Your Children Are Ready for the Pool, but Do They Know the Safety Rules?

As you know, it is extremely important for very young children to learn water safety rules.
This sturdy cardboard book has been designed to be read and reread many times by children aged 2 -5, so they can fully absorb its essential  guidelines.
Whether children are playing in a big pool, a small plastic one – or even in a bathtub – their priceless lives need to be guarded.
All of these water safety guidelines were not covered in my Let’s Stay Safe book, but they are also vital for young children to understand, especially now, as we prepare for the summertime ahead.
You can look inside at the first pages of the book and order it here: https://www.judaicapress.com/collections/new-releases/products/lets-swim-safely
Or you could order and pick it up locally. 🙂
May we help keep all of our precious children safe.
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Warmly,
Bracha Goetz

Author of 39 books that help children’s souls shine: 

Who Insures the WHOLE Banking System? Nobody!

There Are No Safe Banks

By 

June 8, 2011

Occasionally, we see an official attempt at a serious discussion of what Federal Reserve System economists would like the public to believe is safe banking. This means safe fractional reserve banking. This means fraudulent safe banking. This means fantasy banking.

All fractional reserve banking rests on a legal promise: you can get your money out at any time. Yet the money that you deposit is loaned out by the bank. This means that your money is gone. Then how can you withdraw it at any time? Only if (1) the money is loaned out on a “repay instantly on demand” basis, or (2) hardly anyone will demand withdrawal at the same time. The bank will pay you out of its tiny slush fund for withdrawals. The first option assumes that the debtor is always in a position to repay at any time, which is of course ludicrous for most corporate and business borrowers. They will not agree to such terms. The second option is equally ludicrous during a banking crisis.

In other words, all fractional reserve banking is based on a legal deception of the depositors. A depositor cannot get his money back when a lot of other depositors want to get their money back. This is called a bank run. All fractional reserve banking systems eventually experience bank runs.

During bank runs, bankers call on the government to bail them out. The government and the central bank bail out only the biggest banks. They let the smaller banks go under. Then big banks buy the assets of the smaller, now-busted banks at discount prices. The government (FDIC) pays off depositors with $250,000 or less on deposit. Taxpayers therefore subsidize the buying spree of the biggest banks. This is justified as “saving the banking system.” The politicians provide taxpayer money every time.

I remember an on-camera testimony of Congressman Brad Miller, a Democrat Congressman from North Carolina, just before the TARP bailout. He said that his constituents were evenly divided between “no” and “hell no.” He of course voted for the bailout, as did most of his colleagues. He was of course re-elected.

The voters did not really care. They screamed about the bailouts, but they refused to impose negative sanctions on all of the Congressmen who voted for TARP. Until there is real pain, they usually re-elect their Congressmen. They perceive, correctly, that their opinions do not count when big banks are asking for handouts in a crisis. The voters want their lifelong bailouts, and as long as their Congressmen bring home the pork, they really don’t care. By “care,” I mean an automatic vote for the challenger at the next election. Congressmen generally understand only one thing: defeat at the next election. Ron Paul doesn’t care, and maybe Dennis Kucinich doesn’t care, but most of them care deeply.

So, the #1 goal of most politicians, all bureaucrats, and all central bankers is to make sure that the voters feel no pain — at least not pain bad enough that might lead to (1) a new Congress, (2) budget cuts for bureaucracies, and (3) the nationalization of the central bank.

A SCARED CENTRAL BANKER

On June 3, Daniel Tarullo, a member of the Board of Governors of the Federal Reserve System, which is a government-owned institution, unlike the regional Federal Reserve banks, gave a speech at the Peter G. Peterson Institute for International Economics. Peterson until 2007 was the Chairman of the Council on Foreign Relations. As such, he was among the most influential men on earth. He served as Secretary of Commerce (1972-73). He was the CEO of Lehman Brothers (1973-84). He co-founded the Blackstone Group. He is concerned about the growing Federal debt, on-budget and off-budget, which he correctly perceives as a threat to the world’s capital markets.

Tarullo’s topic was the systemic risk of the world’s interconnected banking system. This is surely a relevant topic. When I think of the international banking system, I think of Tom Lehrer’s nuclear war song a generation ago: “We will all go together when we go. Every Tom, Dick, Harry, and Every Joe.”

