Sunday, December 20, 2009

There'll be nowhere to run from the new world government

'Global' thinking won't necessarily solve the world's problems, says Janet Daley

The committee to save the world - Barack Obama, Nicolas Sarkozy, Angela Merkel, Gordon Brown and other leaders at the Copenhagen climate talks
The committee to save the world: Barack Obama, Nicolas Sarkozy, Angela Merkel, Gordon Brown and other leaders at the Copenhagen climate talks Photo: AFP/GETTY

There is scope for debate – and innumerable newspaper quizzes – about who was the most influential public figure of the year, or which the most significant event. But there can be little doubt which word won the prize for most important adjective. 2009 was the year in which "global" swept the rest of the political lexicon into obscurity. There were "global crises" and "global challenges", the only possible resolution to which lay in "global solutions" necessitating "global agreements". Gordon Brown actually suggested something called a "global alliance" in response to climate change. (Would this be an alliance against the Axis of Extra-Terrestrials?)

Some of this was sheer hokum: when uttered by Gordon Brown, the word "global", as in "global economic crisis", meant: "It's not my fault". To the extent that the word had intelligible meaning, it also had political ramifications that were scarcely examined by those who bandied it about with such ponderous self-importance. The mere utterance of it was assumed to sweep away any consideration of what was once assumed to be the most basic principle of modern democracy: that elected national governments are responsible to their own people – that the right to govern derives from the consent of the electorate.

The dangerous idea that the democratic accountability of national governments should simply be dispensed with in favour of "global agreements" reached after closed negotiations between world leaders never, so far as I recall, entered into the arena of public discussion. Except in the United States, where it became a very contentious talking point, the US still holding firmly to the 18th-century idea that power should lie with the will of the people.

Nor was much consideration given to the logical conclusion of all this grandiose talk of global consensus as unquestionably desirable: if there was no popular choice about approving supranational "legally binding agreements", what would happen to dissenters who did not accept their premises (on climate change, for example) when there was no possibility of fleeing to another country in protest? Was this to be regarded as the emergence of world government? And would it have powers of policing and enforcement that would supersede the authority of elected national governments? In effect, this was the infamous "democratic deficit" of the European Union elevated on to a planetary scale. And if the EU model is anything to go by, then the agencies of global authority will involve vast tracts of power being handed to unelected officials. Forget the relatively petty irritations of Euro‑bureaucracy: welcome to the era of Earth-bureaucracy, when there will be literally nowhere to run.

But, you may say, however dire the political consequences, surely there is something in this obsession with global dilemmas. Economics is now based on a world market, and if the planet really is facing some sort of man-made climate crisis, then that too is a problem that transcends national boundaries. Surely, if our problems are universal the solutions must be as well.

Well, yes and no. Calling a problem "global" is meant to imply three different things: that it is the result of the actions of people in different countries; that those actions have impacted on the lives of everyone in the world; and that the remedy must involve pretty much identical responses or correctives to those actions. These are separate premises, any of which might be true without the rest of them necessarily being so. The banking crisis certainly had its roots in the international nature of finance, but the way it affected countries and peoples varied considerably according to the differences in their internal arrangements. Britain suffered particularly badly because of its addiction to public and private debt, whereas Australia escaped relatively unscathed.

That a problem is international in its roots does not necessarily imply that the solution must involve the hammering out of a uniform global prescription: in fact, given the differences in effects and consequences for individual countries, the attempt to do such hammering might be a huge waste of time and resources that could be put to better use devising national remedies. France and Germany seem to have pulled themselves out of recession over the past year (and the US may be about to do so) while Britain has not. These variations owe almost nothing to the pompous, overblown attempts to find global solutions: they are largely to do with individual countries, under the pressure of democratic accountability, doing what they decide is best for their own people.

This is not what Mr Brown calls "narrow self-interest", or "beggar my neighbour" ruthlessness. It is the proper business of elected national leaders to make judgments that are appropriate for the conditions of their own populations. It is also right that heads of nations refuse to sign up to "legally binding" global agreements which would disadvantage their own people. The resistance of the developing nations to a climate change pact that would deny them the kind of economic growth and mass prosperity to which advanced countries have become accustomed is not mindless selfishness: it is proper regard for the welfare of their own citizens.

