Category Archives: Open Thread

Monday Open Thread — DoubleDip?

All, if you’ve been reading me for any extended period of time, you know that I’m a bit of a Cassandra when it comes to the economy. I think the fundamentals are f***ed, and that this little lull of stock market strength is the calm before the storm. If you’re wanting to invest, look at Stash app reviews and find the right platform for you ASAP because I don’t think the market is going to stay this nice for long. I have a lot of reasons to continue my bearishness, such as the recent rapid rise in foreclosures, but economic news lately has been slowly improving, and I’m left wondering what to think. As Keynes said when accused of flip-flopping on monetary policy:

When the facts change, I change my mind. What do you do, sir?

I suppose that there’s at least some evidence that the facts have changed. Dale @ QandO points out data points released this morning here, here, and here that point to an improvement in economic conditions.

So I’m opening this up to everyone. Where are we headed, and why? Stabilization and a return to a growth trend, or is the light at the end of the tunnel an oncoming freight train?

Open Thread Question of the Day: To Whom or What Do You Pledge Your Allegiance?

I was listening to the local talk show host on my way to work this morning and the topic was the ongoing saga surrounding the auto makers. This particular talk show host is a very pro-union “buy American” (and therefore anti-free trade) kind of guy in the mold of Lou Dobbs. As I pulled into my parking space, he posed 2 questions 1.) To whom or what do YOU pledge your allegiance and 2.) To whom or what do these multi-national corporations pledge their allegiance?

My response was an immediate “to myself and to my family, but certainly not the federal government of the US!” (for many of the same reasons that tarran so eloquently explained). I’m quite certain that this is not a response this talk show host would appreciate. I’m also quite certain that in his view, these corporations are supposed to “provide American jobs” no matter how costly and no matter how much the federal government punishes them with taxes and regulations. To suggest that a business should make its first loyalty to pursuing profits for shareholders would be heretical! These populist propagandists ask such questions of these businesses but fail to ask the question of government “to whom or what does Washington pledge its allegiance?” (Hint: it certainly isn’t to free market principles or liberty).

After thinking about the question a little longer, I concluded that my allegiances are as follows: myself*, my family, and the defense of the principles of life, liberty, property and justice for all**.

Now I pose this question to you, the reader: To whom or what do you pledge your allegiance?

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Weekend Open Thread: Tea Parties As Pent-Up Hostility?

As said before, much “ink” has been spilled on these “pages” to discuss the libertarian response to the tea parties. Several of us have suggested that while we’re happy the partiers have regained their allegiance to small government and fiscal conservatives, we’ve thought it a bit strange that these folks seem to come out of the woodwork once they lose power.

But I’m struck by the thought that these people may have been just as fed up with the behavior of elected Republicans as we libertarians, and although they weren’t very vocal about it, they largely laid down at the polls due to that disgust.

Why weren’t they vocal? Well, as former CA state Republican chairman Gaylord Parkinson once called The Eleventh Commandment (as recalled by Ronald Reagan):

Thou shalt not speak ill of any fellow Republican.

Given that one of the biggest problems in the libertarian movement is constant infighting and purity battles, I can understand the desire to hold your ammunition for the enemy, not expend it on friendly fire.

So here’s my thesis. Republicans, getting disgusted by the behavior of Bush and his spendthrift Congress, but conflicted about in-party fighting opening the door to the Democrats (particularly during wartime), acquiesced at the spending as the “cost of remaining in power”. Then, when finally Bush was gone and the Republicans lost control of Congress, the built-up rage at the spending immediately erupted into an onslaught of protest. This sudden protest seems like a change of position, but it was a position that already existed under the surface and the acceleration of spending was the catalyst to open it up.

Two things must, of course, be said:

1) Republicans remaining silent during the Bush administration was wrong. Not only did they not get small government, they ended up losing control of Congress and the White House. Had they enforced spending discipline and acted like Republicans, they might have gotten small government and kept control. At worst, they would have slowed the rate of government growth before losing, instead of dramatically increasing the growth of government.
2) Obama’s spending levels are far beyond those Bush envisioned. Even if Bush’s wish list came to fruition, Obama’s intended spending is a whole new level.

So what do you folks think? Is the tea party protest an eruption of latent hostility that was masked during the last 8 years, or is it simply an about-face of our partisan American polity?

Open Thread Question of the Day: How Can We Fix Our Prisons?

Our prison system, holding nearly 25% of the worlds reported prisoners, may seem like an April fool’s joke but certainly is not a laughing matter. I’m in the early stages of writing a post in response to Sen. Jim Webb’s (D-VA) recent article in Parade entitled: Why We Must Fix Our Prisons.

Sen. Webb is looking for some recommendations on how to reform the prison system so I thought it would be interesting to solicit some ideas from readers and fellow Liberty Papers contributors. The following is the specific questions Sen. Webb wants to answer:

I am now introducing legislation that will create a national commission to look at every aspect of our criminal justice system with an eye toward reshaping the process from top to bottom. I believe that it is time to bring together the best minds in America to confer, report, and make specific recommendations about how we can reform the process. This commission will be tasked with giving us clear answers to hard questions, including:

Why are so many Americans currently in prison compared with other countries and our own history?

What is this policy costing our nation, both in tax dollars and in lost opportunities?

How can we reshape our nation’s drug policies?

How can we better diagnose and treat mental illness?

How can we end violence within prisons and increase the quality of prison administrators?

How can we build workable re-entry programs so that our communities can assimilate former offenders and encourage them to become productive citizens?

How can we defend ourselves against the growing scourge of violent, internationally based gang activity?

The more specific your answers, the better. I’ll refrain from posting here as I will answer these questions and more in my upcoming post.

Open Thread: Stock Market Edition

Two weeks ago, the Dow hit a major low at 6440, closing slightly higher. This made a lot of sense to me, given the fundamentals of the economy. In fact, I nearly posted a rather snide article on CNBC “calling the bottom” that morning.

But then things changed. The Dow has been on a tear ever since, culminating yesterday in a 500-point rise. This is a 20% rise since its lows of merely two weeks ago. And I just don’t understand why.

I see three potential explanations:

  • We’ve hit the bottom of the recession, and the 6440 low was an undershoot on the downswing, which was bound to be quickly reversed.
  • This is a sucker’s rally, and the Dow will soon drop again.
  • We haven’t hit the end of the recession, but the inflationary policies of our government are going to cause a rise in equity and asset prices.

I don’t believe the first. I can be wrong on that, but I think there are structural monetary and economic issues that are still bound to unwind. The government is trying to reinflate the bubble, but I think there’s too much leverage working against them.

I can easily believe the second. I think there’s quite a lot of downside risk, and after such a phenomenal drop, I actually believe there’s plenty of suckers who thought we’d hit bottom.

What really worries me is the third option. If the inflation is starting, this has significant impact on my personal situation. As a renter, I want to purchase real estate before the inflation really hits, locking in a nice low fixed interest rate on a home that’s going to rise in value with the devaluation of the dollar. If the interest rates spike before I can buy, I may be locked out of ownership in any of the neighborhoods I’d actually want to live in.

So what does everyone think? Where will we be in a month, in 6 months, and in 18 months? Is this a sucker’s rally, is this the start of the great inflation, or is this simply the bottom of the recession and things are looking up?

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