49 Stars And Counting

Hope you saved your Haiti-aid receipts: Another quake, this time in Chile.

Thankfully, however, this one didn't wreak near as much destruction, so we won't have to see humanitarian plight every time we turn on the tube. That is by far the worst part about disasters, disease, and celebrity deaths/scandals: I have to see/hear about it everywhere I go.

And before you say it, I'm not insensitive. I just don't care much for countries that deliberately made themselves poor through inane policy over the years. You can cite "building codes" all day long as a major factor in saving lives, but that's not necessarily true, because building codes keep marginal builders out of the market, possibly hurting a far greater number of people that don't have a natural disaster speaking up for them.

Have you noticed that H1N1 hype has just plummeted to nothingness? What happened to all of that? Kind of like every other potential plague... false alarm. This is why I don't take media hype seriously, even when it involves tsunamis and food poisoning. It never materializes like the professionals say it will.

And I was looking forward to having only 49 states. One step closer to smaller government, eh?

Around The World In A Few Weeks

There is a dearth of formalized material about the international monetary system relative to the Fed, U.S. fiscal policy, and many other macroeconomic features of the U.S. economy in standard macro and monetary textbooks, or so I've found.

So, I spent a lot of today looking for stuff that would help me better understand it all. I started my search with the IMF, because it seems very political and thus should put a human face on these concepts for me.

I found a book about World Bank and IMF aid to Pakistan. It's pretty decent, even though it relies exclusively on econometrics and empirical analysis. I read a bit of it today, and have established that as far as Pakistan goes, between 1972 and 1999, IMF aid is negatively related to gross output. Imagine that!

I found a 33 minute video with Paul Krugman and some other important guys. It was not helpful at all; it was more of an emotional appeal about the conditionalities of IMF loans, if you could even call it that, than an educational video about the causal mechanisms of the IMF. I saw one on Jamaica a year ago, before I cared about this stuff, and it played the same guitar string. This reaffirms my suspicion that the IMF is very politicized, at least externally, and like so many other issues plaguing economic debates, true knowledge of the subject is possessed by few.

Tonight I went to Wikipedia to learn about IMF SDRs, and then to CATO to learn why SDRs will likely never become an international currency.

All in all, a productive day. I'm going to dabble on the IMF for another week, then onto the World Bank, and then so on.

No Good

I was looking over an intro Macroecon book, through the chapter about the Fed and specifically the federal funds rate. Here's what I found funny:

"Memory Hint- Are you trying to keep the federal funds rate and the discount rate straight in your mind? The words "federal funds" begins with two f's. If you push them together, they look like two sleeping bags side by side. You can use this to help you remember the federal funds rate is the overnight lending rate."

Really, sleeping bags? Let's see... "ff". Nope, horrible. That 'trick' is more to remember than what the fed funds rate is itself, anyway.

Cute, but fail.

The Problem That Begets The Rest

Dr. Mario Rizzo talks here about French politicians getting their panties in a knot over a restaurant chain serving halal food in order to attract Muslim customers. From what I hear, French society is quite secular and worships at the alter of 'reason.'

I translate this as worship of political correctness and everything that is not individualism. Notice that non-ecclesiastical governments specifically discourage religion, nonviolent crimes, and anything else that doesn't propagate and extend their sphere of control. That is largely the state of affairs in many OECD countries, and the U.S. takes a few steps down this path every day.

I bring this up because Dr. Rizzo hits upon a theme that pervades my thought:

"Even more fundamentally, private property involves the right of private individuals to make decisions about resource use. And since some uses are incompatible with others, private property must imply the right to exclude." [Emphasis mine]

Very few people follow that last line of reasoning to its logical conclusion, and even Dr. Rizzo himself is, I'm pretty sure, a supporter of democracy as a form of government. The right to exclude, however, precludes this possibility.

If there was one idea that would bring about a revolution in the way policy is designed and the way people live their lives, it is that a civil society can only be based on the right to exclusion. If more folks realized this and accepted it, I feel that many 'problems' would be exposed for the paper tigers that they are and would be solved instantaneously.

Instead, ignorance of exclusion lands us right where we are today.

Some People Just Don't Get It

It's incredible how supporters of the left think they can engineer the economy like it's nobody's business. It doesn't matter how many times price controls fail; they're going to do it, anyway. Take, for instance, the following:

This is the Yahoo! news feed. The first link I've circled is a link to a video of Obama's new healthcare proposal, which involves, among other things, "giving the federal government new power to block excessive rate increases by health insurance companies,” [NY Times]. The link right below it leads to a story discussing the 'hidden' consequences of recent credit card reform, which involves, among other things, a restriction of overall consumer credit and annual fees that had been up to this point done away with for many credit card customers.

