The Present in Plain Text

The New LP.Org .. Very Nice

I finally went to look at the new homepage of the LP and I have to say I'm really quite happy with what they've done. I love the membership drive at the top of the page, especially that it is as aggressive a schedule as it is.... 5000 new or re-newed members in 2 months. If they reach that goal that would be very exciting indeed.

Moreover, the blog is a phenomenal idea that I've been trying to get the LPF to implement but am meeting with way too much resistance over.

Whatever, we finally have an LP website worth hanging out at and checking in with.

I'll comment on their new Exit Strategy for Iraq once I've read it.

Ta,

No Higher Calling...

This excerpt from Bush's bomb of a speech last night has me completely convinced that he's lost all sense of proportion vis a vis Iraq and the 'War on Terror.'

I thank those of you who have re-enlisted in an hour when your country needs you. And to those watching tonight who are considering a military career, there is no higher calling than service in our Armed Forces. We live in freedom because every generation has produced patriots willing to serve a cause greater than themselves. Those who serve today are taking their rightful place among the greatest generations that have worn our Nation’s uniform. When the history of this period is written, the liberation of Afghanistan and the liberation of Iraq will be remembered as great turning points in the story of freedom.

Now, the last I checked, this guy was supposed to be a Christian. And, in no way does serving the needs of the United States Armed Forces supplant those serving those of God. This shameless appeal to nationalism and the almighty state should be particularly offensive to anyone of any religious persuasion in any country.

A devout follower of the teachings of Christ could not possibly utter those words. Hell, I'm not one and I couldn't even conceive of saying such an irresponsible and manipulative thing as that.

Desiring to serve the needs of others is a great and noble thing. Make no mistake about that. Bush's ideas on this are like the misguided efforts of Bob Geldof and Live-8, it takes more than a desire to do good to actually do good. It takes execution. Even if one ascribes a nobility of purpose to, which I'm nearly certain didn't exist, Bush's plans in Iraq it is hard to see how anyone's life, especially those thousands of Iraqis killed/maimed, has been improved. Similarly, Live-8's goals of alleviating poverty in Africa by the same methods (IMF loans, freely-donated food and medicine) that have failed in the past will reamin unmet.

He cites in that same speech that they are working hard to restore the basic functions of society, like food, water, electricity and the like. But, correct me if I'm wrong here, but didn't they already have these things in Iraq, and in much greater abundance, before we invaded their homes and destroyed their infrastructure?

If the bombing and terrorizing of civilians is Bush's idea of 'the highest calling' than I'll gladly count myself among the unenlightened and the soulless.

This is just further proof that we have the world's biggest tool as the leader of the 'free' world. Everyday that the freak show that is American Politics continues I am further and further amazed at the willingness of people to continue believing the system is 1) worth preserving and 2) salvagable.

Last week property owners got kicked in the teeth by 5 people! Why put your all of your future plans and faith in any 5 people, no less people appointed by a corruptable process to a group that has the ability to enforce their definitions of words at gunpoint? It takes a special kind of insanity to submit to that kind of situation and consider it a good thing. Just as it takes a special kind of insanity to believe that your life is worth so little that it should be sacrificed on the altar of one man's definition of 'the highest calling.'

Embedded in those same teachings of Christ that our president convieniently lost touch with during his speech last night was the idea that you are responsible for the things you do and the things you advocate. Submitting to someone else's definitions of right and wrong is abdicating that responsibility in the most fundamental way imaginable.

As Paul Craig Roberts noted yesterday at Antiwar.com:

Gentle reader, are you proud that American troops are torturing Iraqis? Are you proud that tens of thousands of Iraqi women and children have been killed and maimed with their deaths and terrible wounds dismissed as "collateral damage"? Are you proud that you elected and reelected a president who lied you into an illegal war that has killed 1,755 American troops, maimed thousands more, and destroyed your country's reputation?

If you are proud of this, what kind of person are you?

This, my few and far between readers, is the legacy of submitting to someone else's calling.

Ta,

More Assault Weapons...? Less Crime.

There is a solid article this morning at LRC and reprinted in the LA Times by John Lott citing the significant drop in gun-related violent crime since the sunsetting of the Assault Weapons Ban in September of last year. I think I can speak for all of the unreconstructed gun-toting, lunatic-fringe, property rights nuts in feeling not the least bit surprised by this. Nor am I surprised at the absolute silence in the news about this either.

