Why Not Sell?

Alex Tabarrok, in reference to encouraging people to become organ donors:

I am not in favor of messing with the insurance system for this purpose but have argued for a more direct approach. Under what I call a “no-give, no-take” rule if you are not willing to sign your organ donor card you go to the bottom of the list should you one day need an organ. Israel recently introduced a version of no-give, no take which gives those who previously signed their organ donor cards points pushing them up the list should they need an organ transplant–as a result, tens of thousands of people rushed to sign their organ donor cards.

This doesn’t strike me as a difficult issue to solve.  Open the market up, and allow people to buy and sell their organs.  I realize that this sounds crude, and possibly exploitative to some. But if this increases the number of organ donations, and consequently the number of lives saved, wouldn’t it be worth it?  Or must we insist on moral posturing at the expense of human life?

The Ryan Plan is Unserious

Yet Emmett Tyrell tries to defend it anyway:

Ryan is a supply-sider. He advocates one of the few economic innovations in years. He realizes that the budget cannot be balanced without faster economic growth. Sure, it would be nice to balance the budget in five years, but not with tax increases. Tax increases would only slow down growth. So his budget balances out in 2039, though possibly sooner. Some of the Republicans think that future Congresses cannot be trusted to carry out the cuts that Ryan proposes, certainly not through all the vagaries leading up to 2039. Well, for my part, I think they can. The country has changed dramatically. A new majority of Americans composed of conservatives and independents understands that we have been spending ourselves into the poor house.

I would generally agree that there is no practical way to sufficiently raise tax rates as a way of balancing the budget, and I would also agree that taxes cause economic damage in direct proportion to their nominal rate.  I even agree that the fundamental assumption of the Laffer curve—that there is a revenue-optimal tax rate—is correct.  I would thus theorize that a lower nominal rate, coupled with fewer loopholes as part of a simpler tax code, constitutes the best course of action.  The fewer the taxes and (generally) the lower the rates, the better the results will be.

However, there is no tax rate low enough to achieve Ryan’s projected economic growth rate, and thus there is no way his economic plan is attainable, or even possible.  It’s not even conservative, at least in the sense of being fiscally responsible.  Quite simply, the way out of this mess won’t be a simplified tax system coupled with minor spending cuts; it will require a revenue-optimized ax plan with massive spending cuts.  Since Ryan’s economic plan more closely resembles the former, it is doomed to fail, and is therefore unworthy of serious consideration.

Other Blogs

I have a new blog post up at In Mala Fide.  Here's an excerpt:

It’s not going to be the young adults now in college because we have screwed them by saddling them with this debt. They thus cannot qualify for a loan to buy your house! 

I think what I like most about this scenario is how the Boomers get it right in the shorts as a direct result of their bad advice.  For years, Boomers told their kids and grandkids to go to college, get an education, and have a career.  They told us to do this to get ahead.

The rest can be found here.  I also have a couple of book reviews at Allusions of Grandeur, if anyone's interested.

Men to Boys

This week I’ve been travelling for work.  One of the jobs I’ve worked on is painting a school in a small town.  It’s a small school, combining primary, middle, and high school into one building.  I’ve had a little bit of time to explore the school, usually during lunch breaks or trips to the janitor’s closet to clean out equipment, and one thing I noticed was the pictures lining the hallways of each year’s graduating class.

The first graduating class was the class of 1929, and there are pictures of every year through 2011.  Most of the classes have fewer than 50 graduates, and the earlier classes had around 25 graduates each.  One of the more striking things about these pictures is the social change that occurs from the late 50s to early 90s.

From the first class pictures in ’29 to the late 50s, pretty much all the grads look like adults.  By this I mean that the grads look like fully mature adults, not only in physical appearance, but also in how they carry themselves.  All the boys young men were dressed in suit and tie for their pictures, and most look like they would be perfectly able to work as, say, an accountant or stockbroker right after they graduated.  The girls young women are dressed a little more trendily (you can, for example, see traces of the flapper style in ’29 and the early 30s), though they also look like adults, ready to work and do adult things.

By the time the 90s roll around, though, the graduating classes start to look considerably more childish.  By this I mean that grads look more like overgrown children than soon-to-be adults.  There was a particularly terrible period of the mid-00s where grads had their senior pictures taken in decidedly childish clothing (like t-shirts and jeans), and it wasn’t until 2009 or so that grads started wearing coats and ties again.

I’m not sure what this indicates about American culture, but I’m sure it doesn’t bode well.  It seems to me that there has been a tendency, particularly in the last decade or so, to shield teenagers from the adult world and, as a result, there is now a generation of rather childish adults.  Some anecdotal evidence to support this claim would be the ludicrous drinking age of 21 (instead of a more reasonable 18 or, as I would prefer, to make this a matter for parents to decide without any state interference), the recent tendency of some states to continue raising the age minimums for driver’s licenses, and the new regulations in health insurance laws that allow parents to keep their children on their policy until the age of 26.  It seems that teenagers are becoming more infantilized because expectations for them have been diminished.  I know that’s quite a conclusion to draw from a couple of pictures, but when you see 83 years of social change compressed into two hallways of pictures, the change becomes more striking.

Anyone have any other ideas or reasons why it might seem that more recent generations of teens seem less adult than the generations of teenagers before them?  And is this a good development, bad development, or does it even matter?

Internet Famous

I got quoted by Doug French at Townhall.com (suck on it, neo-cons), so I guess I'm now internet famous.  There are a few caveats:  I'm not actually mentioned by name, and you have to go to the original Mises blog post to see the comment that I left.  Still, I'm pretty sure this counts towards being internet famous.

Follow the Money

I have just one question in response to this paragraph:

Contrary to what we hear from Republicans, America did not lose its way in the past few years. It lost its way a generation ago when it abandoned its faith in government.

If no one has faith in the government, why can’t Americans agree to eliminate federal spending?

A Sick Joke

Scott Adams:

Sometimes it feels as if our school system is at war with parents, and winning. The kids are just the ammunition.

Take homework, for example. Most schools load up the kids with hours of homework, which ruins a family's quality of life after school, putting parents in the position of being bad cops from the time school is out until bedtime. The kids are stressed, overworked, and tired. You might assume there is a scientific basis for assigning so much homework. Does it make our nation more competitive on the International playing field? Answer: Nope. In fact, the Charter School down the street, that presumably looked into best practices, gives kids time during the school day to complete all of their assignments.

Sometimes I wonder if American culture is nothing more than a sick joke.  It seems to me that everything Americans do, especially those in the middle class, is designed to signal status.  That seems to be the case with the modern school system and with homework in particular.  There is little value to assigning homework because it is so easy to cheat at it.  All that happens, as Scott Adams notes, is that everyone simply becomes stressed out over a triviality.

