Daily Archives: 12 October 2011

The Forgotten Depression of 1920

open quoteThe conventional wisdom holds that in the absence of government countercyclical policy, whether fiscal or monetary (or both), we cannot expect economic recovery — at least, not without an intolerably long delay. Yet the very opposite policies were followed during the depression of 1920–1921, and recovery was in fact not long in coming.

The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover — falsely characterized as a supporter of laissez-faire economics — urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored.

Instead of “fiscal stimulus,” Harding cut the government’s budget nearly in half between 1920 and 1922. The rest of Harding’s approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third.

The Federal Reserve’s activity, moreover, was hardly noticeable. As one economic historian puts it, “Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction.”[2] By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923.close quote (Read more)

Iranian mullah-narco terror plot to kill Saudi ambassador with cartel hitman and Mexico-laundered cash

The “very scary” Iranian Terror plot
open quoteThe most difficult challenge in writing about the Iranian Terror Plot unveiled yesterday is to take it seriously enough to analyze it. Iranian Muslims in the Quds Force sending marauding bands of Mexican drug cartel assassins onto sacred American soil to commit Terrorism — against Saudi Arabia and possibly Israel — is what Bill Kristol and John Bolton would feverishly dream up while dropping acid and madly cackling at the possibility that they could get someone to believe it. But since the U.S. Government rolled out its Most Serious Officials with Very Serious Faces to make these accusations, many people (therefore) do believe it; after all, U.S. government accusations = Truth. All Serious people know that. And in the ensuing reaction one finds virtually every dynamic typically shaping discussions of Terrorism and U.S. foreign policy.

To begin with, this episode continues the FBI’s record-setting undefeated streak of heroically saving us from the plots they enable.

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Hillary Clinton thundered that this “crosses a line that Iran needs to be held to account for.” The CIA’s spokesman at The Washington Post, David Ignatius, quoted an anonymous White House official as saying the plot “appeared to have been authorized by senior levels of the Quds Force.” Meanwhile, the State Department has issued a Travel Alert which warns American citizens that this plot “may indicate a more aggressive focus by the Iranian Government on terrorist activity against diplomats from certain countries, to include possible attacks in the United States.”

In case that’s not enough to frighten you — and, really, how could it not be? — some Very Serious Experts are very, very afraid and want you to know how Serious this all is. Within moments of Holder’s news conference, National Security Expert Robert Chesney – without a molecule of critical thought in his brain — announced that this “remarkable development” was “very scary.” Very, very scary. Chesney then printed large blocks of the DOJ’s Press Release to prove it. Self-proclaimed “counter-terrorism expert” Daveed Gartenstein-Ross tapped into his vast expertise to explain: ”Holder weighing in on the plot’s connection to Iran means the administration is deadly serious about it.” Progressive think-tank expert and Atlantic writer Steve Clemons decreed that if the DOJ’s accusations are true, then ”the US has reached a point where it must take action” and “this is time for a significant strategic response to the Iran challenge in the Middle East and globally,” which “could involve military.”

The ironies here are so self-evident it’s hard to work up the energy to point them out. Outside of Pentagon reporters, Washington Post Editorial Page Editors, and Brookings “scholars,” is there a person on the planet anywhere who can listen with a straight face as drone-addicted U.S. Government officials righteously condemn the evil, illegal act of entering another country to commit an assassination? Does anyone, for instance, have any interest in finding out who is responsible for the spate of serial murders aimed at Iran’s nuclear scientists? Wouldn’t people professing to be so outraged by the idea of entering another country to engage in assassination be eager to get to the bottom of that?close quote (Read more)

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US aimes to punish Iran for Saudi envoy plot

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U.S. alerts citizens overseas about possible Iranian acts

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Iranian Terror Plot: Fake, Fake, Fake
open quoteFake, fake, fake – I’m talking about the latest anti-Iranian propaganda coming out of Washington, which claims the Iranian Revolutionary Guards were involved in a “plot” to take out the Saudi ambassador to the US and blow up both the Saudi and Israeli embassies. The narrative reads like a formulaic melodrama: two Iranians, one a naturalized US citizen, purportedly approached someone they thought was a member of a Mexican drug cartel – according to the indictment [.pdf], it was a “sophisticated” drug cartel, not the plebeian sort – and proposed paying him $1.5 million to murder Adel al Jubeir, the Kingdom’s ambassador in Washington – oh, and by the way, the Iranians supposedly said, “Are you guys any good with explosives?”

The key to understanding just how fake this story is can be found in the New York Times report, which informs us:

“For the entire operation, the government’s confidential sources were monitored and guided by federal law enforcement agents, Preet Bharara, the United States Attorney for the Southern District, said in the news conference. ‘So no explosives were actually ever placed anywhere,’ he said, ‘and no one was actually in ever in any danger.’”

Translation: the whole thing is phony from beginning to end.

This is another one of US law enforcement’s manufactured “anti-terrorist” triumphs, where the feds set somebody up, fabricate a “crime” out of thin air, and then proceed to “solve” a case that never really existed to begin with.close quote (Read more)

Ron Paul Calls Out Herman Cain For Lie Over Fed Audit During GOP Debate

open quoteCain said that, in fact, he didn’t oppose an audit, and that when he served on the Fed it was a different institution. “You have misquoted me. I did not call you or any of your people ignorant. I don’t know where that came from,” he said. “You’ve gotta be careful of the stuff you get off the Internet.”

A careful check of the Internet, however — guided by the Paul campaign — turns up audio of Cain saying just what Paul accused him of saying. As recently as 2010, long after the Fed began engaging in the lending Cain says he opposed, Cain belittled those calling for an audit.

“Some people say that we ought to audit the Fed. Here’s what I do know. The Federal Reserve already has so many internal audits it’s ridiculous. I don’t know why people think we’re gonna learn this great amount of information by auditing the Federal Reserve. I think a lot of people are calling for this audit of the Federal Reserve because they don’t know enough about it. There’s no hidden secrets going on in the Federal Reserve to my knowledge,” he said.close quote (Read more)