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Take Everything You Know, And Burn It: A "New Normal" Recantation In Six Simple Lessons

Tyler Durden's picture


From Charles Gave of

A Recantation

Over the years a number of economists and political scientists have seen the error of their ways and come clean with a reasoned recantation. The mid-19th century British thinker John Stuart Mill famously changed his mind on the divisive question of industrial wages. My contribution to political economy hardly matches Mill’s, but I have spent my adult life pondering the linkages between economics and markets. However, in recent times I have come to realize that I was wrong in my most basic understanding of these relationships. So for the edification of younger readers, and possibly future generations, I have composed a single document to explain my about-face; to my tormentors I hope this proves that I have left behind impure thoughts and incorrect reasoning!

My recantation will take the form of key lessons learned:

Lesson #1 Government agencies allocate capital better than the private sector

We have moved into a new world where it is no longer necessary to have the market decide short rates, long rates or, for that matter, the currency  exchange rate. This happy state of affairs started with euro’s adoption in 2000 and intensified in 2002 when US real interest rates were driven negative. Given the massive successes of these policies, the authorities have expanded their horizon to seize control of other troublesome prices such as salaries, either by fixing them (minimum wages and the capping of financial professionals’ bonuses), taxing “excessive” remuneration (think anything above the minimum wage, especially in France). Even more creatively, new regulations such as Basel III or Solvency II have compelled savings to be invested in government securities rather than financing private sector capital spending. This properly “guided” financial system means a portfolio invested 50/50 in US and German bonds since 2000 has outperformed pretty much all assets with the exception of gold (we expect a directive banning the use of the “barbarous relic” anytime soon). Such a portfolio of government securities, I am told, will continue to outperform for the foreseeable future, and I, of course, believe it. Moreover, the next step will be to control the price of disorderly markets that still exist for traded goods and salaries. And the perfectly dreadful free movement of capital will soon be brought to heel through foreign exchange controls. Hence, a portfolio of securities issued by such enlightened authorities will surely outperform for the foreseeable future.

Lesson #2 Central banks should control asset prices and prevent them from falling

The problem with capitalism (a most disruptive and chaotic economic paradigm as anyone with a proper historical understanding knows) is that asset prices can jump around depending on financial market participants’ reading of "the expected marginal rate of return on capital". For this reason, central banks will soon act to phase out numerically inexact "expectations" since serious decision makers operate only in an environment of full certainty. This means that asset prices will henceforth only go up, and those market participants who disagree will be dissuaded through a restriction that makes “anti-social” trading activity prohibitively expensive (the Tobin tax on financial transactions). Unhealthy volatility will be removed by banning short sales. Another factor supporting prices is the punitive taxation of capital gains as very few wealthy people will now sell anything. And since such benign interventions must expunge risk from the economic system, it is only fair (and logical) to tax capital at the same rate as labor—France is, of course, leading the world.

Lesson #3 Darwin & Schumpeter were wrong, creationists are right; there is such a thing as a free lunch

I once thought that economic growth emerged from the unplanned process of "creative destruction" identified by a charlatan Austrian-American economist named Schumpeter. This was a misunderstanding since wealth and economic growth are both created "ex nihilo" by a benevolent god called "the state," whose role is to stimulate demand by buying goods and services that nobody needs with money that does not exist. This process, of course, leads to an ever rising standard of living.

Such truth was revealed by a great prophet named "Keynes" who some years ago endowed a new church and its clergy of "civil servants" who obey the orders of their economist cardinals. Such fellows are beyond criticism as they selflessly strive to improve the lives of lesser mortals. For their service and their abnegation, they are usually very well paid (as the clergy class always is when it supports the dominant political power). They deserve their stipend, or at least this is what they say, and, of course, unnecessary questioning of settled truths can be a bad career move.

Lesson #4 Towards a new orthopraxy

The promise of this religion is that compliance with the clergy’s edicts will ensure a happy and prosperous life. How do the new economic clergy measure whether its followers’ actions meet divine approval? By using a quantitative measurement called "the GDP"—a central feature of the Keynesian catechism that mixes added values created by the private sector through voluntary transactions and costs incurred by the public sector. (see GDP As A Concept: Misleading If Not Downright Criminal) These public sector costs are funded from taxes (the ignorant might assume such deductions would reduce incomes, but miraculously they do not) and through borrowings. It is an article of faith that any damage to the national balance sheet from the resulting debt will not be recognized. Hence, I will incant in a lusty fashion "glory to the GDP," even if my recidivist inner-self mutters a little like Galileo, "et pur si muove.”

Lesson #5 Wondrous tools used by the clergy to grow GDP

The new clergy uses two tools to guarantee that GDP always gets bigger. It prints "money" which is used to buy government debt and in turn allows the clergy to purchase goods and services on behalf of a needy population. For sure, some citizens may crave worldly vices bought with their own money, but mercifully the good shepherds know best. In order to secure economic control the new clergy needed to capture the central bank(s). Of course, in any reformation there will be apostates; in this case the unreconstructed German central bank which continues to resist the doctrinal shift propagated by Pope Heli I, a brilliant theoretician from the new world who has even promised to dispense money from the skies. Pope Heli I, together with leading cardinals in Europe and Japan, detests the old elite and their quaint belief in monetary orthodoxy. Why this backward-looking ancien regime clings to its old fashioned "market fundamentalism" is beyond me. Looking back, I wonder how I ever supported a group that did not promise happiness on earth for all.

