Saturday, December 26, 2009
The Good News: Rome's first political personality cult (Tiberius Gracchus) seems to have been in 132 BC, a full 86 years before Rome's first dictator Julius Caesar. So all this fear mongering about Obama's power grabs may be a little premature ;)
The Bad News: In between, revolts and government overthrowing riots were pretty common. One purportedly ending with so many bodies in the Tiber river it had to be unclogged to get them to float away.
But, history doesn't repeat does it?
Monday, December 7, 2009
Bob's post and my thoughts are in response to a Cato Institute web video that included a question answer session with famous libertarian economist and blogger Tyler Cowen. [He notes these comments here] His comments set off a firestorm of anger amongst some of the intellectual libertarians, but I'm not concerned with those issues. Among them were some sharp rebukes of those who are anti-immigrant. While I have no time for xenophobic anger or violence, I am becoming increasingly aware that the nativist argument is actually fairly sound.
Def. Nativist - someone who wants to maintain the purity of ones own culture.
Def. Minarchist - referring to minimal or very small government
I am pro-immigration. I believe in open borders. The best way to ensure freedom is to allow people to choose their government. Competition will shrink the size of the state.
However, I have seen noone make a good argument against nativism. Not that I subscribe to the argument, but I don't have a slam dunk reason against it.
My basic nativist argument is this:
You have a democratic minarchist state. The country flourishes economically. Millions of people around the world want to come and enjoy the economic benefits. The minarchist state opens its borders, letting in millions of hard working people who happen to be statists. The minarchist state slowly disappears as the statist immigrants become an increasing part of the voting population.
The issue isn't whether every immigrant will be highly statist, but whether immigrants are likely to be more statist on average. That immigrants are likely to be more statist (and that this effect can last generations) is, I think, amply demonstrated by history.
"Is it also possible that these statists, once they arrive and are saturated by a non-statist society, will begin to adopt different principles, rather than the other way around?"
Then Me Again:
Sure, that's possible, but I lean towards Tyler Cowen's comment that culture is "sticky". Voting patterns amongst certain demographics tend to change very slowly over time.
While I am still not a nativist, I can understand their viewpoint. I won't agree with bigotry anyone who disrespects immigrants as individuals, but for now, I can't really tear down the arguments as I have presented it.
Friday, December 4, 2009
Paul Krugman, Nobel Laureate in economics, and NY Times columnist is the patron saint of the left wing economics. If the Obama started selling our babies to pay off debt to China, Krugman would be complaining that it wasn't toddlers too. He's so dedicated to giving power to the state that nothing seems beyond reproach.
How did he get that way?
The problem is that we learn and believe what we are motivated to learn and believe. The primary factor, I believe, is status. I break down how this happens into 3 types.
First, we like to believe things about ourselves make us better than others. You have book smarts, but I have the all important common sense. It's standard ego defense. If someone tells a child with red hair that red hair is the best, he's likely to believe it because it makes him feel better. Politically this would be someone who is highly educated who thinks that only highly educated people should be allowed to vote. Their ideas would give them more power and status.
Secondly, is indirect status. If I come up with an argument that brown eyes are the best, and you have brown eyes you will reward me with agreement. If people around me tell me that they agree with me, then I'm more likely to believe that I'm right. It's not that my ideas are self-serving, they serve the status of others. This reinforces my line of thinking. The better my line of thinking the more my own status will be raised by those who these ideas serve. I can whole heartedly believe that brown eyes are better, even though my own eyes are blue. This apparent lack of self-interest gives more creedance to my ideas and all the more fuels my own status indirectly.
Politically, we see this all the time. Paul Krugman is surely heavily influenced byt his. He gives cover to power grabs by politicians. His ideas are reinforced by indirect self-interest.
Thirdly, is groupthink. If you put ten Paul Krugmans in a room they will aid and assist each other. When one academic makes a good argument that supports the main argument he will be rewarded by his peers. They reward him because he has assisted the cause that indirectly gives them status.
When thinking this way, this adds to my own beliefs that "scientific" inquiries into the social sciences is fraught with inevitable problems.
Tuesday, November 10, 2009
I love economists. There is no Hollywood actor, pop-star, comedian, or celebrity who so regularly blasphemes the mythologies of our times than economists.
This short forum which includes several economists and a few other "prestigious" people at the Chronicle on higher education should be read. Economist Bryan Caplan, makes a clinical, but very non-PC comment. Two excerpts:
"For whom is college attendance socially beneficial?" My answer: no more than 5 percent of high-school graduates, because college is mostly what economists call a "signaling game." Most college courses teach few useful job skills; their main function is to signal to employers that students are smart, hard-working, and conformist.
College attendance, in my view, is usually a drain on our economy and society. Encouraging talented people to spend many years in wasteful status contests deprives the economy of millions of man-years of output. If this were really an "investment," of course, it might be worth it. But I see little connection between the skills that students acquire in college and the skills they'll need later in life.
The whole article is filled with anti-college thoughts. The non-economists basically parrot myths and pablum. I generally agree that most of college is a status game where learning is secondary to "winning".
Monday, October 26, 2009
Inherent to calling any act an "altruistic" one, is the belief that the act has no value to the actor. It is easy to conceive that many "atruistic" acts are indirectly beneficial, such as building a good reputation or interpersonal trust, but I've helped people out before in secret and still felt a rush of joy. Our minds may simply be hardwired to enjoy simple acts of kindness.
The problem with Altruism and other forms of morality is that there is an implicit compulsion to do those acts. It's not that you simply enjoy doing them, it's that you MUST do them if you are to be a "good" person. People will cast shame on people who don't practice "altruism". Isn't it a little ironic to use manipulation to coerce acts that produce happiness? This compulsion, this guilt, drains the joy out of the act. In the end, we are left with less kindness and less joy.
Replace "You Must" with "You Can" and it will make all the difference.
Saturday, October 24, 2009
Inherent to the definition is that altruistic acts have no reward. If an elderly woman drops an object and I help her pick it up, have I suffered loss? Have I lost value to myself only to help her out? Can I not be motivated by joy? Can I love my neighbor, not out of moral compulsion, but because the act itself is inextricably linked to the reward of joy? If we continue to obsess that there is no reward then we kill the motivation to love. Altruism is a cancer.
What about heroism? Can we not be devoted to people, to a cause, with such euphoric passion that danger fades as a pressing concern? An idea can be more valuable than our lives. Why have we deified death as the ultimate arbiter of our actions? Remember that great man from history who changed the world because he made certain of his safety at all times? Of course not. The opposite of danger is not safety, it's boredom. Why would we discourage heroism by claiming it has no reward?