He focused on the Dodd-Frank law’s requirement that the Federal Reserve System establish prudential standards for “systemically important financial institutions or, as they are now generally known, ‘SIFIs.’ My focus will be on the requirement for more stringent capital standards, which has generated particular interest.”

Keep this acronym in mind: SIFIs. It means very large banks, meaning very large, highly leveraged, highly profitable corporations whose collapse would create a chain reaction in the financial markets. In the old days, SIFIs were called TBTF: too big to fail.

Tarullo made a significant admission: “It was, after all, a systemic financial crisis that we experienced and that led to the Great Recession that affects us still today.” That’s the official party line. It was used to justify TARP and the other 2008 bailouts, such as swaps at face value of liquid AAA-rated Treasury debt held by the FED for toxic assets held by the SIFIs. For a skeptical analysis of the party line, read David Stockman’s response.

Tarullo admitted that the old system of regulation failed to deal with systemic risk. Or, to put it differently, the horse got out of the barn, and now the Dodd-Frank law has increased the responsibility of the FED to regulate things better. But the FED regulated the system before. This is the standard government response: reward failure with greater responsibility.

The pre-crisis regulatory regime had focused mostly on firm-specific or, in contemporary jargon, “microprudential” risks. Even on its own terms, that regime was not up to the task of assuring safe and sound financial firms. But it did not even attempt to address the broader systemic risks associated with the integration of capital markets and traditional bank lending, including the emergence of very large, complex financial firms that straddled these two domains, while operating against the backdrop of a rapidly growing shadow banking system.

But things will be different Real Soon Now. The FED is going to regulate large banks on a comprehensive (macroeconomic) basis. This assumes that a committee of salaried bureaucrats who do not own the banks or have any assets of their own at risk will be able to design fail-safe rules that will coordinate the decisions of depositors and bankers inside the United States. Of course, the system is international, so the USA is dependent on decisions made by bureaucrats, bankers, and depositors around the world. But Dodd-Frank did not cover them.

A post-crisis regulatory regime must include a significant “macroprudential” component, one that addresses two distinct, but associated, tendencies in modern financial markets: First, the high degree of risk correlation among large numbers of actors in quick-moving markets, particularly where substantial amounts of leverage or maturity transformation are involved. Second, the emergence of financial institutions of sufficient combined size, interconnectedness, and leverage that their failures could threaten the entire system.

In short, the FED’s economists, who failed to foresee what would happen to a few banks in 2008, are now going to foresee what will happen to lots of banks, including multinational banks that are interconnected with SIFIs all over the world.

He assured his listeners that “No one wants another TARP program.” No one wants hyperinflation, Great Depression II, or both. The question is: What can a bunch of regulators do to prevent this? “In order to avoid the need for a new TARP at some future moment of financial stress, the regulatory system must address now the risk of disorderly failure of SIFIs.”

There is a theoretical problem here. Risk can be estimated by use of statistical analysis. An example is life insurance tables. Uncertainty cannot be estimated, such as life insurance tables during a nuclear war. These are called “acts of God,” and insurance companies write contracts to escape liability.

A systemic failure is triggered by an event that is not governed by the law of large numbers, i.e., risk analysis. It is triggered by an event that is inherently uncertain. That was why Long Term Capital Management went belly-up in 1998, despite its sophisticated formulas based on the work of two Nobel Prize-winning economists.

He referred to an international agreement known as Basel III. That is the successor to Basel II, which was not enforced and which achieved no protection from 2008. “The Basel III requirements for better quality of capital, improved risk weightings, higher minimum capital ratios, and a capital conservation buffer comprise a key component of the post-crisis reform agenda.” It all sounds so reassuring. But what authority does the committee have to impose sanctions? None. “Although a few features of Basel III reflect macroprudential concerns, in the main it was a microprudential exercise.” In short, it ignored The Big Picture.

We need to pay attention to The Big Picture. “We” means Federal Reserve economists who have formulas, but who were not smart enough to win a Nobel Prize.

Here is the problem:

There would be very large negative externalities associated with the disorderly failure of any SIFI, distinct from the costs incurred by the firm and its stakeholders. The failure of a SIFI, especially in a period of stress, significantly increases the chances that other financial firms will fail. . . .

