The following is a simple and clear explanation of the credit crisis in the shape of a visual guide. Jonathan Jarvis walks you through every step of the problem, from sub-prime mortgages to the economic recession end state.
This attractive video, a thesis project of art student Jonathan Jarvis, provides an impressively clear explanation of the credit crisis, tracing it's origins in low interest rates through interwoven homeowners, mortgage markets, investors, and complex financial instruments.
Though the story it tells is quite accurate, the video doesn't attempt to put forward a full causal explanation linking together all the elements; if you're looking for a hint about the wherefores, keep your eye on the market-distorting effects of easy money and loose credit during the boom period.
Good afternoon, my beloved readers. This has been a busy, busy day for me so I'm not going to have the chance to do much updating. To give me peace of mind, and also to keep you entertained, I'll clear my tab bar of its most interesting material and submit it for your consideration.
If Democrats learned anything from the HillaryCare defeat, it was the danger of admitting to their wish to federalize the health market. Since returning to power, they've pursued a new strategy: to stealthily and incrementally expand government control. "What no one is paying attention to in the [stimulus]," says Wisconsin Rep. Paul Ryan, "is that Democrats are making a big grab at the health-care sector."
Heroes of Capitalism: an excellent blog that provides daily updates about great capitalists, living and dead.
What is a hero of capitalism? Someone who used private property* to produce wealth.
Everyday there will be a featured hero. Though many of the heroes had far more than one accomplishment, only one will be highlighted at a time.
The Western Standard: Harper's golden opportunity to radically embrace trade liberalization and free up the borders.
If the results of this survey can be trusted, and if public sentiment has not changed dramatically since the data was collected, the Conservative government could dismantle Canadian protectionism and pursue an aggressive policy of unilateral free trade with little political risk.
It's interesting to note just how many of the recent reactions to announcements that the Big Three could be going under have been limited to wide-eyed 'too big to fail' expressions of Keynesian corporate welfarist sentiment. Advocates of this business-on-a-government-leash model have been waxing apocalyptic on the subject of a future without General Motors, Ford, and Chrysler for months now. They insist that the only responsible decision politicians could make would be to increase the money flow from the unwilling pockets of taxpayers to the gaping maw of the struggling auto industry. Take money from the productive, they insist, and give part of it back to the productive and part of it to the chronically unproductive. We can call it a 'stimulus package'!
Bradley Doucet of the Western Standard proposes a slightly different response to the failure of inefficient businesses: burn, baby, burn.
Is it bad for the economy if inefficient, badly run businesses go under? That seems to be the thinking behind fears that the Big Three American automakers, GM, Ford, and Chrysler, might go bankrupt if governments do not bail them out. Millions of jobs would be lost, it is argued, including some half a million here in Canada. The effects would ripple through the economy and depress spending all around. Like the major financial institutions before them, interested parties argue that the Big Three are simply "too big to fail." It would be closer to the truth to say that these dinosaurs are too big and clumsy to survive.
In a free market, if a business goes bankrupt, it is because it was badly run, and competitors were able to be more efficient -- that is to say, those competitors were able to produce the same product or service and offer it at a lower price by keeping their costs in check. Alternately, they were able to offer a better product or service for the same price, or again, some combination of a better product or service and a lower price. When in the worst case scenario, a poorly run business is allowed to go bankrupt and liquidate, the capital and labour that were trapped in the inefficient enterprise are freed up to be reallocated to more efficient uses. More successful competitors can expand, purchasing plants and equipment and also hiring laid off workers.
The transition is never painless, of course. Stockholders take a hit as assets are sold off at a discount. Some assets may be of no real use, representing excess capacity or being out of date or run down, leading to further loss. Not all employees will be able to find work in the same fields, as they may have been superfluous; or they will have to take a pay cut, as their wages may have been inflated by decades of legally-sanctioned union extortion. The thing to notice is that, painful as it is, bankruptcy is just the market's way of correcting itself. Economic players have been acting in disregard of reality, and this has consequences. Bankruptcy is a serious form of market correction, but like all market corrections, when it is necessary, it is necessary.
Bailing out an enterprise that should by all rights be allowed to fail is just an attempt to deny reality. It punishes hardworking taxpayers and efficiently-run businesses for the sins of overpaid union members and inefficiently-run businesses. It also sets up an unhealthy spiral, in which those who act recklessly are not held to account, encouraging them to continue to act recklessly in the future. It is corporate welfare at its worst, even though some of the benefits redound to privileged union members at the expense of all other workers.
