Many have contributed to the discussion of Paul's meaning in 1 Thessalonians 5.17. Here's an offering from St. Maximus the Confessor.

Unceasing prayer means to have the mind always turned to God with great love, holding alive our hope in Him, having confidence in Him whatever we are doing and whatever happens to us.

Someday I'll have to post Calvin's contribution to the discussion.

It's clean out the pantry day at the Deviant Household. Seems Lady Deviant bought a bit too much and the pantry won't hold it all. Apparently, I have too many bottles of this and that (this=Captain Morgan's; that=Presidente Mexican Brandy). Apparently, the Bushmill's and the Svedka are not in the way.

Well, that's it for the rum. The rum is gone. Except for that flask back in the -- never mind: it's not in the pantry, so it doesn't count.

Did I say the rum is gone? Yes. I believe I did. But why? Why is the rum gone?

I have loved clean out the pantry day since I was a kid. Of course, in the Solís household there usually was only tequila.

Mmmm, tequila.

That reminds me: I wonder how that bottle of Sauza is doing.

Gotta go. The wife wants me to help with something. As if I'm not doing enough already. I mean, here I am, working my liver to the bone. Some people -- it's just never enough.

(Part One, Part Two)

In thinking about the collapse of evangelicalism, I've wondered about the role of evangelicalism's summation of the doctrine of justification sola fide, which pits idea against idea, as I mentioned in Part Two. There is, in my estimation, another problem with that summation. Sola fide -- faith alone -- has come to mean my faith alone. But the popularized conception of sola fide pays scant attention to the doctrine of union with Christ, without which there is no justification. (Indeed John Murray, in his Redemption: Accomplished and Applied [Eerdmans, 1955], 161, says that failing to take union with Christ into account makes our presentation of redemption defective and "gravely" distorts "our view of the Christian life". "Nothing," he says, "is more central or basic than union and communion with Christ.") This "defective" conception of faith (without union with Christ) easily becomes my faith alone in my Christ alone.

How is this so? Because the only thing in operation here is the professed believer's faith in Christ. And faith, despite protestations to the contrary, really does mean, by and large, mental assent to a statement of faith, together with any qualifications one wishes to stipulate based on one's judgment regarding the facts in the case. This is, after all, my faith. There is (for practical purposes) no attendant conception of the believer's union with Christ, and, therefore, with all other believers by virtue of their union with Christ. We are all "spiritual Lone Rangers", as my parents' old pastor used to say. (See Mom? I was listening. I just didn't believe.) And when that is the case, one can hardly perceive his communion with his brothers and, hence, does not need the church, which Calvin exhorts us to hold dear as our Mother. We really do not need the sacraments. Worship services are shared "Jesus and me" sessions, or theology lectures sandwiched between hymns and prayers, and, every now and then, some bread and grape juice handed round for a sanctified memorial snack (I speak as a fool, if you take my meaning). The Church, therefore, has no authority to prescribe for me who Christ is, and certainly no authority to lay any burden on me, such as set times for corporate prayer and fasting (especially since any burden laid upon me is legalism; and I'm saved by faith, don't you know).

(Naturally, of course, we will continue to speak of the Church as The Body (ha!) of Christ. It is easy to see why it is the parachurch organization, not the Church, which is the center of evangelical life. This is the notion of the Invisible Church on crack cocaine! Since Christ really doesn't have a plan for the parachurch, I'm not surprised that Spencer predicts difficult times for these organizations. In Spencer's article the coming plight of the parachurch organization is a lamentable result of the collapse. Also, he mentions the conversions of evangelicals to Catholicism and Eastern Orthodoxy. Noteworthy is the fact that for these two bodies the Church is central to the life of Christians. Growth of their parachurch organizations; the amount of money given to these organizations; the number of parishioners who depend upon these organizations for the bulk of their spiritual lives -- these are not symptoms of a healthy Church for the Catholic and Orthodox. Demise of their parachurch organizations would not be considered symptoms of bad health.)

This (christianized) individualism, which is probably worse than either christianized Platonism or christianized Aristotelianism, can never have withstood secularism. Indeed, this individualism is perfectly consonant with secular individualism, and, for that reason, powerless against it. The church, which St. Paul likens, among other things, to an army, is, in popular evangelicalism, an army of individuals (and not even an army of individual Davids ), all generals, no privates -- no platoons, no companies, no battalions, no divisions, but each a Special-Forces-A-Team-of-one, claiming to answer directly to the King. And together with its bastardized version of sola scriptura, asserting no place for the Church as Mother to exegete, interpret and apply Scripture, leaving it all in the hands of the individual, evangelicalism makes the individual Christian his own personal ecumenical council. And should the Church assert the authority to act as our spiritual Mother, we'll probably just go elsewhere. And when we get elsewhere, we'll still be wondering why evangelicalism is collapsing. Few, I think, will consider the possibility that there is never any victory without discipline.

Obedience brings victory. And victory is life. (I couldn't resist. I didn't try very hard, either.)

Here, in my estimation, is how this conception of faith -- my faith -- alone weakens evangelicalism. It accepts a secular presupposition, namely, that the individual human is not only capable of, but warranted in, judging of Divine matters. This includes judging of even the existence of God, which, though it seems "rational" enough, is very problematic. Whereas the commandment says, "Have no other Gods before me", the secular conception of the requirements of rationality, has it that the God who commands this be held not to exist until His existence has been established by Reason, and a non-theistic conception of Reason at that. (But see Psalm 14.1.) So the commandment may be violated until the individual human, who has irrationally determined himself a competent judge of the matter, establishes the existence of the God who commands it.

The faith, therefore, that the individual Christian has, really is his and his alone; and it consists only of those elements which he, himself, has established as true to his own satisfaction. One's own satisfaction, is one of the many things secularism seeks. The Self, in evangelicalism, is raised to the same height as the Self in secularism. (And we wonder why the lives of Evangelicals don't look much different than those of non-Christians! What shall we do for an encore, hit ourselves in the heads with hammers and express shock and dismay that our heads ache? But I digress.) And this faith, on this view of the matter, really cannot be shared with other Christians, not just Christians of other denominations but with fellow evangelicals. What they really share is the fact that they have come to the same answers to a set of questions. It is like two people who prepare their own meals, but sit together at the same table and call it a shared meal.

Also, this placement of the Self means that the disposition of the Self, regarding the truth value of the proposition, God exists, (or the contents of creeds, confessions, statements of faith) , by virtue of being the Self's internal disposition, can accomplish things for God. So, by accepting the same (anthropocentric) view of rationality, and the position of the Self, as secularists, evangelicalism set itself up for failure against secularism.

Don't shoot the messenger, folks.

Note: I realize that this part of the discussion raises the question, "What is faith?" I don't have time or space for that question, however.

Part Four

(Part One)
One assertion Spencer makes (here), and with which I agree, I found particularly worthy of comment:

Despite some very successful developments in the past 25 years, Christian education has not produced a product that can withstand the rising tide of secularism.

I think this is unarguably true. But I also think it must be pointed out, in all fairness, that 25 years is not as long a period of time as he seems to think, especially when the secular counterpart has been around at least twice as long, and is better financed. And, like a sick joke, evangelical taxes have comprised some of that financing.

Even with that in mind, it doesn't strike me that evangelicalism is poised for success against secularism. The reason, I think -- and I'm just spit-balling here -- is that this so-called Christian education is still really very secular. It has not been Christian paideia, the nourishing and training to full development of the Christian soul, the entire person. It's focus has been equally as secular, equally as materialistic, as any secular education. It has been Christian only by virtue of being taught by Christians to the children of Christians, and because it has included chapel services and instruction in Bible and Christian worldview. It has been secular by virtue of being relevant, that is, relevant to this world, practical in the sense of churning out worker drones, or Christian leaders. And, like all relevant education, it has largely ignored, as irrelevant, introduction to The Great Ideas, training in participation in The Great Conversation. (And where it has turned to that sort of education, it has done so after secular educationalists have done.) If it isn't going to help the student get to college so he can get a good job someday, then, being irrelevant, it will not be taught. Consequently, education has been reduced to two goals: missions and evangelism, or job training. I mentioned paideia above. If I had a nickle for every evangelical who, when discussing anyone's university major, asked, "What are you going to do [vocationally] with that?" I'd be independently wealthy.

