It's 10 o'clock, do you know where you ideas are?

Imagine that you have a grand idea for some new widget.  Maybe you will change the world.  Maybe you will make a mint.  Or, maybe you will just end up with a pile of scrap and an empty bank account.  Regardless, you need a plan of action to turn your dream into a reality.  What do you do now?


The first thing you need to do, as usual, is check with the State.  Someone else may have had the same idea, or a similar one, and applied for a state-granted monopoly on the use of it.  If you forge ahead, you could stand accused of stealing someone's idea, regardless of its actual origin!  You had better hire a lawyer to search the government's file of officially recognized ideas, though having done due diligence will grant you no immunity from future litigation.  If that goes well, you will need to hire another lawyer to help draft an otherwise very unhelpful document.  It will need to describe as many potential manifestations of the idea as possible, even though you already know what manifestation it will take.   The document will need to be both as specific and as general as possible.  After all, you need to protect your specific idea in as broad a manner as you can.  This will, of course, make the document unreadable and uninteresting to anyone not being paid $500/hour to interpret it, but it is very important that you protect yourself from someone taking your idea away from you in the dark of night.  Worse still, someone could submit your idea in writing to the state, and they will come take it, though it will probably be in the light of day.     

More on Mandatory Blood Donation

As faithful readers and people who exerted the effort to look directly to the left to see "Popular Posts" already know, one of my greatest hits is a post on mandatory blood donation.  It is of course an absurdity to stand for individual freedom and also advocate for mandatory blood donation, but is it really the worst thing a citizen of the united States might be subjected to?  Consider this:

• If you are a male over the age of 18, you have probably registered for the selective service.  As I write this, you are in no danger of being drafted, i.e. forced into slavery and subjected to mortal danger during war time.  I cannot speak for the future.  From the website of the selective service "In a crisis requiring a draft, men would be called in sequence determined by random lottery number and year of birth."  This brings a whole new meaning to the word "service". Sears' call center isn't looking so bad now. 
• If you work for a living in sectors of the economy visible to the eyes of the law, somewhere on the order of one-third to one-half of all of your earnings are taken by one government or another.  Now of course, you may receive some benefits and services as a result, but nevertheless, your payments are not truly voluntary, contrary to the assertions of Harry Reid. 

To me, a pint of blood here or there pales in comparison to risking my life and having a large chuck of my earnings taken before touching my bank account.   So why don't they do it?  It makes so much sense; most people could spare the blood, especially the young and healthy who benefit so much from the system of law and order created single-handedly by government.

They don't do it, because the force in the process is too obvious.  Evan an idiot like Harry Reid cannot fail to see the needle in the arm, even though he seems oblivious to the gun in the room. 

Bastiat on the Fiscal Cliff

 The following excerpt from Bastiat illustrates the predicament of the current regime more eloquently than I can, and he died over 150 years ago.  After 60 years of promising everything under the sun in order to gain power, they are embarrassed, or at least they should be, to admit that they have no money.  This is the so called Fiscal Cliff:

The hundred thousand mouths of the press and of the speaker’s platform cry out all at once:

“Organize labor and workmen.”

 “Do away with greed.”

 “Repress insolence and the tyranny of capital.”

“Experiment with manure and eggs.”

“Cover the country with railways.”

“Irrigate the plains.”

“Plant the hills.”

“Make model farms.”

“Found social laboratories.”

“Colonize Algeria.”

“Nourish children.”

“Educate the youth.”

“Assist the aged.”

“Send the inhabitants of towns into the country.”

“Equalize the profits of all trades.”

“Lend money without interest to all who wish to borrow.”

“Emancipate Italy, Poland, and Hungary.”

“Rear and perfect the saddle-horse.”

“Encourage the arts, and provide us with musicians and dancers.”

“Restrict commerce, and at the same time create a merchant navy.”

“Discover truth, and put a grain of reason into our heads. The mission of Government is to enlighten, to develop, to extend, to fortify, to spiritualize, and to sanctify the soul of the people.”

... And the people believe, and the people hope, and the people make a revolution! No sooner are their friends at the head of affairs, than they are called upon to redeem their pledge. “Give us work, bread, assistance, credit, education, colonies,” say the people; “and at the same time protect us, as you promised, from the taxes.”

The Productive, Peaceful Sector and the Nonproductive, Violent Sector

The words we use to delineate between the portions of our world run by governments (public) and everything else (private) strike me as nebulous and inadequate.  The "private sector" sounds shadowy and secretive, and the "public sector" sounds the opposite-open, visible and cooperative.  But it isn't so.  Ask yourself if you feel more cooperative with Walmart or with the IRS.  Think of all the classified information, protected from your eyes for your own benefit, and of the secret mission carried out in your name.

No, "public" and "private" just won't do.

