18 Apr 2014

Two Married Men Narrowly Avoid Almost Certain Destruction

Humor 7 Comments

These guys need to be applauded for their wisdom and prudence. The military man eventually gets cocky and engages; the civilian man knows that this is a war in which no one wins.

17 Apr 2014

Most Alarming Footage of Bundy Standoff I’ve Seen to Date

Bundy Ranch 90 Comments

There was really almost a shoot-out a few days ago. I’m not saying that to whoop up emotions, I’m just making sure everybody realizes how much this escalated.

17 Apr 2014

New Posts on ObamaCare and Immigration

Gene Callahan, Health Legislation, Immigration, Krugman, Shameless Self-Promotion 64 Comments

At Mises Canada I have two new posts:

==> This one is fun. I just walk through a NYT article on New York state’s experience with ObamaCare to show how it is screwing certain people. Oh yeah, the article was singled out by Paul Krugman to show how great ObamaCare is.

==> In this one I take on Mean Gene Callahan on immigration. You will need to follow the link if you want to see the meat of it, but let me quote a tangential issue that I think people often miss in these debates:

No individual has the power to actually form current government policy. It is not a “cop out” for me to say that the best thing would be to privatize land, get rid of the welfare state and government schools, etc. etc., in which case “unrestricted immigration” by the federal government would be A-OK. Regardless of what I say on immigration policy, the government is going to do whatever it’s going to do. Once we realize that the purpose of our pontificating is to say what the ideal outcome would be, we can stop tying ourselves in knots by talking about “politically possible” options.

17 Apr 2014

Violence Will Only Make Things Worse, At Bundy Ranch and Elsewhere

Pacifism 86 Comments

I’m really glad to see Lew Rockwell, Gary North, and Robert Wenzel come out quite clearly in opposing the use of violence in the Bundy standoff. I’m singling these three out because they obviously appeal more to the “tough guy” libertarians and so it’s braver for them to come out and say liberty-folk bringing guns to Nevada is a bad idea.

(I realize a lot of times I’m a smart aleck and it’s not obvious what I’m “really” saying. The above is frank; I totally agree with them and I’m glad they have the courage to say it, because there are a lot of libertarian Internet warriors who will call you various names for voicing such an opinion.)

17 Apr 2014

Another Element in the “Border Walls Keep You In” Argument

Big Brother, Conspiracy 5 Comments

Let’s not forget the thoroughly distasteful Chuck Schumer, senator from New York:

17 Apr 2014

Are Climate Change Mitigation Policies Like a Form of Insurance?

Climate Change, Insurance, Shameless Self-Promotion 24 Comments

I argue no. Or at least, if they are, they’re really expensive and very few people would buy them voluntarily. I walk through the numbers here, but a quick sampling:

Now ask yourself: Suppose someone from an insurance company came to you in the year 2050 and said, “We’ve run computer models many thousands of times using all kinds of different assumptions. In the worst-case scenario, a very small fraction of the computer runs—about 1 in 500—has you losing 20% of your income in the year 2100. In order to insure you against this extremely unlikely outcome that will occur in half a century, we want to charge you 3.4% of your income this year.”

Would you want to take that deal? Of course not. The premium is way too high in light of the very low probability and the relative modesty of the “catastrophe.” When someone’s house burns down, that’s a much bigger hit than 20% of annual income. And yet, the premiums for fire insurance are quite reasonable; they’re nowhere near 3.4% of income for most households. Moreover, the threat of your house burning down is immediate: It could happen tomorrow, not just fifty years from now. That’s why people have no problem buying fire insurance for their homes. Yet the situation and numbers aren’t anywhere close to analogous when it comes to climate change policies.

17 Apr 2014

Austrian Business Cycle Theory Surprisingly Useful Even Among Its Critics

Austrian School, Banking 123 Comments

The theory of business cycles advanced by Ludwig von Mises (and refined by Friedrich Hayek, who won the Nobel partially for this work) explains the typical recession as the inevitable result from a preceding, and unsustainable, boom period. The cause of the boom is artificially low interest rates, which in turn are caused by the expansion of bank credit made possible by “fractional reserve banking.” When the banks cease (or at least slow down) their credit expansion and interest rates rise, businesses realize their operations are no longer profitable and the bust ensues. (For more on Austrian business cycle theory, and specifically how it relates to the recent housing boom-bust, see my article here.)

