Archive for March 16, 2012
The text source: http://bastiat.org/en/petition.html
A PETITION From the Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.
To the Honourable Members of the Chamber of Deputies.
Open letter to the French Parliament, originally published in 1845 (Note of the Web Publisher)
You are on the right track. You reject abstract theories and have little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.
We come to offer you a wonderful opportunity for your — what shall we call it? Your theory? No, nothing is more deceptive than theory. Your doctrine? Your system? Your principle? But you dislike doctrines, you have a horror of systems, as for principles, you deny that there are any in political economy; therefore we shall call it your practice — your practice without theory and without principle.
We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us .
We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull’s-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.
Be good enough, honourable deputies, to take our request seriously, and do not reject it without at least hearing the reasons that we have to advance in its support.
First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged?
If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.
If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.
Our moors will be covered with resinous trees. Numerous swarms of bees will gather from our mountains the perfumed treasures that today waste their fragrance, like the flowers from which they emanate. Thus, there is not one branch of agriculture that would not undergo a great expansion.
The same holds true of shipping. Thousands of vessels will engage in whaling, and in a short time we shall have a fleet capable of upholding the honour of France and of gratifying the patriotic aspirations of the undersigned petitioners, chandlers, etc.
But what shall we say of the specialities of Parisian manufacture? Henceforth you will behold gilding, bronze, and crystal in candlesticks, in lamps, in chandeliers, in candelabra sparkling in spacious emporia compared with which those of today are but stalls.
There is no needy resin-collector on the heights of his sand dunes, no poor miner in the depths of his black pit, who will not receive higher wages and enjoy increased prosperity.
It needs but a little reflection, gentlemen, to be convinced that there is perhaps not one Frenchman, from the wealthy stockholder of the Anzin Company to the humblest vendor of matches, whose condition would not be improved by the success of our petition.
We anticipate your objections, gentlemen; but there is not a single one of them that you have not picked up from the musty old books of the advocates of free trade. We defy you to utter a word against us that will not instantly rebound against yourselves and the principle behind all your policy.
Will you tell us that, though we may gain by this protection, France will not gain at all, because the consumer will bear the expense?
We have our answer ready:
You no longer have the right to invoke the interests of the consumer. You have sacrificed him whenever you have found his interests opposed to those of the producer. You have done so in order to encourage industry and to increase employment. For the same reason you ought to do so this time too.
Indeed, you yourselves have anticipated this objection. When told that the consumer has a stake in the free entry of iron, coal, sesame, wheat, and textiles, “Yes,” you reply, “but the producer has a stake in their exclusion.” Very well, surely if consumers have a stake in the admission of natural light, producers have a stake in its interdiction.
“But,” you may still say, “the producer and the consumer are one and the same person. If the manufacturer profits by protection, he will make the farmer prosperous. Contrariwise, if agriculture is prosperous, it will open markets for manufactured goods.” Very well, If you grant us a monopoly over the production of lighting during the day, first of all we shall buy large amounts of tallow, charcoal, oil, resin, wax, alcohol, silver, iron, bronze, and crystal, to supply our industry; and, moreover, we and our numerous suppliers, having become rich, will consume a great deal and spread prosperity into all areas of domestic industry.
Will you say that the light of the sun is a gratuitous gift of Nature, and that to reject such gifts would be to reject wealth itself under the pretext of encouraging the means of acquiring it?
But if you take this position, you strike a mortal blow at your own policy; remember that up to now you have always excluded foreign goods because and in proportion as they approximate gratuitous gifts. You have only half as good a reason for complying with the demands of other monopolists as you have for granting our petition, which is in complete accord with your established policy; and to reject our demands precisely because they are better founded than anyone else’s would be tantamount to accepting the equation: + x + = -; in other words, it would be to heap absurdity upon absurdity.
Labour and Nature collaborate in varying proportions, depending upon the country and the climate, in the production of a commodity. The part that Nature contributes is always free of charge; it is the part contributed by human labour that constitutes value and is paid for.