They're like the zombies in video games that walk into a closed door, and because they don't know how to open it, they just keep walking into it, hoping the result to change. They see only what's on the other side of the door, but have no idea about how to get there.

Racism as a Consumer's Good

Legal Insurrection blogged here about the concept of "white privilege," and how there is an actual organization out there that aims to "Involve a multitude of people... in the discussion of how white privilege, white supremacy, and oppression affect their everyday lives." There is an annual "White Privilege Conference" going on and I'm assuming that this is somewhat pervasive throughout particular universities and community activist groups around the nation. The WPC webpage (or an affiliate, I don't care) is here, so you know I'm not making this up. I will not, however, give these nobodies anymore space than I already have on this blog.

Instead, I want to break out the horse pill that nobody can seem to swallow: I don't see racism as a bad thing, per se. I don't see the preservation of culture, habit, and familiarity as a social bad. On the contrary, racially homogeneous communities have a knack for remaining tightly knit and cooperative amongst themselves (Think Jewish ghettos and Asian communities within this country). I'm no expert, and I am not saying that high correlation of relatively peaceful interrelationships and racial homogeneity is causation. But the urge to associate with like-minded, physically similar folks with a common lineage is not something to spurn. I'm willing to bet that 'racist' inclinations are ingrained on the biological level. That is, nature is often the primary cause of racist sentiments, and nurture then exacerbates those natural tendencies. This need not always be the case, but at the same time, if the foregoing is even sometimes true, then it implies that anyone and at anytime, be him black, white or else, is biologically inclined to discriminate.

This does not imply racial violence, but this does mean that there exists the possibility that white (black) business owners will tend to higher a white (black) man over a black (white) man, given both are of equal skill. This does mean that racially integrated communities will have 'disintegrating' tendencies, and no amount of social engineering can change that.

If this is the case, then the WPC and all similar movements are futile. Even if we somehow erased history clean of all racial bigotry and pernicious discrimination, it would still manifest itself as a social preference. Kind of like how I don't like the taste of carrots, but I love me some raw salmon.

I can't apologize for that.

A Follow-up

While fresh on private property rights, I must go back to my previous post about ridiculous "libertarians" and "economists."

Yesterday, a man crashed his plane into an IRS office. He is quoted as saying before the crash,

"I have had all I can stand. I choose not to keep looking over my shoulder at 'big brother' while he strips my carcass."

Although I don't agree with the means this man employed to get back at 'big brother,' I think it is unjustified to say that he was unjustified. This goes back to the theory of law and property that I subscribe to (here in MP3). Essentially, I own 1) myself, 2) anything that I appropriate that is not already appropriated, and 3) I am free to exchange with others and can come to own the property that I acquire in exchange. This is the foundation of a civil and functional society. Thievery is inherently self-defeating because there is no justification for giving any number of people the authority to take from others what was not originally appropriated or exchanged for themselves. If one man can do it, all men will do it.

The way that a private property society is reinforced is simply self defense. I am justified for hitting back when the thief hit me first. So, is our IRS bomber doing what he has the right to do? I'd say so. I don't think that in the long run it does us any good, but it cannot be denied that he focused his attack on the very agency that robs him. The workers within might be semantically 'innocent,' but most people in this country support taxation and thus, whether they are aware that they are technically thieves or not, they are apart of the problem. Call me self-righteous, but I am sticking to a firmly-grounded gun.

This is why I was so hot at Tyler Cowen for saying that there "exists a case for a VAT." This is simply not true. There is never a case for taxation, be it income, value-added, property, etc. There is never a case for thievery. I know it allows economists to dabble and play and have a grand time, but taxation is not justifiable.

Moreover, even if we discount the private property theory of law and look at this issue from a purely 'economic' standpoint, hooking up the federal government to another form of life support will not get us any closer to long-run equilibrium. This kind of cop-out obfuscates the issue at hand, and that issue is the monopolization of the use of force. This pernicious detail is the bleeding, pumping heart of our economic woes, and it should not be forgotten.