Riddle me this: Why did the Spartans learn music and dance? What have they to do with being warriors?

Also, evangelicalism's unintentionally trite (and popularized) summation of the doctrine of justification sola fide, pits idea against idea, Christian principles against secular principles. But secularism is not first of all a set of principles. The heart of secularism is violation of the First Commandment. This is not a mere philosophical ideology. It is a matter of the heart, not the mind. We are talking about sin. This is worldliness in the Pauline sense, standing in opposition to God himself.

In reality, therefore, the popularized conception of sola fide pits a statement of faith against the sinful disposition itself. The sinful disposition isn't something one defeats with an idea. If someone commits a sin, we don't recite the Apostles' Creed! It's like flashing a crucifix at a vampire: it looks good in movies, but seriously, are you kidding me? Secularism isn't mere ideology, to be defeated, or simply replaced, with a contrary ideology. Evangelicalism's focus on teaching a Biblical/Christian worldview may thus have back-fired a bit. The Christian worldview, alone, is an ideology rather than a theology. (And by theology I mean way of life, not academic discipline.) Precisely as ideology it is, paradoxically, powerless against secularism. It could not be otherwise.

Permit me to illustrate. Let us take the proposition, God exists. Strictly speaking, a proof of God's existence is no more than a demonstration that the proposition God exists is logically derived from more basic propositions. This, in and of itself, doesn't mean that God exists. It means the proposition can be derived from other propositions. God exists, by such derivation, is not for that reason, a statement about reality. That's contentious, of course; classical apologists would disagree. The important thing, however, is this. Even under conditions which would render the proposition, God exists, a statement about reality, the proposition itself has no power. The true proposition, God exists has no power to save. The same is true of statements of faith. The assertions of a statement of faith may all be true, but there is no power in them. I can very well believe in the forgiveness of sins and the resurrection of the dead. But the power to forgive sins; the power to raise the dead -- these are not in the creed.

This is not to say that statements of faith are unimportant. They are very important. They are important because they mark out doctrinal boundaries within which the Christian life is lived. But statements of faith are not the Christian life. It is the gospel (the subject of statements of faith), and not the statement of faith, which is the power of God for salvation (Romans 1.16). To learn the Christian worldview; to learn to articulate and defend a statement of faith -- these are not the same as to experience the power of God for salvation. They are not the same as possessing and living life in Christ. When young people are taught the contents of the Christian worldview, they are given nothing which can withstand secularism, anymore than they are given something which can withstand sinful temptations. There is no power in the Christian worldview. The power to withstand secularism; the power to resist temptation -- these powers are in Christ himself. A Christian education which teaches Bible, theology, and Christian worldview as academic subjects in which mastery is demonstrated by performance on a written test is doomed to failure.

Apart from life in Christ, the Christian worldview is an ideology. Secularism, however, is not an ideology; it is the current manifestation of the spirit of the age. Against that spirit, ideology, even a Christian ideology, is powerless. (See 1 John 4.4.) Presently, evangelicalism strikes one as an invitation to ideologically sick people to improve their ideological health by adopting a healthier ideology. In actuality the invitation is extended to dead men. (Am I suggesting, sub silentio that evangelicalism's real problem is Arminianism? Oops, my Calvinism is showing.)

Part Three

This article by Michael Spencer, the Internet Monk, has been the subject of some conversation. (Here, for example.)

Some participants in the conversation have pointed out that it doesn't represent any original thinking: various evangelicals have been saying the same thing, or similar things, for years. This characterization is probably correct. I recall as a youth, attending church with my parents and listening to all the talk about how bad things were getting and how the day of the persecution of Christians was coming, et cetera, et cetera, et cetera.

But Spencer's article is valuable at least as a summation of a case made by others, mixed with some personal observations of his own as to why the evangelical collapse is coming.

I do have to disagree with the first reason he gives for evangelicalism's impending collapse:

Evangelicals have identified their movement with the culture war and with political conservatism. This will prove to be a very costly mistake. Evangelicals will increasingly be seen as a threat to cultural progress. Public leaders will consider us bad for America, bad for education, bad for children, and bad for society.

It's easy enough for public leaders to identify evangelicals as a threat to progress. Alignment with the culture war and with political conservatism will be convenient excuses; but I doubt things would be much different if evangelicals had aligned themselves with Libertarians of the Friedman stripe, or if there were no alignment at all. The sort of leaders Spencer must surely have in mind are out-and-out Statists. And let me be clear: by Statist I mean people who, really, worship Humanity (i.e., themselves) by devotion to, and adoration of, the omnicompetent state.

In the end, evangelicals will not worship humanity by adoring the State. (Well, they shouldn't, anyway.) Rome's persecutions of Christians were motivated by concerns that were political. It was not as if Christians had launched a crusade to claim the empire for Christ. Indeed, by and large, they were dropping out and, well, "tuning in"...to Christ. In contrast, one gets the idea, listening to the spokes-persons for evangelicalism, that dropping out of the culture is the eighth deadly sin.

Getting back to Rome, though, one of the many things we fail to take note of is the fact that the word "gospel" (euangelion) was a word with political implications in the Greco-Roman world. It was frequently used with reference to the Emperor. Imagine how the use of that term, in reference to anyone else, especially a Jewish carpenter, must have struck the Roman world. Even in the best of times, it would not have required alignment with a culture war, or any extreme in the empire's political spectrum, to earn Christians more than a modicum. They simply would not worship the divine State, personified by the Emperor. They lacked pietas.And their use of such a seemingly insignificant word as "euangelion" with reference to their Christ was sufficient evidence of that.

The euangelion of Jesus Christ? That, alone, could have been seen as treason.

So evangelicals need not have identified their movement with the culture war and with political conservatism in order to be seen as a threat to cultural progress, or for public leaders to consider us "bad for America, bad for education, bad for children, and bad for society." If Spencer's location of the cause of evangelicalism's demise is correct and identification with the culture war and with political conservatism is the reason for it, then the vitriol will be leveled against us for the wrong reasons.

However, within his first point, is a claim with which I do heartily agree:

The evangelical investment in moral, social, and political issues has depleted our resources and exposed our weaknesses. Being against gay marriage and being rhetorically pro-life will not make up for the fact that massive majorities of Evangelicals can't articulate the Gospel with any coherence. We fell for the trap of believing in a cause more than a faith.

But I think it's worse: evangelicals haven't traded the faith for a cause; we have, a sufficient number of us, identified a cause with the faith. (In The Screwtape Letters, C.S. Lewis calls this the problem of "Christianity And".) It is almost as if evangelicals have come to believe that if the world will not repent of their sins and turn to Christ, that's all right: we'll just make them behave as if they have done. This, of course, is why they cannot articulate the Gospel with any coherence. There is no need to articulate the Gospel when the power of the State can be brought to bear in correcting our social ills. (Those of my friends who have known me the longest will attest that I've never been a fan of this maneuver.)

Articulating the Gospel is for the minster. The mission of the "layman" is to write his Congressmen and vote for right-wing (i.e., socially conservative) causes (or left-wing [i.e., fiscally liberal] causes, for evangelicals of the Sojourners ilk). I'm being facetious only for rhetorical effect. The simple fact is, I think Spencer is right. Evangelicals do seem increasingly unable to communicate the Gospel. The answer must surely be that they are spending their time learning to do, or, in fact, doing something else. Not only that, but I think the inability is rooted in an unwillingness to communicate the gospel. And I have a sick feeling, in the pit of my stomach, that the reason for the unwillingness to communicate the gospel is an unwillingness to live it. I could be wrong about that; but I'm not.

Part Two

Thomas a Kempis tells us:

Whoso knoweth himself well, groweth mean in his own conceit, and delighteth not in the praises of men. ~ The Imitation of Christ, Bk. 1, Ch. 2.

