Sunday, November 16, 2008

Bad Economics

I sent the following to the Raleigh News & Observer:
I know that it seems like common sense that the government should go on a spending spree now that consumers are becoming more frugal, but this is just bad economics even when it comes from a Nobel Laureate.

The "internal improvement" projects that are being called for must be paid for by taxpayers in some fashion. This will only crowd out private investment and prevent a more sustained recovery. Also, these projects will be allocated by the political process and not by consumer sovereignty. Without profit and loss considerations we will just be building bridges to anywhere.

We've just popped a bubble financed in part by private debt and irresponsibility. Let's not start another one with public debt that will burden the country for decades. Getting our houses in order, so to speak, both publicly and privately is needed now more than ever, even if it does mean short-term pain.

Wednesday, October 01, 2008

Whatever

Sunday, September 28, 2008

Meltdown - Causes (cont.)

  • Jeff Jacoby exposes Barney Frank's role in the bubble
  • Here is an article from the New York Times in 1999 showing Fannie Mae "easing the credit requirements on loans that it will purchase from banks and other lenders"
  • Of course, politicians bragged about the increase in home ownership when it benefited them. And why did Fannie Mae ease credit requirements? "The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer."
  • Many of those sub-prime mortgages went to minorities just like politicians wanted, but in 2001, politicians wanted it both ways - pressure the banks to make loans and sue the banks for pushing those loans
  • In 1997, Wachovia (then First Union) bragged about their involvement with the Community Reinvestment Act
  • More blame for Fannie and Freddie
However, political pressure can only go so far. If the means are not available, there is only so much credit that can be loaned out. That is where the Federal Reserve comes in via its loose monetary policy. Financial institutions were able to come up with creative ways to provide loans to high risk borrowers because credit was easily available (especially after the the 2000-2001 recession and 9/11).

Many people want to blame an era of laissez-faire capitalism for this mess because corporations were involved. It is not, however, "laissez-faire" when governments use corporations to enact egalitarian goals. That is probably best described as Corporate Socialism.

Wednesday, September 24, 2008

Meltdown - Regulations (cont.)

Over the past few weeks I've heard and read the familiar refrain that our current financial meltdown is due to the wave of deregulation that began under the Reagan Administration. We are led to believe that Reagan swept in a laissez-faire philosophy that has created an unsustainable economy.

So I decided to look up some of the key pieces of legislation that were responsible for this wave of deregulation. What I found was interesting considering how the Left and the Right want to portray the history of the past 30 years.
Now, I don't want to get into the economic effects of these laws, either good or bad. Each particular case most likely involves subtleties that make them less than perfect free-market solutions. The point here is to show that blaming deregulation on a free-market ideology forced on the country by Reagan is just silly. Or you could just call Jimmy Carter a laissez-faire ideologue.

Don't get me wrong, I am not saying that all this is Jimmy Carter's fault. Nor am I saying anything about the Reagan Administration. All I want to show here is that the history of the past 30 years is not as simplistic as many "progressives" want us to believe.

Whatever

Tuesday, September 23, 2008

Meltdown - Causes

Over the past several days I've read many theories on the causes of the current financial meltdown. Ranging from greed to too little regulation to too much regulation, everyone seems to have THE reason why we are in this mess.

This brings up something that I've learned over the years from the Austrian School of Economics and Ludwig von Mises in particular - and that is that history is complex. You can explain almost any theory by picking data points from history. To truly understand history, however, you must have a correct theory*. Now, I happen to agree with the Austrian view of economics, but that's not the point. The point is that anyone claiming to explain economic problems must have a logically consistent theory. Pointing to some past event and saying "Aha!" is not a valid argument. Why that past event had the consequences it did can only be explained by good theory.

I could be wrong, but I personally believe that the Austrian Theory of the Business Cycle best explains the situation we are in now. Most other arguments I am hearing tend to lack some underlying mechanism that fuels the boom which leads to the bust. The Austrian Theory gives us that fuel in the guise of monetary expansion. Unless something is done about that underlying mechanism, we will continue to suffer from economic crises.

Anyway, here are some good articles about the current mess that aren't necessarily Austrian:

* See Ludwig von Mises' Theory and History

Monday, September 22, 2008

Meltdown - Regulations

Many writers have blamed the current financial crisis on too little regulation of the market. In particular, they have blamed the 1999 repeal of the Glass-Steagall Act that was enacted in 1933 in the midst of another financial meltdown. That Act created, among other things, a wall between investment and commercial banking. It is claimed that the Act's repeal allowed for the creation of “mega-banks” which, we are led to believe, precipitated the current crisis.

However, what we have seen thus far is the failure of two government-sponsored mortgage institutions (Fannie Mae and Freddie Mac), an insurance company (AIG), and two investment houses (Bear Stearns and Lehman Bros.) - none of which would have fallen under the Glass-Steagall regulations. In fact, those companies that have both investment and commercial banking operations are so far weathering the current storm.

Megan McArdle has some thoughts on Glass-Steagall as well.

Tyler Cowen also examines the idea that there was too little regulation. In fact, he says, the regulation was just ineffective.
[F]inancial regulation has produced a lot of laws and a lot of spending but poor priorities and little success in using the most important laws to head off a disaster. The pattern is reminiscent of how legislators often seem more interested in building new highways — which are highly visible projects — than in maintaining old ones.
He also sends a warning about rushing into creating new regulations:
[I]f you hear a call for more regulation, without a clear explanation of why regulation failed in the past, beware. The odds are that we’ll get additional regulation but with even less accountability and even less focus on solving our very real economic problems.

