Why We Do NOT Have a Fractional-Reserve System

This blog entry is for anyone who believes, as John Tamny here puts it, that “Fractional reserve banking quite simple IS.” Among the many good points Tamny makes in his article, there is the underlying assumption that our system is, in some important sense, a fractional-reserve system. But is this a valid contention? My contention … Continue reading “Why We Do NOT Have a Fractional-Reserve System”

Jimmy Stewart Banking versus James Steuart Banking

In his excellent book The New Lombard Street, Perry Mehrling writes of “a world that never was … Jimmy Stewart banking of blessed memory” (p. 117). This is an obvious  reference to one of Jimmy Stewart’s most famous roles: George Bailey in the holiday classic movie It’s a Wonderful Life. In the movie, Bailey is … Continue reading “Jimmy Stewart Banking versus James Steuart Banking”

How to Make the Euro Project Work

The euro seems to be on its last legs, and the vision which inspired its genesis seems to have vanished from the politicians sponsoring it. The recent spat with England and Prime Minister Cameron has only served to highlight the vacuum in vision. Previously, whenever England was scapegoated, English politicians skulked like whipped curs, and … Continue reading “How to Make the Euro Project Work”

Cloverfield Government

Well it’s about time I woke up from hibernation to begin posting again. Not much to say for awhile there, not to mention being preoccupied with finishing the next volume of the Stahl translation, about the state and constitutional law. I hope to have it published within a month (that’s quite optimistic though). At any … Continue reading “Cloverfield Government”

What is a Crisis of Trust?

We hear a lot these days about the current financial crisis being one of trust. Banks don’t trust each other any more, lenders don’t trust borrowers, investors don’t trust who or what they are investing in. That is all true, but it does not get to the heart of the matter. What is trust? It … Continue reading “What is a Crisis of Trust?”

Anticapitalism as Default Mode

What explains the uphill battle Republicans have in convincing people that their agenda is better for the economy than that of the Democrats? What explains the ease with which Democrats can pretend that economic woes are attributable to Republicans, in the face of all evidence to the contrary? One may blame the monolithic left-wing mainstream … Continue reading “Anticapitalism as Default Mode”

What’s Behind the Meltdown

The stock markets continue to plummet in unnerving fashion. The blame for it is centering on the “bailout” package — was it too little too late, was it too much, was the passage of it a dispiriting display of bad leadership. I think it goes deeper than that. The bailout was never meant to solve … Continue reading “What’s Behind the Meltdown”

The Bottom Line: False Weights and Measures

At bottom, the issue involved in this financial crisis is false weights and measures. That is, a standard of valuation that is manipulated, making people believe they are receiving something other (of lesser value) than they actually are. The Bible has this to say about such false weights and measures: Le 19:36 Just balances, just … Continue reading “The Bottom Line: False Weights and Measures”

More than an Analogy?

One of the themes running through my head regarding a description of the current financial crisis is that of the similarity of subprime mortgages to HIV. Just as HIV gets in the bloodstream and destroys immune capacity, subprime mortgages were packaged together in MSOs and CDOs which, circulating through the banking system, in turn have … Continue reading “More than an Analogy?”