Lesson #6 How to finance infinite needs

This is where the miracle promised by the new faith manifests itself. The elected government issues debt in unlimited amounts to pay for the politicians promises. Hey presto! The old malediction of penury has disappeared as the ability to pay has been unshackled from any worldly constraint. This new debt is bought by the central bank on the most pious orders of Pope Heli I.

Heli I’s omnipotence is revealed by his ability to part the sea of market turmoil and set interest rates on the new debt at zero. Even if the government issues an infinite amount of debt the fact that it pays zero interest means the service cost will remain zero. Truly, water into wine! Only a small and increasingly marginalized group of deficit hawks fail to appreciate the beauty of the new construction. The true believers, who proudly proclaim themselves "deficits deniers'" have seen the light and promise to lead their flock into a promised land of unlimited borrowing with no downside (see Deficit Deniers Of The World Unite).

I am puzzled that no one has thought of such an idea before, but then again what need have I for reading history—especially economic history— when, like Heli I, I can rely on my models. After all, these new revelatory tools of science have passed all tests of statistical significance. It does not matter that their forecasts have been consistently faulty—the model is compliant with the Keynesian sacred books.

In summary my new faith can be understood as follows:

  1. Government allocates capital better than the private sector, and should use interest rates, exchange rates, price fixing, price controls or whatever artifice it deems fit to ensure that capital goes to where it is properly directed.
  2. The alpha and omega of the central bank’s proper role is to finance government spending.
  3. Money belongs to the government, as we have seen properly demonstrated this week in Cyprus.
  4. Property rights, the antediluvian obsession of the market fundamentalists, have been subject to a doctrinal revision “the template” as also shown this week in the eastern Mediterranean.
  5. As a result of this new paradigm, asset prices must rise for the foreseeable future so long as Heli I decrees that the money printers keep printing. How can asset prices fall while the US central bank is printing more than $80bn a month? Even the unreformed Bundesbankers will surely grasp that if the European Central Bank did the same thing, the euro's problems would disappear overnight and prosperity would swiftly return to southern Europe, (Really, Germans should not be allowed into politics until they have had a primer indoctrination at either Cambridge or Princeton.)
  6. More money creates more wealth, and more wealth, especially in real estate, creates more jobs—evidence to the contrary in Spain only represents a small setback on this road to happiness. As we all know, a rise in real estate prices leads to a massive increase in productivity, a prerequisite for an increase in the standard of living.
  7. Services or goods provided to the population by the government, borrowing money from the central bank to pay the fellows who produce the goods that nobody needs with money that does not exist, will add tremendously to the GDP. This is a sure sign that the right policy is being pursued.
  8. These goods and services anyway have a higher moral value than the ones produced in the private sector. One should simply compare the "social usefulness" (a favorite notion of Lenin and Stalin) of a nurse versus a hedge fund manager to be convinced. I rest my case.

So from now on, I will buy what the US, UK, French, Spanish, or for that matter Greek governments and central banks tell me to buy. I cannot afford to offend the new clergy. As a market “intellectual” the risks to my social standing, not to mention career prospects, are too high. One day if I keep my nose clean and my thoughts pure, I may just be admitted to the College of Cardinals.


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Thu, 03/28/2013 - 18:20 | 3387013 Death and Gravity
Death and Gravity's picture

Reading the headlines only:


Wait, too early.

Thu, 03/28/2013 - 18:21 | 3387019 DJ Happy Ending
DJ Happy Ending's picture

The bullet points look like a garden variety Krugman NYT column.

Thu, 03/28/2013 - 18:21 | 3387025 McMolotov
McMolotov's picture

Here, though, the people leaving comments don't line up to tongue his Keynesian butthole.

Thu, 03/28/2013 - 18:25 | 3387035 NotApplicable
NotApplicable's picture

But if he posted this over at HuffPo, they'd claim him as their god.

Thu, 03/28/2013 - 18:37 | 3387071 francis_sawyer
francis_sawyer's picture

"Here, though, the people leaving comments don't line up to tongue his Keynesian butthole..."


Au contraire...

Ms Creant ~ the other day [though well intentioned], gave a PERFECT example as to, at least, HOW, people 'line up', whilst abberantly aligning themselves amongst the 'FIGHT CLUB do~gooders'...

Let's roll... :-)

Thu, 03/28/2013 - 19:04 | 3387137 redpill
redpill's picture

The western world is lurching into tyranny and people think its just an economic recession.

Hard to watch.

Thu, 03/28/2013 - 19:19 | 3387169 francis_sawyer
francis_sawyer's picture



redpill ~ I don't want to lure you into the francis_sawyer 'web of sin', [but I'm serious about this]... I became so frustrated [the other day], that it finally dawned on me that the only way to interact with people might be to go to the CHAT ROOMS [on ZH] to articulate my views... [thus, the aforementioned 'invite']...

Now ~ consider this... If the ONLY way to hope to establish legitimate conjecture on a subject is to dismiss yourself to secrecy [outside of the public eye]... Well ~ you're already, likely, immersed into deep shit...

Thu, 03/28/2013 - 19:50 | 3387226 Supernova Born
Supernova Born's picture

The religion is greed, the false idol is baseless fiat, the high priests are the central bankers and the sacrificial offering is the middle class.