Now that I've read this, I still feel like goofing off.

So, as promised yesterday, your VJ presents two more. Today the theme is double: The City and Songs by Eagles members.



Wow. Don Johnson smoked his cigarettes the same way I did. Didn't know he was a fan.



One of the best songs on The Warriors soundtrack.

Oh, one more just for fun:

Now, for something completely different.

This story has it that the changing economy has many people changing jobs. Frankly, I'm shocked. I thought the thing to do when disaster strikes was to stand around in your filth waiting for the omnicompetent government to rescue you. What this? Saving yourself? (Well, not quite: a lot of unfederal dollars are at work there.)

What's next? A return to capitalism?

Oh, well. Maybe it's time for me to pursue my childhood dream. No, not the dream of being a mercenary; my wife would never stand for that. No, I mean the other dream, of being a DJ. Oh. No. A VJ.

Here's two, back-to-back, just for you. It's a two-for-Tuesday sort of thing.



You may have missed the reference in the song to Tijuana. Interesting side-note: We lived there for a few years when I was a child. I have only the vaguest of memories.

Now, from the If-I-could-be-the-central-attraction-of-any-scene-in-any-of-my-favorite-movies Category:



Wow. That was kind of fun. Thanks for tuning in.

Tomorrow's Hump Day. Maybe we'll have to do this again.

Oh, what the heck. One more. From the If-I-had-a-band-I-would-so-cover-this-song Category (and, yes, that would be me on the drums):

One of the excuses used for the recent bailouts was that the failing companies were too big to fail. The failure of these companies would have ripple effects so catastrophic as to collapse the nation's economy, perhaps even the world's economies.

The same rationale undergirds the push to give to the executive branch expanded power to seize "non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy", instead of just banks. (The comparisons with FDR get uncannier and uncannier. If Hoover was FDR-Lite -- and he was -- then Bush will go down, if the economic history is correctly written, as Obama-Lite.)

It sounds good, to some. But the fact of the matter is this. If a company really is too big to fail, then it is too big to fail even if it is entirely solvent. For then it must be kept solvent, always. If "too big to fail" is a good enough excuse for a government take-over of companies on the verge of collapse, then it is an even better excuse -- when you think about it -- for a government take-over of too-big-to-fail-but-still-solvent companies, as well.

As soon as a company gets to be a certain size, the unfederal government will being take-over proceedings. And since the purpose of any business is simply to employ people, the unfederal department in charge of initiating these proceedings should be the Department of Labor. Poetic, when you think about it.

But I have digressed.

Soon, insolvent companies will be required to file permission with an unfederal department of something-or-other to secure permission before filing for bankruptcy. A three-member commission will determine whether the firm belongs to the 2B2F (i.e., Too Big To Fail) category. If so, take-over proceedings will begin. Bankruptcy will be averted. O, happy day!

But, really, if one of government's responsibilities is to ensure full employment then any business which employs people should be considered too big to fail. When you, personally, are unemployed, the unemployment rate is 100%. (Yes, it's a silly notion. I borrowed it from the Dickens novel Hard Times. One of the Gradgrind children says something like it.)

Obama's appearance on Jay Leno's show last, demonstrates him to be a man of the masses, in a sense. Yes. And that's the problem. We have plenty of men of the masses. What we need are men of the "remnant".

Alfred J. Nock, using the prophet Isaiah as an example, explains, here. It will take you about half an hour to read, depending upon your speed, but well worth it, I think. (You could also listen to it, here.)

As the word masses is commonly used, it suggests agglomerations of poor and underprivileged people, laboring people, proletarians, and it means nothing like that; it means simply the majority. The mass man is one who has neither the force of intellect to apprehend the principles issuing in what we know as the humane life, nor the force of character to adhere to those principles steadily and strictly as laws of conduct; and because such people make up the great and overwhelming majority of mankind, they are called collectively the masses. The line of differentiation between the masses and the Remnant is set invariably by quality, not by circumstance. The Remnant are those who by force of intellect are able to apprehend these principles, and by force of character are able, at least measurably, to cleave to them. The masses are those who are unable to do either.

[...]

Everyone with a message nowadays is...eager to take it to the masses. His first, last and only thought is of mass acceptance and mass approval. His great care is to put his doctrine in such shape as will capture the masses' attention and interest. This attitude towards the masses is so exclusive, so devout, that one is reminded of the troglodytic monster described by Plato, and the assiduous crowd at the entrance to its cave, trying obsequiously to placate it and win its favor, trying to interpret its inarticulate noises, trying to find out what it wants, and eagerly offering it all sorts of things that they think might strike its fancy.

The main trouble with all this is its reaction upon the mission itself. It necessitates an opportunist sophistication of one's doctrine, which profoundly alters its character and reduces it to a mere placebo. If, say, you are a preacher, you wish to attract as large a congregation as you can, which means an appeal to the masses; and this, in turn, means adapting the terms of your message to the order of intellect and character that the masses exhibit. If you are an educator...with a college on your hands, you wish to get as many students as possible, and you whittle down your requirements accordingly. If a writer, you aim at getting many readers; if a publisher, many purchasers; if a philosopher, many disciples; if a reformer, many converts; if a musician, many auditors; and so on. But as we see on all sides, in the realization of these several desires, the prophetic message is so heavily adulterated with trivialities, in every instance, that its effect on the masses is merely to harden them in their sins. Meanwhile, the Remnant, aware of this adulteration and of the desires that prompt it, turn their backs on the prophet and will have nothing to do with him or his message.

But Obama, His Beatitude, is only a man of the masses, as I said, in a sense -- only in appearance. In actuality, as an intellectual, his main concern is not the masses; it is control. And as Étienne de La Boétie informed us long ago, control of any large group of people, by a smaller group, is always by shaping popular opinion -- the opinion of the masses. Hence all the phoney outrage over the AIG bonuses.

It would be comical if it weren't so dangerous.

Commenting on the role of self-denial, Calvin writes:

How difficult it is to perform the duty of seeking the good of our neighbor! Unless you leave off all thought of yourself and in a manner cease to be yourself, you will never accomplish it. How can you exhibit those works of charity which Paul describes unless you renounce yourself, and become wholly devoted to others? “Charity (says he, 1 Corinthians 13:4) suffereth long, and is kind; charity envieth not; charity vaunteth not itself, is not puffed up, doth not behave itself unseemly, seeketh not her own, is not easily provoked etc. Were it the only thing required of us to seek not our own, nature would not have the least power to comply: she so inclines us to love ourselves only, that she will not easily allow us carelessly to pass by ourselves and our own interests that we may watch over the interests of others, nay, spontaneously to yield our own rights and resign it to another. But Scripture, to conduct us to this, reminds us, that whatever we obtain from the Lord is granted on the condition of our employing it for the common good of the Church, and that, therefore, the legitimate use of all our gifts is a kind and liberal communication of them with others. ~ Institutes of The Christian Religion, Bk. 3, Ch. 7, para. 5.

The volume of bonus bluster coming from Congressional and Executive blowhards has covered over the fact that executive compensation under TARP (including bonuses) is provided for in the stimulus organ which many of these bloviating boneheads voted for and which His Beatitude signed. For the discussion which follows I am relying upon the final version of the stimulus organ (which you can read in all its glorious entirety, here).

As I've mentioned (here and here), at no time have we been told who these bonus recipients are. Now, unlike lynch mob-inciting politicians like Barney Frank, Chris Dodd, and, of course, His Beatitude, I don't want to know the names of these people. Their names aren't really important, unless you want to make sure that violent leftists know who stand up against walls and shoot. What is important -- and what I've been getting at -- is that we don't know what types of executives these are. We don't what what, if any responsible role, they have played in the mess at AIG. We know only that "executives" in the division of AIG which caused the mess have received, altogether, a whopping .095% of the TARP money given to AIG, less than one one-hundredth of a percent.