Wednesday, September 17, 2008

Whatever

  • How can you not love dogs?
  • I've always loved good slight of hand card tricks. Ed Brayton links to some YouTube videos of Ricky Jay doing some amazing stuff.
  • The future is so disappointing
  • Ah! What would a new technology be without a call for "government action." This quote is priceless: "I do think government has an almost infinite ability to screw up things when they can't see the future."
  • I wonder if this school teaches bad acting as well
  • Just cut their pay
  • When markets governments fail, government markets must step in

Monday, September 15, 2008

Great Gig in the Sky

In memory of Richard Wright.

"Gouging for greed"

The top story on the local news today was how North Carolina Attorney General Roy Cooper was issuing subpoenas to seven local gas stations accused of "price gouging" over the weekend. Cooper said that "gouging for greed will not be tolerated in North Carolina." My wife nearly got spaghetti sauce spat upon her face when I heard that comment. It is depressing that an adult in a position of authority could utter such an inane comment. It is even more depressing that there are people out there who buy this inanity and cheer him on.

More importantly, however, was the second story that showed some stations running out of gas over the weekend. The reporter in the story said that the stations had "reasonable" prices. Could there be a correlation between the first story and this one? The stations that ran out of gas tried to limit customers to $20 worth of gas. This form of rationing is apparently legal albeit less effective.

One more thing on "greed." With the recent problems in the financial sector and, of course, the gouging controversy, many pundits are talking about greed as if it is a characteristic solely of businessmen. The late Milton Friedman had the best response to this nonsense.

Friday, September 12, 2008

Who's gouging who?

Wow! I was driving home from work today and noticed that gas prices had jumped dramatically. Apparently people are panicking that Hurricane Ike will cause some serious disruptions in gasoline supplies.

North Carolina Attorney General Roy Cooper was on the news saying that gas stations will be prosecuted if they "gouge." There were people waiting in line for gas being interviewed saying that it wasn't fair that the stations were raising prices. Oh, but it's fair for you idiots to rush out suck up all the gasoline!

Here is a quote from Cooper:
"I encourage gas stations to avoid panic price increases and consumers to avoid panic fill-ups."
Words have no teeth Mr. Cooper - higher prices do. In situations like this raising prices is the best way to stop people from panicking.

What would an episode like this be without the following argument:
"That's not what they paid for it. It just seems to me they shouldn't raise (the price) until they have to pay for it"
That was someone waiting in line complaining that the station shouldn't be allowed to raise the price on gas they bought at a lower price. Oy vey! This is why a knowledge of basic economics is so important.

Stations have to make sure they have a steady supply of gasoline so that they can attract customers. If their tanks are empty they get no business (or reduced business). With the hurricane causing uncertainty around national supply chains, stations need to make sure they have some supply to last during the temporary crisis. The price they paid for a good in the past is irrelevant when it comes to decisions they need to make in the present and near future.

Phil Gramm was right for the wrong reasons - we are a nation of whiners.

Take the "gasoline shortages" quiz at CafeHayek.

Wednesday, September 10, 2008

Whatever

Wednesday, September 03, 2008

Whatever

  • The inhumanity of some people
  • Robert Samuelson reports on contrary evidence regarding American living standards. I think there is a lesson to be learned here about drawing conclusions from aggregate numbers in a diverse and dynamic society. (HT: CafeHayek)
  • More bureaucracy, more spending, and more crony capitalism all in the name of science. I am still trying to figure out what Obama means by "change."
  • When you devalue the currency, people go primitive
  • Art by paint ball
  • Here's an investment tip for you...stay away from renewable energy companies (Investment tips are for sarcastic purposes only. Blogger is not responsible for your money problems)
  • Don't laugh, they think they are dying
  • The Libertarian Party - where ex-Republicans go to get mocked

Tuesday, September 02, 2008

Un-Conventional

I didn't watch Barack Obama's acceptance speech last week and I have no intention to watch John McCain's this week. How people can get all giddy about such things is beyond me. What scares me the most is the hagiographic praise that is thrust upon these men (especially Obama). Why does it scare me? I think H.L. Mencken said it best:
"It is the popular theory, at least in America, that monarchism is a curse fastened upon the common people from above - that the monarch saddles it upon them without their consent and against their will. The theory is without support in the facts. Kings are created, not by kings, but by the people. They visualize one of the ineradicable needs of all third-rate men... and that is the need of something to venerate, to bow down to, to follow and obey."
As I said in a previous blog post, "creating myths around men who wield the power of government only distorts history and turns us into what John Adams feard - a nation of men, not of laws."

HT: Don Boudreaux for the Mencken quote.