Altruism is a sham, and it blinds us to the possibilities of the human experience.
Friday, October 23, 2009
Aid organisations and the media have inflated the scale of subsequent horror, regardless of the truth. This year the International Rescue Committee released data from its Democratic Republic of the Congo mortality survey. “Congo’s war and aftermath have killed 5.4 million,” The Washington Post yelled, quoting the IRC. Humbug.
The IRC isn’t deliberately lying, neither was the Post. But the idea that 5.4 million people have died as a result of war in Congo is nonsense. It needs to be peddled to help to generate funds to relieve the real and hideous suffering of Congo’s population, but nonsense it remains. As the IRC admits: “Less than 10 per cent of all deaths were due to violence, with most attributed to easily preventable and treatable conditions such as malaria, diarrhoea, pneumonia and malnutrition.”
The IRC is saying, really, that the Congolese are dying because they are poor. Recent work by André Lambert and Louis Lohlé-Tart shows that the rising mortality rate predates the wars there. But combine “war’’ with “millions dead’’ and you have a donation-winning headline We all do it. We use statistics to highlight the horrors in Africa to drive home the unbelievable scale of the continent’s problems. But that’s the problem: the scale has become unbelievable. Twenty-three million? From my experience of two decades’ reporting from Africa, I can say with absolute confidence that this is humbug. Did anyone count them? No.
Here in lies the problem with making a moral plea. If at first you don't succeed at sufficiently manipulating people's behavior, exaggerate. Employ some shock and awe. The flip side, as he states is that the numbers become unbelievable. When we exaggerate a moral claim, we risk that our audience rejects us carte blanche. Instead of realizing that we are exaggerating they will think we are wrong. So lunacy becomes acceptable and the truth becomes offensive.
P.S. Go back and read the article, because he does make some solid points about the use of food aid in Africa.
Monday, October 19, 2009
Conclusion: Any concept that we are making moral progress or that humanity is moving towards some more perfect moral existence is false.
First, all morality is based on presuppositions. Thanks to some of our diligent atheist friends we know that there is no ultimate truth. All of these presuppositions are subject to doubt. None, are self-evident. These moral truths are only true because we choose to believe the presuppositions. These moral truths are only as true as we want them to be.
Secondly, the selection process of morals is endemically corrupted by the desire for power and status. Either the moral behavior serves the interest of the one making the argument, or the very act of making a successful moral argument serves to give status to the talented orator. Moral truths are not chosen through an altruistic search for truth, but to serve the interests of individuals. How can they be finding truth, when there is no truth?
No utopia, based on moral enlightenment, can ever come. Our human experience is becoming more comfortable, but it is not becoming more moral.
Tuesday, October 13, 2009
The use of moral absolutes has become so diluted and abused that it's not working anymore. What once held significant manipulative sway, just doesn't pack the same punch. We can see their manipulations from a mile away and we're having none of it. Morality is manipulation.
Here's Mr. Will,
If our vocabulary is composed exclusively of references to rights, aka entitlements, we are condemned to endless jostling among elbow-throwing individuals irritably determined to protect, or enlarge, the boundaries of their rights. Among such people, all political discourse tends to be distilled to what Mary Ann Glendon of Harvard Law School calls "rights talk."
Witness the inability of people nowadays to recommend this or that health care policy as merely wise or just. Each proposal must be invested with the dignity of a right. And since not all proposals are compatible, you have not merely differences of opinion but apocalyptic clashes of rights.
Rights talk is inherently aggressive, even imperial; it tends toward moral inflation and militates against accommodation. Rights talkers, with their inner monologues of pre-emptive resentments, work themselves into a simmering state of annoyed vigilance against any limits on their willfulness. To rights talkers, life -- always and everywhere -- is unbearably congested with insufferable people impertinently rights talking, and behaving, the way you and I of course have a real right to.
Hmmm..I wonder why would people throw elbows to expand their rights? It couldn't be that they are using morality as a tool of manipulation to gain more power and status?
Sunday, October 11, 2009
Is the Bible inerrant? That is, are there errors? I have no idea because I'm not a biblical historian or theologian. My faith is that the message that God intended for us to receive has not been mangled. The key word being faith. I believe in a benevolent God who communicates with mankind first and foremost. My faith in the scriptures flows from that initial assumption secondly. Any minor discrepancy with historic records is no threat to my faith in the intent of scripture.
The problem with many evangelicals is flipping this equation around. Their faith in a benevolent God flows from their belief in inerrant scriptures. They live their lives as if the Bible were scientifically provable, and only out of that proof can they then believe in God. The Bible is true, therefore God exists. This proof relies on scientists, theologians, historians, interpreters, anthropologists, and literary analysis. It's a complex web of assumptions that exposes the faith of a biblical "primacist" to attack on thousands of points. It's unstable.
My view can be represented as such:
1. Assume God
2. If God, then A, B, C,....
The view of the biblical premacist can be represented as such:
1. Assume A, B, C, D, E,...Z...
2. If A through Z are all true, then God.
If doubt is cast on any of the assumptions by the biblical premacist, their belief in God would logically fail. To maintain their faith in God, the biblical premacist is placed in the untenable position of being anti-science or anti-historian. I believe this is why so many Christians consider evolution as an existential threat to Christianity. Because if page 1 is proved false, then pages 2-1000 are false as well and God himself is a fraud.
Placing God at the beginning of the equation makes attacks on historical accuracy or the literal interpretation of the Genesis account, meaningless. The simple beginning "God is" is infallible. What about science? Poppycock. Prove to me that the universe can be objectively ascertained. Prove to me a materialist universe. More simply, prove to me that what I see is all there is. These are workable assumptions for living, but they are silent on the existence of God.
Go one step further and believe that God is loving and communicates with us. What better way than to send the very essence of himself to live and die an insuperably heroic, passionate, and compassionate life to let us know that we can indeed warm ourselves in the glow of his perfect love.
"But the geneology on pg. 213 doesn't really work out if you assume..." blah, blah, blah, yawn.
Thursday, October 8, 2009
There are consequences to our current culture of wait, and as an economist I look for incentives. The incentives in delayed marriage not only make abstinence or chastity a longer burden, but it also changes the thought processes of young people.
If a young Christian woman believes that marriage is many years off, why would she limit her dating life to stable and pious men? Dating, without the expectation of marriage, is simply fun. Girls will be attracted to young men who are simply fun.
Unfortunately, what we are training young Christian men to be is anything but fun for young Christian women. We teach them to control their passions, making them dull. When marriage is many years off, what incentive do they have to grow up? Why put down the Playstation to study or get a job? Why have a girlfriend if you don't plan to have sex and don't plan to marry her?
