SEC chairman William Donaldson resigned his post only days after two highly embarassing scandals were revealed at the agency that enforces the nation’s accounting rules. The Government Accountability Office conducted an audit of the agency and found three material weaknesses in its internal controls. The weaknesses related to its recording of fines and restitution via settlements with companies, its preparation of financial statements and the security of its data.

Most experts hold that China’s reluctance to allow its currency the Yuan to appreciate against the US dollar is the key factor behind the low interest rate structure in the US. This is incorrect, for reasons I explain below. It is important to understand the causal factors now, before the US falls back into recession and China, rather than the Federal Reserve, catches the blame.

Repudiating public debts incurred by states is entirely libertarian, as argued by Murray Rothbard. Yet even international law recognizes a more limited version of this notion, in the doctrine of Odious Debt developed by Alexander Sack, a professor of law in Paris and former minister in the Tsarist government. After the Russian Revolution of 1917, the Bolsheviks repudiated Russia’s debts indiscriminately.

This CNN article explains a failed “privatization” attempt. I put that word in quotation marks because, as the article reveals, it seems that the government still interfered. I don’t know any more details, but I bet this is comparable to the failure of “deregulation” in California electricity.

Google’s Scan Plan Hits More Bumps (thanks to Kevin Johnson)

The Sarbanes-Oxley Act, passed into law after the Andersen case was filed, gives the feds the powers they improperly used against Andersen. “in real terms, the opinion likely won’t change much in the way business does business in the post-Enron era. “If you’re a corporate defendant, you still have to make a deal with [New York Attorney General] Eliot Spitzer or the Justice Dept.,” says Stephen Ryan, a partner at Manatt, Phelps & Phillips and a former assistant U.S. attorney.

Yesterday was the anniversary of Walt Whitman’s birth in 1819. It is celebrated because to many, he was America’s foremost poet, whose Leaves of Grass had a farther-reaching impact than any other book of American poetry. Despite his extensive career as a journalist, Whitman’s poetry attracts all the attention. That is unfortunate, given that his early efforts in journalism have been said to “foreshadow the later, enduring writings of the poet.”

In a previous article, I argued that Bush’s original proposal to reform Social Security—in which up to one-third of a worker’s (and his employer’s) “contributions” would be channeled into the stock market, but no one’s current benefits would be cut and other taxes would not be raised—would not increase investment or lower interest rates one iota, contrary to the claims of the plan’s proponents.

The massive credit expansion that Austrians have been calling attention to since the mid-90s has morphed from a stock market bubble into a housing bubble. Whether there was, or was not, a stock market bubble was much disputed among mainstream media analysts until fairly late into the stock bear market. Now the existence (or not) of a housing bubble is similarly controversial. Slowly the mainstream media is starting to question, is there a credit bubble?