More to the point, the parents act like homework is THE MOST IMPORTANT THING EVER and thus push their kids to complete it, even though everyone knows it’s nonsense.  Yet, in spite of knowing how little and unimportant homework is, parents push their children to do it, often with the encouraging rundown of how terrible life will be if you don’t do your homework.  “If you don’t do your homework, you’ll fail the class;* if you fail the class, you’ll fail school;** if you fail school, you won’t go to college;*** if you don’t go to college, you won’t get a good job;**** etc.”

The results of this constant guilt trip have begun to yield a diseased, rotting fruit.  “Relationship” no longer refers to the emotional connection one has with his fellow human beings.  Instead, it refers to how much wealth/status/income one has relative to one’s fellow human beings.  We are a materialist society, driven by our shiny things and the pursuit thereof.  And so, parents continually pressure their children to accomplish meaningless tasks in the hopes that doing so will eventually ensure their children’s ability to acquire meaningless material goods.

The punchline is that this is called the American dream.

* Translation:  you won’t be properly brainwashed.

** Translation:  you won’t get a piece of paper celebrating you’re pitiful intellectual accomplishments.

*** Translation:  You won’t be able to go to an overpriced indoctrination camp to get a piece of paper that tells prospective employer what a compliant little drone you’ll be.

**** Translation:  You won’t be able to sit in a cubicle all day filing meaningless reports and crunching imaginary numbers in order to earn enough money to satisfy the hedonistic and materialistic desires of the ugly hag you married, in order to support ungrateful brats that you don’t ever get (or, truthfully, want) to see.

Hysteresis

Benyamin Appelbaum:

More grim ruminations on our economic prospects: What if recessions do permanent damage, diminishing a nation’s productive capacity?

As I wrote on Thursday, recessions are commonly understood as disruptive rather than destructive to the economy as a whole. But a paper presented Friday at the Brookings Institution warns that recessions may do lasting harm, like an untended house that not only needs a good dusting, but has also started to rot.

The term for this possibility sounds perfectly harsh: hysteresis. (The definition is more benign; it simply means that the past affects the present.)

…

The proper antidote to hysteresis, the authors write, is an increase in government spending. They write that under current conditions there is a good chance such spending would be self-financing, as tax revenues from resulting economic activity would outweigh the cost. But there is little prospect that Congressional Republicans will revisit their opposition to stimulus this year. Which means that our current experiment will run to completion: If hysteresis is real, we will know it by its consequences.

Of course past actions and behaviors affect the present, often negatively. But there are, just as often, positive consequences, as well as neutral consequences.  This is how economic tradeoffs work, in the long run, at a macro level. The call for government intervention, though, does not follow from the premise.

In the first place, harm cannot be determined until after the fact, and harm is a subjective value (though it should be noted that it can be an objective term).  Production capacity is not, in and of itself, a worthy end goal, particularly if higher production is inefficient relative to its alternatives.  Furthermore, no economic occurrence is inherently harmful; it is only ever harmful to some party.  What one party finds harmful another may find beneficial, and so Bastiat’s lesson of the broken window ignored once again.

In the second place, government intervention is not guaranteed to solve the problem.  It would seem that the history of government intervention would show, on the whole, that most forms of intervention are net-negative, often benefitting a politically-connected, generally at the expense of the masses.  While the technocratic solution to various economic problems can hypothetically be both correct and possible, in practice government intervention is generally more skewed to incentive distortion and political corruption, to use a phrase, the theory doesn’t jive with the real world.

College Is Officially Meaningless

From the Washington Examiner:

D.C. students would be required to apply to college or trade school and take the SAT or ACT under the most sweeping education legislation passed by the D.C. Council since a 2007 law set the stage for former Chancellor Michelle Rhee's aggressive reforms.

Under the Raising the Expectations for Education Outcomes Omnibus Act of 2012, the District is set to become the first "state" in the nation to require students to apply to a postsecondary institution, according to council staff.

If college is going to mean anything, it must have standards, preferably in realm of intelligence and academic accomplishment.  This implies that some people won’t live up to the standards.  If everyone could live up to the standards, then either the standards are too low or everyone is an ubermensch.  In the case of the former, the standards are irrelevant; in the case of the latter, the standards are irrelevant.

Anyhow, what’s interesting is how little thought DC officials have apparently put into this program.  Consider:  either every student in DC has the potential to go to college or they do not. Since DC is not Lake Woebegone, it stands to reason that either collegiate standards have devolved into a flaming pile of crap or not every student has the potential to go to college.  Given the sheer amount of federal money in postsecondary education (not to mention state money besides), and seeing the corresponding increases in college enrollment as a result, it seems likely that collegiate standards are becoming more meaningless.

At any rate, this continued emphasis on going to college simply indicates that college is becoming worthless, in terms of educational value and in terms of labor market value.  After all, if everyone can presumably clear the bar, how high can it really be?

Vox Was Right

Quote Vox:

It's not as if she's the only one. Pretty much all the younger generation of top models are all under thirty and either married or getting married. Marissa Miller, Adriana Lima, Brooklyn Decker, Miranda Kerr, and Alessandra Ambrosio are all demonstrating that there is a more satisfactory path than the conventional college, office, settle-after-thirty, one-child, struggle-with-debt plan that most parents recommend to their children.

And to those who point out that these young women are all very wealthy, I would merely point out that they can do anything they want... and what they want to do is not get a PhD or become an astronaut, but get married and have children. They're clearly not "putting their careers first", in fact, they're quite often putting their careers on hold in order to have their children.

Adriana Lima is pregnant again, which suggests that Vox may actually be on to something.

Spot the Fallacies, Free Trade Edition

From Mises.org, in response to Obama’s claim that international trade isn’t always fair:

Here we see the view, commonly held by the media and non-economists in our universities, that international trade is a competition, analogous to sports or military competition (sometimes, “trade competition” is compared to the Cold War). If the playing field is not level, then the trade is not fair. Economists, and this view is not limited to Austrians, understand that international trade is the fruit of cooperation, not competition. America and China are not trade competitors. Paul Krugman thoroughly demolishes this fallacy in “The Illusion of Conflict in International Trade” (reprinted in Krugman’s Pop Internationalism). Krugman explains that in international trade “it is the illusion of economic conflict, which bears virtually no resemblance to the reality, that poses the real threat.”

There are two main fallacies in this paragraph.  The first is that of a false dichotomy.  The second is the blatant ignorance of domestic economic policy as it relates to trade policy.

Regarding the former, it is wholly fallacious to say that trade is either analogous to competition or to cooperation.  The truth is that there are elements of both.  An automobile manufacturer, for example, must cooperate with its suppliers, distributors, and customers.  It must also compete against other automotive manufacturers, as well as any company that manufactures substitute goods.  Both comparisons can be correct, depending on how they’re applied, and it is thus fallacious to claim that trade is comparable to one or the other when it can be comparable to both.

Regarding the latter, it is quite fallacious to ignore reality when discussing policy.  The fact of the matter is the US economy is quite hindered by regulations in ways that many foreign countries are not.  It is not at all fair or free to allow foreign companies to compete with domestic companies when domestic companies have been hamstrung by the federal government.  I’ve written extensively on this before, so I will not repeat myself here.