How about this: the "productive sector" and the "nonproductive sector"?  Admittedly, the "nonproductive sector" is a little cumbersome, so we may want to consider variants in wording, but you get the idea.  Some would argue that the government and its agents, public-private partnerships (yuck!) and the like, occasionally produce goods and services people want, to which I would argue, "not without forcibly creating monopolies for themselves."  Be that as it may, it is prudent to search for better, more universally accepted alternatives.

Which leads me to the distinction that I think is incontrovertible: the "peaceful sector" and the "violent sector".  The unifying principle of government is force, and I feel that the nomenclature should reflect it.  If you don't believe me, try starting a government of your own without the use of weapons.  When you fail, open a bakery or a lemonade stand and give something back to the community.

I don’t mean that a business politician won’t steal; stealing is his business. But all politicians are nonproductive. The only commodity any politician has to offer is jawbone. -- Lazarus Long

"You Didn't Build That" - A response in favor of peace

For those of you living under a rock, there has been a recent uproar over something our gentle public servant Obama said the other day.  If you search for "you didn't build that", you will doubtless find a great number of  news items describing, quoting, misquoting, spinning and backpedaling on the statements of the president.  I will not sully my site with the banal news cycle.  I simply wish to provide my thoughts on the subject.

There are various arguments of the type, "You couldn't have accomplished (or you wouldn't have possession of) X, Y or Z without the government.  The government invested in the internet, microchips, space exploration, your education, and roads.  They provided laws and boots for your protection including such things as patents, police, armies, navies and courts.  Governments paid Columbus to "discover" the new world and Lewis and Clark to explore and document it.  Therefore, you have no cause to complain about taxation or other government interventions which have provided for your general welfare."

These arguments are generally given by the left, though the right is only conditionally allergic to them.  They are given in opposition to the simplistic, dare I say Randian, portrayal of the rugged individualist entrepreneur standing alone against the world to profit in a capitalist paradise.  They so often end with some variant of, "You didn't accomplish this alone."  Well of course is it overly simplistic to think that anyone succeeds in business (or in life for that matter) purely on the merits of their own efforts, but does it follow that we should back off any opposition to government based on this fact?

Of course we all rely on the kindness, savings, investments, intelligence, innovation and business of others in extraordinary and unpredictable ways.  You must receive your business inputs, you must obtain the capital and skills to produce your output and your customers must find you and decide to purchase your product at the price you have set.  You stand on the shoulders of inventors and discoverers who have come before you and presume that somehow a population will have the wealth and the desire to purchase your wares.  You didn't plan all of this; you would have had to start before you were born.  So if you succeed in business through loss of your own blood, sweat and tears, whom do owe and how much?

Certainly you can account for the prices paid for your raw materials, your capital equipment, your employees and your education.  You will pay interest or give up a portion of future profits to investors.  Your parents are unlikely to insist repayment for your upbringing, so you're off the hook there.  You either pay rent for your property or you purchased it outright.  Last but not least, your customers pay you, which ultimately allows you to pay for all of your inputs.  So maybe you owe your customer the most; you clearly couldn't have done it without them.  But wait a minute, they received something in this transaction - your product.  Did they pay too much?  Should you give something back, if not to them then to society?  Unless you defrauded them, forced them or sold a defective product, you should not feel the need to repay anyone.  The price paid for any good is a reflection of the subjective valuation of that good to the purchaser at the given place and time.  You give a man a hamburger, he gives you $5 and you owe each other nothing but mutual thanks.  This relationship recurses back through every transaction in the chain of production and we end up with this beautiful, spontaneous, chaotic order in which we can peacefully make progress and profits off the backs of our neighbors and owe them nothing but our thanks.    

Now enter a gang of thieves who disrupt this harmonious relationship with force or subterfuge.  Their guns represent an attempt to get something from the beautiful order of man without giving anything in return.  The gang may in special circumstances provide money in exchange for their takings, but this "price" is meaningless on account of their weapons and their "right" to use them.  Imagine a gang large enough to repel all other gangs between the sea and the nearest mountain range.  The pragmatic gang will not disrupt the order enough to destroy it as it provides for the welfare of all.  They will protect their borders with troops and the order on their streets with police.  They will take their cut of commerce flowing in, out and within their realm.  The population will become so accustomed to these takings that the guns will be rarely taken out of their holsters for the robbery, which then will be called a tax.  If possible they will monopolize the currency used by the populace to aid in extracting the resources required to "maintain" the order, which preceded their existence.  Finally, the populace will thank them and sing their praises for false promises written on paper to constrain the power they have already usurped for themselves.  They will put roads and build bridges where it pleases them and pay prices that mean nothing for materials and labor.  With funds taken from the people, they will pay meaningless fees to scientists to discover things they think people are interested in knowing and engineers to build things they think people will want.  In the same way they will enforce a curriculum upon the youth.  They will mistake progress with comfort and destroy both by paying men to dig ditches and fill them in.  For all of this they will claim a right to thanks from the citizenry.  They will shout down objections to their power with claims that the order would not exist without them and that their theft was necessary and beneficial.  And at this point, their resemblance to the state is complete.          