The word "global" has taken on sacred connotations. Any action taken in its name must be inherently virtuous, whereas the decisions of individual countries are necessarily "narrow" and self-serving. (Never mind that a "global agreement" will almost certainly be disproportionately influenced by the most powerful nations.) Nor is our era so utterly unlike previous ones, for all its technological sophistication. We have always needed multilateral agreements, whether about trade, organised crime, border controls, or mutual defence.

If the impact of our behaviour on humanity at large is much greater or more rapid than ever before then we shall have to find ways of dealing with that which do not involve sacrificing the most enlightened form of government ever devised. There is a whiff of totalitarianism about this new theology, in which the risks are described in such cosmic terms that everything else must give way. "Globalism" is another form of the internationalism that has been a core belief of the Left: a commitment to class rather than country seemed an admirable antidote to the "blood and soil" nationalism that gave rise to fascism.

The nation-state has never quite recovered from the bad name it acquired in the last century as the progenitor of world war. But if it is to be relegated to the dustbin of history then we had better come up with new mechanisms for allowing people to have a say in how they are governed. Maybe that could be next year's global challenge.

Wednesday, December 2, 2009

Searching in Vain for the Obama Magic

By Gabor Steingart

President Barack Obama's Tuesday speech left a bad taste in many mouths.
Zoom
AFP

President Barack Obama's Tuesday speech left a bad taste in many mouths.

http://www.spiegel.de/international/world/0,1518,664753,00.html

Never before has a speech by President Barack Obama felt as false as his Tuesday address announcing America's new strategy for Afghanistan. It seemed like a campaign speech combined with Bush rhetoric -- and left both dreamers and realists feeling distraught.

One can hardly blame the West Point leadership. The academy commanders did their best to ensure that Commander-in-Chief Barack Obama's speech would be well-received.

Just minutes before the president took the stage inside Eisenhower Hall, the gathered cadets were asked to respond "enthusiastically" to the speech. But it didn't help: The soldiers' reception was cool.

One didn't have to be a cadet on Tuesday to feel a bit of nausea upon hearingObama's speech. It was the least truthful address that he has ever held. He spoke of responsibility, but almost every sentence smelled of party tactics. He demanded sacrifice, but he was unable to say what it was for exactly.

An additional 30,000 US soldiers are to march into Afghanistan -- and then they will march right back out again. America is going to war -- and from there it will continue ahead to peace. It was the speech of a Nobel War Prize laureate.

Just in Time for the Campaign

For each troop movement, Obama had a number to match. US strength in Afghanistan will be tripled relative to the Bush years, a fact that is sure to impress hawks in America. But just 18 months later, just in time for Obama's re-election campaign, the horror of war is to end and the draw down will begin. The doves of peace will be let free.

The speech continued in that vein. It was as though Obama had taken one of his old campaign speeches and merged it with a text from the library of ex-President George W. Bush. Extremists kill in the name of Islam, he said, before adding that it is one of the "world's great religions." He promised that responsibility for the country's security would soon be transferred to the government of President Hamid Karzai -- a government which he said was "corrupt." The Taliban is dangerous and growing stronger. But "America will have to show our strength in the way that we end wars," he added.

It was a dizzying combination of surge and withdrawal, of marching to and fro. The fast pace was reminiscent of plays about the French revolution: Troops enter from the right to loud cannon fire and then they exit to the left. And at the end, the dead are left on stage.

Obama's Magic No Longer Works

But in this case, the public was more disturbed than entertained. Indeed, one could see the phenomenon in a number of places in recent weeks: Obama's magic no longer works. The allure of his words has grown weaker.

It is not he himself who has changed, but rather the benchmark used to evaluate him. For a president, the unit of measurement is real life. A leader is seen by citizens through the prism of their lives -- their job, their household budget, where they live and suffer. And, in the case of the war on terror, where they sometimes die.

Political dreams and yearnings for the future belong elsewhere. That was where the political charmer Obama was able to successfully capture the imaginations of millions of voters. It is a place where campaigners -- particularly those with a talent for oration -- are fond of taking refuge. It is also where Obama set up his campaign headquarters, in an enormous tent called "Hope."

In his speech on America's new Afghanistan strategy, Obama tried to speak to both places. It was two speeches in one. That is why it felt so false. Both dreamers and realists were left feeling distraught.

The American president doesn't need any opponents at the moment. He's already got himself.

Tuesday, November 24, 2009

Global warming exposed as UN-funded fraud



Russian computer hackers have published emails and source code from the UN-affiliated Climate Research Unit showing profound corruption, fraud, and criminal activity. What's really behind the Copenhagen treaty?

