Monthly Archives: June 2015

Selling Out

The Economist has been just brutal on President Obama’s foreign policy, despite having endorsed him in 2008 and again in 2012. They had some other policy in mind, and Jeremiah knows what it is. To prove it, we confidently predict the magazine will endorse Jeb Bush in 2016. Need a hint? Here is the latest shameless advertisement for Common Core.


The data in this chart is from Pearson’s annual report. We love The Economist, but it is chump change to the money Pearson makes from its multimillion dollar no-bid education contracts. They might as well use it for an advertising vehicle. Oh, and did we mention that “Doctor Evil,” Eric Schmidt of the Google-NSA security apparatus, recently joined the board?

A Politico investigation has found that Pearson stands to make tens of millions in taxpayer dollars and cuts in student tuition from deals arranged without competitive bids in states from Florida to Texas.

As for the substance of Common Core, centrist Jeremiah splits the difference. Standards, testing, and merit pay – good. Reliance on agitprop course packs – not so much. At this point, the best way for The Economist to recover its editorial integrity would be for Jeff Bezos to buy it and make it into an app.

Update:  Shortly after this post, Pearson sold FT.  As of this writing, July 28, they also plan to sell The Economist.  Someone must be reading Jeremiah.

See also: Strictly Fishwrap


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Filed under Education, Media

Centrist Donald?

GoodwinDonald Trump has an interesting position on free trade. He is against the TPP, really down on NAFTA, and accuses China of currency manipulation.

For a man touted as the Fox News poster boy, being antitrade is pretty far left. Think unions, Senator Schumer, and this leftist cartoon.

The right is blindly pro-trade, assuming that what’s good for business is always good for America. Jeremiah has discussed this conflation, here. The last business candidate to stand up against free trade was Ross Perot.

On the other hand, you can’t hope to build a wall around your national market. That’s a tactic, not a strategy – although China has done pretty well with it. The balance between trade and protectionism boils down to negotiation.

Trump’s native mode of expression is bombast, so it’s hard to tell, but this is actually a nuanced position. Consider the current debate in Congress. The Democrats are blocking President Obama, for the usual antitrade reasons, and the Republicans are afraid of a “bad deal.”

It is doubtful the race will turn on trade policy, but The Donald gets points for the first non-stereotyped idea of the season. Maybe he can get an endorsement from Michael Moore.

See also: Jeremiah on Protectionism

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Stop Using the Dollar

Dear President Varela, it is one thing to have your currency pegged to the dollar. It is quite another actually to use the dollar as your currency. If you should ever need to break the peg, you will have to build all the infrastructure of currency management – during an emergency.

For example, the Federal Reserve has lately created four trillion new dollars, with the express intention of creating inflation – driving up condo prices in Miami and Panama City. Inflation will hit Panama harder than the United States, and the Fed will tighten when it suits their policy, not yours.

The other emergency comes when the dollar is too strong. Then you have to manage an internal devaluation – like Greece. Greece’s problems (the monetary ones, at least) stem from being yoked to the Euro. Generally, one has both emergencies in sequence. The hot money rolls in, creating inflation, and when it rolls out you have a recession. India’s central banker knows something about this.

Incredibly, several Latin American countries use the dollar. A small, low income country using the dollar (or the Euro) can expect to have its money supply whipped up and down. The Bundesbank had a reputation for price stability, and the Fed before Greenspan. Not anymore.

Jeremiah recommends starting now to de-dollarize. Keep the peg, but begin the process of printing Balboa notes and removing the dollars. Expats and importers will need dual currency banking. Set the peg at $0.97 or $1.03, so merchants can practice their spread pricing.

This will cost some money, in the near term, but it will serve you well. When the time comes, you will be able to hike interest rates. Look at Brazil. Also, as trade with China increases, you will want to clear transactions in Yuan.

From an American perspective, we have enjoyed the “exorbitant privilege,” but now our leaders are squandering it. You might as well save yourself.

See also: Poder a Los Estudiantes

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Filed under Economy

Chart of the Week

This, below, is the best chart of the week. It’s like an optical illusion. You have to stare at it for a while. Note that the right scale is inverted. Tweeps were quick to confirm their favorite political theories – George Bush “put the economy in a ditch,” Obama never “created or saved” any jobs. Jeremiah debunks president centered economic theories here.

EmploymentThe point of plotting both these lines is to show that one of them is bogus. The blue line is the one that’s economically relevant. The black line, U3 Unemployment, is a proxy measure for the blue one. What is astonishing is that U3 held up so well for so long. All serious observers have switched to U6, nonfarm payroll, and labor force participation. Even if you’re looking at NFP, you have to crack the report and look at the categories.

No one takes the headline numbers seriously, especially not U3. It’s not technically wrong. It’s just irrelevant, and then CNN serves it up as feel good propaganda. The Fed has kept ZIRP for almost seven years now. They are either trying to destroy capitalism, or they see a weak economy. Jeremiah is not prone to conspiracy theories. We disagree with the Fed’s prescription, but not the diagnosis.

Back before Chairman Yellen, the Fed set a benchmark of 6.5% unemployment before they would raise rates. The reason this is “chart of the week” is that it shows the corresponding figure, 62% on the blue line, that would mark the return of a healthy job market.

See also: New Fed Bashing Hero

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Land of the Free

PassportSomewhere along the line, the Constitution became associated with the political right. This was not a good move for the Constitution. Maybe it has something to do with partisan attitudes toward domestic surveillance, as we discussed here.

