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On This Day in 1933

June 13, 2013 in Economics

By Christopher Westley

slackers

You were considered a hoarder and a slacker if you still resisted turning over your gold to the government. From the New York Times, June 13, 1933:

(Click on the image for a sharper picture.)

Roosevelt had only been in office for 101 days and while there was broad bipartisan support for inflationary policies in Congress, it’s safe to say that most of those who voted for FDR never expected him to confiscate private holdings of gold coins, bullion, and certificates. Roosevelt called the measure a temporary one (it wasn’t), and he followed it up by invalidating gold clauses in private contracts that obligated payment in gold dollars, which had the effect of devaluing the assets of bond and contract holders. Many of these hoarders and slackers purchased gold as a hedge against the (Fed-fueled) inflationary boom of the 1920s and then hung on to it during the Hoover years when his crazed and unprecedented interventions in wages and prices caused a normal market correction to devolve into a depression. Why would they trust Roosevelt any more?

They were smart not to. By January 1934, Roosevelt increased the dollar price of gold from $20.67 to $35, thus devaluing the dollar by 70 percent while increasing the value of gold that the government now owned.

Gold flowed to the United States because the new price exceeded the world price, causing Fort Knox to become, well, Fort Knox. Since the Treasury was authorized to maintain the new dollar-gold exchange rate, it increased the money supply accordingly. Over the next three years, M2 increased by an average of 13.4 percent a year. Congress and the president with strong ties to Wall Street got the inflation they wanted.

Queue the tape: “Happy Days Are Here Again.

A major constraint on the federal government’s ability to spend had been lifted, and by the end of the decade the balance of political power had shifted from the states and the cities to Washington, D.C. It remains to be seen whether inflating the money supply will have any different effect in the 2010s than it did in the 1930s.

…read more

Source: MISES INSTITUTE

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Return of the Bank Run

June 13, 2013 in Economics

By Jeffrey Herbener

Gary Gorton’s view of bank runs has already filtered down to students. Sam Williams won first prize at the ASSC in February with the paper The Return of the Bank Run: How the Financial Crisis of 2007-2008 was a Next Generation Bank Run

…read more

Source: MISES INSTITUTE

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REMARKS PREPARED FOR DELIVERY: Sen. Paul Speaks at Faith and Freedom Coalition

June 13, 2013 in Politics & Elections

WASHINGTON, D.C. – Sen. Rand Paul today offered the following remarks at the Faith and Freedom Coalition Road to Majority Conference in Washington, D.C.

Last year in Pakistan, 14-year-old Malala Yousafzai was shot in the head by the Taliban for being a girl and for wanting to go to school.
If you haven’t seen the YouTube video of Malala being interviewed on national television, speaking out for the education of girls, watch and you will be amazed at her poise and grace.
Malala never met the great Urdu poet Parveen Shakir, who grew up in Pakistan when women could become highly educated and even Prime Minister.
This line from one of Shakir’s poems reminds me of Malala:
‘They insist upon evaluating the firefly in daylight. The children of our age, have grown clever.’
Why would anyone want to kill this innocent young girl? Because Malala, in her young life, insisted on exposing the firefly to daylight.
Her ‘crime,’ as seen by the Taliban, is to believe in enlightenment, to believe that out of the darkness a flicker of tolerance can glow and grow to overcome ignorance.
Americans are seen by Pakistanis as infidels and invaders. We will not in a thousand years bring enlightenment to Pakistan, only Pakistan can do that.
When Pakistan begins to police Pakistan better, when girls who long for nothing but freedom and education are embraced — rather than gunned down by murderous thugs — then will progress finally be made.
My heart breaks for Malala and her family. It breaks for all those who suffer under violent oppression in the name of religion. It breaks for those who cannot grow up to be poets and teachers, but mostly it breaks for those who cannot speak without being gunned down by extremists.
I can only hope that the violence done to her will motivate those who believe in both Islam and peace and tolerance to stand unanimously and proclaim this violence does not represent them. That the Taliban does not represent them. That gunning down children in cold blood does not please their God.
The violence and intolerance against girls is also directed toward Christians. It saddens me to see countries that are supposedly our allies persecute Christians.
It angers me to see my tax dollars supporting regimes that put Christians to death for blasphemy against Islam, countries that put to death Muslims who convert to …read more

Source: RAND PAUL

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Supreme Court Says Human Genes Cannot Be Patented, Striking Down Breast and Ovarian Cancer Gene Patents

June 13, 2013 in Blogs

By Steven Rosenfeld, AlterNet

The Court's unanimous decision is a major public-interest victory.