Monday, November 23, 2009

VeriChip acquires Steel Vault and changes name to PositiveID

...ahhhh yessss....and I remember when the US Social Security card stated on the back "not to be used for identification" but today you don't exist without it......


Nov 11, 2009 (M2 EQUITYBITES via COMTEX) -- CHIP | Quote | Chart | News | PowerRating -- Radio frequency identification (RFID) systems provider VeriChip Corporation (NASDAQ:CHIP) reported on Tuesday that it has completed its acquisition of identity security products company Steel Vault Corporation (OTCBB:SVUL).

Following the merger the company has changed its name to PositiveID Corporation and will trade on NASDAQ under the symbol 'PSID'.

The combined company will initially focus on health and security identification tools, operating in two main divisions, HealthID and ID Security.

Under the terms of the acquisition Steel Vault stockholders will receive 0.5 shares of VeriChip common stock for each share owned.

VeriChip Buys Steel Vault, Creating Micro-Implant Health Record/Credit Score Empire

VeriChip (CHIP), the company that markets a microchip implant that links to your online health records, has acquired Steel Vault (SVUL), a credit monitoring and anti-identity theft company. The combined company will operate under a new name: PositiveID.

The all-stock transaction will leave PositiveID in charge of a burgeoning empire of identity, health and microchip implant businesses that will only encourage its critics. BNET previously noted that some regard the company as part of a prophecy in the Book of Revelation (because the HealthLink chip carries an RFID number that can be used as both money and proof of ID) or as part of President Obama’s secret Nazi plan to enslave America.

The most obvious criticism to be made of the deal is that it potentially allows PositiveID to link or cross-check patient health records (from the HealthLink chip) to people’s credit scores. One assumes that the company will put up firewalls to prevent that. PositiveID CEO Scott Silverman said:

“PositiveID will be the first company of its kind to combine a successful identity security business with one of the world’s first personal health records through our Health Link business. PositiveID will address some of the most important issues affecting our society today with our identification tools and technologies for consumers and businesses.”

Unless, of course, consumers don’t actually want to be implanted with chips, have their health records available over the internet, or have their medical records linked to their credit scores.

Sunday, November 15, 2009

Debunking 2012

Cool graphic, from Information is Beautiful:

click for larger graphic
2012_960

chart courtesy of Information is Beautiful

Ayn Rand: The Boring Bitch is Back

There is a substantial take-down of pedantic bore Ayn Rand in GQ. They tease it thusly:

2009’s most influential author is a mirthless Russian-American who loves money, hates God, and swings a gigantic dick. She died in 1982, but her spawn soldier on. And the Great Recession is all their fault.

I love that because it is both funny and touches upon so many subtle truths; Here is a longer, funnier excerpt:

“This is because there are boys and girls among us who have never overcome the Randian infection. The Galt speech continues to ring in their ears for years like a maddening tinnitus, turning each of them into what next year’s Physicians’ Desk Reference will (undoubtedly) term an Ayn Rand Asshole (ARA). They constitute a relatively small percentage of Rand readers, these ARAs. But they make their reading count. Thanks to them, the Rand Experience is no longer limited to those who have read the books. It’s metastasized. You, me, all of us, we’re living it. Because it’s the ARA Army of antigovernment-antiregulation puritans who have spent the past three decades gleefully pulling the cooling rods out of the American economy. For a while, it got very big and very hot. Then it popped. And now the rest of us have to spend the next decade scaling the slippery slopes of the huge suppurative crater that was left behind.

Feeling fisted by the Invisible Hand of the Market lo these past fifteen months? Lost a job lately? Or half the value of your 401(k)? Or a home? All three? Been wondering whence the too-long-ascendant political and economic ideas and forces behind Greenspanism, John Thainism, blind Wall Street plunder, bankruptcy, credit-default swaps, Bernie Madoff, and the ensuing Cannibalism in the Streets? Then you, sir, need to give thanks to Ayn Rand Assholes everywhere—as well as the steely loins from which they sprang.”

Brilliant.

I haven’t read Rand’s work for decades, but I do recall two things: A) It was a giant pedantic bore; 2) Debating it with people in College was always a hoot. The thing that struck me most was the lack of rigor in the arguments — it was more religion than logic, more wishful thinking than reality based observations of how humans actually behave.