In all, the case for free trade is often predicated on focusing on theory at the expense of reality, and building arguments on obvious fallacies.  If this is the best free-traders have to offer, in the way of argumentation, perhaps they should reconsider their position.

The Abstract and the Concrete

Vanity of vanities, all is vanity:

Source.

This chart basically shows that Republicans are really no different than the mainstream when it comes to specific spending cuts (which, incidentally, is why Rep. Ryan’s budget is a joke).  Now, it is true that Republicans are more supportive of spending cuts in general.  However, once you start discussing specifics, Republicans are just like everyone else when it comes to spending.

I think the reason for this is simply the difference between the concrete and the abstract.  In the abstract, everyone is for cutting spending.  Pretty much everyone knows that running trillions of dollars in deficits year after year is unhealthy and unsustainable.  We all know this.  Yet, when it comes to specific areas in which we should cut spending, suddenly no one seems able to find it in their heart of hearts to actually make cuts.  We “need” Medicare, we “need” welfare, we “need” to spend hundreds of billions on the military, we “need” the arts, and so on.  There’s nothing we can bring ourselves to part with because it’s all so important.

Really, this is nothing more than the rationalization hamster writ large.  We want what we want, and we will always find a way to rationalize it, even when we know that it’s detrimental.

Thus, we are powerless to prevent the systemic breakdown that will eventually occur once it becomes impossible to pay off the federal debt.  There will be an unavoidable tightening of the fiscal belt, and it will be painful.  Collapse will accompany it.  The sad thing is, the collapse was not only predictable, but avoidable as well.  The reason why the collapse is unavoidable, though, is simply due to the difference between practicing and preaching.  There are many bloggers who keep harping on the dangers of fiscal irresponsibility, yet their warnings continue to go unheeded.  And so, the collapse will eventually occur, not because no one was warned, but because no one had the spine to do what was necessary to avoid it.  Thus, all the warnings of disaster are in vain.

Congratulations, Environmentalists

It looks oil price trends don’t bode well for the future of air travel:

Emirates, the biggest airline by international traffic, said more carriers will go bust this year as fuel costs and sluggish economies undermine profitability.

“We can reel off a whole load of airlines that are teetering on the brink or are really gone,” Tim Clark, the Dubai-based carrier’s president, said in an interview. “Roll this forward to Christmas, another eight or nine months, and we’re going to see this industry in serious trouble.”

Airline profits will plunge 62 percent in 2012 to $3 billion, equal to a 0.5 percent margin on sales, as oil prices rise, the International Air Transport Association said this week. Emirates’s fuel bill accounts for 45 percent of costs and may jump by an “incredibly challenging” $1.7 billion in the year ending March 31, according to Clark, who says he’s sticking with a no-hedging strategy rather than risking a losing bet.

There are some environmentalists who aren’t completely economically retarded, and thus have recognized that one way to reduce consumption of a good that releases CO2 into the air is to raise the price.  Some have even suggested using gasoline excise taxes as a way of essentially reducing the consumption of gas.  This is practically what will happen with air travel, as higher gas prices will reduce consumption and/or profit margin, leading to the bankruptcy of several airlines.  (Of course, this means that there will be fewer people buying a get-out-of-unconstitutional-patdowns-free card.)

I’m not entirely sure what’s all at play in rising airline fuel prices, but I’m going to assume that regulation plays a huge role.  It’s omnipresent throughout the entire process of turning crude oil into jet fuel, including drilling regulations, transport regulations, refinement regulations, and so forth.  I can’t imagine that US inflation helps, since it is still the world’s reserve currency, and seeing as how all the other major players are inflating their currencies, as well as some of the minor players, it doesn’t look like the nominal price of jet fuel will be coming down soon.

At any rate, it looks like the environmentalists have pretty much won this battle, with everyone being worse off as a result.  Gaia demands sacrifice, after all. She’ll probably demand the sacrifice of cars next.

A Troubling Sentence

From the Grey Lady:

The United States trade deficit surged in January to the widest imbalance in more than three years after imports grew faster than exports.

This is not a good sign. The US economy is predicated on false demand, by which I mean that the US, and the citizens thereof, buy a lot of things on credit.  One thing that’s true about buying things on credit is that, in general, the credit has to be paid back, usually with interest.  As Ian Fletcher noted in Free Trade Doesn’t Work (review forthcoming), the US has bought a lot of foreign goods on foreign credit, and this will have to be repaid, either with goods or with capital.  Thus, there are a lot of downright terrifying scenarios implied by the simple fact that the US has run a trade deficit for every year of the recession, and continues to increase its trade deficit even now.

In the first place, it could be that the US is maintaining its trade deficit by essentially offshoring control of its capital.  In this case, it would mean that foreign businesses and governments own US land, or US factors of production (factories, e.g., or perhaps natural resources).  This means that US policy will quite probably become more pro-foreigners, which does not bode well for maintaining the social fabric that made this country free and wealthy.

In the second place, it could be the case that the US is simply expanding its credit with nary a thought of how it will be repaid.  It will either be defaulted on, which has its own obvious negative implications, or it will be inflated out of, which also has its own obvious negative implications.

In the third place, it may simply be that the US is the least-worst place to trade right now, and so foreign producers sell on credit simply because they need to clear their inventories, and all the other potential markets are even less creditworthy than the US.  Incidentally, this would imply that the situation in Europe is worse than most suppose, and would also imply that South American and African countries are all a long way from developing into powerful market economies, which does not bode well for lovers of liberty.

No matter how it’s sliced, though, the fact that the US has not run a trade surplus at any point during the recession indicates that a) demand hasn’t reset to its true levels and that b) things are eventually going to get much, much worse.

The Wrong Debate

This time focused on the corporate tax:

Corporate tax reform is not usually a major issue in a presidential campaign, but it may be this year. President Obama has introduced a bold framework for a business tax overhaul.

His framework is already under attack from both the left and the right, indicating that the president has found a sensible middle position from which to start the debate — a debate worth having. Corporate taxes are a significant determinant of investment, innovation, job opportunities and growth.

When Japan cuts its corporate tax rate this year, the United States will have the highest statutory corporate tax rate of the developed countries. Even after incorporating various deductions, credits and other tax-reducing provisions in the tax code, the effective marginal corporate tax rate in the United States — the one that corporations actually pay on new investments — remains one of the highest in the world.

I’ve written on corporate taxation before, but I think my general point bears repeating:  it’s best to just eliminate the corporate tax altogether.  It doesn’t provide that much revenue, relatively speaking, and it imposes massive compliance costs, especially in light of the complexity of corporate tax law.  It deprives workers of jobs and reduces, and hurts the economy overall because so much labor is required to obey corporate tax laws (think of how man accountants and lawyers would be out of work if there were no corporate taxes; that’s how much systemic waste the government is currently imposing).

