Month: September 2011


Don’t You Dare Call It a Ponzi!

Governor Perry referred to Social Security as a “Ponzi scheme” and the Left went ape. Somehow, they think it’s nuts to refer to Social Security as a Ponzi arrangement, even though their own darling, Paul Krugman, has said it has a “Ponzi game aspect.” So is it a Ponzi scheme, partly a Ponzi scheme, or not remotely a Ponzi scheme?

Robert Murphy breaks down the Ponzi elements and examines them. It’s worthwhile reading, if you want to understand the Ponzi concept and how it relates to Social Security. For me, I’m less willing to refer to Social Security as a Ponzi scheme, since it’s not as “cut and dry” as I previously thought. On the other hand, it’s clearly not nutty to refer to it as a Ponzi scheme. It has more Ponzi-like attributes than not.

The article also has a common sense defense of the much-maligned (and pictured above) Charles Ponzi:

It’s true that Ponzi engaged in fraud; his victims never would have “invested” with him, had he accurately explained the business model. Libertarians therefore agree with everybody else that Charles Ponzi was a criminal and would have to face legal consequences in any just legal order.

However, so far as we know Ponzi never threatened anybody. He didn’t tell struggling young workers, “Give me 15 percent of your paycheck every week, so that I can

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notebooks.jpgFrom the Notebooks

Allegations of Brownson’s inconsistencies in later years are often misplaced. Recent biographer R.A. Herrera, for instance, alleges that Brownson’s view on the democratic revolution that was picking up speed in the mid-nineteenth century flip-flopped. Herrera criticizes Brownson for saying, in 1856, that the democratic “revolution, in some form, will go on,” and urging the Catholic Church to prepare for the revolution’s success. Herrera calls Brownson a weathercock for this “turnabout” because eight years earlier Brownson had “severely criticized the view that the Church should abandon the governments and appeal to the people, forming an alliance between religion and liberty.”

Herrera’s analysis doesn’t fit. Brownson didn’t think any form of government was necessarily better than another as long as it assured the people liberty. Democracy, he thought, was in the best position to do this, and hence he tended to favor democracy, especially in the United States where it was implemented under the Constitution. But he never wavered from the view that the people’s liberty could be obtained under a monarchy, aristocracy, or other form, and he also thought all just governments were an arm of God and deserved obedience, as long as they ruled with divine law in mind. He accordingly objected to the rabidly-democratic rebellions and revolutions that were accosting European nations at that time, finding that they proposed to overthrow monarchies and divine law in the name of popular government … Read the rest

The Gricester

Dylan Grice is a brilliant man. Based on this picture, he’s about 17-years-old, but he’s also Société Générale’s Cross Asset Research strategist whose learning branches far beyond investments and economics.

Consider carefully his most recent piece (much of which you can find here), in which he says that, priced after all the recent money printing, gold should be at $10,000 per ounce right now. The piece in general serves as a great primer of the deceptive evil of money printing and, at the same time, penetrates into psychological and historical truths. Consider this outstanding passage:

By issuing bonds to itself the government seems to have miraculously raised revenue without burdening anyone else. This is probably why the mechanism is universally adopted throughout the world’s financial system. Yet free money does not, and cannot, exist. Since there can be no such thing as a government, or anyone else for that matter, raising revenue “at no cost” simple logic tells us that someone, somewhere has to pay.

But who? This is where the subtle dishonesty resides, because the answer is that no-one knows. If the money printing creates inflation in the product market, the consumers in that product market will pay. If the money printing creates inflation in asset markets, the purchaser of the more elevated asset price pays. Of course, if the printed money ends up in asset markets even less is

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I really like a good drinking glass, whether it’s a big wine cup or a solid pilsner. For those enamored with comic books, these pint glasses looks pretty cool, though I can’t believe the neo-Prohibitionists aren’t going to scream “foul” on grounds that they promote pre-teenager drinking.

Additional problem: They’re a little expensive: $10 a glass.