Wednesday, August 27, 2008

Whatever

  • The impedance mismatch between the wishes of planners and the reality on the ground. "The dirty secret of clean energy is that while generating it is getting easier, moving it to market is not."
  • Government bailouts work both ways it seems. One of the big problems with this trend is that it won't be true privatization, and in a few years unfettered capitalism will take the blame.
  • On Biden
  • What's that old line about doing the same thing over and over again and expecting a different result?
  • Andy, Fannie, and Freddie

Wednesday, August 20, 2008

Whatever

  • The high price of energy is a political, not economic, problem. "Windfall" profit taxes and consumer subsidies, i.e. more politics, will only exacerbate the problem. And along with those economic inefficiencies comes corruption.
  • Um, whoops?
  • Ok, I take back what I said last week about science making Science Fiction boring
  • Sometimes you win by just letting your enemies be themselves

Wednesday, August 13, 2008

Whatever

  • Yes, let's give a stupid movie that will literaly have 15 minutes of fame more attention that it deserves
  • Science is making Science Fiction boring
  • Ah, rent seeking at its finest (pun intended, of course). So, is the problem here that businesses are lobbying those who will attain power or the power itself?
  • This is why Obama was marginally appealing to me
  • Man! If you can't rely on the "Republicans are in the pocket of Big Oil" shibboleth what can you rely on

Wednesday, August 06, 2008

Whatever

  • Obama wants to tax (i.e., reduce) the production of and subsidise (i.e., increase) the demand for oil. People, this is not hard: reducing the supply of or increasing the demand for a good, ceteris paribus, means the price will increase. Encouraging both as a plan to ease higher prices should be a sign of insanity (or political prowess).
  • What's the big deal? We weren't using the Fourth Amendment anyway.
  • Oooh! LHC is sexy (in a sciency sort of way)
  • An interesting video explaining why, even if you are 100% innocent, you should never talk to the police (HT: Bruce Schneier)
  • I agree with Perry's comment at the end of this blog post, but it won't be long before it is considered anti-social
  • More significant than the iPhone?? How dare you say such things!
  • The food industry, in an effort to avoid dealing with a problem itself, calls for more regulation. "More important than the financial loss is the loss of consumer confidence," says an industry representative. Well, getting consumers confident in your product is a cost you should have to bear. Calling for government to regulate makes you sound noble, but it has the added "benefit," I'm sure, of pushing out marginal competitors.
  • Don't think that raising the minimum wage had no part is bringing this and this about

Wednesday, July 30, 2008

Whatever

Thursday, July 24, 2008

Big Government is Big Oil

I sent the following to the Raleigh News & Observer:
Tuesday's front page story entitled “Big Oil spends to jack up stock” scrutinized international oil companies for business decisions made with their earned revenue. I was wondering if that same scrutiny will be used to examine the expenditures of those entities that control roughly 90% of the world's proven oil reserves. I am, of course, referring to governments around the world. I am not going to hold my breath, however, because we all know that expenditures on socialistic welfare programs are beyond scrutiny, while any form of profit is per se evil.

It is ironic that the term “Big Oil” is applied to entities that are puny in comparison to those that actually control oil. In reality Big Government is Big Oil.
Here are some examples of Big Government mismanagement of oil.

The original article that I am replying to is pretty sensationalist to begin with. It is obviously trying to stir up some controversy around how oil companies disperse their profits.

What is the proper distribution of revenue? Hell if I know. But if the oil companies are making the 'wrong' decisions then profits won't be a problem for them in the future, and idiot reporters won't have to worry about writing sensationalist claptrap.

Wednesday, July 23, 2008

Whatever

  • Just avoid smalltalk all together
  • It's always fun to watch central banks blame their ineptitude on businesses
  • How to stop a sequel
  • Servitude is coming back into fashion. "I solemnly swear that I will never take part in any involuntary civilian service at the behest of the federal government, regardless of the consequences."
  • Maybe this technology would be cost effective (i.e., profitable) if water prices were allowed to reflect reality
  • A Nudge to fix the wrong problem

Wednesday, July 16, 2008

Whatever

Wednesday, July 09, 2008

Whatever

Sunday, July 06, 2008

Money and Power

Robert Frank, in a New York Times piece (free, annoying registration may be required), spews the typical liberal pabulum regarding campaign finance reform. I won't comment on the entire piece, but I want to say something about the general theme: money corrupting politics.

Just because our representatives are elected by a majority of the population and sit in the seats of power in Washington, doesn’t make them omniscient. It is silly to believe that just because they are not influenced by money that their decisions would be more just and wise. Sure, the policies would be different, but we are still dealing with mere mortals. They would have to be experts in economics, science, law, history, medicine, technology, etc. to govern as they do now. Only if we scale down the size of government dramatically will this arrangement even be remotely possible. But, at that point there would be no need for campaign finance legislation because government would not have the heavy hand it does now nor would it have anything to sell.

But why do we need to limit contributions anyway? If we are assuming that these people we send to Washington are wise enough to determine the ‘right’ legislation if they were only free from the corrupting influence of money, why are they not wise enough now to just not be corrupted by the money in the first place? In other words, if they are so easily corrupted now, maybe they aren't fit govern at any time.

It could be said that we would want politicians to only get influence from the experts in the respective fields. But who are the experts? Do all experts agree? Who will be the arbiter if they don’t? Again, with a small government limited to a specific set of tasks, this could possibly work (I still have my doubts, however).

The other question we need to ask is how is it possible to prevent conflicts of interest? We are a nation of 300 million and we have different interests and wants. If government is reduced to a fraction of its current size this might be possible, but when government spends $3 trillion and has its tentacles in every aspect of our lives there are going to be conflicts of interest when it comes to how to spend that money and wield that power.

Lastly, I would like to comment on a specific quote in the article. After begrudgingly admitting that money can't be completely eliminated from the political process, Frank writes this: "The harsh reality is that free speech and good government are conflicting goals." When I first read that statement I had to stop and say "Wow!" Free speech is now a "goal" - not an inalienable right of the individual, mind you - a goal that can be negotiated like all other issues in government. Maybe this is why so many people want to buy influence. Maybe this is why so many people need to buy influence.