Yes, I know we need to increase tax revenue in order to be more fiscally responsible, but there is no reason to think that increasing the complexity of the current tax system will help attain this goal, nor is there any reason to think that taxes can be raised indefinitely.  Yes, the federal government is facing a lot of fiscal shortcomings.  However, it is obvious that the only real solution to the current fiscal problems is cutting spending.  Raising taxes anywhere and everywhere has the potential to provide some help, but the root problem is that the federal government is pending more than it can ever realistically hope to take in.

As such, the focus on tweaking corporate tax policy and retaining ridiculously high rates is simply absurd.  There is so little to be gained from high having corporate rates, and so much to lose, that it seems absurd that debate over corporate taxation is centered how high rates should be instead of whether corporate taxes should be levied in the first place.

In the free market, corporations wouldn’t exist.  In the real world they do.  But there is no reason to be stupid about having this market distortion, and there is thus no reason to tax it.  All corporate taxes do, when conjoined with the policy of free trade, is encourage businesses to locate elsewhere, depriving workers of jobs and reducing wages.  And the only received in return is a pittance in tax money, which makes such a small amount of federal revenue that it seems simply absurd to even suggest continuing the levy the corporate tax.

Notes:  My analysis is based on the most recent set of complete data, which is for fiscal year 2010.  In 2010, the federal government spent $3.721 trillion, and collected $2.165 trillion in taxes (source).  Corporate taxes accounted for 9% of tax revenues (source), for a total of approximately $195 billion, which is roughly 5% of the federal budget.  If the corporate tax were eliminated, revenue could easily be regained by some combination of raising income tax rates, closing income tax loopholes, or eliminating income tax credits.  Additionally, eliminating the corporate tax would encourage more corporations to locate domestically and hire more domestic workers, which would expand the income tax base.

Yet Another Case For Homeschooling

I stopped by home today to pick up a package that had arrived for me.  My parents had taken the day off from work because my mom had a doctor’s appointment to follow up on her cancer recovery.  I got roped into changing the oil in my dad’s car, and when I came back in, my mom and dad were discussing how terrible American culture had become.  They came to the conclusion that the root causes of the current problems were the shifts, in the 60s, to humanism and feminism.  I asked what prompted this philosophizing, and my mom related the following story to me:

Last Friday, my mom had a case worker come to her classroom to observe one of my mom’s students. To make sure that said student was getting along well in school. The case worker sent some time, at the end of the day, conversing with my mom to see if the student’s behavior on that particular day was representative of his behavior every day.  It was around 4:30 when the case worker was finally preparing to leave that she noticed her smart phone was missing.  It appears that one of the students had stolen it.

The case worker started to freak out, mostly because she used her phone to handle a lot of her work duties, and she didn’t want to lose all the data that was stored on her phone.  After getting a grip on herself, she went home and called her cell phone.  That father of one the girl’s in mom’s class answered the phone.  They talked briefly, and the case worker made arrangements to pick up the phone on Saturday.

The case worker picked up the phone on Saturday, as arranged.  At first it looked like nothing had been deleted or ruined, and so she was relieved.  Until she found pornographic pictures on her phone.  She also saw that her web browser’s history was full of searches for porn, and that there were also text messages containing foul language and referencing lewd sexual acts.  There were also some calls made, although the content of the calls remains unknown.

At first, the case worker suspected that it was the father of the girl that had stolen the phone who loaded her phone up with porn and sexts.  She took it to one her tech-savvy friends, who then looked at the time stamps of the pictures, web history, and text messages.  All of the texting, searching for porn, and picture-taking occurred on the bus ride home.  The girl who stole the phone is nine.

My mom talked to the girl Monday, to rebuke her for stealing, and for looking at porn.  The girl told her that she didn’t think there was anything wrong with watching porn because that’s what she (along with some of her nine-year-old friends) does at her grandma’s house when her parents aren’t around to watch after her.

Incidentally, my parents do not teach at an inner-city school.  They teach at lower-middle class school in a quiet Midwestern town.

I guess the lesson to be learned from all this is that Theodore Dalrymple doesn’t even know the half of it.  American society is a festering corpse of unrestrained hedonism.  Rule 34 needs to be amended:  not only is there a porn of it, but it’s more depraved than you could have imagined, and even children have seen it.  There is nothing redeeming about modern culture; it is poisonous to the last, and this poison has seeped into the once-benign public schools.  The only hope for the future is that society collapses upon itself and that the nihilistic hedonism of modern culture finally dies off, ridding the world of the disease that is humanism run amok.

In the meantime, homeschool your children.

The Sins of the Father

Will not be repeated by their children:

The times are changing, and not necessarily for the better when it comes to giving back to society, according to 40 years of research on 9 million young adults. Since the baby boomer generation, there has been a significant decline among young Americans in political participation, concern for others and interest in saving the environment, according to a new study published by the American Psychological Association.

I think that this is a good thing, since it shows that the current generation has seen through the crock of lies perpetuated by the Boomers.  Millennials aren’t falling for the nonsense on stilts that is environmentalism or political idealism.  They won’t even fall for the lie that voluntarism makes you a good person.  Quite simply, it is now obvious to everyone but the Boomers that the flower child idealism of the 60s is a steaming pile bovine fecal matter, and is no more deserving of serious consideration than a pro-unicorn advocacy group.

Wise As Serpents

From WaPo:

The U.S. Supreme Court on Monday refused to consider a request by Christian groups on a college campus to allow them to limit membership based on religious beliefs.

Justice turned back a legal effort by a Christian fraternity and sorority at San Diego State University that challenged an anti-discrimination policy at California state universities.

The lawsuit filed in 2005 said the plaintiffs should be allowed to insist members follow their religious standards of conduct and avoid sex outside of marriage between a man and woman.

Susan Westover, head of the California State University system’s litigation unit, welcomed the Supreme Court decision,

“We don’t want our students to discriminate, just like we don’t want our employees to discriminate,” she said.

Christians need to take a page from Saul Alinksy’s book and use the rules to their advantage.  The first step for Christians to take is to disband their college groups to ensure that not one ungodly anti-religionist can join. This is known as taking one step back.

The second step is to join every single leftist, anti-God group that the college has to offer.  After all, students can’t discriminate against any potential member.  They need to get as many fellow Christians to join until they have a sizeable majority, so that way they can take control of the leadership of the various groups for themselves.  Then they need to shout their religion as loud as they can, particularly when it runs counter to the stated goals of the groups they now control.

For example, they should make the biblical injunctions against homosexual behavior the official policy of any and all campus gay groups. Alternatively, they should make the biblical command of wifely submission the official policy of all campus feminists groups.  This is known as taking two steps forward.

If college administrators want to pull this anti-discrimination bullshit, Christians should unite and shove it right back in their faces.  If school administrators want Christians to play by these rules, so be it.  We can still win.

