…at the Freedom Book Club.  Pick up your copy here.

And the FBC informs us:

Also, The Case Against the Fed is now a finalist for our annual literary
award, which will be announced some time in 2013.  The winner is
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your publication is located on our website at the following URL:
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‎”I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces.” -Étienne de La Boétie

According to Bloomberg, banks are beginning to push short sales consistently for the first time since foreclosures began to pile up back in 2008. Prices really began to fall before the financial crisis, as early as mid-2007 in some places, but banks have long placed numerous obstacles in the way of homeowners who tried to sell their homes for what they were actually worth in the marketplace. Those of us who have worked with real estate agents who do short sales have heard nothing but complaints for years about how banks will stall and prevent short sales in a variety of ways. The result is that the property then goes into foreclosure and ends up selling for far, far less as an REO property post-foreclosure.

Why would banks do this? Well, banks have for years just assumed that home prices would turn around “any day now.” Their army of PhD economists, who ran their little computer models to tell them what would happen, told them to just avoid facing the reality of home prices for just a little while longer, and then everything would be OK. After nothing but declines since 2008, some banks are coming to terms with reality.

The article mentions CoreLogic’s home price index as ongoing proof of price declines, and we could also point to Case-Shiller in which the composite index has declined year over year fro the past 14 months or so, ever since the tax credit ended. In other words, government meddling did nothing but postpone the inevitable.

The New York Times reports on vacant malls across the American landscape. Thanks to declining retailers:

The result is near-record vacancy rates at malls of all kinds, both the big enclosed ones and the sprawling strips. Sears Holdings is closing up to 120 stores, Gap Inc. 200 stores and Talbots 110. Abercrombie & Fitch closed 50 stores last year, Hot Topic, almost the same number. Chains that have filed for bankruptcy in recent years, like Blockbuster, Anchor Blue, Circuit City and Borders, have left hundreds of stores lying vacant in malls across the country.

The political side of this is that these malls were cash cows for state and local governments and now that revenue is drying up. It’s not just that people are buying less stuff, it’s also that a lot of it has moved online, so the stakes are very high for governments seeking to tax internet sales.

Meanwhile, while single-family and retail real estate remains in the dumper, multifamily loan originations spiked 64% in 2011. The multifamily industry is just making up for lost time after almost a decade of misallocation of resources toward single-family mortgages in response to Fannie, Freddie and the Fed pushing homeownership like there’s no tomorrow. Multifamily production and demand suffered from about 2003 through 2009, thanks to government and GSE edicts on mortgages.

Eugen von Böhm-Bawerk was an economist, lawyer, finance minister, teacher, and a founding figure of the Austrian School of economics. Born in 1851 in the city of Brno in the Austro-Hungarian Empire, Böhm-Bawerk was initially trained as a lawyer at the University of Vienna. During his education, he first read Menger’s Principles of Economics and it immediately transformed him into an economist. Although he never studied economics under Menger directly, he quickly became an adherent of his work.

FULL ARTICLE by Mattheus von Guttenberg

A governmental easy-money policy has many repercussions. Currency debasement, the enabling of unnecessary wars, and increases in the size of federal power are among them. And political interference into monetary affairs always leads to economic distortions.

These distortions in turn lead to government imposition of rules, regulations, taxation, and tariffs, all of which favor a handful of powerful and influential corporations to the detriment of small- and medium-sized businesses.

And easy money leads to the impoverishment of the middle and lower classes and an increase in government dependence. How can anyone who has come to depend on his government for his livelihood feel empowered to demand that the same government allow him the freedom that he thinks he deserves?

FULL ARTICLE by Carmen Alexe

My son was upset when he returned home from his minimum wage job at a local grocery store. Seems he was confronted with, “The assistant manager is hopping mad about something you did,” as soon as he entered the door. His mind raced. What had he done? He took a breath, composed himself, and headed toward her office.

And she was mad. Turns out my son — who is new to the job — had taken only a 15-minute break instead of the state-mandated 30-minute break on three separate occasions — an offense the assistant manager said could cost the store $10,000 per occurrence, $30,000 in all.

He said he wasn’t aware of the break rule. Regardless, the manager added three minor violations to his personnel file.

At home, my son couldn’t understand what happened. He hadn’t cheated anyone or stolen anything. He had simply punched back in after only 15 minutes in the break room.

“Son,” I said, “Welcome to the surreal world of fascialism.”

In his book, Vampire Economy: Doing Business Under Fascism, Günter Reimann details life under the German version of fascism. We live under the Progressive version, aptly named fascialism — a little softer, but just as evil and nonsensical.

You know, you can tell a teenager about the ills of government interventions and think you are hitting home. But a real example — in the face of an angry assistant manager — is much more effective.

