08 Nov 2012

If I Know Anything About the Blogging Structure of Keynesian Economists, Brad DeLong Invents 20% of His “Facts”

DeLong 166 Comments

Every now and again I like to check in on Brad DeLong to see what trouble he’s getting himself into. Today he has a post entitled, “KARL ROVE AND COMPANY GOT $80 MILLION AND REPUBLICAN DONORS GOT?” DeLong writes:

Memo to Republican billionaires: Rupert Murdoch is not your friend. John Roberts is not your friend. Karl Rove is not your friend.

Rupert Murdoch is not in the business of providing news, or advancing right-wing causes. Rupert Murdoch is in the business of selling eyeballs to advertisers. As he said lo more than a decade ago: “There is no news channel catering to the very large right-wing segment of the American market. And that is a definite market opportunity”. That’s what determines the content on Fox News. But do not confuse the fact that Rupert Murdoch wants to keep your eyes glued to the screen with the idea that Rupert Murdoch is your friend. He is not. You are his mark.

Stop right there. What would Murdoch have needed to say, in order for DeLong to believe that Murdoch was a friend of conservatives who was in the business of providing news to them? Would we need a quote saying, “I will lose money setting up a network catering to right-wingers, but my conscience tells me it’s the right thing to do”?

Suppose a guy plants apples because he sees a market opportunity. Is he not really in the business of providing apples to people who like apples?

Anyway, those are minor quibbles. On to the good stuff when DeLong writes:

Karl Rove is not your friend. Karl Rove took $400 million of your money this cycle and, if I know anything about the fee structure of Republican political consulting, kept $80 million for himself and his faction and wasted the rest. That Karl Rove promises he will deploy the $400 million to make sure high-bracket income taxes and estate taxes remain low does not mean that he knows how to do so. And his first and highest priority is to skim off the $80 million for himself and his faction.

Go read DeLong’s entire blog post. He cites the $400 million figure for donations to Rove-controlled SuperPACs etc., but there is nothing in there to justify the $80 million figure, except for the phrase I put in bold above. As far as I can tell, Brad DeLong pulled a number out of the clear blue sky and made it the title of his post.

166 Responses to “If I Know Anything About the Blogging Structure of Keynesian Economists, Brad DeLong Invents 20% of His “Facts””

  1. Jonathan M.F. Catalán says:

    With regards to to the first excerpt, it may be that DeLong’s target are moderate Republicans. Other than those he’s directly catering to, it may be that Rove is persuading otherwise moderate right-wingers towards the extreme. DeLong may be saying that you shouldn’t be persuaded, because in reality Rove has ulterior motives and he’s not primarily interested in providing his audience the truth. As a corollary, I think he’s also, more generally, making the point that we should be wary about what Rove writes/says, for the same reasons.

    • Jonathan M.F. Catalán says:

      In all instances where I typed Rove, I meant Murdoch.

      • Major_Freedom says:

        Now I get your post. haha

    • Matt Tanous says:

      “it may be that [Murdoch] is persuading otherwise moderate right-wingers towards the extreme”

      You can tell, because the GOP nominated a crazy fundamentalist extremist like Santorum instead of the so-moderate-as-to-basically-be-Democratic Mitt Romney.

      • Jonathan M.F. Catalán says:

        Murdoch isn’t running for president, he’s catering to a specific subset of the population. That there are a lot of moderates in the Republican camp doesn’t mean that Murdoch is catering to all of them. Neither does it mean that all moderate Republicans find Murdoch persuasive, or even entirely persuasive. DeLong’s point, as I see it, is only that we should be careful about believing what Murdoch says, because Murdoch’s priority is not the truth, but selling something to the aforementioned “specific subset.”

        • Matt Tanous says:

          My point was that if Murdoch is trying to persuade moderate right-wingers towards the extreme to get more people watching Fox or whatever, he’s not doing a very good job of it.

          And given DeLong’s fabrication of the facts, I don’t think his priority is necessarily the truth, either.

    • Bob Murphy says:

      Jonathan, I am not defending Murdoch in the sense that I think he’s a great guy. I’m saying, that allegedly smoking gun quotation tells us nothing. If I am a Fox News junkie who loves the fact that it provides me with an alternative to the biased liberal media, how is a quote from Murdoch saying there is a profit opportunity for providing news for right-wingers a bad thing? I’m going to say “heck yeah CNN kept ignoring us and Murdoch saved us.”

      • Grant says:

        “I am not defending Murdoch in the sense that I think he’s a great guy”

        I’m certainly not qualified to comment on GOP consulting rates, but as an amusing sidetrack on ol’ Rupert… This is one of my favorite blog posts of recent months: http://www.lrb.co.uk/blog/2012/08/24/glen-newey/harrying-harry/

        It ends thusly: “On the subject of plausible half-truths and their exposure, recall Geoffrey Robertson’s immortal observation that Rupert Murdoch is a great Australian in more or less the same sense that Attila was a great Hun.”

  2. Major_Freedom says:

    Re: the first quote from DeLong: Most anti-capitalist progressives do not believe that actions can be truly good for the target beneficiary if the giver has any material self-interest stake in the game. If Murdoch showed his programs for free to the consumers, then he would be considered a hero and a friend to republican billionaires. But because he wants to earn money as well, his actions are not truly good, and he cannot be considered a hero and friend.

    Memo to DeLong: Does this mean that because you get paid to do what you do, that your readers should not consider you a friend or hero? That you are only writing what you write to keep your readers’ eyes glued to your writings for self-interested reasons?

    Murphy, looks like DeLong is doing what you showed Krugman to be doing in one of your previous posts.

    Neither DeLong nor Krugman seemed to have learned the valuable lesson from Adam Smith written 236 years ago:

    “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.” – Wealth of Nations.

    I wonder if DeLong would consider that his neighborhood cake and cookie baker is not his friend! He probably would, because his baker is not a republican billionaire. You know, different strokes for different folks. DeLong doesn’t adhere to any human ethic, but rather one ethic for rich republicans and a separate one for poor democrats.

    ——————-

    Re: The second quote from DeLong: I wonder if he’ll write any disparaging remarks on the organizers of Obama’s SuperPacs, and what fees were skimmed off the top by them. Oh that’s right, silly me, those fees are zero. Democrats don’t work for money. They are our “friends.”

    • Jonathan M.F. Catalán says:

      Re: the first quote from DeLong: Most anti-capitalist progressives do not believe that actions can be truly good for the target beneficiary if the giver has any material self-interest stake in the game.

      I don’t think DeLong is “anti-capitalist,” and neither do I think that he believes self-interested action can’t be beneficial. I’m not saying he’s a Mises- or Friedman-type economist, but not being either of those doesn’t make him anti-capitalist (even if, according to you and I, it does make him wrong). And, like I tried to say in my comment above, DeLong’s argument is not about how well Murdoch serves the consumer; DeLong’s relevant standard isn’t the targeted consumer, but “truth.”

  3. Brad DeLong says:

    Did you do any work to assess margins in the political consulting business? I suspect not.

    • Bob Murphy says:

      No Professor DeLong I didn’t do any such work.

      • Ken B says:

        Nor did you claim to know the margin. Not every commenter in this thread can say the same.

        • Major_Freedom says:

          Wow, see that ad hominem from DeLong?

          He is saying that because Bob hasn’t done political consulting, then DeLong believes himself justified for whether the $80m number is right.

          Does that mean DeLong has done political consulting? If so, was he paid less than or greater than $80 million? As a corollary, does that make him more or less jealous of Rove? As a further corollary, is that what is really underlying his entire attack on Rove?

    • Arthur Krolman, CFA says:

      And Prof. DeLong, if I may be so bold, what is your work experience in assessing friendship in the political consulting and media business? I am impressed by your knowledge of conservatives’ friends.

      Who are your friends?

    • David R. Henderson says:

      Brad,
      Did you?
      Best,
      David

    • Jason B says:

      Is a 20% margin that egregious here? I ask this because there are particular sectors of the economy with higher margins.

      • Bob Murphy says:

        Jason B just to clarify the point of my post: I am not saying whether the % is higher or lower than 20. My point is, DeLong’s headline makes it sound like it is a documented fact somewhere that Rove and his buddies got $80 million. But it turns out that DeLong just guessed that number. Now maybe it’s an educated guess, but it would be like me having a headline, “Krugman makes $80,000 for after dinner speech” and then you find out I’m just making that number up by looking at what other people make.

        • Dan says:

          Krugman made 80k for an after dinner speech? That’s going on Facebook. Don’t worry, I’ll put you down as the source.

        • Jason B says:

          I knew where you were going with this, I was just trying to understand a separate point. Brad made it sound like Rove shystered his way into a 20% margin. He used the phrase, “skim off the top”. I was just wondering if that was egregious for Rove to actually make that type of money on a $400 mil campaigning effort.

  4. Adrian Gabriel says:

    Jonathan, at what point is someone Capitalist or anti-Capitalist? I’m lost on how we measure that. If economists of those ilks you named, Keynesian and Monetarist, both promote and create economic models by which to intervene in the free-market, are they not now Socialist or anti-Capitalist. Certainly Hitler thought he was doing a duty to raise the standard of living of the people in his country with the intervention and economics he promoted/used, yet many of should know by now that he was anti-Capitalist and Fascist. The Free-Market is precisely that, “Free.” Modern economics, and Austrians always advocated this, showed the harms of government intervention and its anti-Capitalist motives. I think its fair to classify DeLong as a Socialist, no matter how benevolent what he advocates in his economics may seem. There is good reason why Austrian Economists are radical. We should not take Slegin and White as good examples of true Austrians, they’ve certainly crossed the threshold not even Hayek crossed in teaching at the university level.

  5. Bob Roddis says:

    Mr. DeLong: “My view is that Money and Credit is very readable–compulsively readable, in fact: I have just spent two and a half hours telling myself “it’s OK; I will just read one more page…”. But it is only readable in a rhetorical-excess-train-wreck mode, for it is also totally bats— insane.

    I recommend starting at page 416: read through the defenses of the gold standard as the only monetary system consistent with representative government, the attacks on Keynes, the attacks on the New Deal, the attacks on the United Nations, the blaming of all unemployment on labor unions–or on governments–the attacks on private-sector fractional-reserve banking, and stop with the attacks on all other believers in the gold standard not named “von Mises”, not dedicated to the root-and-branch elimination of all forms of private fractional-reserve banking, and infected by the errors of the nineteenth-century British Banking School”:

    Ludwig von Mises, Money and Credit: p. 416 ff: “[T]he gold standard appears as an indispensible element of the body of constitutional guarantees that make the system of representative government function…. What the foes of the gold standard are asking for is… to intensify very considerably the already-prevailing upward trend of prices and wages…. Such a policy of radical inflationism is, of course, extremely popular…. How pale is the art of sorcerers, witches, and conjurors when compared with that of the government’s treasury department! The government, professors tell us, ‘can raise all the money it needs by printing it’[1]. Taxes for revenue, announced a chairman of the Federal Reserve Bank of New York, are ‘obsolete’[2]. How wonderful!… Eventually… the cleverly-concocted plans of inflation collapse. Whatever compliant government economists may have said, inflationism is not a monetary policy that can be considered as an alternative to a sound-money policy….”

    http://delong.typepad.com/sdj/2008/12/when-reactionar.html

    • Matt Tanous says:

      Oh, wow. That whole post and comment thread was a massive train-wreck of stupid. There were like three different failures to understand Say’s law. And one guy actually claimed that “store credits and gift cards are an example of a voluntary fiat money”. What absurdity! Although I guess it makes sense on the blog of someone who hates gold so much as to just point to Mises as being ridiculous for merely supporting it, no matter the reasons he gives.

      • Bob Roddis says:

        When I first read that Delong post almost four years ago, I had not yet been introduced to those whizzes known as the MMTers which had to wait for the arrival of MMT troll “APLerner” in the summer of 2010. I now note that Delong is all pissy because Mises allegedly misquoted the real Abba Lerner who had said, “The government, professors tell us, ‘can raise all the money it needs by printing it.’” Mises omitted “if the raising of the money is the only consideration.” That makes such a big difference. Of course, Delong does not find that bat **** crazy.

        Recall the table of contents for Abba Lerner’s book “The Economics of Control” for which I paid at least $25 to own and cherish:

        http://www.flickr.com/photos/bob_roddis/5560086644/in/set-72157626353319778

        And we now have the MMTers and others seriously proposing that there is no need for taxation because the government CAN get whatever it wants through spending money into existence and that the purpose of taxation is solely to “control inflation”.