Avatar: A Libertarian Exercise

I saw Avatar for the second time tonight (but in 3D IMax). It was entertaining, not amazing, and I wouldn't have ever seen it again had it not been for the 3D part. I found many politically interesting things, though:

This is the main character, Jake Sully, fighting the evil humans at the end of the movie. He's fighting humans because they want to extract a precious mineral, unobtainium (valuable stuff), from the Navi's (the blue people) home world. Extraction involves destroying the Navi's sacred trees and land, and all the wildlife therein.

James Cameron is a leftist, and the entire movie reeks of corny environmentalism and hatred of anything capitalist and U.S. military (it's great how the 'agenda' always pits those two on the same side, ain't it?). I found it funny, though, that towards the end of the movie, Jake Sully makes a speech to his Navi buddies that they will not let the 'sky people' (humans) take their land. Essentially, the movie ends up being about a battle for property rights. Cameron, whether he knew it or not, blew the chance of Avatar being a propaganda piece for environmentalism. Environmentalism scorns private property, because property owners usually don't care about slugs and ferns as much as environmentalists would like them to.

Cameron, though, couldn't pull out the unifying climax at the end without a rallying point. That rallying point had to be the land owned by the Navi. Americans wouldn't have bought anything less than that. Our culture does not think in terms of the commune-ideal that intellectuals and utopian leftists would like them to.

Even if a given culture did, I'd hesitate before saying that this movie would have been nearly exciting had there not been a battle over property. Think about any 'epic' movie, from Braveheart, to Dances With Wolves, and even Star Wars: they all revolve around pitting property-takers against property-owners.

Ironic, but one could argue that this movie is way more libertarian than it is leftist.

I Don't !@#@$&* Know

When guys like this write stuff like this, I feel like I've been asleep at the wheel the entire time.

Sometimes I'm not sure if they do it just to get hits on their blogs/books/TV shows/etc. or if they really are as ridiculously eccentric as they appear to be. If the former, all the more power to you. You remind me of an unamusing Glen Beck, and nobody was really taking you seriously in the first place. You're a no-count.

If the latter, please, stop. Go home. Stay inside and unplug the router. Your 'hit' books were a waste of time, anyway. Your writing style is no fun to read, and the only person more confused than each of your ardent followers is yourself.

My criticism stems from reading books and articles from 'professionals' like the guy above, not just this particular article. Specifically, their writing style and subject matter is so aberrant that it's annoying. Reminds me of economists and sociologists that claim they'll have you "looking at the world totally anew after you hear/read this!" Except, I never do. I only become more cynical about working with these total narcissists in the future, and maybe accidentally reading three or less words from them again.

Maybe I'm just not the kind of reader I need to be to stomach their silliness. I've always liked textbooks and straight facts focused on a subject, not books on how to get my kids to do the dishes and where I should eat at in New York, both in the same book.

Maybe I'm dumb. Honestly, I really think it might be this one. So many people have wet dreams about guys like this; what's my problem?

1.5 Years In The Making

I've studied economics at an increasing rate over a 1.5 year span. I started with neoclassical textbooks, then read Reisman, and then was introduced to Mises and the Austrian school. However, I really didn't know much about anything until I read Man, Economy, and State last summer. Until then, I didn't have a reliable paradigm to work off of. Sure, I had knowledge of political economy and the like, but nothing that really let me sink my teeth into economic history, abstract theory, predictions, etc. Also, in acquiring my B.A., I've been bogged down by math and science classes that, in their own right, are interesting, but have nothing to do with economics. I'm really hoping I get into the school of my choice so I can dedicate in full my next few years to this stuff.

But if I had to do it all again, or, if I could give somebody just starting out some advice on how to go about acquiring a solid economics background, I'd say this: Start with Rothbard's Man, Economy, and State (Do not purchase the study guide). Then immediately follow with Landreth and Colander's History of Economic Theory. Then, go back to Man, Economy, and State, and in tandem with this, dabble on the footnotes and recommended readings of MES, to acquire a firmer understanding of the subject matter. After this (or alongside), I strongly recommend a neoclassical monetary economics book: Checchetti's Money, Banking, and Financial Markets is really good (get one from another author to gain a broader point of view, too). After these, one should be well-equipped to tackle Human Action, any of Hoppe's books, Knight's Risk, Uncertainty, and Profit, and the list goes on. This should all take about 1.5 years, and would leave one with plenty of time to complete all other undergraduate work, no matter the degree.

One might say that my recommendations are lop-sided, but that's wrong. I had to work my way through the muck and nastiness of the books that leave you with nothing to remember or think about in the long-term.