It's instructive to remember just how passionately the media hyped the dangers of "sunsetting" the ban. Associated Press headlines warned "Gun shops and police officers brace for end of assault weapons ban." It was even part of the presidential campaign: "Kerry blasts lapse of assault weapons ban." An Internet search turned up more than 560 news stories in the first two weeks of September that expressed fear about ending the ban. Yet the news that murder and other violent crime declined last year produced just one very brief paragraph in an insider political newsletter, the Hotline.

What's particularly funny is that the crime statistics for 2004 in Florida have apparently just been released as a slew of articles gets turned up in a Google News search for violent crime statistics, all basically saying the exact same thing. Many of these articles have paragraphs cut and pasted about the effectiveness of the 10-20-LIFE laws and a soundbite from Jeb Bush on the subject.

What's worrisome is the never ending call for more cops and stricter enforcement even though per capita crime in Florida is dropping rapidly, expecially in 2004, where there was a drop from 4833 crimes per million people to 4528. Per Capita violent crime dropped from 0.68% to 0.66%, a 1% relative drop. Digging inside the numbers a little more reveals:

• Robberies with Firearms dropped 6.4%
• Forced entry burglaries dropped 3.2%
• Pick-pocketing dropped a whopping 23.2% (certainly not related to the AWB sunset, but interesting nonetheless)
• Forcable sex offenses with a firearm dropped substantially (some classes dropping over over 20%)
• and lastly Murder with a Firearm dropped 5.4%

So much for Sarah Brady and the bloodletting that was predicted during the presidential campaign last fall. Imagine how much lower those numbers would be if the Federal Government would end the War on Drugs. As cited in a couple of the counties that saw their number of murders rise, it was probably gang/drug related according the the police.

The simple truth is that a combination of easy CCW permits and a whole lot of cops have done a great job in dropping the crime rate here in Florida over the past 15 years. While I'm no fan of municipal police departments and especially the modern, military-style training they receive, when you throw as much money at a problem as we have there has to be something to show for it. But, what I don't understand is why there is an ever-increasing call for more cops and more money when it is obvious that stronger property and defense rights of individuals is the path to a stable and crime-free society?

I got an e-mail yesterday from a friend who informed me of his purchase of a new Romanian SAR-1 (semi-auto AK-47) and how much he loves it. Between that purchase and one of a Yugoslavian SKS he is a very happy man. He never knew how much fun eastern bloc infantry rifles could be. Now he does. And the world is a better place for it.

Ta,

Kinsella on Kelo at LRC

Patent and IP lawyer Stephan Kinsella has a great article this morning at LRC about the constitutionality of the Supreme Court's decision in Kelo vs. New London. In essence, he is saying that the Supreme Court arrived at the right result with exactly the wrong argument.

His argument also contravenes something I spouted off on earlier in the week, and after due consideration must conclude that he is correct and I was wrong (something I suspected as I typed those words, but didn't feel like checking into first). I made the statement that the role of the Federal Government was to protect the rights of the people from the depradations of indidvidual state laws, that is incorrect. And I thank Mr. Kinsella for clarifying that point for me.

Unlike American States and other states around the world, however, the federal government does not have general legislative or plenary police power (though it has done a good job inventing this power by stretching the "interstate commerce" clause). Rather, it is limited by having only the powers enumerated in the Constitution – the powers delegated to it. This scheme is made clear by the very existence of the Bill of Rights, the Ninth Amendment, and especially the Tenth Amendment, which provides: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

With that in mind, now consider the following:

Now what is crucial for our purposes is to recognize that for the U.S. Supreme Court to overturn a given State law, this is an exercise of power. This means that the power to review and nullify State legislation must be enumerated in the Constitution.

There is no mention of this power in the Constitution, therefore the Supreme Court has no jurisdiction. It has no more power to overturn state law than it has the power to overturn Canadian law for example. The states are supposed to be sovereign and as such should be free to enact any law that does not run afoul of another state law, with the Federal Government providing a framework for interaction and dispute resolution.

Now, all of this said, none of the Supreme Court justices acknowledged this in their opinions. They all focused on the the 'for public use' part of the 5th amendment to inform their decisions. But, as Mr. Kinsella points out, the 5th amendment has no jurisdiction over an internal state matter, and Kelo vs. New London is certainly, for once, not an Interstate Commerce issue, though possibly a "General Welfare" one, depending on how broad your interpretation of that phrase is.

