According to this article on mlive.com, the Chairman of the Republican Party, fascist Saul Anuzis, is trying to have Ron Paul banned from future debates. The Republicans are quite clearly shaking in their boots — if Ron Paul is no threat, why do they need to ban him? It’s because he connects with real traditional conservatives, and those who might be re-evaluating the US’ war against Iraq. At the moment, he also connects much more with the American populace, at large, than pro-war fascists like Giuliani.

In Germany, politicians like Giuliani, McCain, and Hillary Clinton might be banned for being too neo-Nazi, if the ban on Nazi’s was taken seriously (that is, interpretted in policy, not merely name).

Before MSNBC deletes these reader comments, I’m posting them here (MSNBC doesn’t have copyright over other’s comments). The following is an exhaustive listing of all of the comments up to the point of this posting. Despite winning MSNBC’s own polls, and winning Fox News’ listener polls, Ron Paul has been blacked out. It seems pretty clear that the way the nomination system works, and the way the mainstream media works, is to make it impossible for anyone but the “favored candidates” to have a chance. See Ron Paul 2008 for a video of Ron Paul’s answers in the debate.not much of a story…just a comment really, if i didn’t know who ron paul was before reading this, i certainly wouldn’t know after…you dont even mention he’s running for president or that he is a current senator…
Roy, Denver, CO (Sent Tuesday, May 15, 2007 4:24 PM)

So, based on what you read and heard, what is the “Ron Paul Revolution” all about?
Steve Dasbach, Falls Church, VA (Sent Tuesday, May 15, 2007 4:36 PM)

Actually, he’s a current Representative.
Bill, Springfield, Oregon (Sent Tuesday, May 15, 2007 4:38 PM)

Well, since the article was so short in details, here’s some of facts about Ron Paul: He has never voted to raise taxes. He has never voted for an unbalanced budget. He has never voted for a federal restriction on gun ownership. He has never voted to raise congressional pay. He has never taken a government-paid junket. He has never voted to increase the power of the executive branch. He voted against the Patriot Act. He voted against regulating the Internet. He voted against the Iraq war. He does not participate in the lucrative congressional pension program. He returns a portion of his annual congressional office budget to the U.S. treasury every year. Ron Paul is a representative of Congress from Texas’s 14th district. He is currently seeking the Republican party nomination for president.
Stephen, San Jose, CA (Sent Tuesday, May 15, 2007 4:44 PM)

Ron Paul won your own viewer poll. Yet, you are barely are willing to acknowledge his existence! It’s disgusting – and obvious to viewers! It is also quite obvious to all of us that Ron Paul is not one of MSNBC’s “annointed” candidates. The hypocrisy you show is astonishing. Is MSNBC part of a free press? Nope! You are part of a “machine” press that wants to tell us what to think. And you make it so blatant it would be funny if it weren’t so repulsive. Now go do a story about Paris Hilton…. it’s about all you can muster.
JJH NewYork, NY (Sent Tuesday, May 15, 2007 4:50 PM)

As a Congressman, Paul has: -Read the Patriot Act, and voted against it -Voted against going to war in Iraq -Wants to abolish the IRS -Wants to get rid of the Federal Income Tax Even today, individual income taxes account for only approximately one-third of federal revenue. Eliminating one-third of the proposed 2007 budget would still leave federal spending at roughly $1.8 trillion – a sum greater than the budget just 6 years ago in 2000! Does anyone seriously believe we could not find ways to cut spending back to 2000 levels?
Anthony, New York, NY (Sent Tuesday, May 15, 2007 4:53 PM)

Ron Paul is a Republican representative from Texas who has never voted to raise taxes nor has he voted for an unbalanced budget. He voted against the Iraq War and the Patriot Act. Check him out, he’s a great candidate! The Ron Paul Revolution, in my understanding, is simply a group out promoting Dr. Paul and his message. Here’s his campaign website: http://www.ronpaul2008.com/
Matthew Peterson, Mobile, Alabama (Sent Tuesday, May 15, 2007 4:54 PM)

“Ron Paul Revolution” isn’t actually endorsed by his campaign to the best of my knowledge. And I also would like to comment that it would be nice if you would actually mention who he is in the article.
John Mac, Hudsonville, Michigan (Sent Tuesday, May 15, 2007 5:09 PM)

If you’re looking for info about Ron Paul Revolution you can find them on youtube. They have a bunch of videos. It’s great to see they were out there at the debate tonight
Jen, Chicago, Illinois (Sent Tuesday, May 15, 2007 5:10 PM)

Ron Paul is the only congressman that keeps his oath of office. He returns money to Washington that he doesn’t need to spend in his district. He has turned down the lucritive congressional retirement. He has EARNED more respect than anyone who has graced the hill, but he gets NO respect from the media.
Flo Greenville, Ohio (Sent Tuesday, May 15, 2007 5:31 PM)

You guys are actually reading MSNBC.com looking for *information*?!?!? That’s rich.
Rob, Binghampton, NY (Sent Tuesday, May 15, 2007 5:45 PM)

OH MAN!!! I am so impressed by the people posting on here…they are really telling the truth! Whom knew that when you turn off mainstream media you could become a well informed patriot!!! Look this is the guy that will allow us to take our country back from the current administration whom has no interest in the american citizen but only corporations. Bottom line the government should work for the people not the other way around….wouldn’t be a democracy! He is willing to remove the IRS as it is an “ILLEGAL” entity!. Bring back Security to our Borders…correction Bring back the Republic and Security to our borders. For the brain-washed google NAFTA AND CAFTA … North American Empire…yup it’s coming with no say from you and I. Yes RON PAUL is against it! He will bring the troops home…I know we should keep them there until we win…although I don’t think GW knows what a good definition of victory is. (Soverign Nation with secuirty, army, and peace 2004 / no car bombs 2006 / less secualr violance 2007.) Most of all he is talking about building a stronger United States. Yea reminds of some GW’s propoganda right….right before shipping hundred of thousands of off-shore. No I don’t hate GW besides he’s not really in control anyway. Google Rockefeller…predicted 9/11 before it happened 11 months before it did…scare people to create endless war on terror! Not crazy talk…GOOGLE IT!! Watch out Venezuela is next!!
Roberto Gonzales (Sent Tuesday, May 15, 2007 5:45 PM)

I am impressed with Congressman Ron Paul’s dedication to the US Constitution. I believe he would be the best President because he would restore peace, preserve our liberties, and enable real prosperity. He has my support.
George Whitfield, Seoul, Korea (absentee voter in Florida) (Sent Tuesday, May 15, 2007 5:50 PM)

Ron Paul is featured in the movie “America: Freedom to Fascism”….you can watch it free on Google video….I’d love to see a Ron Paul/Dennis Kucinich 2008 ticket….they’d be unstoppable!…..Google videos: 9/11 Press for Truth, Loose Change 2nd Edition
911truthdotorg (Sent Tuesday, May 15, 2007 5:56 PM)

Roberto Gonzales….right on, my man! The people in this country had better wake up to the fact that the fascists running this country right now are mass murderers. They made their “new Pearl Harbor” happen to give them the eternal green light to destroy The Constitution, our rights and ultimately, this country. We NEED someone like Ron Paul to help us undo the nightmare of these barbarians. But I fear that he will end up like Kennedy if he does get elected. JFK had signed Executive Orders to abolish the Federal Reserve and the CIA and a few months later they killed him. Ron Paul wants to do the same with the Federal Reserve and the IRS, not sure about the CIA. We need to help Ron Paul!!….Google videos: 9/11 Press for Truth, Loose Change 2nd Edition
911truthdotorg (Sent Tuesday, May 15, 2007 6:20 PM)

Alright! Glad to hear about the activity on the ground.
iRonPaul.com (Sent Tuesday, May 15, 2007 6:51 PM)

Name another politician who refuses to take a nickel of his fat Congressional pension and strictly abides by the Constitution. Ron Paul is the real slash big government deal. As for MSNBC’s deliberate censorship of the Paul campaign and his first-place finish in their own poll, it’s just proves they’re a modern version of the old Soviet-era Pravada.
Al Doyle, Oshkosh, WI (Sent Tuesday, May 15, 2007 7:10 PM)

I wanted to come out there so bad! I learned about Ron Paul 3 months ago. There is no one else to vote for! He is such a statesman–even if you don’t agree w/ him on everything (how could you agree 100% w/ anybody?), there is no denying that this man speaks from his heart…and he speaks the truth.
Aaron, Bloomington, IN (Sent Tuesday, May 15, 2007 7:26 PM)

RonPaulRevolution dot com and .org will provide you with a great deal of information. The most important of which is how you can make use of material provided by other individuals to start your own RonPaulRevolution near you without any permission slip from the government.
Ernest Hancock Phoenix, Arizona (Sent Tuesday, May 15, 2007 7:32 PM)

Not only is Ron Paul the only real conservative running for president he is the only candidate that isnt a total corporate sellout. We need to get the disenfranchised Democrats and Rebublicans to realize this fact. The left right paradigm has held the country back for many years. We need to wake the citizenry up and it seems that there is a real chance to do that but Ron Paul supporters MUST get the word out. The MSM has proven its not going to do it. I think it is also important to stress getting back to the CONSTITUTION and the BILL of RIGHTS. No other candidate will touch those subjects. The people want to hear about it but until now havent had that choice. Now we all have a real canididate to vote for! Vote Ron Paul 2008 www.ronpaul2008.com DONATE what you can!
Jason Virginia (Sent Tuesday, May 15, 2007 7:33 PM)

Congressman Paul a major candidate tonight. Anyone who pays attention can practically feel the oceanic swell of his suporters, national as well as international. Thomas Jefferson, Ben Franklin and John Locke would be proud! Godspeed to you, Dr. Paul!
Antony, Hopkins, Minnesota (Sent Tuesday, May 15, 2007 7:35 PM)

Actually Ron Paul voted against the USA PATRIOT ACT because he couldn’t read it. Nobody did. That was his first objection, as he so stated on the floor at the time … the legislation they were voting on was unavailable for ANYONE other than the Speaker to read at the time. So your Congressman voted your rights away without even knowing, or obviously caring, what he was voting on if he voted for the PATRIOT ACT. Business as usual from the Washington Party.
Fascist Nation, Phoenix, AZ, USA (Sent Tuesday, May 15, 2007 7:42 PM)

Ron Paul will have a chance only when you, the media, start reporting him. How can he poll high if the people —who’s job it is for you to inform— haven’t heard of him? How can he win if the people —who’s job it is for you to give unbiased coverage— are repetedly told he has no chance? The after-debate coverage of the May 3rd debate was a disgrace. While the paid talking-heads were opining about anyone but Paul, the public was voting him to the top of the GOP candidates. We choose our candidates, not the media!
JTaverner, AZ (Sent Tuesday, May 15, 2007 7:45 PM)

