Grabbed from Mish’s Global Economic Trend Analysis blog:

Things are looking pretty bleak. There is bad news in housing, the stock market, commercial real estate, jobs, and wages . Unfortunately, no matter how bad things are, someone always comes along to propose a “solution” that is guaranteed to make the situation much worse. Please consider the following ideas.

Punish savers and make them spend money: Near-zero interest rates and even a tax on bank deposits are necessary to force those with cash to use it productively

Assuming interest rates are reduced to about 1 per cent today, it will make little difference to savers if they fall all the way to zero. To all intents and purposes, income from bank accounts will be reduced to nil.

The next logical step, although it may be politically controversial, would be to do the opposite of what the Tories suggest. Instead of reducing taxes on interest payments, the Government could tax all bank deposits and other risk-free savings. This would create a negative risk-free interest rate, encouraging savers either to invest in property, shares and other productive assets – or simply to save less and consume more. In either case, the result would be more consumption and physical investment, less unemployment and faster recovery from the slump.

The Case for Bigger Government

Thirty years ago, Americans were told that government was part of the problem, not the solution. We bet on the magic of the marketplace, but the magic proved illusory. Every major part of the economy – health care, energy, transportation, food and finance – is deeply troubled. Now we are ready to invite government back in to help solve our problems, if the price is right and the strategies are convincing. By spending more through government and treating government as a partner rather than an enemy of the private sector, we can potentially save vast sums in the long run through a more efficient health-care system, safer climate, more competitive economy and more secure country.

A big difference between the U.S. and the rest of the rich world is that for the past 30 years or so, Americans consistently rejected “government solutions” to the problems of health, poverty, education and the environment.

What Hath Big Government Wrought?

• It was big government that brought us Fannie Mae and Freddie Mac.
• It was big government that sponsored the war in Vietnam and the war in Iraq.
• It was big government that gave us nightmare problems we face with Medicaid and Medicare.
• It was big government that gave us overlapping hundred billion dollar systems in the Army, Navy, and Air Force.
• It is big government that sponsored 10’s of thousands of pork barrel projects and bridges to nowhere.
• It is big government that gave us the Davis Bacon Act and the insanity pf prevailing wages.
• It was big government sponsorship of the rating agencies that created the “AAA” rated securities that went to zero.
• It was big government that took us off the gold standard and illegally confiscated citizen’s money.
• It was big government that allowed fractional reserve lending and theft by inflation this is the root cause of a shrinking middle class today.
• It was big government that created the Fed, and it was the Greenspan Fed that blew serial bubble after bubble culminating in the housing crash we are in today.

Big government either created or made worse every problem we have today. Yet Time Magazine and free lunch proponents like Krugman propose an even bigger government is necessary to fix the enormous problems of an already too big government.

I’d like to add that the idea that “Americans consistently rejected “government solutions” to the problems of health, poverty, education and the environment” is completely fallacious and ridiculous. Medicare, medicaid, the war on poverty, from little or no federal involvement to No Child Left Behind, huge federal college subsidies, the increase of scope and power of the EPA, etc. Just because Americans didn’t jump on board as quickly as other socialist / fascist States doesn’t mean such ideas were rejected.

http://www.theglobeandmail.com/…

Japan’s Defence Minister dismissed his air force chief yesterday for writing an essay that claims the country was not an aggressor in the Second World War and was trapped into getting involved by the United States.

Toshio Tamogami’s essay will likely upset relations with China and South Korea, which remain bitter about Japan’s wartime occupation and say Tokyo has failed to properly atone for its invasion of the Korean Peninsula, Taiwan and China.

The claims drew a swift rebuke from politicians, and Defence Minister Yasukazu Hamada said he would dismiss the general. “I think it is improper of the air force chief of staff to publicly state a view that clearly differs from the that of the government,” he told reporters after the essay was made public yesterday.

Is this guy full of it when he claims Japan was not an aggressor? Absolutely. Is there some truth in the claim the United States goaded the Japanese government? Absolutely. It’ll never be known how much was known and how much was deliberate but there are some interesting facts concerning the event. A quick Google search also reveals a History Channel special on the topic.

The topic is interesting but the reason for posting this story was what I highlighted above. The idea that a person, regardless of his association, should be dismissed due to his opinion “that clearly differs from that of the government.” Perhaps it’s a translation issue but apparently to say so succinctly that the issue was not that there was just a disagreement or that what he said was wrong but that if differs from that of the government line. Very nationalistic. Very “Country First.” Very unsurprising.

http://www.nytimes.com/…

The military trainers who came to Guantánamo Bay in December 2002 based an entire interrogation class on a chart showing the effects of “coercive management techniques” for possible use on prisoners, including “sleep deprivation,” “prolonged constraint,” and “exposure.”