Brand X - Xtreme Stupidity

Unfortunately I was awake last night to catch part of an episode of Brand X on FX.  In the course of an incoherent argument, propped up by a Harvard graduate who used to work for congress (yes, you are supposed to be impressed), the host presented the audience with two examples of "the free market".  The basis of the argument was something like America doesn't need a Dalai Lama because we have the president of the united States, Oprah Winfrey and "the free market" to worship.  This is really too asinine to get in to, but who did he present as  models of the free market?  Warren Buffet and Alan Greenspan!  I have previously explained for those who don't already know how Warren Buffet is a poor example of a free marketeer, but Alan Greenspan, seriously?!  Perhaps when he was writing about the use of gold as currency for Ayn Rand's Newsletter that would have made sense, but he is most well known as the Chairman of the Federal Reserve.  The Federal Reserve is a banking cartel affiliated with the federal government and dedicated to controlling the monetary system!   Do I really need to explain how controlling a fiat currency and manipulating the banking system are not actions that can be associated with a free marketplace?  


In the interest of full disclosure, I stopped watching the show at this point, so it is possible that this was an elaborate set-up for a more informed discussion of economics and freedom.  I feel comfortable with the assumption that it was not.  

Penny4NASA Follow-Up

This thought came to me in the shower, as most good thoughts do, and I thought it was a shame I didn't include it in my previous post:

Consider for a moment the capital expended to mass produce the first automobiles.  Now think of how quickly they were adopted, how drastically they changed human activity and productivity and how unbelievably quickly they improved with respect to speed, mobility, style, reliability and efficiency.  All of that was produced with hard-earned capital, voluntarily given in expectation of profit, and a healthy dose of enterprising individuals employed for the same cause.  Now compare this with NASA's history.  The expenditure has been enormous, not to mention it was all taken by force, and the payoff relatively small.  The so-called "spin-off" technologies and secondary externalities created by the agency seem paltry compared to the advances in technology Ford alone developed.  I encourage anyone to look them up.  While you're at it, read Garet Garett's The Wild Wheel.

Freedom, Peace and Liberty - 1
Tyranny, Force and Plunder - 0


Related Posts:


Pennies for Flying Cars - Another Tale of the Unseen
Pennies for NASA - Ignoring Cost at all Cost

Pennies for Flying Cars - Another Tale of the Unseen

Wouldn't it be great if I drove a flying Mercedes-Benz?  I certainly think so!  Wouldn't it be great if everyone else did too?  No doubt.  Of course we would need to nationalize a major car company, but I don't anticipate any obstacles there.

How much would you pay for the universe (of flying cars)?  How do we examine the costs and benefits?

Besides the mere fact that everyone would be flying in style with little concern for congestion, just think of all the stimulative effects it would have on society.  We would probably all save a bunch of time going to and from work.  The ability to fly would eliminate many of the complexities associated with driving and would probably facilitate automating the process.  This would free us from the drudgery of the daily commute and essentially make the world smaller, expanding our zone of employment and improving our earning power.  Besides all that, I certainly would feel better about myself and my status, being a hot-rod pilot and all.  I would probably start dressing better, and maybe I would have the esteem to go for that big promotion at work.  Multiply that by millions of people so effected and imagine the economy purring along like a spoiled kitten.  Children everywhere would be inspired by the wonder of daily flight, as well as the precise engineering, the smooth handling and the attractive contouring that go along with the now ubiquitous, flying Mercedes-Benz.  Just imagine the young crop of overachieving engineers, scientists, designers and artists growing up and really getting after it in an ever expanding world of opportunity!  Beyond all of that, we're bound to happen upon a great many wealth-producing discoveries and labor-saving inventions in our quest to mass produce flying cars.  We can't afford to let go of this dream!  People probably won't go for it voluntarily, so we'll probably need the government to foot the bill.

Foolish, childish ideas and hyperbolic extrapolations?  Absolutely.  No one would ever seriously propose such an expensive, narrow-minded, centrally-planned "national greatness" program simply on the grounds that it would be inspirational or generally stimulative.  First of all, to attribute the life decisions and successes of any individual in an advanced society (let alone that of a group of such individuals) to a single program, stimulus or event is utter foolishness.  Further, to claim that directing that desire toward a particular field in lieu of all others is an improvement on the situation of men is a fatal conceit indeed.  Inspiring a young Sam Walton to design thrusters for the new F-Class would have deprived us of Walmart, which would have been an injustice nearly beyond this author's will to consider.

