Doubt and verify

It is ALWAYS wise to doubt any assertion made by a progressive, no matter how credentialed:

Jonah Goldberg quotes Robert Reich: “Bill Clinton never mentioned the words `health care reform’ after the 1994 midterms.” Reich’s claim is false — wildly false. A check of the database at the American Presidency Project shows that President Clinton used the phrase on 116 occasions after the midterm.

What’s remarkable is how being shown to be factually incorrect seldom slows them down in the least.

Time preferences

This should serve as a cautionary tale to those who still believe that giving money to the impoverished is a rational solution to poverty. And yet, we can be confident that it won’t.

A short drive away, Hamon Matipe, the septuagenarian chief of Kili, confirmed that he had received that sum [$120,000] four months earlier. In details corroborated by the local authorities, Mr. Matipe explained that the provincial government had paid him for village land alongside the Southern Highlands’ one major road, where the government planned to build a police barracks.

His face adorned with red and white paint, a pair of industrial safety glasses perched incongruously on a head ornament from which large leaves stuck out, Mr. Matipe said he had given most of the money to his 10 wives. But he had used about $20,000 to buy 48 pigs, which he used as a dowry to obtain a 15-year-old bride from a faraway village, paying well above the going rate of 30 pigs. He and some 30 village men then celebrated by buying 15 cases of beer, costing about $800.

“All the money is now gone,” Mr. Matipe said. “But I’m very happy about the company, ExxonMobil. Before, I had nothing. But because of the money, I was able to buy pigs and get married again.”

Now, not everyone is capable of blowing $120,000 in only four months and winding up with nothing but another notch on the old bedpost. But this sort of behavior is seen all the time, from professional athletes to lottery winners. So long as an individual’s time preference is limited to the short term, he will never amass any wealth because he will immediately spend any amount of money that is given to him or earned by him.

This is why societies that insist on transferring wealth from those with long-term time preferences to short-term preferences are ultimately doomed. One can always eat a heartier meal if one does not save the pigs for breeding and the grain for planting, but there won’t be anything left to eat come the winter. And unfortunately, one cannot instill time preferences though education due to the human talent for rationalization.

Stay on target

Remember this January 1st prediction for December 2010? “The national median existing-home price will not rise 4% from $172,600 to $179,500 as predicted by NAR’s lead economist Lawrence Yun, but will fall below 165k instead.”

From yesterday’s September NAR report: “The national median existing-home price for all housing types was $171,700 in September, which is 2.4 percent below a year ago.”

Considering that the impact from the Great Mortgage Fraud hasn’t begun to appear yet in the housing statistics, I’m not the least bit concerned about this one panning out. And on that note, MSNBC’s Dylan Ratigan is doing an excellent job covering what the so-called conservative media won’t. The Bill Black segment starting at 6:20 is particularly informative, although the nurse that precedes him is fantastic in her observation that virtually none of the politicians, including the Tea Party all-stars, are talking about holding the bankers responsible for their crimes. Black draws a very clear picture pointing directly at the mortgage banks as being the sole causal factor of the fraud, with the Federal Reserve becoming subsequently complicit in the coverup through its purchase of $1.5 trillion in fraudulent loans. He also explains how the “deadbeat” borrowers cannot have been responsible for committing any fraud due to their ignorance of the loan ratios and various formulas involved in framing their “liars loans” to allow their categorization as AAA-rated loans.

Black is entirely correct to say that the Federal Reserve cannot be trusted in its belated “investigation” that Bernanke announced yesterday. And it is obvious that the Treasury cannot be trusted either.

“The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program.”