The right likes old timey language. They see the depredations of the IRS, for example, as “tyranny.” Jeremiah, his political sensitivities formed in the Sixties, sees fascism. The blog has tags for both. Libertarians are for liberty, broadly construed, while the left will settle for “civil rights.”

You would think that protecting our, um, freedom would be a concern for all Americans. Everyone in government takes an oath to defend the Constitution, and President Obama was a professor of Constitutional law.

The first ten amendments to the Constitution are the Bill of Rights, one of history’s most profound statements of human freedom. Other charters are merely aspirational. The UN declaration wants us all to have good jobs, with time off and a health plan.

The Bill of Rights is more pragmatic. Instead of what the government should do for you, it lists what the government may not do to you. Readers will have noticed a theme lately, as we have chronicled the erosion of your personal freedoms.

  • The Fourth Amendment, against unlawful search and seizure, was the first casualty in our Orwellian “war on terror.”
  • The First Amendment, freedom of speech, has been replaced by a censorship regime with potent sanctions.
  • Even the Eighth Amendment, against cruel and unusual punishment, has been shredded by a prison industry that is paid on volume.

Those are (were) the big ones. Ilya Somin has even found a violation of the Third Amendment. Six and Seven are pretty much toast, too. You can play this game at home by following the news, and tracking how many of your Constitutional rights are still standing.

The stated purpose of this blog is to explore solutions for America’s problems. If no one is going to defend the Constitution, though – despite having taken the oath – then it’s not really America anymore. It might be time to go Simon Black, and start working on that second passport.

See also:  Rule of Law

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Filed under Civil Rights, Liberty

Taking Your Stuff

Police-might-shoot-you-during-a-traffic-stopBelow is an abridged transcript of the Fifth Amendment. Not too bad, is it? The government is not allowed to take your stuff, much less kill or imprison you without due process. Plus, we have habeas corpus – the right to our day in court, with a jury of our peers.

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury … nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

It’s just as well that you never learned this in public school, because it’s obsolete. Not only can the government take your stuff – and they are constantly dreaming up new ways to do it – but they can outright kill you with no “due process” at all.

We have covered extrajudicial killing previously. That’s the doctrine that if you are merely accused of being a terrorist – by a properly anointed government official, of course – your own government can murder you, and never present evidence to anyone. If that sounds paranoid to you, there is plenty of backup on the ACLU web site.

The U.S. targeted killing program operates without meaningful oversight outside the executive branch, and essential details about the program still remain secret

Short of taking your life, the government can absolutely take your property. This used to be called eminent domain, as in the famous Norwalk case. True story – the city turfed these people out of their homes so that they could build a mixed-use retail block.

Eminent domain is passé now, because city governments are getting desperate. Now the police can rob you in broad daylight, like some banana republic. It’s not true that Loretta Lynch invented civil asset forfeiture but, as New York’s D.A., she was a big proponent. Lynch is now America’s “top cop,” the Attorney General of the United States.

… civil asset forfeiture, which allows law enforcement agents to take property they suspect of being tied to crime even if no criminal charges are filed. Law enforcement agencies get to keep a share of whatever is forfeited.

Perhaps you have heard of deposit structuring. This is a truly Kafkaesque money grab, as if the IRS were not already omnipotent. If you deposit more than $10,000 cash into your bank, you might be a terrorist, or laundering drug money. You might also be depositing the week’s take from your hair salon, but never mind – you have to fill out Form 8300.

Here’s the Kafkaesque part. If you deposit less than $10,000, you do not have to fill out Form 8300 … and now the IRS seizes your entire bank account! That’s because you are apparently dodging Form 8300. Good luck suing the IRS. You are guilty until proven innocent, plus you’re broke.

The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent.

The list goes on and on – the DEA, IRS, ATF, the Patriot Act (or whatever), RICO, FINCEN, and the DHS. Government agencies have more power to deprive you of life, liberty, and property than was ever dreamed of in 1791.

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Freedom of Speech

Way back in 2013, when the IRS was caught intimidating Republicans, one of their targets was groups wanting to defend the Constitution. Jon Stewart quipped, “You can see why they don’t want you to know about the Constitution.” It was not clear, previously, that the Republican party had a monopoly on the Constitution.

The left seems to think they don’t need the First Amendment anymore, because their team is on top right now. As Jeremiah has warned you, this kind of thinking is strictly for morons. Your personal freedom ratcheted down a few clicks under George Bush, and a few more clicks under Barack Obama.

This Vox article about censorship at college reads like something from China’s Cultural Revolution. Ironically, armed with only an anecdote or two, the author resorts to the same self-centered reasoning he complains of in his students. A rebuttal was rapidly posted here. Jeremiah is with the OP, though. Try to count how often you have heard of a debate being cancelled, a speaker disinvited, or a teacher fired.


An article on Popehat discusses whether obnoxious online comments constitute actionable threats. Apparently some people mouthed off about a judge, anonymously, and now the DOJ is going to hunt them down and prosecute them. No one likes these comments, but – like the IRS scandal – this is a clear case of selective prosecution. The DOJ is not going after all obnoxious comments, just anti-government comments on libertarian sites.

Yes, Virginia, there is censorship. There are certain things you can say on Facebook, or wherever, and certain things that will get you busted. Your words can get you audited, fired, or jailed. The universe of acceptable speech is defined, not objectively, but politically.

Jeremiah recalls that old sketch of Emmett Kelly sweeping up the spotlight. It doesn’t matter which direction it is moving. The point is that this bright spot of public discourse is growing smaller.

See also: Students for Liberty

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Filed under Liberty