The rationalization of the program based on the stimulative effects of inventions made in the process is a particularly special pleading based on ignoring the costs of the program itself.  Of course the monetary price we would pay for the program is obvious, but the activities forgone in order to support it will forever be hidden to us.  I am not speaking here of what other great national work must be given up, like the Federal Jetpack Program, though that is a viable concern.  I am considering what activities in the private (or peaceful) market place must be displaced in order to make the flying car dream a reality.  It takes real saved wealth to pull off a project like this, and since the government has none, they'll have to take it away from someone (more likely a whole bunch of someones).  Your guess is as bad as mine as to what that saved wealth would have been used for.  Some of it no doubt would have been saved for consumption at a later date, while some of it would have been consumed right away on things like candy, shirts, smart phones and regular, old-fashioned rolling cars.  So that's simple enough; we're just asking for little Johnny to go without his chocolate for the week, or little Susan to cut back on the texts or 16 year-old Franklin's parents to go for the fixer upper instead of certified pre-owned.  That's not so much to ask of the patriotic citizen for the common dream of flying cars.  If you buy that argument, I guess this is where we go our separate ways, but there is one last thing I would like you to consider - investment.  Some of that wealth would have been invested in a broad array of forward-looking ventures, most of which probably would have had a better chance of turning a profit than the lofty dream of flying luxury cars.  Some, no doubt, would have been massive failures that were either poorly managed or not well thought out or both, but if history is any guide, a great many of them would have been successful, some of them fantastically so.  There would have been some AOL-TimeWarner's and some Betamax's, but there would also be the Amazon's and the Apple's.  Maybe we would be missing out on the next Iphone, Ipad, or hell, the Icar (not flying til generation 4.f).  Maybe Bayer would have cancelled a line or research on some young drug that would have turned out to cure cancer, or AIDS, or diabetes.  Maybe Pfizer pulled back on the next great erection enhancer.  Maybe Kenmore's new dishwasher would have saved us more time at less expense than the flying 'Benz.  The fact is, we'll never know the costs of the great flying machine project because they are simply immeasurable.  So you tell me if you can justify taking your neighbor's wealth by force to support this or any other technological fantasy.

In my previous post on the subject of Penny4NASA, I focused on the fiscal irresponsibility of clamoring for increased NASA funding.  Now I hope I have demonstrated the fallacious nature of the arguments used to present the supposed benefits of increased funding for the program as expounded on said website:

NASA contributes to society in massively huge ways in terms of technological, economical, and inspirational progress. The progress that we have seen in the last 40 years comes largely from the world's extremely talented scientists and engineers. Now, talk to most any scientist and/or engineer of the last 40 years, and we are willing to bet that they were drawn into their chosen field by something NASA related. And more often then not, they refer to the Apollo, Gemini and/or Space Shuttle program where humans were physically advancing a frontier. It's the human spirit of exploration that drives the world's greatest technologists to invent the future, today. We want to see to it that the US annual budget allocation for NASA reflects that hugely important role technology, economy, and inspiration bringer.

I hope my work can be a massively huge inspiration bringer to young thinkers everywhere so that they can root out the legal plunder of the future, today.


Related Posts:
Pennies for NASA - Ignoring Cost at all Cost

Pennies for NASA - Ignoring the Cost at All Cost

I consider myself a skeptic.  I try to live my life by reason, guide my choices by science and defend my positions without faith.  However, my political philosophy, which I think is rationally derived and is deeply rooted in individual liberty, often clashes with the leftist/statist strain within skeptical society.  This was so exposed on my drive to work this morning as I listened to one of my regular podcasts.   

I think it is relatively clear that the federal government of the united States is in a dire fiscal situation, along with much of the developed world. In spite of this fact, there is a segment of the population clamoring for an approximate doubling of the budget for NASA under the cleverly misleading moniker "Penny4NASA". The gist of their platform is described at the head of their homepage:

NASA’s budget currently represents 0.5% of the US budget, and has been relatively unchanged for 25 years. We are calling for their budget to be increased to 1% of the US budget.

The site contains some links and videos intended to educate the public and gin up support for one of the most universally beloved government programs in history. One of the videos contains the following quote from Neil degrasse Tyson, a widely respected, highly adored and well spoken astrophysicist:

...I’m tired of saying this, but I’m gonna have to say it again, the NASA budget is four-tenths of one penny on a tax dollar. If I held up the tax dollar, and I cut horizontally into it, four-tenths of one percent on a tax dollar does not even get you into the ink! So I will not accept a statement that says, “We can’t afford it!”’

I hate to be the bearer of bad news to Dr. Tyson, but "we" can not even afford to keep NASA's budget the same in our current condition, let alone increase it by any fraction of a penny on the dollar.  "We" are massively in debt beyond what the rosiest predictions indicate "we" will be able to pay back, and the government's ability to paper (literally) over this fact will come to an end sooner or later.  If your definition of "afford" is, "having access to credit without any demonstrable means of sufficient repayment of this or any other debt", then you may think that I am crazy for saying this.  

Granted, the NASA budget is small potatoes compared to the entitlement/warfare/never-ending-stimulus spending nightmare we are in, but that does not mean it can be ignored.  