You can the concentration of ARAs in a certain groupings. These are the folks who blame the CRA for the collapse of the economy; ARAs tend to be hardcore idealogues; many are rabidly partisan. All too many are deeply uninformed. They breathje co0gnitive dissonance they most people breathe oxygen. When confronted with facts, data, reality that challenge their ideology, they make up new facts.

I imagine that Freud would bluntly use Randian logic to note they inhabit a guise of superiority in part to compensate for vast and deeply felt inferiorities and insecurities. That’s right, those of you who feel compelled to talk about how big your junk is are typically are sporting selections from the wee person’s aisle.

Malcolm Gladwell is a guy who knows how to write compellingly readable stories. The takeaway in his book OutliersThe Story of Success is quite unRandian — it is that luck plays an enormous factor in out-sized success. That is a factor the Randians prefer to ignore.

What I find so weird about Rand is that there are more than a few people I respect who gobbled up her work. These are not ARAs — but are otherwise rational folks who never quite went full tilt into ARA-hood. But they have a huge respect for her work. Me? I prefer “lessers” like Adam Smith, Thomas Jefferson and John Maynard Keynes. I prefer John Stuart Mill’s Harm Principle of Liberty over Rand’s Objectivism.

Dangerous Minds contextualizes the pedantic bore portion of the Rand legend:

“It’s Rand’s dialogue that seals her reputation as an author you just can’t take seriously. To be fair, she was writing in her second language, but the problem with her books is that no one actually speaks to one another, they just make speeches at each other. Hectoring, long-winded speeches. It’s fine to read stuff like that as a teenager, but when I crack open one of her books today, I shake my head in disbelief at how bombastic and horrible her writing is.”

Bombastic and horrible? You are being too kind . . .

My actual problem with Rand — behind her blindingly horrific prose — is that she was pushing back against a totalitarian system in the Soviet Union, a corrupt and morally indefensible system she had every right to be infuriated by. But she applies that righteous fury and outrage to a Democracy, whose economy is Free Market based. Hence, rather than challenging the politburo, she challenges Unions. Cooperative behavior seems to be hard for her to grasp. One suspects she would have disliked Consumer Reports, or Zagats, or Amazon’s user ratings.

Worst of all, Rand’s Objectivism has become the rationale for all manner of morally repugnant behaviour. However, I did take one personal lesson from Atlas Shrugged to heart: Anytime I see a parked car with a John Galt bumper sticker, I like to knock off one of the sideview mirrors, and leave it on the hood. I include a note stating my selfish, random act made me feel good, and therefore should be a perfectly fine act in their world.

I assume the recipients miss the irony . . .

Sources:
The Bitch is Back
Andrew Corsello
GQ, October 27, 2009
http://www.gq.com/entertainment/books/200911/ayn-rand-dick-books-fountainhead

Ayn Rand Assholes
Dangerous Minds, 11.11.2009
http://www.dangerousminds.net/index.php/site/comments/ayn_rand_assholes/

Saturday, October 24, 2009

"ISM" will save us all!



This Cartoon predicts the future 50 years ago. This could have been made yesterday!

Wednesday, October 21, 2009

Is Obama Poised to Cede US Sovereignty?


On October 14, Lord Christopher Monckton gave a presentation in St. Paul, MN on the subject of global warming. In this 4-minute excerpt from his speech, he issues a dire warning to all Americans regarding the United Nations Climate Change Treaty that is scheduled to be signed in Copenhagen in December 2009.

A draft of the treaty can be read here:
http://www.globalclimatescam.com/docu...

Page 18: Section 38 of the "Share vision for long-term cooperation action plan" contains the text for forming the new government.

Page 40: Section 46 Subsection H of the "Objectives, scope, and guiding principles" contains the text for enforcement and establishment of the rule of law.

There has been considerable debate raised about Monckton's conclusion that the Copenhagen Treaty would cede US sovereignty. His comments appear to be based upon his interpretation of the The Supremacy Clause in the US Constitution (Article VI, paragraph 2). This clause establishes the Constitution, Federal Statutes, and U.S. TREATIES as the supreme law of the land. Concerns have been raised in the past that a particularly ambitious treaty may supersede the US Constitution. In the 1950s, a constitutional amendment, known as the Bricker Amendment, was proposed in response to such fears, but it failed to pass. You can read more about the Bricker Amendment in a 1953 Time Magazine article:
http://www.time.com/time/magazine/art...,9171,806676-1,00.html

Lord Monckton served as a policy adviser to Margaret Thatcher. He has repeatedly challenged Al Gore to a debate to which Gore has refused. Monckton sued to stop Gore's film "An Inconvenient Truth" from being shown in British schools due to its inaccuracies. The judge found in-favor of Monckton, ordering 9 serious errors in the film to be corrected. Lord Monckton travels internationally in an attempt to educating the public about the myth of global warming.