Let me use Mr. Frank's language to close: free speech and big government are conflicting goals. In fact, any individual right and big government are conflicting goals.

Solutions?

Thomas Sowell once said that "there are no solutions...there only trade-offs." We are learning that lesson good and hard today.

Friday, July 04, 2008

Little Brother


I just finished reading Cory Doctorow's Little Brother. I highly recommend it to those who like stories about technology and using technology in a clandestine manner. It reminded me a lot of a book I read a long time ago by Clifford Stoll called The Cuckoo's Egg. The books have different plots (in Stoll's book the hacker is the bad guy), but in both you get a small glimpse into the hacker culture.

Even if you don't like stories about technology, however, you should read Little Brother. It's an inspiring tale about a young man not willing to let the government get away with tyranny even if it means his own freedom.

One interesting aspect in my experience reading this book was following along with Google Maps Street View. I was able to follow the action in the streets of San Francisco (a city that I've been to twice but really didn't get to see). Try it, it's fun.

Obama on Iraq...for now

I guess I should have seen this coming. Oh wait, I did. So, for those of you who were worried that I might vote for Obama (if I was really, really forced to), don't worry.

Wednesday, July 02, 2008

Whatever

Wednesday, June 25, 2008

Whatever

  • I love this idea of "competing" tax plans. It's like competition between McDonald's and Burger King - the differences are marginal and they both suck.
  • Oooh, save me from Google, I'm so oppressed
  • Jason Kuznicki does a great job at debunking the idea that the recent Supreme Court decision regarding Habeas rights will lead to a "flood" of lawsuits. And here is some good stuff from George Will, as well.
  • The Web Time Forgot (annoying, free registration may be required - try BugMeNot)
  • Is labeling menus with nutritional content a good idea? Maybe not.

Monday, June 23, 2008

Oh Obama!

I know I've blogged in the past that if forced to I would vote for Obama. But now it is becoming harder for me to even make that concession.

Obama has given his support to a bill that will, in Glenn Greenwald's words, legalize "many of the warrantless eavesdropping activities George Bush secretly and illegally ordered in 2001." Here is the way he justifies his decision:
Given the grave threats that we face, our national security agencies must have the capability to gather intelligence and track down terrorists before they strike, while respecting the rule of law and the privacy and civil liberties of the American people. . . .

After months of negotiation, the House today passed a compromise that, while far from perfect, is a marked improvement over last year's Protect America Act. . . It does, however, grant retroactive immunity, and I will work in the Senate to remove this provision so that we can seek full accountability for past offenses.

It is not all that I would want. But given the legitimate threats we face, providing effective intelligence collection tools with appropriate safeguards is too important to delay. So I support the compromise, but do so with a firm pledge that as President, I will carefully monitor the program, review the report by the Inspectors General, and work with the Congress to take any additional steps I deem necessary to protect the lives -– and the liberty –- of the American people.
First of all, what if you are not elected President? You just supported a bill that you basically admit has problems that could affect the liberty of the American people. How will you feel in January if John McCain gets that power? You shouldn't support legislation that has as a contingency the need for the "right" people enforcing said legislation.

Secondly, I thought I had a Constitution to protect my liberties, not your work ethic.

My very limited support for Obama was largely based on his rhetoric that he would get us out of Iraq. Now I'm thinking that if he is elected President we will get a statement from him next January which begins thusly,
Given the grave threats that we face, our military must continue to be deployed ... blah blah blah.
Whatever!

Wednesday, June 18, 2008

Whatever

Tuesday, June 17, 2008

No Win

We are now going to have the courts flooded with so-called...habeas corpus suits against the government, whether it be about the diet, whether it be about the reading material. And we are going to be bollixed up in a way that is terribly unfortunate because we need to go ahead and adjudicate these cases."
Those were the words of John McCain in response to the recent Supreme Court ruling on Guantanamo Bay detainees. It is also a big reason why I can't vote for him this year.

Habeas Corpus is not about filing suits to complain about diet or reading material; the term literally means 'you have the body'. It is a basic right, not of Americans, but of all human beings to challenge their imprisonment in front of a neutral party. For McCain, a Senator and Presidential candidate, to make such a silly statement is disturbing.

I shouldn't be surprised, though. I've always disliked McCain because of his stance on civil liberties. His support for anti-First Amendment campaign finance regulation really told me all I needed to know about him.

Oh, BTW, here is one of many reasons why I can't vote for Obama this year either. Surprise, surprise, he'll raise taxes.

Monday, June 16, 2008

Little Pink Houses

People of Cary unite! Rise up against those who would allow home values to not soar ever so skyward! Down with the powers who do nothing to free us from the pain we suffer when prospective buyers avert their eyes!

The Colorist class, with their disdain for the historical progress of drab, must no longer be allowed to offend the Beige class. Talk of 'rights' is a polycolorist tactic which should be looked upon with a blank stare, and disregarded as if not even mentioned.

Polycolorism, after all, is just a superstructure foisted upon society at the behest of the Colorists with the full complicity of their pawns in power. We must break the chains that bind us to this superstructure so that history can pass into the Age of Drabness.

Rise up! Or succumb to the Rainbow.