Ignoring the cost of the program is explicit in the Penny4NASA platform.  At first blush one might think that they are advocating for everyone to give (or rather have taken from them) a penny to support NASA.  That might sound ok, but wait a minute!  They are talking about a penny of every "tax dollar"!  That's a little bit different, especially since most people don't even know how much they pay in federal taxes.  Go ahead and calculate it if you would like; I'll wait here and hold my breath.  Just don't forget to include paycheck withholdings along with the lump sum you might send the IRS in April (ignore any interest you might have earned on the  withholdings just to safe).  While you're at it include payroll taxes that your employer pays that he or she might otherwise have paid you, tariffs and customs duties on all the goods you purchased that were imported or contained components that were imported, estate and gift taxes etc.  It's a little bit more than a penny now isn't it?  It gets better.  The call to action is to raise the funding of NASA from 0.46% of the federal annual BUDGET to 1% of the federal annual BUDGET.  If you just calculated your annual federal taxes based on Dr. Tyson's allegory to the "tax dollar", you calculated your contribution to federal REVENUE.  Do you want to make any guesses as to how that stacks up against the federal  BUDGET?  Not well!  According to The Hill, "CBO has predicted that in 2012, the U.S. will have its fourth consecutive year with a budget deficit over $1 trillion."  I cannot begin to tell you how to calculate your projected increase in "contributions" required to meet an increased budgetary obligation made by an entity that is serially delinquent with its bills, but my guess is, it's more than a penny.   

To further the case for increasing NASA's funding, the group provides this chart of the NASA budget history:

http://penny4nasa.org/?q=how

Which may be a little bit misleading if you don't understand that total federal spending during the approximate time frame did this:

When you look at NASA budget history in terms of absolute 1996 dollars as in the following graph (orange trace), which I plucked from Wikipedia, the situation for NASA is a little bit less dire.

http://upload.wikimedia.org/wikipedia/en/1/1a/NASA_budget_linegraph_BH.PNG

There are way more problems with this movement to forcibly take your money for great works of national pride, but I have a day job.  So, I will be back for more later.


Related Post:

Pennies for Flying Cars - Another Tale of the Unseen



An elephant: A mouse built to government specifications. -- Robert Heinlein, Time Enough for Love

Incandescent Bulbs - The Seen and the Unseen

During a large portion of the year, in a large portion of the world, I would argue that the incandescent bulb is 100% efficient.  Provocative enough?  Well it shouldn't be.  If you're thinking that incandescent bulbs are generally reported to be 10-20% efficient, you are correct.  But the energy that is wasted is simply heat put off by the bulb.  Here in Pittsburgh there are only 4-5 months out of the year that I am not running the heat, at least intermittently.  This means the heat put off by the bulb, even though it is quite small in magnitude, is helping me heat my house.  So from my perspective, the bulb is 100% efficient during such time.  I doubt this consideration has been included in the justification of the laws attempting to ban incandescent bulbs in favor of the "more efficient" compact florescents.  This thinking is in line with the overly constrained and simplified engineering perspective that our great leaders so often take when attempting to run out lives.  They will always fail to take into consideration all potential use cases - in this case they missed a pretty big one.  It is relatively easy to come up with models and estimates for how much product X is going to save the average consumer Y.  The difficulty comes in extrapolating those savings to the entire population.  It is quite easy to imagine scenarios in which a CFL does not save John Q. Citizen any money or is more trouble than it is worth.  But it doesn't matter.  Our choice will be forcibly constrained so that model citizen Y may save a few bucks using his light bulbs in a particular way.   

University Pelf

I went to my home state's flagship university for my undergraduate engineering degree.  I had a classmate there who thought he was particularly bright.  Most of us begged to differ, and he didn't have the most endearing personality.  He once laughed at me in 2006 for suggesting that Microsoft would loose market share to its competitors and that the specter of its "monopoly" would run its own course if left alone.  He struck me as particularly lazy, both intellectually and physically, and he was a poor leader of our senior design team despite his campaign to the contrary.  I was delighted to learn this morning in our alumni magazine that he is now a professor at the university and the new poster child of a considerable DOD grant to develop the next super weapon for the never ending War on Everyone.  I couldn't think of a more appropriate person to represent the suckling piglets of university pelf.  


pelf - money or wealth, especially when regarded with contempt or acquired by reprehensible means.

It has become an archaic term, but I suggest we bring it back.

I Am Officially Getting in the Way

It's easy to miss the point of an article, blog or oral argument, especially when you are more interesting in grinding your ax than really understanding the other point of view.  It turns out this is even the case for highly skilled philosophy experts.

Every struggling upstart blogger is thrilled to see notifications of comments on one of their posts.  I am no different; I relish each of the 10 comments my site has received.  A few weeks ago I was delighted to see a new comment but was surprised to find that it was a tag from another blog.  I pasted the address into my browser and was delighted to find a rather lengthy article devoted to missing the point of my original commentary which was essentially a very simplified, sound-bite-style summary of the socialist calculation problem.  I never intended for the piece to be a thorough dissertation on the topic, but rather, a rant the blow off steam and preach to for four-person choir that is my following.  But I posted it nonetheless, so it is fair grounds for debate.  It is a curious strategy to pick on a blog nobody reads, but I am flattered still.
 