Thursday, October 15, 2009

Kenyan-born Obama all set for US Senate

Kenyan-born Obama all set for US Senate

Kenyan-born US Senate hopeful, Barrack Obama, appeared set to take over the Illinois Senate seat after his main rival, Jack Ryan, dropped out of the race on Friday night amid a furor over lurid sex club allegations.

The allegations that horrified fellow Republicans and caused his once-promising candidacy to implode in four short days have given Obama a clear lead as Republicans struggled to fetch an alternative.

Ryan’s campaign began to crumble on Monday following the release of embarrassing records from his divorce. In the records, his ex-wife, Boston Public actress Jeri Ryan, said her former husband took her to kinky sex clubs in Paris, New York and New Orleans.

nh-obama.jpg (12114 bytes)
Barrack Obama

"It’s clear to me that a vigorous debate on the issues most likely could not take place if I remain in the race," Ryan, 44, said in a statement. "What would take place, rather, is a brutal, scorched-earth campaign – the kind of campaign that has turned off so many voters, the kind of politics I refuse to play."

Although Ryan disputed the allegations, saying he and his wife went to one ‘avant-garde’ club in Paris and left because they felt uncomfortable, lashed out at the media and said it was "truly outrageous" that the Chicago Tribune got a judge to unseal the records.

The Republican choice will become an instant underdog in the campaign for the seat of retiring Republican Senator Peter Fitzgerald, since Obama held a wide lead even before the scandal broke.

"I feel for him actually," Obama told a Chicago TV station. "What he’s gone through over the last three days I think is something you wouldn’t wish on anybody."

The Republican state committee must now choose a replacement for Ryan, who had won in the primaries against seven contenders. Its task is complicated by the fact that Obama holds a comfortable lead in the polls and is widely regarded as a rising Democratic star.

The chairwoman of the Illinois Republican Party, Judy Topinka, said at a news conference, after Ryan withdrew, that Republicans would probably take several weeks to settle on a new candidate.

"Obviously, this is a bad week for our party and our state," she said.

As recently as Thursday, spokesmen for the Ryan campaign still insisted that Ryan would remain in the race. Ryan had defended himself saying, "There’s no breaking of any laws. There’s no breaking of any marriage laws. There’s no breaking of the Ten Commandments anywhere."

—AP

Sunday, June 27, 2004

Tuesday, October 13, 2009

Every Space Mission Ever Flown On One Map

This is a very cool depiction of every space mission over the past 50 years, overlaid on one map of the solar system

Each line traces the path of a different space mission or satellite launch.

Notable missions (including failures) are included, as are those from different countries . . .

>

click for ginormous graph

View image  post

Original image via National Geographic
http://books.nationalgeographic.com/map/map-day/index

via flickr

Saturday, August 15, 2009

Business Books: Fed is "fourth branch" of U.S. government

By Neil Stempleman

WASHINGTON (Reuters) - For David Wessel, an award-winning journalist for the Wall Street Journal, last year's financial crisis was the "The Great Panic."

In a new book, "In Fed We Trust" (Crown Business, $26.99), Wessel makes the case that policymakers at the Federal Reserve lacked a clear understanding of events leading up to the crisis. The result, when the crisis hit in late 2008, was panic.

The book gives a concise chronology of the events leading up to the crisis, with technical details of the banking system and the Fed, in clear language with little financial jargon.

In addition, he shows how Federal Reserve Chairman Ben Bernanke's upbringing and study of the Great Depression provides his motivation and colors his actions.

Whereas Bernanke's predecessor, New Yorker Alan Greenspan ran the Fed as a one-man show, Bernanke, who grew up in South Carolina, emphasizes the "committee" in Federal Open Market Committee, which sets Fed policy. And while Greenspan believed he failed if anyone understood what he said in public, Bernanke tries to be clear.