Thu, 03/28/2013 - 19:53 | 3387241 spankthebernank
spankthebernank's picture

Well said.

Fri, 03/29/2013 - 00:58 | 3387828 Raymond K Hessel
Raymond K Hessel's picture

ZH has chat rooms?


So this is what Cato must have felt like watching the Republic turn into the Empire.  

So this is what Padmé must have felt like watching the Republic turn into the Empire.

So this is what Snowball must have felt like watching the Animal Farm turn into the Manor Farm.

So this is what Raymond must have felt like watching the American republic turn into the United States of America.

Fri, 03/29/2013 - 01:08 | 3387834 TruthInSunshine
TruthInSunshine's picture

I have approx 38 requests that I accepted, yet can't interact with via zchat.

I think it might have something to do with the adblockplus, https everywhere and ghostery (along with some other privacy plugins and settings).

Anyone else have this issue?

Fri, 03/29/2013 - 03:56 | 3387913 Manthong
Manthong's picture

trying to figure this out, too.

Mon, 04/01/2013 - 17:59 | 3397461 TruthInSunshine
TruthInSunshine's picture

I just accepted your request, FWIW.

I have no idea if people think I'm ignoring them since I only get requests and no follow up messages or whatever the chat thing is supposed to do.

Thu, 03/28/2013 - 18:26 | 3387040 TruthInSunshine
TruthInSunshine's picture

Lesson #7: Buy The Fukkin' (Non) Dip!**


** "Stock prices have reached what looks like a permanently high plateau."

Thu, 03/28/2013 - 18:34 | 3387056 kaiserhoff
kaiserhoff's picture

Lesson  #8

Economists can, in fact, divine chicken guts,

and from that science tell you exactly how you should live, whom you should marry, how many children to have, whether you are a cat or dog person, etc, etc, ad nauseum ,foreveh.  You are a SLAVE.  GET OVER IT.

Thu, 03/28/2013 - 18:35 | 3387064 billhilly
billhilly's picture

Lesson  #9

Don't EVER try to short MY market !

Ben Bernank

Thu, 03/28/2013 - 18:51 | 3387107 Cdad
Cdad's picture

Lesson #10

Do not forget your daily devotional, offered up to Big Brother whom you love.

Thu, 03/28/2013 - 18:40 | 3387081 zorba THE GREEK
zorba THE GREEK's picture

The silver market sure is behaving in contradiction to everything I know.

In fact it just spiked down 2% in a minute and back up again. Turn your

head SEC, you don't want to see this.

Thu, 03/28/2013 - 18:44 | 3387091 zorba THE GREEK
zorba THE GREEK's picture

And there it goes again. It looks like the PM surge protection team is working overtime.

Thu, 03/28/2013 - 21:04 | 3387427 LongBallsShortBrains
LongBallsShortBrains's picture

Friday humor came without warning. On a Thursday......

Thu, 03/28/2013 - 18:19 | 3387018 McMolotov
McMolotov's picture

Central planning for the muthafuckin' win. The Soviets were rank amateurs compared to Uncle Ben.

Thu, 03/28/2013 - 18:44 | 3387086 Cdad
Cdad's picture

Each and every day it is amazing to see The Federal Reserve Bank in action, now printing $85 billion per month to keep both the nation and the banks liquid in the face of insolvency, as it rationalizes its actions as defending job creation [as the labor pool in America continues to collapse], while denying that inflation exists [as processed food makers include horse meat, exploding butt "tuna" and now dog meat in their products to mitigate inflationary effects] while the masses hardly say peep.

Toss in a DOJ that thinks it can blow you up from altitude unmanned style without due process, and a DHS [never mind that it actually exists] stocking up on billions of rounds of ammo and thousands of armored vehicles...and add a pinch of "accounting is now discouraged/illegal", and a whiff of your deposits are no longer "safe assets"....oh...and should the govt not like the look on your face, a blanket of indefinite detention without redress of any kind.

It is one thing to have been out in front on The Fed issue, having had your epiphany closer to 1913 than to 2013 let's say...but what is going on now is so brazen, so obviously "in your face average Joe" that it has all actually become stupefying.  Daylight robbery of trillions has apparently been legalized in modern America.  Yeah!  Now that is one hell of an economic model right there, I tell you.

Which way to the next planet?



Thu, 03/28/2013 - 18:50 | 3387102 McMolotov
McMolotov's picture

"You have committed thought-crime. Go directly to FEMA Camp #9. Do not pass GO and do not collect your chocolate ration."

Thu, 03/28/2013 - 18:52 | 3387110 Cdad
Cdad's picture

No...really...I love Big Brother.  Truly, I do.

Thu, 03/28/2013 - 21:44 | 3387528 ToNYC
ToNYC's picture

FED lies and their winners won't survive.

Thu, 03/28/2013 - 18:20 | 3387021 Bicycle Repairman
Bicycle Repairman's picture

He wrote GDP.  I kept seeing GDR.  What's up with that?

Thu, 03/28/2013 - 18:24 | 3387028 DirkDiggler11
DirkDiggler11's picture

I don't know which reminds me of "The Planet of the Apes" more, this bizarro world we seem to be living in, or the current occupants in the White House.....