For instance, I made the mistake of reading Human Action when I was just starting out. I wanted to be ahead of the game, but it left me feeling more lost than I had started. And, I wasn't able to enjoy gems like this:

"Animals are bestial and inhuman precisely because they are such as the iron law of wages imagined workers to be." (Mises, Human Action, 1963, p.628).

The above statement is made so much more appreciable when you have a knowledge of not only who Malthus is and why animals are factors of production, but also when you realize the controversies that surround(ed) such thought, too. The above statement is also the more special when you realize how many economic historians look upon Menger, Mises, and the Austrian school with ignorance, disdain, pompous arrogance, and as "ideologically biased." You realize that the mainstream is flat wrong concerning the school, and it leads you to question the assumptions you've carried your entire life about 'facts,' science, and mainstream scholastic thought.

I'm really enjoying reading Man, Economy, and State again, and going through the footnotes and the actual texts that Rothbard cites (like Mises!). It makes me look forward to the next 30 years, and the work I will pioneer.

The End

is near. April 30th, 2010, at 4 PM, I will no longer be an "undergrad."

Who Cares About Bill?

AP sent me the above photo early this morning. Don't worry, Willy, I'm second to Twitter with my girlfriend, so I know how you feel.

But really, does anybody care about Bill Clinton anymore? Not like this guy made front page news with his heart, and I can't even find any stories on Yahoo!'s main page anymore. I'm willing to bet Fox news lost revenue when they ran the alert on their network.

If 1) how many stories about a particular event are written and 2) how long any particular story stays alive is any indication of consumer preference/interest, Bill Clinton ranks low.

Update: Yesterday, the 11th, Bill ranked #2 on Google's 'Hot Searches' list. Today, he doesn't even make the top 20.

I rest my case.

Trash On The Steps

Look very closely at this picture. Notice the 14 or 15 people shoveling the Capitol steps, on a day when the Capitol is closed due to snow. Also notice that only 2 out of the 14 or 15 are actually shoveling; the rest are looking around in a stupor (I've arrowed them). Also notice how much snow is still left on the ground even with all that "man-power."

I wish I could say that if it wasn't for the stimulus, this wouldn't be happening, but that's false. This happens every season. And then this caption elsewhere:

I wish Washington would stay frozen. Our standard of living would go way up.

My Trump Card

Rothbard's articulation of utility being an ordinal, and not a cardinal, concept comes in handy. When all else fails, I pull it out of my little bag of econ tricks. I did it just now in a paper I wrote about open markets for organs, and how the Organ Transplantation Act of 1984 kills people. I tried to upload the paper to the blog but I don't think I can upload files here.

Anyway, what stinks about such a trump card is that it's unheard of in the mainstream. By accepting Rothbard's point, you have to also accept the fact that coercive government as a whole is not only pernicious but unjustifiable, too. So, by default, I can't really use this defense outside of free market circles.

Does anybody know of a good refutation of Rothbard's welfare analysis?

Fed Stuff

Dr. Robert Murphy here writes in totally unambiguous words and terms, what the Fed is. He attacks it with more force and on more points than I did below.

It's a damn shame that not only does my Monetary Economics book (for Junior/Senior college students) not connect the dots about the giant counterfeiter called the Fed (but instead feigns justification for it), but it and all other Monetary books I've looked at about the Fed simply leaves out one or more features of the Fed-Treasury connection altogether.

The following connection is the one that I've never known about, that NO macro nor monetary book has ever disclosed, and in fact I just learned about it today:

The Fed can roll over the U.S. Treasury's bonds that come to maturity. The Fed can give rain checks on debt due to it by Uncle Sam.

"You know, I'll just pay for my 3.8 trillion dollar budget... ummm... never!"

Between artificially low interest rates the Treasury already gets to borrow at (because the Fed remits its 'profits' on interest back to the Treasury) and the fact that the Fed's demand for Treasury securities pushes up the bond price and thus lowers their yields, PLUS the Treasury never having to pay a debt in full, there is no surprise as to why the govamint might want to take over, in full, the health industry. We now realize that taxation is not primarily a means to raise revenue but is instead for exacting retribution and to better mold the social landscape into their ideal community.

The government controls its own wallet, plus the prices people pay for its 'services.' It also controls most educational institutions and the methods taught therein, thus it has considerable sway over intellectual opinion. If it can get its hands around the health industry AND legislate over a natural byproduct of our metabolism (CO2), the private sector will be completely enslaved by the public apparatus. You can't vote your way out of a situation like that.