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free trade & free markets moral hazard

Is It Still Capitalism?

Is it still capitalism if the capital is guaranteed?

“The U.S. government will guarantee all customer funds in Silicon Valley Bank (SVB) after a series of bad decisions and a run on deposits led to the bank’s collapse,” explains Elizabeth Nolan Brown in Reason

Technically, the bank isn’t being bailed out. Its customers are. And that’s a lot more popular than bailing out banks directly. There are more bank customers who vote than bankers who vote — though there is probably more political donations from banks directly seeking banking policy “correctives” than bank customers doing the same. That’s almost apodictically true.

The most bizarre element? While the FDIC, the federal agency that insures depositors of this and similar banks, is designed to guarantee depositors’ capital up to a certain limited amount ($250,000, more or less), the regulatory triumvirate of Treasury Secretary Janet Yellen, Federal Reserve Board Chair Jerome Powell, and FDIC Chair Martin Gruenberg declare that “all depositors of this institution will be made whole.” 

All.

Even the super-rich.

The key concept, here, is moral hazard — “The decision creates bad incentives for financial institutions and their customers” is how Ms. Brown puts it. We’ve been through all of this before. Is there really any question? The answers are in.

So, to the opening, Is it still capitalism if the capital is guaranteed? — if even Prince Harry’s fortune will be guaranteed — the answer is No.

Sorta. 

It’s a special kind of capitalism. State-dominated capitalism; Neo-mercantilism; f***-ism. Use whichever term.

As we contemplate a profit-and-loss system without loss, and how the losses will be made up within the financial system, just remember that the federal government playing the role of Savior is not itself costless, and . . . its debt keeps growing. And the Ultimate Result of all this still looms.

Immoral hazard.

This is Common Sense. I’m Paul Jacob.


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crime and punishment general freedom international affairs moral hazard

Thank Omicron? Or Hypocrisy?

It was not immediately clear what had changed regarding “the science,” when, midweek, Britain’s Prime Minister Boris Johnson lifted the Queen’s government’s mask mandates and other coronavirus restrictions.

The case for and against mask efficacy has been about the same for a very long time. There’s no obvious statistical evidence for mask mandates working. And pre-2020 studies showed ambiguous results for preventing virus transmission by wearing masks — and certainly not for the cloth masks most people wear.

So what changed?

Well, Johnson cited the omicron variant. “Our scientists believe that the omicron wave has now peaked nationally,” he said, adding that hospital admissions had stabilized and that London admissions were falling. 

So he lifted mask requirements in schools, too.

This takes some pressure off him. The vast majority of Brits are tired of masks, especially on students.

Predictably, however, some school masters appear to be clinging to the cloth. 

Regardless, why the change?

Spokespersons for the beleaguered opposition party, Labour, argue it’s mostly political, since Boris was caught at two bigwig parties where no one was wearing masks. “Can the PM share the evidence,” asked one, “behind his decision and that he’s not just protecting his job?” 

And Johnson says that “the scientific evidence is there for everybody to consult” — but, face it, everything these politicians say is half-assessed and untrustworthy.

Still, at least the people of Britain will receive a little let-up from the oppressive “scientific” tyranny of their government.

Not all states to the west of the Atlantic can say the same.

This is Common Sense. I’m Paul Jacob.


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government transparency moral hazard national politics & policies partisanship

The Secret of the Second Impeachment

The impeachment that followed the events of January Sixth was . . . peculiar. President Trump had just a few weeks to go in his term, thus “removing him” on the way out seemed . . . almost pointless. 

And we quickly learned that the Senate wouldn’t hear the case until after Trump’s replacement was installed in office.

So why?

Had enough Republicans in the upper chamber jumped ship, what House Democrats would have obtained for their troubles was (1) a prohibition on Trump running again and (2) a twist of the knife.

Key word: Payback.

Democrats had never really “accepted” their defeat in 2016. So they played up Trump’s unwillingness to “accept defeat” in 2020. A poetic revenge — “with a twist.”

But this may have been more than merely partisan payback. 

Here’s the proverbial Rest of the Story: The lame duck president had been seriously considering pardoning Edward Snowden and Julian Assange. And that was something the permanent government of the intel agencies and military-industrial complex could not allow. So, as Glenn Greenwald reported on Rumble, the Deep State’s most ardent Republican supporters in the Senate — Lindsay Graham being most prominent — threatened to vote against Trump in the impeachment proceedings if the president pardoned either of those . . . heroes.

By impeaching Trump, Democrats not only humiliated the man, to the extent he could be humiliated, they scored a political win against Snowden and Assange, two men who had humiliated the establishment in general and their party in particular.

The big winner? The Deep State.

And the real loser? Not Trump — the American people.

Because we are left with a Leviathan that spies on us and lies to us.