Of course, these are generalities, and I don't want to focus merely on the deleterious effects of these incentives. There is the issue of passion and the human experience.
For thousands of years, most every society (any historians please correct me if I'm wrong) had young marriage. It was either young arranged marriage or young romantic marriage. Either way, they were young. Not only is it apparent from our physical urges and the lower birth complications for younger women, but the romantic notions in youth seem to imply we were meant for young love, young marriage, and young reproduction.
While the Evangelical Christian world is telling kids to wait for sex, the secular world is telling them to wait for love. Either way, the message is clear: Squelch your passions, and give into the dullness of sensibility.
These most powerful human sentiments can be the most wonderful and beautiful things. but we are told to crush them, subdue them, wait, wait, wait, and then wait some more. Wait until your heart is jaded and the love you find is pleasant but modest. Deny those sexual urges, and when you fail, feel horrible, feel guilty. Wait until you've established a career, because who needs love and passion when you can afford a comfortable lifestyle?
Where have all the real men gone? Where have all the true ladies gone? We bury them with wait.
C.S. Lewis in his book "The Abolition of Man" has a great passage that relates:
"And all the time--such is the tragi-comedy of our situation--we continue to clamour for those very qualities we are rendering impossible. You can hardly open a periodical without coming across the statement that what our civilization needs is more 'drive', or dynamism, or self-sacrifice, or 'creativity'. In a sort of ghastly simplicity we remove the organ and demand the function. We make men without chests and expect of them virtue and enterprise. We laugh at honour and are shocked to find traitors in our midst. We castrate and bid the geldings be fruitful."
Update: A reader has a blog mostly dedicated to the subject - The Unorthodox Marriage
Monday, October 5, 2009
First, let me provide a couple definitions - "the law" - the moral system passed down in the Jewish tradition - "sin" - error as a result of man's inherent naivete/hubris
In Romans 7: 7-11, Paul captures the points I've been making about the failure of morality:
"What shall we say, then? Is the law sin? Certainly not! Indeed I would not have known what sin was except through the law. For I would not have known what coveting really was if the law had not said, 'Do not covet.' But sin, seizing the opportunity afforded by the commandment, produced in me every kind of covetous desire."
Paul is stating that the focus on the law took his eyes off of understanding what is beneficial and instead focused it on the law itself. The moral law itself was leading him to do that which is not beneficial. He continues...
"For apart from law, sin is dead. Once I was alive apart from law; but when the commandment came, sin sprang to life and I died. I found that the very commandment that was intended to bring life actually brought death. For sin, seizing the opportunity afforded by the commandment, deceived me, and through the commandment put me to death."
He goes on in verses 14-24 to speak how he struggles in a tug of war between the good that he can see and sense, but he is bound by the slavery to the law.
14 "We know that the law is spiritual; but I am unspiritual, sold as a slave to sin. 15I do not understand what I do. 16For what I want to do I do not do, but what I hate I do. And if I do what I do not want to do, I agree that the law is good." [He struggles to do the good that he can sense]...18.."For I have the desire to do what is good, but I cannot carry it out."
23 "but I see another law at work in the members of my body, waging war against the law of my mind and making me a prisoner of the law of sin at work within my members." [He can see what is beneficial, but morality works against that.]
and finally, in verses 24 through 8:1-4, he begins to show us the way out.
What a wretched man I am! Who will rescue me from this body of death? Thanks be to God - through Jesus Christ our Lord! So then, I myself in my mind am a slave to God's law, but in the sinful nature a slave to the law of sin.
Therefore, there is now no condemnation for those who are in Christ Jesus [no longer bound by morality], because through Christ Jesus the law of the Spirit of life set me free from the law of sin and death. For what the law was powerless to do in that it was weakened by the sinful nature, God did by sending his own Son in the likeness of sinful man to be a sin offering. And so he condemned sin in sinful man, in order that the righteous requirements of the law might be fully met in us, who do not live according to the sinful nature but according to the Spirit"
The law, or morality, is no longer necessary because Christ has demostrated that everything the law has tried to manipulate us into doing could be done without it. Perfect goodness, doesn't need morality, only humility.
Saturday, October 3, 2009
The renowned skeptic, Neitzsche, says in his "Beyond Good and Evil":
"All the moralities that address themselves to the individual, for the sake of his "happiness", as one says - what are they but counsels for behavior in relation to the degree of dangerousness in which the individual lives with himself; recipes against his passions, his good and bad inclinations...little and great prudences and artifices that exude the nook odor of old nostrums and of the wisdom of old women"
Modern Evangelical Christian culture teaches us to nudge each other, especially our kids, towards a higher "morality" by appealing to self interest. The underlying premise being that achieving Christian morality leads to a higher level of happiness. Don't look at girls that way or you will ruin your future marriage. Don't dress like that or all the dregs and perverts will fool you and seduce you. I think that Neitzsche captures this situation pretty well.
I have met plenty of Christians, and experienced personally for myself, who wondered why they were not that happy even though they had managed to quell many of their passions and were living according to much of the Christian code of morality. The problem is simple, and I will use the moral formula from an earlier post again.
A is true, and B is true, so action C is a moral behavior.
The underlying assumption that the Christian has made is that obeying the moral constraint leads to happiness. This is the folly. The Christian must believe that behavior C is beneficial on it's own. While many Christians will claim that they believe that C is indeed beneficial, they also simultaneously believe that NOT C is also beneficial. This belief that C and NOT C are both beneficial is the real problem. It is not a lack of faith in A and B, but a lack of skepticism on NOT C.
As an example:
I hate cauliflower and I love steak. Do I need will power to choose steak over cauliflower? Not at all. I know that I like steak more than cauliflower in every possible situation. I also like Dr. Pepper. I like it too much and drink it too often. In fact, I'm on a no Dr.Pepper diet currently. I like the weight I lose when I quit drinking Dr. Pepper, but I also really like the taste of it. I've gone on and off Dr. Pepper several times over the last ten years, but I've obviously never quit forever.
My problem is that both drinking it and not drinking provides happiness (or utility), but the rewards are mutually exclusive. As long as Dr. Pepper remains my indulgence of choice and my remedy for tiredness, its grip will stay tight. Does it really wake me up? Is it really as refreshing as I think or has clever marketing made me believe this? Is it a placebo effect? I'm not sure, but I know that skepticism is my way out.