This is a truly excellent article, a clear look at the way businesses should work in a capitalist economy as well as the effects that governments have on the economy when they bail out inefficient companies. There's much more of the article than what I quoted so it's definitely worth following the link.
In the wake of Ezra Levant's passionate performance at the Alberta Human Rights Commission's investigative hearing, the issue of freedom of speech in Canada has been making a lot of headlines. Feeding the growing frenzy, Iowahawk somehow got ahold of the presiding human rights officer Shirley McGovern's official hearing report and personal notes on Levant's comments and the case in general. The report provides a fascinating window into Shirley McGovern's mind and is profoundly revealing of the entire HRC process. Definitely a recommended read.
Ezra Levant wrote a great article for today's Globe & Mail about his experiences with the Alberta Human Rights Commission and his thoughts on hate speech and human rights in Canada.
It was so banal, so routine. When she walked in, she seemed happy. With a smile, she reached out her hand to shake mine. I refused — to me, nothing could have been more incongruous. Would I warmly greet a police officer who arrested me as a suspect in a crime? Then why should I do so for a thought crime? This was not normal; I would not normalize it with the pleasantries of polite society.
This was not a high-school debating tournament where Human Rights Officer McGovern and I were equals, enjoying a shared interest in politics and publishing. I was there because I was compelled to be there by the government, and if I answered Officer McGovern's political questions unsatisfactorily, the government could fine me thousands of dollars and order me to publicly apologize for holding the wrong views.
I told her that the complaint process itself was a punishment. Even if I was eventually acquitted, I would still lose — hundreds of hours, and tens of thousands of dollars in legal bills. That's not an accident, that's one of the tools of these commissions. Every journalist in the country has been taught a lesson: Censor yourself now, or be put through a costly wringer. I said all this and then Officer McGovern replied, "You're entitled to your opinions, that's for sure."
But that's not for sure, is it? We're only entitled to our opinions now if they don't offend some very easily offended people.
...
What a strange place Canada is in 2008, where the police care more about human rights than the human rights commissions do, where fundamentalist Muslims use hate-speech laws drafted by secular Jews, and where a government bureaucrat can interrogate a publisher for 90 minutes, and be shocked when he won't shake her hand in greeting.
I posted a few weeks ago about the Canadian Islamic Congress dragging Mark Steyn before a Human Rights Commission on charges of Islamophobia and inciting hatred. I wrote it with the intention of highlighting the very real threat these commissions pose to the inalienable human liberties of free speech and freedom of the press. I would like to take this opportunity to remind everyone that the battle Mark Steyn is currently fighting did not occur in a vacuum; it began with the case of Ezra Levant and The Western Standard.
As most of us will remember vividly, two years ago the Danish newspaper Jyllands-Posten published twelve cartoons depicting the prophet of the Islamic faith Muhammad. In response, many muslim groups deemed these depictions of their prophet offensive and blasphemous so they torched a few embassies, desecrated some flags, held violent riots leading to 100 deaths, you know, the usual. As the controversy was snowballing, I remember being captivated not by the grossly unreasonable reactions these muslim groups displayed in response to the cartoons, but by the cowardice of the mainstream media in the United States, Britain, and Canada. In an ideal world, the media response would have been a non-partisan showing of unity for the fundamental right of free speech through a mass reprinting of the offending cartoons. Instead, most newspapers printed stories about the case without reprinting the pictures. Alone stood publisher Ezra Levant of The Western Standard.
Fast-forward a year and a half and Ezra Lavant is sitting before the Alberta Human Rights Commission. The first "interrogation," as Levant calls them, was Friday, January 11.
It is crucial that we make note of the trials Ezra Levant is being subjected to by his own government; The Western Standard has gone defunct in the wake of the accusations, his reputation has been sullied, he must finance his own defense while Alberta taxpayers pay for the prosecution, and he has been forced to live and breathe these accusation for nearly two years. Levant is a great man fighting for a right that must be protected at all costs. In the interrogation, which was videotaped and released against the wishes of the Human Rights Commission, he eloquently outlines his convictions and indignation at these charges. As Canadian citizens, we must stand witness to this travesty of justice and speak out against it.
Mr. Levant's Exceptional Opening Statement (For A Transcript Follow The Link):
Perhaps His Best Moment. Levant Rips Into The Government Representative Over The Question Of Intent:
Levant Explains The Root Of Violence & Islamophobia:
An Incisive Explanation of Freedom of Expression In Canada:
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