Wednesday, June 04, 2008

Whatever

Monday, June 02, 2008

The Religion of Politics

[I recently finished Bryan Caplan's The Myth of the Rational Voter. In this and future posts I will provide my chapter-by-chapter notes.]

Beyond the Miracle of Aggregation
Voter ignorance is a product of natural human selfishness, not a transient cultural aberration.
- Bryan Caplan
Caplan explains the Aggregation concept which says that individual voter ignorance is canceled out over the large population of voters. His main thesis, however, shows that this only applies if there isn't systematic ignorance throughout the population (or the voters don't make systematic errors).

He asks the question: Are voter errors systematic on questions of direct political relevance? He answers yes, and lays out a set of biases that voters seem to hold. These are
  • Antimarket bias
  • Antiforeign bias
  • Make-work bias
  • Pessimistic bias
We will expand on these biases in future posts.

Caplan then goes on to talk about how politics is a form of religion: "Political/economic ideology is the religion of modernity." People find comfort in politics as they do with religion, and some of the same passions are exhibited as well. He gives the comparison of the Inquisition of the Middle Ages and totalitarian regimes of the 20th Century. I've often made the comparison between socialism and religion. Caplan, however, does not make this comparison himself - it's nationalism and social revolutions that he is concerned with.

Keeping with the theme of religion, Caplan shows how voters can afford to be ideological. In a democracy voters do not pay the "full price" for their beliefs because the odds of one vote having a substantial influence on policy diminishes with the growing voter base. "The price of ideological loyalty is close to zero," so people can easily partake in ideological delusions. "Faith is a shortcut to belief."

In a democracy, "negative externalities irrelevant to individual behavior add up to a large collective misfortune." People will rationalize their errors, however, going so far as to deify those who encourage their delusions; victimizing those who destroy those delusions.

All this means is that in the end democracies fall short because voters get the foolish policies they ask for.

Wednesday, May 28, 2008

Whatever

Wednesday, May 21, 2008

The Price of Eyeballs

On a recent episode of EconTalk, Russ Roberts interviewed Chris Anderson who was claiming "many delightful things in the world are increasingly free." This is supposed to be some new economics that businesses need to conform to or die. I'm skeptical.

The economics behind this phenomena is actually interesting, and Fernando Herrera-Gonzalez over at the Mises Institute I think explains it incredibly well. The following is where it clicked for me:
Google offers us free use of their search engine and other web applications. Why? Because that is how Google attracts our attention to its advertisements. Google doesn't sell its online services to us; it sells an audience to its actual costumers, the advertisers. Google is buying our time and selling it wholesale. As time is a scarce resource, and time (and attention) demand is increasing as a result of fierce competition on the Internet, Google has to pay us ever more, according to the law of diminishing returns. This payment is made not in terms of money, but as storage and process capacity. That's why Google keeps increasing its "free" offering to us, its providers, in terms of, e.g., storage capacity for e-mail accounts.
You see, we are not Google's customers. Google pays us for our eyeballs with free disk space and applications so that they can attract their true customers - advertisers.

Now Microsoft is actually making this even more blatant. They plan on paying cash to users who purchase goods found using their Live Search engine.

The interesting thing is that is this is not new. Broadcast television has operated on this model for over fifty years - they pay for your eyeballs with entertainment so that they can attract their true customers.

Wednesday, May 14, 2008

Whatever

Tuesday, May 06, 2008

Oh Hillary!

So I see that Hillary Clinton doesn't care too much for economists:
"I'm not going to put my lot in with economists," Clinton said when asked to name an economist who backed her proposal.

"We've got to get out of this mind-set where somehow elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans."
I'm confused. Is she part of the "faith-based" or "reality-based" community?

Thanks to Arnold Kling at EconLog for the link. Also, his cohort Bryan Caplan has this intriguing view on why Hillary would be harmless as president. In summary, she wouldn't get much done because people hate her so much. Hillary, Divisiveness we can believe in!

Tuesday, April 22, 2008

Who is John Alpha?

If you like science fiction and/or suspense thrillers, I highly recommend the 7th Son Trilogy by J.C. Hutchins. I just finished listening to the last book and I find myself wishing for more. It has clones, blood, computers, government conspiracies, blood, international mayhem, blood, oil, and more. Oh, and blood!

Do yourself a favor and go to iTunes now and download Book One to your iPod (or use whatever feeble mp3 player you find yourself having to cope with).

Saturday, April 05, 2008

Whatever

Sunday, March 30, 2008

Solutions that aren't

Why do I not look to government to solve environmental problems? Two recent news items should help explain.

First, Time Magazine is reporting on the disaster that is ethanol.
Even cellulosic ethanol made from switchgrass, which has been promoted by eco-activists and eco-investors as well as by President Bush as the fuel of the future, looks less green than oil-derived gasoline.

...

[T]he basic problem with most biofuels is amazingly simple, given that researchers have ignored it until now: using land to grow fuel leads to the destruction of forests, wetlands and grasslands that store enormous amounts of carbon.
What has been a dirty little secret for years is finally becoming common knowledge. Yet, we still subsidize and encourage ethanol production.

The second item appeared today in the Raleigh News & Observer and deals with the disposal of Compact Fluorescent (CF) light bulbs (those new bulbs that you will be forced to purchase in a few years).
Disposal options: Don't throw fluorescents in the trash. The light will break and release mercury. In a landfill, it could contaminate the ground. If you must throw a burned-out CFL into the trash, seal it first in two plastic bags to prevent leakage.