Goodbye News

Here’s a wonderful paper on why you shouldn’t consume news.  The author gives fifteen reasons for this (note: the reasons are in bold, my commentary is in normal font).  Among them:

News is Systematically Misleading.  There are two primary reasons for this.  First, journalists are in a constant rush to get a scoop, so being first to press often leads to be rushed, and unintentionally reporting things that aren’t true, or reporting things that aren’t well-qualified.  Second, all reporters have biases, and will thus occasionally lie simply to reflect their biases (just ask Dan Rather—zing!).  There are other issues as well:  sometimes journalists don’t really understand what they’re supposed to be reporting on, sometimes there are typos or other types of information misidentification, sometimes reporters are lied to, etc.  As such, the news is often misleading; sometimes intentionally, sometimes unintentionally.

News Is Irrelevant.  News focuses more on breadth, not depth, and rarely offers any insightful commentary.  At its best, news is simply a well-organized list of facts; at its worst it is a poorly organized list of lies.  News, by definition, never provides any method of interpreting the facts that are presented, and so it is irrelevant to most people because it doesn’t and can’ make sense in a broader context.  Also, a number of news stories are simply anomalies and not part of a larger trends, and therefore not worthy of being considered as a factor.

News Limits Understanding.  As above, news does not provide the means to make sense of what it presents.  It provides no key to interpretation.  That, plus its lack of depth, encourages passive reception and shallow thinking.  What can be made of a simple list of often incomplete facts?  Not much.  Furthermore, the media of news often encourage people to respond emotionally, not intellectually.

News Inhibits Thinking.  In many ways, this is simply due to the fact that news is often a distraction.  It is packaged in small, easily digested chunks, and is intended to provoke an emotional response.  It should come as no surprise, then, that news junkies are often shallow thinkers.

News Is Produced By Journalists.  Journalists, in this day and age, often see themselves as intrepid reporters, forcing people to confront the truth about themselves and their action, or about hidden things that no one sees.  They are activists, out to change the world by revealing the truth to everyone and calling them to action.  In reality, journalists are nothing more than skilled writers whose main ability is crafting narratives.  They are as deserving of one’s trust as lawyers are.

News Is Manipulative. In his excellent book How To Watch TV News, Neil Postman observed that news is nothing more than entertainment, intended to sell ads.  He also noted that the news (and, more broadly, television programming) is indeed influential, as evidenced by the fact that TV stations could sell brief ad spots on the grounds that thirty seconds of viewing television was sufficient to convince someone to buy a specific product.  Of course, then, news is manipulative, for it is like all other TV shows in its ability to manipulate behavior.  Any journalist who says that news is not manipulative needs to return advertisers’ money.

News Gives Us The Illusion of Caring.  This describes a roommate I had in college, who would constantly ask me if I had heard the latest news about nonsense that happened in the world of sports, or in the world of politics, or just in the world in general.  I often had not, since I refused to keep up with things I considered to be inconsequential.  My roommate, upon hearing that I did not keep up with every new piece of irrelevant trivia, would occasionally claim that I didn’t care about things that were happening around the world.  Of course, he was quite correct in his assertion.  However, he failed to realize that, even though he read about things happening around the world, he never actually did anything about them, and so he didn’t care about those things either.  He simply allowed himself to believe that being aware was the same as caring, and so he developed this wholly undeserved sense of superiority.

As might be clear, I don’t ever really read the news, and haven’t for some time.  I’ve never watched the news, and cannot stand to watch any of the news networks, like CNN of Fox.  I cancelled my subscription to the WSZ when I was a sophomore in college, and killed all the news sites from my RSS feed a couple years ago.  I don’t regret it, as I’ve found that I can generally find the important things by relying on filters.  I’ve also found that most of the stuff I once read on a daily basis was pretty much irrelevant.  I highly recommend the linked article, as well as its recommendation to avoid the news.  Furthermore, I recommend reading more books, particularly those that delve deeply into highly specific subjects.  You will think better and more deeply, and be better able to make sense of the world.  Also, your time won’t be wasted with pieces of inconsequential fluff.

Paragraphs to Ponder

From Vox Day:

For little more than the fear of being called racist and in a futile attempt assuage the guilt for past centuries of colonialism, the people of the West have permitted their countries to be invaded by barbarians. Instead of civilizing the immigrants, as it was foolishly imagined, the immigrants have increasingly barbarized the nations they have invaded en masse. This should not have been a surprise, as the attempts to civilize them in their native lands had failed for hundreds of years.

The problem isn't that Africans or Central Americans cannot ever be civilized or that there is a civilization gene, the problem is that like domesticating an animal species, civilizing an entire culture is a process that takes hundreds of years. Consider, for example, how long it took the barbarians of Britain and Germany to go from the naked pagan barbarism described by Julius Caesar to the heights of Christian civilization that produced Mozart and the chamber orchestras. The nations of the West doesn't have that much time, especially when they can no longer serve as a strong and stable models, having invited the enervating peoples into their civilizations. Moreover, in addition to attempting to civilize the barbarians inside their borders rather than outside them, they are trying to do so without the benefit of Christianity, which historically played a powerful role in the civilization of the white European barbarians.

I’ve spent about a week and a half trying to think of something to add to this, but this is pretty much a perfect summation of the situation at hand.  Culture takes centuries, if not occasionally millennia, to come into being.  Even then, there is an element of fortune to this, as Thomas Sowell noted in Conquests and Culture and again in Migrations and Culture.  Geography, external influences, and a host of other, seemingly random variables all play a role the development, rise, and decline of culture.  Many of these variables are beyond the recipients’ control.

Given the inherent difficulties in developing a culture, plus the sheer amount of time such development takes, it should, as Vox notes, come as no surprise that the barbarians inside the gates are not civilized and likely will not become civilized in the near future.  It’s not a matter of race or genetics; it’s simply a matter of time and circumstance.

What Women Want

Even feminists agree—alpha males are wonderful:

Last week, Kim Kardashian shot back: "Calling someone who runs their own businesses, is a part of a successful TV show, produces, writes, designs, and creates, 'stupid,' is in my opinion careless."

Today, Hamm answered to that, saying that he did not think his comments were careless. "I think they were accurate. It's a part of our culture that I certainly don't identify with, and I certainly don't understand the appeal of it other than in a sort of car-crash sensibility, and it's not something I partake in or enjoy. Vincent Kartheiser piped up and voiced his agreement with Jon Hamm by stating, "I agree."

Oh, Hamm. We love you even more for not backing down or backpedaling. [Emphasis added.]

What women—even feminsists—want is pretty simple:  They want a man who takes the lead, and doesn’t back down from his role as a leader.  He says what means, means what he says, even if it hurts someone’s feelings, and he doesn’t apologize for his honesty.  This takes a lot of confidence and self-assurance, to be sure, but women will always respond to it.

Conservatism: Still Jumping the Shark

Here’s Rick “Santorum” Santorum, on pornography:

The socially conservative Santorum launched his proposal this week on his website, calling pornography "toxic to marriage and conservatives."

He demanded a crackdown on the distribution of smut on the Internet, in addition to tighter controls of sexually-explicit material on television, hotel pay-per-view systems, adults-only stores, and even porn delivered by mail.

Pornography in America is an obscene "pandemic," Santorum's website says. "It contributes to misogyny and violence against women. It is a contributing factor to prostitution and sex trafficking."