If an orange from Lisbon sells for half the price of an orange from Paris, it is because the natural heat of the sun, which is, of course, free of charge, does for the former what the latter owes to artificial heating, which necessarily has to be paid for in the market.
Thus, when an orange reaches us from Portugal, one can say that it is given to us half free of charge, or, in other words, at half price as compared with those from Paris.
Now, it is precisely on the basis of its being semigratuitous (pardon the word) that you maintain it should be barred. You ask: “How can French labour withstand the competition of foreign labour when the former has to do all the work, whereas the latter has to do only half, the sun taking care of the rest?” But if the fact that a product is half free of charge leads you to exclude it from competition, how can its being totally free of charge induce you to admit it into competition? Either you are not consistent, or you should, after excluding what is half free of charge as harmful to our domestic industry, exclude what is totally gratuitous with all the more reason and with twice the zeal.
To take another example: When a product — coal, iron, wheat, or textiles — comes to us from abroad, and when we can acquire it for less labour than if we produced it ourselves, the difference is a gratuitous gift that is conferred up on us. The size of this gift is proportionate to the extent of this difference. It is a quarter, a half, or three-quarters of the value of the product if the foreigner asks of us only three-quarters, one-half, or one-quarter as high a price. It is as complete as it can be when the donor, like the sun in providing us with light, asks nothing from us. The question, and we pose it formally, is whether what you desire for France is the benefit of consumption free of charge or the alleged advantages of onerous production. Make your choice, but be logical; for as long as you ban, as you do, foreign coal, iron, wheat, and textiles, in proportion as their price approaches zero, how inconsistent it would be to admit the light of the sun, whose price is zero all day long!
Frédéric Bastiat (1801-1850), Sophismes économiques, 1845
 A reference to Britain’s reputation as a foggy island.
Bankers win. The people pay.
One of my less scrupulous bosses once told me, “The way I like to win a race is to punch the other guy in the stomach and then yell, ‘Let’s race.’”
And I replied, “Well that may be all well and good, but if the guy you punch is Italian or Greek, I would not stop running at the finish line.”
He was a Irish lad, who having enjoyed a temporary run of luck, was left terribly over his head, pretty much in everything. And as you might suspect, he ended badly, and took a lot of his type, whom he had gathered into his contrivances, down with him. Its the little things that make life worth living.
No wonder the American derivatives dealers are leaving Europe. They are probably just a few steps ahead of the pitchforks and torches. Europeans keep a ledger of wrongs that never expires until the debts are paid.
The bad news is that they are coming home.
These Wall Street hooligans remind me of an old acquaintance of German descent, (nice fellow although a bit cheap, confirmed bachelor, good card player, but an unbearable drunk), who had been banned from so many pubs around his modest country home that we used to have to go over forty kilometers to get a drawn beer on the weekend. It got so bad that he finally gave up drinking altogether, just to save on gas. Found a nice woman, or rather I think she discovered him, and got married at fifty. Found his happiness. True story.
Italy Said to Pay Morgan Stanley $3.4 Billion
By Nicholas Dunbar and Elisa Martinuzzi
Mar 16, 2012 10:10 AM ET
When Morgan Stanley (MS) said in January it had cut its “net exposure” to Italy by $3.4 billion, it didn’t tell investors that the nation paid that entire amount to the bank to exit a bet on interest rates.
Italy, the second-most indebted nation in the European Union, paid the money to unwind derivative contracts from the 1990s that had backfired, said a person with direct knowledge of the Treasury’s payment. It was cheaper for Italy to cancel the transactions rather than to renew, said the person, who declined to be identified because the terms were private.
The cost, equal to half the amount to be raised by Italy’s sales tax increase this year, underscores the risk derivatives countries use to reduce borrowing costs and guard against swings in interest rates and currencies can sour and generate losses for taxpayers. Italy, with record debt of $2.5 trillion, has lost more than $31 billion on its derivatives at current market values, according to data compiled by the Bloomberg Brief Risk newsletter from regulatory filings.
