounds vaguely familiar somehow. Why are there shortages? The AP article explains. 

Economists say Venezuela’s shortages stem from price controls meant to make basic goods available to the poorest parts of society and the government’s controls on foreign currency.

“State-controlled prices — prices that are set below market-clearing price — always result in shortages. The shortage problem will only get worse, as it did over the years in the Soviet Union,” said Steve Hanke, professor of economics at Johns Hopkins University.

President Nicolas Maduro, who was selected by the dying Hugo Chavez to carry on his “Bolivarian revolution,” claims that anti-government forces, including the private sector, are causing the shortages in an effort to destabilize the country.

This, of course, could not happen here! I have two blasts from my blogging past on this. Click here for “The Great Toilet Paper Shortage,” and click here for “The Great Toilet Shortage.” Both took place around the time of US price controls.  As the economist mentioned in the AP article, if a product's price is kept artificially low by government, a producer has to stop making it. They have no choice. The "president" of Venezuela's inability to understand this does not bode well for that country. 

In fact the crisis in health care in the US will probably lead to price controls, which always leads to shortages. This is one reason why I have been blogging about health recently. Get in the best health you can, while you can, as the crisis I am expecting may lead in unexpected directions and that might include rationing of health care. It is good to have a spare tire when you drive, it is not good to have a "spare tire" all the time. 

Cutting the Military

The US cannot afford the military it now has. If the US military is exempt from any cuts, then the rest of the budget must be cut so substantially that it would be catastrophic. Back in the time when the US actually had an enemy, the man who was president, Dwight Eisenhower, actually knew more about the military than any president we ever had. What did he do? David Stockman in his new book The Great Deformation tells us:

The nearly one-third reduction in real defense spending during the Eisenhower period was thus achieved by sharp changes in priorities and force structure. These included shrinking the army by nearly 40 percent, large cuts in naval forces, and an overall reduction in military personnel from about 3.5 million in early 1953 to 2.5 million by December 1960.

As a conservative I am supposed to worship at the altar of Ronald Reagan. But Stockman actually worked for him. Here is his description of military spending under Reagan:

As indicated, constant-dollar spending in Reagan’s fiscal 1989 budget was 30 percent, more than Eisenhower’s last budget, but even the subsequent official end of the Cold War resulted in only a modest rollback. Clinton’s final budget was a tad smaller in inflation-adjusted dollars than Eisenhower’s, even though by the year 2000 the United States had no industrial state enemy left on the planet.

Well, at last we can be happy that Obama is president and the insanity will stop. No, not so much. Stockman explains:

In fact, inflation-adjusted defense spending in fiscal 2011 of $670 billion was a new record, eclipsing even George W. Bush’s final war budget. It was thus abundantly evident that even an out-and-out “peace” president is no match for the modern warfare state and the crony capitalist lobbies which safeguard its budgetary requisites. Indeed, Barack Obama pushed the frontiers of the warfare state further than ever before. Beating his mandate for plowshares into an even mightier sword, the peace president pushed defense spending to a level 80 percent greater in real terms than General Eisenhower.

All these quotes are from pages 215 to 218 of The Great Deformation.

I suppose that neither liberals nor conservatives should read The Great Deformation, at least not unless they are taking their blood pressure meds.

While I am only guardedly pessimistic, and Stockman is totally pessimistic, the crisis that is coming will not be a happy time. I hope I am wrong.

Here is a part of the most ignored speech ever made.

Why Be a US Ally?

Henry Kissinger once said that "being a US ally is often more dangerous than being its enemy." This is obviously true. 

Qadhafi no doubt felt that way as he lay in a ditch in Tripoli dying.  He had given up his anti-US stance and became an "ally." Do you think I am wrong on this? Look at this mini article from 2009 about John McCain's trip to Libya. 

Sen. John McCain, visiting Libya this past week, praised Muammar Gaddafi for his peacemaking efforts in Africa. In addition, McCain called for the U.S. Congress to expand ties with Gaddafi's government, according to Libya's state news agency. 

McCain had a face-to-face meeting with Gaddafi, which he detailed on his Twitter page with the following message:

Late evening with Col. Qadhafi at his "ranch" in Libya -- interesting meeting with an interesting man. 

After once being designated a state sponsor of terrorism in the wake of the Pan Am bombing over Lockerbie, Scotland, Libya has seen its diplomatic ties fully restored under the Bush Administration in return for dismantling its nascent nuclear program. Since then, Libya has been instrumental in securing peace deals between warring factions in Africa.

McCain is the poster boy for the military industrial complex. Third World politicians would have to be brain dead not to get the picture. 

Hosni Mubarak, former president of Egypt, according to former VP DIck Cheney, was a good friend of the US. He is in prison right now, held by the US' new best buddy, the Moslem Brotherhood. Vice President Biden called him a good friend as well. 

These two examples have to give a moment’s pause to leaders who might support the US in its fight against terrorism. 

US support of terrorists in Syria is another example. While Syria and the US are not best buddies, Syrian support in the war on terror was well known. Here is an example of this I talked about before. Except for Lebanon, this was the Syrian government policy, no doubt based on the old philosophy that the enemy of my enemy was my friend. Why would anyone ever help the US again? 

Al Qaida in Syria, the rebels the US supports, recently used chemical weapons. The idea was to frame the Assad government and force US intervention. I am not sure if the US government’s repetition of this is stupidity or just another lie. The US has used this type of operation before in the Spanish American War. I blogged about it before. BTW this is my second most popular blog post. 

But ultimately it does not matter. Just as the bread (food stamps), circuses (TV), and the legions of Rome (Or the huge US Navy) led to its downfall, so the same will happen to the US. 

Yes, the crisis I see coming in 3 to 7 years will not be pretty. But I still am guardedly pessimistic, and I think that the US empire will continue for decades as the US, as bad a shape as it is in, has the cleanest dirty shirt around—even China may be in worse shape. 

Prepare as best you can. 

Stockman on Stockman

I thought the best way to begin to talk about Stockman's book The Great Deformation was to let Stockman explain it himself. So I decided to begin with this book signing speech. 

I must admit that one lady annoyed me in the Question and Answer part as she did not understand that this is not a Republican problem, it is not a Democratic problem, it is bipartisan in origin. 

Another place that you can go to get a feel for what Stockman is saying is his New York Times article, “Sundown in America.” That is a humorous title playing on Reagan's reelection campaign slogan, “Morning in America.” If you decide not to buy Stockman's book, and at 700+ pages I certainly understand, I do recommend you read this article.