1. lock all doors and keep them locked.


2. do not roll down any window far enough for one of the apes to get his arm through and unlock a door.


3. resist with questions every command for you to change that status.

• important for communication. [nonsense; when you go to one of their fortresses you're expected to communicate through something as telling as vent slits mounted in thick glass. one police station last month, the dispatcher simply opened up the document tray so we could speak through that air gap. treat them the same way. they can hear fine. far as the window goes, if you can hear them, they can hear you. if they can't hear you through a 4" gap, rolling down the window further isn't going to help.]


• they want to be able to smell the inside of the car, and your breath. [fuck 'em. let them get a warrant; you'll wait.]
• if a window is tinted, you could be blocking the view of a nearby weapon. [i don't tint my windows. if your driver window's tinted, that could be a tough one to get around.]

A Crucial Lesson of the Bailout Victory

Posted by Stephen Carson at September 29, 2008 05:08 PM

I was reading Glenn Greenwald's gloomy assessment of the prospect that the bailout would get passed despite everyone's objections and it made me think that there is a crucial lesson of this wonderful development that should not be missed.

As Murray Rothbard, JRR Tolkien, the Bible and so many others have counseled: Do not give in to despair!

Among other important reasons is that you might just win despite seemingly insurmountable odds. But if you don't even try there really is no hope.

The US Govt has effectively decided that its corporatist national champions in the coming forced consolidation will be JPM, Citi, BoA and now GS and Morgan Stanley - the latter pair newly transformed into banks where the teat of succour runs more profusely, and where the Fed/FDIC accounting regulations are less onerous than those of the SEC; where they can sit, jaws agape waiting, not to be explicitly bailed out from their funding difficulties, but to pick up cheap deposits from the authorities at the expense of an arbitrary denial of the contractual rights of debt and stock holders in those small fry firms who are seized the moment they totter.

I have to say this next piece of special pleading also made me involuntarily spit my Assam half way across the room:

'Only a few weeks ago, we saw that the liquidation of a large bank such as Lehman Brothers and the sale of Merrill Lynch did not cause massive disruptions. In fact, the adjustment was swift and almost invisible. The reason for the smooth adjustment is that the market was allowed to do its job. If government and Fed bureaucrats had tried to intervene with bailouts, the whole process would have taken much longer and would have been very costly in terms of real resources.'

No massive disruptions?!? A 'swift and almost invisible adjustment'? The god of the market doing its work?

We had a $200 billion run on money funds; a plunge in many commodity prices; a jump in credit risk premiums to unprecedented levels; renewed stresses at regional banks; bail outs in all of the UK, Russia, Iceland, Denmark, Belgium, Germany and, effectively, Ireland; a near global criminalisation of short selling; wild and damaging gyrations in foreign exchange; what is feared will be the decimation of whole cohorts of hedge funds (many of whom have not only had their business model outlawed but had their assets frozen at Lehman, their prime broker); a further freeze of money and capital markets; the launch of government stock support schemes in Asia and, even before yesterday's rout, what I think is now in excess of $1 trillion of global central bank injections to try - so far to no effect - to prevent the whole house of cards falling in one quick heap!

I confess that I don't quite see where the 'free market' was at work in any of this. Moreover, I should well imagine that it might just prove 'very costly in terms of real resources', indeed, by the time its ramifications become clear. As Fritz Machlup once wrote: "the bust always starts as a monetary crisis and then becomes a real one".

To call a spade a spade, Lehman was an ill-judged gamble at restoring a little macho credibility to a team which had swung drunkenly between paying handsomely for Bear to be folded into JPM, putting FNM/FRE into 'conservatorship' (whatever THAT actually means in practice), semi-rescuing AIG, summarily dumping Lehman (on the ludicrous grouds that, unlike the others, the market 'could see it coming;!), brokering a Merrill wedding, elevating Goldman to unimpeachability, expropriating WaMu debtors, then taking over Wachovia as a fictional 'open bank'.

All of this, too, despite a long litany of expressed false optimism and prevarication, not to mention the subtle diplomatic pressure aimed at inveigling America's long-suffering foreign creditors into pouring more money into these sumps of moral corruption and managerial ineptitude. Failing a positive response from their would-be 'marks', the authorities themselves have meanwhile broken every rule and violated every custom in the urge to lend to them on ever easier terms, all without once demanding that they account consistently for what is on their books as a quid pro quo.

Therefore, to add to liquidity problems, deep suspicions about the asset side of the balance sheet, and worries about the future income stream, all this flip-flopping has now engendered an even more debilitating opaqueness about the regulatory treatment of the whole legal ranking of liabilities, to the extent that proper market solutions seem, sadly, ever more remote.

So while you might cheer all this, let's not pretend that it has been serene and untroubled or else our ideological foes are going to be able to strike back to good effect by quoting such La-la land outpourings of joy when the bankers' problems become those of a whole host of otherwise blameless enterprises and families, as they inevitably will.

In a ringing condemnation of Wall St welfare I am fourquare behind you: in singing false paeans to an impossibly Panglossian reading of events and in trying to gloss over the wrenching - if ultimately salutary - consequences of a collapse, I suggest you are being naively counterproductive.

Our enemies are on the run, so a little less hysteria and a deal more calm ratiocination and sober exegesis might prove far more profitable than all these ill-judged - and, frankly, jejune - bromides which are being loosed off willy-nilly by people who - judging from both the blog and the mailist - are in many cases not in anyway current with either the institutional framework, the policy implications, or the international repercussions of what is going on and who (perhaps understandably) reveal themselves to be totally unversed in the perverse functioning of modern financial markets, for all these commentators undoubted academic brilliance.

It seems that a sizeable faction of the Mises group has become so intoxicated at the chance of getting a date at last with the girl of its dreams, that it has dipped too deeply in the punchbowl of 'I told you so' and has ended up goosing her mother instead, in front of all the family. Come on guys, get real - and leave the empty hosannahs to the Collectivists!

I am sorry if this sounds abrasive, but I strongly feel that, in many instances, the rush to print is being mirrored by a rush of blood and I fear that immoderate language and the blind quotation of Misesian scripture during what is clearly one of THE great upheavals of our irretreviably flawed monetary and political system can only be to the detriment of the cause over the longer haul.