The ‘Ron Paul Revolution’ is a grass roots campaign that started in Phoenix AZ and is now nation wide to promote Ron Paul for president. Instructions on how to be a part of it can be found here: ronpaulrevolution.com. Through this election, the MSM will be exposed for the censorship that they have imposed on the electoral process. I hope that this article is an attempt by MSNBC to save themselves by reaching out to the people. I welcome this and hope to see more.
Tom Westbrook, Mesa AZ (Sent Tuesday, May 15, 2007 8:02 PM)

ronpaul2008.com Vote for Ron tonight on FOX by texting them R7 to 36988
NH4RonPaul (Sent Tuesday, May 15, 2007 8:20 PM)

Thanks for the story MSNBC! There is a poll using your cellphone up on foxnew.com it is sort of complicated, so take your time.
Jones, Springfield, MO (Sent Tuesday, May 15, 2007 8:23 PM)

Ron Paul is this country’s last hope – he really is. All the top tier people are bought and paid for and so is the bulk of the press. The more they try to ignore RP and pretend he doesn’t exist by simply making no mention of him, the more comical and obvious it becomes.
NickT, San Antonio, Texas (Sent Tuesday, May 15, 2007 8:57 PM)

Ron Paul is the voice of americans that are tired of seeing their country and liberty being stolen or sold to global elites, tired of being kicked out of their homes so government can line their pockets off of the profits of a wealthy buisness owner.. tired of being presumed guilty before innocent and becoming the focus of unwarrented survellience and searches.. tired of their income being taxed and given to others in the form of healthcare, welfare or corporate subsidies. while the richest corporations in this country pay little or no taxes.. tired of fiat currency and the devaluation of the US dollar.. tired of our government lying to our face and policing the world.. tired of government backing corporate interests before that of its people and participating in the fleecing of common americans, such as enron&worldcom or the california energy crisis.. we need to look back to our constitution and what this country was founded upon because our government is guiding us to communism and away from our democratic republic..
john gomes, sacramento, ca (Sent Tuesday, May 15, 2007 9:10 PM)

MSNBC WAKE UP!!! The people got to see a genuine candidate, who had something different to say FOR ONCE, and EVERY major newscorp ignores him! LOOK AT YOURSELVES
m jackson, portland,oregon (Sent Tuesday, May 15, 2007 9:31 PM)

I’m watching the debate right now and they are not asking Ron Paul hardly any questions at all. Now they’re ignoring him on the stage!…Ron Paul is amazing!! He does not shrink from saying the “unpopular” thing. They just tried to trip him up with an Iraq question when he mentioned 9/11 and that schmuck Giuliani jumped down his throat and demanded he retract his statement. Ron didn’t do it….We need to get him in the White House!!….Google videos: 9/11 Press for Truth, Loose Change 2nd Edition
911truthdotorg (Sent Tuesday, May 15, 2007 10:24 PM)

In response to tonight’s debate, I thought it worth mentioning that Giuliani’s attack on Ron Paul was cowardly and severely harmful to his standing in the Republican primary race. As a scholar of international relations, Ron Paul’s perspective was a regurgitation of the consensus on the causes of 9-11. Giuliani attacked him in an attempt to prey on the fears of the American people. Right now I’m going out to my car, removing the Giuliani 08 sticker, and replacing it with Ron Paul.
Joe Smith, Athens, Georgia (Sent Tuesday, May 15, 2007 10:41 PM)

OMG! In the post debate Fox Noise spin, they’re crucifying Ron Paul for what he said…especially that fraud, Giuliani….If I was advising Ron Paul, I’d tell him to withdraw from the debates because they’re never going to give him a fair shot….Ron Paul needs to come out for 9/11 Truth…he knows it’s a lie!…. Google videos: 9/11 Press for Truth, Loose Change 2nd Edition
911truthdotorg (Sent Tuesday, May 15, 2007 10:43 PM)

Ron Paul is the only Academic choice!!!!!
Dan Smith, Garland, NC (Sent Tuesday, May 15, 2007 10:54 PM)

Ron Paul rebuttal to Giuliani’s political grandstanding was pure genius. However, when Giuliani asked ROn Paul to retract his statement….the audience cheered! Face it! The GOP has completely been hijacked by neocons
Justin Foard, San Jose, CA (Sent Tuesday, May 15, 2007 10:55 PM)

Ron Paul OWNED tonight. Only the ignorant disagree that 9/11 was caused by blowback from American foreign policy. Ron Paul is America’s candidate. Visit www.ronpaul2008.com. Friend request him on myspace. Watch and vote positive on his youtubes. Now is the time for change in America, and the neo-cons have lost their opportunity. Long live true republicanism!
V, New York, NY (Sent Tuesday, May 15, 2007 11:07 PM)

Ron Paul is an esteemed intellectual when it comes to American foreign policy. However, this hurts him in our dumped-down, foreign policy hubris infested society.
Justin Foard, San Jose, Ca (Sent Tuesday, May 15, 2007 11:21 PM)

Ron Paul has my Vote..
Don – Channahon,IL (Sent Tuesday, May 15, 2007 11:31 PM)

Ron Paul is leading the text message poll on Fox News. Can this be real? I host his campaign web site and traffic is way up, although not as much as after the first debate. Part of that may be due to the later timeslot. Did anyone else think Fox News set Ron up for Rudy to make his indignant (and ignorant) remark? It looked staged to me and as soon as the debate ended, Hannity and the other talking heads started talking about cutting Ron from future debates. Now they are interviewing everyone but Ron. Can you say “rigged game”?
Kent White (Sent Tuesday, May 15, 2007 11:32 PM)

Ron Paul is currently placing first in the foxnews poll. He is the only civil libertarian that EITHER party is running. He is truly the only man running for the White House that will preserve what this nation stands for.
Matt Shroy, Greenville, SC (Sent Tuesday, May 15, 2007 11:33 PM)

watch America:Freedom to Fascism on youtube that is your best introduction to Ron Paul and what he stands for. If you want more information go to thomas.org
Troy Lawrence, Byers, Colorado (Sent Tuesday, May 15, 2007 11:35 PM)

Ron Paul in 2008! Show the media how they cannot spin and silence his views. He still wins the polls.
Jeff, Warwick, RI (Sent Tuesday, May 15, 2007 11:37 PM)

Man, NeoSean really hates Ron Paul. He is such an ass when he is losing an argument. The post debate interview was priceless . . .
Kent White, Orlando, FL (Sent Tuesday, May 15, 2007 11:45 PM)

Ron just owned Sean Hannity, and insisted on continuing the debate even after Hannity and Colmes attempted to break for commercial. RON PAUL WON TONIGHT.
V, New York, NY (Sent Tuesday, May 15, 2007 11:47 PM)

they are right now trying to knock out ron paul micheal steel is a dum knuckle head. ron paul won romeny
ferl ball (Sent Wednesday, May 16, 2007 12:08 AM)

It’s sad to see that a so-called ‘news event’ was so clearly controlled to benefit just a few candidates. There was no clear attempt to give the American people a chance to see what each candidate had to say on a given question. How about a debate that’s truly fair to all parties involved. One where the same questions is posed to ALL participants, and ALL participants get equal time to respond. Dr. Paul certainly deserves that much (actually more) based on his un-wavering many years of service to the American people, with such a high-level of integrity in the face of so much opposition and propaganda. Not to mention the fact that he’s probably smarter in the area of foreign policy than the sum total of all the candidates combined. To assume that the American people are now too stupid to see a blatant censorship like that which happened tonight on Fox is to assume that all is lost here in America. Thank God for the internet, the one and only last resort for FREE SPEECH for the American people. America – for your children’s sake, PLEASE WAKE UP.
Bill Kosloskey, Petoskey MI (Sent Wednesday, May 16, 2007 12:10 AM)

Presidential Candidate Ron Paul has my vote. Thank God he has the integrity to stand his ground and defend this nation, our forefathers and the United States Constitution.
Jim Theriault, Sarasota FL (Sent Wednesday, May 16, 2007 12:14 AM)

It’s sad to see that a so-called ‘news event’ was so clearly controlled to benefit just a few candidates. There was no clear attempt to give the American people a chance to see what each candidate had to say on a given question. How about a debate that’s truly fair to all parties involved. One where the same questions is posed to ALL participants, and ALL participants get equal time to respond. Dr. Paul certainly deserves that much (actually more) based on his un-wavering many years of service to the American people, with such a high-level of integrity in the face of so much opposition and propaganda. Not to mention the fact that he’s probably smarter in the area of foreign policy than the sum total of all the candidates combined. To assume that the American people are now too stupid to see a blatant censorship like that which happened tonight on Fox is to assume that all is lost here in America. Thank God for the internet, the one and only last resort for FREE SPEECH for the American people. America – for your children’s sake, PLEASE WAKE UP.
Bill Kosloskey, Petoskey MI (Sent Wednesday, May 16, 2007 12:15 AM)

MSNBC and Fox now have both spiked the news that Ron Paul won their republican presidential debates.
David (Sent Wednesday, May 16, 2007 12:21 AM)

Tier 1, Tier 2, what a bunch of BS. Who is the media to tell me what to think, whatever happened to objective journalism?? Big media won’t deter from supporting Ron Paul and I would ask of them to please give him more airtime he deserves it, we deserve it, do it for the Republic!! We are not a democracy, we are a constitutionally limited Republic!!
benny benfari, briarwood, new york (Sent Wednesday, May 16, 2007 12:22 AM)

Ron Paul tied with Romney for the winner of the fox cell poll after leading for nearly an hour. Hannity and some pollsters then call their own poll worthless because ‘there is no way Paul won that debate, no way.’ I can not describe how frustrated that makes me fell. I am an Iowan Republican and I support Ron Paul out of this current crop. If no one else comes into the race, I encourage all other Iowa Republicans to vote for him in the caucus. I hope the Libertarians and Democrats will help him in the caucus as well. Ron Paul is right for America. God Bless.
Matt, Dubuque, Iowa (Sent Wednesday, May 16, 2007 12:26 AM)

Start covering this guy more. I’m going to tell everybody about him. I believe he is what the people want. Of course, he doesn’t fit into your agenda……..does he.
John Stump (Sent Wednesday, May 16, 2007 12:28 AM)

Ron Paul is the only traditional conservative running for the Republican nomination.
Robert Moore, Huntsville, AL (Sent Wednesday, May 16, 2007 12:30 AM)

Please donate to Ron Paul. If only five or ten dollars, it all helps. I will be supporting him in the caucus state.
Matt, Dubuque, Iowa (Sent Wednesday, May 16, 2007 12:36 AM)