Type of executive is important because the stimulus organ, for which these screaming banshees voted (unread, as I suggested here) and which Epihanes signed, also unread, I'm sure, provides for compensation of executives, including bonuses. But the stimulus organ categorizes executives, and then specifies the limits to their compensation, including bonuses. Division B, Title VII ("LIMITS ON EXECUTIVE COMPENSATION") defines, for example, a Senior Executive Officer, as "an individual who is 1 of the top 5 most highly paid executives of a public company, whose compensation is required to be disclosed pursuant to the Securities Exchange Act of 1934, and any regulations issued thereunder, and nonpublic company counterparts." Furthermore, the stimulus organ provides for the prohibition of certain forms of compensations, including retention bonuses for executive officers.

However, Title VII, Section 7001 ("EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE"), which amends Section 111 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5221), (b), (3), (D)(ii),(IV), (iii) [you have to love the way legislation is written] states "The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary."

The aforementioned clause (i) provides for a prohibition of certain forms of compensation during the period for which TARP recipients have an outstanding obligation (i.e., owe the government the money for the loan). Furthermore, and this goes to my point about the types of executives affected by the stimulus organ, clause (i) specifies prohibitions as applying to the top 5 most highly compensated executives (or the top 10, depending upon more specific provisions of clause (i)).

But the limitations on bonuses received by executives, including senior executives, do not apply, once again, according to clause (iii) because these compensation contracts were executed on or before February 11, 2009.

So, yes, Congress and the Constitutional Dictator, first permitted, by law, the payment of these bonuses and now pretend they had no idea. They now pretend outrage and disgust. They now seek to take away what they first gave.

And by the way, we now know that Chris Dodd made sure that the aforementioned clause (iii) was in the stimulus organ. (See also this NBC News story.) He claims that he did so at Administration request, the present Administration, not the previous (i.e., Bush) Administration. He might be telling the truth. For once.

The Teleprompter used by Barak Obama Epiphanes now has his own blog. Now, this is really convenient.

Then, people wouldn't be in such an uproar.

Wait a minute. What's this? Retention bonuses at Freddie Mac, scheduled for next year? (H/T: Ed Morrissey)

Important note: While we do know that the recipients of these offensive bonuses worked in the AIG division which caused AIG's downfall, we still do not know who these people are, or what their specific duties were, or how the performance of these duties makes them responsible for the calamity. But we're going to treat them like it anyway. (And when we find out who these people are...let the lynchings begin.)

Another important note: We are still talking about money equaling a mere .095% of the bailout money. There is still a deafening relative silence about the 69.36% paid to, among others, certain overseas banks.

And, in top-of-the-hour radio news I hear His Beatitude inform us that the AIG bonuses are a symptom of our entire culture, excessive greed, excessive compensation, excessive competition. And he also informs Wall Street that we shall not be returning to "business as usual". Well, that ought to keep it from ever hitting 14,000 again. There will be no more competition, no more compensation, no more anything which our betters believe is excessive.

And he also compared Timothy Geitner to Alexander Hamilton. The reference to Hamilton, is positively ironic. Thomas Jefferson, no fan, said that Hamilton's goal was to ally the rich to the government at the peoples' expense. The reason he said so is that what Hamilton was after was an economy such as we have. (Hint: Despite repeated usage of the term, it is not a "free" one.)

Hamilton, who Thomas DiLorenzo -- rightly -- calls the founding father of crony capitalism, was a traitor to the Revolution. It would be fair to say that the only thing he and his ilk objected to, when it came to British mercantilism and imperialism, was being on the paying side of it. They didn't mind mercantilism and imperialism as such, especially if it were to be American mercantilism and imperialism. If Hamilton had had his way, at the convention to "improve" the Articles of Confederation, we would have a permanent president who would appoint the state governors and have veto power over all state legislation. Under his plan, state sovereignty would have been destroyed, and there would have been no escape from the central government's high taxes, protectionist tariffs, heavy debt, and foreign-policy imperialism. Oh, yes, and a central bank -- very important; can't have a country without it. It took a while, and a "civil war"; and he didn't live to see it. But Hamilton eventually got most of his way. No, the President can't veto state legislation; but either Congress or the Federal courts can. States' rights? Just use the term and you'll be treated like a card-carrying member of the Ku Klux Klan.

Like I said: The reference to Hamilton is ironic.

Well, what remains of capitalism, anyway. But I digress.

The bonuses that our benevolent fathers on the hill are so exercised about (and over which Charles Grassely, who took $26,250 from AIG in 2008, thinks these bonus receiving executives should commit suicide ) are retention bonuses.

There is more to this, of course. In typical journalistic fashion, news media report (and Congressmen spew) that these bonuses are being paid to people in the very division that destroyed the company by issuing billions of dollars in derivatives insuring risky assets. These people work in the division that destroyed the company. And, apparently, simply for working in that division -- quite apart from any consideration for the nature of the work they did -- they are actually responsible, as if they themselves made the decision to issue the derivatives. Perhaps they did, but we don't know. We don't know what these people did. We don't know what, if any, responsibility they have for the mess. They may have none at all. But they work in the division which caused the mess; and that is all we need to know.

And again: We're supposed to think these people are smarter than us. It staggers the imagination.

Nevertheless, what's completely odd is the fuss made over the $165 million spent to honor these contracts while there is relative silence about the billions in payments AIG has made to Goldman Sachs Group Inc and others. Specifically, AIG has paid $120 billion in cash, collateral and other payouts to banks, municipal governments and other derivative counterparties around the world, including at least $20 billion to European banks. Goldman Sachs received at least $13 billion. That's not only more than $165 million, it's more than half of the $173 billion in U.S. taxpayer money spent to rescue AIG. For any journalists and liberal politicians who might be reading (as if!), I'll do the math for you. While the pay-out to Goldman Sach's and the Eurobancs is 69.36% of the bailout money, the bonuses amount to a whopping .095%. Note, that .095% is not the same as 9.5%. And further note, just to make sure we're clear, that 69.36% is bigger than .095%.

I understand the payout to Goldman Sachs: Save the U.S. economy. But if the bailout was to save the U.S. economy, then why the payout to the Eurobancs? Why should taxpayer money, needed to prop up the taxpayer economy, be sent overseas? Could it be that the money was paid out because these payouts, like those executive bonuses, were contractual obligations?

Whatever the answers to those questions, it seems a bit disproportional, like one of those crazy mirrors at the carnival, to focus so much on the .095% rather than the 69.36% -- the $165 million rather than the $120 billion. I doubt we'll hear the likes of Charles Shumer or Barney Frank threatening to get the $120 billion from those foreign countries, or the $13 billion back from Goldman Sachs.

A side-bar comment addressed to the aforementioned Charles Grassely. I agree with the Confederate Yankee: If dishonor in the use of taxpayer money is grounds for committing seppuku, then you first. No one beats Congress when it comes to dishonor in use of taxpayer money. And unlike government, AIG didn't get our money from us at gun-point. And the shareholders of AIG didn't approve the bailout plan. (Does anyone remember what a shareholder is?)

Yes, you read that correctly. I did not intend to title it "A Feast for the Eyes".

In honor of this being the Lenten Season, a little something on fasting:

The value of fasting consists not in abstinence only from food, but in a relinquishment of sinful practices, since one who limits his fasting only to an abstinence from meat is one who especially disparages it. Do you fast? Give me proof of it by your works. If you see a poor man, take pity on him! If you see a friend enjoying honor, do not envy him. For let not the mouth only fast, but also the eye, and the ear, and the feet, and the hands, and all members of our bodies. Let the hands fast by being pure from avarice. Let the feet fast by ceasing from running to forbidden spectacles. Let the eyes fast by being taught never to fix themselves rudely upon handsome countenances. For looking is the food of the eyes, but if it be unlawful or forbidden it mars the fast and overturns the safety of the soul; but if it be lawful and safe, it adorns fasting. For it would be an instance of the highest absurdity to abstain from meats and unlawful food because of the fast, but with the eyes to feed on what is forbidden. Do you eat flesh? Do not feed on licentiousness by means of the eyes. Let the ear fast also. The fasting of the ear is not to receive evil speaking and calumnies. "You shall not receive an idle report," it says. Let also the mouth fast from foul words. For what does it profit if we abstain from birds and fish, and yet bite and devour our brethren? ~ John Chrysostom.

