In an interview posted at Real Clear Politics, Ron Paul states what everyone knows, but won’t acknowledge:

“Default is coming. The only argument that’s going on now is how to default, not send the checks out or just print the money. In all countries our size, they always print the money,”  …  They’re going to raise the debt limit, and then they’re going to print the money, and then they’ll default by inflation, and that’s much more dangerous than facing up to the facts of what’s happening today.”

See the video here.

According to the LA Times, Ron Paul is no longer a fringe character:

For three decades, Texas congressman and former presidential candidate Ron Paul’s extreme brand of libertarian economics consigned him to the far fringes even among conservatives. Not a few times, his views put him on the losing end of 434-1 votes on Capitol Hill.

No longer. With the economy still struggling and political divisions deepening, Paul’s ideas not only are gaining a wider audience but also are helping to shape a potentially historic battle over economic policy — a struggle that will affect everything including jobs, growth and the nation’s place in the global economy.

His warnings on deficits and inflation are now Republican mantras.

Read more at Mish.

The web is abuzz today over Google’s announcement that they have acquired Teracent. Teracent offers a technology to optimize display ads for click-thru in the same way that Google optimizes text ads. Teracent’s secret sauce is it’s ability to mix and match graphical elements to design new ads and then optimize their delivery. As Andy Beal puts it, it’s “multi-variate testing for your banner ads.” But multi-variate testing to what purpose? The only response Teracent can measure is clicks; so that’s what they measure. That’s fine if you are focused on direct response from your display ads, but in that case you are better off buying text ads. Text ads are cheaper, and likely just as, if not more effective.

Traditionally, display advertising has been about brand awareness. Unfortunately, there’s no direct way to measure that, and so it’s ignored by Teracent. My (relatively uninformed) guess is that Teracent will optimize these display ads towards those that have a direct call to action. If what the advertiser wants is a direct action that’s fine. But, if you want to launch a brand with this kind of display ads, then this kind of optimization won’t work.

Despite an attempt to add a crippling amendment, and the (surprise) opposition of Barney Frank, the bill passed. Here’s the Youtube video:

For more details, see Mish.

What are the limits of fair use on the web? If a journalist or blogger puts a lot of effort into a story, which is then summarized by a much more popular blog, are they being ripped off. Ian Shapiro, of the Washington Post, is debating this question right now in regards to Gawker’s summary of a story he wrote. Here’s the best analysis of the debate I could find: Gawker and the Washington Post: a Case Study in Fair Use.

By temperament, I am a conservative. By conservative, I mean that I believe that society and institutions are difficult to change successfully, and that, in general, things are better left alone. Having said that, I do believe that radical reform is much more likely to be successful than incremental. To my mind, the chances of fixing a fundamentally, broken system by making a series of small changes is low. Now, I find myself in the happy situation of having my prejudice in favor of drastic reform confirmed by a scholarly study. In a study of the effects of the civil reforms imposed across Europe by the French Revolutionary armies, four economists have found that in those areas where the most drastic changes were made from past practice, the greatest economic growth subsequently occurred. You can find a good summary of the study at The Economist’s View in a post titled The Consequences of External Reform: Lessons from the French Revolution.

I woke up this morning to hear the news that Microsoft was launching a competitor to Twitter. In my mind, I can’t help but juxtapose that story with the news from last week that Oracle is buying Sun. Now, I’m not a big fan of Larry Ellison. I still have bitter memories from the 90s when my wife’s raise was held up, because Larry had to approve it, and he was off yacht racing. But, you have to admire the way that he approaches his business. I never have any questions about what Oracle is doing. Larry knows what Oracle is about: Enterprise Software. He has a vision of where the market is going: a few big players. And, he has a strategy to make Oracle the dominant player in this new world: buy up key technologies; offer the complete Enterprise stack. Once you understand Larry’s vision, you can understand and justify every move Oracle has made.

Now, contrast that with Microsoft. Ballmer doesn’t know what the company is about. Is it focused on the desktop, games, internet, enterprise? Who knows? He doesn’t have a coherent vision of where all these markets are going. Who could? As a result, Ballmer doesn’t have a coherent strategy. He’s attempting to do everything; and he’s doing nothing well. Seriously, does anyone have a clue what Ballmer will do next, and why? If you say you do, you’re lying. You can’t know, because there is no strategy. There’s just a bunch of incoherent initiatives. It’s too bad, because if Microsoft had been as focused as Oracle, they could be hugely dominant in the enterprise space. As it is, they’ve wasted ten years.

If you want to understand why the stimulus will fail, just read Ambrose Evans-Pritchard’s article in the Telegraph entitled Bond Market Calls Fed’s Bluff As World Falls Apart. As Ambrose points out:

The yield on 10-year US Treasury bonds – the world’s benchmark cost of capital – has jumped from 2pc to 3pc since Christmas despite efforts to talk the rate down.

The Fed has stepped into the breach, up to a point. It has bought $350bn of commercial paper, and begun to buy $600bn of mortgage bonds. That helps. But still it recoils from buying Treasuries, perhaps fearing that any move to “monetise” Washington’s deficit starts a slippery slope towards an Argentine fate. Or perhaps Bernanke doesn’t believe his own assurances that the Fed can extract itself easily from emergency policies when the cycle turns.

Now, the stimulus is going to add another $800 billion to the borrowings, and who knows how much Geithner’s “Bad Bank” plan will add in addition. Borrowing of that much money is bound to increase interest rates even more. And that increase will directly counter a stimulus bill that is already badly constructed to produce immediate benefits.

The Painter of Battles: A Novel. Perez-Reverte’s latest and darkest of novels.

Inside Hitler’s Bunker: The Last Days of the Third Reich A collection of four essays dealing with the events around the fall of Berlin and the death of Hitler.

In the Bunker with Hitler: 23 July 1944-29 April 1945. Despite being an eyewitness account, adds almost nothing to our knowledge of the last days of Hitler.

The Halo Effect: … and the Eight Other Business Delusions That Deceive Managers. Great book on how a company’s success colors the analysis of it’s strengths and weaknesses.

Supplying War: Logistics from Wallenstein to Patton. Classic book on how logistics controls military success and failure.

The Road to War: The Origins of World War II. Series of essays that, country by country, describes the path to war. Very good chapters on France and England.