Thu, 03/28/2013 - 18:21 | 3387024 Bastiat
Bastiat's picture


Thu, 03/28/2013 - 18:26 | 3387029 Diogenes
Diogenes's picture

Too long. Let's simplify.

1) Work is for suckers.

2) The government can borrow money every year and never pay it back.

3) If anything goes wrong don't panic. All you need is the slick trick, the quick fix and the gimmick.

Thu, 03/28/2013 - 18:31 | 3387052 blu
blu's picture

Okay! So the problem is ... what?

Thu, 03/28/2013 - 18:34 | 3387060 Diogenes
Diogenes's picture

"Okay! So the problem is ... what?"


Eventually you run out of other people's money.

Thu, 03/28/2013 - 18:40 | 3387077 blu
blu's picture

"Eventually you run out of other people's money."

Then just print moar moneez and spend them. Seriously.

People around here kinda don't get it. It's not actually about money. It never was about money. Not even a little bit.

Sat, 03/30/2013 - 07:07 | 3391026 Kobe Beef
Kobe Beef's picture

You're right. It's about controlling the issuance of money. Doesn't matter how broke, dysfunctional, and debased countries, industries, and people become, so long as the cartel controls issuance, oligarchical collectivism survives, and they win.

Thu, 03/28/2013 - 19:38 | 3387204 JR
JR's picture

The miracles of Keynes…

Eleven states now have more residents dependent on the government than they have people with jobs in the private sector. These are:

Ohio, Hawaii, Illinois, Kentucky, South Carolina, New York, Maine, Alabama, California, Mississippi and New Mexico.

“Last month, the Senate Budget Committee reported that in 2011, between food stamps, housing, child care, Medicaid and other benefits, the average U.S. household below the poverty line received $168 a day in government support. To put this into perspective, the median household income in America is just over $50,000, which averages out to $137.13 a day.

Welfare now pays the equivalent of $30 an hour for a 40-hour week, while the average job pays $25 an hour.” -- AFP - March 25, 2013

Thu, 03/28/2013 - 21:30 | 3387497 espirit
espirit's picture

Wow! I do need to move out of Florida.

Fri, 03/29/2013 - 01:01 | 3387830 Raymond K Hessel
Raymond K Hessel's picture

What is the source for this claim?  I need to look at it.  It's so fantastical that the govt would admit it that I can't believe it.

Fri, 03/29/2013 - 11:52 | 3388580 JR
JR's picture

"Poor" Households Getting $168 in Welfare Per Day from Taxpayers by Katie Pavlich, news editor, Town Hall

With charts…

“It's official. Taxpayers are no longer simply helping the poor, they're subsidizing the lives of welfare recipients at a better rate than their own. The Senate Budget Committee has released a report showing households living below the poverty line and receiving welfare payments are raking in the equivalent of $168 per day in benefits which come in the form of food stamps, housing, childcare, healthcare and more. The median household income in 2011 was $50,054, totaling $137.13 per day. The worst part? Welfare payments are equivalent to making $30 per hour for 40 hours a week. The median wage for non-welfare recipients is $25 per hour but because they pay taxes, unlike welfare recipients, the wage is bumped down to $21 per hour. From the report:

“For fiscal year 2011, CRS identified roughly 80 overlapping federal means-tested welfare programs that together represented the single largest budget item in 2011more than the nation spends on Social Security, Medicare, or national defense. The total amount spent on these federal programs, when taken together with approximately $280 billion in state contributions, amounted to roughly $1 trillion. Nearly 95 percent of these costs come from four categories of spending: medical assistance, cash assistance, food assistance, and social / housing assistance. Under the President’s FY13 budget proposal, means-tested spending would increase an additional 30 percent over the next four year…”

Fri, 03/29/2013 - 12:23 | 3388634 JR
JR's picture

It turns out that welfare elects presidents. Of the welfare states…  

Obama won Ohio, Hawaii, Illinois, New York, Maine, California and New Mexico.

 Mitt Romney was victorious in Kentucky, South Carolina, Alabama and Mississippi.

If the electoral votes of those welfare states were switched, Romney would be president with a total of 309 electoral votes and Obama with 197.

Out of Obama’s 332 electoral votes, those states represented 135 votes. Out of Romney’s 206 electoral votes, the 4 of those states that he won represented 32 electoral votes.

Here are the Obama states and number of electoral votes cast: Ohio -18, Hawaii - 4, Illinois - 20, New York- 29, Maine - 4, California - 55 and New Mexico - 5, for a total of 135 votes.

Here are the Romney states out of the 11: Kentucky - 8, South Carolina - 9, Alabama - 9, and Mississippi - 6, for a total of 32 votes.

It's money for votes; you get people to vote for you and then you pay them. And if it turns out they need money, i.e., jobless, illegal immigrant, already on welfare, it's easier to buy their vote. And if it doesn't add up to enough votes to buy the election, you always can open the borders wider and sue states who try to protect their borders.

Thu, 03/28/2013 - 22:22 | 3387601 johnnynaps
johnnynaps's picture

I agree 95%! Legitimate work is for suckers......unless you like paying for welfare recipients, welfare bankers, corrupt politicians, the MIC, TBTF....oh Z'Hers are too smart to go on!!!!!

Thu, 03/28/2013 - 18:26 | 3387038 NotApplicable
NotApplicable's picture

The only thing I see missing is my ration of soma.