This is Common Sense. I’m Paul Jacob.


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First Amendment rights general freedom media and media people moral hazard nannyism social media

Tom Paine Sues Facebook

The ghost of Thomas Paine is suing Instagram and Facebook.

Mr. Paine, the eloquent champion of the American Revolution who penned such zeitgeist-capturing volumes as Common Sense, The American Crisis, and The Rights of Man, is going to court to protest the indignity that these social-media forums recently inflicted upon his spirit by censoring his statement that “He who dares not offend cannot be honest.”

The statement comes from an op-ed Paine published in the April 24, 1776 issue of the Pennsylvania Journal: “Cato’s partizans may call me furious; I regard it not. There are men too, who, have not virtue enough to be angry, and that crime perhaps is Cato’s. He who dares not offend cannot be honest.”

Mr. Paine seems to be saying that persons of craven mettle often eschew the challenge of being standard-bearers of truth, especially when controversial matters are involved. Articulating such views forthrightly tends to offend — somebody.

The particular mentalities of censorious Facebook flunkies and algorithms are new to Mr. Paine, of course. But he is ready to fight.

“Tyranny, like hell, is not easily conquered,” he declares when asked to assess his prospects, “yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly. . . . [I]t would be strange indeed if so celestial an article as FREEDOM should not be highly rated.”

If that be hate speech, Mr. Paine seems to suggest, make the most of it.

This is Common Sense. Happy New Year! I’m Paul Jacob.


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general freedom international affairs moral hazard

WHO’s Daddy

China and its lapdog, the World Health Organization (WHO), face increasing global anger over having initially hid the person-to-person spread of coronavirus, which has killed a staggering 126,000 people worldwide. So far.

Still unrepentant, Beijing and the WHO have continued to butcher the truth — even in petty ways. 

Late last month, a Hong Kong reporter asked a WHO official to comment on how successfully Taiwan had responded to the pandemic. The official pretended he couldn’t hear the question. Then, when the reporter offered to repeat it, he insisted they move on. 

WHO could provide such a cocktail of cowardice and disingenuousness?

Yes! 

Of course, the last refuge of such scoundrels is to hurl utterly bogus allegations — to play the victim and change the subject. Enter WHO Director-General Tedros Adhanom Ghebreyesus, who last week made the ridiculous and completely unsubstantiated charge that the Taiwanese government was instigating racist attacks against him on social media. 

Discriminated against by the United Nations and WHO for years, upon China’s insistence, the Taiwanese reacted on social media with their usual grace, sense of humor and a smart promotion of their island’s great food and beautiful scenery, using the hashtag: #ThisAttackComesFromTaiwan. 

As explained yesterday, Taiwan is a friend. China and the WHO? Not on your life.

That’s why Americans of all political persuasions (and so many others across the globe) cheered President Trump’s announcement yesterday that the U.S., the largest donor to the World Health Organization, would suspend its financial support.

“So much death has been caused by their mistakes,” Mr. Trump said.

Sadly, I fear Trump is wrong about one small part: “mistakes” seems far too generous a word for what WHO and its dastardly daddy, China, have done.

This is Common Sense. I’m Paul Jacob.


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crime and punishment general freedom moral hazard The Draft

Draft Mom or Not?

“The biggest piece of opposition” to extending draft registration to women, former Nevada Congressman Joe Heck told The New York Times, “was, we are not going to draft our mother and daughters, our sisters and aunts to fight in hand-to-hand combat.”

Yet, that seems precisely what the National Commission on Military, National and Public Service, chaired by Heck, called for in its just released report, urging Congress to make our daughters sign up for the military draft and to be equally conscripted in any call-up.

Or in a new compulsory military will draftees be able to say, “No thanks, I don’t feel like engaging in hand-to-hand combat”?

Today, women comprise nearly 19 percent of 1.2 million active-duty soldiers. They rightly have all combat jobs open to them — the very positions a draft has traditionally been used to fill.

So, in the name of equal rights are we forcing mom into a foxhole or not?

It seems . . . complicated.

“Women bring a whole host of different perspectives, different experiences,” offered Debra Wada, a commission member and former assistant secretary for the Army. 

Since when does the military conscript people for their “perspective”?

“[B]eing drafted does not necessarily mean serving in combat,” The Times paraphrased Wada. “In a time of national crisis, the government could draft people to a variety of positions, from clerical work to cybersecurity.”

This doesn’t seem to be about actual equality of service —or equality of risk — at all, but instead about a bigger pool of possible forced labor.

“If the threat is to our very existence,” Wada rhetorically inquired, “wouldn’t you want women as part of that group?”

Yes! Certainly.

Of course. 

But as volunteers, not as conscripts — and the same for men. 

This is Common Sense. I’m Paul Jacob.


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