He argued that the SIFIs must increase their capital reserves. Increased capital means lower leverage. It means a reduced ROI: return on investment. So, a SIFI will not do this without regulation. “A SIFI has no incentive to carry enough capital to reduce the chances of such systemic losses. The microprudential approach of Basel III does not force them to do so.” Quite true. So, what is the FED going to do about it? And how, exactly, can the FED get foreign SIFIs to do it?

What has been done so far? Committees have been set up. This is basic to the theology of all modern civil government: salvation by committee. “Together with the FDIC, the Federal Reserve will be reviewing the resolution plans required of larger institutions by Dodd-Frank and, where necessary, seeking changes to facilitate the orderly resolution of those firms.”

Still, we must acknowledge that we are some distance from achieving this goal. The legal and practical complexities implicated by the insolvency of a SIFI with substantial assets in many countries will make its orderly resolution a daunting task, at least for the foreseeable future. Similarly, were several SIFIs to come under severe stress, as in the fall of 2008, even the best-prepared team of officials would be hard-pressed to manage multiple resolutions simultaneously.

I see. “Some distance.” “Practical complexities.” “Daunting task.” In short, they don’t know what they are doing. The formulas are not yet clear. The appropriate sanctions are not yet on the books. So, it’s “pray and patch.” It’s bureaucracy as usual.

“I HAVE A PLAN”

He offered a five-step program. Point one is choice:

. . . an additional capital requirement should be calculated using a metric based upon the impact of a firm’s failure on the financial system as a whole. Size is only one factor to be considered. Of greater importance are measures more directly related to the interconnectedness of the firm with the rest of the financial system. Several academic papers try to develop this concept based on inferences about interconnectedness from market price data, using quite elaborate statistical models.

Oh, boy. Academic papers! Yes, my friends, academic papers, written by Ph.D.-holding economists who have never run a bank or anything else. That will do the trick!

Others have proposed using more readily observed factors such as intra-financial firm assets and liabilities, cross-border activity, and the use of various complex financial instruments.

So, the experts do not agree. Surprise, surprise! Then whose system will win out? None. A committee will decide how to coordinate all these proposed solutions.

Second, the metric should be transparent and replicable. In establishing the metric, there will be a trade-off between simplicity and nuance. For example, using a greater number of factors could capture more elements of systemic linkages, but any formula combining many factors using a fixed weighting scheme might create unintended incentive effects.

You know: transparency. It’s the new mantra. It’s a revision of Woodrow Wilson’s “open covenants openly arrived at.” Trust them!

“Systemic linkages.” “Formula combining many factors.” “Fixed weighing scheme.” Yes! Yes! I believe!

On the other hand, using a small number of factors that measure financial linkages more broadly might reduce opportunities for unintended incentive effects, but at the cost of some sensitivity to systemic attributes of firms. Whatever the set of factors ultimately chosen, the metric must be clear to financial firms, markets, and the public.

Clear. It’s all so clear. Doesn’t it appear clear to you? It does to me.

This is transparency, all right: the transparency of the wardrobe worn by the emperor, who had the best tailors money could buy.

Tarullo went on and on. The fifth point was the corker: international cooperation with independent agencies, all according to Basel III standards, which will be imposed by 2019. They promise!

Fifth, U.S. requirements for enhanced capital standards should, to the extent possible, be congruent with international standards. The severe distress or failure of a foreign banking institution of broad scope and global reach could have effects on the U.S. financial system comparable to those caused by failure of a similar domestic firm. The complexities of cross-border resolution of such firms, to which I alluded earlier, apply equally to foreign-based institutions. For these reasons, we have advocated in the Basel Committee for enhanced capital standards for globally important SIFIs.

Achieving and implementing such standards would promote international financial stability while avoiding significant competitive disadvantage for any country’s firms. I would note in this regard that it will be essential that any global SIFI capital standards, as well as Basel III, be rigorously enforced in all Basel Committee countries.

I have summarized half of his speech. The rest of it is equally concrete, realistic, and inspirational. You can read it here.

CONCLUSION

This is the best the FED has to offer. This is one Board member’s proposed solution to systemic risk, which is in fact systemic uncertainty. It is a salaried bureaucrat’s proposed solution to the inherent uncertainties imposed by fractional reserve banking — a system whose major players are politically protected from failure, and which therefore subsidizes high leverage and high returns . . . until the day the dominoes begin to fall.