Ron Paul proves that,the founding fathers vision of the country still ALIVE..RUN RON RUN
Michael , ventura , ca (Sent Wednesday, May 16, 2007 12:43 AM)

Congressman Paul, I want to let you know that I am absolutely appalled at your misuse of our trust in your misrepresentation of yourself and your views when you ran for election in our district. You are completely aware that you ran on a strong military support stance, you know that we support the anti-terrorism war in Iraq, and you know that you are a charlatan in running under the cloak of strong conservative values. Now you embarrass us with you diatribes against our men and women’s efforts on national television. Shame on you and shame on your dishonesty to your constituents. I will work will all of my energy to recall your election to office on the grounds of misrepresentation and no confidence. I am embarrassed that you are from the State of Texas.
barbara sherrill, Alvin, TX (Sent Wednesday, May 16, 2007 12:44 AM)

RON PAUL ROCKS! Period! GO RON GO!! He just won the FOX debate too! Take that Military Industrial Complex!!
AJ Severino, Parkville, MO (Sent Wednesday, May 16, 2007 12:46 AM)

MSNBC, thank you for not censoring Ron Paul comments like abc.com does.
Tom Westbrook (Sent Wednesday, May 16, 2007 12:47 AM)

I usually vote democrat, but I will vote for Ron Paul if the neocons don’t keep him from getting nominated. The republicans have a choice. Either nominate Ron Paul or possibly have a democrat in the white house.
Ryan Mann (Sent Wednesday, May 16, 2007 12:56 AM)

Go, Ron, go!
B Iman, Chewelah, Wash. (Sent Wednesday, May 16, 2007 12:57 AM)

If he doesn’t get the nominatation, we’ll just write him in. I’m not a republican by any means, but I’d vote for Ron Paul.
Jane, Southern Mississippi (Sent Wednesday, May 16, 2007 1:00 AM)

Ron Paul is the only true republican presidential candidate. I had left the republican party and now, I’m going to register as a republican and vote for RON PAUL in the primary elections. RON PAUL is the only one, who actually voted against the Iraq War. Did Hilary or any of those other democrats? NO. RON PAUL is the only candidate that with enough experience and consistently voting with his princples and constitution in mind. RON PAUL FOR PRESIDENT!!! THE RON PAUL REVOLUTION!!!!
Jacob, San Antonio, Texas (Sent Wednesday, May 16, 2007 1:02 AM)

I wonder how long it will take the major news media to realize that they’re missing the boat as long as they portray Dr. Paul as some sort of abberation. He has always spoken his mind and his position is clear. How can the same be said for the other candidates? It just can’t. I will register as a Republican ONLY if Dr. Paul is on the primary ticket. Otherwise, it will be anyone who is NOT on the Republican ticket. No votes for drones for me!
Louie, Burleson, TX (Sent Wednesday, May 16, 2007 1:07 AM)

Ron paul is an alright guy. He is a little more like that gravel fool on the democrat side, but at least he tells you the way it is. I disagree with him on Iraq, but other then that, he would make a good president. If the democrats are still in power if he gets elected, I think they will shut him down myself. I remember when he was running for congress against some liberal moron named Sneary. The folksy voice on the radio would tell everyone what this liberal moron’s position would be and how he would help destroy america. At the end of the ad, you would hear “there’s something lerry about that fellow sneary”. Of course Ron Paul won hands down. He is a good man, but there is something gravel-esque about him and that is why he probably won’t win. Still, it would be fun if he was running against Obama and he tried to do an ad like he did earlier, just have to find something to rhyme with Obama.
jerry/corpus christi texas (Sent Wednesday, May 16, 2007 1:25 AM)

Paul is the ONLY consistently coherent, constitutionally-based candidate in the race. The other clowns on both sides are pandering to the lowest common denominataors, preying on the innocent, and are an insult to the average person’s intelligence. It’s AMAZING to see that people are responding so positively on this site….almost makes one believe there is still some hope.
Charlie, Arizona, USA (Sent Wednesday, May 16, 2007 1:31 AM)

Awesome, I disagree with Paul on some of his social issues, but his view on foreign policy and the nature of government far outweighs my fears over his anti-abortion stance. The only sane choice is to vote for Paul. I am a liberal and will vote for him.
josh, new york, NY (Sent Wednesday, May 16, 2007 1:43 AM)

Awesome, I disagree with Paul on some of his social issues, but his view on foreign policy and the nature of government far outweighs my fears over his anti-abortion stance. The only sane choice is to vote for Paul. I am a liberal and will vote for him.
josh, new york, NY (Sent Wednesday, May 16, 2007 1:44 AM)

Dr. Ron Paul is the only candidate for President with the courage, integrity, intelligence, knowledge and voting record to get us out of this mess. The set up question on 911 proves the bias of Fox. Dr. Ron Paul won this debate as he won the first debate.
David Kay Snider, Mt Vernon, Oregon (Sent Wednesday, May 16, 2007 2:02 AM)

I caught the debate end in the spin room with Hannity and Colms,live, watched the debate repeat, and then watched the spin room repeat (I’m in WA state). FOX NEWS CUT THE INTERVIEW WITH RON PAUL IN THE SPIN ROOM ON THE REPEAT!!!
E. J. “Ed” Pole II, Lacey, WA (Sent Wednesday, May 16, 2007 2:09 AM)

I won’t complain that this short article doesn’t talk about who Ron Paul is. I take it as a sign that MSNBC reporters/bloggers think there’s no need to do so. Just like they wouldn’t need to explain who the other TOP candidates are. He did, after all, win all of their polls!
Pat Davis, Ava, Missouri (Sent Wednesday, May 16, 2007 2:11 AM)

Ron Paul all day everyday. Class act.
Charles Pete (Sent Wednesday, May 16, 2007 2:48 AM)

Words to describe Congressman Paul – Integrity, Statesman, Experienced, Reserved, Tenacious, Committed, Honest, Independent, Dedicated, Admired, Courageous, Solid, Unwavering, Sincere, Leader, Skilled, Diplomat, World Leader. Michigan For Ron Paul – 2008. WAKE UP AMERICA!!!!
Bill Kosloskey (Sent Wednesday, May 16, 2007 2:50 AM)

Miss the debate? Learn about Ron Paul: http://www.tinyurl.com/yoagoh
John, Brooklyn, NY (Sent Wednesday, May 16, 2007 3:35 AM)

Wow this news site did a disgrace by not even mentioning that he is running for president. I think the American big media companies are pretty much just like censored Communist media in Russia. What a disgrace. I am voting for Ron Paul if I get the chance and when I look to see how he is doing in the news, they don’t even hardly bother mentioning him.
Scooter Chanman (Sent Wednesday, May 16, 2007 3:45 AM)

MSNBC is owned by people who make weapons of war. Ron Paul is not. It’s as simple as that.
Jeremiah Patoka, Austin Texas (Sent Wednesday, May 16, 2007 4:33 AM)

Ron Paul was right about 911 and Rudy needs to shut-up and take some history lessons.
Jimmy Brown, Kingsport, TN (Sent Wednesday, May 16, 2007 7:55 AM)

It doesn’t suprise me at all that Ron Paul is receiving no coverage. And of this morning, he has trounced all the others in MSNBC’s own poll. I’m sure that even this clear evidence isn’t enough to evn have his name mentioned. Paul supporters must persevere.
M. Gish (Sent Wednesday, May 16, 2007 8:11 AM)

I just wanted to take a moment and thank MSNBC for not deleting our comments. It’s important to respect public opinion, even if you have no respect for yourself and your country. You do a great disservice to us all and the freedom of the press when you report stories like this one. With that said, we’re more than happy to pick up where you left off, provided you leave the comments without deleting them. By the way, if you want a story, you should consider investigating the deletion of comments on YouTube and Google Video.
Mark, Atlanta, GA (Sent Wednesday, May 16, 2007 8:35 AM)

Ron Paul: finally a politician who will speak the truth courageously and articulately. Rudy Giuliani should be condemned not only for his cheap, opportunistic attack on Ron Paul, but also because of his sheer lack of knowledge WHY militant Islamists decided to attack the United States. If he would read the 1996 & 1998 fatwas issued by Bin Laden, he would KNOW: the attacks were in retaliation for American meddling in the Middle East.
Gene Trosper (Sent Wednesday, May 16, 2007 8:54 AM)

Yes, our “mainstream media” is bought and paid for, kind of like Pro wrestling…it’s all for show. The good news is that more and more people are waking up to that fact everyday. The propaganda machine is destroying itself over Ron Paul. The Neocons are going down ! **********Ron Paul 2008**********
Cindy, Texas (Sent Wednesday, May 16, 2007 9:14 AM)

Based on what I heard, Ron Paul didn’t justify the 9-11 terrorists’ attacks, he explained why Muslim extremists are targeting the United States. Thoughout history, empires have been attacked and challenged by disgruntled peasants and barbarians.
Stuart, Nashville, TN (Sent Wednesday, May 16, 2007 9:33 AM)

Ron Paul made me proud last night. It cost his campaign 25,000 to enter that debate and I’m very glad I contributed so he could educate me, FoxNews viewers, and not least Guliani and Hannity. Great, great points about Lebanon, Iran and Iraq.
Karl P, Atlanta, GA (Sent Wednesday, May 16, 2007 10:02 AM)

If you want to know more about Ron Paul, take a look at U.S. House Con. Res. No. 40 of the 110th Congress. You will see that he co-authored that piece of legislation, currently PARKED PURPOSEFULLY BY THE CORPORATE CONGRESS, in committee, never to see the light of day. But to know where America is right now, you need to read every word. Go get em Dr. Paul!!!!!!!!
Gary Conner, Dripping Springs Texas (Sent Wednesday, May 16, 2007 10:17 AM)

Ron Paul won the Fox News poll after the debate. No mention. That just illustrates that the people don’t decide these matters, it’s a handful of elitist party bosses and media spinsters that do. I watched the debate. He never said 9/11 was America’s fault, yet that’s the spin. Very Soviet like. We’re watching a propaganda machine mobilizing to destroy Ron Paul before our eyes, proving that this political system is corrupt beyond repair.
larry blythe vinton, iowa (Sent Wednesday, May 16, 2007 10:47 AM)

Rudy Guillani: I have never seen that commetn made at a Republican Presidential Debate. He’s right. The last time a comment was made like that(regarding entagnling alliances) was from Thomas Jefferson.
Mike, Pittsburgh (Sent Wednesday, May 16, 2007 10:49 AM)

Ron Paul stood his ground in the South Carolina debate 5/15/07. He spoke the truth, and those who twisted his words can be found throughout big media. Listen to the entire set of debates if you want to know how threatened FOX and big reporters – as well as the favored candidates are – by Ron Paul. They want to silence him or freeze him out, or, failing that, mischaracterize him. Take a good look at Ron Paul. Listen to the man. Then ask yourself: what sort of person would be threatened by this man? A crook? A monster? A war profiteer? Someone who gets in the way of reindustrializing the United States? Oh. Yeah. Ron Paul for President 2008 if it takes bake sales and potato races make it happen.
Jo, Hampton, VA (Sent Wednesday, May 16, 2007 10:57 AM)

In Germany, 3 families face fines, frozen accounts for homeschooling their children

A German family has been subject to threats from the National Socialist government of Germany, because they’re trying to homeschool their children. The family wants to raise their own children, to oversee their sex education, and protect them from the occult (hmm, I wonder why they’d be worried about sex-education in sexually deviant Germany). Specifically, the government has levied fines on them, frozen their bank accounts, and even threatened to sell their house. The German government is even tyring to steal their children from them. Sound familiar? That’s because it is a preserved remnant of Hitler’s regime:

Melissa had fallen behind in math and Latin and was being tutored at home. When school officials in Germany, where homeschooling was banned during Adolf Hitler’s reign of power, found out, she was expelled. School officials then took her to court, obtaining a court order requiring she be committed to a psychiatric ward because of her “school phobia.”