Wessel also contends that the Fed has now become the "fourth branch of government," raising and spending vast sums of money with little oversight from elected officials. He notes that Congress, which is elected and has authority under the constitution to raise and spend money, has raised $700 billion to resolve the banking crisis. The Federal Reserve has allocated more than $1 trillion.

Wessel drives this key point well: enormous power has been give to a small number of people who were not chosen by the citizens.

We are fortunate they have mostly used that power wisely, he says, but do we want to bet our future prosperity on their actions when we come to the next "Great Panic"?

(Reporting by Neil Stempleman; Editing by Eddie Evans)

Max Keiser - "Brown's Bottom" - (Documentary)


Gold reserve's disappearance noted in Germany

Section:

9:45p ET Monday, August 10, 2009

Dear Friend of GATA and Gold:

The German Internet site WorldGoldBook, based in Augsberg, has published a story about journalist Max Keiser's revelation that the Bundesbank has placed its country's gold reserves in the custody of the United States. At this hour the story is in the right column of the site's home page under the headline "Deutsche Goldreserven Lagern in New York" ("German Gold Reserves Stored in New York"):

http://www.worldgoldbook.de/

Here's the direct link to the story:

http://www.worldgoldbook.de/blogs/teamblog/deutsche_goldreserven_lagern_...

Here's an attempt at a very rough English translation:

"On August 7, 2009, there was a new posting on YouTube by Max Keiser, the financial journalist noted on France 24 and other networks for spectacular short documentaries and interviews on topics of high finance. He also has worked for the BBC and as a reporter with various print media.

"The documentary's topic is 'Brown's Bottom,' in regard to Gordon Brown, at that time British finance minister, now prime minister, who liquidated much of the British gold reserves as the price fell in 1999.

"The video has an interesting footnote with special explosiveness. Keiser indicates from his March 17, 2008, interview with the Bundesbank 'that the entire German gold reserve is stored in New York.' That would be news, because, according to the statement of Chris Powell, who makes this point in an August 9 article on the GATA Internet site, appropriate assumptions about the German gold reserve were for a long time disclaimed.

"As for media echoes in Germany, on message boards already one whispers that Chancellor Helmut Kohl sent Germany's gold to the United States to get approval for reunification with East Germany. Whether it is sensible to keep a gold reserve abroad may be doubted, and a parliamentary inquiry may be needed."

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Tuesday, August 4, 2009

End the Fed? A not-so-crazy idea.

Since it was introduced in February, Representative Ron Paul's "Audit the Fed" bill (H.R. 1207) has gained 282 congressional cosponsors. If adopted, the bill would allow the Government Accountability Office to review, not only the Federal Reserve's balance sheet, but its recent monetary policy deliberations and transactions.

Fed Chairman Ben Bernanke opposes the plan, saying it would undermine the Fed's hallowed independence.

But Mr. Paul, a noted libertarian who ran for president last year, also wants to keep the Fed out of Congress's clutches – by scrapping it altogether. That's the goal of his follow-up Federal Reserve Board Abolition Act (H.R. 833). Although that measure has yet to gain a single cosponsor, it has plenty of grass-roots support, and Paul hopes that members of Congress will jump on the bandwagon once their eyes are opened by a no-holds-barred audit.

Wacky stuff? Well, if not having a ghost of a chance is enough to make a bill bonkers, Paul's measure probably qualifies. But that doesn't mean you've got to be crazy to believe that the US economy would be better off without the Fed.

The Fed's apologists suggest otherwise, of course. They note that the US spent nearly half the years between 1854 to 1913 in recession, as opposed to just 21 percent of the time since the Fed's establishment in 1913. Who would want to go back to those bad old days?

But consider: the US economy has actually grown less rapidly since 1914 than it did before. And inflation has been much worse, despite both the Civil War, which featured the nation's worst inflation, and the Great Depression, which featured its severest deflation!

What's more, the frequent downturns before 1914 were due, not to the lack of a central bank, but to foolish government regulations. Topping the list were bans on branch banking, initiated by state governments and then incorporated into federal banking law. The bans propped up thousands of undercapitalized and under-diversified banks – banks unfit to survive major local shocks, let alone macroeconomics ones. They also caused bank notes – competitively supplied counterparts of today's Federal Reserve notes – to trade at discounts whenever they traveled far from the solitary offices of banks that issued them.

During the Civil War, state bank notes were taxed out of existence to make way for those of new national banks. Because national banks had to accept one another's notes at full value, their currency was uniform. But national bank notes had to be backed by government bonds.

