Posts Tagged Gary North

“State rescue packages have not worked”

Worst Case Scenario (song)
Image via Wikipedia

So says a report from major French bank, Société Générale , as reported by Tellygraph reporter Ambrose Evans-Pritchard. (Trivia: typing “Evans-Pritchard” into the Wikipedia search box brought up Ambrose’s father, who was born in the Sussex village I grew up in.)

Ambrose’s article was brought to my attention by economist/historian Gary North, in an article titled “A Major European Bank Issues Investment Guidelines for a Worst-Case Scenario.” North adds: “I do not recall a headline like this in my lifetime. Not from a major international bank. Is the author exaggerating?” Read the rest of this entry »


Learn Economics Thru Movies – Ferris Buehler’s Day Off

Remember Ferris Buehler’s Day Off? Remember the valet in the parking lot? Yee-haaaarrr!! Gary North, a successful businessman and writer, economist, historian, and former professor, uses this memorable image from the movie Ferris Buehler’s Day Off to explain today’s economic reality in a recent article entitled Ferris Geithner’s Day Off (subscription site):

Because of the Federal Reserve, the economy is in such bad shape that lenders depend on the Treasury to park their money for them.
Think of Timothy Geithner as a valet in some downtown parking lot. You drive your car to the little booth. You hand him the keys to your car. He says he will park it for you. He says you can get it back at any time. He holds the keys to your car, and you trust him. He hands you a ticket. It is an IOU to your car.

When I think of Tim Geithner, I think of the valet in “Ferris Bueller’s Day Off.” It’s joy ride time! He climbs into the car, and his buddy leaps in beside him. Off they go! The buddy, of course, is Ben Bernanke. Think about this situation. The lenders of the world are lending trillions of dollars to an agency that has a AAA rating, yet this agency is the most indebted organization on earth. It is on the hook off-budget for at least $75 trillion that it does not have for Social Security and Medicare. It is on the hook on its on-budget budget for $12.6 trillion. This will be $14 trillion before we know it.

Our government is not alone. All Western governments are on the hook for similar percentages. It is just that the United States is larger than the other governments. They, too, are lenders of last resort only because they are borrowers of last resort.

Dr. North then expands this to create a further image: Of course, it’s more complex than this. It is a gigantic system of parking tickets, with tickets against tickets. Dr. North is a believer in free-market economics. He ends his article with a sobering proposition (my emphasis):

For someone to lose confidence in what appears to be the central institution of society, the national government, he must then search for a plausible alternative. Not to begin such a search is to abandon hope.

The central institution of the United States has always been the free market. But this is not an organized market. There is no visible chain of command. It has been under constant assault by intellectuals and the media ever since the Great Depression. The typical American does not perceive the extent to which the free market, not civil government, provides him with whatever protection he enjoys.

So, as he steadily loses faith in the Federal government, there is no replacement institution. He therefore clings to whatever remnants of the confidence he once possessed.

I think the underlined phrase applies not only to Americans, but to many citizens of that most popular of the 20th century’s political systems: social democracies.

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The truth about (American) colleges

Gary North writes regularly for the libertarian, free-market economics website I’ve been impressed by his no-nonsense, fact-filled, humour-laced style (a combination of honest businessman and high-powered professor).

Links in these articles led me to Dr North’s own website. Here, there’s free stuff and a subscribers-only area. The free stuff includes sections on college finances and study habits, both of which I found fascinating. The latter especially I found of potential practical use, especially the sections on note-taking and on writing book reports.

Somewhere amongst the numerous articles and reports, I found a reference to this Forbes article Is College Worth It?, and this New York Times 2006  one on Brand U. This article included the following, which caught my eyes as discussions about changing names (of the department, of the faculty) pop up fairly regularly in formal meetings where I work in Japan.

I RECENTLY did some research for a satirical novel set at a university. The idea was to have a bunch of gags about how colleges prostitute themselves to improve their U.S. News & World Report rankings and keep up a healthy supply of tuition-paying students, while wrapping their craven commercialism in high-minded-sounding academic blather.

I would keep coming up with what I thought were pretty outrageous burlesques of this stuff and then run them by one of my professor friends and he’d say, Oh, yeah, we’re doing that.

One of my best bits, or so I thought, was about how the fictional university in my novel had hired a branding consultant to come up with a new name with the hip, possibility-rich freshness needed to appeal to today’s students. Two weeks later, a friend called to say it was on the front page of The Times: “To Woo Students, Colleges Choose Names That Sell.” Exhibit A was Beaver College, which had changed its name to Arcadia University. Applications doubled.

There was a Japanese newspaper article on specific cases of this type in Japan just a couple of months ago which my wife pointed out to me. I’ll post the link later.

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