Human genetic sequences cannot be patented, the U.S. Supreme Court ruled Thursday in an unexpected decision that is a tremendous public interest victory.

“Myriad [Genetics] did not create anything,” the Supreme Court held, in a lawsuit that challenged the firm’s monopoly on two gene sequences used in expensive tests that reveal whether women have an inherited risk of breast and ovarian cancer. “To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention.”

The immediate impact gives other biotech firms the go-ahead to develop less-expensive DNA-based tests for the genetic risk of breast and ovarian cancer. Looking down the road, the ruling will force biotech companies to rethink their business models that have been based on ‘owning’ the building blocks of life.

“The Court rightfully found that patents cannot be awarded for something so fundamental to nature as DNA,” said Daniel B. Ravicher, Executive Director of the Public Patent Foundation, which lead the suit challenging two patents awarded for gene sequences tied to breast and ovarian cancer. “Bottom line, diagnostic genetic testing is now free from any patent threat, forever, and the poor can now have their genes tested as freely as the rich.”

Women’s health care advocates immediately hailed the Court’s decision, saying it put patients' health and scientific research ahead of private corporate profits.

“This ruling makes a huge and immediate difference to those with a known and suspected inherited risk of breast cancer,” said Karuna Kagger, executive director of Breast Cancer Action. “It is a tremendous victory for all people everywhere. The Supreme Court has taken a significant stand to limit the rights of companies to own human genes by striking down Myriad’s monopoly.”

“The Court struck down a major barrier to patient care and medical innovation,” said Sandra Park, senior staff attorney with the ACLU Women’s Rights Project, which was a co-counsel in the lawsuit. “Myriad did not invent the BCRA [breast and ovarian cancer] genes and should not control them.”

The public interest attorneys challenged …read more

Source: ALTERNET

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Sen. Paul Statement on Border Security Amendment

June 13, 2013 in Politics & Elections

WASHINGTON, D.C. – This morning the U.S. Senate voted on Amendment 1195 to S. 744, the immigration bill, an amendment that would strengthen border security. The amendment was rejected.
‘It is very disappointing that the Senate rejected this first step to fixing the border security issue in the immigration bill. If any immigration bill is to pass, the Senate needs to be more serious about securing our border. I am in favor of immigration reform and I view it as an important issue that must be handled properly. But, in order for reform to take place, we must first secure our nation’s border,’ Sen. Paul said. ‘Sen. Grassley’s amendment could have been a good first step. I will insist that the Senate revisit this issue with my ‘Trust but Verify’ amendment.’

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…read more

Source: RAND PAUL

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Catholic School Fires Teacher for Being a Domestic Violence Survivor

June 13, 2013 in Blogs

By Steven Hsieh, AlterNet

“I mean that’s why women of domestic violence don’t come forward.”


A San Diego Catholic school fired a teacher and domestic violence survivor due to her ex-husband’s “threatening and menacing behavior,” KNSD-TV reports.

Second-grade teacher Carie Charlesworth said she received notice of her termination after an incident in which her abusive ex-husband followed her to Holy Trinity School, where she worked. Charlesworth had been teaching in the district for 14 years.

“They’ve taken away my ability to care for my kids,” she told KNSD. “It’s not like I can go out and find a teaching job anywhere.”

Charlesworth went on leave after in incident in January that forced her to call the police on her husband three separate times. As KNSD reports, she went to Holy Trinity the next day to warn the principle “to be on the lookout for her ex-husband,” who “has a trail of restraining orders and 911 calls.”

Sure enough, Charlesworth’s abuser showed up at the school’s parking lot, sending it into lockdown. The next day, she received a letter informing her that she and her children were put on “indefinite leave.” And three months later, the teacher received a letter from Holy Trinity informing her that the school “simply cannot allow”her to return to work.

It didn’t matter that Charlesworth’s ex-husband is currently behind bars for his crimes, as the school has “no way of knowing how long or short a time he will actually serve.”