I heard a clip of His Beatitude on the radio this morning, saying that the economy is not as bad as we think it is. Indeed, he said, the economy is never as good as we think it is, and is never as bad as we think it is. This, from one who won an election based, among other things, upon the claim that the economy is the worst it's been since the Great Depression.

Now, it's not really that bad. But we still need another stimulus organ.

As talk goes on about this new stimulus organ, we ought to consider the fact that this market is the result of a collapsed housing market, a housing market which was the result of a previous stimulus organ. The CRA, along with Fannie Mae and Freddie Mac's implicit-turned-explicit mortgage guarantee, created an artificial demand for housing, a demand which should not have existed. In true, government-driven-demand fashion, the push for "affordable" housing and "non-discriminate" lending encouraged lenders to lend money to people who otherwise wouldn't get loans. This was all government stimulus to the max. When the goal -- a government-mandated goal -- is simply to increase home-ownership, the question is no longer, "Who can afford a home, and at what price?" but, "Who can be put into a home, and how?" And trouble is just a matter of time, the only question being, "Who's going to be without a chair when the music stops?"

Hint: It's never the one playing the music. And in this case, the unfederal government was playing the music.

On one hand, the unfederal government has made clear it will go after you if you aren't doing enough affirmative action lending, and acknowledged you'll take a loss on these loans due to an increase in defaults:



(H/T: Hot Air)

Then, on the other hand, government sponsored entities, which, between the two of them, had already purchased or guaranteed about half of the U.S.'s $12 trillion mortgage market, have effectively told you not to worry about the bad loans you've made because they will be guaranteed by the unfederal government, there's not much reason for not granting the loans -- quite the contrary, in fact. (Important point: some of the loans you don't grant to people who can't pay them will get you hauled into court, accused of discrimination based on race.)

Of course, now we know that when the music finally stops, you and your fellow bankers will be left standing without a chair, blamed for the financial ruin which was always only a matter of time. And, of course, the unfederal government, which just about single-handedly creating this mess by commanding bad loans to be made, will be wagging its finger at you, crying, "For shame, for shame."

To add to the spectacle, while the government is wagging its guilty finger at you, some of your compatriots in the lending business will have their hands thrown up in the air, claiming not to know how you could have been so unscrupulous as to lend money to people who couldn't pay it back. (Transcript, here.)

And then, as if the spectacle isn't sick enough, those for whom hatred of capitalism is a religious conviction, call it all proof positive that, despite a mixed economy, capitalism -- not government involvement -- doesn't work, that, with 73 thousand pages of federal regulations, there is not enough regulation. (They do the same thing with healthcare. It's never the government involvement; it's always the capitalism.)

It's a simple thing, really, and easy to grasp. Government cannot create demand; but it can exaggerate demand.

In November 2007 this story raised few few eyebrows on the left. Briefly, the story claimed that a recent experiment could put an end to the embryonic stem cell debate. In this posting, I expressed my doubts.

The thing to remember about the U.S. left is that their greatest commitment is denying any victory to the right. It may be that adult stem cells can do all that is hoped for from embryonic, but if the right is opposed to use of embryonic stem cells, for whatever reason, then the left is going to insist on embryonic stem cell research.

What I said in that post was:

[T]here is a certain prejudice here. You know how you know people whom you so dislike that if they are for something you are just positive you need to be against it? There are some people who, in addition to scientific curiosity, just cannot stand the idea that the pro-life movement might "win" something.

Much of this goes back to Galileo's conflict with the Church over heliocentrism, from which the Church still has a black eye. (Of course, the problem is that the Church had made Aristotelianism synonymous with Christian orthodoxy. But any Church which makes that sort of move deserves the black eye it gets as a result.) If anyone associated with any religious perspective objects to a research program, then it is another "Galileo" moment, with affected scientists in the role of persecuted scholar, in the second-oldest conflict in human history: academic freedom versus religious orthodoxy. (The oldest conflict is good versus evil.) Then, of course, there is the conflict between evolutionism and its opponents. "Which scientific breakthrough have these people not opposed?", one might well ask.

So, if "these people" are against it, then we must be on the right track.

It's very easy for me to understand this. It isn't "religion" versus "science". It's religion versus religion. Only the object of worship is different; the nature of the commitments involved is the same.

[T]his -- not religion versus science -- is where the disagreement lies: To us, species membership is morally relevant, while person-hood (manifested by consciousness) is not. To our opponents species membership is morally irrelevant, and person-hood is morally relevant. (This was the same issue in the Terri Schiavo case.) The two positions are primitive (or axiomatic, if you prefer): I can't think of a way to derive either of them from more primitive assertions. So the two positions are discreet and probably don't share much in the way of significant common ground, and therefore the switch from one position to another really does amount to something like a religious conversion. Both positions are ultimately fairly religious in nature.

The religious nature of the two positions makes debate difficult: each side accuses the other of not being rational in approach. Resolution is impossible. Each side thinks it is being rational. But the more obvious religious connection among the pro-life makes it easier for pro-life opponents to charge us with being irrational, easier for them to characterize the debate as one between "religion" and "science".

It is awfully convenient, however, for those who are conscious to decide that this is the attribute separating those with legal protections from those without. Awfully convenient.

No. I don't think the debate has been quelled. Why should scientists not seek after another method of utilizing stem cells just because this one has been discovered. If there are more roads than one to a panacea, why should we be limited to...one? Just because religious nutters object?

Obama's lifting on the ban on fetal stem cell research is proof positive that denying any victory to the right is the end game.

[W]e are probably only at the threshold of an age in which the technological possibilities of mind control are likely to grow rapidly and what may appear at first as innocuous or beneficial powers over the personality of the individual will be at the disposal of government. The greatest threats to human freedom probably still lie in the future. ~ Friedrich Hayek.

In this article (read by the author, here), Gennady Stalyarov II, explains how we no longer need fear that Hayek, who did not live to see what the internet has become since the days of ARPANET, X.25, BBS and FidoNet, may have been right.

As a decentralized communication system facilitating the sending and receiving of messages by billions of people, the Internet has greatly shifted the balance of power away from governments and toward sovereign individuals. Even in its early days, the Internet played a vital role in bringing about the downfall of the Soviet Union's government. Since then, it has catalyzed tremendous economic, social, and political liberation in countries ranging from Cuba to the United States.

While governments have tried to use modern communication technologies to monitor and regulate private individuals, their efforts are doomed to failure stemming from a much more powerful and competent market response.

It's a good, though rather lengthy, article. If you don't have time to read it,then I heartily recommend listening to it while you work.

Okay, not really. But sort of.

According to George Bittlingmayer & Thomas W. Hazlett, "the best forecast... is the one made by investors risking their own money. They are shorting the 'stimulus.' "

[F]rom Nov. 4, 2008 through Feb. 12, 2009, the DJI overall fell 18% -- a larger drop than during the Sept-Oct plunge. In January, when the Obama plan, promising far greater deficits than the two...plans signed by Pres. George W. Bush in 2008, was unveiled, the market tanked – the worst January performance in 113 years. (Emphasis mine.)

Yesterday, the market closed at 6,763.29. And while today it is up a little (6,772.69) as I write this, it has trended in a, shall we say, down-ward direction. (And to think, just the day after his economic "Gettysburg" address, Mary Cate Cary was writing that she thought it worked.) If investors' willingness to risk their own money is indicative of anything, then the market's continuing dive suggests the investors have precious little confidence in His Beatitude's ability to fix the economy.

Investors Business Daily puts the matter this way: Capital is on strike.

[M]any upper-income taxpayers already are planning to cut back on work and investments to stay under $250,000 in income — the point where Obama's punitive taxes kick in. No one wins from this, yet Obama seems oblivious.