German gestopo officers have even brought children from their homes to public schools. When families objected to this, the government’s response: “In order to avoid this in future, the education authority is…look[ing] for possibilities to bring the religious convictions of the family into line with the unalterable school attendance requirement.“. Yes, the German government seeks to forcibly alter the religious convictions of families, to bring them in line. In the case of the family in question:

In Melissa’s case, the local Youth Welfare Office arrived at the family home with about 15 uniformed police officers to take her into custody. They had in hand a court order allowing them to take her into custody, “if necessary by force.”

The family is asking for the prayers of fellow Christians, and appreciates support from anyone. They have received numerous letters of support.

Unfortunately, it doesn’t look like the CFA Level I Program Curriculum actually has much of Hayek’s economics in it, but it does pay a tribute to him in a highlight box:

Outstanding Economist
Friedrich A. von Hayek (1899 – 1992)

Remarkably, the writings of this 1974 Nobel Prize recipient spanned seven decades. His work on knowledge and markets both enhanced our understanding of the competitive process and highlighted the fatal defects of central planning. He also made major contributions in areas as diverse as monetary theory, law and economics, business cycles, and capital theory.

I’m reading their Economics and Financial Statement Analysis textbook, so when I’m done with it (which might be a while), I’ll give an update on how good their economics section is. On the bright side, just over-viewing it, it does seem to do a good job on mechanical issues (like how the fed increases the money supply). Having finished their textbook on Ethics and Statistics, I must say that from an Austrian perspective, I’m pleased with their treatment of statistics — for the most part, a very careful and thorough treatment. They note the different types of data that one can have (think ordinal vs. cardinal, but split out into a few more categories), and are careful to note, among other things, that correlation does not mean causation. They also point out problems with data-bias in collecting information, and with using statistical summaries of past information in our analysis of the possible future.

The claim by libertarians that to taxation is equivalent to ensalvement strikes many people as being extreme and fanatical. However, I hope to show that this claim is entirely correct by a rather brief argument that I hope clarifies the situation.

When someone is enslaved*, they are in a situation of involuntary servitude. They have no choice about their employment, their residence, or the work they are asked to do. Their rights are not recognized, nor is their rightful property. Now, intuitively, one can already see that taxes bear a similarity to this in kind, the only difference in kind being that taxes do not eliminate one’s choice of employment (although they do manipulate and distort it, along with many other State-interventions).

Now, what do we have with taxes? People are required to give up a certain percentage of their income annually. Thus, they were effectively forced to work without compensation for a certain percentage of the year or a certain percentage of every day. Now, we do at least have the choice of what kind of employment to take, and some kind of mobility. However, both of those things are restricted by states. Hence, in a very real sense, all of us are slaves to our respective states.

I just ran accross this article by Murray Rothbard: Ludwig von Mises and Natural Law: A Comment on Professor Gonce. “Professor” Gonce’s paper, published in the prestigeous Southern Economic Journal, made several absurd assertions, all of which anyone with even a passing familiarity with Mises would recognize as such. Rothbard thoroughly debunks these claims about Mises. Here are Gonce’s claims about Mises:

1. Gonce claims that Mises’ economic system is grounded in the “ideaology” of natural law.

2. Gonce claims that Mises ‘assumes’ perfect competition in product and factor markets, assumes ‘perfect knowledge’ (at least for Crusoe), and ignores ‘the problem of transaction costs.’

3. Gonce makes the astonishing assertion that Mises holds ‘money, banks, and credit…contain no seeds of instability,’ and further claims that Mises’ trade cycle theory ‘shows that the free market mechanism will automatically adjust prices to preclude serious trade cycles.’

Rothbard rightly concludes that:

We are forced to conclude that either Professor Gonce has willfully distorted Mises’ position to support his own “ideological” dislike of Mises’ classical liberal views, or that he is woefully ignorant of the polar difference between natural law and its mortal enemy, utilitarianism…

Gonce is no more capable of comprehending
a writer’s economic theory than he is his social philosophy. The fact that Gonce’s article was published in a distinguished economic journal says
much about the parlous state of the discipline.

It is difficult to attribute these mischaracterizations of Mises to anything other than extreme incompetence or extreme malice. Either intentional misrepresentation was carried out, or the author was abysmally incompetent and ignorant. It takes little more than a glance at Mises’ work to realize that he was opposed to natural law and was a strong critic of the fantasies of “perfect competition” and “perfect information”. Since the Southern Economic Journal published this tripe, they too share in the blame: either extreme incompetence, or purposeful and malicious misrepresentation.

For 40 years, my father worked for the Rochester Telephone Company, almost 30 years as a foreman / manager. During that time, he was never absent due to sickness. This is not because he was never sick, but because he went to work even if he was sick. He first started working there several years after his immigration from Germany, where he’d been trained in technical electronics at a trade-school.

During his time working for Rochester Tel, he numerous interesting experiences with the Unions, all of which illustrated the work of DiLorenzo on unions.

I’d like to share a few of his experiences with the unions, and some of his union “workers”. According to “union rules”, everyone had their specific job to do, and couldn’t be asked to do anything else, nor could anyone else do the job of another (as this would take away from his job security). There were recurring problems at the phone-company, which none of the union workers seemed to bother fixing. So, my father would sometimes take on these problems (normally some mechanical malfunction), and fix them. While doing this one time, some union stiff ran up to him trying to scold him for doing “someone else’ job” (namely, the union-workers job). In response, my father said, “When I see you or one of the union guys fixing this, then I won’t come down here and fix it. Otherwise, I’m going to fix it.” The union-guy didn’t have a response.

Another interesting experience occured during a 6-month strike by union employees. While they were on strike, my father and other foremen took on more work, and did the jobs formerly done by the union-guys themselves (in addition to their own). While doing this, they realized how much they’d been cheated. At the phone-company, there were various “trouble-cases” reported, and the union employees could typically fix about 8 of them per day. Because they wanted to get overtime, they’d go about “fixing” these problems in the slowest manner conceivably justified, taking numerous breaks and whatnot. My father and other foremen each could fix about 16 trouble-cases a day. Summarily, they could and did do the job better than the union employees; this was probably due to a combination of laziness and incompetence on the employees part, as well as the desire to clock overtime.

The so-called “strike” was actually a favor the company, during the time of its occurence. My father said, “things were running better than ever during that strike”. Unfortunately, when the union decided to end the strike, the company had to take back all of those lazy and incompetent bums.

The May 2005 issue of the National Geographic has an interesting article on the Nobel committee and Albert Einstein. Apparently, the Nobel committee was really determined to deny Albert Einstein a Nobel Prize, even if the entire world demanded it. So much for the honesty and integrity of the Nobel committee. Quoting from the article:

In 11 different years, Einstein was nominated only to be rejected. One Nobel committee member wrote Einstein must never receive a Nobel Prize even if the entire world demands it. The entire world did demand it, and Einstein got the 1921 Nobel — for his contributions to physics and for his 1905 paper on the photoelectric effect. He showed that light behaves not only as a wave but also as a stream of particles, or quanta. The committe directed Einstein not to mention relativity in his acceptance lecture [emphasis added]. He did so anyway. — Heidi Schultz

This seems to be suggestive of why Hayek received the Nobel Prize only the year after Mises died, when it could no-longer be awarded to Mises. It is also arguable that just as Einstein could have (rather should have) received the Nobel for relativity, so too can an argument be made that Mises and Hayek could have received the Nobel Prize for their contributions to the socialist calculation debate. Of course, then, the mainstream economists — such as crackpot Paul Samuelson — were still thoroughly convinced that the USSR would overtake the US economically. In fact, in the edition of Economics just before the USSR collapsed, Samuelson still argued such. This, from an “economist” who claims adherence to the fact.

Michael Barnett, son of William Barnett II, is sticking it out in New Orleans. He’s keeping a livejournal blog about what’s going on, and Mises.org is running a live feed of his webcam. As someone who’s friends with Michael, I know him to be a great person, and a hard-core Austrian, a supporter of the free market and libertarianism. Right now, he’s exposing the fraud of State-management, and of State “protection” of private property.

So, what is Michael Barnett & co. doing in New Orleans? Business! He and his associates run directNICHeroically, they’re continuing to serve customers, helping people out:

A local company called us because they heard we still had the datacenter operating. They asked for our help. We went to their office and brought back their most critical server. We are in the process of transferring 40 gigs of data from their most critical server at this time. Of course we have no experience with Macs so this will be interesting. While at their facility we noticed that they had 5 drums of water with 5 gallons each. With their permission we took the 25 gallons of water and their cleaning supplies to our office.

Michael has noted an enormous amount of looting going on, some of it by police officers themselves, in New Orleans:

The police are looting. This has been confirmed by several independent sources. Some of the looting might be “legitimate” in as much as that word has any meaning in this context. They have broken into ATMs and safes: confirmed. We have eyewitnesses to this. They have taken dozens of SUVs from dealerships ostensibly for official use. They have also looted gun stores and pawn shops for all the small arms, supposedly to prevent “criminals” from doing so. But who knows their true intentions.

