It seems to me this passage from a three-year-old Mises Daily summarizes a lot more than the logic of government debt:

“A Sizable National Debt Is Good Because It Gives the Citizens an Incentive to Support the Government.”

I have never seen a textbook discussion of colonial America that didn’t mention this alleged wisdom from the champion of infant industry, Alexander Hamilton. The idea is quite simple: As we have seen above, the national debt consists of financial claims (such as government bonds) against the Treasury. The holders of these bonds would be disappointed, therefore, if the government fell, because then their bonds wouldn’t be paid off.

What the textbooks fail to note is that (typically) the government can only pay off its creditors by taxing the money away from them first. Suppose you lend me a $20 bill, and I give you a piece of paper saying, “IOU $20 next Monday.” I take my fresh twenty and go spend it on a nice dinner. Then Monday rolls around and you hand me the piece of paper. I reach into your wallet, pull out a different $20 bill, and hand it to you as I crumple up the IOU. Aren’t you glad I didn’t get hit by a bus Sunday afternoon? You might never have gotten paid back!

Of course, the real logic behind Hamilton’s proposal is that wealthy capitalists could lend money to the government, which would then levy taxes on the general public to pay off the bondholders. In this more realistic scenario, the privileged few would indeed support the regime, because it pledges to use its coercive powers to transfer wealth into their pockets. But if this is the mechanism we use to gain support for the regime, why go through the shenanigans of issuing debt? The government could just openly state to the elite, “Support us and we will use our guns to siphon off money from the unorganized rabble every year and give you a cut.” (Now that I think about it, that probably wouldn’t have been too popular, and even history textbooks might not have approved.)

– “Government Debt Has No Upside” by Robert P. Murphy

Walter Williams writes:

News media people, often plagued with little understanding, fail miserably in their duty to inform the public. This is particularly evident in their reporting on the current financial meltdown, suggesting it was caused by deregulation and free markets.

Professor David Henderson, research fellow at Stanford’s Hoover Institution, writes about regulation in “Are We Ailing From Too Much Deregulation?” in Cato Policy Report (November/December 2008). The Federal Register, which lists new regulations, annually averaged 72,844 pages between 1977 and 1980. During the Reagan years, the average fell to 54,335. During the Bush I years, they rose to 59,527, to 71,590 during the Clinton years and rose to a record of 75,526 during the Bush II years. Employees in government regulatory agencies grew from 146,139 in 1980 to 238,351 in 2007, a 63 percent increase. In the banking and finance industries, regulatory spending between 1980 and 2007 almost tripled, rising from $725 million to $2.07 billion.

So here’s my question: What are we to make of congressmen, talking heads and news media people who tell us the financial meltdown is a result of deregulation and free markets? Are they ignorant, stupid or venal?

“These false prophets of capitalism are the greatest friends that proponents of socialism have.”

– Briggs Armstrong, “Enemies of Capitalism”

My new hero:

Archaeology is no stranger to unusual personalities. ‘Indiana Jones’ of the movie Raiders of the Lost Ark has a real life counterpart in Vendyl Jones, a self-trained adventurer in search of the Ark of the Covenant. Sir William Flinders Petrie discovered that pottery types could be dated according to the layers in tells (mounds) where they are found. He also was the first European to measure the pyramids. An old man with a full white beard and blazing blue eyes, he did his work wearing a ballerina’s frilly tutu, thus sparing himself from stoning by local religious fanatics.

– Clarke Johnson DDS, PhD, “Introduction to Anthropology”

Now, I’m sure you want to know the story behind the ballerina’s tutu. Up until the 19th century there had been no accurate survey made of the Great Pyramids. The main reason for this was the danger involved. The pyramids had been ransacked so badly the locals would often beat or even kill anyone believed to be a grave robber. There was a peculiar caveat to this custom, though. Anyone violating local customs and laws [who was] deemed insane was to be left alone, as long as no one was being harmed. Therefore, Petrie actually wore a ballerina’s tutu while surveying so he would appear insane! Some accounts say he openly wore pink frilly underwear while working. There are also several accounts of Petrie working naked inside the pyramids to prevent any annoyances from curious tourists. Petrie was at his best when he was challenged with unique problems that required innovative solutions. This, I have found, is the core quality of most surveyors who are true to their calling.

– Barry Savage, PLS, “Web Exclusive! The Man Behind the Tutu”

[read caption]

(via Roderick Long, who comments, “To delight praxeologists everywhere.”)