This isn't the only warning sign. A new study asserts that some 100,000 highly educated, well-trained Indians now living in the U.S. will return home in the next few years. Ditto China.

Immigrant entrepreneurs are highly sensitive bellwethers of economic and social conditions. They know where the opportunities are — and where they aren't. They're voting with their feet.

Obama, as IBD points out, does seem oblivious; but he isn't oblivious. He doesn't care. I just heard on the news (WBAP-AM, Dallas, 12.00, CST) that he wants us to ignore the market, which he likened to a tracking poll in politics, as a gauge of the economy.

"But, golly gee, Wally," said the Beaver, "that's what they told us to look at when they told us that Bush was responsible for the market tanking in the first place. It's why they told us to vote for Obama."

A popularity tracking poll in politics? My portfolio has never increased or decreased in value in relation to any president's popularity.

In the interest of full disclosure, let us remind ourselves that, in all fairness to His Beatitude, the market has been falling steadily since Lehman Brothers went under, back in September 2008. And to be even fairer, the market didn't respond positively to any maneuvering of the Bush Administration.

What does this tell us? Perhaps it tells us that market performance and federal policy is purely co-incidental, no causal relation whatsoever. Perhaps it tells us that the market's continued fall is a response to both Bush and Obama, specifically, their Keynesianesque policies. That is, the market simply has no confidence in the federal government's ability to "fix" the economy. The housing bubble (the bursting of which brought about this mess) was, some of us think, created by the Fed. Maybe, for now, the market has learned its lesson: ignore the false signals sent out by the Fed, and place no faith in the unfederal government's attempts to "jump-start" the economy.

I've asked several times (e.g., here), in the context of socialized healthcare, if, in the event of a dearth of medical professionals, the un-federal government might have to institute a draft and force people into those professions.

Apparently, there is a dearth of healthcare professionals willing to perform, or be associated with the performance of abortions. Epiphanes and his court intend to remedy that.

H/T: Pro-life blogs

This has happened to me a lot:

I have often prayed, requesting that something I thought was good for me be done for me, insisting on my request, and irrationally attempting to force God’s will. And thus I did not leave it to him who knows what is profitable to arrange. And when I eventually received what I asked for, I was very sorry I had asked for my own choice; for the matter did not turn out as I had imagined. ~ Evagrios of Pontus, On Prayer.

In his journals, General Patton once wrote that, while strategy need only occupy what he referred to as "stellar" officers (by which I understand him to mean general officers), tactics ought to be the daily preoccupation of all officers.

Ludwig von Mises had a similar view of economics:

Whether we like it or not, it is a fact that economics cannot remain an esoteric branch of knowledge accessible only to small groups of scholars and specialists. Economics deals with society's fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen. - Human Action

I don't know about "main and proper"; but it certainly is important.

In a way, the Westminster Larger Catechism expresses a similar sentiment in its discussion of the 8th Commandment (beginning at Question 140):

Question 140: Which is the eighth commandment?

Answer: The eighth commandment is, Thou shalt not steal.

Question 141: What are the duties required in the eighth commandment?

Answer: The duties required in the eighth commandment are, truth, faithfulness, and justice in contracts and commerce between man and man; rendering to everyone his due; restitution of goods unlawfully detained from the right owners thereof; giving and lending freely, according to our abilities, and the necessities of others; moderation of our judgments, wills, and affections concerning worldly goods; a provident care and study to get, keep, use, and dispose these things which are necessary and convenient for the sustentation of our nature, and suitable to our condition; a lawful calling, and diligence in it; frugality; avoiding unnecessary lawsuits and suretyship, or other like engagements; and an endeavor, by all just and lawful means, to procure, preserve, and further the wealth and outward estate of others, as well as our own.

Question 142: What are the sins forbidden in the eighth commandment?

Answer: The sins forbidden in the eighth commandment, besides the neglect of the duties required, are, theft, robbery, man_stealing, and receiving anything that is stolen; fraudulent dealing, false weights and measures, removing land marks, injustice and unfaithfulness in contracts between man and man, or in matters of trust; oppression, extortion, usury, bribery, vexatious lawsuits, unjust enclosures and depopulations; engrossing commodities to enhance the price; unlawful callings, and all other unjust or sinful ways of taking or withholding from our neighbor: What belongs to him, or of enriching ourselves; covetousness; inordinate prizing and affecting worldly goods; distrustful and distracting cares and studies in getting, keeping, and using them; envying at the prosperity of others; as likewise idleness, prodigality, wasteful gaming; and all other ways whereby we do unduly prejudice our own outward estate, and defrauding ourselves of the due use and comfort of that estate which God has given us.

Elements of the duties required and the sins forbidden by the commandment really do require some knowledge of economics. One is to "study to get, keep, use, and dispose these things which are necessary and convenient" for sustenance. One should also engage in a "lawful" calling, and be diligent in it. Additionally one should be frugal, avoid unnecessary lawsuits.

But it isn't a matter of being self absorbed with regard to material concerns. We must also work to procure, preserve, and even increase the wealth of others, in addition to our own. Moreover we should resist all unjust or sinful ways of taking or withholding from our neighbor what belongs to him, or of enriching ourselves at his expense. We are to avoid covetousness; "inordinate prizing" of worldly goods, as well as dishonest means of getting, keeping, and using them. This one is particularly hard for liberals and socialists: We should not envy the prosperity of others. Here's one that difficult for professional welfare recipients: not engaging in idleness, prodigality, and gambling.

From the perspective of Reformed ethics, these things are central to economics, which used to be a branch of moral science.

That -- right there -- is one of the reason I blog so much on politics and economics.

"We will rebuild...." ~ Barak Obama Epiphanes

No, I didn't watch His Beatitude's address last night. For one thing I rarely watch or listen to speeches: I don't waste an hour of my time listening to a speech that will take me only a handful of minutes to read. Last night's took me less than ten minutes. I especially have no interest in a speech for which the speaker is going to disrespect my time by showing he's in charge by making me wait for him to show up late and then going over his allotted time. Why should I give a guy that much of time when he's going to abuse it like that?

Be that as it may, having read the speech, I can say it was predictable. He complained about the massive debt "we've" inherited, and then attempted to inspire us with a speech about how he's going to continue the same type of government policies we've been living with since Roosevelt's New Deal and Johnson's Great Society.

In response to a recession, which follows on the heels of a boom created by credit expansion (which, in turn, was a response to the dot com bust), he promised -- if you can believe it -- more credit expansion. Those banks must get lending again because credit is the life-blood of capitalism. Businesses, among other things, can borrow what they need in order to make payroll.

These are people who know nothing about business. If you must borrow in order to make payroll, you're in a world of hurt. (Makes one wonder why its called "capitalism" and not "creditalism", or something like that.) But I digress.

I read it myself in black and white: credit caused this problem; and credit is the answer to the problem. Of course, he really couldn't press the credit expansion issue too far. He wants us to focus on Democrat hobby-horses as the causes of the recession: tax cuts for the rich (never any explanation of how they caused the recession which, we were initially told, was caused by predatory lending), dependence upon foreign oil, rising healthcare prices, incompetent schools, an inefficient energy grid. But not credit expansion -- except for the part where he blamed people taking on loans they couldn't pay, and people who sold such loans.

One would love to analyze the speech. But it would take a book.

I did enjoy one thing. Several times, in discussing government provision of healthcare I have asked if we might have to draft people into the medical professions should an insufficient number of people be attracted to it, for whatever reason. Last night, His Beatitude announced that dropping out of school will no longer be permitted. Your country needs you, damn it. And you're going to get an education whether you want one or not. And, apparently, these people will be forced to work, drafted into the work force, which, in a different era, was called slavery. Now, no doubt, it will be called patriotism. (Similar to Lincoln's attitude toward the Confederacy: You can't secede. Your country needs you, especially the tariffs your trade generates for us.) But, on another hand, he's effectively put an end to welfare reform, so maybe not. Hard to tell with these people.