The argument, which was about 5 times the length of my original post, went something like this (parenthetical statements are to be taken from my perspective):

1. Talented individuals do not always perform up to their expectations.
2. Sometimes less talented individuals outperform more talented ones by better honing their skills and being more well rounded.
3. Therefore skill is the relevant metric for predicting success as opposed to talent.  
4. The quoted statement (from my post) implies that no one will ever be talented enough to effectively centrally plan an economy (a gross misunderstanding).  We already know how irrelevant talent is, therefore this statement is false.  
5. Our institutions have it all wrong because they tend to look at talent instead of skill. 
6. Parents who tell their children to follow their talents and do what they love are "almost criminal" because alot of people don't like their jobs.  
7. Therefore, we can't give up on central planning because we haven't been appropriately looking for or demonstrating the skills required to be successful at it.  We have to keep our optimism and keep plugging away (in spite of a total lack of evidence to the efficacy of central planning).

I especially enjoyed the conclusion:

"This is just one more reason why I find libertarian bomb-throwing to be wearying: we already know that something is going wrong, and we already know how to make it better. What we need is for fewer people to pounce on the opportunity to be bitterly pessimistic and instead look around them at the ways in which we can, have, and do make things work - or, in the case of people who can't manage that, to at least have the courtesy to stay the fuck out of the way."

Really, "we" know how to make it better?!  Then why didn't "we" stop it from happening in the first place.  The author must suffer from the delusion that there was no central planning going on prior to the crash and that only the government can swoop in and save us from the dastardly deeds of "the market".  The original point he is missing, and I take part of the blame for being so terse to begin with, is not that no one is smart enough, talented enough or even skilled enough to manage an economy.  The point is that no one will ever acquire the knowledge needed to do such a thing at the time they will have needed to do it.  To think otherwise is pure hubris, and frankly, quite dangerous.  This is not pessimism per se; I simply disagree with the position. that "we" can and must do something.  I am quite optimistic that free individuals left to their own devices and allowed to live, innovate, and trade freely will prosper.

Besides all of the practical considerations, which I leave to Mises, Hayek and Rothbard for further detail, there is no moral justification for central planning.  No amount of skill gives anyone the right to force me to use a particular type of money or to spend it on a particular type of good.  No level of crisis gives anyone the right to take something from one individual by force and give it to another.  It seems pretty clear to me, that the man who proposes we give up on peace and start imposing the will of the state on formerly free people should bear an enormous burden of proof well beyond torturing a distinction between "talent" and "skill".  Further, it is clear that he is the one standing between us an prosperity.  

The author, after missing the finer points, has hit square upon the central purpose of this blog - to get the fuck in the way...




...of legal plunder*.








*If you didn't get this, you haven't been reading enough Bastiat.
 

Cold, Soft Cash

You will occasionally hear old-timers use the phrase "Cold, Hard Cash".  This is clearly an expression of a bygone era as our cash no longer can be misconstrued as "hard" in any way.  The fiat bugs (they call us gold bugs) have managed to destroy the currencies of the world by pegging them to the ever fluctuating index of bureaucratic whim.
"How can you say the dollar is weak?" people often ask me me, "After all, it is thumping the Euro (or the Peso or the Canadian dollar) this week."  This would be like concluding that my nephew is getting shorter because my niece is going through a growth spurt.  In order to draw meaningful conclusions about the value of cash or the heights of youngsters, we need a stable, standard reference.

Today's James Taggart

While reading Peter Schiff's excellent article on gold investment, I realized that the real James Taggart is alive and well.  The following is an excerpt from that article focusing on the Oracle of Omaha's less than honest, politically charged rhetoric of which we should all now be familiar.

[Warren Buffet] has been in the press since last August claiming that he pays less taxes than his secretary – and urging Congress to pass a "Buffett Rule" mandating a 30% minimum tax on millionaires. The natural reaction is to say, "If you want to pay more, go ahead." But Buffett has gone on record saying that it's not enough for him to lead by example, and demanding that all of America's well-off bear the burden of Washington's reckless spending binge.

The problem is that Buffett's entire argument is constructed on deception. Buffett is rated as the third richest man in the world for managing the nearly $393 billion in assets, and he highlights that he pays only pays 17.4% of his income in taxes. But this is because he earns less than 1% of his annual wealth from his salary, while over 99% is earned as the largest shareholder of Berkshire Hathaway. Buffett claims that he discounts his Berkshire holdings because he plans to give it all to charity when he dies. So, it's not that the tax rates are so low, it's that Buffett plans to give away 99% of his wealth.