The preferred method is to take CFLs to a recycling facility or hazardous waste facility.
So let me get this straight, I'm not supposed to dispose of the bulbs in the usual way because I will be contaminating the environment with mercury. Instead, I should drive to a central recycling facility to dispose of these bulbs, thereby contaminating the environment with carbon dioxide from my car.

Whatever!

Thursday, March 20, 2008

More on Obama

I listened to Barack Obama's recent speech on race and was impressed - it was philosophical and nuanced. As much as I don't like politicians I do like listening to people who have a gift for speech and who speak with depth on serious issues.

I'm not going to say much more about it because I think Jason Kuznicki at Positive Liberty nails it. Here's how he sums it up:
I'm thrilled, because after nearly eight years of bumbling belligerence, and of government by catchy phrases badly delivered, finally someone seems to understand that the American people don’t enjoy being talked down to. This is — finally — nuance without fuzziness.

I'm wary, because Obama's program really is just more of the same frank, old-fashioned big-government liberalism. It still makes me cringe, even after nearly eight years of hypocritical, new-fashioned big-government conservatism. The Bush administration has proven the importance of labels: Call something conservative, and it becomes acceptable to a wide swath of the population, no questions asked. Even if it can't at all be distinguished from LBJ-style war-and-welfare liberalism. I hope that once they are out of power, the Republicans will finally abandon their recent change of direction.
Read the whole thing.

Like Jason, if I had to vote then I would probably vote for Obama - the two alternatives are that bad. But I still plan on sitting this one out.

Wednesday, March 12, 2008

Whatever

Sunday, March 09, 2008

Money, Knowledge, and Power

I tend to ignore those who repeat the blather about how money corrupts the political process. The phrase, like many repeated in the political arena, seems almost meaningless because almost everyone uses it. Being the cynic that I am, I tend to roll my eyes when I hear someone use that phrase even if I'm supposed to think that they are some intellectual spouting some deep political insight.

Larry Lessig, a Stanford law professor, is using this "money corrupts politics" idea as somewhat of a centerpiece for his Change Congress campaign. A recent blog posting on Wired.com briefly explains the current buzz around Lessig's movement. I'd like to comment on some of his statements in order develop my point about political corruption.

First, Lessig is quoted as saying "Money corrupts the process of reasoning...They [legislators] get a sixth sense of how what they do might affect how they raise money." Again, being the cynic that I am I would question whether politicians "reason" about any piece of legislation that crosses their desk (e.g., the PATRIOT ACT). Nonetheless, this statement begs the question: What are legislators doing that would cause them to have to worry about how they raise money?

Let me move on to his second statement: "Lawmakers need to be free from a system that requires them to constantly raise money in order to free them to simply think about how to craft good public policy." I could go along with this if we had a government of limited scope; a government that didn't meddle in the affairs of other nations; a government that wasn't involved in the birth, eduction, business, pleasure, and retirement of the citizens it is supposed to obey; but we don't have that kind of government. We have a government that pervades society, and increasingly inserts itself into the affairs of the people. The knowledge needed to craft "good" policy in a complex society is not knowable even by intelligent men like Mr. Lessig.

I can anticipate the response to the above statement: Legislators will consult the wisest members of the appropriate fields before drafting legislation. This is a naive, Utopian conceit that still assumes knowledge that is not knowable. On economic issues, should you consult an economist or the business man that must make profit and loss decisions? On technology, should you consult the big players in the industry or the guy tinkering in his garage? On health care, should you consult hospitals which are few in number or the vast number of health care consumers clamoring for "free" drugs and medical procedures who, by the way, will be voting in large quantities in the next election?

What it comes down to is that money isn't the problem. Money in politics is like a fever - an effect of a more serious cause. That more serious cause is an insidious disease that can consume anyone. That disease is power.

Money, on the other hand, is the medium of exchange with which those who must succumb to power purchase access to those who exploit power. Fixating on that medium obscures the true source of corruption.

If Mr. Lessig is serious about corruption in politics he should be looking to curb its true source. I fear, however, that he is not serious because his policy recommendations only consolidate more power in the hands of politicians (e.g., government funding of political campaigns).

So, maybe I shouldn't ignore those who use the phrase "money corrupts politics." It's a marker that tells me that the speaker either doesn't understand the true source of political corruption, or the speaker wants access to that source.

Saturday, March 01, 2008

Whatever

Monday, February 25, 2008

The Danger of Myth

In response to the Raleigh News & Observer's Q Section question "What makes a perfect president?", I sent the following
In the Local Voice column of Sunday's Q Section, people responded to the question “what makes a perfect president?” by listing personal traits they look for in a candidate. Things such as intelligence, integrity, and the ability to “think outside the box.” While these traits may be well and good, it seems that people are looking for men who they can mythologize instead of men who will perform the mundane task of preserving, protecting, and defending the Constitution of the United States – the actual duties that should make for a “perfect” president.

The main article seemed to capture this view by showing how we've created a mythology around past presidents. The authors seemed to think that this development is a good thing, and even go so far as to suggest that candidates should “harness the power of mythology” to “become part of the myth.” I have to disagree. Creating myths around men who wield the power of government only distorts history, and turns us into what John Adams feared - a nation of men, not of laws.

