reforming the Fed

You hear a lot of griping regarding Ron Paul's stand on getting rid of the Federal Reserve bank, calling him an out & out loonie for wanting to go back to the gold standard and the stringency of 100-percent-reserve banking. I don't know, honestly, what's best. In a world where central bankers are doing their damnedest to weaken their currencies, simply keeping one's true money-supply constant would send the value of one's currency through the roof. Good thing? Bad thing? I dunno.

But I do know one thing: there are actually several different Fed rates out there, and no-one talks about the important one -- the discount rate. The DR is what's used to reflect the true, instant cost of money. When you make a net-present-value calculation using anything other than the discount rate, you're including some sort of premium (usually a risk or duration adjustment). The Funds rate is a different matter: what rate banks are allowed to lend to each other at. I propose keeping the Fed -- we've already got it, and quarter-annually pandering to the credit markets is certainly better than the banana republic we'd inhabit if we trusted Congress to manage our money supply.

But why should the Fed regulate the inter-bank rate? Why not let our banks decide among themselves at what rate they are willing to loan money? By letting the rate float, then banks can increase or decrease the their rates in real-time according to market pressures, instead of having to wait for the Fed to make its pronouncements. If you want guaranteed borrowing, use the discount window or repos. If you want market-adjusted funding with varying risk spectra, then talk to the other banks. This still ensures that banks aren't destroyed during market panics, but takes "policy" out of an equation that by definition must constantly change.

A credit crisis is a shortfall in the supply of credit, no different than a gasoline crisis or a doughnut crisis, and is almost always the result of price controls. President Carter did untold damage to our economy fixing our gas prices, and Mugabe's nearly destroyed Zimbabwe with his own price controls. We don't want to find ourselves in the same boat with money. If we want to avoid long-term disaster in the credit markets, we need to get out of the price-fixing business and let the day-in/day-out players make their moves according to the daily realities they face.

the American fatso

Recent studies showing that a "few extra pounds" do not contribute to increased mortality were not talking about obesity. If this trend continues, the Social Security and Medicare crises will fix themselves.

Sons of Gods

A brief snippet of a W.H. Auden poem I admire:

 The sons of Hermes love to play
 And only do their best when they
      Are told they oughtn’t;
 Apollo’s children never shrink
 From boring jobs but have to think
      Their work important.

Hermes or Apollo? I know from which I come....

Global Incident Map

On the link bar to the left you'll see a new addition entitled "Global Incident Map", which shows security-related issues around the globe (mostly terrorism related). Today's pretty quiet compared to normal; generally there's at least half again as much stuff going on.

200 Lashes

I've met some pretty disgusting flavors of Christianity in my time, growing up near CBN in Pat Robertson's stronghold of Virginia Beach, but even at the nastiest "kicking heathen ass" (this is a real quote) flavor of Christianity, even the most idiotic Old Testament Pseudo-Christians who haven't clued in that Jesus's message wasn't "an eye for an eye", wouldn't sentence a rape victim to six months in prison & two hundred lashes. Even the most moronic "she was asking for it" dim-wit would consider that her offense, riding in a car with someone she wasn't married to, had already been amply punished by the rape that ensued.

The center of Saudi Arabia isn't some backwater where no-one knows what Islam is supposed to mean; this's the center of the freakin' religion. Imagine the Pope or the Ecumenical Patriarch calling such a thing just -- it just boggles the mind. My mind has now been made up -- I was ready for all manner of arguments in favor of "moderate" Islam, but upon seeing this, while I don't know what justice is, it's obvious that Islam is far removed from anything remotely just.

Honestly, if it weren't for all the innocents who'd suffer, I'd say just nuke Mecca and wipe Islam off the face of the Earth. It's a disease.