There are three points worth observing.

First, as the incomparable Professor Hale pointed out in such a manner as only he can, this is not exactly the biggest issue facing America right now.  It’s not even in the top twenty.  Furthermore, the negative effects of pornography appear to be overstated, particularly in regards to violence.*

Second, conservatives are playing right into the leftist/feminist frame.  Pornography isn’t immoral because it contributes to misogyny; it’s immoral because it is adultery in its fundamental form.*  Trying to argue against pornography because of its negative impact on women is a leftist tactic, and yet here it is used by a nominal conservative, and a GOP frontrunner at that.  Again, conservatives have bought into the liberal frame, which is why they are no different from liberals when all is said and done, except on a few inconsequential policy points.

Third, this is nothing more than using the legal system to impose a system of morality (instead of, say, property rights enforcement) on the citizenry.  Which, incidentally, is what conservatives denounce liberals for doing.  Again, conservatives do exactly what liberals do, in this case adopting the same tactics.  Now, some conservatives might try to argue that they are simply being politically savvy, which is certainly true, but that doesn’t mean they aren’t being liberal.

Anyhow, this goes to show that conservatives are, for the most part, just like liberals.  As noted in a prior post, if conservatives really want to win, they need to subvert the system, not try to rise to the top.  Ultimately, statism is statism, and those who are at the top cannot be distinguished by their actions; they can only be distinguished by their rhetoric.

* Pornography would generally be immoral (per the Christian ethic) because of what Christ says on the Sermon on the Mount.  What makes it immoral is that it leads to fornication, not assault.  This would certainly fit in with the Judeo ethics contained in the Ten Commandments.  Note that the 7th commandment (“Thou shalt not commit adultery”) is also prohibited by the 10th Commandment (“…you shall not covet your neighbor’s wife…”), and so Christ’s assertion in Matthew 5 is simply an explanation of a preexisting Old Testament theology. (Cf. also Matthew 22:34-37.)

Subversive Conservatism

In spite of my criticisms and condemnations of conservatives, I still have a bit of a soft spot for them—especially social conservatives—since they’re my people, after all.  To this end, I recommend some subversive political maneuvering as it relates to this:

A second, much larger group of single women don’t hold college degrees and are much harder to pin down. Even on Rush Limbaugh, these women could probably go either way. They are not necessarily progressive and definitely not feminist. These women are not unmarried because they don’t believe in family values. As Harvard sociologist Kathy Edin has pointed out, single women with less education are quite idealistic about marriage; the problem is that many men in their demographic just don’t measure up, especially in a recession, when so many men without college degrees are out of work.

When sociologists fret about marriage disappearing, this is the class of women they are talking about. Their divorce rates have stayed as high as they were in the 1970s and increasingly they tend not to ever get married at all, and tend to have children and raise them alone. They may think like Republicans but they live like a Republican’s parody of a Democrat. They struggle financially, and living alone has given them a kind of “ambiguous independence,” as Edin likes to say. As heads of their own households, they may not like being told, say, how to conduct their sex lives. “I personally have come to the conclusion that jobs and the economy are the most important issue to these women,” says Michelle Bernard, CEO of the conservative Bernard Center for Woman, Politics, and Public Policy. “But only when questions of individual liberty are not at stake. When someone starts referring to them as ‘sluts’ and no Republican comes out to say this is none of government’s business, then you’ll see them flow the Democrats’ way.”

As it relates to the issue of government-provided contraception, I think conservatives should let the issue go and tacitly support it because, let’s face it, the people making the loudest demands for free birth control are liberals.  And if they don’t want to have children and raise another generation of leftists, then why should conservatives stand in the way of this choice?

Now, there is potential objection to the general tendency of leftists to indoctrinate other people’s children as they receive an education.  While this doesn’t appear to actually happen during postsecondary education, it seems to happen during primary education, and potentially secondary education.  There is a solution to this, though, and it is called homeschooling.  (Of course, the mere concern that leftists will indoctrinate conservative children begs the question of whether conservatism is the superior belief if it is so fragile.)

At any rate, allowing liberals to easily self-select themselves out of the political future while also preventing them from having access to impressionable children may work better in the long run than winning a rancorous debate on whether the government should shell out a couple million dollars on condoms and birth control pills.  It’s something to think about.  After all, if liberalism is so self-destructive, why not make it easier for it to self-destruct?

Broken Legs

I was volunteering at the local access TV station Saturday, as is my general custom, and was setting up the audio board in the control room when I heard this exchange between the new girl and the station manager (SM):

Her (noticing the SM’s mug of coffee):  You should get me some coffee.

SM (with a look of concern on his face):  Are you alright?  (He then walks over to her swivel chair and spins her around.)  Oh good, your legs aren’t broken.  Get your own coffee.

Her: *laughter.*

And that, gentlemen, is how you pass a fitness test with flying colors.  She then tried to immediately try it on me:

Her (sulking):  I’m the only girl in this office. [In case the subtext doesn’t come through, she was very much implying that someone should fetch her coffee because she’s a girl.]

Me (with a smirk):  Well, it sounds to me like you’re the one best qualified for fetching coffee.

Her (with an I-can’t-believe-you-just-went-there look on her face):  a brief shocked silence followed by laughter.

I spent the rest of the day teasing her mercilessly.  She asked for my number (for professional reasons, of course).  I gave it to her.

Government Hypocrisy

This time from the TSA:

Hate the full-body scans, pat-downs and slow going at TSA airport security screening checkpoints? For $100, you can now bypass the hassle.

The Transportation Security Administration is rolling out expedited screening at big airports called "Precheck." It has special lanes for background-checked travelers, who can keep their shoes, belt and jacket on, leave laptops and liquids in carry-on bags and walk through a metal detector rather than a full-body scan. The process, now at two airlines and nine airports, is much like how screenings worked before the Sept. 11 attacks.

To qualify, frequent fliers must meet undisclosed TSA criteria and get invited in by the airlines. There is also a backdoor in. Approved travelers who are in the U.S. Customs and Border Protection's "Global Entry" program can transfer into Precheck using their Global Entry number.

This is nothing more than the federal government yet again trying to tax people, this time in an especially insulting and hypocritical manner.  Two observations are in order:

First, the TSA, in setting up this system, is tacitly admitting that some passengers pose a greater threat than others.  Now that this absurdly obvious truth has been officially acknowledged, it should be the case that the TSA simply states that profiling not only works, but that it will be the standard du jour henceforth.

Second, the TSA, in setting up this system, is tacitly admitting that the current screenings aren’t all that effective.  Seeing as how the current systems can’t even detect metal, it seems absurd to even continue the charade that it will keep passengers safe from even the most obvious of threats.

Now, what makes this whole incident insulting is that the TSA wants to charge airline customers $100 to have special access to a screening standard that should already be the standard screening procedure for every airline at every airport.  In essence, people are asked to shell out their hard-earned dollars to escape a tyranny that shouldn’t even exist in the first place.