Thu, 03/28/2013 - 18:29 | 3387046 Bastiat
Bastiat's picture

You'll have to settle for Prozac.

Thu, 03/28/2013 - 19:30 | 3387190 jimmytorpedo
jimmytorpedo's picture

Prozac is mostly flouride, you (probably) already get your fair dose.

go ahead, NSA, i mean, google it

Thu, 03/28/2013 - 20:49 | 3387395 Bastiat
Bastiat's picture

Carbon filter is my friend.  Before that, 20 years of artesian.

Thu, 03/28/2013 - 18:26 | 3387039 drink or die
drink or die's picture

The status quo sacrifices everyone who doesn't believe the above 6 steps first before finally consuming itself.  Glad to see Charles has figured it out.

Thu, 03/28/2013 - 18:29 | 3387045 stant
stant's picture

yes it is a glorious failure!! one we will never afford again

Thu, 03/28/2013 - 18:31 | 3387047 MrNude
MrNude's picture

You forgot the timeless classic: DON'T BUY GOLD.

And I say to thee, for the very fact it pisses people like Paul Krugman off that you should buy as much physical as you can get into your actual hands. Don't listen to the fairy tales those clowns tell you about how it will be worthless to hold onto and you will not be able to buy anything with it.

How can they suddenly change history and thousands of years of Gold being the ultimate store of value. Just look at what happened to the USSR after it collapsed, the barter system came back because people had no money, do you want to be the schmuck trying to bargain and barter for food with thin air and food stamps or the person who sleeps with a full belly thanks to forward planning, still think it can't happened today? wakey wakey look around you and what is happening right now.

Thu, 03/28/2013 - 18:37 | 3387069 Bastiat
Bastiat's picture

It is forbidden, of the devil.

Thu, 03/28/2013 - 21:13 | 3387456 LongBallsShortBrains
LongBallsShortBrains's picture

We need all of the help we can get. And the real devil doesn't have time for this shit. We're fucked.

Thu, 03/28/2013 - 18:31 | 3387050 blu
blu's picture

Everyone liked the free market until the free market ran out of cheap oil.

Thu, 03/28/2013 - 18:32 | 3387057 Wakanda
Wakanda's picture

Astute observation of the state as a savior religion.  We're living in a "theocrostate"? where critical thinking is heresy.

When I am burned at the stake, would someone please pop a joint in my mouth?

Thu, 03/28/2013 - 18:58 | 3387123 Winston Churchill
Winston Churchill's picture

You will not a joint left to pop at that point.

Most joints were dislocated prior to execution.

Thu, 03/28/2013 - 19:01 | 3387129 Wakanda
Wakanda's picture

OK, how about a big, fat splee for old lang syne?

Thu, 03/28/2013 - 22:07 | 3387571 King_Julian
King_Julian's picture

Just in time for Easter. History certainly does rhyme...

Thu, 03/28/2013 - 18:35 | 3387062 blu
blu's picture

"et pur si muove.”

For those not up on their Latin; but she moves nevertheless.

Galileo was a stubborn old fart. Good on 'em.

Thu, 03/28/2013 - 19:33 | 3387194 Bingfa
Bingfa's picture

LOL ..."The Russians have managed to contain their delight admirably to date"

Thu, 03/28/2013 - 18:38 | 3387066 Bastiat
Bastiat's picture


Bumper sticker I saw today:  "PBS Mind in a Fox News World"   Infintiy Q45

Should have been:  "Tripping, a mile from shore, on thin ice"



Thu, 03/28/2013 - 18:41 | 3387084 ziggy59
ziggy59's picture

Lesson 7: Everything is FUBAR!

Thu, 03/28/2013 - 18:42 | 3387088 Agent 440
Agent 440's picture

I had this dream: the risk free rate was 2%!! I felt like a lottery winner.

Thu, 03/28/2013 - 18:43 | 3387089 lolmao500
lolmao500's picture

Bullish :

North Korea’s leader has signed off on a plan to prepare rockets to be on standby for firing at U.S. targets

In other news, US military goes on THREAT LEVEL RED and the X-Band Radar (radar for missile shield) left Pearl Harbor yesterday.

Thu, 03/28/2013 - 18:52 | 3387105 teamr2
teamr2's picture

That will add a percent or two to the dow and probably shave the same amount off of the PM's. Crazytown!

Thu, 03/28/2013 - 20:13 | 3387287 lolmao500
lolmao500's picture

KCNA reported that Mr Kim had "judged the time has come to settle accounts with the US imperialists in view of the prevailing situation".

Very bullish.

Thu, 03/28/2013 - 18:52 | 3387109 Winston Churchill
Winston Churchill's picture

Honest , I see six fingers, or however many you say there are.

Thu, 03/28/2013 - 18:59 | 3387124 Black Markets
Black Markets's picture

9. Eat shit and die you worthless pieces of shit. {did I say that out loud?}

Thu, 03/28/2013 - 19:00 | 3387126 evernewecon
evernewecon's picture






There's a third person in the living room. 


monopoly (and family: risk filtering and gatekeeping (next img.)


TBTF's monopoly of the currency.

Health care: monopoly's defined by the ability

   to command price based on the ability to pay,

   and that's determined under ObamaCare by

   risk, but including increasing risk and its

   concomitant higher price tag being part of

   what qualifies you for subsidy eligibility.