Liberty won one more this evening.

The Senate voted to ban executive bonuses at Fannie and Freddie.

After buttering up the public for another round of quantitative easing, the buzz today (at CNN, Fin Times and the WSJ) is that the January jobs report will kill QE3 forever.

The census bureau released new homeownership rate data this week for the 4th quarter. The national estimated rate was 66 percent, which, if true, means homeownership is returning to more reasonable levels. I write on the homeownership rate here.

Century 21 takes a softer line: Apparently, it’s been twenty years since a residential real estate company advertised during the Super Bowl. Remember, there’s never been a better time to buy. Except maybe next year when prices are lower.

Century 21 is naturally hoping that you will forget this commercial which they produced shortly before the housing collapse. Remember this one? The wise, go-getter wife and her REALTOR® browbeat a reluctant husband into buying an overpriced house – in 2006. The agent in the new commercial is slightly less atrocious.




The sappy headline said it all: “Ticket scalpers jam computers, spoiling hopes and dreams of Springsteen fans.” The Boss is just Born to Lose in his neverending campaign against the inviolable law of supply and demand.

For decades Springsteen has created shortages of tickets to his shows by grossly under pricing his tickets in order to live up to his reputation as folk hero of the working class. The inevitable result is that secondary sellers of tickets have profited handsomely at his expense, while his fans, shrewdly egged on by their hero, have continually misdirected their outrage at the high prices against unscrupulous “ticket scalpers.” For the New Jersey leg of his upcoming tour, tickets that were listed on Ticketmaster for a face value of $98.00 ($114.00 including shipping and handling) wound up within minutes listed on secondary seller websites for prices ranging up to $6,600.00. It appears that ingenious secondary sellers using sophisticated computer programs called “bots” inundated Ticketmaster computers with orders. Ticketmaster alleges that it was “attacked by ticket scalpers” and blamed “highly suspicious sources” for much of the additional traffic, estimated to be two-and-a-half times greater than the traffic of any major act last year. Worse still, this unanticpated traffic caused computers of some individual fans to malfunction and freeze up.

Predictably, New Jersey pols, ever eager to profit from a perceived crisis, immediately began weighing in with legal solutions. Rep. Bill Pascrell (D-8th Dist.) pledged to reintroduce federal legislation to intensify oversight of the ticket industry. And conservative columnist Paul Mulshine reported that Governor Chris Christie warned that the state Attorney General might investigate. However not everyone was blaming the ticklet scalpers. Some were placing blame where it belonged–on the Boss himself. Mulshine interviewed economist Steve Happel of Arizona State University who put it bluntly:

If I ever got to meet Bruce, I’d like to say to him, ‘I know you’re a nice guy, but you’ve got your head up your (expletive that rhymes with “bass” — the fish not the guitar) when it comes to economics,’

Even music insiders are beginning to recognize Springsteen’s posturing as the reason for the debacle. Bob Lefsetz, a music industry observer and former entertainment attorney wrote:

Ultimately, this is Springsteen’s fault. Bruce should take a stand. Bruce should be an agent for change. But he’s afraid of looking greedy. But the end result is all that money goes to scalpers and fans have to buy tickets on the ‘black market.’ All that money should go to Bruce, he deserves it.

Lew Rockwell writes:

Learning freedom is exhilarating. And there is still time to join a great teacher—Tom DiLorenzo—in examining a forbidden topic: the libertarian tradition of secession and states rights. But psst: don’t tell the NY Times. The course, which is just $95, starts tonight. Sign up!

Joseph T. Salerno is interviewed, along with Peter Schiff and Boston University economist Laurence Kotlikoff, regarding the Fed’s articifial suppression of interest rates and America’s looming default. The interviewer and producer of the video is Cody Jennings.
Default America: Suppression of Interest Rates

As president, Ron Paul would select Jim Grant as chairman of the Federal Reserve. A president Newt Gingrich would appoint Grant to a gold standard commission. “Unfortunately, I haven’t heard from Mr. Romney yet,” joked Grant when MarketWatch’s Brett Arends called on him in his offices down on Wall Street. “I’m sitting by the phone, I’m ready.”

Arend’s discussion with Grant produces many great points from Wall Street’s foremost wordsmith, including

“The anachronism is today’s system,” he says. We have a “command and control, top down” system whereby the Federal Reserve imposes an interest rate on society. The Fed, in other words, tells us what the price of money should be. It is, Grant says, oddly at odds with the modern age. “We live in a world of collaborative social networks” of the Internet and Facebook, of Wikipedia instead of the old World Book, and so on. And yet when it comes to the price of money, we wait for a committee that sits in private to tell us what it should be.