  6. Lord Keynes says:

    “And we now have the MMTers and others seriously proposing that there is no need for taxation because the government CAN get whatever ” …

    You obviously haven’t even remotely understood MMT: for their position is not that taxes are unnecessary, but that from a strict functional perspective taxes do not “fund” government spending in the way we normally think.

    On contrary, taxes are necessary to free up resources, regulate aggregate demand, and control inflationary pressures.

    • Major_Freedom says:

      LK, the fact that the state taxes in the currency it issues is, according to MMT, THE foundation that establishes a general demand, and hence monetary characteristic for, state issued fiat currency.

      Yes, they CLAIM that taxation is not necessary to fund their spending, but inferring from this that they hold taxation is what serves to enforce the entire fiat currency regime, would be fallaciously implying that MMT is logically consistent.

      PS taxes do not free up resources, they redirect them towards where the government wants them.

      • Major_Freedom says:

        Typo.

        “Yes, they CLAIM that taxation is not necessary to fund their spending, but inferring from this that they do not hold that taxation is what serves to enforce the entire fiat currency regime, would be fallaciously implying that MMT is logically consistent.”

        I have debated many MMTers, and every single one of them have conceded that it is the state’s power to collect taxes on exchanged, but only in the currency it issues, that ultimately underlies the state’s currency being a medium of exchange.

        • Lord Keynes says:

          “they CLAIM that taxation is not necessary to fund their spending, but inferring from this that they do not hold that taxation is what serves to enforce the entire fiat currency regime, would be fallaciously implying that MMT is logically consistent”

          Where did I infer that MMTers do not point to taxation as a fundamental source of supporting modern fiat money? You laughable dolt.

          • Major_Freedom says:

            LOL! You said that MMTers believe taxation is necessary to “free up resources, regulate aggregate demand, and control inflationary pressures.”

            I don’t see any mention of “necessary for fiat money to even exist”.

            MMT holds that taxation is necessary to even enforce the fiat regime in the first place. Since you did NOT include that in your list, what way could one have taken your post, other than you believing the myth that MMT does NOT hold taxation to be necessary to enforce fiat money, and only then can there be any “regulating” of various monetary statistics?

            It was a failure of omission that conveyed the impression that you believe “MMTers do not point to taxation as a fundamental source of supporting modern fiat money”.

            • Lord Keynes says:

              “Since you did NOT include that in your list, what way could one have taken your post, other than you believing the myth…”

              No, this is simply your incompetent and erroneous inference.

              Indeed, given my own qualified support for chartalist views on the origin of money, you already had evidence that I hold to that view.

              • Major_Freedom says:

                It is not an erroneous inference to infer from a lack of an item in a list that supposedly explains the purpose of taxes, that it means you don’t hold it as the purpose of taxes, especially when the context is MMT.

                Also, it does not follow from your prior “qualified support” for the chartalist theory of money that this constitutes evidence that you do understand the fact that MMT per se holds that taxation is what underlies the existence of state currency as a medium of exchange.

                It’s not a bad idea to assume by default that you don’t understand what you are talking about. If you occasionally do know, then it is an exception, not a rule.

    • Bob Roddis says:

      LK: You obviously haven’t even remotely understood MMT: for their position is not that taxes are unnecessary, but that from a strict functional perspective taxes do not “fund” government spending in the way we normally think.

      On contrary, taxes are necessary to free up resources, regulate aggregate demand, and control inflationary pressures.

      I thought I just said that.

      Me: And we now have the MMTers and others seriously proposing that there is no need for taxation because the government CAN get whatever it wants through spending money into existence and that the purpose of taxation is solely to “control inflation”.

      So, what did I miss about the glories of MMT?

      And since the market does not fail, what is the point of inflicting such a totalitarian regime upon society?

      • Lord Keynes says:

        “And since the market does not fail, what is the point of inflicting such a totalitarian regime upon society?”

        So, in your wild fantasies, an imaginary free market where negotiable debt instruments and FRB-created fiduciary media would expand the money supply would never cause (by the logic of your school’s theories) Austrian business cycles?

        And how would you know this: by magic or telepathy perhaps!

        • Major_Freedom says:

          So, in your wild fantasies, an imaginary free market where negotiable debt instruments and FRB-created fiduciary media would expand the money supply would never cause (by the logic of your school’s theories) Austrian business cycles?

          Nobody would be obligated to accept those notes in a free market of money.

          There would be no general, economy wide boom and bust in a free market. At most, there would be an over-expansion of particular bank credit, and the losses would be localized to that bank and those who accepted their frb notes.

          You don’t seem to grasp the fact that free banking is not a monolithic singular concept.

          Most importantly, it is not inevitable that an anarcho-capitalist society would have economy-wide FRB practises. It is entirely possible for such a society to contain a universal ban on the practise, through private law enforcement built on informed bank clients wanting to avoid such risky banks.

          You cannot presume that anarcho-capitalism “reduces down” to free banking.

          • Lord Keynes says:

            Nobody would be obligated to accept those notes in a free market of money.

            Nobody is obligated to accept negotiable debt instruments and FRB-created deposit money today either. Yet they are widely accepted.

            “There would be no general, economy wide boom and bust in a free market. “

            Again: presumably you know this by magic or telepathy.

            ” It is entirely possible for such a society to contain a universal ban on the practise, through private law enforcement built on informed bank clients wanting to avoid such risky banks.”

            Meaning it would outlaw the free and voluntary exchanges that some of its citizens wish to engage in, and, by its own criterion of alleged being pro-freedom and non-coercive, actually be nothing but another tyrannical, anti-freedom, coercive system.

            • Bob Roddis says:

              Zzzzzzzzz

              We’ve been over this so many times before.

              http://factsandotherstubbornthings.blogspot.com/2012/07/bob-roddis-makes-bad-argument.html

              And I was thinking, why don’t you just sit down, learn economic calculation and then come back and prove it? Life is short.

              • Bob Murphy says:

                Zzzzzzzzz

                We’ve been over this so many times before.

                Yes, indeed you guys have. What can we conclude from this?

              • Lord Keynes says:

                Bob Murphy,

                I am interested to know, since I have never seen you talk about it (perhaps I missed your relevant posts):

                (1) do you hold that fractional reserve banking is inherently fraudulent?

                (2) if the answer to (1) is “yes” what about negotiable debt instruments?

                (3) do you think markets have a strong tendency to an equilibrium state (say, Mises’s final state of rest).

              • Bob Murphy says:

                LK on (1) I am a waffler. I think something is really screwy with FRB, but I don’t know if I want to say it’s inherently fraudulent.

              • Matt Tanous says:

                LK, don’t you have some napkins to throw on the floor of restaurants, like your namesake?

                http://online.wsj.com/article/SB123137373330762769.html

            • Major_Freedom says:

              LK:

              Nobody is obligated to accept negotiable debt instruments and FRB-created deposit money today either. Yet they are widely accepted.

              They are widely accepted today because the state has made them legal tender by law, and has made them acceptable for taxation. People did not come to accept them in an absence of coercion.

              Again: presumably you know this by magic or telepathy.

              Actually the claim that anarcho-capitalism would necessarily contain FRB is what is magic and telepathy. Without FDIC, without a central bank last resort, without any state that enforces a 19th century style National Bank Act that effectively cartelizes competing banks, and with bank customers perpetually losing their life savings by putting their money into FRB banks, it is reasonable to expect banks to move towards 100% reserve or close to it, thus moving towards eliminating/minimizing the credit cycle.

              Meaning it would outlaw the free and voluntary exchanges that some of its citizens wish to engage in

              But it isn’t free and voluntary if the third parties who accept them don’t know that they are receiving debt instead of what they thought it was (money).

              and, by its own criterion of alleged being pro-freedom and non-coercive, actually be nothing but another tyrannical, anti-freedom, coercive system.

              Not if people agree not to engage in the practise, which you can’t rule out in anarcho-capitalism.

              If “some people” want to engage in FRB, and those third parties who accept those notes are aware that they are receiving debt rather than final money payments, then those notes aren’t even money at all. They would be more like barter. A trades his goods to B, and B trades his debt to A. The debt would not be final payment, because the debt depends on the bank having the money to finalize the trade.

              If people want to engage in trading goods for debt, rather than goods for money, then that would be justified, as long as everyone is aware, which has never historically been the case anywhere in the world since the dawn of human civilization.

              Even today, the overwhelming majority of Brits believe that they are the legal owners of the money that backs their FRB accounts. Regardless of whether they accept the bank lending the money, they are still not aware of the fact that they are owners of debt, not money.

              • Lord Keynes says:

                “Even today, the overwhelming majority of Brits believe that they are the legal owners of the money that backs their FRB accounts. Regardless of whether they accept the bank lending the money, they are still not aware of the fact that they are owners of debt, not money.”

                That still does not make FRB fraudulent, for the nature of the contract is stated in the contacts people sign.

                Banks do not fraudulently misrepresent the FR account as literally locking your money up in a safe.

                This is mere public
                ignorance of the nature of FRB when they assume that latter without thinking about it.

                The solution would be mere legislation making bankers explain clearly the nature of FRB.

                And even then I doubt whether much would change, for the simple reason that few people really want to pay banks money for bailment, when they can get interest on a debt claim.

              • Lord Keynes says:

                >Nobody is obligated
                >to accept negotiable >debt instruments and >FRB-created deposit >money today either. Yet
                >they are widely accepted.

                They are widely accepted today because the state has made them legal tender by law”

                That is total garbage. This latter statement demonstrates your outright stupidity – or plain dishonesty.

                The US dollar is the legal tender, not cheques, or promissory notes or even FR deposits.

                When you pay your taxes you need US dollars – base money – not debt instruments.

              • Major_Freedom says:

                That still does not make FRB fraudulent, for the nature of the contract is stated in the contacts people sign.

                I didn’t claim it did make them fraudulent.

                I will say that it makes them illegitimate, or at least not identical to what would occur in a society where the customers face the consequences of not knowing, which is bank failures and loss of savings.

                The ignorance will almost certainly be followed followed by a reduction in the number and quantity of such contracts, as customers are no longer numbed down into complacency due to FDIC, central bank, and other state “guarantees”.

                Banks do not fraudulently misrepresent the FR account as literally locking your money up in a safe.

                You don’t know that. History has shown that there have been outright fraudulent presentations from bankers as to the true nature of customer bank deposits.

                It would be silly to assume that such fraud is non-existent today what with the tremendous number of bank branches that exist.

                This is mere public
                ignorance of the nature of FRB when they assume that latter without thinking about it.

                Call it what you want, but you cannot call it informed contracting, and that is a sufficient criticism of the practise.

                The solution would be mere legislation making bankers explain clearly the nature of FRB.

                That is not a realistic solution, because the bankers typically write the legislations. The bankers also finance politicians and regulators who have zero incentive to introducing these “legislations.”

                Politicians and regulators have had over 100 years to implement these legislations to make it clear to consumers what kind of deposits they are entering into.

                And even then I doubt whether much would change, for the simple reason that few people really want to pay banks money for bailment, when they can get interest on a debt claim.

                Please. Most people get only around 0.25% interest on their demand deposits. It’s so little it might as well be absent.

                And nobody said the only alternative is for banks to charge customers for bailment. Banks could offer demand deposits for free, as an addition to other bank products customers would have that pays the banks a fee. The banks could offer clients free demand deposits 100% reserve as long as they LEND the banks a minimum amount of money as debt.

                There are many possibilities that would see zero charges for demand deposits.

                That is total garbage. This latter statement demonstrates your outright stupidity – or plain dishonesty.

                Actually it’s correct.

                The US dollar is the legal tender, not cheques, or promissory notes or even FR deposits.

                False. Both dollars AND FR deposits are legal tender you ignoramus.

                When you pay your taxes you need US dollars – base money – not debt instruments.

                False. Virtually nobody pays taxes in currency notes. Who sends the IRS cash? Almost everyone pays taxes by either writing checks off FR deposits, or sending direct payment notices to their banks that debit their FR deposits.

                You have no clue how our taxation system works. You’re uninformed.

              • Major_Freedom says:

                LK:

                The solution would be mere legislation making bankers explain clearly the nature of FRB.

                This “solution” is absurd for another reason besides the one I already gave.