“These losses demonstrate the speculative nature of these deals and the supremacy of finance over government,” said Italian senator Elio Lannutti, chairman of the consumer group Adusbef.
The transaction may prompt regulators to push for greater transparency and regulation of how governments use derivatives, said the head of the European Parliament panel that deals with market rules.
“This latest revelation shows that we need to know a lot more,” Sharon Bowles, chairwoman of the economic and monetary affairs committee, said in an interview today. “I’m reluctant to have quite as many exemptions for central banks and countries” from transaction-reporting rules, she said.
Morgan Stanley said in a Jan. 19 filing with the U.S. Securities and Exchange Commission that it “executed certain derivatives restructuring amendments which settled on January 3, 2012” and reduced its Italian exposure by $3.4 billion.
Mary Claire Delaney, a spokeswoman for the New York-based firm, declined to comment further. Officials at the Italian treasury in Rome declined to comment on the contracts…
Francis Cabrel Le monde est sourd
By DEB RIECHMANN and AMIR SHAH
KABUL, Afghanistan (AP) — Warning he’s at the “end of the rope” over civilian casualties, Afghanistan’s president angrily accused the U.S. of not sharing information about how an American soldier allegedly shot and killed 16 Afghans in two villages.
The incident has reverberated through the already complicated relations between the U.S. and Afghanistan, endangering talks over a long-term relationship after most U.S. and NATO combat troops withdraw by the end of 2014.
A senior U.S. official on Friday said the soldier accused in the killings is Army Staff Sgt. Robert Bales. The official spoke on condition of anonymity because of the sensitivity of the investigation. American officials had previously refused to release his name, saying it is military policy to publicly name a suspect only after he has been charged with an offense.
Bales has not yet been charged. He was being flown Friday from Kuwait to a military detention center in the U.S.
In an emotional meeting with relatives of the shooting victims, Karzai said the villagers’ accounts of the massacre were widely different from the scenario depicted by U.S. military officials. The relatives and villagers insisted that it was impossible for one gunmen to kill nine children, four men and three women in three houses of two villages near a U.S. combat outpost in southern Afghanistan.
Karzai pointed to one of the villagers from Panjwai district of Kandahar province and said:
“In his family, in four rooms people were killed — children and women were killed — and then they were all brought together in one room and then set on fire. That, one man cannot do.”
Karzai said the delegation he sent to Kandahar province to investigate the shootings did not receive the expected cooperation from the United States. He said many questions remained about what occurred, and he would be raising the questions with the U.S. military “very loudly.”
The U.S. military had no comment on Karzai’s remarks.
The Afghan leader stressed that he wants a good relationship with the international community, but that it was becoming increasingly difficult in light of airstrikes that miss their targets, leaving civilians dead and raising opposition to night operations where troops raid homes looking for insurgents.
Cut to the chase, this is all BS, banging the war drums and fear mongering. Stop and think, North Korea has nuclear bombs and the technology to reach the US west cost, but where is the fear and war drums? Then you have the country of Iran that may have the potential to build a nuclear weapon and you have asshats like Santorum that says let’s bomb them for our protection. Should Iran be trying to build a nuclear weapon and not just wanting to join the many nations, such as the US, Japan, and others, in providing nuclear energy, will they deliver the warhead via FedEx or UPS? Maybe the CIA has shmoozed a deal with North Korea to think a strike is contained but the unable strike from Iran is worth the fear and furry? Ah heck, I have the radar screen too tightly focused. What is the regional plan where Iran is involved and what corporate profit can be made, above and beyond the military industrial complex? Bottom line, how will the corporate owners profit from promoting a war with Iran? Maybe we are just wearing the white cowboy hat and protecting the region from those nasty weapons of mass destruction, just like the ones we sold to Iraq that no longer existed?