We are asked to believe that Federal Reserve economists can design a coherent, enforceable system of controls to protect the world from leveraged banks that overestimate the ability of their formulas to protect them from uncertainty. We are asked to believe that salaried economists at the FED and all other major central banks can produce a better formula, and then impose it in ways that profit-seeking bankers cannot evade.

My conclusion: we will all go together, when we go.

June 8, 2011

From LRC, here.

Hyehudi Consists of Footnotes to Rabbi Brand

Per this:

The renowned British philosopher A.N Whitehead once commented on Plato’s thought: “The safest general characterization of the European philosophical tradition is that it consists of a series of footnotes to Plato. I do not mean the systematic scheme of thought which scholars have doubtfully extracted from his writings. I allude to the wealth of general ideas scattered through them”.

Wars Used To Be Private Affairs of Kings, Are Now Supposedly National Concern…

Bereishis Rabbah 93:4 (link):

נבהלו נחפזו ולא יכלו אחיו וגו’ רעדה אחזתם שם אלו השבטים אמרו מלכים מדיינים אלו עם אלו אנו מה איכפת לנו יאי למלך מדיין עם מלך.

From Dr. Hans Hoppe:

[After explaining the crucial distinction between kings and democratic politicians: While all states must be expected to have aggressive inclinations, the incentive structure faced by traditional kings on the one hand and modern presidents on the other is different enough to account for different kinds of war. Whereas kings viewed themselves as the private owner of the territory under their control, presidents consider themselves as temporary caretakers. The owner of a resource is concerned about the current income to be derived from the resource and the capital value embodied in it (as a reflection of expected future income). His interests are long-run, with a concern for the preservation and enhancement of the capital values embodied in “his” country. In contrast, the caretaker of a resource (viewed as public rather than private property) is concerned primarily about his current income and pays little or no attention to capital values.]

… monarchical wars tended to be “moderate” and “conservative” as compared to democratic warfare. Monarchical wars typically arose out of inheritance disputes brought on by a complex network of inter-dynastic marriages. They were characterized by tangible territorial objectives. They were not ideologically motivated quarrels. The public considered war the king’s private affair, to be financed and executed with his own money and military forces. Moreover, as conflicts between different ruling families, kings felt compelled to recognize a clear distinction between combatants and noncombatants and target their war efforts exclusively against each other and their family estates.

Thus military historian Michael Howard noted about 18th-century monarchical warfare: On the [European] continent commerce, travel, cultural and learned intercourse went on in wartime almost unhindered. The wars were the king’s wars. The role of the good citizen was to pay his taxes, and sound political economy dictated that he should be left alone to make the money out of which to pay those taxes. He was required to participate neither in the decision out of which wars arose nor to take part in them once they broke out, unless prompted by a spirit of youthful adventure. These matters were arcane regni, the concern of the sovereign alone. [War in European History, 73]

Similarly Ludwig von Mises observed about the wars of armies: In wars of armies, the army does the fighting while the citizens who are not members of the army pursue their normal lives. The citizens pay the costs of warfare; they pay for the maintenance and equipment of the army, but otherwise they remain outside of the war events. It may happen that the war actions raze their houses, devastate their land, and destroy their other property; but this, too, is part of the war costs which they have to bear. It may also happen that they are looted and incidentally killed by the warriors even by those of their “own” army. But these are events which are not inherent in warfare as such; they hinder rather than help the operations of the army leaders and are not tolerated if those in command have full control over their troops. The warring state which has formed, equipped, and maintained the army considers looting by the soldiers an offense; they were hired to fight, not to loot on their own. The state wants to keep civil life as usual because it wants to preserve the tax-paying ability of its citizens; conquered territories are regarded as its own domain. The system of the market economy is to be maintained during the war to serve the requirement of warfare. [Nationalökonomie, 725–26]

In contrast to the limited warfare of the ancien regime, the era of democratic warfare which began with the French Revolution and the Napoleonic Wars, continued during the 19th century with the American War of Southern Independence, and reached its apex during the 20th century with World War I and World War II has been the era of total war. In blurring the distinction between the rulers and the ruled (“we all rule ourselves”), democracy strengthened the identification of the public with a particular state. Rather than dynastic property disputes which could be resolved through conquest and occupation, democratic wars became ideological battles: clashes of civilizations, which could only be resolved through cultural, linguistic, or religious domination, subjugation and, if necessary, extermination. It became increasingly difficult for members of the public to extricate themselves from personal involvement in war. Resistance against higher taxes to fund a war was considered treasonous. Because the democratic state, unlike a monarchy, was “owned” by all, conscription became the rule rather than the exception. And with mass armies of cheap and hence easily disposable conscripts fighting for national goals and ideals, backed by the economic resources of the entire nation, all distinctions between combatants and noncombatants fell by the wayside. Collateral damage was no longer an unintended side-effect but became an integral part of warfare.