Now to the main point. In my lifetime the presentation of consequence-free and unbridled sexual activity has been one of the most pervasive points of contention. Is it true? We are presented with information that as long as we use protection it's only our moral hangups that prevent us from enjoying this unequaled pleasure. How can we know that the self interest of the "authorities" isn't clouding their analysis? Does it give them power and status for us to believe them?
Much like the Christian will at times get a rush of euphoria from conquering a sinful behavior, is it also possible that the status and ego boost given to us through a sexual conquest really mask a growing emptiness. Much like the Christian who is purging sinful desires in hopes of recapturing that temporary bliss, is the sexual conquistador on the same path, hoping that the next conquest will satiate that growing sense of purposelessness? Is it an endless path of constantly chasing the next temporary high?
The rest of the world is skeptical of Christian ideals, but are we skeptical of theirs? Do we actively tear down what they preach? Do we demand proof? Should we hide our children from "the world" or should we mock its self serving manipulation?
Thursday, October 1, 2009
Using the same formula as before:
A is true, and B is true, so action C is a moral behavior.
Not every person has the same mental capacity or the same zeal for rigorous intellectual pursuit of consistent logical behavior. Because of this, some are better at changing minds and others are more likely to have their minds changed. Those who are better I will call "authorities" and those who have their minds changed I will call "followers".
The problem is that authorities are not altruistic, and in regards to spreading the one objectively true morality (A and B) they may balk because it doesn't serve their interests or preferences. If it is in the interest of authority figure X that follower Y not practice behavior C, X will use its authority power to persuade Y not to practice behavior C. Moral laws break down because they do not serve the interest of the authorities. Follower Y is not aware that they are serving the interest of authority figure X, only that the authority figures makes sense.
Jesus saves his anger for authority figures alone. The Pharisees and the "Teachers of the Law" lord their expertise over their people and coerce them to beleive and practice things that serve to maintain the status, power, and wealth of the authority figures. Jesus eviscerates them on several occassions. As for today we have "name it and claim it" preachers, media propagandists, and Global Warming theorists :)
Other forms of blatant manipulation come to mind, but we all, in subtle ways practice this. Parenting is the profession of this practice. How do I get my son not to hit the other son? Moral imperitive. How do I keep them out of the street? A car WILL hit you (with high probability). It's exaggeration, manipulation, and a whole menagerie of half-truths and cliches. If anyone has any better ideas please let me know.
Morality breaks down because talents are dispersed. If we assume that the strong will accumulate more resources by the sweat of their brow, and that the smart and industrious will join them by focusing their faculties, then we must accept that the crafty and surreptitious will do it by changing our morals through manipulation.
Tuesday, September 29, 2009
Moral logic, in general, follows this pattern:
A is true, and B is true, so action C is a moral behavior.
A traditional Christian moralist would like say it like this:
God gave us his law, God is the ultimate judge, so actions prescribed in that law are moral behaviors.
If this were an immutable truth there would be little room sin. Traditional Christianity paints any rejection of this as mere rebellion, but there are other more fundamental problems.
What if someone doubts that God exists? What if the Bible isn't perfectly clear on defining action C? The moral compulsion breaks down. Sprinkle a little skepticism on A, B, and C, and the moral law fails.
More universally, any set of A, B, and C is subject to doubt. If someone doesn't want to do action C, know that they will dedicate their energies to casting doubt on A and B.
A more experienced logician will claim that A and B are axioms. That they are self-evident truths. Skepticism, however, is not bound by anything. The skeptic will find a way. They always do.
Doesn't this imply an ethical nihilism that nothing is moral or immoral? Yes it does, and I'm not afraid, and you shouldn't be either.
Monday, September 28, 2009
Your boss comes by and asks if you have started that report. Do you lie and say "Yes" or do you tell the truth and incur his criticism? What if you lie? Will he believe you or will he ask to see what you have not accomplished? Is this a 40% chance of getting caught or a 10% chance? Can you even calculate this? In a split second? How many contingencies do you have to cover? 10? 100? 1,000,000? Quick, you have 2 seconds.
Why do we lie? Because it often "works". Usually we can maintain our bloated reputation, so we do it. We lie over and over again to hide our flaws and weaknesses and present an image that exaggerates reality. But when it doesn't work, it can really blow up. Fundamental to this behavior is an assumption. We are gods and others are fools.
Not too long ago I read through Frederick Hayek's "The Fatal Conceit" and a portion of "The Counter-Revolution of Science" These two books have had a great impact on my religious views. (I was hoping to find a killer quote, but none of my flagged pages yielded any)
Hayek criticizes the use of empiricism on the social sciences. His main criticism of socialism boils down to a lack of information problem and violations of the basic principles of science. An economy is infinitely complex and no controlled experiment can ever be performed.
Socialism, or any form of government planning, is not just impossible in practice, it is ridiculous in theory. No one is smart enough. Not even close. What we get from our intellectuals are elaborate rationalizations for mistakes.
The same narcissism that infects many of our academic elites and political leaders infects us as well. Why can we lie and get away with it? Because we are smart and they aren't. Why can we steal and get away with it? Because we are more clever. Why can we gossip and talk behind their back? Because we are more righteous and not quite as trashy. We are either book smart or street smart, but we are definitely smarter.
Being ignorant to the full depth of other minds, we kid ourselves that we are little better. In our heads, we are gods. Awareness of this natural inclination was captured all the way back in the Genesis account:
Genesis 3:4-5 "You will not surely die," the serpent said to the woman. "For God knows that when you eat of it your eyes will be opened, and you will be like God, knowing good and evil."
The first sin was, and I believe all sin is, born from pride. We want to be the god in our little worlds.
Side note: Christians should be wary of sociological studies that prove that a moral behavior is objectively beneficial or harmful regardless of the source. These kinds of studies have rampant uncontrolled variables and other biases. In my experience, children might find this kind of information persuasive, but most adults have built up walls of skepticism to defend their egos.
Saturday, September 26, 2009
More specifically, my religious beliefs and my economic beliefs, which had been mostly separate, began to converge. When push came to shove, it was my politics that failed. Not the accuracy or my general embrace of libertarianism and Austrian economics, but my zeal failed. It failed because I realized I believed in a utopia that could never be. Human nature simply will not allow it.
I am hoping to blog more regularly, but there will be a significant change in direction. My writings will mostly deal with Christianity and philosophies that surround it, although I'm likely to dabble in politics and economics as well. I have recently been greatly influenced by Nobel Laureate economist Frederick Hayek, philosopher and author C.S. Lewis, and the theologian Francis Shaeffer.
Do not be mistaken that this will be a blog that defends the Christian status quo. Some will find it irreverent, blasphemous, shocking and appalling. Serious problems exist within modern Christian culture and plenty of traditions need to be wrecked. Don't worry, I'll also hammer a few silly atheists along the way.