What the trainers did not say, and may not have known, was that their chart had been copied verbatim from a 1957 Air Force study of Chinese Communist techniques used during the Korean War to obtain confessions, many of them false, from American prisoners.

The recycled chart is the latest and most vivid evidence of the way Communist interrogation methods that the United States long described as torture became the basis for interrogations both by the military at the base at Guantánamo Bay, Cuba, and by the Central Intelligence Agency.

The only change made in the chart presented at Guantánamo was to drop its original title: “Communist Coercive Methods for Eliciting Individual Compliance.”

Reduce, reuse, recycle.

http://www.airforcetimes.com/…

Republicans receive the largest slice of presidential campaign contributions made by military members and their spouses, but leading anti-war candidates are getting a substantial cut, too, according to an independent analysis of political contributions.

From January 2007 through March of this year, service members or civilian employees of the military donated at least $766,000 to presidential candidates, according to data made available April 20 and provided by the Center for Responsive Politics, a nonprofit research group in Washington.

The analysis included donations of at least $200 made by individuals who listed their employer as one of the four branches of the military – Army, Air Force, Navy and Marine Corps – or the Coast Guard, National Guard, Army Air Force Exchange Service, armed forces or military.

These donors gave the largest amounts to Rep. Ron Paul, the long-shot Republican candidate from Texas who has acknowledged defeat in the nomination process but continues to campaign, and Sen. Barack Obama, the Democrat from Illinois.

During the reporting period, Paul – a former Air Force surgeon who broke with his party to vote against the Iraq war – received the most military contributions, with $201,271.

That’s significantly more than the presumptive Republican nominee, Sen. John McCain from Arizona, who received $132,133 from military donors, according to CRP.

“I think that our fighting men and women want to protect America, defend our Constitution and defend our borders,” said Jesse Benton, a spokesman for Rep. Paul’s campaign. “I think they’re sick and tired of being sent overseas on these police actions and getting caught in the middle of these civil wars, and want someone like Ron Paul speaking sense.

“They signed up to defend our country, not police the world,” Benton said, “and I think they’re hungry for leaders who do that.”

Obama, meanwhile, whose opposition to invading Iraq has been a centerpiece of his campaign, has received $178,456 in military contributions, compared to Sen. Hillary Clinton’s $85,000, the analysis shows.

“To see two anti-war candidates getting more money from the people fighting the war or providing support for the war effort was surprising to us,” said Massie Ritsch, communications director for the Center for Responsive Politics.

However, the donations cannot be considered representative of military employees’ political preferences as a whole because the analysis does not include donations of less than $200, the point at which campaign finance law requires campaigns to disclose the name of a donor and contribution amount. Thus, individuals who give less than $200 aren’t counted.

“The picture could be completely different if you were able to look at smaller donors,” Ritsch said. “You’re looking at a tiny slice of the military who have enough disposable income to donate to a candidate.”

Overall, military donors still favor Republicans to Democrats, 62 percent to 38 percent, according to CRP. But Ritsch said at the beginning of the war, three-quarters of military donors favored GOP candidates.

And you can bet this won’t get much MSM coverage.

http://www.guardian.co.uk/…

The US today signed a deal with Israel offering $30bn (£15.1bn) in military aid to its closest Middle East ally.

The package coincides with US plans to offer Saudi Arabia advanced weapons and air systems that would greatly improve its air force.

Israel has said it has no opposition to US aid to Saudi Arabia, which comes as America seeks to bolster its Arab allies in the face of an increasingly assertive Iran.

Why do we give Israel aid at all? As far as I can tell they do pretty well for themselves. As do the Saudis. Another entry in the clusterfuck which is the United States interventionist foreign policy.

I’ve been reading Ron Paul’s latest book, A Foreign Policy of Freedom. It’s just a collection of speeches given to Congress but it’s full of great tidbits. If you don’t spend your days watching CSPAN this book will show you just how screwed up our foreign policy is. Sending aid to our enemies and our enemy’s enemies who later become our enemies. Funding two sides of a war with cash and weapons. Complaining that a current enemy attacked someone… with the weapons we sold them to fight them. It’s amazing. I highly recommend it.

http://blog.ronpaul2008.com/…

What a great time we had in San Antonio last weekend. An enthusiastic bunch of Texans thronged the Alamo for a rally, and then there was a fundraising dinner at an historic museum. More than a thousand people attended one or the other.
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