21 Aug 2009

I Finally Understand Matt Yglesias

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Tyler Cowen brings to our attention this revealing passage from Yglesias:

At the same time, I’ve come to be increasingly baffled by the high degree cynicism and immorality displayed in big-time politics. For example, Senators who genuinely do believe that carbon dioxide emissions are contributing to a global climate crisis seem to think nothing of nevertheless taking actions that endanger the welfare of billions of people on the grounds that acting otherwise would be politically problematic in their state. In other words, they don’t want to do the right thing because their self-interest points them toward doing something bad. But it’s impossible to imagine these same Senators stabbing a homeless person in a dark DC alley to steal his shoes. And what’s more, the entire political class would be (rightly!) shocked and appalled by the specter of a Senator murdering someone for personal gain. Yet it’s actually taken for granted that “my selfish desires dictate that I do x” constitutes a legitimate reason to do the wrong thing on important legislation.

Making it all the odder, the level of self-interest at stake isn’t all that high. Selling the public good down the river to bolster your re-election chances isn’t like stealing a loaf of bread to feed your starving children. The welfare rolls are hardly stocked with the names of former members of congress. [Emphasis in original.--RPM]

Wow. Where to begin?

First of all, Mr. Yglesias, it would be incredibly reckless to kill someone with your own hands, in order to obtain a pair of shoes. If a senator got caught doing that, his peers would be amazed all right, but only because of the ridiculous risk/reward judgment involved. (And yes, they would all say their moral sensibilities were ruffled, but that would be for show–just like everything else they publicly say.)

Second of all, Mr. Yglesias, the reason retired senators (and Fed chiefs etc. etc.) are loaded when they lose office, is that they played along while in office. That’s how the game works. When you’re, say, a Pentagon general in charge of procurement, you make sure Defense Contractor X (not naming names here) gets the $3 billion project to breed sharks with laser beams attached to their heads. Then when the general retires, he becomes a “consultant” and gets paid millions to show up on Fox News and CNN and explain that yes indeed, it would be very useful to deploy sharks with laser beams attached to their heads in the Mediterranean.

Ironically, Friedrich Hayek explained “Why the Worst Get On Top” in perhaps the most famous chapter of his gigantic political classic, The Road to Serfdom. You would think that Yglesias surely read such a book–especially since in this blog post Yglesias says, “But I’ve been back-and-forth on the main issues long enough that I’m pretty sure I could switch this blog’s point of view and do a credible job of offering critiques-from-the-right of the progressive liberal health reform movement and the progressive liberal approach to domestic policy generally.”

And yet we can’t be certain Yglesias has bothered to read something as crucial as Hayek’s slender classic, since in another blog post our commentator referred to it as a “nutty alarmist book”.

21 Aug 2009

Assessing the State of the Golden State

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Pacific Research Institute (PRI) has released part one of a new series called, California Prosperity Project. This particular study is, “Assessing the State of the Golden State.” In this one, we are just trying to get California citizens and policymakers to admit there is a problem.

21 Aug 2009

Best Evidence Yet That Recession Hasn’t Bottomed Out

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This is a two-part argument. First:

U.S. Federal Reserve chief Ben Bernanke on Friday said prospects for a return to global economic growth looked good “in the near term,” the clearest signal yet the world’s most powerful central banker thinks a recovery is at hand.

“After contracting sharply over the past year, economic activity appears to be leveling out, both in the United States and abroad, and the prospects for a return to growth in the near term appear good,” Bernanke told an annual Fed conference here in the shadows of the Grand Teton mountains.

Now the second part of the argument:

Note: If you’re an important person and are rushed for time, just watch, say, the last minute of the above video. It never gets old.

21 Aug 2009

The FBI Looking to Hire More Bloggers?

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Jesse Johnson passed along this story–and he actually did it days ago, when it was fresh!–about the FBI hiring “right-wing” bloggers. I called them up, but they explained that I am serving their false-flag purposes just fine, for free. They assure me that several agents read my blog religiously.

All joking aside, here is the story:

A notorious New Jersey hate blogger charged in June with threatening to kill judges and lawmakers was secretly an FBI “agent provocateur” paid to disseminate right-wing rhetoric, his attorney said Wednesday.

Hal Turner, the blogger and radio personality, remains jailed pending charges over his recent online rants, which prosecutors claim amounted to an invitation for someone to kill Connecticut lawmakers and Chicago federal appeals court judges.

But behind the scenes the reformed white supremacist was holding clandestine meetings with FBI agents who taught him how to spew hate “without crossing the line,” according to his lawyer, Michael Orozco.