                If the majority of people don’t understand who the legal owners of the demand deposit money really are, then how in the heck can they vote in politicians who will force the banks to educate their clients on who the owners really are? How can the majority of people vote to educate themselves on something that they themselves don’t even understand?

              • Lord Keynes says:

                Your original statement:

                “They are widely accepted today because the state has made them legal tender by law, and has made them acceptable for taxation. People did not come to accept them in an absence of coercion.

                You are a liar or an idiot.

                Debt instruments are not legal tender:

                ” United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts.”
                —31 U.S.C. § 5103

                Just because you can pay your taxes in US dollars VIA a cheque, this does not mean that debt instruments are legal tender.

                A buffoon, liar, or idiot – this is what you are M-F.

              • Lord Keynes says:

                To clarify: private checks, promissory notes, bills of exchange, and drafts are not legal tender.

                Paying VIA them does not make them legal tender.

                The only exception historically where one debt instrument was ever accepted as legal tender were national bank notes,and that era ended in 1935, and even then these were NEVER legal tender for customs payments to the treasury or interest payments made on national debt.

                Even at that time private checks, promissory notes, bills of exchange, drafts were never legal tender.

              • Matt Tanous says:

                “When you pay your taxes you need US dollars – base money – not debt instruments.”

                Not so! You can, and most people do through withholding, pay taxes with checks drawn on fractionally reserved bank accounts. For the most part, these checks are not actually cashed out by the government into base money, either.

              • Major_Freedom says:

                LK:

                Just because you can pay your taxes in US dollars VIA a cheque, this does not mean that debt instruments are legal tender.

                I didn’t say that because you can pay your taxes with a check, that debt is legal tender. I said that FR deposits are legal tender.

                ” United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts.”
                —31 U.S.C. § 5103

                Sigh, you really really have no idea how our monetary system works.

                When you deposit money into a demand deposit account at a (member) bank, that bank acquires the privilege of having its account at the Fed credited with equivalent federal reserve bank circulating notes that can be redeemed by the bank. This makes the FR deposit sum a de facto legal tender sum.

                Just because 5103 doesn’t specifically mention “FR deposits” by name, it doesn’t mean they are not legal tender in practise.

                A buffoon, liar, or idiot – this is what you are M-F.

                LOL, no, that’s what you desperately WANT me to be, it’s what you NEED me to be, because your beliefs are untenable.

                You not only failed to refute my argument that FR deposits are widely accepted today because the state has made them legal tender by law, but you also thought the law you cited refuted my argument that FR deposits are legal tender, when in fact that law clearly proves my argument correct.

                Too funny.

              • Major_Freedom says:

                LK:

                To clarify: private checks, promissory notes, bills of exchange, and drafts are not legal tender.

                Nobody claimed they were.

              • Major_Freedom says:

                Matt Tanous:

                You can, and most people do through withholding, pay taxes with checks drawn on fractionally reserved bank accounts. For the most part, these checks are not actually cashed out by the government into base money, either.

                Bingo. That’s why I argued FR deposits are (de facto) legal tender.

                The law doesn’t actually have to explicitly say they are not legal tender. What matters is the practise.

              • Lord Keynes says:

                “When you deposit money into a demand deposit account at a (member) bank, that bank acquires the privilege of having its account at the Fed credited with equivalent federal reserve bank circulating notes that can be redeemed by the bank. This makes the FR deposit sum a de facto legal tender sum.”

                No, it does not. Only the US currency or actual reserves – high powered money – transferred in final settlement (if you opened your account with cheques or electronic transfer) become part of the bank’s reserves.

                Actual FR demand deposits remain the bank’s liabilities.

                And cash “deposits” usually just become the bank’s vault cash.

                Your original statement:

                “>Nobody is obligated
                > to accept negotiable
                > debt instruments and
                > FRB-created deposit
                > money today either. Yet
                > they are widely
                > accepted.

                They are widely accepted today because the state has made them legal tender by law, and has made them acceptable for taxation. People did not come to accept them in an absence of coercion.

                Your sad lies above notwithstanding, your statement includes negotiable debt instruments” in those ones allegedly “accepted today because the state has made them legal tender”.

                Your statement is false.

                Your dishonest operating procedure is now to just deny your made any such statement! Impressive.

              • Lord Keynes says:

                “You can, and most people do through withholding, pay taxes with checks drawn on fractionally reserved bank accounts. For the most part, these checks are not actually cashed out by the government into base money, either.”

                They do not have to literally “cashed out” with physical currency. And reserves or base money ARE required to finally pay taxes.

                If your cheque bounces, you have not paid your taxes. Nor does the government not demand high power money when it gets a cheque.

                Only with final settlement in clearing, by transferal of high powered money , are taxes extinguished.

              • Major_Freedom says:

                LK:

                “When you deposit money into a demand deposit account at a (member) bank, that bank acquires the privilege of having its account at the Fed credited with equivalent federal reserve bank circulating notes that can be redeemed by the bank. This makes the FR deposit sum a de facto legal tender sum.”

                No, it does not. Only the US currency or actual reserves – high powered money – transferred in final settlement (if you opened your account with cheques or electronic transfer) become part of the bank’s reserves.

                That always happens when you add money to a demand deposit FR account.

                Actual FR demand deposits remain the bank’s liabilities.

                They are accompanied by a corresponding credit to their account at the Fed when you deposit money into a FR account.

                And cash “deposits” usually just become the bank’s vault cash.

                No, they usually send excess cash to the Fed as well. They only keep enough to settle their daily requirements.

                Your original statement:

                “Nobody is obligated to accept negotiable debt instruments and FRB-created deposit money today either. Yet they are widely accepted.}

                “They are widely accepted today because the state has made them legal tender by law, and has made them acceptable for taxation. People did not come to accept them in an absence of coercion.”

                Your sad lies above notwithstanding, your statement includes negotiable debt instruments” in those ones allegedly “accepted today because the state has made them legal tender”.

                Accusing one of lying presupposes that you know their actual beliefs, specifically that they contradict their professed statements. My professed statements do not contradict my beliefs, ergo I am not lying.

                Having said that, no my statement does not necessarily include negotiable debt instruments. I have only said it includes FR deposits. You are falsely generalizing when my statement was restricted.

                Your statement is false.

                No, my statement is true. Your statement is false.

                Your dishonest operating procedure is now to just deny your made any such statement! Impressive.

                No, you are straw manning me. You are asserting I said things I actually did not say.

                “You can, and most people do through withholding, pay taxes with checks drawn on fractionally reserved bank accounts. For the most part, these checks are not actually cashed out by the government into base money, either.”

                They do not have to literally “cashed out” with physical currency. And reserves or base money ARE required to finally pay taxes.

                Hahaha, notice the “finally” that you added. No, base money is NOT required to “finally pay taxes.”

                The IRS rarely if ever takes possession of base money when they receive checks off FR deposits. Almost always, they consider the payment finalized if your bank communicates that your FR demand deposit account has sufficient funds.

                If your cheque bounces, you have not paid your taxes.

                Your check does not bounce if you have sufficient funds deposited into your FR account. If you have an FR account totaling $100k, and you owe $10k in taxes, then you can pay taxes using a check drawn on your FR account. Your bank will debit your account $10k, and credit the IRS’s account $10k.

                Nor does the government not demand high power money when it gets a cheque.

                False. The government rarely demands high powered money when it collects taxes.

                Only with final settlement in clearing, by transferal of high powered money , are taxes extinguished.

                False. Taxes are considered by the IRS as cleared once their accounts are credited with money that is not necessarily high powered.

              • Lord Keynes says:

                “The IRS rarely if ever takes possession of base money when they receive checks off FR deposits. Almost always, they consider the payment finalized if your bank communicates that your FR demand deposit account has sufficient funds.”

                lol.. “rarely if ever takes possession of base money when they receive checks”!

                You have proven beyond any shadow of a doubt: you are utterly ignorant of how modern clearing and tax payment works.

                Cite me clear and explicit evidence of this.

                You won’t, of course. because you cannot.

                ” If you have an FR account totaling $100k, and you owe $10k in taxes, then you can pay taxes using a check drawn on your FR account. Your bank will debit your account $10k, and credit the IRS’s account $10k.”

                The bank will always clear with high powered money with the government sector. Your argument is totally destroyed.

              • Major_Freedom says:

                LK

                “The IRS rarely if ever takes possession of base money when they receive checks off FR deposits. Almost always, they consider the payment finalized if your bank communicates that your FR demand deposit account has sufficient funds.”

                lol.. “rarely if ever takes possession of base money when they receive checks”!

                You have proven beyond any shadow of a doubt: you are utterly ignorant of how modern clearing and tax payment works.

                LOL, that showed YOU are utterly ignorant of how taxation and banking works.

                Cite me clear and explicit evidence of this.

                LOL, in other words, you had no idea, and now you want me to hold your hand.

                You won’t, of course. because you cannot.

                Ooooh, double dare!

                The IRS receives something like $3 trillion a year in taxes, and the overwhelming majority of this money is electronic transfers of FR accounts from taxpayers. To claim that the IRS actually takes receivership of high powered money is about the dumbest thing you have said yet, and that is saying something.

                ” If you have an FR account totaling $100k, and you owe $10k in taxes, then you can pay taxes using a check drawn on your FR account. Your bank will debit your account $10k, and credit the IRS’s account $10k.”

                The bank will always clear with high powered money with the government sector.

                False. There was not (up until only the last few years) even enough high powered money in existence to settle all taxation transfers in high powered money.

                Your argument is totally destroyed.

                No, it is merely being tickled with these spitballs you call “arguments.”

              • Lord Keynes says:

                “The IRS receives something like $3 trillion a year in taxes, and the overwhelming majority of this money is electronic transfers of FR accounts from taxpayers. “

                All settled in high powered money.

                “False. There was not (up until only the last few years) even enough high powered money in existence to settle all taxation transfers in high powered money. “

                lol.. And what about monthly flows back and forth from the government sector?

                As for the aggregate amount of high powered money, since government spends a vast amount of money every month, the flows back and forth each month from and to the government sector more make up for the fact that aggregate annual taxes might exceed aggregate base money.

                Your statement above shows idiotic ignorance of stocks and flows.

              • Major_Freedom says:

                LK:

                All settled in high powered money.

                No, it isn’t “all” settled in high powered money. You’re wrong.

                lol.. And what about monthly flows back and forth from the government sector?

                The money is almost all kept by the banks the whole time, and the banks and IRS are just electronically transferring ownership claims of various FR deposits.

                As for the aggregate amount of high powered money, since government spends a vast amount of money every month, the flows back and forth each month from and to the government sector more make up for the fact that aggregate annual taxes might exceed aggregate base money.

                You’re just making that up.

                Prior to 2008, the IRS collected around $250 billion a month in taxes, and currency at the time was around $800 billion, of which around 70%, or $560 billion was kept overseas, leaving the IRS to clear $250 billion a month taxes on $240 billion (high powered) currency.

                Your statement above shows idiotic ignorance of stocks and flows.

                No, it doesn’t. Your response shows utter ignorance of our taxation and monetary system.

              • Lord Keynes says:

                “Prior to 2008, the IRS collected around $250 billion a month in taxes, and currency at the time was around $800 billion, of which around 70%, or $560 billion was kept overseas, leaving the IRS to clear $250 billion a month taxes on $240 billion (high powered) currency.

                Even assuming these figures are true – and you have provided actually zero evidence in support to of them – what about the monthly spending by all levels of government (state, local and federal), capital account inflows of US dollars, open market operations?

                Buffoon.

              • Major_Freedom says:

                LK:

                Even assuming these figures are true – and you have provided actually zero evidence in support to of them – what about the monthly spending by all levels of government (state, local and federal), capital account inflows of US dollars, open market operations?

                If you want to add spending by state and local governments, then you have to also include state and local taxes, and the same principle of taxes exceeding high powered money would remain.

                When governments spend money, they aren’t necessarily spending high powered money. More often than not they simply digitally credit the FR bank accounts of the receivers. They don’t necessarily send currency.

                Buffoon.

                Rubbish straw man ad hominem garbage incompetent contemptible red herring.

              • Lord Keynes says:

                “When governments spend money, they aren’t necessarily spending high powered money. More often than not they simply digitally credit the FR bank accounts of the receivers. “

                And that involves >creating high powered money.