Friday, May 29, 2009
First things first. It’s important to realize that there’s no hint of inflationary pressures in the economy right now. Consumer prices are lower now than they were a year ago, and wage increases have stalled in the face of high unemployment. Deflation, not inflation, is the clear and present danger.
Oil has gone from $32/barrel to $66/barrel (WTI morning of 5/29). The dollar keeps dropping. The 5yr TIPS-Treasury spread (a market indicator of inflation) has risen from -0.7% to +1.4% over the last few months and its growth shows no signs of abating.
Then, in his standard style he throws up a straw man:
But it’s hard to escape the sense that the current inflation fear-mongering is partly political, coming largely from economists who had no problem with deficits caused by tax cuts but suddenly became fiscal scolds when the government started spending money to rescue the economy. And their goal seems to be to bully the Obama administration into abandoning those rescue efforts.
Find me one libertarian economist who had no problem with Bush's profligate spending. Right now, it's the libertarians making the most noise about inflation, not the middling "conservatives" like Greg Mankiw who is all for massive money printing.
Someone is going to be gloating over the next few months, we'll just have to wait and see.
Tuesday, May 26, 2009
An excerpt (note his sarcastic tone):
These events have heralded a new era of partnership between the White House and private companies, one that calls to mind the wonderful partnership Germany formed with France and the Low Countries at the start of World War II. The press conferences and events marking this new spirit of cooperation have been the emotional highlights of the administration so far.
Wow. He likens Obama's relationship to corporations to Nazi Germany's relationship to Vichy France. Didn't expect to see the day where I thought David Brooks would use stronger terms than I.
At this, the C.E.O.’s behind him don frozen smiles, exuding the sort of spontaneous enthusiasm often seen at North Korean pep rallies.
Double Wow. Now it's a comparison to Kim Jung Il's North Korea.
David, you need to leave some hyperbole on the plate for the blogosphere. That's our niche, you're treading on our turf.
Tuesday, May 19, 2009
I'm sorry, but I believe Obama calculatingly employs this approach mainly as a smoke screen to hide his real agenda, which resides anywhere but on common ground. He specializes in paying superficial respect to his opponents' arguments while proceeding to bury them. The examples are endless.
He calls forced union membership "free choice." He masquerades as a fiscal disciplinarian while authoring nationally bankrupting budgets in perpetuity.
He endorses capitalism as a superior economic system while undermining it with other words and actions. He condemns it as "unfair" and decries achievers as "selfish" and "greedy." He's set on restructuring our economy away from the free market and toward government control, from taking over private businesses to setting executive salaries to subsidizing mortgages to nationalizing health care. But he knows better than to condemn capitalism outright, because if he did, the American people finally would wise up to his endgame.
Saturday, May 16, 2009
I have thought for a number of years that proper education and enlightenment would lead to the inevitable adoption of free market principles. If we are truly rational beings, how could society, over time, not accept what is true and beneficial. In chemistry, physics, and biology, we seem to be progressing all the time. However, I have now come to reject this concept as it applies to politics and propose that we are in never-ending oscillations between shades of freedom and tyranny.
Underlying many of our motivations, as is the case for gorillas, is the desire for status. It is not just a desire to be rich, but to be richer than our friends and neighbors. Wealth and status can be gained through virtuous means like hard work, through immoral ways such as theft and murder, but also through manipulation. The homeless man on the street is not stealing from passersby, he is merely manipulating people to give him money.
This manipulation is a constant force around us. A pretty girl will get a boy to do favors for her. A slick salesman will sell an item for far more than the going market rate. A politician will tell tear jerking stories to get votes. For those who seek power, but live in a civil society, manipulation is the most powerful tool at their disposal because violence is rarely tolerated.
At given points in time, societies around the world endeavor to pursue a new course. Much like England and it’s Magna Carta, and the U.S. with it’s Constitution, weak societies decide to try something different that improves on previous frameworks that don’t seem to be working anymore. If these new frameworks are truly better, the society will flourish and thrive. Clearly, America’s framework has worked spectacularly by growing a small group of colonies into a singular world power.
What works for societies are limits on individual power. There is no mistaking the strong correlation between free markets and high growth/high incomes around the world. Individual freedom to calculate one’s own actions leads to the best outcomes. However, this framework of individual freedom does not allow for the kind of power that certain individuals wish to wield. Manipulation is the pathway back to that power.
When one individual is able to successfully manipulate others to give them power, still others who desire power or status will adopt these techniques and employ it themselves. The manipulators, over time, must destroy the logic and tenets of the framework of individual freedom. Slowly, but surely, these manipulations begin to weave together a narrative that does reject freedom and offers some “more perfect” alternative. Successful manipulators use these narratives to get elected to office in a democracy.
Young and old, smart and dull, all start to fall sway to the romance and the Utopian possibilities promised in the narrative. A whole army of intellectuals will dutifully build a "science" around it, unknowing that they are greater victims of manipulation than the dullards they pity. The masses begin to reject old traditions and the fundamentals of individual liberty. The manipulators compete endlessly to perfect the power of the narrative and raise their status.
Finally, the day arrives when the old ways appear to fail (usually because it has been corrupted by a weaker narrative) and the new way is given a chance. It’s not that the narrative is invincible, but all that needs to happen is the appearance that it “works.” Under Mussolini, the crippling strikes by communist labor organizations ended and things “worked” much better. Under Hitler, the hyperinflation and sky-high unemployment of the Weimar Republic ended and things “worked” again. Under Hugo Chavez, oil prices soared and more than mitigated the horrible economic policies he has instituted.
The narrative that gave credence to government power does fail eventually because an oversized government is the downfall of a civilization. Communism failed. Monarchies failed. Jimmy Carter’s Statism failed. All led the pendulum to swing back to something different, and often times the manipulators got their just desserts.
Hopefully, our current leaders get stuck holding the bag when the music stops.
Thursday, May 14, 2009
President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.
“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”
Are you kidding me? How can you stand up there and claim that "WE" can't keep borrowing when it is "YOU" who are using every possible avenue to spend TRILLIONS of dollars and drive us into these wretched levels of debt.
This is like a man beating his wife to a pulp and then lecturing her that "WE" need to stop fighting like this.
Friday, May 8, 2009
Unfortunately, their materials were copyrighted so I don't know if I can give you many specifics.
First, let's look at long-term interest rates.
Prediction by the first: Long term rates sliding down to 2.75% by year's end.