So much for the myth of the police protecting private property. Meanwhile, it seems like every criminal or marginal criminal has surfaced in New Orleans, with massive looting of private property occuring. It is one thing to homestead goods that are going to be destroyed by the increasing water-levels, or food which is going to rot if not used — this is salvaging — but it is quite another to steal something that is in no threat of being destroyed, or that is indestructable (e.g., any precious metals). Furthermore, some of these crooks are stealing items of the most personal nature — people’s personal and emotional belongings, left in their homes. Apparently, it’s Christmas for Crooks:

These people were absolutely nuts rammed trucks(stolen I’m sure) in to jewelry stores stealing items, they were tearing apart Wal-Mart carrying out TV’s, Playstations, DVD players, etc. One lady was wheeling out an entire rack of merchandise, not sure what it was but sure wasn’t clothes for food. They were all laughing and carrying on like it’s freaking Christmas.

Amazingly, very few have mentioned how this entire episode is a giant example of State failure at every level and every point. It was well known for years that if a category 4 or 5 hurricane hit New Orleans, the levees wouldn’t suffice:

[van Heerden] predicted that floodwaters would overcome the levee system, fill the low-lying areas of the city and then remain trapped there well after the storm passed — creating a giant, stagnant pool contaminated with debris, sewage and other hazardous materials.

Van Heerden and other experts put some of the blame on the Mississippi River levees themselves, because they channel silt directly into the Gulf of Mexico that otherwise would stabilize land along the riverside and slow the sinking of the coastline.

Despite warnings from experts, the levees may also have contributed to an unwarranted sense of security among residents.

But that wasn’t the end of State-failure. Central planners also stuffed thousands of people in a football stadium, a great plan for disaster if there’s any weakness in the building, which there was. Look for increased calls for regulation, due to this episode of State-planning gone awry being blamed on the free market. Of course, there’s also the looting, which police officers aren’t stopping, and are even engaging in themselves. Furthermore, this kind of looting is the result of forced integration and various welfare policies, which destroys values.

I was particularly moved by this passage from Thomas DiLorenzo’s The Real Lincoln (also available from Amazon.com), reviewed here by David Gordon. DiLorenzo is one of the few people to take an honest look at Lincoln, instead of treating him like a saint and making excuses for his atrocities. This passage is from the chapter, Was Lincoln a Dictator?

In 1861 the Santee Sioux Indians in Minnesota sold 24 million acres of
land to the federal government for $1,410,000. By August 1862 thousands
of white settlers were pouring onto the Indian lands, but there was such
corruption in the government that almost none of the money was paid to
the Sioux. A crop failure that year meant the Sioux were starving. The
federal government refused to pay what it owed, breaking yet another
Indian treaty, and the Sioux revolted. A short “war” ensued, with
Lincoln putting General John Pope in charge. Pope told a subordinate,
“It is my purpose to utterly exterminate the Sioux…They are to be
treated as maniacs or wild beasts, and by no means as people with whom
treaties or compromises can be made.”

The Indians were overwhelmed by the Federal army by October, at which
time the “war” was over and General Pope held hundreds of “prisoners of
war,” many of whom were women and children who had been herded into
military forts. Military “trials” were held, each lasting ten to fifteen
minutes, in which most of the male prisoners were found guilty and
sentenced to death. The lack of hard evidence against the accused was
manifest; many men were condemned to death just because they were
present during a battle.

Three hundred and three Indians were sentenced to death, and Minnesota
political authorities wanted to execute every one of them, something
that Lincoln feared might incite one or more of the European powers to
offer assistance to the Confederacy, as they were hinting they would do.
So his administration pared the list of condemned men down to
thirty-nine, with the promise to Minnesota’s politicians that in due
course the Federal army would remove every last Indian from Minnesota.
This was the bargain: Lincoln would look bad if he allowed the
execution of three hundred Indians, so he would execute only thirty-nine
of them. But in return he would promise to have the Federal army murder
or chase out of the state all the other Indians, in addition to sending
the Minnesota treasures $2 million.

On December 26, 1862, Lincoln ordered the largest mass execution in
American history — and yet the guilt of the executed could not be
positively determined beyond reasonable doubt.

For those interested, there are MP3-formatted lectures on Lincoln given by Prof. DiLorenzo and Prof. Denson on Mises Media, under the section Reassessing the Presidency series:

• DiLorenzo, Thomas. Lincoln and the Triumph of Mercantilism


• Denson, John. Tricking Us Into War: The Cases of Lincoln and Roosevelt.
  

Also of interest may be an James Ostrowski’s DiLorenzo and His Critics on the Lincoln Myth, which summarizes DiLorenzo’s charges against Lincoln, and responds to some erroneous criticisms.

Following up on a previous blog, Australian Schapelle Corby was convicted of drug-smuggling in Bali, and sentenced to 20 years in prison. Breaking down in tears, Ms. Corby embraced her family before Bali thugs took her to a prison cell. Ms. Corby prays for justice every day.

Defense Evidence Ignored, Bali Police Coverup, Corrupt Prosecutors

The judge dismissed her defense that the drugs were planted on her, saying she had no evidence to support that. Apparently, in Bali, like in Nazi Germany, one is presumed guilty until proven innocent, despite the claims of Professor Tim Lindsey. Irrelevant of whatever may or may not be the case as printed on pieces of paper, in practice, it is obvious that one is assumed guilty until proven innocent in Bali.

The prosecution trumped up the claim that Corby admitted the drugs were hers, something she clearly did not do, as she later said. The judge also apparently ignored a letter by the Australlian government stating that they were investigating Quantas Airlines baggage handlers in a cocaine-smuggling operation. Apparently, the reason for this is that the letter was sent “too late”: If it were to be submitted now, it would have no value at all according to Indonesian law.

This shows the worthlessness of State legal systems, holding bureaucratic rituals as sancrosanct, more important than human liberty and the pursuit of justice. This is the result of the attitude that “justice” is something that can be legislated on a piece of paper.

The police didn’t fingerprint the bag containing the drugs, or videotape their search, so for all we know, they planted the evidence. The prosecution (or police) denied Corby’s defense’s request to have the marijuana tested to reveal its source, casting further reasonable doubt in-and-of itself. What exactly do they have to hide?

Ron Bakir, the heroic financial backer to Corby’s defense, claimed that the prosecution was open to dropping the case in exchange for a bribe, but later retracted that statement (probably because he was traveling to Bali to speak with Corby personally) and apologized to the Bali prosecution.

The Inquisition: A Judge Who Never Acquits

Speaking of the prosecution, I should mention that one of Corby’s judges (they don’t have juries in Bali) was a de-facto member of the prosecution. “judge” Sirait bragged that he had never acquitted an accused drug-smuggler, and that he’d never sentenced one to less than 5 years. Apparently, Sirait makes no distinction between the words “accused” and “proven guilty”. With Inquisitioners like Sirait posing as “judges”, why bother with a trial at all? Apparently, the only purpose of the trial was to prolong the poor victim’s (in this case Ms. Corby’s) agony, making her think there actually was some remote possiblity of something resembling justice, when clearly there wasn’t.

In finding Ms. Corby “guilty”, Sirait said, “[f]rom Corby’s defence I haven’t heard anything to prove she is innocent.” There it is, clear as day. One has to prove innocence beyond a reasonable doubt — apparently, beyond all doubt before Sirait. Sirait aquits when hell freezes over.

Bali Hotel Operators “Surprised” at Proposed Boycott

Amazingly, tourism operators in Bali are “dismayed” that some travel agents and others in Australia are calling for a boycott on Bali because of the Corby-case. In a inspiring show of support for Corby, 177 Australian travel agents said they’d stop selling Bali if Corby was found guilty. Australians have been the biggest tourists to Bali, brining in large amounts of money. Bali hotel operators are puzzled at the desire to “punish the Balinese”, since Corby’s defense is that individuals in Australia planted the drugs on her. They claim to be puzzled at this, when the baggage handlers were responsible. The baggage handlers were responsible for planting the drugs, not for prosecuting Ms. Corby. That falls on the heads of the prosecutors.

As for the hotels in Bali, it is quite possible that many of them support these draconian anti-drug fiat-legislation or decree, and thus share responsibility. For those that do, this is punishment. For those that don’t, it is a free-market response — well within the right of consumers — to encourage them to actively oppose such barbarism. Here, we have, as I predicted earlier, and example of a State action lowering the attractiveness of Bali to tourists, thus lowering property-values in Bali. Who would want to travel to a country where one is de-facto presumed guilty until proven innocent, and where all evidence set forth in one’s defense is systematically ignored, either outright or because of worthless legal minutia on procedure? Who would want to go to a country where to be accused of a crime is equivalent to being convicted of a crime, and where a trial is only held for show?

Resources:

Firstly, an interview with Schapelle Corby. Thanks to Alan Singer, who blogged about Corby for these references:

• Schapelle.com
• SchapelleCorby.com: A Forum
• SaveSchapelleCorby.org

• FreeSchappelle.com
• Myesk.ws
• Schapel Corby Blogspot
• Don’t Shoot Schapelle: Innocent Without a Doubt (indeed, she is, because drug-related “crimes” aren’t any-more crimes than eating sugar).

What You Can Do

Unfortunately, it is now too late to write anything to Bali officials regarding the case, although it is now obvious that no please for civility and respect of human rights, nor even any evidence, could have helped Corby against the Inquisition she faced. However, Ms. Corby (Schapelle) could still use the support of people world-wide:

• Join the mission to save an innocent Australian life
• The Free Schapelle Shop
• Bring Schapelle Corby Home
• Free Schapelle Corby Petition Spot
• Hard copy petition to free Schapelle Corby. Download this petition, print, sign, and mail to Free Schapelle Corby. PO Box 113. Jimboomba QLD Australia 4280.
• Schapelle Corby Support Petitions
• How you can help Schapelle Corby

Justice Janice Brown is a justice in the old tradition of actually abiding by the Constitution, and is of a strongly libertarian bent. What follows are a few choice quotes from Janice Brown.