                When they spend, governments create high powered money and add reserves to the whole financial/banking system.

                Congrats on your continuing demonstrations of total ignorance.

                All government spending adds reserves to the system, just as tax payment in the final clearing drains reserves.

                But aggregate taxes in any one year are also spent.

                Monthly flows of new reserves from the government sector will roughly balance tax intake.

              • Major_Freedom says:

                LK:

                And that involves creating high powered money.

                You’re now in full retreat. You’re now claiming it “involves” high powered money. Well sure, but the point is whether high powered money is actually exchanged.

                When they spend, governments create high powered money and add reserves to the whole financial/banking system.

                Not necessarily.

                Congrats on your continuing demonstrations of total ignorance.

                You haven’t shown any prior “ignorance” that would warrant justification for the use of “continued.”

                All government spending adds reserves to the system, just as tax payment in the final clearing drains reserves.

                You’re arguing from outdated models.

                But aggregate taxes in any one year are also spent.

                Yes, but that doesn’t imply it’s always currency that is being transferred.

                Monthly flows of new reserves from the government sector will roughly balance tax intake.

                The governments spends far in excess of what it taxes.

              • Lord Keynes says:

                There’s no “retreat” – only continuing confirmation of your errors.

                You have now admitted that no government forced the private sector to accept cheques, bills of exchange, promissory notes etc.

                “Monthly flows of new reserves from the government sector will roughly balance tax intake.

                The governments spends far in excess of what it taxes.”

                Nice red herring – which means you’re now cowardly evading the assertion that “monthly flows of new reserves from the government sector will roughly balance tax intake”. This means that it does not matter that aggregate base money is lower than aggregate spending – monthly government spending flows basically balance tax revenues – and certainly they do in the aggregate annual sense.

                And governments borrow to cover the shortfall in spending.

                That involves high powered money from overseas’ owners, as in foreign purchases of newly issued treasuries (e.g., China and Japan).

                There is more than enough domestic reserves for purchasing of the remaining bonds not bought by the foreign sector.

              • Egoist says:

                LK:

                You still haven’t shown any errors that would warrant continued use of the word “continuing”.

                I have shown you have no clue how our taxation and monetary system works.

                There’s no “retreat” – only continuing confirmation of your errors.

                You have now admitted
                that no government forced the private sector to accept cheques, bills of exchange, promissory notes etc.

                That was never disputed, and no, I did not “admit” the government forces the private sector to accept those listed items.

                I have only said the government enforces legal tender laws that include FR deposits.

                Your responses have been nothing but red herrings, straw men, and demonstrably false empirical claims.

                “Monthly flows of new reserves from the government sector will roughly balance tax intake.
                The governments spends far in excess of what it taxes.”

                Nice red herring – which means you’re now cowardly evading the assertion that “monthly flows of new reserves from the government sector will roughly balance tax intake”.

                Nice red herring. You have dodged the point that the government spends far more than it taxes, and thus is sufficient to prove that not all money the government spends and collects is currency.

                This means that it does not matter that aggregate base money is lower than aggregate spending – monthly government spending flows basically balance tax revenues

                False. Monthly government spending does not roughly equal monthly tax revenues. The government is running an over $1 trillion annual deficit.

                – and certainly they do in the aggregate annual sense.

                It’s even worse in the aggregate.

                And governments borrow to cover the shortfall in spending.

                That involves high powered money from overseas’ owners, as in foreign purchases of newly issued treasuries (e.g., China and Japan).

                Notice your retreat again. You continue to use the word “involve.” The key is whether or not currency is actually transferred. It is not necessarily.

                There is more than enough domestic reserves for purchasing of the remaining bonds not bought by the foreign sector.

                Red herring. The issue is not whether there is enough to purchase bonds. The issue is whether there is enough to tax.

                Keep digging that hole. Your claims are continuing to be utterly fallacious.

              • Major_Freedom says:

                LK:

                You still haven’t shown any errors that would warrant continued use of the word “continuing”.

                I have shown you have no clue how our taxation and monetary system works.

                There’s no “retreat” – only continuing confirmation of your errors.

                You have now admitted
                that no government forced the private sector to accept cheques, bills of exchange, promissory notes etc.

                That was never disputed, and no, I did not “admit” the government forces the private sector to accept those listed items.

                I have only said the government enforces legal tender laws that include FR deposits.

                Your responses have been nothing but red herrings, straw men, and demonstrably false empirical claims.

                “Monthly flows of new reserves from the government sector will roughly balance tax intake.
                The governments spends far in excess of what it taxes.”

                Nice red herring – which means you’re now cowardly evading the assertion that “monthly flows of new reserves from the government sector will roughly balance tax intake”.

                Nice red herring. You have dodged the point that the government spends far more than it taxes, and thus is sufficient to prove that not all money the government spends and collects is currency.

                This means that it does not matter that aggregate base money is lower than aggregate spending – monthly government spending flows basically balance tax revenues

                False. Monthly government spending does not roughly equal monthly tax revenues. The government is running an over $1 trillion annual deficit.

                – and certainly they do in the aggregate annual sense.

                It’s even worse in the aggregate.

                And governments borrow to cover the shortfall in spending.

                That involves high powered money from overseas’ owners, as in foreign purchases of newly issued treasuries (e.g., China and Japan).

                Notice your retreat again. You continue to use the word “involve.” The key is whether or not currency is actually transferred. It is not necessarily.

                There is more than enough domestic reserves for purchasing of the remaining bonds not bought by the foreign sector.

                Red herring. The issue is not whether there is enough to purchase bonds. The issue is whether there is enough to tax.

                Keep digging that hole.
                Your claims are continuing to be utterly fallacious.

              • Lord Keynes says:

                Slipped up did you!

                Posting under one of your many other handles: first “Egoist” then under M_F.

                And your point lies in tatters: it does not matter that base money is lower than total government spending.

                All government tax revenue is spent, returning reserves to the banking system.

                You have demonstrated that you’re incompetent in understanding stocks and flows.

              • Anonymous says:

                LK:

                And your point lies in tatters: it does not matter that base money is lower than total government spending.

                I didn’t say it did matter, to the actual argument I am making, which is that:

                1. FR deposits are (de facto) legal tender

                2. Not all money transacted through the government is finalized by currency payment.

                All government tax revenue is spent, returning reserves to the banking system.

                Red herring.

                You have demonstrated that you’re incompetent in understanding our taxation and monetary systems.

              • Major_Freedom says:

                LK:

                And your point lies in tatters: it does not matter that base money is lower than total government spending.

                I didn’t say it did matter, to my main argument, which is that:

                1. FR deposits are (de facto) legal tender.

                2. Not all transactions through the government is finalized in currency payments.

                All government tax revenue is spent, returning reserves to the banking system.

                Red herring.

                Not all government spending is accompanied by equivalent taxes.

                You have demonstrated that you’re incompetent in understanding our taxation and monetary systems.

      • Lord Keynes says:

        “I thought I just said that.”

        No, you did not:

        “And we now have the MMTers and others seriously proposing that there is no need for taxation …”

        They do not propose that there is “no need for taxation,” only that taxes are not needed to finance government spending.

        Taxesare in fact needed for other reasons.

        • Bob Roddis says:

          It was like 6:00 a.m. and I had been up for about 4 minutes and neither my eyeballs nor brain were particularly clear, you miserable @%$#$%.

          All you ever can come up with are petty little errors, omissions or misstatements by Austrians here and there because you cannot understand the basic concepts. Keep it up. You provide comic relief. And you are a constant reminder that even someone who puts in thousands of hours attacking us has come up with NOTHING. You miserable @%$#$%.

          And note that LK did exactly what Delong did in trying to turn a quick and short statement of or about the MMTers into some type of serious substantive error.

    • Bob Roddis says:

      I think we can be quite assured that, in addition to LK not understanding economic calculation….

      http://tinyurl.com/czq33lq

      …..neither to Delong nor Abba Lerner understand it either.

      I also know and understand that MMTers claim additional marvelous functions for taxation like it being what gives their fiat funny money its value and that they claim taxation has a marvelous use in “regulating” the ephemeral “aggregate demand”.

      And I love Keynesian terms like “inflationary pressures”. Economic calculation, anyone?

      • Lord Keynes says:

        “I think we can be quite assured that, in addition to LK not understanding economic calculation…”

        lol… So do you mean by economic calculation problems these things:

        (1) the alleged miscalculation problems caused in the Austrian business cycle theory (ABCT).

        (2) alleged price distortions caused by government spending, deficit spending, central bank fiat money creation, price controls, subsidies, income policies, and so on.

        (3) Cantillon effects

        (4) impediments to a price vector that will clear markets as in this quotation of Hayek:

        The primary cause of the appearance of extensive unemployment, however, is a deviation of the actual structure of prices and wages from its equilibrium structure. Remember, please: that is the crucial concept.” (Hayek 1975: 6–7).
        ———-

        Do these cause economic calculation problems or not?

        If not, we can obviously all sleep peacefully at night! They can’t be a problem.

        If, according to you, they do, you have admitted that the idea that no non-Austrian can understood what you mean by “economic calculation” is nonsense.

        • Bob Roddis says:

          I think I answered all of those questions somewhere on the Mike “Price Controls are the same as the Free Market” Norman web site, didn’t I? Then didn’t Matt Tanous and Major Freedom smack you down again once and for all on the absurd view that economic calculation only means “movement towards GE”? The subject for the day is Brad Delong.

          • Lord Keynes says:

            ” Then didn’t Matt Tanous and Major Freedom smack you down again once and for all on the absurd view that economic calculation only means “movement towards GE”?”

            Since I have never asserted that your alleged “economic calculation” carping
            “only means “movement towards GE”, this is nothing but a straw man.

            Movement towards GE is only 1 of the 4 factors you claim are economic calculation problems.

            So are the 4 things above “economic calculation problems” or not?

            • Matt Tanous says:

              “Since I have never asserted that your alleged “economic calculation” carping
              “only means “movement towards GE””

              … except that time when you actually responded to Roddis’ claim you didn’t understand it with a “rebuttal” about how “Walrasian market clearing GE” was not an “Austrian concept not understood by anyone else”.

              Either that was a claim that economic calculation is just “market clearing GE”, or it was an implicit admission that you had no real basis for criticism or defense, so just threw out an ad hominem tu quoque (and a rather poor one at that, since it can easily be misinterpreted as you just being utterly retarded).

              Your list of four things demonstrates you don’t understand it, as – with the exception of Cantillon effects – they are the possible results, and not the cause, of calculation problems that are introduced. The Cantillon effect critique has little to do with calculation, but with hidden wealth redistribution caused by government.

              • Lord Keynes says:

                Your comments are becoming increasingly incoherent.

                I have never asserted that Roddis’s alleged “economic calculation” problems are all some version of “movement towards GE”. You have no idea what you’ve talking about.

                Specially since ABCT – a distinctly Austrian theory rejected by neoclassicals – has always been part of what Roddis means by “economic calculation/miscalculation”.

              • Matt Tanous says:

                “Specially since ABCT – a distinctly Austrian theory rejected by neoclassicals – has always been part of what Roddis means by “economic calculation/miscalculation”.”

                Again, you cannot distinguish cause and effect. The distortions to the ability to do economic calculation by credit expansion results in the business cycle, according to ABCT. “Economic calculation” does not mean ABCT.

                “I have never asserted that Roddis’s alleged “economic calculation” problems are all some version of “movement towards GE”.”

                You responded to :

                “in lieu of actually learning and understanding the Austrian concept of economic calculation”

                With: “So says someone who declares that Walrasian market clearing GE is an *Austrian* concept never understood by any critic.”

                Like I said, I can take that in two ways. You think the concept of economic calculation is just the mechanism for market clearing and the tendency toward equilibrium (and thus totally miss it), or you are a petty, simple man who has no argument better than “I think you don’t understand economics, so I don’t have to listen to you”.

                And, once again, you have demonstrated in your list of four things that you do not understand the concept- confusing it with the results of interference in it. Your mistake is analogous to calling a freezer the frozen food, and not the mechanism that freezes it.

      • Matt Tanous says:

        Hah. Markets don’t clear because the law of demand doesn’t hold. Great stuff.

        Demand curves slope downward. This is inevitably true. In instances where it appears incorrect, there are other factors at work that Keynesians and neoclassical economists ignore with their ridiculous emphasis on aggregates and mathematics.