Then there was the pretense of knowledge that these people always have, sort of. I mean, first they admit they don't really know if the stimulus plan will work, but we can't do nothing. (Oh, please, can we at least test that hypothesis?) Then, last night, we are told what the plan will do. For one thing, the plan will create or save 3.5 million jobs, which, of course, means that the people who came up with the plan know how to create jobs. (The laundry list is in the speech, which you can read, here.) One wonders why they didn't, in true capitalist fashion, take some intiative and create those jobs themselves.

Note: If Obama were Bush, the press would be spending time on nothing but the claim that America invented the automobile.

Curtis Schweitzer wonders what I think about this story and presents an argument in favor of a mixed economy over a fully capitalist one. The story amounts to this:

On Thursday (Sept 18, at 11am) the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S. To the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there.

If they had not done that, their estimation is that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.

Well, what I think is this. It does present an argument in favor of a mixed economy as opposed to a "fully" capitalist one. But it does so only on the hypothesis that fully capitalist economies have no means of preventing, coping with or withstanding the effects of bank runs.

What a bank run is

A bank run occurs when a large number of bank customers withdraw their deposits because they believe the bank is, or might become, insolvent. (I here overlook the question of how depositors come to believe the bank is in danger of insolvency.) As the run progresses, it acquires a momentum of its own, in a kind of self-fulfilling prophecy. As more people withdraw their deposits, the likelihood of insolvency naturally increases, which encourages further withdrawals. This can destabilize the bank to the point where it, indeed, faces bankruptcy.

How we had this run

The run in question here, and which has Curtis's interest, began, or was noticed, with a draw-down of money market accounts in the U.S. to the extent of $550 billion being drawn of these accounts in the matter of an hour or two. We are not told in the video to which Curtis links, what proportion of total money market deposit accounts in represented by the $550 billion, so, to be quite technical, we really don't know that it was a crisis. Clearly the Federal Reserve thought it was a crisis; I suppose we can assume the Fed knew what proportion of total money market deposits was represented by the $550 billion. (I personally avoid making favorable assumptions about the Fed. I'm not a fan. But I digress.)

We are not told who was drawing out this money, or why. But it does have the ear-mark of a run: a sudden and apparently significant withdrawal of deposits. But the video clip here includes neither an explanation of how this draw-down signaled a danger, nor an explanation of what a money market deposit account is. (Never fear: I know what a money market account is. For our purposes let's just say it is a deposit account at a bank, and therefore the sort of account significant withdrawals from which would constitute a run.) Apparently the draw-down constituted a danger because, we are to believe, despite knowing neither the banks in danger or their financial solvency, the banks did not have the reserves to cover the funds being pulled from these money market accounts.

Nevertheless, the behavior of depositors does constitute a run, so in all fairness we'll grant that single proposition.

How banks become susceptible to runs

But how can this happen? If one deposits one's money in a bank, that money should be there when one wants to withdraw it. By logical extension, if five hundred people deposit money in a bank, then all that money should be there even if all five hundred depositors arrive to withdraw all of their deposits. How, then, do banks face risk of insolvency just by virtue of having all deposits withdrawn?

It's something like this. Most banks practice a type of banking called fractional-reserve banking. Under this type of operation, banks retain only a fraction of their demand deposits as cash. What is not retained as cash is invested in securities and loans. So, if all the people who bank where you do all got together with their passbooks and totaled up the amount you all have deposited, including money market, savings, checking accounts, and (what the heck) IRA's, that amount might come to, say, $100 million -- chump change. But, let's say, your bank has taken half of that amount (i.e., $50 million) and loaned out half of that (i.e., $25 million) and, with the other half (i.e., $25 million), it has purchased stocks, shares of mutual funds and so forth. Of the $100 million dollars you and your fellow-depositors have placed with the bank, there is only $50 million in the bank. You can easily see that there is no way the bank could handle a sudden withdrawal of all its deposits. On any day your bank could only cough up half of what has been deposited with it. So, no bank has enough reserves on hand to cope with more than a fraction of deposits being taken out at once. (This is one reason for those pesky charges you pay for early withdrawal on some of your accounts.)

How banks can protect themselves from runs

Banks can employ several techniques to prevent, or cope with, bank runs. Individual banks may, independently of the rest of the economy:

1. temporarily suspend withdrawals (unless stupidly prohibited by law), called suspension of convertibility (in many cases the mere threat of suspension can prevent a run, which means the threat need not be carried out at all);

2. impose upon themselves a reserve ratio requirement, the higher the better, which limits the proportion of deposits which are lent out, making it less likely for a bank run to start, as more reserves will be available to satisfy the demands of depositors;

3. practice full-reserve banking, in which case the reserve ratio is set to 100%, eliminating the risk of a run because maturities of deposits and loans will be matched, avoiding vulnerability to runs.

Collectively, banks may:

4. utilize a central bank as a lender of last resort, guaranteeing to make short-term loans to banks, to ensure that, if they remain economically viable, they will always have enough liquidity to honor their deposits;

5. employ deposit insurance systems to insure each depositor up to a certain amount, so that depositors' savings will be protected even if the bank fails, removing the incentive to withdraw one's deposits simply because others are withdrawing theirs (however, depositors may still be motivated by fears they will lack immediate access to deposits during a bank reorganization).

How this run was managed

In general this run was handled utilizing a combination of the aforementioned strategies, specifically, 1, 4, and 5. In this case the Treasury, with its "pumping" of $105 billion into the system and guarantee of $250,000 per account acted as lender (or loan shark) of last resort, rather than the Fed. One wonders how this maneuver demonstrates the superiority of a mixed economy over a fully capitalist one. We have to assume that a fully capitalist system would be without ability to engage a lender of last resort, or even, given free enterprise, a plethora of lenders of last resort. (No point looking to the Great Depression as demonstration of the inability of a fully capitalist economy to handle bank runs. Our mixed economy goes back to The Progressive Era which began in the 19th century. And, if not then, certainly with the creation of the Federal Reserve in 1913.)

So, our Lord and Savior Big Government, saved us all -- the whole world, in fact -- from world-wide economic collapse. Or, did it?

On the averted economic collapse

"If they had not done that, their estimation is that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.”

It isn't enough to tell us where money was pulled out of. Unless the people doing all of this withdrawing were stuffing the money in mattresses or holes in the dirt, then it was simply moving from one segment of the economy to another; it wasn't being pulled out of the economy simply by virtue of being pulled from money market deposit accounts. The Fed may have known that money was leaving these money market deposit accounts, but did not, ostensibly, seek to ascertain where the money was going when it left those accounts. It is possible that a great number of banks might have failed as a result of insufficient reserves to cover all those withdrawals. That is one of the costs of foolishness and poor risk assessment. But the economy isn't just the banks. And, contrary, to the Congressman's assertion, you can indeed have an economy without banks. It simply depends upon the nature of the banks in question. What you can't have, without the sort of banking system we have, especially with our fiat – or credit – money system, is just the sort of economy the Congressman undoubtedly wants: a mixed economy, which is a government-dominated economy. This mixed economy might have collapsed. But cooler heads could quite possibly have led a shift to a fully capitalist economy, which is a truly, and fully, free economy.

Conclusion

This argument in favor of a mixed economy rests upon the saving -- if it truly was that -- of a mixed economy. It's looks like a sound argument: "See," it asserts, "we need a mixed economy as evidenced by the ability of a mixed economy to save itself." But it begs the question: it assumes that a fully capitalist economy would not have its own methods. Frankly, the bankers in a fully capitalist economy would be more highly motivated to create systems for avoiding, or coping, with runs -- perhaps even 100% reserve banking. For one thing, without the government stealing, or just creating, money and credit out of thin air, their bearing of the entire burden of risk would make the risk assessments very highly conservative. Moreover, without the politically correct loan requirements imposed upon lenders, at gun-point, lenders would probably not be as over-extended as their government requires them to be. But, again, I digress.