Prediction by the second: 30-yr rates falling to 3.5% during 2Q09
Let's go to the chart:
Hmmm...30-yr rates seems to have climbed to 4.3% as of 5/8 closing. These rates are almost up to the pre-crash rates of early 2008. 30-yr Treasuries tend to be an implication of the market's beliefs of long-term inflation.
Now, let's examine the whole deflation thing. How about the price of oil? Sorry for the ugly chart, but it gets the point across. Data here, along with Friday's close from Bloomberg.
Or perhaps the fact that the dollar is now at a 4-month low? If we're stuck in a liquidity trap like the Keynesians believe, then why is the world beginning to not hoard dollars?
Since, I am mocking their predictions, I will make some predictions of my own. And, since my ego is still drunk on my previous success, I'm going to make some bold ones.
1. 30-yr Treasury yields break 5.00% by year's end. 10-yr Treasuries break 4.00%.
2. WTI Oil Price will break $80/barrel before year's end.
3. Bloomberg's Dollar Index, will drop below 70 before year's end. (Currently 82.53)
So remember, buy some eggs on December 31st. My face is ready!
Saturday, May 2, 2009
I am transcribing the words of this attorney, so forgive me any errors starting at around the 1:30 mark.
"...cause let me tell you, it's no fun standing on this side of the fence, opposing the President of the United States. Uh, in fact, let me just say, you know, people have asked me who I represent..and that's a moving target. I can tell you for sure that I represent one less investor today than I represented yesterday. Uh, one of my clients was directly threatened by the White House, uh and, in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight..."
I guess what der leader wants, der leader gets. Hail Victory!
UPDATE: A nice article from the Financial Times explains how dangerous this behavior by the White House is to financial markets. Likening it to Machiavelli.
"More importantly, the Chrysler saga sets a dangerous precedent for US capital markets. For once, the law is unambiguous: senior secured creditors should be paid before junior unsecured creditors and employees (the words “senior” and “junior” are a bit of a give-away on this point). By turning legal wisdom on its head – and vilifying investors that opposed the move – the administration is signalling the principle is no longer sacred.
While that, in itself, will not cause a massive capital flight away from the US, it will have some serious repercussions."
Friday, May 1, 2009
Housing booms and busts are nothing new to Europe. If you want to understand the seeds, read his post. He boils it down to two necessary ingredients: Credit expansion by a central bank and too much land use regulation. On these points I completely agree.
Wednesday, April 29, 2009
Tuesday, April 28, 2009
What does this mean? The UAW and the federal government will run the firm....into the ground. Chrysler, which has almost zero chance of being profitable now that they are run by two organizations that hold profitability last on their list of priorities, will be a function of the government. The UAW is too interconnected with the White House and the Democratic party and will owe its allegiance to them. Make no mistake, you and I will now have to subsidize Chrysler for years to come. These taxpayer dollars will then be turned around in the form of multi-million dollar donations to the Democratic Party.
General Motors is also on the same path. They are now entertaining a deal with the government that Larry Kudlow details this way: (HT EPJ)
What is going on in this country? The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization.
That's right. The U.S. Federal Government will own 50% of the company. The UAW will own 40%. Political interference by the White House, the Democratic congress, and the UAW will prevent GM from ever becoming profitable again without government subsidies. Billions of your tax dollars will go to a company that will turn right around and give tens of millions to Democratic party candidates and our current President to help them stay in power.
If you believe in a truly free America you will do the same. Never buy any of their cars ever again.
Now, using the most recent data I've been able to check those predictions. Four out of five are spooky accurate, so I just had to brag.
Predictions for total price drop:
Miami – 32% drop
Los Angeles – 31%
Tampa, FL – 28%
Las Vegas – 28%
Washington – 24%
Miami - 33% drop
Los Angeles - 30%
Tampa, FL - 27%
Las Vegas - 38%
Washington - 23%
Note: For a fee I will send you lottery number predictions and perform Taroh card readings as well.
Saturday, April 25, 2009
Well, an interesting thing has happened since this announcement. 30-yr Treasury yields have been rising and are now at their highest point so far this year. Is this a trend? Is this the beginning of the dramatic and inevitable rise I expect in borrowing costs? We'll see...
Why is This Happening?
China is selling long-term U.S. Treasury Bonds in favor of short term t-bills. This has driven yield on short term t-bills down while putting upward pressure on yields for treasury bonds.
According to Bloomberg:
Rates on three-month bills turned negative in December for the first time since the government began selling them in 1929 as investors sacrificed returns to preserve principal. After increasing at the start of the year, rates have dropped 0.20 percentage point since the beginning of February to 0.13 percent.
Demand for bills is rising again because investors including foreign central banks are snapping up the shortest- term U.S. securities as the Federal Reserve buys Treasuries to drive down borrowing costs in a policy of so-called quantitative easing. China, the largest U.S. creditor, with $744 billion of debt, has questioned the practice and shifted purchases to bills from longer-maturity securities.
“There’s a group of investors out there who are looking at what the Fed is doing and the policy action they’ve taken and the asset purchases, and saying ultimately this is inflationary,” said Stuart Spodek, co-head of U.S. bonds in New York at BlackRock Inc., which manages $483 billion in debt. “You’re going to invest in very short-term bills because you absolutely need not just the quality but also the absolute liquidity.”
China bought $5.6 billion in bills and sold $964 million in U.S. notes and bonds in February, according to Treasury data released April 15. It was first time since November that China purchased more bills than longer-maturity debt.
Friday, April 24, 2009
Citigroup CEO Vikram Pandit's job security is increasingly in jeopardy as momentum grows in Washington to oust him.
I love how someone like Tim Geithner who has never worked for, much less run, a private firm in his professional life now chooses CEOs for major American companies.
There's also a word for this kind of government behavior: Fascism.
Wednesday, April 22, 2009
There are several great speakers, including my friend* Bob Murphy, author of the new The Politically Incorrect Guide to the Great Depression and the New Deal. Bob seems to be a laugh riot from the youtube videos I've seen of his other speaking engagements.
Others Speakers are:
Thomas E Woods, Jr. (author of the NYT bestseller Meltdown)
What's great about this conference?
First, it's only $75, which is a bargain. Second, if it's anything like the similar Mises Circle in Houston the crowds are usually small so if you wanted to get a book signed or ask some questions that is available. Third, I'll be there! If you let me know that you are going I may get a group together the night before to have dinner where you'll get to meet my darling wife and kids.
To register, you can go here, and if enough of you mention my name in the comments I may be able to negotiate a reserved table closer to the front.
* I'm not sure how you refer to someone with whom you have exchanged a number of e-mails and debated on a blog. My bar for internet "friend" is whether they consistently respond to my e-mails, which he does.