But even accounting for this clever accounting trick, Buffett is still grossly understating his personal tax burden. He owns roughly 1/3 of Berkshire's outstanding shares, the profits from which are subject to a 29% corporate tax rate. Last year, Berkshire paid $5.6 billion in taxes – and the IRS says they owe $1 billion more! In addition to corporate taxes, Buffett is also subject to an additional 15% capital gains tax on his stock when he cashes out, not to mention any future estate tax, leaving many to conclude that his share of taxes is certainly higher than his secretary's.

Ayn warned us that we would have to save Capitalism from the capitalists.  She is turning out to be more prescient than we could have imagined.

The Core Fallacy of Central Planning

The fundamental fallacious assumption that all central planners make in the course of their divine intervention into our personal affairs is not that they are smarter than the average person or even that they are the smartest person alive.  Rather it is that they are smarter than all of us put together.  

Was bailing out GM a good idea?  Well maybe, maybe not, but "we" had ample opportunity to make investments in the company on our own through the stock market.  Perhaps investors chose not to do so for a reason - it wasn't a sound investment.  Instead, the geniuses in the federal government decided that they were smarter than the whole of the people and that they would force us to "invest" in GM's future.  

Should we invest in new forms of energy?  On an individual level investing in particular energy concerns may pay off handsomely and help the future of mankind immensely.  Unfortunately when the central planners decide where to spend our money, they do so based on  much less information and insight than our pooled individual efforts, and they base their decisions in whole or in part on political merits.  They may occasionally back into a good idea that pays off, but their historical record is pretty awful - think Soviet Union.  The fact is "we" shouldn't be investing in anything.  The government has no right or authority to plunder our savings to fund their pet projects.  What's worse they will never have the information or the skills to succeed at it, regardless of who is in office.  


A committee is the only known form of life with a hundred bellies and no brain. -- Robert Heinlein

Beyond-Presidents Day

It seems that the natural progression towards enlightenment is from more government to less.  Unfortunately, this is not the natural progression of history.  All progress is not forward.  As children become adults, they learn to become less dependent on their parents.  In my opinion, the most significant breakthrough in this process is understanding that you really don't need your parents' help any more.  This point often comes after it has been true for quite a while.  Likewise, as a society matures the people within it begin to understand that they require less and less help from their parental "public servants."  Maybe someday we will have the ability and the widespread understanding required to live without them entirely, but I won't hold my breath.  We need baby steps, and I propose that we start by getting beyond "Presidents Day".

The office of the presidency is too powerful as it is.  We don't need any further excuses for the average citizen to sit in mindless and uncritical awe of its present and former holders.  They have been programmed for a lifetime to accept the primacy of "the leader of the free world."  Think back to grade school.  Were you taught anything substantive about decentralization of power, the philosophical underpinnings of the revolution, the debates between the founders, the Articles of Confederation, the history of the central banks, or the various political and economic factors that culminated in the war between the States?  If you were like me, you weren't taught any of that.  Instead, you were forced to memorize the names of all the past presidents in order - rote memorization in its most banal form.  Instead of learning fascinating and critical information our minds were turned off by tedium, and every year we celebrate with ritual.

I hereby propose that from now on we celebrate the third Monday in February as "Beyond-Presidents Day."

Append "By Force"

I am usually more for breaking laws than making them, but I just had one of those there-ought-to-be-a-law moments that I imagine liberals and conservative have daily.  My law would be that every time someone who is either running for or executing some government office speaks to the public and gives a plan for how they are going to "help" us, they must append the words "by force" to their statement.

Example:  We're going to invest in Green Energy - by force.  We're going to provide health insurance to every American citizen - by force.

This may seem cumbersome, but in my opinion it is the best way to ensure that the motives and methods of the government remain in clear view of the general populous.  Just imagine how poorly FDR's Second Bill of Rights would have been received if this law was in place.  Hell, the State of the Union Address might even be bearable were this law in effect.

I think most people apply the old adage about sausage to government - it's best not to think about how it is made.  But, if we are to be consistent moral agents, we must not ignore the dirty side of governance lest we give our sanction to the imposition of force on others.  What made the Solyndra scandal so egregious was not that the president and his cronies picked a loser, it was the fact that they took money from the taxpayers - by force - and propped up a pet company in a politically sexy business.

Call your congressmen; let's make it happen!

Lessons from the Eugenics Movement

I cannot give an expert opinion on whether or not anthropogenic climate change is going to be a problem or whether government policies to stop it are going to be a solution, but I can recommend that we take a moment to pause and think about the burden of proof required to justify the states' management of our lives.

I think one of the lessons from the eugenics movement should be that the step from academic exercise to state policy should be a bit more arduous.  It was a crackpot theory based on an oversimplified, nascent understanding of genetics, proposed by otherwise intelligent, successful and respectable men.

Had it remained a mental medicine ball inside the minds of gray-haired academics, it would have been fine.  Even if a few nuts had devoted themselves to the culture and voluntarily congregated on an island to try the experiment on themselves, I would have been fine with that too. But they didn't, and the planners didn't wait for volunteers before they enlisted the arms of state.  It was only at that point that a silly idea became an evil one.