This argument also fails as an argument for a mixed economy because we don't really know if the economy was saved, or was even in danger of collapse. Those two claims have certainly been made. But, of course, the government is going to make such claims: its power rests upon a mixed economy. Ever see the movie Dragonheart? Dennis Quiad, a dragon-slayer-for-hire, and Sean Connery, a dragon, form a partnership, and the two begin defrauding local villages with staged dragon-slayings. The dragon attacks a village, Quaid offers to kill him for a fee, and pretends to spear the dragon, who then falls into a nearby lake and swims out of sight underwater.

That’s the government in a mixed economy: causing problems left and right, with its demands for politically expedient, rather than economic, decisions, and then rushing in like that lunatic, Teddy Roosevelt, charging up San Juan Hill to save the day.

One final note about "fully" capitalist economy: When you hear people refer to credit as "the life-blood" of capitalism you know you don't live in a capitalist economy. The life-blood of capitalism is capital.

Our communion, then, with God consisteth in his communication of himself unto us, with our returnal unto him of that which he requireth and accepteth, flowing from that union which in Jesus Christ we have with him. And it is twofold:— 1. Perfect and complete, in the full fruition of his glory and total giving up of ourselves to him, resting in him as our utmost end; which we shall enjoy when we see him as he is; — and, 2. Initial and incomplete, in the first-fruits and dawnings of that perfection which we have here in grace; which only I shall handle. It is, then, I say, of that mutual communication in giving and receiving, after a most holy and spiritual manner, which is between God and the saints while they walk together in a covenant of peace, ratified in the blood of Jesus, whereof we are to treat.

And this we shall do, if God permit; in the meantime praying the God and Father of our Lord and Saviour Jesus Christ, who hath, of the riches of his grace, recovered us from a state of enmity into a condition of communion and fellowship with himself, that both he that writes, and they that read the words of his mercy, may have such a taste of his sweetness and excellencies therein, as to be stirred up to a farther longing after the fulness of his salvation, and the eternal fruition of him in glory. – John Owen, Of Communion, with God the Father, Son and the Holy Ghost,, Chapter 1.

"[P]rophecies of what the courts will do...and nothing more pretentious, are what I mean by the law." ~ Oliver Wendell Holmes
There must be a civil right to trespass. How else to explain a thirty-two million dollar lawsuit, by 16 Mexican nationals, in which the defendant, Roger Barnett, is said to have violated their civil rights?

They trespassed on his land, known by federal and county law enforcement authorities as "the avenue of choice" for immigrants seeking to enter the United States illegally. He stopped them at gunpoint. Now, they sue him for $32 million dollars.

You have to love the way some people attempt to subvert the law to their purposes. One of the counts alleges that the Barnett conspired, in violation of 42 U.S.C. §1985(3), to deprive Plaintiffs of their right to interstate travel. (See Defendant's Motion for Summary Judgment , p. 2.) Note the logic: the right to interstate travel implies the right to trespass on private property. Want to go from Texas to Kentucky? Forget the highways; hop in a four-wheeler and drive in a straight line. And if any property owner objects, just assert your right to interstate travel. Beautiful. Reminds me of that line from Beverly Hills Cop: "What's the charge for getting hit by a car? Jay-walking?"

Barnett's attorney presented a strange argument against this charge:

[I]llegal aliens have no constitutional right to interstate travel. It would seem counterintuitive to maintain that an illegal alien, who is subject to arrest and removal by the government at any time (as indeed Plaintiffs were removed), and whose interstate transportation is a felony, 8 U.S.C. §1324(a)(1)(A)(ii), possesses a constitutional right to travel within the United States; at the very least, this would be a strange species of “constitutional right.” (Defendant's Motion , p. 7, emphasis mine.

No kidding. You don't have a right to be here in the first place. Indeed, your being here (as a consequence of an illegal border-crossing) is a violation of federal law. So, you have no right to interstate travel. That's deep.

In his essay, "The Path of the Law", Justice Holmes wrote, "The primary rights and duties with which jurisprudence busies itself...are nothing but prophecies.... [A] legal duty...is nothing but a prediction that if a man does or omits certain things he will be made to suffer in this or that way by judgment of the court."

In case Justice Holmes's style is a bit difficult to grasp, whenever someone says, "You have a legal duty to perform some act R," what he really means is, "I predict that if you do not perform R the court will make you suffer in some way," (e.g., by throwing your butt into jail). "You have a duty" is, therefore, nothing but a threat of force.

Conversely, a legal right is nothing but a prediction that if a man does or omits certain things he will not be made to suffer in this or that way by judgment of the court. It's getting more and more difficult to know what our rights are, not because we can't read the Constitution (that's easy enough, which is why so many people don't like it), but because we can increasingly not predict those things for which a court may make us suffer.

And that's limiting ourselves to what courts decide. Juries are entirely unpredictable. A woman sues McDonald's because the hot coffee she spilled on herself was, well, hot. And the jury awards her damages. (You can read an interesting 2004 legal discussion of this case, here.)

I suspect Barnett's in trouble and will probably have to sell his ranch to pay the damages.

The stimulus organ stinks. And while it was being debated -- unread -- we were told it might not be enough. We'll need, surprise, more federal action down the road.

We are hardly in the same condition this country was in when the market crashed in 1929, but we have the largest legislation of this type ever in the nation's history. Why? Because statists can never let slip an opportunity to garner ever more power for the state.

That's why these people didn't read this bill. They didn't have to. Without reading it they know all they need to know: it grows government. Not as much as they want; but it's a start.

That's why it stinks. But what does it smell like?

Paul Shlichta suggests that the stench may be turpentine.

Today, His Beatitude flies to Denver to sign the stimulus organ into law, a bill not one person who voted for it could possibly have read in its entirety, certainly not the one who is going to sign it into law.

On the other hand, maybe he doesn't really have to read it to know what's in it -- business give-aways to companies like General Electric and Vestas, among others (the Left's version of "big oil"). And it doesn't really matter what's in it. Appropriate bureaucrats will just make up for deficiencies by fiat, or Our Benevolent Leader will issue the executive order needed to patch up any missing elements. It would have been just as effective to write a one-page bill to the effect that the President is empowered to do, by fiat, whatever it takes to fix the economy, and whatever else Congressional Democrats and their Republican trophy wives determine he should be personally empowered to do.

After all, they love us and want only what's best for us; and what's best for us is whatever it is they decide to do.

My close friend, Lew Rockwell, reacts:

After all the ghastly statism of the Bush years, you might think that the Left would back off from using power to achieve its aims. Instead, they have learned nothing. The Left has been lying in wait for its chance. As the Obama people entered the White House, it was as if they found a closet labeled "failed ideas of the past." They opened it and the contents spilled everywhere. They started grabbing things and putting them in the regulatory books and in legislation.

What an amazing pile of junky, worn-out, bogus policy ideas! Equal pay for equal work. Infrastructure spending. More money to the public schools. Socialized medicine. Rock-bottom interest rates. Welfare! Every wish granted by government. Down with business. Down with business failures. Curbs on fat-cat pay. Down with Wall Street. Turn on the money spigots. Expropriate the expropriators. Subsidies for every lifestyle that flies in the face of bourgeois prejudice.

[...]

Those Obamaites! So compassionate, loving, universally minded, progressive — except that their ideological cousins managed to starve and destroy whole civilizations. Loyalty to their creed means death, because their ideology is the pathway to the gulag — and for one simple reason: their preferred means of social change is the state. The state is always and everywhere a threat to liberty, and liberty is the basic building block of prosperity and civilization.

Despite the slogans about progress, the upshot of the Obama administration is as deeply reactionary as anything that Bush conjured up. Despite all the hype and hope, what Obama offers is nothing new. It amounts to the robber state and the regimentation of society, a plan that will kill off prosperity and the conditions that allow for it.

The Republicans are right to fight this tendency at every turn, for it represents a radical attack on all things truly American. Worse still, by playing with the printing presses, the policy tendency here is also deeply dangerous. It could destroy the dollar internationally and domestically, igniting a hyperinflation that no one will be able to control once it gets going. One only wishes that the Republicans had been so principled when their president was in charge! (Emphasis mine.)

Okay, Lew isn't a close friend -- not even an acquaintance; but he should be.