So, in essence, the Supreme Court was able to have its cake and eat it too, with this ruling. The result of the decision was to uphold the underlying concepts of federalism but the opinions used to generate that result assumes that the Court has powers that neither the people nor the states have delegated to it.

I had been waiting for a few days for LRC to chime in on this subject, knowing that whatever Lew decided to publish would be at once orthogonal to what the general buzz was and probably dead-on correct. If the result of this decision is that people all across this country pound on their state and local governments to pass stricter mechanisms for the use of Eminent Domain than the cause of liberty will have advanced a tiny bit. If not, then, in the immortal words of Dennis Miller, "Aww, F$&K it! Who wants pie?"

Ta,

Movement on the ED Front

I just got e-mail from Walt Augustinowicz on the LPF Ex. Comm. list saying that he's been in contact with Rep. Nancy Detert-Venice from District 70, who is "outraged by the ruling:"

Dear Walt,

I, too, am outraged by the Supreme Court ruling. In fact, I really can't
believe it! I would be happy to file the bill or least explore the
possibilities of presenting a reasonable option. I think that most
Americans felt that government only has the e d option for roads,etc. but
this idea of government taking property so that they can make more money
from the increased tax revenue flies in the face of private property rights.

I sent him these two options for changes to the Florida Constitution:
Changes are bold

Change Article X, Section 6 Eminent Domain to:

• (a) The State of Florida does not have the power of Eminent Domain and is
  prohibited from seizing private property for any reason that is not in conformity
  with Article I Section 12.

or

• (a) No private property shall be taken except for a public infrastructure
  purpose, limited to the building of roads and railways or the furnishing of
  utilities, and with full compensation therefor paid to each owner or secured by
  deposit in the registry of the court and available to the owner.

  (b) Provision may be made by law for the taking of temporary easements, by like
  proceedings, for the drainage of the land of one person over or through the land of
  another.
  

Let's see where this goes. Personally, I'd be ecstatic if she presented the second option and embarrassingly orgasmic if she presented the first. Either of these should place serious brakes on the juggernaut that is Eminent Domain. We need help though. So, all you people in Florida who read this space get on the horn to your representative in the State Legislature and let them know.

We must make this stand now.

Ta,

Viagra for City Government

The latest ruling by our illiterate Supreme Court is without question one of the most vile pieces of information I've ever had the displeasure to process. In essence, the Supreme Court just handed out the biggest free sample of Viagra to those city governments suffering from F.E.D. syndrome (Foiled Eminent Domain). With renewed vigor and a smile to rival Bob from the Enzyte commercials the pleasure to be derived from the taking of private property for the public use of 'increasing the tax base' will be akin to orgasmic. Trust me on this. Not only do they not understand the concept of State's Rights, as witnessed by their recent ruling against State Medical Marijuana laws, when they do devolve power back to the state's, as in this case, they do it badly. The U.S. Constitution (and the bill of rights) exists to protect the individuals from the ravages of bad State Laws as well as enumerate the powers of the Federal Government.

Thankfully, according to this article, Floridians are spared some of the unwanted adavances by amorous city and county officials. As first they have to seek a legal standing of 'blighted' for the property to be seized, before proceeding with the actual thieving. Personally, this article seems like more of an apology for the abuses to come rather than an explanation of the law. Notice how many of the county officials speak in terms of doing what they have to, even if the decision is a hard one.

*Paging Chancellor Palpatine, your apprentice is waiting for you*

This quote is especially illuminating of the staggering incompetence of government employees:

"Remember, the (New London) case turns on whether you can cause redevelopment for purely economic reasons," said county legal consultant Mark Lawson, of Tallahassee-based Bryant Miller & Olive P.A. "That is not what Charlotte is doing. Charlotte is trying to economically develop a blighted area."

Uhh, I hate to break this to you Mr. Lawson, but what you said doesn't make a lick of sense. There is no difference between what New London and Charlotte are doing. One situation is more extreme than the other. Both are the unjust taking of people's property for purely economic purposes. I love when people make complete morons out of themselves in public, it makes my job sooooo much easier.

Props to Walt Augustinowicz for getting a quote in the article., by the way. This is prrof that is we campaign like professionals Libertarians can be a part of the political process.