This is sick.  No, it’s beyond sick; it is evil.  There is no reason for the government to be doing anything of this sort.  If the special system can work for some, it can work for all, and should be implemented universally, posthaste.  Unfortunately, this will simply turn into a system of convenient taxation and crony capitalism because the American people are too tolerant of tyranny to fight this encroachment on their liberties.  Their hell will be deserved.

Women Are Marginal Labor

First, here’s this:

She is far from alone, according to a new study from the Federal Reserve, due to be published shortly.

It shows that between 1993 and 2006, there was a decline in the workforce of 0.1 percent a year on average in the number of college-educated women, with similarly educated spouses.

That contrasts with growth of 2.4 percent a year between 1976 and 1992.

The result: the labor force in 2008 had 1.64 million fewer such women than if the growth rate had kept up its earlier trend, slightly more than 1 percent of the total workforce in that year.

Then there’s this:*

I have commented on these job losses a few times before, so this time around I want to highlight the gender dynamics a bit. These cuts to state and local government workforces, while a significant drag on the economy as a whole, are particularly damaging for women. In 2011, women made up 46.6 percent of the overall labor force, but among state and local workers, about 60 percent are women. Because women are so disproportionately represented in state and local jobs, they also have taken the brunt of the job losses in state and local governments. Of the net change in total state and local employment between 2007 and 2011—a decline of roughly 765,000 jobs—70 percent of the drop is from female employees. Today, there are about 540,000 fewer women in state and local jobs than in 2007, compared with about 225,000 fewer men.

The first thing to note is that women are not as indispensable to the workforce as is generally supposed.  The first story tells us that the economy grows just fine without them, since GDP increased from $6.6 trillion to $9.9 trillion (in constant 1993 dollars) from 1993 to 2008** in spite of there being 1.64 trillion fewer female participants in the labor force.

Now, it is possible that nominal GDP would have grown in the event of greater female labor participation, but this hypothetical occurrence could potentially be due to the fact that it is easier to record the contributions to GDP in the event of increased formal channels of production.  For example, there really is no way to calculate, say, how much a SAHM’s completion of household chores contributes to GDP, while one can calculate the costs of formally recognized cleaning agencies.  This is to say that a SAHM’s economic contributions are not—and indeed cannot be—generally accounted for in the official measurements of GDP, while a SAHM’s replacement goods and services (say, pre-cooked meals or day care) can be accounted for.  As such, any potential growth in nominal GDP that might result as a result of hypothetically increasing the labor participation rate of women might occur simply because the contributions can now be officially measured.

The second thing to note is that women take disproportionately economically damaging jobs.  Government bureaucracies impose economic inefficiency on citizens.  At the most basic level, this accomplished merely by taxation.  At more advanced levels, some economic inefficiencies take the form of asinine regulations that must be met.  If the government does provide some desirable services (I would argue for education and criminal investigations and prosecutions), it is likely that these services could be performed more efficiently on the free market, away from the coercion of taxes.  On the other hand, the government may provide some services that aren’t desirable at all, like issuing driver’s licenses, in which case the loss imposed by this economic inefficiency is simply revealed in its direct costs. Additionally, the government may impose some counterproductive services, like regulation, that not only impose direct costs on taxpayers (which is one form of inefficiency) but also indirect cost via increased consumption costs (which is another form of inefficiency).

That there are a disproportionate number of women that work in government jobs, it is highly likely that, in the aggregate, women impose significant economic costs by their employment.  Since they work so many government jobs, relatively speaking, eliminating their jobs would lead to either more efficient outcomes through privatization or the elimination of wasteful or counterproductive spending.  Remember, regulations and vast government services are luxury goods, which makes them marginal items, not the foundation of society.  Thus, eliminating women from government jobs frees up the economy to do things that are more productive.

When all is said and done, it would appear that the feminists’ press for gender equality in the workforce is nothing more than a steaming pile of bovine fecal matter.  Women are not needed for economic growth, and in many cases their presence in the workforce hinders it.  As such, the call for increasing women’s presence in workforce seems a little forced, and not particularly well thought-out.  Perhaps it’s time we encourage women to leave.

* On a completely tangential note, can you tell which of the two excerpts was written by a journalist and which one was written by an academic?

** Figures derived by going to Google’s Public Data and the BLS’s Inflation Calculator.

Women and Patents

Consider this abstract:

We investigate women's underrepresentation among holders of commercialized patents: only 5.5% of holders of such patents are female. Using the National Survey of College Graduates 2003, we find only 7% of the gap is accounted for by women's lower probability of holding any science or engineering degree, because women with such a degree are scarcely more likely to patent than women without. Differences among those without a science or engineering degree account for 15%, while 78% is accounted for by differences among those with a science or engineering degree. For the latter group, we find that women's underrepresentation in engineering and in jobs involving development and design explain much of the gap; closing it would increase U.S. GDP per capita by 2.7%.  [Emphasis added.]

The concluding assertion is obviously false.  This is simply because patents are not distributed randomly.  The system is opt-in, which introduces self-selection bias (which may possibly be particularly influential at the corporate level), and patents have to be approved.

The latter qualification is especially important, because inventing new things and creating meaningful innovations generally requires a high degree of intelligence and knowledge.  Since men have the flatter distribution curve when it comes to intelligence, it stands to reason that men should naturally receive more patents because they have more of the elite intelligence that generally correlates with invention and innovation.

Incidentally, this also renders the conclusion void as well, since it is predicated on the assumption that patents are essentially distributed randomly.  Since they are not, and since women are not in a position to perform equally in regards to innovation, it is illogical to assert that closing the engineering and R&D gap will solve the patent inequality problem, and correspondingly increase GDP.

Shirking Responsibility

When did we become a nation of wimps?

But Churchill never imagined a government that would add 10,000 year after year. That's what we have in America. We have 160,000 pages of rules from the feds alone. States and localities have probably doubled that. We have so many rules that legal specialists can't keep up. Criminal lawyers call the rules "incomprehensible." They are. They are also "uncountable." Congress has created so many criminal offenses that the American Bar Association says it would be futile to even attempt to estimate the total.

I believe it was P.J. O’Rourke who once observed that there is really only one freedom—the freedom to do whatever you please—and with that freedom comes the responsibility to live with the consequences.  The current loss of freedom now means the absence of responsibility.  If you are bound to live by someone else’s rules, than someone else will have to take responsibility for your actions.

There is some comfort in being stifled in this manner.  You never have to think for yourself, for starters.  In addition, if anything you do goes bad, you never have to take the heat for it.  Since humans are rather risk-averse, it makes sense that they would trade freedom for irresponsibility.  Sure, you may not be able to make independent decisions, but at least you don’t have to answer for yourself if anything goes bad.