Welcome to Libertarian Papers!

To Authors, Readers, and Potential Libertarians:

A new libertarian journal—a new type of libertarian journal—is born today. Libertarian Papers is an exclusively online peer-reviewed journal. Its home is this elegant, fast, easy-to-use website. Please feel free to browse around.

[...]

[read more]

Having finished Asimov’s Guide to the Bible (very highly recommended), I was at a bit of a loss as to how to continue my new habit of “Sunday study.”

I turned to a fascinating lecture course from the Teaching Company called “Lost Christianities: Christian Scriptures and the Battles over Authentication” by Professor Bart D. Ehrman, thanks to which I can identify Calvin as the demiurge of the Marcionites and of Gnosticism:

Was James Watt’s patent of the steam engine a crucial incentive needed to trigger his inventive genius, as the traditional history suggests?

Or did his use of the legal system to inhibit competition set back the Industrial Revolution by a decade or two?

Here is a case study in how “intellectual property rights” do grave damage to the market economy.

FULL ARTICLE

(via FreakingNews.com via MarketBlog.com)

My friend David Miller tells me a plane leaving La Guardia just went into the Hudson. “I watched it, mostly submerged, float by the windows of the office gym. … you know the Auden poem Musee de Beaux Arts?”

Here’s what he’s referring to:

About suffering they were never wrong,
The Old Masters; how well, they understood
Its human position; how it takes place
While someone else is eating or opening a window or just walking dully along;
How, when the aged are reverently, passionately waiting
For the miraculous birth, there always must be
Children who did not specially want it to happen, skating
On a pond at the edge of the wood:
They never forgot
That even the dreadful martyrdom must run its course
Anyhow in a corner, some untidy spot
Where the dogs go on with their doggy life and the torturer’s horse
Scratches its innocent behind on a tree.
In Breughel’s Icarus, for instance: how everything turns away
Quite leisurely from the disaster; the ploughman may
Have heard the splash, the forsaken cry,
But for him it was not an important failure; the sun shone
As it had to on the white legs disappearing into the green
Water; and the expensive delicate ship that must have seen
Something amazing, a boy falling out of the sky,
had somewhere to get to and sailed calmly on.

And here’s the painting Auden is referring to.

Someone who occasionally proofreads for Mises.org recently double-checked with me that it’s OK to add an apostrophe s to form the possessive "Mises’s."

The short answer is yes it is OK and it would violate house style to form the possessive in any other way.

Here is the longer answer:

Not only is it OK, but it would be wrong to have it otherwise — not only in our house style but in general according to what the Chicago Manual of Style refers to as Strunk and White’s famous rule 1 ("Form the possessive singular of nouns by adding ’s"):

William Strunk, Jr. (1869–1946).  The Elements of Style.  1918.

II. ELEMENTARY RULES OF USAGE

Form the possessive singular of nouns with ’s.   Follow this rule whatever the final consonant. Thus write,   Charles’s friend Burns’s poems the witch’s malice   This is the usage of the United States Government Printing Office and of the Oxford University Press.   Exceptions are the possessives of ancient proper names in -es and -is, the possessive Jesus’, and such forms as for conscience’ sake, for righteousness’ sake. But such forms as Achilles’ heel, Moses’ laws, Isis’ temple are commonly replaced by   the heel of Achilles the laws of Moses the temple of Isis   The pronominal possessives hers, its, theirs, yours, and oneself have no apostrophe.

From my Mac guru, neural:

So, I just had a fit of laughter such as I haven’t experienced in years.

Microsoft released a new product called “Songsmith”. You sing into your microphone, and it writes backing music automatically. Honestly, a clever idea, if executed well.

So, item 1. Microsoft’s commercial for this product, is itself atrocious. It demonstrates once again that Microsoft has completely lost touch with the concept of “cool factor”.

http://uk.youtube.com/watch?v=3oGFogwcx-E

Item 2, you can run any vocal file into Songsmith, and it proceeds to write the backing music. So, some genius came up with the idea to run the David Lee Roth vocal track to “Runnin’ With the Devil” into Songsmith.

http://www.youtube.com/watch?v=nlgE5TKXWsA

Item 3, the resulting work of absolute genius:

http://music.metafilter.com/2943/Runnin-With-The-Songsmith

It’s so amazingly bad, it’s hilarious. I start laughing like a madman as soon as it starts to play.

I’m hoping this is the start of a whole new series of popular song vocal tracks run through Songsmith.

That would keep me entertained for ages.