“[a]rbitrary government actions which infringe property interests cannot be saved from constitutional infirmity by the beneficial purposes of the regulators.” — Santa Monica Beach, Ltd. v. Superior Court (1999)

“Theft is still theft even when the government approves of the thievery…The right to express one’s individuality and essential human dignity through the free use of property is just as important as the right to do so through speech, the press, or the free exercise of religion.” — San Remo Hotel v. City and County of San Francisco (2002)

• Banning Affirmative Action. Brown authored an opinion that effectively ended meaningful affirmative action in California. Hi-Voltage Wire Works, Inc. v. City of Jan Jose, 12 P.3d 1068 (2000). Brown’s opinion was severely criticized, both on and off the court, for its harsh rhetoric and its suggestion that affirmative action resembled racist and segregationist laws that predated landmark civil rights laws.
• Denying Effective Remedies to Victims of Unlawful Discrimination. Brown would have barred administrative agencies from awarding compensatory damages for emotional distress in race discrimination cases. Konig v. Fair Employment and Housing Comm’n, 50 P.3d 718 (2002). While couching her decision in separations of powers language, Brown disparaged administrative agencies and implicitly questioned their ability to fairly assess damages, saying that “administrative agencies [are] not immune to political influences, [and] they are subject to capture by a specialized constituency.” 50 P.3d at 732. Brown was the only justice to take this position. And in Aguilar v. Avis Rent-a-Car, 980 P.2d 846 (1999), Brown authored a dissenting opinion that would have struck down, on First Amendment grounds, an injunction that instructed a supervisor not to use racial epithets against Latino employees. The injunction was issued by a trial court judge after the employer was found liable by a jury for maintaining a discriminatory hostile work environment for Latino employees.
• Barring Civil Rights Claims. Brown dissented in a civil rights case and said the plaintiff’s race and age bias claims should have been thrown out as preempted by federal banking law. Peatros v. Bank of America, 990 P.2d 539 (2000).
• Allowing Mandatory Arbitration Agreements Even If Employees Must Pay for the Cost of Arbitration. Brown authored an opinion saying that she would allow employers to require employees to agree to compulsory arbitration of employment claims (such as discrimination claims or unpaid overtime claims) even if those agreements allowed arbitrators to impose some or all of the cost of the arbitration on the employee. Armendariz v. Foundation Health Psychcare Servs., 6 P.3d 669 (2000). The majority of the court ruled that a mandatory arbitration agreement containing such a provision would be invalid, because it would discourage employees from exercising their right to bring claims against their employers.
• Protecting Private Property Rights at the Expense of Affordable Housing Measures. Brown dissented from a decision that upheld the City of San Francisco’s determination that the owner of a residence hotel needed to retain affordable housing or contribute to an affordable housing fund as a condition of converting its property to a tourist hotel. Brown wrote a sarcastic and blistering dissent, calling the city’s decision “theft,” “extortion” and an unconstitutional “taking” of the hotel owner’s private property. San Remo Hotel v. City and County of San Francisco, 41 P.3d 87 (2002). Brown’s opinion shows that she is skeptical of government action when it impacts private property rights—a view which, if adopted, would put at risk many consumer, environmental and worker protection measures.
• Protecting Private Property Owners from Expressive Activity on their Property. Brown authored an opinion that took a narrow view of the California Constitution’s free speech protections, imposing a “state action” requirement as a condition of those protections, even though such a requirement does not appear in the language of the California Constitution. As a result, tenants in a huge residential apartment complex were barred from distributing a tenant newsletter to their neighbors. Golden Gateway Center v. Golden Gateway Tenants Ass’n, 29 P.3d 797 (2001). Employers are now using the decision to try to keep union organizers away from their workplaces.
• Chilling E-mail Communication with Employees. Brown dissented from a ruling that a company could not sue an ex-employee under the tort of trespass after the ex-employee sent e-mails critical of the company to his former co-workers. The court majority said the company could not sue because there had been no actual damage or disruption to the company’s e-mail system. Brown would have allowed the lawsuit even in the absence of such damage. Intel Corp. v. Hamidi, 71 P.3d 296 (2003). Had Brown’s view been adopted, companies throughout California could have used trespass laws to shut down group e-mail contact from outside individuals or organizations.
• Denying Schoolteachers Timely Information About Their Employment Status. In Kavanaugh v. West Sonoma County Union High School, 62 P.3d 54 (2003), Brown authored a dissent that would have allowed school districts to notify teachers of their status well after they began work, meaning that new hires could be subjected to “bait-and-switch” tactics by school employers. The court majority ruled that applicable statutes require school districts to notify teachers of their status (e.g., temporary, probationary, etc.) on their first day of work. Knowledge of this status is important because different categories of teachers have different levels of job security.
• Undermining Health and Safety Protections. Prior to joining the California Supreme Court, Brown served on the California Court of Appeal. There, she authored an opinion that would have invalidated a state law that required paint companies to help pay for screening and treatment of children exposed to lead paint. Brown’s opinion was later overturned by the California Supreme Court. Sinclair Paint Co. v. Board of Equalization, 49 Cal. App. 4th 127 (1996), rev’d, 937 P.2d 1350 (1997).

It would be difficult to make a stronger case for Justice Brown than the AFL-CIO has done here by this bullet-point listing. In opposing “affirmative action”, Brown is supporting property rights and the right of freedom of association. Likewise in opposing the gravy-train that comes from “discrimination lawsuits”, expecially when “emotional distress” is claimed. Brown supports the right of companies to refuse to pay for the costs of employee-disputes; it is one thing to say that employees have a right to bring a claim against their employers, and entirely another to say they have a right to force their employers to pay for the cost of bringing those claims.

Judge Brown rightly argued that forcing the Remo Hotel to contribute to an “affordable housing fund”, as a condition of allowing it to convert its property to a tourist hotel, was theft, extortion, and unconstitutional taking. She is also rightly argued that freedom of speech doesn’t mean the right to freedom of speech on someone else’s property: no-one has the right to step on my property and start “freely expressing themselves”, whether my property is my yard or my business.

Even her argument in favor of allowing Intel to sue a former employee for sending e-mails critical of Intel to then-current Intel employees was justiable: the e-mail server which the then-current employees used was the property of Intel; after the former employee was asked to stop trespassing on Intel’s property, they had every right to sue him (whether or not the damages could be significant is another matter). Furthermore, in focusing on damage to the e-mail system, those from whom Brown was dissenting were attempting to make an end-run around the fact that costs are subjective. Likewise, Brown supports property rights in opposing laws requiring paint companies to help pay for screening children exposed to lead paint. Should the companies that make knives, oven burners, mercury thermometers, gasoline, and other things that children shouldn’t be around also be required to pay for the treatment of children who were exposed?

Apparently, Japanese car-makers are concerned about being too profitable, when American car companies are experiencing difficulty. I wonder when strategy courses in business schools will start teaching management of political perception of “fairness to competitors”.

Apparently, in Bali, one can get the death penalty for importing drugs. Bali prosecutors, however, have been “merciful”, and only asked for life in prison for Schapelle Corby, an Australlian beauty therapist accused of smuggling 9lbs of marijuana into Bali.

Although no-one should be imprisoned for selling, importing, exporting, or using drugs in the first place, Corby claims that someone placed the drugs in her bag after she checked in at the airport. Ms. Corby believes that her life is over.

Do you know what the alleged reason is for such barbaric punishments in Bali? According to Prosecutor Ida Bagus Wiswantanu, the reason is:

“The defendant’s actions can ruin the image of Bali as a tourist destination,” he told the three judges who will determine her fate. “The defendant’s actions can make Bali look like a drug haven and affect young people’s lives.”

Of all the worthless utilitarian arguments to justify life in prison, or death, for drug-use, that’s one of the most atrocious I’ve heard. Because the prosecution thinks that Corby’s actions “make Bali look like a drug haven”, that justified life in prison, or even death. I’m sure similar arguments are used to “justify” stoning women to death for infidelity. Bali’s punishments for drug-related crimes challenges the punishments given in the Middle East for adultery in terms of injustice and cruelty.

Incidentally, I don’t think that sentencing women and men to life in prison, or possibly death, for drug “crimes” has a positive effect on tourism. It seems more likely to make Bali about as attractive as a tourist spot as Afghanistan.

A woman was fined for holding an apple while performing a maneuver in a car. Aside from the absurdity of this, it cost the government far more to prosecute her than what they obtained from the fine:

A NURSERY nurse was fined £60 yesterday for holding an apple in her hand while driving around a bend after police used a spotter aircraft, a helicopter and a patrol car to win the case.

Northumbria Police went to extraordinary lengths to gather evidence against Sarah McCaffery, 23, who had missed breakfast and grabbed the apple to eat on her way to work. Magistrates ruled that she had not been in full control of her car. Miss McCaffery was also ordered to pay £100 costs at the tenth court hearing of the case.

Chris Kay, for the prosecution, said that the bill was £425, not including the aerial photographs and the squad vehicle’s video. The full cost of bringing the case against Miss McCaffery is thought to have been about £10,000.

This is a brilliant essay by Philip Fischer that I’ve transcribed from Common Stocks and Uncommon Profits and Other Writings, the third book, Developing and Investment Philosophy. Here it is:

By the coming of the 1970′s nearly all of my investment philosophy was firmly in plce, molded by my experience of four prior decades. It is not coincidence that with only one exception all of both the wise and the foolish actions I have mentioned as examples that helped form the background of this phiosophy were incidents that occured during these four prior decades. This does not mean that I have made no mistakes in the 1970′s. Unfortunately, it seems that no matter how hard I try, sometimes I must stub my toe more than once in the same way before I truly learn. However, in the examples I have used I usually took the first instance when a particular type of event happens to illustrate my point, which explains why all but one of the examples I used occured during these earlier periods.

It might be helpful to notice the striking parallels in each of these past ten-year periods. With the possible exception of the 1960′s, there has not been a single decade in which there was not some period of time when the prevaling view was that external influences were so great and so much beyond the control of individual corporate managements that even the wisest common stock investments were foolhardy and perhaps not for the prudent. In the 1930s there were years when this view, influenced by the Great Depression, was at its most extreme, but perhaps not any more than the fear of what the German war machine and World War II might do in the 1940′s, or the certainty that another major depression would hit in the 1950′s, or fear of inflation, hostile government action, etc., in the 1970′s. yet every one of these periods created investment opportunities that seemed almost incredible with all the advantages of hindsight. In each of these five decades there were not a few, but many common stock opportunities that ten years alter yielded profits running to many hundreds of percent for those who had bought and stayed with the shares. In some instances profits ran well into the thousands of percent. Again in every one of these five decades some stocks which were the speculative darlings of the moment were to prove the most dangerous kind of trap for those who blindly followed the crowd rather than those who really knew what they were doing. All of these ten-year periods essentially resembled the others in that the greatest opportunities came from finding situations that were extremely attractive but that were undervalued because at that particular moment the financial community had significantly misjudged the stiuation over this fifty-year period and at the great waves of public optimism and pessimism that succeeded each other over this time span, the old French proverb, Plus ca change, plus c’est la meme chose (the more things change, the more they remain the same), comes to mind. I have not the slightest doubt that as we enter the emerging decade of the 1980′s, with all the problems and the prospects that it now offers, the same will continue to hold true.

The Fallacy of the Efficient Market

In the last few years, too much attention has been paid to a concept that I believe is quite fallicious. I refer to the notion that the market is perfectly efficient. Like other false beliefs in other periods, a contrary view may open up opportunities for the discerning.