        • successfulbuild says:

          Whatever Matt Tanous says, just take the opposite of what he says and you will have the truth. Demand curves do not always slope downward even within neoclassical economics. Furthermore, its been shown through a proof by contradiction that you cannot get an individual demand curve through a market demand curve, hence, either there is a problem with their assumptions or market curves do not always slope downward.

          Here’s some more Matt Tanous’ greatest hits:

          “Then they are absolutely nuts.” (In regards to mathematicians believing that numbers exist, which a majority of them do. )

          His proof that mathematics is reducible to logic:
          “Have you seriously never heard of the logical axioms of arithmetic, or dealt with a mathematical proof?”

          “The proof of Euclidean geometry…”

          “I don’t have to remember the proof of Euclidean geometry …”

          (I’ll have to learn that proof as I don’t remember it.)

          Claims this is all a part of his computer science education:

          “Seeing as you claim to refute practically everything I learned about CS obtaining mine…”

          I ran out of time but I’ll explain why computer scientists learn Godel’s theorem when I return. And by the way the ACM recommends a thorough course in programming, particularly in an OOP language, and a course on data structures and algorithms. Almost all schools follow this model, even some of the top schools like Cornell and Stanford. The goal of CS is not to prove that CS is just all “logical analysis” as he claims.

          Again, I’ll have a lot more to say here when I return. (This guy is even funnier than Major_freedom and bob roddis.)

          • Major_Freedom says:

            Whatever Matt Tanous says, just take the opposite of what he says and you will have the truth.

            Matt Tanous said successfulbuild is correct.

          • Matt Tanous says:

            “Demand curves do not always slope downward even within neoclassical economics.”

            Marginal utility requires that demand curves for individuals slope downward. As market curves are just the sums of individual curves, they also slope downward. I don’t give a whit about the errors of neoclassicals.

            “Furthermore, its been shown through a proof by contradiction that you cannot get an individual demand curve through a market demand curve”

            Stop trying to work backwards.

            “(In regards to mathematicians believing that numbers exist, which a majority of them do.”

            Numbers are not separate physical entities that exist on their own. If mathematicians – and you – actually believe that, they have a screw (or many screws) loose.

            “I ran out of time but I’ll explain why computer scientists learn Godel’s theorem when I return.”

            You can go on explaining all you like. You might also want to explain why all my professors – and Godel himself – were wrong in what it is, and how it applies.

            “The goal of CS is not to prove that CS is just all “logical analysis” as he claims.”

            That class in algorithms? Basically all logical analysis of various complicated problems. Because it is all based in mathematics, which is just logical analysis applied to quantified systems. It is, in short, the logic of quantity.

            • successfulbuild says:

              “Marginal utility requires that demand curves for individuals slope downward. As market curves are just the sums of individual curves, they also slope downward.”

              This is false because our desire for purchases are constantly changing. I may want 1 pizza at $10 one day and 2 pizzas for $22 another day, in that case my demand curve would actually slope upwards. Behavioural economists have also shown that people’s preferences can be anchored to seemingly unrelated things: for example, I may say one minute that I would pay $20 for the game, but if the guy asked me how many games I had or something else seemingly unrelated, I would anchor that to the price. Which means my marginal utility isn’t even a good predictor of human wants and needs.

              Second, marginal utility can only get a nation wide demand curve if everybody’s tastes are the same. If they are not, then our demand for things will fall, rise, etc. based on the choices other people make and the costs of other goods. Your theory fails to take into account differences in income etc.

              • Major_Freedom says:

                Successfulbuild:

                This is false because our desire for purchases are constantly changing. I may want 1 pizza at $10 one day and 2 pizzas for $22 another day, in that case my demand curve would actually slope upwards

                That is not how to understand demand curves in the Austrian comtext, which is the argument you’re addressing.

                Demand curves are hypothetical constructs. They are not temporal empirical concepts.

                If you want one pizza for $10 one day, and then two pizzas for $22 another day, then you are not necessarily talking about a single demand curve that you are moving up and down along. You may be considering TWO separate demand curves, one which intersects at $10 a pizza for one pizza, and another at $11 a pizza for two pizzas. Two separate demand curves would be drawn through those two points, and neither are necessarily upward sloping.

                Behavioural economists have also shown that people’s preferences can be anchored to seemingly unrelated things: for example, I may say one minute that I would pay $20 for the game, but if the guy asked me how many games I had or something else seemingly unrelated, I would anchor that to the price. Which means my marginal utility isn’t even a good predictor of human wants and needs.

                Such behavior would be capable of being fully expressed by marginal utility scales.

                Second, marginal utility can only get a nation wide demand curve if everybody’s tastes are the same. If they are not, then our demand for things will fall, rise, etc. based on the choices other people make and the costs of other goods. Your theory fails to take into account differences in income etc.

                This is false. Constructing aggregate demand curves from individual demand curves does not at all require identical “tastes”. For it is merely the aggregated sum of all individual demands for all heterogeneous goods and services.

            • successfulbuild says:

              “That class in algorithms? Basically all logical analysis of various complicated problems. Because it is all based in mathematics, which is just logical analysis applied to quantified systems. It is, in short, the logic of quantity.”

              The algorithms class is not “all based on mathematics” but based on human psychology, learning patterns, and so on as well. Computer scientists attempt to create languages that they think will be the easiest to use for most people. That is why the syntax varies from language to language, and statements in one language will do something completely different in another language. You also might learn things such as code review and how to help detect errors in your code, which is also as much based on psychology as it is logical analysis. If what you were saying is true, then all languages would be the same.

              Next, the analysis of algorithms is based on a system powerful enough to model arithmetic, and Godel’s theorem says that any such system can never be formally complete. Any such a system would have to account for Godel’s statement, which means it is self-contradictory, since G contradicts itself. So for any such axiomatic system, there will at least be one statement that is unprovable. Therefore, it cannot be reduced to logical analysis.

              Also, computer scientists do not have a formal definition of an algorithm in the first place. So not only do they not know whether all problems can be solved algorithmically, they also do not know whether monitoring the vital signs of a hospital patient or maintaining an aircraft’s altitude in flight really are represented algorithmically since they are nonterminating applications.

              • Matt Tanous says:

                “The algorithms class is not “all based on mathematics” but based on human psychology, learning patterns, and so on as well.”

                Right. Determining whether a mathematical algorithm to solve a problem will require linear or polynomial time is based on “learning patterns”. Totally. Have you ever taken a class in algorithms, or are you just blowing smoke? Do you even know what an algorithm IS?

                “Computer scientists attempt to create languages that they think will be the easiest to use for most people.”

                Which has nothing to do with algorithms. Just as the language you choose to speak in has nothing to do with the ultimate meaning of the sentences.

                “So for any such axiomatic system, there will at least be one statement that is unprovable. Therefore, it cannot be reduced to logical analysis.”

                This is an absurd non sequitur. Godel’s theorem only applies to open systems – such as abstract mathematics – that are not bound by having their premises checked by reality. Further, even if there WAS a true statement that could not be proved with the axioms of the system, the REST of the logical analysis that is involved (it does not “reduce to” it – it IS it) is completely unaffected.

                “Also, computer scientists do not have a formal definition of an algorithm in the first place.”

                The intuitive notion of repeated calculation steps seems to work just fine. The technical details involved in a formal definition are only difficult because of the Church-Turing thesis and other constraints.

                Either way, your point – if it even exists – is not relevant. The incomplete nature of human knowledge does not invalidate what knowledge we DO have.

              • successfulbuild says:

                “Right. Determining whether a mathematical algorithm to solve a problem will require linear or polynomial time is based on “learning patterns”. Totally. Have you ever taken a class in algorithms, or are you just blowing smoke? Do you even know what an algorithm IS?”

                Yes, I have and it is clear that you haven’t and are completely clueless as to what is actually taught. Algorithm representation requires data structures and how languages hold data is based upon over 50 years of computer science research. Furthermore, algorithms require an individual to understand their design.

                Do you seriously think that they teach an “algorithms class” (generally called CS2) without teaching how to discover algorithms, how to implement them in a modern programming language, how to test them, and the various software engineering models and so on?

                The ACM recommends computer science students learn: the limitations of, the execution of, the analysis of, the discovery of, the representation of, the communication of, algorithms in a modern language. Most books cover these topics.

                “Which has nothing to do with algorithms. Just as the language you choose to speak in has nothing to do with the ultimate meaning of the sentences.” Programming languages are simply algorithm representation schemes. Algorithms and logic have types and that the syntax makes precise.

                “This is an absurd non sequitur. Godel’s theorem only applies to open systems – such as abstract mathematics – that are not bound by having their premises checked by reality.”

                Proof further that this guy doesn’t know what he’s talking about. Godel’s theorem does not only apply to “open systems such as abstract mathematics…”

                Godel’s theorem applies to any mathematical system that encompasses our traditional arithmetic system. Now, where do programming languages come from? They come from the lambda calculus (in the case of McCarthy), or first order logic, etc. That is where the “logical equivalents” come from. This is sufficiently complex enough to model arithmetic. This means that any complete study of these systems lies beyond the capabilities of algorithms.

                Does this little guy seriously think a mathematician wouldn’t define where his theorem applies.

                “further, even if there WAS a true statement that could not be proved with the axioms of the system, the REST of the logical analysis that is involved (it does not “reduce to” it – it IS it) is completely unaffected.’

                And yet even MORE proof that Matt Tanous is a fool and a liar. Every theory has a Godel statement. This means that provability within T is NOT the same as truth, G cannot be proven; it is incomplete. Thus, any such formal system is not “reducible to” logic.

                “The intuitive notion of repeated calculation steps seems to work just fine.’

                That is NOT the definition of an algorithm, formal or otherwise.

                In fact, “repeated calculation” is not even an algorithm. Take the long division “algorithm”; it is not actually an algorithm because it never terminates when dividing, say, 1 by 3. The definition of algorithm in CS requires that there be a terminating condition.

                Whoever educated this Matt Tanous troll should be charged with child abuse. He’s a clown.

          • successfulbuild says:

            So now I have two demand curves? How would I know when I’m switching from one demand curve to the other? If I have two demand curves, I could just as easily draw a line that connects them, sloping upwards, and say that is my demand curve.

            Of course marginal utility is an abstract concept, but it’s an abstract concept that doesn’t exist and is false. For example, I may want to buy more of an item if its price INCREASES, because it is a luxury good. Or, if a price decreases, I may not want it at a certain point, because it gets mixed in with what I consider the “cheap stuff” or the lemons in society. There are many reasons why you’d be willing to buy more as the price actually increases (perhaps because if you notice the price increasing you might buy more because you think you could sell it later) and so on. I’ve actually bought items after a price increase and sold it on ebay, and turned out to be right in my decision and made money (Star Wars DVDs which are now out of print).

            In other words, as price increases, my demand increases as well. My personal demand curve sloped upwards for the star wars DVDs.

            If anything the Austrian version is even worse. Any points plotted on the Cartesian plane would have to refer to a given time, since the p is the price, and q is the quantity. There is no way of knowing which point would be associated with which time, in other words. So it’s ridiculous to say it “slopes downwards.”

            Second of all, the market demand curved is called the market demand curve, not the “aggregate demand curve,” which is different altogether and has much more complicated logic going on.

            Third, you cannot sum up all the individual demand curves because there is no way of knowing who is going to be buying what at any given point in time and how that will affect MY CHOICES which is why neoclassicals assume one consumer, one product.

            Fourth, of course the formulas for gravity are just as “abstract” and so on. The difference is that the formulas for gravity will always give you a reasonable result. It will never be violated, but the “marginal utility theory” is false in a lot of cases and nothing more than a social theory.

    • Matt Tanous says:

      “On contrary, taxes are necessary to free up resources, regulate aggregate demand, and control inflationary pressures.”

      All of that is nonsense, except maybe the controlling of inflation that was caused by the printing.

      But Roddis actually stated that was the MMT stance, so I don’t see what you are on about. Do you still hold the absurd view that economic calculation only means “movement towards GE”?

  7. Daniel Kuehn says:

    I don’t know, this is some information from the first thing that came up in Google when I searched on “political consulting profits”: http://www.factsandotherstubbornthings.blogspot.com/2012/11/im-no-accountant-but-maybe-bob-murphy.html

    I’m no accountant. I don’t know exactly what ought to be in the numerator or the denominator, but I can take a stab at it and DeLong’s numbers don’t seem implausible.