Sadly, Charlesworth’s story is part of a larger pattern of employees losing their jobs after incidents of domestic violence. As KNSD reports, a 2011 study shows that “Nearly 40 percent of survivors in California reported being fired or feared termination because of domestic violence.”

Charlesworth is telling her story to raise awareness of this problem, saying: “I mean that’s why women of domestic violence don’t come forward, because they’re afraid of the way people are going to see them, view them, perceive them, treat them.” 

h/t Raw Story

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Intervention Temptation

June 13, 2013 in Economics

By Doug Bandow

Doug Bandow

Since the dawn of human history men have warred against one another. The bitterest fights tend to be within political communities, the sort of civil wars that rent America, Russia, China, among many others. Today Syria is going through a similar brutal bloodletting. The result is horrific tragedy.

Administration officials reportedly are debating providing arms to Syria’s insurgents. A National Security Council spokeswoman explained: “We are taking a closer look at what we can do to help the opposition.”

It’s a bad idea. This kind of messy conflict is precisely the sort in which Washington should not get involved. Not everything in the world is or should be about the U.S. or what Washington wants.

Is Washington’s collective madness pushing America towards war in Syria?”

In fact, the push to intervene suggests that working in Washington leads to policy madness. Despite the end of the Cold War, the U.S. armed services have spent much of the last quarter century engaged in combat. At the very moment Washington should be pursuing a policy of peace, policymakers are considering joining a civil war in which America’s security is not involved, other nations have much more at stake, many of the “good” guys in fact are bad, and there would be no easy exit.

The starting point for U.S. foreign policy should be peace. Sometimes tragic times require war, but only rarely. Most of America’s wars are hard to justify, with mass death and destruction inflicted for reasons which in retrospect look frivolous or foolish. Military action should not be a matter of choice, just another policy option. War is no humanitarian tool to employ to “fix” foreign societies. The government should not call Americans to arms unless their own political community has something substantial at stake.

No such interest exists in Syria.

Intervention against Damascus means war. Some activists imagine that Washington need only add a finger or two to the military scale and President Bashar Assad would depart. However, weapons shipments, no fly zones, and safe zones would not be enough to oust a regime which has survived two years of combat. Allied airpower was uniquely effective in Libya due to its open terrain and the government’s lack of modern air defenses, and even then the conflict dragged on for months. Intervening ineffectively would cost lives and credibility while ensuring heavier future involvement. 

There is no serious security rationale for war. Damascus has not attacked or …read more

Source: OP-EDS

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Are You a ‘Blue Republican’?

June 13, 2013 in Blogs

By Robin Koerner

2013-06-12-BlueRepublicanbannerLA10E17Apr.jpg

These days, Rand Paul can often be heard saying that the Republican party needs to become competitive in “the West and New England,” and that the more libertarian brand of Republican politics that he represents will help make that possible.

In 2008, Democrats and Independents voted for Obama, believing that, in voting against Bush’s Republicans, they were voting against crony corporatism (remember Halliburton, corporate bailouts?), wars of choice (Iraq) and the take down of our civil rights (Patriot Act). Two years ago, a huge number of them realized that not only did their vote fail to stop any of these, but Obama was a kind of Bush-plus, extending and even deepening illiberal policy in all of these areas. As recent revelations about America’s massive surveillance state have revealed, they were right.

Many of these disillusioned Obama voters came to understand that the real problem was bigger than one party or the other, one president or another, but that, “the presuppositions of the system,” as Noam Chomsky call them, ensure that the state, under control of either party, consistently and increasingly acts at the expense of our basic individual liberties, Bill of Rights be damned. Thousands of these voters chose to stay true to their liberal principles by becoming (often for the first time in their lives) signed-up Republicans to support Ron Paul in his run for the presidency. In an article that I wrote at the time, I called them “Blue Republicans.” The article went viral and the term caught on, leading to the setting up of a Facebook group, the design and distribution of Blue Republican marketing materials aimed at liberals, and even all kinds of guerrilla marketing, such as the surreptitious hanging of banners over Californian freeways, and so on.

People flew to the USA from all around the world to hand out Blue Republican fliers in liberal parts of the country. Blue Republican became the largest coalition in support of Ron Paul’s campaign and I found myself giving in excess of 60 media interviews to explain the phenomenon that I had both named and promoted.