    So it's monopoly, including because an effort

   to repeal immunity from anti-trust was openly


combined with risk filtering.

Health care's labyrinthic.


Does The Annual Fee On Health

Insurance Providers Work As

Some Sort Of Broad Brush Risk


My View:

No.  It Bears No Relation.

Does It Have Any Monopoly Mitigative Effect?

My View:

No.   The Carriers Keep Their

Statutory Profit Margins.  Therefore,

This Will Be Passed

Along As A Tax On The Insured

 It's a cartel-broker where one's assigning

 services per risk.  It's insurance where one

 has legitimate risk equalization, a necessity

 where the efficiency and discipline of the market

 can still help but where we all know we're

 generally declining and where accidents and germs

 could care less about price and where there are

 such things as clinical realities and epidemiology.

We've the former, not the latter.

 However, it DOES replace:

the inability to

move between states for r.e./job op's

lest one suffer an exclusion and the

ultimate choice for many of "go naked"

or "premium death spiral" (for many.)

I’m “market progressive” (read: progressive)

and the basic problem is ObamaCare

is not-really-progressive.

It lacks a whole world of “clinical rationalization”

as well.  But it’s really about cartel.

So it's really risk filtering.   The GSE

are bank lending with the losses filtered.

It should instead be education/empowerment/

enabling mechanisms ("bootstrapping.")

Gatekeeping is the not-older woman on Medicare

cause of its Disability and thriving on physical

therapy but told to go back to languishing

and wiping out most of the physical therapy

gains because here physical therapy allowance

for the calendar year is maxed out and she

has to go back to drugs.

Thu, 03/28/2013 - 20:27 | 3387332 JR
JR's picture

Like a locomotive, Obamacare is coming. And at the controls, Big Pharma!

And no wonder, as your Salon link points out. The major player in the Senate health care negotiations, Elizabeth Fowler, who took the lead with Senator Max Baucus in drafting the legislation, was a prior lobbyist for WellPoint, the nation’s largest health insurance provider.

More amazingly still, as Glenn Greenwald points out, when the Obama White House needed someone to oversee implementation of Obamacare after the bill passed, it put this former health insurance industry executive “in charge of implementation of its new massive health care law.”

Liz subsequently left the White House “for a senior-level position leading 'global health policy' at Johnson & Johnson's government affairs and policy group."

Wrote Greenwald in December in your Salon-linked article:The pharmaceutical giant that just hired Fowler actively supported the passage of Obamacare through its membership in the Pharmaceutical Researchers and Manufacturers of America (PhRMA) lobby. Indeed, PhRMA was one of the most aggressive supporters - and most lavish beneficiaries - of the health care bill drafted by Fowler.

“Mother Jones' James Ridgeway proclaimed ‘Big Pharma’ the ‘big winner’ in the health care bill.

Monopoly (from your link):


  • Profit Maximizer: Maximizes profits.
  • Price Maker: Decides the price of the good or product to be sold.
  • High Barriers to Entry: Other sellers are unable to enter the market of the monopoly.
  • Single seller: In a monopoly, there is one seller of the good that produces all the output.[5] Therefore, the whole market is being served by a single company, and for practical purposes, the company is the same as the industry.
  • Price Discrimination: A monopolist can change the price and quality of the product. He sells more quantities charging less price for the product in a very elastic market and sells less quantities charging high price in a less elastic market.

Sources of monopoly power

Monopolies derive their market power from barriers to entry – circumstances that prevent or greatly impede a potential competitor's ability to compete in a market. There are three major types of barriers to entry; economic, legal and deliberate…

Obama Care – a massive insurance monopoly! And are we going to pay…and pay…and pay...

Thu, 03/28/2013 - 21:13 | 3387458 Bingfa
Bingfa's picture

Study estimates Obamacare will raise individual claim costs 32%++++++....


Thu, 03/28/2013 - 19:00 | 3387127 mt paul
mt paul's picture



are the BRICS

going to open a new bank

for international trade next week....

Thu, 03/28/2013 - 19:08 | 3387141 Winston Churchill
Winston Churchill's picture

Already announced new BRICS world bank ,and pooling of currency reserves.

Two moves left on the board to a new GRC.

King dollar is in check

Don't play chess or Go against Russians ,and Chinese.

Thu, 03/28/2013 - 19:30 | 3387187 Yen Cross
Yen Cross's picture

  Winston and Mt. Paul may I present you with a BRICs figure?    

   Brazil    10.100    10.140    9.800    0.230    2.33%    8.811    8.248    23:16:41 

I'm sure the Brazilian government is happy with 9%+ interest rates on the Fed. POMO dump?  <SARC>

Thu, 03/28/2013 - 19:09 | 3387144 Winston Churchill
Winston Churchill's picture

Already announced new BRICS world bank ,and pooling of currency reserves.

Two moves left on the board to a new GRC.

King dollar is in check

Don't play chess or Go against Russians ,and Chinese.

Thu, 03/28/2013 - 19:10 | 3387147 Bingfa
Bingfa's picture


When you absolutely, positively have to have it over night....

Thu, 03/28/2013 - 19:21 | 3387150 Yen Cross
Yen Cross's picture

     Recantations are for African Shamans.  Incantations are for Central Banksters. 


   Read it word for word Tyler. I'm going spear fishing.