    Do you have any reason to think DeLong doesn’t have some familiarity with consulting margins?

    I guess I’m just confused whether the argument is “I know about political consulting margins and DeLong is making this up” or whether it’s “I can’t find this $80 million figure ergo Brad DeLong is making it up rather than working off of a familiarity with political consulting margins”

    The former is a good argument against DeLong. The latter, not so much.

    • Jordan says:

      The point is he doesn’t know the real number, and even if he guessed based off typical margins in the industry that doesn’t provide cover for saying “Rove profited X” when in reality you’re saying: “a lot of people like Rove usually earn Y margin which for Rove would equate to a profit of X.” It’s

      The relevant quote from your link is: “top 150 consulting companies — media, fundraising, digital/social, direct mail and others — have grossed $465.76 million so far in the 2011-12 electoral season, out of a total of $1.24 billion spent.”

      Can’t really say what this means. Does “grossed” mean the top 150 firms have that share of the total revenue, or does it mean operating profit? This info is really hard to come by, so I’m going to guess that it means revenue and therefore doesn’t tell us much.

    • Ken B says:

      “Do you have any reason to think DeLong doesn’t have some familiarity with consulting margins?”

      The phrase “If I know anything about X” is a claim to know more than a little about X, without deigning to say what or how. It’s code for “don’t ask”. Bob is suggesting that when you make inflammatory statements about named individuals “don’t ask” won’t cut it.

      • Daniel Kuehn says:

        I guess I just feel like judging it as inflammatory presumes at least as much knowledge of those sorts of margins.

        Some quick googling doesn’t suggest it’s a crazy figure, and Brad certainly isn’t alone making this critique of Rove:

        http://www.breitbart.com/Big-Government/2012/11/08/waste-gop-money-edge-squandered

        • Ken B says:

          He’s not alone in slamming Karl Rove? Are you sure? At least it’s not like Rove was some kind of punching bag bogey amn for democrats since the year 2000.

          • Daniel Kuehn says:

            Not Rove as a person.

            The whole “American Crossroads eats politicians’ money without delivering” point is not exclusive to DeLong. Conservatives have been saying that.

            • Ken B says:

              Wow Daniel. Karl Rove has the premier hate fetish object of the left for 12 years and counting. I had a friend — an econ prof so sexy — who seriously compared Rove to Goebbels.

      • Daniel Kuehn says:

        Maybe DeLong is completely making things up. My experience with him says “no”, but I’d be much more persuadable if I knew Bob had a sense of consulting margins… and I’m not clear that he has any better sense of it than I do.

        • Daniel Kuehn says:

          Well – Bob obviously does have a sense of consulting margins, since he’s a consultant!

          I mean political consulting, of course, which I’m assuming is a whole different world.

          • Major_Freedom says:

            Callahan would say Bob is a political consultant because Bob chooses not to participate in political consulting. Seriously.

            • Ken B says:

              Nice.

            • Daniel Kuehn says:

              hmmm… Gene would say Bob engages in politics even when he rejects politics (which really just means making a political claim that he is rejecting other peoples’ political claims).

              I don’t think Gene would say he’s a political consultant so long as he is not consulting for individuals seeking office.

              • Ken B says:

                I believe Gene argued as well for applying the commerce clause to Obamacare, on the grounds that non-activity is activity.

              • Major_Freedom says:

                Right, that’s what I mean.

                If the mere rejection of A = politics allegedly makes one active in A = politics, then it logically follows that the non-participation in X = political consulting allegedly makes one active in X = political consulting.

                I don’t see how one can hold the position that rejecting politics is still politics, but then not hold that rejecting political consulting is still political consulting.

            • Daniel Kuehn says:

              Certainly his consulting is political. But let’s keep the implications of these adjectives straight!!!!

              • Major_Freedom says:

                I don’t think it’s fair to say that one is politically active on the basis of rejecting politics.

                I am a political atheist, meaning I don’t believe in the validity of any particular statist paradigm nor in the truth of any statist paradigm’s claims as to what it is typically advertised as being able to achieve.

                I hold that any benefits that arise in any society with a state nevertheless derive from “spontaneous” individual private property based actions which are curbed by the state and hence prevented from deriving even greater benefits.

                If I choose to reject all “politics = art/science of governmental affairs”, then it would be absurd to claim I am pro-politics, or a political activist, or anything that would suggest I am in favor of implementing my own government system.

    • Adrian Gabriel says:

      Daniel, if you remember the Pareto Efficiency level from you statist econ classes at your local university, it’s 80/20. Divivde 80 by 400. There’s your answer. Brad DeLong was taking a wild stab in the dark with socialist economic calculation. He was also simply giving a class prediction based upon certain ratios and numbers. Bob is right, he’s pulling this stuff out of his ass.

  8. John says:

    The argument is made, “Stop right there. What would Murdoch have needed to say, in order for DeLong to believe that Murdoch was a friend of conservatives who was in the business of providing news to them?”

    First, I hope we could all agree that nothing said by a Robert Murdoch would ever convince any of us of anything, including that today is Friday. He has every motive to lie and no motive to tell the truth, so who would even bother to listen to what he might say?

    That leaves one path for Murdoch, his actions. Actions speak louder than words. Can anyone point to any actions by Murdoch that show or end tend to show that he is a friend of conservatives?

    The first answer to that question would be to search for some evidence where he has put ratings and ad revenue second to doing what would be good for conservatism. Now, that presents two challenges, itself.

    One has to ask, what is conservatism. Insofar as know, no principled definition exists for an American conservative. Mostly certainly Fox has never advanced such. Simple example; reconcile being anti-abortion, anti Gay marriage with being pro small government. Cannot be done.

    Look past that and what evidence is there. None. To the contrary, he treats people like Huckleberry, Palin, Newt, and mini-candiates for President, Ron Paul (I could go on and on and on) like serious people. By doing such, he appears to have greatly aided Obama.

    Beyond that, being a news source doesn’t mean being a cheerleader. By contrast, Obama’s faults are widely known and reported by the rest of the media

  9. Ken B says:

    “First, I hope we could all agree that nothing said by a Robert Murdoch would ever convince any of us of anything, including that today is Friday. He has every motive to lie and no motive to tell the truth, so who would even bother to listen to what he might say?”

    No we don’t all agree. Nor do we agree that it slights an ideological opponent to twist his name to match that of a character from American fiction who stood up to the group think and bigotry of his culture, as at least one commenter here seems to.

  10. Marc says:

    “Suppose a guy plants apples because he sees a market opportunity. Is he not really in the business of providing apples to people who like apples?”

    He is, but that does not mean he himself likes apples. The current perception is that Murdoch makes FOX News right-wing because he himself is right-wing. Delong is saying that FOX’s “right-wingness” is nothing more — like selling apples to people who like apples — than a market opportunity.

    A practical implications of that is, say, the right-wing segment of America fades away, and shifts to the left. FOX news would go right along with that and shift to the left.

    • Ken B says:

      In your apple story it’s not about whether he likes apples that Bob is taling about. It’s about whether he likes apple eaters. He needn’t like them to “be a friend” to them.

      • Marc says:

        To break down the analogy, the apples are conservative ideas. The people who like the apples, are people who like conservative ideas, i.e. conservatives. There is no reason to like conservatives, apart from the fact that they like conservative ideas. And if you like conservative ideas, then chances are you are a conservative (I’m using the word “conservative” way too many times).

        That said, Delong’s point was to show that Murdoch is NOT a conservative, as people seem to think. Murdoch is simply capitalizing on a business opportunity. So if Murdoch one day wakes up and sees that a large segment of Americans are Marxists, Murdoch will switch the conservative nature of FOX News to capitalize on THAT business opportunity.

        • Dan says:

          That’s fine if Delong believes that, but the quote he used from Murdoch does nothing to prove that point.

          • Marc says:

            The quote is: “There is no news channel catering to the very large right-wing segment of the American market. And that is a definite market opportunity”

            I’ll spin Bob’s question around, and ask it on him: What does Murdoch need to say for you to think that Murdoch is not necessarily a conservative? Would, “Hey, I really don’t care for politics, but I see a market opportunity here” work?

            • Bob Murphy says:

              I think people need to take a course in logic. Marc suppose I say, “Brad DeLong hates kittens. The other day I heard him say he wanted to buy a kitten.” Wouldn’t you think I had erred in such a statement? Now I didn’t just prove he likes kittens either–maybe he wants to buy a kitten so he can put it in a stew. But the point is, you don’t ‘prove’ a point with a quotation that is consistent with the opposite interpretation.

              • Marc says:

                I’m logically sound Brad Delong is not saying Murdoch hates conservatives either. He is simply saying the reason Murdoch made FOX News was to make money, NOT — as one may be inclined to think — because he is a conservative. Isn’t it reasonable to assume that the reason he presented in this quote is the reason he created FOX News — and not for any other reason? So Delong is saying that we have no idea what is going on in Murdoch’s head politically– but don’t make the mistake of assuming he’s a conservative just because he does FOX News.

              • Dan says:

                What post did you read, Marc? Here’s what Delong actually said,

                “Rupert Murdoch is not in the business of providing news, or advancing right-wing causes.”

                “But do not confuse the fact that Rupert Murdoch wants to keep your eyes glued to the screen with the idea that Rupert Murdoch is your friend. He is not. You are his mark.”

                How does Delong show republicans that Murdoch is not their friend, and they are simply his mark? By quoting a statement Murdoch made that in no way proves DeLong’s point.

                If Dr. Murphy said the same exact thing as Murdoch, but about libertarianism rather than conservatism, it would not imply that libertarians are not his friend, and simply his mark.

              • Marc says:

                Dan, that’s where you are completely wrong. If there was a quote by Bob Murphy — before he started this blog — saying ““There is no blog catering to the very large libertarian segment of the American market. And that is a definite market opportunity”, You can watch his libertarian followers walk away. Far away.

              • Major_Freedom says:

                Don’t be ridiculous. If Bob actually said that, I would definitely not consider him an enemy. As long as he offers what his “market” wants, and for me that is arguments that are sound, then I would not think he’s not a friend simply because he thinks there is a market opportunity for libertarianism.

                I wouldn’t “wake away.” But according to DeLong’s logic, I should believe he is not a friend.

                Sellers can be friends you know.

              • Bob Murphy says:

                Phew! I was worried that if my email got hacked I would lose all my fans. For example, when Bob Wenzel and I gave our fee-based talks in Boston, I’m sure we sent emails back and forth trying to estimate what the response would be. We didn’t want to actually lose money buying plane tickets and giving up our time to fly out there. I hope I didn’t just shock everyone.

              • Major_Freedom says:

                You mean that libertarianism allows individuals to pursue their material self-interest?

                Heathen!

            • Marc says:

              MF
              Maybe the use of “walk away” is the wrong word, the same way if conservatives found out that Murdoch was apolitical, they wouldn’t “walk away” from FOX. They wouldn’t be his enemy either. But this whole argument is just one of semantics — on what is meant by “friend”. If someone calls you a friend of conservatives, that means you are a conservative. Now, what evidence is there that Murdoch is a conservative? Zero. That is the point.

              And again, that’s why Bob’s apple analogy is flawed. Because to be a “friend” of apple eaters, the apple seller does not need to like apples himself. See? Different uses of the word “friend.”

              I’m done.

              • Ken B says:

                “If someone calls you a friend of conservatives, that means you are a conservative. ”

                Wrong. For example you are a friend to logic teachers everywhere, lest they lack examples to justify their keep.

              • Marc says:

                I’m not sure if that’s a joke or not, but if not — a logic teacher is not a conservative. One is in the business of providing a service, and one is simply a person with a specific ideology. What other reason is there for me to earn the title “friend of conservatives” if I’m not a conservative (or similar) myself? Are conservatives inherently funnier? Are they inherently cooler? Are they inherently nicer?

                Again, assuming you weren’t joking and just poking fun at logic teachers (not sarcastic).

              • Major_Freedom says:

                Marc, you seem to be going all over the place.

                You said Dan is wrong in this post.

                Yet that post by Dan is exactly right. It is exactly the point Murphy is getting at. I see it. Dan sees it. You said Dan’s wrong.

                To show Dan’s wrong, you claimed that if Murphy did the same thing as Murdoch, that is, of seeing a market opportunity within the libertarian population and catering towards it, that suddenly I, Dan, everyone here would supposedly not consider Murphy a friend, but solely a business partner or whatever.