Thursday, February 21, 2008

Whatever

  • There is a potty joke here somewhere, but I'll leave it at just being really neat
  • This is an interesting dilemma. Should you be able to sue the company that made the defective product? Or should you be able to sue the institution that said the product was safe?
  • I thought secession was bad??
  • This is just disturbing
  • It's funny (read tragic) what government will do to make sure data align with a political agenda. Or what individuals have to put up with to serve that political agenda.
  • The Nordic miracle isn't so miraculous
  • The good old days are now
  • Power seeking scoundrels can't let family ties stand in the way, can they?
  • Let me guess, in a hundred years we will be complaining about how man is destroying the planet by taking CO2 out of the atmosphere. Seriously though, this is why we need to resist those who call for wealth destruction as a way to solve climate problems. Climate change is an engineering problem that can only be solved with increasing wealth.

Monday, February 18, 2008

Obama and Change

A friend of mine asked for my thoughts on Barack Obama. I alluded to my opinion in my previous post, but I wanted to expand on it here because some libertarians seem to be warming up to Obama.

My friend also sent me this link to Lawrence Lessig's video on why he, Lessig, supports Obama over Clinton. I will try to address some of the points in that video.

Peace for a change

I agree with Lessig's message that electing Obama would give us the best chance for getting out of Iraq. Being against this war from the beginning, I have been tempted to support Obama just on this issue alone. In fact, Obama's 2002 speech opposing the war expresses some sentiments with which I can agree. In particular, the following
I stand before you as someone who is not opposed to war in all circumstances...I don’t oppose all wars...What I am opposed to is a dumb war. What I am opposed to is a rash war...A war based not on reason but on passion, not on principle but on politics.
I can agree with this attitude, but I don't think it goes far enough. What is Obama's philosophical approach to foreign policy in general? Looking at his foreign policy page, I see a hodgepodge of diplomatic efforts that rely on the U.S. being heavily involved in the affairs of other countries. For example
Obama would offer the Iranian regime a choice. If Iran abandons its nuclear program and support for terrorism, we will offer incentives like membership in the World Trade Organization, economic investments, and a move toward normal diplomatic relations. If Iran continues its troubling behavior, we will step up our economic pressure and political isolation.
And if the "economic pressure and political isolation" doesn't work? How far is Obama willing to go? And does this policy risk harming the good will we have with the Iranian people?

What about a non-interventionist policy that pulls U.S. troops, money, and influence out of the affairs of other countries? What are Obama's criteria for a "smart" war? I may be cynical, but my guess would be that Obama, like Bill Clinton, will justify bombing foreign countries with rhetorical flash, and his supporters will eat it up.

How much change, really?

A word on this idea of "change." All candidates for president running against an incumbent in the opposite party are for change. They may wrap it up with noble rhetoric like "changing the tone in Washington," but in reality they just want to change who holds the reins of power. I defy you to name a national election in your lifetime in which someone was not calling for "changing the tone in Washington." Bush in 2000 called himself the "uniter". In 1988 George H.W. Bush was running on a platform of a "kinder, gentler America." This from a man who was essentially the incumbent.

Let's call this Orwell's Law: a word's meaningfulness is inversely proportional to the number of political placards it is printed on.

So, I don't think Obama is for "change." Yes, he wants to end the war in Iraq, but that's about as far as it goes. I know he talks about warm and fuzzy concepts of unity and bringing people together, but I'm sorry, I've heard it before.

He is basically running on the same platform that all Democrats have run on for the past 70 years - the continuation of the New Deal. Take a look at the Issues tab on his website and tell me what's different about his proposals? He may not give hard details, but the basic outlines are pure New Deal statism. Almost every bullet item begins with "The Obama program creates..." or "The Obama program increases.." Yes, the details of his plans may be structurally different from some other candidate's, but how is it philosophically different? Quibbling over which department runs a new program or what percentage increase a program should get is not fundamentally different from what we've seen since the 1930's.

The problem I see is that these programs create constituencies and an entitlement mentality that cause domestic conflict. Any new program that Obama creates will be for a constituency that will fight tooth and nail to see it continue or expanded by future administrations. When the inevitable budget crisis comes, lobbying for those programs will increase and pit one set of constituencies against another.

Take Social Security, for example. Anyone who questions the efficacy or financial health of Social Security is deemed an enemy of seniors. Touch it and your political career is in jeopardy. You can say the same for Medicare, Medicaid, eduction, and to a lesser degree the minimum wage, and public funding of the arts.

Take this piece of legislation co-sponsored by Obama himself. Even if this bill is well-intentioned, having the government define a "Patriot Employer" creates a mindset of division and ugly nationalism, and gives future lawmakers more ways to pander to the masses.

By growing the scope of government, Obama is creating more ammunition for future political wars. How many times have you heard the phrase "this next election is the most important in our lifetime"? I think I've heard it in nearly every election since I've been politically active (1988). Why do people say this? Because the federal government has taken on so much responsibility that even slowing its growth is considered to be the end of civilization.

Conclusion

I respect Obama's stance against the Iraq war, and I can understand why people may want to vote for him on this issue alone. But as a libertarian, I am disturbed by his trust in government to solve so many problems. His overall philosophy is still that of welfare at home, intervention abroad.

I fear that many libertarians are getting drawn in by Obama's rhetorical skills. While I find it somewhat refreshing to hear someone passionately express their beliefs with skill, I would hope that libertarians would not get caught up in the religious oratorical flair of a gifted politician.

By the way, I haven't voted since 2000 and would not have voted for Obama anyway. Politics is not the way to solve problems.