Finally, a strong man contest for the rest of us: an endurance competition in which athletes try to hold onto an enormous beer for as long as they can. Link.

The beer is one liter, or about five pounds. Most people can’t last longer than a couple minutes. If you can do it for ten minutes, you might be the champ in New York City. If you want to win international competition, you have to last more than 20.

Well, I know what I’m going to be doing this weekend.


Germans are already hopping mad about the Greek bailouts. I heard this week that 75% of them oppose the measures. That’s a shocking majority.

I gotta think the anger is going to increase when Germans see what easy-money policies are doing to Oktoberfest:

Oktoberfest inflation — measured by the cost of transportation, two Mass (or liter) of beer and half a grilled chicken — is set to rise 3.3% this year from a year ago. That’s well above the ECB’s 2% target for euro-zone

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The Kavorka

A Dutch woman who called a man 65,000 times in the past year – an average of 178 calls a day – is to face charges of stalking. Kinda reminds me of my high school years. My parents had to change our home phone number after a group of chicks saw me mowing the yard with my shirt off one day.

Or something like that.

Poor Art

I don’t think I ever bought into the whole gambling addiction concept, until I read about poor Art Schlichter. The Ohio State QB could’ve been a star in the NFL, but he threw it all away for gambling.

Back in the 1990s, I was an Arena Football fan. The Detroit Drive won four championships. The reason: Art Schlichter was their QB. Whoever had Art, won the Arena Bowl. It was that simple. The guy was that good (compared to his Arena counterparts).

In any event, his trials and troubles continue: “Documents filed Wednesday in U.S. District Court in Columbus allege Art Schlichter deceived people by promising sports tickets at low prices based on his contacts.” Link.

Drinking Corner

I blogged months ago about extreme beers: Beers that pack a huge alcoholic wallop. Start the Future is the current record holder at 60 percent alcohol.

But I never knew that Sam Adams started the contest over two decades ago. I found this very interesting:


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Drinking Corner

This a merciful thing: “Some of America’s most famous beers have lost a tremendous amount of their national sales over the last five years. Mostly, they are full-calorie beers, and they have lost sales to lower-calorie products, as well as imports and craft beers. 24/7 Wall St. looked at the 23 largest selling beer products in America and found eight that have lost a staggering 30% or more of their sales between 2005 and 2010.” Link.

So which eight have taken the biggest hit? I’ve listed them below, in reverse order. I have rated each beer on a scale of one-to-ten, using my expert status as a drinker with 30 years experience. As you’ll notice, I think we’re seeing a fine and noble trend with these beers’ decline:

8. Budweiser: 3
7. Milwaukee’s Best Light: 2
6. Miller Genuine Draft: 7
5. Old Milwaukee: 6
4. Milwaukee’s Best: 3
3. Bud Select (never tasted)
2. Michelob Light: 6
1. Michelob: 7

Average score: 4.85. I’m also encouraged that Pabst (my favorite low-end beer) isn’t on the list, but then again, it lost so much market share in the early aughts, it probably didn’t have much more room to give.

notebooks.jpgFrom the Notebooks

Orestes Brownson was the first person to try to offer a complete theory of the role of the Catholic Church in America. He wasn’t willing to concede America to the … Read the rest


Detroit Poetry

I split a couple of bottles of wine with Uncle Verny last night. He lives in Texas, but he grew up in Detroit. In the early 1960s, he worked in a convenience store on Five Mile Road (for those unacquainted with Detroit, everything south of Eight Mile is, well . . . check out that link). He said customers would come in and rhyme, in a distinctive swagger:

“What’s the word?
“What’s your joy?
“Nature Boy!
“What’s the price?
“44 twice.”

Then the customers would buy a bottle or two of low-shelf wine. I thought he was kidding, and he kinda looked at me like, “You think I remember that 50 years later because I dreamt it?”

A good time with Uncle Verny last night. Good man, that V.D. (named “Vernon Duane” by his parents, my father–and his older brother–made sure he understood the import of his initials early in life). … Read the rest