Ultimately, this decision has further clarified for me that no law is fool-proof. Furthermore, any law with a exception clause that can be expressed using the english language is especially vulnerable to poor interpretation. Therefore it is my contention that the only reasonable political course of action is to put forth a Amendment to the Florida Constitution that reads as follows:

Change Article X, Section 6 Eminent Domain to:

(a) The State of Florida does not have the power of Eminent Domain and is prohibited from seizing private property for any reason that is not in conformity with Article I Section 12.

There is no way to prevent the theft of property by government or its benefactors with any other language. This is the kind of reform that is needed in this society. I include the language of explicitly denying the power of Eminent Domain as opposed to just removing all references to it as a precaution against a Federal argument implying the power exists with the states as well.

Any project worth doing is worth paying whatever the costs end up being. Short-cutting this process by thieving from people is wrong and sends the wrong pricing signals through an economy. No road is more important than a person's right to life. No mall or marina or condominium or parking garage or bus depot is more important than a human being. Anyone who thinks that is bully and a coward. Period.

If this isn't the hill that a great many Americans are willing to fight and die on, then there truly is no hope for this country and I'll make the appropriate future plans.

Now, as a beneficial side-effect of this, watch land values in Florida skyrocket (and the attendant gains in tax revenue, unfortunately) as this amendment would create a unique commodity in the United States... a little thing called private property.

Ta,

More on the Housing Bubble ...

As I made my blog-rounds this morning I came around to this great article by Kip Esquire where he makes a very cogent argument about why housing prices only need to dip a little to have a huge effect on the state of the lending system. I got there from this article at The Marginal Revolution. Kip uses Tarrabok's own argument against him, brilliantly. Equating a mortgage to buying stocks on margin, and with little equity in your position (house or stock) a small change in price creates a huge change in your equity. Just like a small change in the growth rate of a company can have a huge effect on it's stock valuation as measured by P/E. Alex, honestly, only focuses on the rising portion of the rate of change, and not the negative. The bank can, and will, foreclose on you, analogous to a margin call, if your equity drops too low, or becomes negative, depending on the insanity level of the mortgage contract under scrutiny.

The real danger in this situation is who is eventually going to foot the bill if prices start to fall? In recent history it's been the U.S. Government/Federal Reserve in the immediate term and everyone else in the medium-term. Think LTCM, Mexico, Brazil, the S&L bailout, Y2K, ad nauseum, ad infinitum.

What I'd like to know is where is all of this money going to come from? The Chinese and the Japanese have slowed down their buying of U.S. Debt Instruments. See this article at Bob's Gold Price Column to understand what's happening with the Net Flow of the US Dollar, as seen from the latest TIC Report, which showed a net outflow again this month.

All of this is pointing to a firestorm. When these interest only (Smart Loans from Quicken, an Orwellian appelation if I ever saw one) and negative-equity (No one lost another loan to Ditech over my Re-fi, 36% net-equity @ 6.5% for 20 years fixed) mortgages begin to topple the only choice will be, as Bob suggests for the settlement of international trade which is a competing problem, the printing of digital IOU's to cover the shortfalls and stem the tide defaults. In the past the Fed managed their bailouts by selling more bonds to an ever-hungry market. The current situation is much different as noted by the second chart posted by Dan Norcini in Bob's article linked above.

This is a recipe for something that in common parlance would be called Inflation.

For a less-technical, but equally well-reasoned position on the housing situation check out this other article by Kip here.

Ta,

Update on the Addition to Outer Luongolia

To those 3 of you still interested in the progress on the house I finally have the energy (and the pics in hand) to give an update on the addition we started building earlier this month. Back in March we put a porch on the place (10'x24') off the south wall, which has done wonders to making the house more livable in the summer Florida heat. My little AC window unit works less than half as hard as it did last summer and the house is cooler. As a matter of fact we didn't turn it on until the beginning of the month, as opposed to last year when they got installed and turned on in mid-april, the moment the temperature reached the high 80's.

For our next project a much larger addition was needed, as it needed to perform a few functions:

1. It had to add a Master Bedroom/Bathroom
2. It had to be wide enough that the chimney from the wood-burning stove would not be installable without having to take the big 2-story roof into account, i.e. greater than 13' in total width.
3. Create an area that Capt. Charity Vain could nurse an infant without being disturbed by !, our roommate.
   