All that happened when “Blue Republican” was nothing more than a label, identified only with a core set of principles and a …read more

Source: ROBIN KOERNER BLOG

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Letter to the Editor: Venezuela Hit by Fears of Hyperinflation and Recession

June 13, 2013 in Economics

By Steve H. Hanke

Steve H. Hanke

Dear Sir:

Benedict Mander’s reportage, “Venezuela hit by fears of hyperinflation and recession” (10 June 2013), adds confusion to the subject of hyperinflation, as well as to Venezuela’s inflation story. The piece mentions two definitions of hyperinflation, neither of which is used in economic research: one was dreamed up by Goldman Sachs (“seasonally adjusted annualized rates of more than 40 per cent”) and the other by the International Accounting Standards Board (“a cumulative rate of 100 per cent over three years”).

Mr. Mander protects his text by asserting that “there is no fixed definition of hyperinflation”. But, there actually is a recognized scientific definition of hyperinflation. This convention, articulated in Prof. Phillip Cagan’s seminal 1956 paper, “The Monetary Dynamics of Hyperinflation”, holds that hyperinflation begins when the monthly inflation rate exceeds 50%. This is the definition that Nicholas Krus and I utilized in documenting all 56 hyperinflations in world history (“World Hyperinflations” in: The Routledge Handbook of Major Events in Economic History, 2013). Indeed, Cagan’s 50%-per-month threshold is the standard definition of hyperinflation used in economic research.

Official statistics put Venezuela’s monthly inflation rate for May at 6.1%. But, official statistics never tell the real story in a place like Venezuela. Using changes in the bolivar’s black-market U.S. dollar exchange rate, I estimate that the true monthly inflation rate for May was 11.4%. That’s almost twice the official rate, but it is not even close to the hyperinflation threshold of 50% per month. Venezuela has a serious inflation problem, but the situation will have to deteriorate significantly before Venezuela can join the other 56 cases in the hyperinflation hall of shame.

Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute in Washington, D.C.

…read more

Source: OP-EDS

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Utah Cops Assassinated 21-year-old Woman Sitting in Her Car, Parents Claim

June 13, 2013 in Blogs

By Jonny Bonner, Courthouse News

Widespread corruption and violence alleged in now-disbanded narcotics unit.


Police shot a young woman to death “assassination style” as she sat in her car, amid “widespread and systemic corruption” in the undercover drug force, the woman's parents claim in court.

     Melissa Kennedy and Frederick Willard, parents of the late Danielle Willard, sued West Valley City, its police Officers Shaun Cowley and Kevin Salmon, Lt. John Coyle, Police Chief Thayle “Buzz” Nielsen, and 10 Doe officers, in Federal Court.

     West Valley City, pop. 125,000, is a suburb of Salt Lake City.

     According to the complaint: “On Nov. 2, 2012, at approximately 1:30 p.m., decedent Danielle Misha Willard, 21 years old, was fatally shot in the back of her head, assassination style, by defendants Shaun Cowley and Kevin Salmon, members of the narcotics unit of the West Valley City Police Department, while she was seated in her vehicle in the parking complex of the Lexington Apartments, … Defendants' execution of Danielle Willard was without justification, unrelated to any legitimate law enforcement purpose, and done purposefully and/or in reckless disregard of her safety and well-being.”

     Willard's parents say the “brutal killing” was “untimely and unwarranted,” and that Cowley and Salmon “were engaged in a pattern and practice of illegal conduct.” 

     ”Since the tragic shooting of Danielle Willard, it has been uncovered that Officers Cowley and Salmon were engaged in a pattern and practice of illegal conduct and widespread and systemic corruption, sanctioned by the West Valley Police Department, culminating in the unjustified and senseless killing of Danielle Willard,” the complaint states.

     The narcotics unit was disbanded after the shooting, the parents say, and West Valley City admitted “rampant corruption and systemic constitutional violations by its officers,” including mishandling evidence and confiscating drugs for personal benefit.

     ”In the months following Danielle Willard's fatal shooting, the narcotics unit of the West Valley Police Department was disbanded. To date, two supervisors and five other rank and narcotics [sic] unit officers have been placed on administrative leave, along with Officers Cowley and Salmon; another West Valley City Police Department officer, Michael Valdes, was discovered in Wyoming, dead from what appeared to be …read more

Source: ALTERNET