Fri, 03/29/2013 - 00:12 | 3387780 bigyimmy007
bigyimmy007's picture

Now that's a place where drone striking for terrorist activity would be justified.

Thu, 03/28/2013 - 19:21 | 3387172 stiler
stiler's picture

the wealth of the world was created when God made the earth with all iits hidden treasures of gold, silver and precious stones. That's not ex nihilo.

Paper belongs to the ents.

Thu, 03/28/2013 - 19:22 | 3387175 RhoneGSM
RhoneGSM's picture

Pair trade for North Korea attacking South: Long Apple Short Samsung. No brainer

Thu, 03/28/2013 - 19:23 | 3387179 JR
JR's picture

Zero Hedge reported today that the final Q4 2012 GDP revision came in this morning at 0.37%. And it probably was much lower if the truth were known.  Also, per Zero Hedge, initial jobless claims missed expectations by the most since the second week of November (following Hurricane Sandy)”while “chaotic idiocy continues in Emergency Unemployment Compensation (which jumped 125k in the latest week).”  At the same time,  the February Chicago PMI “tumbled from 56.8 to 52.4…the biggest miss in 11 months.”

New Orders “tumbled from 60.2 to 53.0, the most since May 2011.”

The country is in recession and the government can’t pull it out. They just can’t make any numbers go up except the stock market and the stock market is neither an enrichment of the country nor its major population.

This is a country in decline. And the culture is in decline. The Fed can push and push but it can’t make this thing run. The Fed and the politicians have pushed the country into a morass.

The government is getting ready for a revolution and do you know why? A revolution is coming!  

Americans are buying a gun every 1.5 seconds, yet Harry Reid was forced to drop the assault weapons bill of Diane Feinstein’s from the gun program wanted by the Senate.

People are afraid of the government and rightly so.

Thu, 03/28/2013 - 19:50 | 3387230 Yen Cross
Yen Cross's picture

  Rock on J.R.  I just hope the indoctrination of our youth is 'savable'.

Thu, 03/28/2013 - 21:32 | 3387502 My Days Are Get...
My Days Are Getting Fewer's picture

Why do you think that I converted  six figures cash into bullion this week.

I am sleeping better now.

Fri, 03/29/2013 - 07:51 | 3388051 WTFx10
WTFx10's picture

Guns don't kill people, Awake pissed off and lied to Americans kill banksters?

So the government tells us think of the children. thats why we need gun Control.

Who does Gun Control benefit? The criminals left with the Guns and who are the criminals?


Do the Palestinians have a 2nd amendment?


Thu, 03/28/2013 - 19:44 | 3387221 B2u
B2u's picture

I spent all that money for my MBA, geez...this is cheaper.

Thu, 03/28/2013 - 19:45 | 3387223 Terrorist
Terrorist's picture

Thank God!
Somebody finally gets it.

Thu, 03/28/2013 - 19:54 | 3387246 tailgunner
tailgunner's picture

Pathetic piece, self ingrandizing, with a moral code of a banker

Thu, 03/28/2013 - 19:58 | 3387252 Slightly Insane
Slightly Insane's picture

You forgot Number 9 - the "It's not a shotgun gun barrel in your mouth ..... it's a feeding tube"!

Thu, 03/28/2013 - 20:02 | 3387258 stiler
stiler's picture

is it because muppets have no feet that Jamie Dimon does not bend over to wash, kiss (and smell) a muppet's foot.

Thu, 03/28/2013 - 20:01 | 3387260 juggalo1
juggalo1's picture

The markets are subject to irrational panics and bubbles.  These are not all the fault of the federal reserve.  When the markets are behaving irrationally there really is a free lunch.  Sorry.

Thu, 03/28/2013 - 20:52 | 3387400 Pareto
Pareto's picture

Fuck.  Another dipshit interpretation of Lucas leads to another fucktard conclusion that markets are irrational.  What constitutes an "irrational market"?  And how do you logically arrive at the conclusion that from this comes a free lunch?  Markets comprise a dynamic voluntary system of production and exchange between individuals seeking to satisfy infinite preferences of wants and needs subject to scarcity (price).  How the fuck is this irrational?

There is nothing irrational about a panic, or, a bubble. Rather it is totally rational behaviour responding to price signals, including the ones fixed (set) by government - which is entirely the source of our problems and what this site is about.  And the ONLY fucking free lunch I ever see, is when government takes a 40% cut of everything I earn.

Fuck being "sorry" for thinking you got it all figured it out while EVERYBODY else is mistaken.  Smarten up and connect the fucking dots.  Its not complicated.

Thu, 03/28/2013 - 20:01 | 3387261 PubliusTacitus
PubliusTacitus's picture

Fuck you Krugman!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Thu, 03/28/2013 - 20:08 | 3387276 Arrowflinger
Arrowflinger's picture

9. Rule of Law is Dead

Fri, 03/29/2013 - 01:01 | 3387831 Raymond K Hessel
Raymond K Hessel's picture

Sky is blue and water is wet.

Thu, 03/28/2013 - 20:18 | 3387299 lindaamick
lindaamick's picture

In 2008 the average 401k lost 30% when the crash came. 

Did you see any riots?  No.

When the next crash comes and people lose 40 or 50% will you see any riots?  No.

Basically US citizens will just muddle through.  Honestly my take is that regular citizens KNOW intuitively based upon the facts how the US military exterminates millions and always has and therefore feels lucky that the merciless savagery has not been visited on them...