Sunday, February 17, 2008

Whatever

  • American jobs created because of trade with China...who'd a thunk that?
  • I can't believe I'm saying this but I long for the Clinton years
  • Hacking the Earth
  • Zeus gets pissed when his flock worship a false idol
  • For a second there I was thinking that Obama might not be so bad because of his advocacy for ending the war in Iraq. Now I'm cured. Patriotic Employer sounds so bad we should change the term from Orwellian to Obaman. (HT: Coyote Blog)
  • Markets promote peace; governments promote wars
  • Someone got the future correct in the 1960's, but I'm still waiting for the flying car (hey, is that Wink Martendale)
  • What a surprise

Monday, January 28, 2008

Whatever

Sunday, January 27, 2008

Myopia

One of the arguments made against the free market is that businesses are shortsighted - only concerned about short-run profits. Now, I'm not going to make a sweeping claim saying "no they aren't" because that would be simplistic (just as the original claim is). The truth of the matter is that some business are shortsighted and, of course, some aren't. The market process has a way of sorting out those entities whose vision (short or long) doesn't align with consumer interests.

My own personal experience shows that companies can be both long- and shortsighted at the same time. For example, I currently work in the rail industry as a software architect. Like a lot of technology companies, there is a tendency to produce software quickly without looking at the long-term costs of "rushing to get into production." While at the same time the rail industry is spending billions to upgrade their rail network. In one case you have a short-run view to get products delivered, while in another you have a long-run view of protecting future revenue.

I had a discussion with someone this week about the health care industry and whether or not such companies were shortsighted. He gave the example of the shortsighted companies that just wanted to produce drugs, for example, that only dealt with treating current problems and not investing in research for cures to diseases like cancer. (This was also part of discussion about the so-called conspiracy to keep the cancer cure secret from the public.) This is not true, of course, because there are lots of companies spending billions to find cancer cures. What the correct mix of investment for producing treatments for current problems and searching for new cures is something only the market process can determine.

I bring this up because the claim that the market is shortsighted goes along with the claim that government is better at long range planning. This is silly on its face because politicians have an incentive to pander to constituents on a time frame based on the next election. A perfect example is ethanol. Everyone knows that ethanol is at best no better than regular gasoline, and when all environmental impacts are taking into consideration, may even be worse. Yet we spend billions on subsidizing ethanol in part because Iowa is the first test for presidential candidates.

Anyway, Steven Landsburg has a great article on the shortsighted "stimulus" plan now circulating in Washington (HT: Cafe Hayek). Here's a quote:
Ultimately, the only solution to unemployment is for displaced workers to get retrained and find their way back into the workforce. The new stimulus package only delays that process by propping up dying industries for a while and postponing the day of reckoning. Ultimately, there will be just as much hardship because the stimulus package can't last forever. Why spend all this money trying -- and probably failing -- to delay the inevitable?

Sunday, January 20, 2008

Whatever

Wednesday, January 16, 2008

The Firm

Russ Robers over at Cafe Hayek has another good EconTalk episode. He talks with guest Mike Munger of Duke University on the Nature of the Firm. The concept that I took away from the conversation was that firms economize on transaction costs. This may sound a bit arcane, but take a listen anyway. You may appreciate the company you work for a little more.

Speaking of The Firm...

Monday, January 14, 2008

Is Space Exploration Worth the Costs?

Over at the Freakonomics Blog Stephen Dubner asks this question to a panel of 'space authorities'. The post is a long one, but the consensus is yes, space exploration is worth the costs. I'd like to comment on some of the answers.

Let's start with G. Scott Hubbard. He states, in part
2. We explore space and create important new technologies to advance our economy. It is true that, for every dollar we spend on the space program, the U.S. economy receives about $8 of economic benefit.
I'm inclined to be skeptical of this figure, but even it is accurate we have to ask the question "compared to what?" Mr. Hubbard has apparently never heard of Frederic Bastiat. I won't rehash the seen/unseen argument, so go read it yourself.

Along with the seen/unseen argument there is a political angle to this as well. How would politics be different if there weren't billions of dollars available for the taking by crafty politicians trying to buy votes with extravagant projects for congressional districts?

Mr. Hubbard continues:
3. Space exploration in an international context offers a peaceful cooperative venue that is a valuable alternative to nation state hostilities. One can look at the International Space Station and marvel that the former Soviet Union and the U.S. are now active partners. International cooperation is also a way to reduce costs.
Umm...didn't we race into space to beat the Soviet Union, not to cooperate with them? Yes, it's great that we cooperate now, but that's not the way it was from the beginning.

Some more from Mr. Hubbard:
4. National prestige requires that the U.S. continue to be a leader in space, and that includes human exploration. History tells us that great civilizations dare not abandon exploration.
'National prestige' reeks of nationalism to me which contradicts #3 above with regards to 'peaceful cooperation'. Maybe we need fewer 'great' civilizations and more that respect basic rights of the individual. Besides, I hear this argument from every do-gooder and 'grand' thinker who wants to solve some big problem or erect some monument to our greatness. I say to these people "open your wallet and get your fingers out of mine."

Having said all of that, I have always been a fan of astronomy and space exploration. I love hearing about new discoveries and seeing images from the Hubble Space Telescope. I even listen to the Astronomy Cast on a regular basis. I just don't think it's right to force others to fund my hobbies. Maybe if I had less of a tax bite I could privately fund some of these efforts.

More to come...maybe.