Monday, April 20, 2009
Dr. Parks ran across this post of mine in support of a balanced budget amendment. I tend to channel William Buckley when I'm emotional, as my vocabulary soars above my standard typo ridden fare. Looking back at it, I'm still pleased with it.
At any rate, check out Americans for a Balanced Budget Amendment, and lend your support.
I wrote about this post where the young man in Pittsburg, PA, shot to death three police officers. I predicted it would show up in op-eds as further "proof" that those opposing Obama were dangerous. Refreshingly, it didn't reach any of the major papers that I peruse. It did however reach some left wing bloggers. Such as author David Neiwert who tries to link the shooter to conservative commentator Glenn Beck and also FoxNews.
This guy is a nobody, but I started reading the now infamous assessment from the Department of Homeland Security, where they list people who are pro-life, anti gun control, military veterans, and those who are generally anti big government as potential terrorists.
This is what it says on page 3:
A recent example of the potential violence associated with a rise in right wing extremism may be found in the shooting deaths of three police officers in Pittsburgh, Pennsylvania, on 4 April 2009.
So much for "weaving a narrative" to demonize, now it is explicitly linked by official government documents.
Sunday, April 19, 2009
Last year, the state of Texas pulled out into the lead against New York by having 58 of the 500 largest companies in the U.S. New York fell to second with 55. This year, New York actually gained one, surprising given their financial problems extending well back into 2008. Texas, however, placed 6 additional companies on the list, for a total of 64.
Within Texas, the major metropolitan regions had these totals:
Dallas/Fort Worth 25
San Antonio 5
Pittsburg, El Paso 1 each
Saturday, April 4, 2009
First, is the incident of three police officers being shot in Pittsburgh. The piece of information headlined at Drudgereport added that he, the gunman, "feared the Obama administration was posed to ban guns. "
I wrote here, that I was beginning to feel that the Left was beginning to weave a narrative to demonize conservatives and anyone not supporting Obama. Robert Reich's freightening mischaracterazation was this:
Make no mistake: Angry right-wing populism lurks just below the surface of the terrible American economy, ready to be launched not only at Obama but also at liberals, intellectuals, gays, blacks, Jews, the mainstream media, coastal elites, crypto socialists, and any other potential target of paranoid opportunity.
This story just broke on Saturday night. If someone doesn't write an op-ed linking these killings to a demonization this coming week, I'll be surprised. If you see one, let me know. Not on this blog, but privately I have expressed some concern to friends that a mass shooting or domestic terrorist event commited by a crazed anti-government type will lead to a broad demonization of the non-Left in the U.S.
Second, is this one at the WSJ:
I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?
My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.
That's right. The government is not allowing banks to pay back the TARP money. The firm grip that Obama and his Congress have on Wall Street is not going to be relinquished.
The author, who is English goes on:
After 35 years in America, I never thought I would see this. I still can't quite believe we will sit by as this crisis is used to hand control of our economy over to government. But here we are, on the brink. Clearly, I have been naive.
Friday, April 3, 2009
He seems most taken with Woods' account of the severe 1920-21 depression, where the U.S. quickly got out of it by doing what? NOTHING!
The "forgotten depression" of 1920-21 was caused by a huge increase in the money supply for President Wilson's war. When the Fed started to tighten at war's end, production fell 20 percent from mid-1920 to mid-1921, far more than today.
Why did we not read about that depression?
Because the much-maligned Warren Harding refused to intervene. He let businesses and banks fail and prices fall. Hence, the fever quickly broke, and we were off into "the Roaring Twenties."
He also rebuts the myth that Herbert Hoover was a laissez faire ideologue who refused to intervene as the economy began to tank
Herbert Hoover, contrary to the myth that he was a small-government conservative, renounced laissez-faire, raised taxes, launched public works projects, extended emergency loans to failing businesses and lent money to the states for relief programs.
Hoover did what Obama is doing.
Indeed, in 1932, FDR lacerated Hoover for having presided over the "greatest spending administration in peacetime in all of history." His running mate, John Nance Garner, accused Hoover of "leading the country down the path to socialism." And "Cactus Jack" was right.
Finally, he gets to the myth that World War II ended the great depression:
But how can an economy be truly growing 13 percent a year, as the economists claim, when there is rationing, shortages everywhere, declining product quality, an inability to buy homes and cars, and a longer work week? When the cream of the labor force is in boot camps or military bases, or storming beaches, sailing ships, flying planes and marching with rifles, how can your real economy be booming?
It was 1946, a year economists predicted would result in a postwar depression because government spending fell by two-thirds, that proved the biggest boom year in all of American history.
With this finale:
Should not this creature from Jekyl Island [The Federal Reserve], for all its manifold crimes and sins against the republic, also be summarily put to death?
Yes Pat, let's end the Fed.
Wednesday, April 1, 2009
Romeike, his wife Hannelore, and their children live in a modest duplex about 40 miles northeast of Knoxville while they seek political asylum here. They say they were persecuted for their evangelical Christian beliefs and homeschooling their children in Germany, where school attendance is compulsory.
When the Romeikes wouldn't comply with repeated orders to send the children to school, police came to their home one October morning in 2006 and took the children, crying and upset, to school.
He had to pay fines equivalent to hundreds of dollars for his decision, and he's afraid that if he returns to Germany, police will arrest him and government authorities will take away his children, who range in age from 11 to 3.
Lutz Gorgens, German consul general for the Southeast U.S., said he's not familiar with the Romeikes' specific situation but believes the claim of persecution is "far-fetched." He defended Germany's requirements for public education.
"For reasons deeply rooted in history and our belief that only schools properly can ensure the desired level of excellent education, we (Germany) go a little bit beyond that path which other countries have chosen," Gorgens said.
Germany's approach to homeschooling is starkly different to the U.S. and other European countries. Homeschool students have been growing by an estimated 8 percent annually in the U.S. and as of 2007 totaled about 1.5 million.
If you read between the lines in the article, what is apparent is that Herr Gorgens believes, along with much of Germany presumably, that it is the role of the state to properly engineer good citizens. They don't like minority viewpoints or value, so they actively seek to crush those viewpoints. If you resist, they will take your money and your children.
I support the Romeikes, and the United States should rebuke this kind of thuggery by granting them asylum.
Monday, March 30, 2009
Now, Kevin Hassett of the American Enterprise Institute, summarizes in a piece at Bloomberg, the latest Congressional Budget Office Report. The Bad News: The yearly surplus effectively hits ZERO next year. He also argues that deficits will be here from now on.