It is the same way for any Utopian fantasy.  It's all fun and games until you force others to play along.

If you want to gather with 12 other families on a communal farm and "live off the land" because that's how you interpret Marx and Malthus, good luck and godspeed.  But don't enlist a gang to force me to milk "our" cows.  I am not your slave.

If after your first undergraduate economics course you think we need an elastic money supply or that we need to "stimulate the economy" during a recession, make it happen with your own wealth, not mine.  I don't work for you.

If for some reason you think healthcare is a right of every human being, spend your life providing it to them for free.  Don't pass laws forcing me to provide X to my employees or to buy Y from the state's chosen insurer.  If the doctor's office becomes any more like the DMV, I will find you, and you will not be glad that I did.

Truly good ideas, like liberty and free exchange, prosper without the use of force.

Change In Which We Can Believe

First of all, I thought liberals were supposed to be grammatically correct, yet we have let them get away with ending their most highly touted campaign slogan of the past 4 years with a preposition.  I am not one to ride the grammatical high horse - it's not a safe place for me to be - but I am shocked that no one else has pointed this out.  

Turning to more serious matters...
In a previous post I provided a defense for capitalism, but I have not yet come to the issue of money in any direct sense.  Money (insert ominous tone) has been referred to as the root of all evil to the point of cliche.  It has recently come under attack by some 'Occupy' protesters in the various forms of, "The world would be so much better/simpler if we did not have money."  In protests supporting socialized medicine, well meaning people have fingered money as the cause for failure of our healthcare system.  Money, besides being a drag, breaks up families and comes between friends.  Even in my beloved Star Trek, Roddenberry's vision of the future was one in which we had solved the problem of poverty and eliminated the need for money.

First of all, eliminating poverty is like eliminating disappointment or ridding the world of bellyaches and broken hearts.  It is a futile and childish fantasy that, if taken too seriously, will lead to ruin.  But even more ridiculous, and thus more dangerous, is the idea of saving the world from money.  Money is our store of value.  It represents our hard work, our good ideas, our prudence and the services we have provided our fellows.  Money is our medium of exchange.  It gives us a means to share our gifts with the world and to benefit from the gifts of our neighbors.  Money is the root of man's peaceful existence on earth because it allows us to trade without violence and benefit from our neighbors without theft.  Throughout history it has taken many forms: gold, silver, salt, rocks, etc.  But, it has always abided by one law - that no one can easily and cheaply produce it.  Societies may weather fluctuations in the quantity and value of money, but its systemic debasement always amounts to theft and leads to pain.

Enter here our modern era Mandrakes who, by destroying the definition of money in textbooks, have destroyed it in reality.  We live in a time when the dollar, the reserve currency of the entire world, is printed with all the difficulty and expense of a free college newspaper.  It is backed by trust in our government's prudence and its willingness forcibly take our wealth if it is running a bit low.  The printing is limited only by the dreams and aspirations of the most lofty politicians.  Its quantity is deftly managed by our humble central planners who, from their ivory towers, long for the days without let-downs or tummy aches.  This exercise, my friends, is more useless and ill-conceived than tasking a well-armed, drunken group of teenagers with controlling the rhythm of the tides.  They don't need to do it, they can't do it, and they are very likely to be dangerous doing it.     

I don't care what form our money takes.  Let it be gold or let it be silver, so long as it is not trust in our masters to beat us.  Let's make it something in which we can believe!

Keynesian Fallacies Part II - Money on the Sidelines

John Stossel, who I admire greatly for his continued struggle for the advancement of liberty, recently devoted a show to debunking Keynesian economics.  The show was great, but here was a comment from one of the pro-Keynesian guests which was not addressed and that I would like to comment on in greater detail:  

I don't recall the exact quote, but it was something of the variant, "During a recession there is a lot of money sitting on the sidelines that we need to bring back into the economy so it can be productive."

Really?  Sitting on the sidelines?  Ladies and gentlemen, you can tell me if this is not true for you, but all of my money is being used in some way or another all of the time.  I have active investments, which I assume Keynesian theory would consider to be not on the sidelines, that I expect to grow fairly aggressively over time.  I have checking and savings accounts for use for daily business; the extra fat I have in there is serving as a cushion for unforeseen expenses.  Even if I were to' hoard' cash or precious metals, which I plan to do, they would be in use as well, as a hedge against really rainy days.  Furthermore, how we allocate our savings serves to signal everyone else in the market as to our time preference and our perception of risk.   

There is no such thing as money that is not being used.  Only if you ignore one of the fundamental uses of money, a store of value, does this line of argument make sense.  This thinking belies the childish notion that today's spending is all that counts and that saving today to spend tomorrow is an old-fashioned bromide of our grandparent's generation.  

The origin of this line of thinking is the collectivist/socialist foundation of Keynesianism that leads to the conclusion that only the use of money in the aggregate matters.  'Individual rights and preferences be damned, we have a society to manage.'