As Philip K. Howard has observed, the main reason why regulations have become so detailed is to minimize, and possibly eliminate, the amount of human error in society.  Unfortunately, the only real way to reduce and/or eliminate human error is to reduce or eliminate its source:  humans.  Mistakes are a part of life, and no amount of regulation will change this.  The day-to-day situations in which we find ourselves can often be unique and unforeseeable, which means that there will never be an adequate level of regulation, simply because humans are limited creatures, unable to foresee the future with perfect clarity and judge accordingly.  As such, the legal system in which humans operate is one that needs to be flexible, understanding that humans occasionally find themselves in perplexing and impossible situations. They should have freedom to act, and they should take responsibility for their actions.

Of course, proposing a system wherein people have more responsibility, even if it means having more freedom, is politically suicidal because in this day and age, most people are simply too risk averse.  For many, security is still preferable to freedom.  As Ben Franklin once noted, those who would trade freedom for security will wind up having neither.  This is still the case today, for while our regulatory agencies seek to use regulations to eliminate human error, they can never essentially do so without eliminating humans.  Perhaps this explains the left’s genocidal bent.

Rules For Thee But Not For Me

It’s the new official motto of CONgress:

Even for official Washington, where elite crimes are tolerated as a matter of course, this level of what appears to be overt criminality — taking large amounts of money from a designated Terrorist group, appearing before its meetings, meeting with its leaders, then advocating on its behalf — is too much to completely overlook.

Salon details this story pretty well, explaining how politicians have accepted money from designated terrorist organizations even though they passed legislation earlier prohibiting any and all transactions with designated terrorists.  This sort of rank hypocrisy is all too common among politicians, who often pass laws that apply to everyone but themselves, as if they are the only ones who can be trusted to act intelligently.  Of course, politicians should be subject to the laws they pass (they are fellow citizens, after all), but they aren’t and they won’t.  In spite of being a nominal democracy, the Unites States has become a de facto aristocracy, and most citizens seem just fine about this.  The people truly have the government they deserve.

In Praise of Deflation

First, some neo-Keynesian nonsense:

It's counterintuitive that falling prices can be bad. After all, nobody ever complained about stuff being cheaper. The problems, though, are twofold. First, if prices fall across the board, so too will wages -- but debts won't. Borrowers will have a harder time making their payments. More of them will default. And defaults will push down prices and wages even more. This so-called debt deflation is basically a doomsday machine for mass bankruptcy -- and it's exactly what happened in the 1930s. The other way of thinking about why deflation is so toxic is that it effectively increases interest rates just when we want to reduce them. What matters for borrowers is the real interest rate: that is, the interest rate minus inflation. But falling prices mean inflation is negative, so real interest rates go up. Again, bad for borrowers.

Actually, falling prices aren’t bad at all, especially if they are coming down after having been artificially inflated.  This is how the market clears itself.  Will some get hurt by this?  Yes, especially those who foolishly bet on the bubble expanding indefinitely.  But this was always a bad bet from the beginning; declining nominal prices merely reveal this fact.

Now, it is generally true that lower prices will lead to lower wages, all things being equal.  But, as long as there are generally efficiency gains in labor, the rate of decline in regards to the price of goods should be greater than the decline in regards to the cost of labor.  As long as production efficiency is realized in some way, declining wages should not be a problem because they generally will not decline as much as product prices.  Caveat:  this analysis is predicated on the assumption that there is no expansion in the money supply.  Monetary inflation complicates analysis considerably, at least in terms of nominal price, but does not invalidate the fundamental point.

That debts won’t deflate is theoretical nonsense.  In the aggregate, debt will most certainly deflate because a certain number of people will inevitably default on their loans.  Others may settle their loans in lieu of default.  The practical outcome is that deflation will hit debt.  And those that get hit the worst by deflation will be those who most encouraged the bubble by loaning to those who caused it.

The conclusion that this will lead to some sort of doomsday scenario is absurd on its face, for it is obvious that aggregate demand will never be zero.  Humans always want something, and they will pay to get what they can.  And so, while it is most certainly true that practical aggregate demand will decline considerably in the wake of deflation, it is simply farcical to even suggest that aggregate demand will go to zero, or even be cut in half.

Ultimately, deflation is the markets way of cleansing itself, allowing misallocated resource to be used more effectively.  Once the market begins to clear, prices rise again until there is once again an optimal mix of resource usage.  Trying to prevent nominal deflation from occurring only encourages the continued misallocation of resources, and makes the inevitable pain worse, while also allowing for the possibility of rampant inflation.  Thus, preventing deflation is nothing more than a lose-lose proposition, and a fool’s errand to boot.

The Rationalization Hamster, Writ Large

Continuing on my new interest in the subject of cognitive dissonance:

It’s a well-known fact that Americans oppose government spending in the abstract yet favor virtually every government spending program. For example, last April Gallup reported that 73 percent of Americans blame the deficit on excessive spending and 48 percent wanted to reduce the deficit mainly through spending cuts (and 37 percent equally with spending cuts and tax increases). Only a few months before, however, Gallup also reported majorities opposed to cutting spending on anything—even “funding for the arts and sciences”—except foreign aid.

Citizens of the United States, much like human beings in general, have the inherent conflict of ideals versus reality.  Citizens recognize that government spending is generally bad, particularly if said spending runs a deficit.  Yet, everyone wants the goodies that are bought with government money.

This is nothing more than the rationalization hamster running amok on a national, political scale.  Women recognize that cads are bad, and yet they are attracted to them and will rationalize away their terrible behavior and general caddishness.  In like manner, citizens recognize that deficit spending is bad, yet still manage to find a way to justify virtually every form of federal spending, even though the majority of it is unconstitutional, and often inefficient and counterproductive to boot.  And so, humanity gets the best of us once again:  we know what reality is, but it is so much more pleasant to wish it away, and thus we continue to rationalize our support of policies we know will harm us in the end.

A Waste of Resources

Here’s a video that models how computer-driven cars would function in traffic:

Compare it to this video:

The traffic flow in the latter video looks suspiciously similar to the traffic flow in the first video, yet there are no computer-driven cars in the latter video.  What gives?

Quite simply, the quest for computer-driven cars is predicated solely on the government’s completely arbitrary (and obviously counterproductive) traffic laws.  When rules are completely objective (albeit, again, arbitrary), computers should have an advantage over humans at creating optimal riving routes.  However, if the exact same results can arise from an elimination of completely arbitrary rules, then why not simply eliminate the rules?

Traffic laws, as the second video clearly demonstrates, impose an unnecessary level of complexity onto the system of driving.  Imagine if the same sort of rules were applied to foot traffic in a mall, complete with official lanes and stop lights.  Do you suppose that traffic would flow more efficiently?  Yet, somehow putting humans behind the wheel of a car makes navigation so much more difficult that we must have rules, or so we’re told.  But, as the evidence clearly suggests, the rules impose additional chaos.

This extra chaos, then, is to be solved by adding another layer of complexity, in this case computer assistance.  This will cost millions, maybe even billions in research and design costs and implementation costs.  What makes all this R&D so wasteful is that the problem of traffic flow has already been solved; the only reason it exists is because the government wants yet another way to tax people.

[Note: the second video was originally referenced by me here.]