We have all been so busy whining about bonuses at American International Group Inc. and arguing about the so-called card- check legislation that we forgot to watch the Social Security surplus. While we were looking away, that surplus disappeared, eight years ahead of schedule.
According to the latest Congressional Budget Office estimate, the Social Security surplus will be only $3 billion in 2010. That number is almost surely too rosy, and the actual realization next year will be a big deficit. In February, according to data from the Social Security Office of the Actuary, the program paid out more in benefits than it collected in taxes and interest combined. There will be many more months like that before we are through.
Opponents of Social Security reform have tried for years to underplay the problem by stating that the program’s finances are fine. Social Security was, in the most recent report by its trustees, expected to run surpluses all the way to 2017. Why bother to reform something now if the crisis is so far off?
Who wants to bet that the entire surplus (which is a silly notion anyway) will no longer survive until 2041 in the next Trustee Summary?
Friday, March 27, 2009
Wednesday, March 25, 2009
Another piece adding fuel to that theory from Bloomberg.
The U.K. failed to find enough buyers for 1.75 billion pounds ($2.55 billion) of bonds for the first time in almost seven years as debt investors repudiated Prime Minister Gordon Brown’s plan to stem the worst economic crisis in three decades.
Brown’s government aims to sell a record 146.4 billion pounds of debt this fiscal year and as much as 147.9 billion pounds in 2010 as he tries to pull Europe’s second-largest economy out of its worst recession since 1980. The prime minister’s plan drew criticism yesterday when Bank of England Governor Mervyn King told lawmakers in Parliament in London the government should be “cautious” about spending and deficits.
“This sinks Brown below the waterline,” said Bill Jones, professor of politics at Liverpool Hope University. Brown’s “whole strategy is based on borrowing and now he can’t get anyone to buy his gilts. This means the prospect of going cap in hand to the IMF hovers increasingly into view.”
This isn't a watershed moment for England, but it should raise some eyebrows given other evidence.
Tuesday, March 24, 2009
"There is no limit to how much we can do, which is why, in the end, this policy will work"
They are now considering to begin "printing money".
Then this article at Bloomberg today:
Consumer prices climbed 3.2 percent from a year earlier, the Office for National Statistics said today in London. The median forecast of 28 economists was for 2.6 percent. Bank of England Governor Mervyn King wrote in a letter to the Treasury explaining the increase from the 3 percent limit that a “sharp decline” in the inflation rate is likely to resume.
“It’s a big surprise,” said Stewart Robertson, an economist at Aviva Investors in London
How shocking, Mr. King, that you hold no upper bound on the money supply, yet your country experiences surprisingly higher inflation.
The article goes on to blame the drop in the value of the Pound as a reason for price hikes by foreign companies like Ford Motors. You print money and your currency loses value? What? That can't be right.
Monday, March 23, 2009
Paul Krugman writes:
The likely cost to taxpayers aside, there’s something strange going on here. By my count, this is the third time Obama administration officials have floated a scheme that is essentially a rehash of the Paulson plan, each time adding a new set of bells and whistles and claiming that they’re doing something completely different. This is starting to look obsessive.
But the real problem with this plan is that it won’t work. Yes, troubled assets may be somewhat undervalued. But the fact is that financial executives literally bet their banks on the belief that there was no housing bubble, and the related belief that unprecedented levels of household debt were no problem. They lost that bet. And no amount of financial hocus-pocus — for that is what the Geithner plan amounts to — will change that fact.
I repeat my suggestion to the President: Ask Geithner to resign.
Furthermore: Get some conservative economic advisors for balance. Your people are taking us towards the brink.
Sunday, March 22, 2009
I have never received any bonus from my employer. I own no stock in any particular financial firm outside of shares included in general mutual funds. I know few specific details beyond what you can read in a newspaper.
Having said that, I think that the bill that passed the House is absolutely hurrendous. If this doesn't fall under Bill of Attainder, I don't know what does. From the outside looking in, many activities within a company or industry can seem idiotic, immoral, etc... Sometimes they are, and sometimes they aren't.
Bonuses are paid as compensation so that managment level employees care about the future of the company. If not for this kind of mechanism, an employee will often view the employer as merely a means to a paycheck. If the company fails they only face the nuisance of finding another job. Without paying some kind of retention bonus, employees would be leaving by the droves. This would leave the mess to a skeleton crew comprised of individuals who are less attractive to other potential employers. Banning retention bonuses would not have fixed anything, only made them worse. Many financial firms will fail without some of this high priced talent.
Why do they get paid so much? I don't know. I've never understood why they were paid so much. But, I also don't understand why someone would buy a $1,000 Louis Vuitton purse. Clearly someone thinks it's worth a lot or they wouldn't pay for it. Their pay may be excessive, but the general concept is a sound one that is not often understood outside of the financial services sector.
The precendent that this sort of legislation creates is an awful one. No company is safe that has any deals with the federal government. Any company can face confiscation of property based merely on political theater and not the tradition of the rule of law.
As an illustration to my brother, I used his particular industry. He works as a manager of a fast food restaurant in Oklahoma. From the outside looking in, there are certain routine acts that could be manufactured into an outrage.
I can see the headline now: "Burger company throws out thousands of pounds of food every week!" This food could go to feed the homeless, or to charge the customer less. What a bunch of wasteful and lazy people who work there!
At the company everyone is perplexed. Of course we have to throw food away. Sometimes it goes bad. Sometimes French fries get stale and burgers get burned. No one would eat them. Someone returns a burger because we missed that they requested no onions. Who wants a burger that's been rifled through by another customer. We have to throw it away. We work tirelessly to keep costs down by not throwing out food.
Our politicians and media personalities refuse to dig deeper than superficially to consider the consequences of their over-reactions. Facts don't matter, only rage in the New America. Once we cower to the mob once, the mob expects blood everymore. Let us not devolve into Jacobins.
Friday, March 20, 2009
If you have written something on your blog that relates to the topic of my post (for or against), feel free to write a short blurb and post a link to your post in the comments. If you see an article that relates to my post (for or against), feel free to write a short blurb and post a link to that article.
Thursday, March 19, 2009
The dollar tanked yesterday and gold soared. Oil took a jump as well. These aren't definitive signs of impending inflation, but they will put upward pressure on prices. Everyone should carve out time to think about how to position themselves financially for the possibility that inflation may become a serious problem.
Also note that the metric I often use to look at inflation expectations is the spread between the TIPS and Treasury yields. If you happen to have bookmarked it, you should pay much less attention to it in the near future as the Fed is going to be directly manipulating those rates through Treasury purchases. For now, it is a bogus metric.