For those unfamiliar with “efficient” market theory, the adjective “efficient” does not refer to the obvious mechanical efficiency of the market. A potential buyer or seller can get his order to the market where a transaction can be executed very effectively within a matter of a couple of minutes. Neither does “efficiency” refer to the delicate adjustment mechanism which causes stock prices to move up or down by fractions of a point in response to modest changes in the relative pressure of buyers and sellers. Rather, this concept holds that at any one time the market “efficient” prices are assumed to reflect fully and realistically all that is known about the company. Unless someone has some significant, illicit inside information, there is no way genuine bargains can be found, since the favorable influences that make a potential buyer believe that an attractive situation exists are already reflected in the price of the stock!

If the market was as efficient as it has become fashionable to believe, and if important opportunities to buy or significant reasons to sell were not constantly occuring, stock returns should not subsequently have the huge variations that they do. By variation, I am not referring to changes in prices for the market as a whole, but rather the dispersion of realtive price changes of one stock against another. If the market is efficient in prospect, then the nexus of analysis that leads to this efficiency must be collectively poor.

Efficient market theory grew out of the academic School of Random WAlekrs. These people found that it ws difficult to identify technical trading strategies that worked well after transactions costs to provide an attractive profit relative to the risks taken. I don’t disagree with this. As you have seen, I believe that it is very, very tough to make money with an out trading based on short-term market forecasts. Perhaps the market is efficient in this narrow sense of the word.

Most of us are or should be investors, not traders. We should be seeking investment opportunities with unusual prospects over the long run and avoiding investment opportunities with poorer prospects. This has always been the central tenet of my approach to investments in any case. I do not believe that prices are efficient for the diligent, knowledgeable, long-term investor.

Directly applicable to this is an experience I had in 1961. In the fall of that year, as in the spring of 1963, I undertook the stimulating duty of substituting for the regular finance professor in teaching the senior course of investments at Stanford University’s Graduate School of Business. The concept of the “efficient” market was not to see the light of day for many years to come and had nothing to do with my motivation in the exercise I am about to describe. Rather, I wanted to show these students in a way they would never forget that the flucations of the market as a whole were insignificant compared to the differences between changes in price of some stocks in relation to others.

I divided the class into two groups. The first group took the alphabetical list of stocks on the New York Stock Exchange, starting with the letter A; the second group, those starting with the letter T. Every stock was included in alphabetical order (except preferreds and utilities, which I consider to be a different breed of cats). Each student was assigned four stocks. EAch student looked up the closing price as of the last day of business of 1956, adjusted for the stock dividends and stock splits (rights were ignored as not having sufficient impact to be worthy of the additional calculations), and compared this price with the price as of Friday, October 13th (if nothing else, a colorful closing date!). The percentage increase or decrease that occured in each stock over this period of almost five years was noted. The Dow Jones averages rose from 499 to 703, or by 41 percent in this period. Altogether, there were 140 stocks in this sample. The results are displayed in the following table:

Percentage Capital Gain or Loss	No. of Stocks in Group	Percentage of Total Gropu
200% to 1020% gain	15 stocks	11%
100% to 199% gain	18 stocks	13%
50% to 99% gain	14 stocks	10%
25% to 99% gain	21 stocks	15%
1% to 24% gain	31 stocks	22%
Unchanged	3 stocks	2%
1% to 49% loss	32 stocks	23%
50% to 74% loss	6 stocks	4%
Net	140 stocks	100%

These date are quite insightful. In a period when the Dow Jones averages rose 41 percent, 38 stocks, or 27 percent of the total, showed a capital loss. Six of them, or 4 percent of the total, recorded a loss of over 50 percent in their total value. In contrast, roughly one quarter of the stocks realized capital gains that would have been considered spectacular.

To drive the point home, I noted that if a peron invested $10,000 in equal amounts in the five best stocks on this list, at the outset of this four and three-quarter year period, his capital would now be worth $70,260. On the other hand, if he had invested the $10,000 in the f ive worst stocks, his capital would have shrunk to $3,180. These extreme results were most unlikely. It would take luck, either good or bad, as well as skill, to hit either of these extremes. It would not be so implausiable for a person with real judgement to have picked five out of the ten best stocks for his $10,000 investment, in which case his net worth on Friday the 13th would have been $52,070. Similarly, some investors consistently select stocks for the wrong reason and manage to pick lemons. For them selecting five out of the ten poorest in performance is also not an entirely unrealistic expectation of results. In that case, the $10,000 investment would have shrunk to $4,270. On the basis of this comparison, there might be, in less than five years, a difference of $48,000 between a wise and an unwise investment program.

A year and a half later, when I also taught this same course, I repeated the exact same exercise, with the exception that instead of using the letters A and T, I selected two different letters in the alphabet from which to form the sample of stocks. Again, over a five-year time frame, but with a different starting and different closing date, the degree of variation was almost exactly the same.

Looking back on most markets of five-year duration, I believe that one can find stock performance results that are about as disparate. Some of this dispersion may come as the result of surprises — important new information about a stock’s prospects that could not be reasonably foreseen at the outset of the period. Most of the differences, however, can be anticipated at least roughtly both in terms of direction and general magnitude of gains and losses relative to the market.

The Raychem Corporation

In view of this kind of evidence, it is hard for me to see how anyone can consider the stock market efficient, again using the word “efficient” as it is used by the proponents of this theory. But to belabor the point further, let me take a stock market situation of just a very few years ago. In the early years of the 1970′s, the shares of the Raychem Corporation had considerable prestige in the market place and were accordingly selling at a relatively high price-earnings ratio. Some of the reasons warranting this prestige may be perceived by some comments made b y the company’s Executive Vice President, Robert M. Halperin. In outlinining what he called the four cardinal points to Raychem’s operating philosophy, he stated:

1. Raychem will not do anything technically simple (i.e., something that would be easy for potential competitors to copy).


2. Raychem won’t do anythign unless it can be vertically integrated; that is, Raychem must conceive the product, manufacture it, and sell it to the customer.


3. Raychem won’t do anything unless there is substantial opportunity for real proprietary protection, which generally means patent protection. Unless this occurs, research and development energies will not be employed on a project, even though toherwise it might fit Raychem’s skills.


4. Raychem will only go into new products when it believes it can become the market leader in whatever niche, sometimes smaller, sometimes larger, that product attempts to capture.

By the mid-1970′s, awareness of these unusual strengths was sufficiently prevalent among those who controlled large institutional funds so that sizeable blocks of shares had been taken out of the market by people who believed that Raychem was a situation of unusual competitive strength and attractiveness. However, it was another aspect of this company that gave Raychem its greatest appeal to these holders and was probably the cause fo the high price-earnings ratio at which it was then selling. Many considered that Raychem, which was spending an above average percentage of sales on new project development, had perfected a research organization capable of producing an important enough stream of new products so that the company could be depended on to show an uninterrupted upward trend in sales and profits. These research rpoducts had quite justifiably a special appeal to the financial community because many of the newer ones only indirectly competeted with older products of other companies. Primarily, the new products enabled high-priced labor to do the same job in considerably less time than had previously been required. There were enough savings offered to the ultimate customer of these products to justify a price which should afford Raychem a pleasing profit margin. All this caused the stock twoard the end of 1975 to reach a high of over $42.5 (price adjusted for subsequent stock splits) — a level about 25 times the estimated earnings for the fiscal year ending June 30, 1976.

Raychem, Dashed Expectations, and the Crash

Toward the close of the June 30, 1976, fiscal year, Raychem was hit by two hammer blows, which were to play havoc with the price of the stock and with the company’s reputation in the financial community. The financial community had become very excited about a proprietary polymer, Stilan, which enjoyed unique advantages over other compounds used by the airplane industry for coating wire and which was then in the final research stages. Furthermore, the polymer was to be the first product in which RAychem would go basic, that is, make hte original chemicals in its own plant rather than buying raw materials from others and compounding them. Because of the appeal of the product, Raychem had allocated by a considerable margin more funds to this research product htan to any other in its history. The financial community assumed this product was already on its way to success, and after passing through the unusual “learning curvea” experienced by all new products it would become highly profitable.

Actually, quite the opposite was occuring. In the words of Raychem management, Stalin was “a scientific success but a commercial failure.” Improved products of an able competitor, while technically not as desireable as Stilan, proved adequate for the job and were far cheaper. Raychem management recognized this. In the course of a relatively few weeks, management reached the painful decision to abandon the product and write off the heavy investments made in it. This resulting charge to earnings for that fiscal year was some $9.3 million. T his charge-off caused earnings, exclusive of some offsetting special gains, to drop to $0.08 a share from $7.95 the previous fiscal year.

The financial community was as much upset by the erosion of the great confidence in the company’s research ability as by the precipitous drop in earnings. Largely ignored was the basic rule that some new product developments are bound to fail in all companies. This is inherent in all industrial research activity and in a well-run company is far more than offset in the long run by other successful new products. It may have been just bad luck that the particular project on which the most money had been spent had been the one to fial. At any rate, the effect on the stock price was dramatic. By the fourth quarter of 1976, the stock had dropped to al ow of approximately $14.75 (again adjusted for subsequent splits amounting to six to one) or to approximately one-third its former high. Of course, only a tiny amount of stock could be bought or sold at the low point for the year. Of greater impact, the stock was available at prices only moderately above this low level for months thereafter.

Another development also affected the profits of the compnay at this moment and contributed to Raychem’s fall from favor. One of the most difficult tasks for those responsible for the success of any growing compnay is to change the management structure appropriately as the company grows to allow for the difference between what is needed for proper control of small companies and optimum control of big companies. Until the end of the 1976 fiscal year, Raychem management had been set up along the divisional lines based largely on manufacturing techniques; that is, on the basis of the products produced. This worked well when the company was smaller, but was not conducive to serving the customer most efficiently as the company was growing. Therefore, at about the end of the 1975 fiscal year, top Raychem management started working on a “big compnay” management concept. THe firm restrucured the divisions by the industry served rather than by the physical and chemical composition of the products being manufactured. The target date to make the change was at the end of the 1976 fiscal year. This was done at a time when there was not hte least thought within the management that this date would coincide with the time of the huge write-off for the abandonment of Stilan.

Everyone in Raychem knew that when the organizational change was to occur there would be at least one quarter and probably a minimum of two of subsequently reduced earnings. While making these changed caused almost no change in the individuals on the Raychem management payroll, so many people now had different superiors, different subordinates, and different co-workers with whome they had to interface their activities that a time of inefficiency and adjustment was bound to occur until Raychem employees learned how best to coordinate their work with the new faces with whome they were now dealing. Perhaps no stronger indication could have existed to justify long-range confidence in this company or to indicate that management was not concerned with short-term results than its decision to go ahead with this project as planned rather than to postpone what was bound to be a second blow to Raychem’s current earnings.