That requirement, designed to bolster the Union's finances while the war raged on, proved disastrous afterward, when government surpluses led to a halving of the federal debt, and to a corresponding shortage of bonds for securing bank notes. The resulting currency panics – in 1873, 1884, 1893, and 1907 – prompted the Fed's establishment.

But they didn't have to. Until 1907, prominent reformers favored simply abolishing Civil War-era restrictions on banks' freedom to issue notes and allowing all banks to branch nationwide to ease the mopping-up of unwanted paper money.

They drew inspiration from Canada, where a similar "asset currency" arrangement had been working smoothly for decades. Between the panic of 1893 and that of 1907, Congress considered more than a dozen "asset currency" measures But none got anywhere, thanks to local bankers' determination to block any proposal for branch banking that would threaten their cozy monopolies.

It was only once these deregulatory efforts failed that reformers fell back on the plan of establishing a "central reserve bank." The resulting Federal Reserve Act was, in essence, merely a plan to allow 12 new banks to do what other banks were prevented from doing themselves, namely, establish branch networks and issue currency backed by commercial assets.

But the Federal Reserve plan proved to be a poor substitute for deregulation. By granting monopoly privileges to the Federal Reserve banks, it allowed them to inflate recklessly: By 1919, the US inflation rate, which had cleaved close to zero ever since the Civil War, was close to 20 percent! Yet the Fed was also capable of failing to supply enough money to avert crises. The first downturn over which it presided – that of 1921 – was among the sharpest in US history. Still it was nothing compared to the unprecedented monetary contraction of 1929-1933.

Would asset currency have been any better? Canada's was: Between 1929 and 1933, for instance, 6,000 US banks failed, and a third of the US money stock was wiped out. In contrast, and despite a fixed Canadian-US dollar exchange rate, Canada's money stock shrank by just 13 percent, and no Canadian bank failed.

Notwithstanding this superior outcome, the Canadian government itself abandoned asset currency in favor of central banking in 1935, to placate a growing Canadian movement for easy money.

So a call to end the Fed would have been anything but crazy in 1934. Three-quarters of a century and a dozen crises later, there are plenty of grounds for insisting that it hasn't gotten any crazier.

George Selgin is a senior fellow at the Cato Institute and a professor of economics at the University of Georgia.

Thursday, July 30, 2009

World's first computer may be even older than thought

antik1.jpgJo Marchant, consultant

From Swiss Army knives to iPhones, it seems we just love fancy gadgets with as many different functions as possible. And judging from the ancient Greek
Antikythera mechanism, the desire to impress with the latest multipurpose must-have item goes back at least 2000 years.

This
mysterious box of tricks was a portable clockwork computer, dating from the first or second century BC. Operated by turning a handle on the side, it modelled the movements of the Sun, Moon and planets through the sky, sported a local calendar, star calendar and Moon-phase display, and could even predict eclipses and track the timing of the Olympic games.

I gave a talk on the device at London's
Royal Institution last night. One new clue I mentioned to the origin of the mechanism comes from the Olympiad dial - there are six sets of games named on the dial, five of which have been deciphered so far. Four of them, including the Olympics, were major games known across the Greek world. But the fifth, Naa, was much smaller, and would only have been of local interest.

The Naa games were held in Dodona in northwestern Greece, so Alexander Jones of the Institute for the Study of the Ancient World in New York has suggested that the mechanism must have been made by or for someone from that area.

Intriguingly, this could mean the device is even older than thought. The inscriptions have been dated to around 100 BC, but according to Jones the device may have been made at latest in the early second century BC, because after that the Romans devastated or took over the Greek colonies in the region, so it's unlikely that people would still have been using the Greek calendar there.

But the highlight for most of the audience - judging from the spontaneous round of applause it received - was this breathtaking new animation (below) of the gearing inside the mechanism. It has been made by
Mogi Vicentini, an Italian astronomer and computer scientist, and it brings the device to life brilliantly.
Judge for yourself, but I think it shows that the mechanism would hold its own against the best of today's luxury gadgets.

Jo Marchant is author of Decoding the Heavens, a book about the Antikythera mechanism. It has been shortlisted for the 2009 Royal Society Prize for Science Books, and is out now in paperback.
Also check http://www.antikythera-mechanism.gr/node/192 they have online a paper published last year, will a lot of details about the games and the dates.