Fight the good fight, not the owners chosen fight of the moment.If the corporate and banking owners want to shed the blood and expire the lives of our military, it should be to defend the USA, not for corporate gin and control. Makes you wonder how they are selling us down the river to North Korea to not consider them as a nuclear threat when they have the potential to drop payload here?
I am utmost committed to protecting US citizens, but comparing the two threats, I see nothing but corporate interests and mission statements that are not in the best interests of our citizens. Your thoughts always appreciated.
Education Secretary Arne Duncan recently said that the idea that the Obama Administration is working to implement national standards and tests “is a conspiracy theory in search of a conspiracy.” Duncan can deny that the federal government is on the verge of creating a national curriculum—an unprecedented federal overreach—but as George Will argued last Friday, the Obama Administration can’t ignore “those pesky things called laws.”
By the Pioneer Institute’s count, the Administration is running afoul of three federal laws in particular: the General Education Provisions Act, the Department of Education Organization Act (establishing the agency in 1979), and the Elementary and Secondary Education Act of 1965 (ESEA, the predecessor to No Child Left Behind). As Will points out—and the Pioneer report confirms—ESEA does not authorize any federal official to “mandate, direct, or control” the content taught in local schools. As for the other two laws, Will continues:
The General Education Provisions Act of 1970, which supposedly controls federal education programs, stipulates that “no provision of any applicable program shall be construed to authorize” any federal agency or official “to exercise any direction, supervision, or control over the curriculum, program of instruction” or selection of “instructional materials” by “any educational institution or school system.”
The 1979 law establishing the Education Department forbids it from exercising “any direction, supervision, or control over the curriculum” or “program of instruction” of any school or school system.
The current effort to impose national education standards and tests began in 2009, when the National Governors Association and the Council of Chief State School Officers released standards for math and English Language Arts with the idea that the standards would guide the content taught in every public school across the country. The Obama Administration quickly jumped on board, offering $4.35 billion in Race to the Top (RTT) grants to states that agreed to adopt common standards. Then and now, the Common Core standards were the only standards meeting the Administration’s requirement for uniformity.
The Administration’s incentives didn’t stop with RTT. The Department of Education is now offering No Child Left Behind waivers to states on the condition that they adopt common standards or standards authorized by the state’s higher education institutions. No state that has been awarded a waiver to date has opted for the latter.
The Obama Administration has circumvented Congress through the waiver process, allowing states to opt out of the burdensome No Child Left Behind if they agree to the Administration’s preferred education policies and agree to hand over control of their standards-setting authority to the Department of Education.
The federal government’s involvement with the Common Core national standards doesn’t end there. President Obama has also suggested that Title I funding—nearly $15 billion for low-income schools—could be tied to national standards adoption. And from the beginning, the Obama Administration directly funded national assessments that will be aligned with the standards, to the tune of $350 million.
Despite what Secretary Duncan might claim, it is clear that the federal government is inextricably linked with the Common Core standards effort. Will concludes:
Here again laws are cobwebs. As government becomes bigger, it becomes more lawless. As the regulatory state’s micromanagement of society metastasizes, inconvenient laws are construed—by those the laws are supposed to restrain—as porous and permissive, enabling the executive branch to render them nullities.
National standards and tests—which will undoubtedly lead to a national curriculum—will be costly in terms of liberty lost and, as the Pioneer Institute has also found, costly in terms of dollars. Pioneer estimates that states will be on the hook for nearly $16 billion in implementation costs, yet groups from across the ideological spectrum agree that national standards will fail to improve academic outcomes.
Washington’s experiment in micromanaging education has failed. Expanding the federal government’s role will produce more of the same: little improvement in academic achievement, stagnant graduation rates, and persistent achievement gaps. The push to nationalize curriculum is one of the greatest federal overreaches orchestrated by the Department of Education to date, and it will come at the expense of state and local educational control.
“Progressives,” Will states, “celebrate diversity in everything but thought.” State leaders have the opportunity to prevent this government-sponsored educational conformity from moving forward. Let’s hope they heed Will’s call.