Actually, this significant change worked with considerably less difficulty than had been anticipated. As expected, the first-quarter earnings of the new fiscal year were much lower than would have been the case if the change had not been made. However, the change was working so well that as the second quarter progressed, the short-term costs of what had been done had largely been eliminated. Fundamentally these developments should ahve been considered bullish by analysts. Raychem was now in a position to handle the growth properly in a way that could not have been done before. It had successfully hurdled a barrier of the type that is most apt to dull the luster of otherwise attractive growth companies. By and large, the financial community did not seem to recognize this, however, and instead the temporary further shrinkage of earnings was just one more factor holding the stock at the low levels to which it had fallen.

Making these price levels even more attractive to potential investors was another influence that I have seen happen in other companies shortly after they had abandoned a major research project that had proved unsuccessful. One financial effect of the abandonment of Stilan was that a sizeable amount of money that had heretofore been devoted to that project was now free to be allocated elsewhere. Even more important, it had similarly freed the time of key research people for other endeavors. Within a year or two much like a field of flowers starting to bloom where rain follows drought, the company began to enjoy what was possibly a greater number of attractive research projects in relation to its size than had ever before been experienced.

Raychem and the Efficient Market

Now what has Raychem’s situation to do with the theory of an “efficient market” that has recently gained such a following in certain financial quarters? According to that theory, stocks automatically and instantly adjust to whatever is known about a company, so that only those who might possess illicit “inside information” that is not known to others could benefit from what might lie ahead for a particular stock. In this instance, at the drop of a hat, the Raychem management would and did explain to anyone interested all the facts I have justed cited and explained how temporary they believed was the period of poor earnings.

Actually, well after all this had happened and when profits were climbing to a new all-time high level, the Raychem management went even further. On January 26, 1978, they held a long one-day meeting at their headquarters which I had the priviledge of attending. Racyehm management invited to this meeting the representatives of all institutions, brokerage houses, and investment advisors who either had any interest in Raychem or they thought might have. At this meeting the ten most senior executives of Raychem explained with what I believe was extreme frankness and in detail, such as I have only occasionally seen at similar meetings of other companies, the prospects, the problems, and the current status of Raychem matters under their jurisdiction.

In the year or two following this meeting, Raychem’s earnings growth developed exactly as might have been inferred from what was said there. During that period, the stock was to much more than double from the price of $23.25 at which it was selling that day. yet in the weeks immediately following this meeting, there was no particular effect on the stock whatsoever. Some of those present were obviously under the influence of the double shock that they had experienced a year or two before. They obviously mistrusted what was being told them. So much for the theory of an efficient market.

What kind of conclusion does the investor or the investment professional reach from experiences like Raychem? By and large, those who have accepted and been influenced by this theory of the “efficient market” fall into two groups. One is students, who have had a minimum of practical experience. The other, strangely enough, seems to be many managers of large institutional funds. The individual private investor, by and large, has paid relatively little attention to this theory.

From this experienced gained in applying my personal investment philosophy, I would conclude that in my field of technological stocks, as the decade of the 1970′s comes to and end, there would therefore be more attractive opportunities among the larger companies, the market for which is dominated by the institutions, than among the small technological companies where the individual private investor plays a considerably bigger role. Just as some ten years years earlier those who recognized the folly of the then prevailing concept of the two-tier market benefited from recognizing that particular nonsense for what it was, so in each decade false ideas arise creating opportunities for those with investment discernment.

Robbert Herring, a “tycoon”, has offered Michael Schiavo $1million if he hands over the rights to decide whether or not to take his wife, Terri Schiavo, to her parents. Mr. Schiavo says that she’d told him she didn’t want to live that way, but her parents disagree and think she could become better with treatment. Mr. Herring, who is a completely independent party, thinks that new developments in stem-cell research may provide hope for Mrs. Schiavo.

This case touches on several big issues in politics, including the rights of the disabled, the right to die, and stem-cell research (which has the potential to save many lives). It seems to me that there isn’t a real conflict here between these groups on fundamental issues, but rather on the specifics of what Mrs. Schiavo’s wishes really were.

In any event, irrespective of how one feels about what is the right thing to do in this case, the generosity of Mr. Herring is inspiring.

Now that the State has finished the fascist imprisonment of Martha Stewart for engaging in non-crimes, they’ve committed her to house-arrest, as if she’s some kind of dangerous criminal. This is clearly a ludicrous attempt by the State to embarrass, humble, and humiliate Ms. Stewart. However, she is of such high dignity that she apparently has not let this atrocious miscarriage of justice depress her spirits. Much has been made about the treatment Stewart has received upon being released from prison: having a chartered plane ready for her, having more latitude than most criminals under house-arrest, etc. Of course, regarding her jet, she’s earned that by providing value to millions of people; as for her relative freedom on house-arrest — having a “longer leash” than most on house-arrest — such ignores the fact that Ms. Stewart hasn’t harmed anyone, and is not a dangerous person who needs to be monitored.

On the Financial Sense news hour, Jim Puplava and others talk about the disaster that our social security system is in. Of particular interest is an exchange they replay between Allan Greenspan and a completely aloof Congresswoman, Carolyn Maloni. Here’s a transcript:

Rep. Maloni: My question was the statement by 2042, the entire system will be bankrupt. It will not be bankrupt, I agree the trust fund will be gone, but there will still be the money coming in from the payroll taxes — enough to pay, by all accounts, three-quarters of the benefits. Is that true or not?

Chairman Greenspan: It’s true in dollar terms, but I suspect it may not be true in real terms. And the reason I’m saying that: if we cannot get full funding and the savings required to build up the capital stock in time for 2042′s production of goods and services, yes, the individuals may have the cash, but the cash will not buy as much as they think it would be. The real problem has got to be real resources, and this issue of whether or not the OASI goes bankrupt or not bankrupt is an interesting legal and political question, but it really doesn’t get at the economics of the retirement of individuals, the 30 million additional individuals.

Rep. Maloni: That’s true, but the point is, in 2042, the entire system is not bankrupt.

As Puplava notes, she tries to slam home that point, that the system isn’t bankrupt; on paper, in fictitious dollars, you can say it’s not bankrupt. But in real assets, in real value, as the Chairman said, it’s not there. The other point he made is that it may be conceivable that you’ll get your money, but it’ll only buy a cup of coffee. The surplus collected into social security, which was supposed to be set aside and invested for the time when there’d be greater demands on it, was instead spent, replaced with an empty IOU. As Puplava notes, if he did that kind of funny-business with the money his employees put in their 401k, he’d be in jail.

Another point that’s worth bearing is that these IOUs aren’t just empty: they’re meaningless. To understand this, we have to understand that people are not entitled to social security payments; it is not like a contract where you pay into the system, and then have a legal right to get something back out later on. Rather, as Prof. Rounds notes in No More Euphemisms, social security is an umbrella term for two things: taxes and welfare. Thus, the State doesn’t legally owe any of those who’ve paid into the SS system anything. Hence, these IOUs are nothing more than the State loaning itself money: an accounting fiction. Hence, Puplava’s example isn’t quite right; rather, to make it more analogous, we would have to say that he uses coercive force to make his employees give him money, with the non-binding claim that he’ll pay them something back later. Thus, what is going on is even more criminal than what Puplava suggests.

Nor is social security some form of insurance. Again, under insurance, one would have a legally binding claim; under social security, the to-be recipient has no legally binding claim. He is, rather, a welfare-recipient. And there is no trust-fund. As Roth bad explains in The Social Security Swindle:

The federal government taxes the youth and adult working population, takes the money, and spends it on the boondoggles that make up the annual federal budget. Then, when the long-taxed person gets to be 65, the government taxes someone else–that is, the still-working population, to pay the so-called benefits.

…

The notion that a fund really exists rests on a “creative” accounting fiction; yes, the fund does exist on paper, but the Social Security System actually grabs the money as it comes in and purchases bonds from the Treasury, which spends the money on its usual boondoggles.

The recent talk of privatization is complete and utter humbug, and it would be an even worse disaster if the public buys it. The idealistic notions of SS-privatizers have their own problems (such as the enormous misallocation of resources, the involuntary aspect, the great likelihood that such a thing will result in much heavier intervention in and the socialization of the stock-market). However, the reality of “SS-privatization” is far worse than the fantasies of SS-privatizers. Firstly, as Lew Rockwell explains in Save or Else, there is nothing to privatize: you can’t privatize something that is a non-existent accounting fiction. If we were to talk of real privatization, it would mean eliminating the program entirely, and allowing a combination of voluntary savings, voluntary insurance, and voluntary charity to work in the free market. However, what is actually being talked about is nothing other than the creation of a forced-savings program. Prof. Sennholz provides an excellent overview of Distractions in the Social Security Debate and offers some worthwhile suggestions.

Let me close with a gem from Rep. Ron Paul, who always seems able to corner and fluster Greenspan (perhaps by reminding him what it’s like to be true to one’s principles):

Mr Greenspan, yesterday you were quoted as saying it was imperative that Congress restore fiscal discipline. Of course, you’ve made that point very often over the years. I have tried my best to vote accordingly, but sometimes I find myself in a lonely category. I have found that we have a group here that is quite willing to vote for deficits for domestic programs, then we have another group that’s quite willing to spend for militarism abroad, then we have another group that likes both. So if you look around for people who are willing to cut in maybe both areas, it’s pretty hard to come by. But you in the past, in answer to some of my questions, have answered that you believe that central bankers have come around to getting paper money to act in many ways like gold, therefore that there’s less of an imperative for a gold standard.

I haven’t yet been convinced of that. Take, for instance, the current accounts deficit. Under the gold standard, there’s a lot of self-adjustments, and we certainly wouldn’t have the exchange-rate distortions between the renminbi and the dollar. So I think a lot of shortcomings under the paper standard with the current account deficit. Also, the argument is made that CPI reflects that there’s little or no inflation; yet, if you look at the cost of bonds, or if you look at the cost of medicine, if you look at the cost of energy, there’s a lot of inflation out there. Also, if you look at the costs of houses, which are skyrocketing, which then is reflected into tax-increases, the consumer is still suffering from a lot of price-inflation that we, in Washington, are trying to deny.

PS: Regarding Greenspan’s statement, it may not be true in real terms, what else could this mean but that the Fed plans on continuing the crank up the printing presses and inflate the monetary supply, the effects of which are to be compounded by fractional-reserve banking and the ever-increasing national debt?

Thanks to Tim Swanson for the link. Apparently, the French are very worried about the oncoming attack of American ideas. Google is planning on uploading libraries to the internet. Jeanneney, head of France’s national library, is worried that Google will favor books written in English, and tend to be Americanized. So, he thus proposes the the European Union balance this dastardly deed with their own (State-sponsored) search-engine, uploading various books in French and other languages of Europe. Another government boondoggle. Google bringing more value to the consumer is somehow a threat.