“Once the state ceased to be regarded as ‘property’ of dynastic princes,” Michael Howard noted, and became instead the instrument of powerful forces dedicated to such abstract concepts as Liberty, or Nationality, or Revolution, which enabled large numbers of the population to see in that state the embodiment of some absolute Good for which no price was too high, no sacrifice too great to pay; then the ‘temperate and indecisive contests’ of the rococo age appeared as absurd anachronisms. [ibid. 75–76]

Similar observations have been made by the military historian and major-general J.F.C. Fuller: The influence of the spirit of nationality, that is of democracy, on war was profound, … [it] emotionalized war and, consequently, brutalized it; …. National armies fight nations, royal armies fight their like, the first obey a mob always demented, the second a king, generally sane. … All this developed out of the French Revolution, which also gave to the world conscription herd warfare, and the herd coupling with finance and commerce has begotten new realms of war. For when once the whole nation fights, then is the whole national credit available for the purpose of war. [War and Western Civilization, 26–27]

And William A. Orton thus summarized matters: Nineteenth-century wars were kept within bounds by the tradition, well recognized in international law, that civilian property and business were outside the sphere of combat. Civilian assets were not exposed to arbitrary distraint or permanent seizure, and apart from such territorial and financial stipulations as one state might impose on another, the economic and cultural life of the belligerents was generally allowed to continue pretty much as it had been.

Twentieth-century practice has changed all that. During both World Wars limitless lists of contraband coupled with unilateral declarations of maritime law put every sort of commerce in jeopardy, and made waste paper of all precedents. The close of the first war was marked by a determined and successful effort to impair the economic recovery of the principal losers, and to retain certain civilian properties. The second war has seen the extension of that policy to a point at which international law in war has ceased to exist. For years the Government of Germany, so far as its arms could reach, had based a policy of confiscation on a racial theory that had no standing in civil law, international law, nor Christian ethics; and when the war began, that violation of the comity of nations proved contagious. Anglo-American leadership, in both speech and action, launched a crusade that admitted of neither legal nor territorial limits to the exercise of coercion. The concept of neutrality was denounced in both theory and practice. Not only enemy assets and interests, but the assets and interests of any parties whatsoever, even in neutral countries, were exposed to every constraint the belligerent powers could make effective; and the assets and interests of neutral states and their civilians, lodged in belligerent territories or under belligerent control, were subjected to practically the same sort of coercion as those of enemy nationals. Thus “total war” became a sort of war that no civilian community could hope to escape; and “peace loving nations” will draw the obvious inference. [The Liberal Tradition: A Study of the Social and Spiritual Conditions of Freedom, 251–52]

Again quoting Hans Hoppe (he praises Cursedinaity, but any good there is leftover spoils from Judaism!):

…

“Feudal Law” reflected this “hierarchic-anarchic” social structure of the Middle Ages. All of law was essentially private law, i.e. law applying to persons and person-to-person interactions, all of litigation was between a personal defendant and a personal plaintiff, and punishment typically involved the payment of some specified material compensation by the offender to his victim or his lawful successor. However, this central characteristic of the Middle Ages as a historical model of a private law society did not mean that feudal law was some sort of unitary, coherent and consistent legal system. To the contrary, feudal law allowed for a great variety of locally and regionally different laws and customs, and the difference in the treatment of similar offences in different localities could be quite drastic. Yet at the same time, with the Catholic Church and the Scholastic teachings of the Natural Law, there was an over-arching institutional framework and moral reference system in place to serve as a morally unifying force, constraining and moderating the range of variation between the laws of different localities.