4. Provide a little more common living space than the teeny 11.5'x11.5 room we have now.

Because the house is a 24' cube, 2 stories tall we couldn't fit all of that into an addition 24' wide. We had to go wider than that. So, the addition is off the east wall of the house (the one with no windows designed explicitly for future expansion), and is 34' x 16' in size.

Pics are here, here, here, here, here, here, and here.

These are not the best pics I've taken of our work, but it gives you an idea of where we are. Shingles for the roof get delivered on Thursday and Capt. C. Vain and I will spend the weekend roofing. Once that's done, we'll finish getting the studwalls and sheathing up to shore up the structure in case of a storm. I'm hoping to have the place dried-in by the end of July.

Ta,

Econbrowser: Babble about a housing bubble

Over at the Econobrowser, James Hamilton argues against a housing bubble because of localized growth rates having a multiplicative effect on expected returns of the property owner. I'm unsure how that argument makes any sense whatsoever, mind you, because in my mind he holds so many variables constant as to remove his example from any realistic application.

In essence, he's saying that the rate of change of housing stock to economic growth will create multiplicative increases in the cost of rental housing given a constant rate of rental income. Well, again, holding all variables equal like that creates an unrealistic scenario.

The rental income of $4,000 plus the capital gain of $2,000 provide the requisite 3% return on capital of $200,000. Next year's $202,000 price is likewise warranted by next year's $4,040 rental income and prospect of 1% capital gain on $202,000, and so on. There's no bubble because both the price-to-rent ratio and the rent-to-income ratio remain constant over time.

In his example a home's value could double simply because the growth rate could double relative to the housing stock increase.

In this case, if the stock of available housing is still only growing at 1%, the rental rate would now grow at 2% each year. The analogous calculation to the one above implies that the same piece of property earning the same $4,000 rental would now be worth $400,000 rather than $200,000. The owner is now rationally expecting to earn $4,080 in rent next year and to be able to sell the property for $408,000. The $8,000 capital gain plus the $4,000 current rental income again justify the property value in terms of giving the owner a 3% real return.

That's nice but why couldn't the owner more rationally raise his expected rate of return from 3% to 4.04%.

As in, for his $200,000 home that he receives $4000 in rental income from he would be expecting a 2% increase in the price of his home and the rental income the next year. This equates to $4080 (rental income) plus $4000 in capital gains (home now worth $204000). This scenario, I think, is more likely than the one where he keeps his rate of return expectation the same, and doubles the perceived value of his home.

If you couple this effect with the lowering of mortgage rates,the derivatizing of risk (and its subsequent distortions...interest only loans, lending 125% of the home value, etc.), and the mania that sets in once the prices start to rise rapidly (Buy now b4 the price goes up ...again) it is then reasonable to see as much as a 10-15% YOY increase in the price of housing in a hot market.

I happen to live in one, by the way, and these are the numbers. The blow-off phase, I think, is coming here in North Florida as prices are begininng to rise 5-10% per month.

We'll see how sustainable this is, and whether Prof. Hamilton or myself is right.

Ta,

Oil Price Follow-up: Chinese Price Limits and Demand

About half-way down this article is a quote from Monty Guild, advisor to Jim Sinclair and an analyst that Mr. Sinclair trusts implicitly.

Oil is strong in June. It’s hard to believe that gold and the rest of the commodities won't follow eventually. Every year in June thru August, not so good economists call for a Chinese meltdown – and every year they are wrong.

The Chinese consumer is now starting to buy. If the government will let him. China’s next wave of growth will be both consumer and export driven in my opinion. More consumer products mean more raw materials which means more commodities so after a slowdown I expect commodity demand to resurface!

A new data point; Chinese oil imports will be down for the next few months because the government has price limits and they will only allow limited imports above a certain price. This will probably be misinterpreted and will be judged to be forecasting a slowdown in China. We may get 7% GDP growth in China but no lower. I will email some interesting stats of global growth and inflation from the Merrill Lynch global economics team.

I offer this up as counterpoint to the assertion about shortfalls in the demand for oil as expressed by Mr. Polos and Mr. Steven Ayer over at Disinterested Party who seems to think that the U.S. is the only player in the demand for oil and is overly worried that December 2011 future contracts didn't respond to news the way he thought they should.

Personally, I remain convinced of a combination of increased foreign demand, especially Chinese, and simple inflation of the money supply to explain these things.

Ta,