                After I said hey wait a minute, I know I wouldn’t consider Murphy a non-friend if I found out he was managing this blog for marketing reasons, I wouldn’t walk away, I wouldn’t consider myself duped, I wouldn’t think LESS of Murphy, you then come back with “maybe walk away is too strong a word”. That’s when I knew you’re not serious about ideas. You want to change your mind, but rather than say OK, I was wrong to make those assumptions about you and others, you instead tried to make this just a misunderstanding of word usage, that you always had it right, you just used the wrong words to describe it.

                The post you made here is very clear. You said that if Murphy’s followers found out that he said something like “There is no blog catering to the very large libertarian segment of the American market. And that is a definite market opportunity”, that we would all “walk away. FAR AWAY.”

                What else does that mean other than that we would all cease visiting his blog?

                I think I knew what happened. You yourself are the kind of person who does not like friendships being centered around self-interested business pursuits. You think friendships should only be centered around altruism, of each being a selfless giver to the other, no questions asked.

                If you were in such a friendship, and you suddenly found out that the person you thought was your selfless friend, was only spending time with you and whatnot because he is in some way making money off you, that this would ipso facto be reason for you to “walk away, far away” from that so-called “friend.”

                You then incorrectly thought this ideal would be the same for everyone else too, like the libertarians on this blog. You thought there is no way that the libertarians would remain here posting if we all found out about a quote Murphy made awhile ago about this blog being a business opportunity.

                Let me be perfectly clear with you: I WOULDN’T MIND if I found that out. Murphy’s reasons are his own. My reasons for coming here are my own.

                I would not walk away, I would consider less of Murphy, I would not think he duped me. I wouldn’t even mind if Murphy himself is not a libertarian, and is just posting libertarian blog posts, writing libertarian books and papers, and giving libertarian lectures and seminars.

                If it was all a rube, I would actually feel sorry for him, because I believe that there are ways to make money without being completely dishonest with oneself. But he’s not that, so I don’t have to feel sorry.

                ————-

                Ken B:

                Marc’s statement:

                “If someone calls you a friend of conservatives, that means you are a conservative.”

                There is truth in that. I think by “conservatives” he isn’t referring to individuals who happen to be conservatives, in which case your criticism would be warranted.

                Rather, I think he means something like conservative ideas out there in society, embodied in individuals.

                If a Christian said to me “Ken B is a friend to Christians”, then I would at least think you are a religious person. I would think that interpretation is warranted.

                On the other hand, if someone said to me “Ken B is a friend to Frank, Tom, John, and Suzy, and oh, they all just happen to be Christians”, then I would not think you are at least a religious person. For you can be friends with them even though you are not yourself Christian.

                I think with Marc’s statement, he wasn’t referring to friendships with individuals, but rather, he was thinking of a set of ideas that are the common link between friends, and those friends refer to those ideas when considering each other’s friendships. The friendships are centered around the ideas of conservatism.

                Like when a mafia guy says to another mafia guy about a third guy named Donny: “Donny’s a friend of mine”. That means he’s also mafia. If the mafia guy says “Donny’s a friend of ours”, that means Donny is “made”.

              • Major_Freedom says:

                Oops.

                “I would NOT consider less of Murphy.”

              • Ken B says:

                Thus does M_F prove Oscar Schindler was a Jew.

              • Marc says:

                MF
                Thanks for following up.
                The reason why I brushed aside the “walk away” usage, is because — although I do admit I was wrong in responding to Dan’s post — I realized that what I was saying was irrelevant to the point. I already sufficiently made my point before I wrote that post. Do you or do you not admit, that Bob’s apple analogy was flawed? When you come to that realization, you will concede my point.

              • Major_Freedom says:

                Ken B:

                Oskar Schindler was not a friend of the Jews. He was a man who hired some Jews to build goods that helped the Nazis kill other Jews.

                He was a friend of some people who happened to be Jews. He was a man who made money through the killing of Jews.

                Ask those Jews who were killed by the Nazis who had Schindler’s help, if Schindler was a friend of the Jews.

                I personally think he was a horrible man, but I don’t have the influence that Spielberg has in spreading my non-Hollywood-revisionist impression.

                Yes, many Jews consider Schindler a blessing, but that’s mostly because they and their families were the ones saved.

                —————

                Marc:

                Do you or do you not admit, that Bob’s apple analogy was flawed? When you come to that realization, you will concede my point.

                I don’t think that Murdoch being a conservative or not a conservative is even relevant, IMO. This is about whether Murdoch likes or dislikes his conservative market.

              • Major_Freedom says:

                Ken B:

                Yes, I know you can’t ask dead people anything. It was a rhetorical flourish.

              • Marc says:

                One more thing, MF: I won’t say anything about your insistence that my “refusal” to acknowledge my error in that post is relevant to this argument (because when I made the rebuttal to Dan, I myself thought it was relevant) — but your analysis of my view on friendship shows me that you do not understand my point. This isn’t an insult. Either I’m not being clear, or you haven’t read all my posts about this.

              • Major_Freedom says:

                You have made many points, Marc. I am just trying to understand, and find what’s right at the same time.

                The relevant meaning of “friend” is DeLong’s meaning, not yours, since that is what Murphy is critiquing.

                What is the importance of Murdoch being or not being a conservative, and what does your meaning of friend have to do with the apple analogy?

              • Marc says:

                “What is the importance of Murdoch being or not being a conservative, and what does your meaning of friend have to do with the apple analogy?”

                This topic is getting tiring (and its importance does not justify the attention) so this is going to be my last post. Murdoch being/not being a conservative has a practical implication — if the conservative segment of America fades away, and say, turns Marxist — Murdoch may keep the conservative nature of FOX News or change it — depending on his personal views (this is not necessarily inevitable, but hopefully you see the point).

                “The relevant meaning of “friend” is DeLong’s meaning, not yours, since that is what Murphy is critiquing.”

                Correct — I wasn’t giving my own meaning of friend. I was simply explaining Delong’s usage of “friend” IN THAT SCENARIO. I showed why I interpreted it that way, and I think my proof is sound. But I will give another proof that Delong does not mean a “business friend” from the angle that you’re coming from: If you assume Delong meant “business friend,” then Delong’s post is incoherent. After all, aren’t all customers “marks” (Delong’s word) to businesses even though they may have a friendly business relationship? So would it make sense that Delong is saying “Don’t think Murdoch is your BUSINESS FRIEND, because you are really his MARK”? After all, the two do not exclude each other in any way.

                But it does make perfect sense for him to say “Don’t think Murdoch is a conservative just b/c he made FOX. You are simply his mark.”

                Hopefully that was clear.

        • Matt Tanous says:

          You should be more conservative with your use of the word conservative.

      • Marc says:

        Just in case I wasn’t clear in that post…

        Ken, why would Murdoch be a friend of conservatives, if he didn’t like conservative ideas? That’s the implication of him being a friend of conservatives. That’s why Bob’s analogy doesn’t work– because in the apple case, he doesn’t need to like apples to be a friend of the apple eaters.

  11. Matt Miller says:

    Does anyone know if DeLong has any particular opinions on Glenn Beck? Because that’s exactly what he claims to be doing – starting a conservative news network at great personal expense. On the radio today, he claimed that his company has taken a loss in the past two years due to all of his investments in his new television network.

    Does this make him a more reliable news source? A more qualified “friend” of conservatives? Would DeLong be satisfied with Republicans giving him money and watching his network?

    • Bob Murphy says:

      Matt Miller wrote:

      Does anyone know if DeLong has any particular opinions on Glenn Beck?

      Exactly Matt, I didn’t want to dwell on this point because it would detract from DeLong inventing the $80 million figure (but it was a plausible invention, I grant). If he had a quote from Murdoch saying, “I’m going to give right-wing-slanted news even though it’s not profitable,” I imagine DeLong would be laughing up and down about what a hypocrite he was–don’t conservatives love the market? Ha ha losers.

      • Matt Miller says:

        Right. There’s also the “Glenn Beck is so crazy and extreme that he can’t even find enough viewers to turn a profit” argument.

        On the one hand, if conservative news is unprofitable, that means it’s stupid and there’s no market for it, etc.

        On the other hand, if it is profitable, it means that those providing it are only in it for the money and secretly don’t care about conservative beliefs at all.

        A true no-win situation!

  12. successfulbuild says:

    Well, one thing about Brad Delong is that I think he distorts what chomsky did with that book by Faurisson in his article about his Allergic Reaction to Noam Chomsky. For example, his claim that Chomsky “wrote a preface” to the Faurisson book and his attempt to paint him as a run-of-the-mill conspiracy theorist and anti-Semitic. This is picked up by Discover the Networks and other conservative bloggers who attempt to smear anti-war critics as being anti-Semetic, such as Paul Bogdanor, who is a Libertarian “anarcho”-capitalist.

    In fact, no “preface” was ever written. What was written was an essay entitled “Some Elementary Comments on the Rights of Freedom of Expression.” This was then attached as a preface without Chomsky’s permission. In fact, Noam Chomsky actually OPPOSED any article by him being attached to any book by Faurisson:

    “no — that’s not the preface that I wrote, because I never wrote a preface.” — From the movie manufacturing consent.

    Chomsky: May I continue with the facts?

    Joop van Tijn: Yes, you can continue with the facts for hours. But, I mean, there are a few facts that — Youah, OK.

    Chomsky: Let’s get to the so-called preface. I was then asked by the person who organized the petition to write a statement on freedom of speech. Just banal comments about freedom of speech, pointing out the difference between defending a person’s right to express his views and defending the views expressed. so I did that. I wrote a rather banal statement called “Some Elementary Remarks on Freedom of Expression” and I told him, “Do what you like with it.”

    Joop van Tijn: Why did you try at the last moment to get it back from–

    Chomsky: –Thats the one thing I’m sorry about.. That’s the one –

    Joop van Tijn: — But that’s the real, thatls the real important thing.

    Chomsky: No it’s not

    Joop van Tijn: because you –

    Chomsky: The fact that I tried to retract it?

    Joop van Tijn: Because with that you said that it was wrong of you to do it.

    Chomsky: No. I didn’t. See, in fact, take a look at what I — I wrote a letter, which was then publicized, in which I said: look, things have reached apoint where the French intellectual community simply is incapcable of understanding the issues. At this point it’s just going to confuse matters even more if my comments on freedom of speech happen to be attached to this book, which I didn’t know existed, so just to clarify things, I better separate them. In retrospect, I think I probably shouldn’t have done that. I should have just said, Fine. then let it appear. Because it ought to appear. But that’s — apart from that, I regard this as not only trivial, but as compared with other positions I’ve taken on freedom of speech, invisible.

    (From Holland public TV.)

    So Chomsky never wrote in any preface and actually opposed it being attached. You can see more about that even in the wikipedia entry on the so-called Faurisson affair:

    “Chomsky granted permission for the essay to be used for any purpose. Serge Thion then used it as a preface when publishing a book by Faurisson, without Chomsky’s knowledge.[9]”

    http://en.wikipedia.org/wiki/Faurisson_affair

    http://mailman.lbo-talk.org/2002/2002-June/015333.html

    And delong refuted on that point:

    http://www.counterpunch.org/2003/07/25/refuting-brad-delong-s-smear-job-on-chomsky/

    (Pay attention to the paragraph that contains “Note also the dishonesty in not mentioning that the preface was only written as an independent avis and inserted in the book as a preface without Chomsky’s prior approval (see Chomsky’s “The Right to Say It,” The Nation, Feb. 28, 1981.”)

    He (delong) then cites the Chomsky claim that Faurisson was apolitical, and his claim that Faurisson was publishing his “findings”,”[1] and then shows the response of a typical Chomskyite confronted by these facts, without actually quoting said Chomskyite.

    Robert Faurisson was some nut and a crackpot historian who claimed to have new evidence on the holocaust that was holocaust denial. He was then going to be taken to jail. Chomsky signed a petition opposing this and then wrote that article on some truisms about free-speech. I’ve actually talked to some holocaust deniers who are indeed completely convinced it never happened or was exaggerated because they claim it contradicted population statistics or what have you. They are simply crazy, not necessarily anti-Semitic. By Delong’s logic that everybody who denies the holocaust is anti-Semitic could just as easily be transformed as saying that everybody who denies global warming is anti-human, or everybody who denies evolution is anti-human, and so on and so forth.