Needless to say, there were many imperfections that future historians, up to this day, would focus on and highlight so as to discredit the entire period. During the Middle Ages, under the influence of Catholic Church, the institution of slavery, which had been a dominant feature of Greek and Roman society, had been increasingly discredited and pushed back to near extinction, but it had not entirely disappeared. As well, the institution of serfdom, from a moral point of view “better” than slavery but still not without moral blemish, was still a widespread social phenomenon. Moreover, plenty of small-scale wars and feuds took place during the entire period. And as we are never allowed to forget: The punishments dished out in various law courts for various offences here or there, were sometimes (for modern sensibilities in any case) extreme, harsh and cruel. A murderer might be hung, or beheaded, quartered, burnt, boiled or drowned. A thief might have his finger or hand cut off, and a false witness his tongue torn out. An adulteress might be stoned, a rapist castrated, and a “witch” burnt.

It is these features in particular that we are told in standard history to associate with the Middle Ages so as to arouse our moral indignation and feel elated about our own enlightened present. Even if all true, however, any such exclusive concentration on these features as a distinctive characteristic of the Middle Ages is to miss the mark, or the wood for the trees. It takes accidents for nature and what is natural and normal. That is, it ignores, whether deliberately or not, the central characteristic of the entire period: the fact that it was a State-less social order with widely dispersed, hierarchically ordered and rivaling centers of authority. And it then conveniently closes the eyes to the fact that the “excesses” of the Middle Ages actually pale in comparison to those of the present democratic State order. For surely, slavery and serfdom have not disappeared in the democratic world. Rather, some increasingly rare ‘private’ slavery and serfdom have been replaced by a near-universal system of ‘public’ tax-slavery and serfdom. As well, wars have not disappeared, but only become of a larger scale. And as for excessive punishments and witch hunts, they have not gone away either. To the contrary, they have multiplied. Enemies of the State are tortured in the same old gruesome or even technically ‘refined’ ways.

Moreover, countless people who are not a murderer, a thief, a libeler, an adulterer or a rapist, i.e. people who live in complete accordance with the ten biblical commandments and once would have been left alone, are nonetheless routinely punished today, up to the level of lengthy incarceration or the loss of their entire property. Witches are no longer called that way, but with just one single authority in place, the “identification” of anyone as a “suspect of evil-doing” or a “trouble-maker” is greatly facilitated and the number of people so identified has accordingly multiplied; and while such suspects are no longer burnt at the stake, they are routinely punished by up to life-long economic deprivation, unemployment, poverty or even starvation. And while once, during the Middle Ages, the primary purpose of punishment was restitution, i.e. the offender had to compensate the victim, the primary purpose of punishment today is submission, i.e. the offender must compensate and satisfy not the victim but the State (thus victimizing the victim twice).

With this we can state a first conclusion. The present democratic social order may be the technologically most advanced civilization, but it most certainly is not the socially most advanced. As measured by biblical-libertarian standards of social perfection it falls far behind the Middle Ages. Indeed, as measured by those standards, the transition in European history from the anarchic medieval to the modern Statist world is nothing less than the transition from a God-pleasing to a God-less social order.

The bigger the state, the worse the wars:

Thus, according to Pinker, WW II with all its atrocities, for instance, had essentially nothing to do with the institution of States but was a historical fluke, owing to the evildoings of a single, deranged individual, Adolf Hitler. Indeed, unbelievably and seemingly without blushing (although that is admittedly difficult to tell from a written text) Pinker approvingly quotes historian John Keegan saying that “only one European really wanted war – Adolf Hitler.” (p.208)

Question: But how much evil can a single, deranged individual do without the institution of a centralized State? How much evil could Hitler have done within the framework of a State-less society such as the Middle Ages? Would he have become a great lord, a king, a bishop, or a Pope? Indeed, how much evil could he have done even within the framework of a thousand mini-States, such as Liechtenstein, Monaco or Singapore? Answer: Not much, and certainly nothing comparable to the evils associated with WW II. It holds not, then: ‘no Hitler, no Churchill, no Roosevelt or no Stalin, and then no war,’ as Pinker would have it, but rather: ‘no highly centralized State, and then no Hitler, Churchill, Roosevelt or Stalin.’ Remove the State, and they may have become a Jack the Ripper, a Charles Ponzi or even harmless people, but not the mass-murdering monsters we know them to be. Institute the State, and you create, attract and breed monsters.

See the rest here…