Eruptions in the News


The volcano in Iceland that belched enough concentrated emissions over Europe to ground air travel to a degree not seen since September 11, 2001 must be the envy of climate-change prognosticator Al Gore. His own eructations about carbon emissions have not enjoyed such an impact for a while. Of course, with the United Nations’ International Panel on Climate Change record for fraud and data manipulation, how long will it be before human intervention in Iceland is blamed for this natural occurrence?

Opening Salvo

The United States Securities and Exchange Commission (SEC) has accused Goldman Sachs & Company of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the U.S. housing market was faltering. SEC officials said it will continue to investigate causes of the financial/economic crisis and take appropriate actions. I am certainly not the first to comment on the “coincidental” fact that the Obama administration is promoting a stiffer regulatory oversight on the financial industry in new legislation, the particulars of which have been outlined by Senator Chris Dodd recently. Let me just state that in politics, or in any other realm, I do not like coincidences. In politics in particular, a separate investigation into this coincidence is warranted, but I am not aware of a journalist with the integrity or independence to conduct one objectively. There are likely to be dozens of charges brought down against other Wall Street firms, but Goldman is the biggest target in the world. No other company has the ability to raise the kind of capital required for innovative and speculative market ideas. This attack by the US government is nothing more than a bald-faced continuing assault on capitalism as the scapegoat for government failure. Only when Chris Dodd, Barney Frank, Charles Schumer and other sleazy enablers in the U.S. Congress are put in handcuffs and/or put on trial for their many malversations will justice be served.


Ron Paul, Republican Congressman, has polled dead even with President Obama in a hypothetical 2012 election among likely voters. This is remarkable because Ron Paul is generally regarded as a Libertarian who has political enemies among both Democrats and Republicans in the so-called political class. This is where things get interesting. A similar poll question among the political class would have Barack Obama winning in a runaway. Anyone who thinks the US is a classless society should think again. The ambiguity of the simultaneous appeal of Sarah Palin to broad swaths of society amidst almost universal revulsion held for the young woman among the media and other members of the political class proves to be not such a mystery at all.


Federal Reserve Chairman Ben Bernanke says a moderate U.S. economic recovery is likely to warrant low interest rates for a long time. He also said that inflation was not an immediate concern. He is counting on “productive over-capacity”, high unemployment and “controlled” inflation expectations to make his prognostications. If any of these conditions should change he says a different (unspecified) response would be required. He does not have a clue about what is going to happen next in the U.S. economy. His expectations are no more refined than yours if you just try to understand what he is saying and look at what is actually happening. The esoteric double-talk of representatives of the Federal Reserve serves to highlight what an overrated unproductive role this institution and all of its bureaucrats serve in a society where economy is determined by the unpredictable decisions and actions of millions every hour. What the hell is “immediate” in the context of concern over inflation? Did he define inflation? See Inflation of What?


Listen up, Bernanke. The International Monetary Fund (IMF) expects unemployment rates to remain high in developed countries (U.S. and Europe in particular) for at least two more years.


Kosovo Republic, an Islamic country, joins Tunisia, France and the province of Quebec in Canada in banning headscarves in public schools. This is a thorny issue for egalitarian institutions like public schools (which generally pursue the objective of pleasing everyone and end up pleasing no one). There are legal and other procedural or jurisdictional challenges facing all of these decisions. However, if an Islamic country like the young Kosovo Republic can take a common sense step when faced with an issue where a few detractors are affecting the whole institution’s credibility and ability to function, then why cannot more secular countries or Western democracies take such common sense steps? Of course, the answer lies in the “diversity” values of the accommodating democracies; this is just another manifestation of trying to please everyone and pleasing no one. Market solutions are available. If societies allowed the complete privatization of education over time so that parents and students could make choices among institutions that don’t waste time trying to please anyone but their paying clients, these useless nationwide controversies would essentially disappear.


John McCain says at a Senate hearing that the U.S. needs to act more boldly in dealing with Iran. If this comment came from someone other than “which-way-is-the-wind-blowing-today” McCain, it might be worthy of reporting more widely. The “slipstream” media, for very different reasons, has avoided much comment on the McCain viewpoint. He is simply political history in the wake of the Obama election.

Bursting Bubbles

Bernanke also says the Fed does not see speculative bubbles forming in assets such as stocks, bonds or commodities at this point but is closely monitoring the situation. Some observers are concerned that the low interest rates will create another bubble like the one in housing. Here is a news flash: the new bubble is already here and it is not an asset but a liability in the form of government debt. This debt is at all levels: national, state and local governments. When that sucker bursts, look out below.


The Media Research Center has found that the major news media (what I call the “slipstream media”) has either ignored or maligned the so-called Tea Party movement. One self-proclaimed supporter of the leaderless grass roots movement said: “First they ignore you, then they ridicule you, then they fight you, then you win.” Who in the media would have expected that among those they’ve been maligning as racists, gun nuts or rednecks, someone would be channelling Mahatma Ghandi?


New Jersey Governor Chris Christie, who is trying to bring some fiscal sense to the budget of the long-time spendthrift state, is receiving death threats. It is not unusual for a politician to be receiving anonymous threats, but this time it is on the record via an email message from the head of the Bergen County Teachers Union, who is apparently praying for the death of the governor and urging others to do the same. Calls for the resignation of this union leader by the Governor have been summarily rejected. Christie is the newly elected Republican governor in a historically Democratic state.


An 86-year old woman in Britain caused a major kerfuffle when she started eating a cookie. The offending cookie was purchased for off-site consumption and thus could not be legally consumed in the store cafe where she had also purchased her lunch. Still feeling a bit hungry following lunch the woman innocently decided to nibble on the previously purchased cookie. Security guards and other officials had to be called in, thereby creating a major scene and thoroughly humiliating the old lady. Although worthy of a Monty Python sketch, I don’t think these unintended consequences of an arcane tax system represent much progress in the civilization satirized by John Cleese and his associates some 40 odd years ago.

Trial Balloon

In February, George Soros warned of an asset bubble in gold. Then his investment funds promptly began acquiring the commodity, presumably signalling that it is okay for him to ride the bubble but the riff-raff should stick with paper money. As more investors at various levels of wealth add bullion to their holdings the “commodity” is taking on more of a wealth-protection role, which is the true value of the metal as measured against the funny money printed by central bankers. Watch out for overtures to make holding gold by private citizens illegal.

Puff Adder

Also in February, U.S. President Barack Obama said that the emergency legislation he signed a year earlier helped the economy of the U.S., saving at least 2 million jobs and avoiding a deeper recession. Neither assertion was provable, nor are they provable now, nor will they ever be provable. The jobless rate in the U.S. continues high and is expected to be high for years hence. The recession, despite “slipstream “ observations to the contrary, is still in full flower; conditions suggest to me that it will be at least as prolonged as the ridiculous unemployment levels in that country. Now you can estimate the value of non-provable assertions from empty-suited politicians.


On “Twitter” or some other social network somewhere, teenagers are discussing acne afflictions.

©Copyright 2010 Edward Podritske

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