Naturally, most respectable economists do not endorse the Misesian theory. Yet two recent episodes show that it is still quite relevant for an understanding of the modern economy:

==> In a post entitled “Austrian business cycle theory refuses to die,” Tyler Cowen (a sharp critic of the internal logic of ABCT) relates the preliminary findings of a new paper by Princeton economists:

This paper examines financial instability associated with bank credit expansion in a set of 23 developed countries over the years 1920-2012. We find that credit expansion, measured by the three-year change in bank credit to GDP ratio, predicts a significantly increased crash risk in the returns of the bank equity index and equity market index in the subsequent one to eight quarters. Despite the increased crash risk, credit expansion predicts both lower mean and median returns of these indices in the subsequent quarters, even after controlling for a host of variables known to predict the equity premium.

==> A recent Bloomberg article relates the concern among Fed officials that slowing asset purchases will cause a crash:

Federal Reserve Governor Jeremy Stein endorsed a warning by economists that raising the main interest rate may cause a financial-market convulsion similar to the “tantrum” that occurred last year after the Fed said it was considering trimming its bond purchase program.

“Whenever the decision to tighten policy is made, then the instability seen in summer of 2013 is likely to reappear,” economists including Michael Feroli, the chief U.S. economist for JPMorgan Chase & Co. in New York and a former Fed economist, said in a paper released today. “Risks of instability have not been eliminated.”

Stein lined up behind Feroli’s argument in comments on the paper during a conference in New York, saying “monetary policy makers cannot wash their hands of what happens” in financial markets when they begin withdrawing stimulus.

Of course, few mainstream economists are going to say, “Maybe that Ron Paul guy was on to something?” but we are seeing the familiar playing out of unintended consequences that free-marketeers admit occur in most other areas of government “helping.” Why central planners should suddenly have an advantage in the production of money and setting of interest rates has never been adequately explained.

17 Apr 2014

Some More Touchy-Feely Thoughts on Immigration

Immigration 29 Comments

In the comments of my previous post, Matt M. wrote:

Bob,
Even if you’re a libertarian who is in favor of open borders, is there not some legitimacy towards pointing out the fact that someone like Harry Reid is arguing that the Bundy Ranch situation must be dealt with harshly because “everyone has to follow the law” is just fine with illegal immigrants not following the law?

First, I don’t describe my position as “open borders.” That would be like saying I’m “closed schools” if I’m against government funding of education.

Second, the poster that got 18,000+ shares on Facebook wasn’t merely saying, “Look at the hypocrisy here.” No, it actually said, “I wish my Federal Government would put this many resources on our Southern Border instead of on Cliven Bundy’s cattle ranch.”

So the poster was calling for the federal government to enforce the border. If you don’t see that, suppose instead it had said, “I wish my Federal Government would put this many resources into enforcing gun laws on the books, instead of on Cliven Bundy’s cattle ranch.” Such a poster would NOT have gotten 18,000+ shares.

Furthermore, if you go look at the Facebook comments that I posted underneath in my original post on this, people were routinely using the term “illegals.” Now in this context, what does that term mean?

(A) Rich people who don’t pay as much income tax as the IRS says they owe, even though this is illegal?

(B) People who drive faster than the speed limit, even though this is illegal?

(C) People who keep a gun in their house for defense, even though this is illegal in their area?

(D) Cliven Bundy who refuses to pay what the BLM says he owes, even though this is illegal?

(E) Cocaine dealers, even though this illegal?

(F) White Canadians who are working in the United States even though they do not have the right authorization to do so?

Of course not. It would be grammatically incorrect to refer to any of these people as “illegals.”

No, to be an “illegal,” you have to be a Mexican and the specific law that you are violating has to be immigration law. Even someone named Mohammed who is trying to blow up a plane isn’t an “illegal,” he’s a terrorist.