Ron Paul Got This Exactly Right

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Two key paragraphs:

The Fed fails to grasp that an interest rate is a price—the price of time—and that attempting to manipulate that price is as destructive as any other government price control. It fails to see that the price of housing was artificially inflated through the Fed's monetary pumping during the early 2000s, and that the only way to restore soundness to the housing sector is to allow prices to return to sustainable market levels. Instead, the Fed's actions have had one aim—to keep prices elevated at bubble levels—thus ensuring that bad debt remains on the books and failing firms remain in business, albatrosses around the market's neck.

The Fed's quantitative easing programs increased the national debt by trillions of dollars. The debt is now so large that if the central bank begins to move away from its zero interest-rate policy, the rise in interest rates will result in the U.S. government having to pay hundreds of billions of dollars in additional interest on the national debt each year. Thus there is significant political pressure being placed on the Fed to keep interest rates low. The Fed has painted itself so far into a corner now that even if it wanted to raise interest rates, as a practical matter it might not be able to do so. But it will do something, we know, because the pressure to "just do something" often outweighs all other considerations.

I should add (since I used the word "exactly" in this entry's headline), that I do have one small nit to pick with the way Paul expresses himself here. Not with the substance of his exposition, which is perfect, but with the jots and tittles.

He defines interest rates briefly as "the price of time." They aren't the price of time. They are defined and measured by time, just as apartment rents are defined and measured by weeks, months, or years. But a rent isn't the price of time, it is the price of occupancy. Likewise, an interest rate is the price of credit, or of the use of the principal, for a specified period of time.

What Paul means is clear enough, and his brief use of the phrase "the price of time" probably does no harm, except ... that in the days of Savonarola and in the glare of Scholasticism one of the most common objections to the charging of interest, one of the reasons given for considering all interest as the sin of usury, was this notion that it is selling time and that time is of God. I would rather not have free-market advocates play into those bad old superstitions, or we'll end up throwing our vanities into a bonfire.

Still, Paul is making sound points. The Fed isn't wrong because of this chairman or that chairman. It isn't wrong in ways that new appointments or some tweaking of the mandating statutes could fix. It is wrong because it is a central bank, and what central banks do is in essence wrong. They are central planners, just as those who would run the auto industry from Washington (and who, these days, essentially do) are central planners.

The point should be not to improve the Fed but to close it down.

In this, perhaps, tea partiers and OWS types can come together.

Howrey Collapse

Howrey LLP, a once very prominent global law firm that has been around since July 1956, declared bankruptcy earlier this year after the collapse of merger talks with Winston & Strawn, and is still in the process of dissolution.

It is good to see that in the field of the law at least, even the biggest firms are still considered small enough to fail.

It isn't difficult to imagine a situation in which high government offiucials run around wringing their hands about what a disaster the failure of such a multi-national well connected form will be, and asking each other what can be done to save it.

Anyway, for those interested in a proper RIP: the firm is named after  Jack Howrey, who chaired the Federal Trade Commission in the early Eisenhower years.  His first partners were Bill Simon, Hal Baker, and Dave Murchison, and the firm's first focus was on antitrust law. Early on it became associated with the cereal industry, which has long had to fight antitrust battles. 

As it grew, though, it developed other areas of focus, especially in intellectual-property law. The leading light of the firm's Amsterdam office, Willem Hoyng, is the author of a highly regarded textbook on Dutch IP law. 

So they pass into history with a hardy "Cheers!" from me, and best wishes to all the displaced partners (who seem to have long since written lucrative tickets for themselves elsewhere) and the bankruptcy law trustee who has to sort it all out.

Cuban Perestroika?

Well ... baby steps.

Relenting on car sales

Looking Inside

Anderson Brown has a fascinating post on the "mereological fallacy" and its significance for the philosophy of mind.

I'll just link to it and allow you to find my further comment on it there.

"Points of light"

I've just been skimming, for no especially good reason, through a conspiratorialist book written in the late 1980s.

You may remember the late 1980s. The elder Bush in the White House. 

Conspiracy theorists of course typically seize on whatever is in the headlines and spin it into a freemason plot or whatever.  When those things drop out of the headlines, these writings can become dated quickly. 

Thus, the conspiracy book in qustion diud what it could with the expression "a thousand points of light" used by George H.W. Bush in his campaign in 1988.  Aha!  similar expressions were used by Masons and Illuminati and so forth.  It's all part of the "New Age New World Order"!

Yes, except, a "point of light" is a quite common expression, likely to have occurred to anyone who has ever looked at the night sky. Not evidence of any link except that we all do live under the night sky.

Phony pointless expressions of erudition don't make for understanding.  Oops, I just used the word "point" as a metaphor didn't I?  I guess the jig is up.

Nor'eastern

Now THAT was nasty!

I don't remember a power outage in leafy suburban Enfield lasting as long as did the one initiated by the freak pre-Halloween wintry storm this year.

Don't really want to see another one. 

Indeed, the situation reminds me of the famous poem about a purple cow.

Clint Eastwood on Gay Marriage

These people who are making a big deal out of gay marriage?  I don't give a fuck about who wants to get married to anybody else. We're making a big deal out of things we shouldn't be making a big deal out of.  They go on and on with all this bullshit about "sanctity." Don't give me that sanctity crap! Just give everybody the chance to have the life they want.

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Thanks Clint.  The next time somebody tries to stop gay people from marrying, ask them whether they think you've still got a bullet in your gun.

"In all this excitement, I've lost track myself...."