    If you’re going to imprison holocaust deniers, why not imprison racists (many of whom come from the field of economics), global warming deniers, and others, whose “research” obviously does far more to the detriment of mankind than holocaust deniers. In fact, that was one of chomsky’s points. [2] Racism in some of the social sciences does far more damage to society than holocaust denial, because nobody takes holocaust denial seriously (although with the rise of anti-Semiticism that might not be so true).

    I could easily claim that everybody who posts here should be in jail for their position on “intelligent design” being a science, or theories on AIDS that make no sense, and the other crank science I’ve seen posted here, which probably also causes more deleterious effects to society than holocaust denial. Further, any attempt to imprison right-wingers will ultimately be used against the far left (egalitarians, anti-war activists, etc., sooner or later). “We imprison the far-right, why not imprison the far left.”

    In short, I think Chomsky was actually correct in defending Faurisson, that he never wrote any preface, his statements don’t prove anything that is anti-Semtic (delong also posts articles by others bringing up his ethnicity and so on in criticizing him), and that his case against imperialism is quite good. I don’t think Delong’s other criticisms were very good but I wouldn’t say they were necessarily dishonest.

    This is a case where what Delong said had 0% truth in it. Click on the links and judge for yourself. Also, for a refutation of “Libertarian” smear merchant\ and anarcho-capitalist paul bogdangor see: http://bigwhiteogre.blogspot.com/2011/06/response-to-paul-bogdanors-top-200.html

    [1] The term “findings” is quite neutral. One can say, without contradiction: “He amde his findings public and they were judged worthless, irrelevant, falsified…” From “His Right to say it,” the Nation (Debruary 28, 1981)

    [2] “I have defended this principle in far more controversial cases than the present one; for example, at the height of the Vietnam war, with regard to people I believe to be authentic war criminals, or scientists who claim that Blacks are genetically inferior in a country where their history is hardly pleasant and where such views may well contribute to the virulent racism, which persists. Whatever one may think of Faurisson, no one accuses him of being the architect of major war crimes, nor does he claim that Jews are genetically inferior, nor does he receive a tiny fraction of the support afforded in those more controversial cases — in which, I might add, my advocacy of principles I continue to hold elicited not a peep of protest.” –radical priorities.

    • skylien says:

      SB, there is only one thing to say about freedom of expression: “I do not agree with what you have to say, but I’ll defend to the death your right to say it.” Voltaire

      • Major_Freedom says:

        Just want to add:

        Freedom of speech only makes sense in a context of property rights.

        • successfulbuild says:

          Yeah, and as Hoppe says there will be no freedom of speech in the Libertarian dictatorship. Freedom of speech is about a lack of property rights. I can say whatever I want because my saying things NEVER hurts anybody. Only people hurt others.

          Even in the cases of shouting fire in a crowded theater, it’s really how people react that is the problem, not free-speech. I imagine rules could be constructed so people can exit without hurting themselves, esp. when there is no fire.

      • successfulbuild says:

        I think it’s worth pointing out that defending the holocaust is not the worst type of speech you can defend. As Chomsky himself said in the article, he also signed petitions in support of East European dissidents subject to repression and threats, without knowing exactly what they were claiming. He also supported the speech of counterinsurgency research in the universities in 1969, and which is going to do more harm to society, counterinsurgency research (used to bolster US efforts in Vietnam), or holocaust denial? Probably the former.

    • Beefcake the Mighty says:

      @successfulbuild:

      So, e.g., you believe that the Germans machine-gunned 33,000 people in a day and a half at Babi Yar? If so, why?

      • successfulbuild says:

        There’s a holocaust denier on Youtube who lives in Japan I believe.

        He’s also a Ron Paul supporter. However, he’s also anti-war and seems like a nice guy. He’s just completely convinced, as probably you are, that the holocaust was greatly exaggerated. In fact, I think he thinks it doesn’t even exist. There are other Austrians on youtube with links to videos like “the holohoax.”

        Another of Delong’s criticisms of Chomsky was that anti-Holocaust history implies anti-Semitism, and I don’t think that’s necessarily the case. As chomsky himself said he didn’t even care what research Faurrison was publishing (I’m thinking of an excerpt from that article on Faurrison in the nation).

        Some people are just crazy. Again, Matt Tanous comments here simply blow your mind.

        surprisingly, KenB also seems to criticize Chomsky. So even here at a Libertarian forum there are people who just can’t understand free-speech.

    • Ken B says:

      “Chomsky granted permission for the essay to be used for any purpose. Serge Thion then used it as a preface when publishing a book by Faurisson, without Chomsky’s knowledge.[9]”

      Your apologia depends on Chomsky denying permission for that use, not his ignorance of it.

      • successfulbuild says:

        Did you not follow the timeline of events? This is just like that post on the gold standard where you guys could not figure out the timeline of events: that gold existed as money AFTER the creation of the state.

        Chomsky wrote the article, not thinking it was going to be attached to any book (the book it was attached to was Faurisson defending himself by the way, not his “findings”), it was attached without him knowing it, then he tried to STOP it from being attached by having it retracted. There should be no issue here.

        And why is holocaust denial worse than, say, advocating for the deaths of millions in Indochina. Or worse than racism? In both cases chomsky defended the right of professors to teach whom he thought were responsible for justifying great atrocities that go on in modern times.

        Look at this Matt Tanous guy, claiming Gödel didn’t understand his own theorems.

        And if there really is something “fishy” in Chomsky’s defence of free-speech, why hasn’t he been involved in holocaust denial since then? Why did he call the holocaust “the most fantastic outburst of collective insanity in human history” in “Peace in the Middle East” if sympathizes with holocaust deniers? I mean, this isn’t like Rothbard’s followers, who want in to participate in the IHR, a REAL holocaust denial group. So what’s the point here.

        I do like Delong and I think he probably is more correct on how society should be structured than a Chomsky, but some of his political science thinking I think is lacking.

  13. Brad DeLong says:

    I do have one more semi-hard number comparison now: Zac Moffett’s Targeted Victory appears to have charged Romney 30 times as much as its Democratic equivalent Blue State Strategies charged Obama.

    There are serious papers to be written here about the difference between a news organization that sells information to viewers and one that sells eyeballs to advertisers, and about moral hazard in political consulting–on just how it was that Gore’s guy Carter Eskew was suddenly rich enough to buy a horse farm in Virginia the day after election day in 2000.

    But if you start out denying that these market failures exist, you are going to look like an idiot and not contribute anything useful…

    • Ken B says:

      People in politics, both politicans and their minions, graft all the time. My member of the house has had only one job for 50 years — representative — and is a multi-millionaire. We can all guess how he got that way. I am seriously puzzled why some corrupt political payoff would count as a market failure.

    • Major_Freedom says:

      I do have one more semi-hard number comparison now: Zac Moffett’s Targeted Victory appears to have charged Romney 30 times as much as its Democratic equivalent Blue State Strategies charged Obama.

      That’s better.

      There are serious papers to be written here about the difference between a news organization that sells information to viewers and one that sells eyeballs to advertisers, and about moral hazard in political consulting–on just how it was that Gore’s guy Carter Eskew was suddenly rich enough to buy a horse farm in Virginia the day after election day in 2000.
      But if you start out denying that these market failures exist, you are going to look like an idiot and not contribute anything useful…

      OK, suppose those phenomena exist. How are these are “market failures”?

      A market failure does not mean an outcome transpired of which you personally don’t approve.

      If Romney is charged 30 times more than Obama, then that is between Romney and Targeted Victory on the one hand, and Obama and Blue State Strategies on the other. It is not a “market failure” that one candidate is charged more than the other. You can personally disagree, but disagreement is not sufficient grounds. The two consulting firms are not identical. It would be absurd to suggest that unequal firms MUST sell unequal services at equal prices.

      Similarly, if one news organization caters towards selling information, and another news organization caters towards selling advertiser slots, thus creating a difference in the contents, then this is between the news organizations and their respective customers. It is not a “market failure” that the news organization’s contents would differ. You can personally disagree, but disagreement is not sufficient grounds. It would be absurd to suggest that unequal firms that provide unequal services to unequal markets MUST contain equal content.

      It is not a “market failure” for a palm reader to convince an impressionable old lady to pay $500 for the reader to tell her a fortune.

      Why is it that those political strategists who are most hostile to laissez-faire, are least capable of understanding the market? It’s because those hostile to laissez-faire are most likely to be Platonist “ideal type” followers.

      You have in your mind what an “ideal” news organization should deliver in terms of content. You have in your mind what an “ideal” political consulting firm should charge their client. Deviations away from these ideal types is considered a “failure” of reality to live up to those ideal types.

      • The Merit That Fascism Has Won For Itself Will Live On Eternally says:

        What you’re really saying is that by definition there are no market failures. Your reasoning is completely circular.

        • skylien says:

          Wrong. Though admittedly In you post there certainly is no circular reasoning, neither is it rectangular, nor linear or equal-sided triangular, just none at all.

        • Fascism was an emergency makeshift. To view it as something more would be a fatal error. says:

          What you’re really saying is that by definition there are no market failures.

          Correct. It’s a figment of statist’s imaginations.

          Your reasoning is completely circular.

          No it isn’t, and I challenge you to show how it is.

          Sincerely,

          Major_Freedom

          • So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no says:

            And one more thing, it is true that if the free market process does not exist in area X, then one cannot claim there are empirical examples of MARKET failure in area X.

            It would be like claiming communism fails on the basis of empirical evidence in Texas.

          • The Merit That Fascism Has Won For Itself Will Live On Eternally says:

            There are no market failures therefore there are no market failures. You’re a cult.

            • Ken B says:

              Cultists? At FreeAdvice!? Nooooooo!

              • That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. says:

                Does cult of sarcasm count?

            • So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no says:

              There are no market failures therefore there are no market failures.

              That isn’t my logic.

              There are no market failures because the market process is inherently one of individual property rights in conjunction with economic freedom. Free trade consists of both parties to every trade expecting to benefit.

              There is no failure in this. There is only failure of man not being omniscient enough to never make mistakes in judgment. This fallibility exists in every social system.

              You’re a cult.

              You’re obtuse.

              • The Merit That Fascism Has Won For Itself Will Live On Eternally says:

                “There are no market failures because… There is no failure in this”

                And then the funny self-contradiction: “This fallibility exists”

              • That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. says:

                The market fails because the market fails. The reason the market fails is because markets exist.

                And then the straw man “The market doea not fail because the market does not fail.”

            • That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. says:

              There are market failures therefore there are market failures. You’re a cult.

              • The Merit That Fascism Has Won For Itself Will Live On Eternally says:

                Not quite. Your view is simply based on a tautology.

              • That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. says:

                No, it isn’t based on a tautology. You have only invented that as my reason, based on zero evidence or logic.

                Your claim that the market fails because the market fails is what is the tautology.

  14. Yancey Ward says:

    DeLong once paid $50 for a Twinky.

  15. Brad DeLong says:

    FYI–

    “While the 2012 election may have severely damaged Dick Morris’ credibility as a pundit, leading to his temporary benching at Fox News, it appears to have been good for his wallet. The Fox News contributor and columnist at The Hill aggressively fundraised for a super PAC he advised, which then apparently funneled money back to Morris through rentals of his email list.

    “According to FEC data released December 6, Morris’ Super PAC for America paid conservative news outlet Newsmax Media roughly $1.7 million for “fundraising” in October and November. A significant portion of the super PAC’s money likely went to renting Morris’ own email list, which is operated by Newsmax Media.

    “A Media Matters review found that in the month before the election, Morris sent at least 21 emails to his mailing list featuring fundraising pitches that were “paid for by Super PAC for America.” Super PAC also “paid for” at least 25 emails to Newsmax.com’s main email list during the same period.

    “This is the second consecutive election cycle that Super PAC for America has paid significant money to Newsmax. The group, which was formed prior to the 2010 midterm elections, paid Newsmax Media nearly $2 million in 2010 for advertising, fundraising, and “email list rental.” At the time, Morris also sent numerous fundraising solicitations to his email list that were “paid for by Super PAC for America.” Morris also regularly used his Fox News platform in 2010 to promote the group.

    “In October and November of 2012, Super PAC for America paid more money to Newsmax Media than it spent on all independent expenditures combined.”

    • Ken B says:

      Ooooo, grudgy, relevant, and convincing all in one. Well played.

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