It's fear baby.


Thu, 03/28/2013 - 20:39 | 3387361 shinobi-7
shinobi-7's picture

Rather funny and to the point. But I feel some unease when what is done today is called Keynesianism. It is not. The points of Keynes were rather subtle and certainly not to flood the market ad infinitum. Keynes recognized that market mechanisms are not perfect and that just as for a plane, a deflationary death spiral is a kind of equilibrium and he therefore advocated countercyclical and temporary actions to avoid such a fate. He would probably not approve what financial authorities are doing today and most certainly be vocal on Zero Hedge to tell us that the machine is broken!

Thu, 03/28/2013 - 21:39 | 3387513 espirit
espirit's picture

Have you read any of his posts on ZH?

Thu, 03/28/2013 - 21:42 | 3387522 espirit
espirit's picture

Now where did I put that spare moniker?

Fri, 03/29/2013 - 01:48 | 3387861 shinobi-7
shinobi-7's picture

Few indeed. :-)

Still I am convinced that what we call Keynesianism today is nothing of the sort. Endless deficits, systemic unbalance, cancerous governments, scientific progress automatically absorbed in 2% yearly inflation, out of control expenses... These are the bastard children of expediancy and short term fixes not of a rational economic theory.

Also don't forget one of his most famous quote: "When I am proved wrong, I change my mind! What do you do?"

Thu, 03/28/2013 - 21:51 | 3387545 GeneralMunger
GeneralMunger's picture

Don't hang # 3 on Christians because Jesus and his Apostles never advocated free lunches.  To wit, the Apostle Paul wrote:

2 Thessalonians 3, 8-15

8 Neither did we eat any man's bread for nought; but wrought with labour and travail night and day, that we might not be chargeable to any of you:

Not because we have not power, but to make ourselves an ensample unto you to follow us.

10 For even when we were with you, this we commanded you, that if any would not work, neither should he eat.

11 For we hear that there are some which walk among you disorderly, working not at all, but are busybodies.

12 Now them that are such we command and exhort by our Lord Jesus Christ, that with quietness they work, and eat their own bread.

13 But ye, brethren, be not weary in well doing.

14 And if any man obey not our word by this epistle, note that man, and have no company with him, that he may be ashamed.

Thu, 03/28/2013 - 22:54 | 3387668 eddiebe
eddiebe's picture

And lest we forget: The cart pushes the horse!

Fri, 03/29/2013 - 01:14 | 3387842 q99x2
q99x2's picture

The free lunch needs to be larger. We want all the Rockefeller's money.

Fri, 03/29/2013 - 01:52 | 3387863 Audacity17
Audacity17's picture

Our sun is about the only free lunch.

Fri, 03/29/2013 - 03:33 | 3387901 AnAnonymous
AnAnonymous's picture

Good quality 'american' articles raining down. No shortage in those ones, 'americans' can provide.

So many 'american' cheap propaganda in this article.

As if the question to know if the private or the public sector could allocate better capital matters in 'american' economy.

Again, the false dichotomy between private/public.

As if there was another end possible than depletion of resources in 'american' economics...

Both the private and the public sectors proved themselves able to lead humanity on that path. As long as they are 'american', it is what all matters...

Fri, 03/29/2013 - 08:22 | 3388114 ISEEIT
ISEEIT's picture

Fantastic read. Sad though because 99% of the inmates could read it and have no clue what the hell is being mocked. So far it's been a nearly silent coup.

Fri, 03/29/2013 - 09:12 | 3388214 falak pema
falak pema's picture

This guy sounds like a neo liberal who is pissed off with the failings of the invisibly handed market, disgusted at its evident morph into dystopian bubbleonomics in ZIRP and the resultant knee jerk into infinite bail out mode of neo-feudal kings by their CB printer press. He is lost like a Robinson Crusoe without compass or a Man Friday.

No need to regress into obscurantism...

He should read P C Roberts and his enlightened thesis on the decadence of the neo liberal NWO and its labour arbitrage model to make the .1% richer than rich at the expense of the middle class demise of first world. He will then see right from wrong, night from day.

and here : 3387999

As for the rest its a game of smoke and mirrors, the current totalitarian bend, his misguided (slanted?) pretence that these "statist plays" are there to protect a leninist state construct; quite the contrary, the FED is the instrument of this neo-feudal capitalist oligarchy bent on world hegemony in total aggression mode.

We are in the heart of the capitalist cabal whose religion has lost its ten commandments in neo-liberal translation, as practiced currently by Pax Americana. And it leads to the same result as the other statist construct of Leninism but from a totally different perspective.

We need our democracy back.

Fri, 03/29/2013 - 12:56 | 3388715 Nehweh Gahnin
Nehweh Gahnin's picture

Google "satire" brah.

Fri, 03/29/2013 - 11:12 | 3388506 monad
monad's picture

Brother, you asked for it.

Fri, 03/29/2013 - 12:19 | 3388635 GeezerGeek
GeezerGeek's picture

A minor problem, but important: Darwin was wrong. He envisioned the living cell as a little more than a blob of jelly. In fact, living cells are each far more complex than Ford's River Rouge manufacturing complex. And that's aside from the fact that the information contained in DNA in a cell could not have been assembled randomly; entropy forbids it.

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