“Almost everything was at the behest of the Federal Bureau of Investigation,” Orozco said in a 45-minute telephone interview from New Jersey. “Their job was to pick up information on the responses of what he was saying and see where that led them. It was an interesting dynamic on what he was being asked to do.”

Bill Carter, an FBI spokesman, said in a telephone interview the bureau’s policy is “to neither confirm nor deny whether an individual has an association with the FBI.”

Turner’s alleged 5-year-long bureau stint ended sometime in 2007, Orozco said, the year the mischievous online group, Anonymous, briefly shuttered his site — turnerradionetwork.blogspot.com — with a denial of service attack. At the time, hackers also posted what appeared to be private e-mails between Turner and the FBI.

The e-mails are legitimate, said Orozco. The FBI approached Turner, now 47, in 2002, and he spewed rhetoric about politics, white supremacy, immigration, abortion and other hot-button issues for years in exchange for government cash.

Turner was arrested in June at his apartment in suburban New Jersey.

According to court documents, (.pdf) after a three-judge panel of the Chicago-based 7th U.S. Circuit of Appeals upheld a Chicago handgun ban, he blogged that the judges should be “killed.”

“Let me be the first to say this plainly: These judges deserve to be killed. Their blood will replenish the tree of liberty. A small price to pay to assure freedom for millions,” he wrote.

A day later he posted addresses, photos, maps and other identifying information about Chief Judge Frank Easterbrook and Judges Richard Posner and William Bauer, the authorities said. State charges are also pending in Hartford, Connecticut, where Turner is accused of inciting readers to “take up arms” against state lawmakers.

Though the alleged threats came after his FBI service ended, Orozco said Turner’s relationship with the FBI is relevant to his defense.

“It is not trivial that the very government that trained an individual where the line was is prosecuting him when he has not stepped over the line,” Orozco said.

If the guy really did get paid by the FBI–and elsewhere I’ve seen a figure of $10,000–then that is surely relevant. But this I thought a rather lame defense by his attorney: “It’s a protected political statement. He opined,” Orozco said. “He said they deserved to be killed. He did not say grab a gun and go out and do what is necessary.”

To be clear, I’m simply saying that the attorney’s argument deserves to be ridiculed. I am NOT saying, “Start your own blog and say the guy is a moron.”

21 Aug 2009

Is Amazon Making Some Kind of Purchasing Power Joke?

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So I want to read up on the German hyperinflation, what with that old adage about history repeating itself. I asked (who else?) David Gordon for a book recommendation, and he suggested Adam Fergusson’s When Money Dies.

But when I look it up on Amazon, there is one copy, priced at $761.29. Am I somehow missing the main selection, or is this some kind of publicity stunt to acclimate us to hyper-depression?

21 Aug 2009

Stiglitz Knows Dollar Crash Is Coming, Too

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As CNBC reports:

A new global reserve system is needed after the global financial crisis exposed the U.S. dollar-based system as flawed and risky, Nobel Prize-winning economist Joseph Stiglitz said on Friday.

The “dollar now is yielding almost zero return,” Stiglitz said in a speech at the United Nations regional headquarters in Bangkok. “The current global reserve system is fraying. It’s falling apart. The issue isn’t whether we go to a new system.

The question is do we do so in an orderly or disorderly way.” The build up of the U.S. deficit, debt and “the boiling up of the balance sheet” is cause for anxiety, he said.

But don’t get excited, Stiglitz isn’t a Free Advice reader:

Stiglitz urged rich nations to provide funds to help poorer countries avoid a steep crash during the financial crisis.

The group has called for global coordination to avoid competition to cut taxes, and for a worldwide increase in tax on high earners. Dubbing itself the “Shadow GN,” the group has urged governments to opt for bank nationalisations rather than bailouts in order to drive the pace of fresh lending.

20 Aug 2009

This Recession’s Got Legs

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More “unexpected” bad news from CNBC… Jobless claims show “surprise” gains, and mortgage delinquencies aren’t confined to subprime borrowers:

Late payments on U.S. mortgages increased to a record in the second quarter, with almost one in eight homeowners delinquent or in the foreclosure process, the Mortgage Bankers Association said Thursday.

A sharp drop in subprime adjustable-rate mortgages entering the foreclosure process offset a surge on other types of loans, particularly prime fixed-rate loans, the MBA said in its National Delinquency Survey.

The percentage of loans on which foreclosure actions were started fell to 1.36 percent in the second quarter, down from an all-time high of 1.37 percent in the first quarter, but up sharply from 1.08 percent in the second quarter of 2008.

What’s really depressing is that I think most Americans–including supposedly no-nonsense businesspeople–can’t understand why this downturn doesn’t just bottom out, for crying out loud. I mean really, all the other recessions ended after a while, so surely this one has to, any day now?

And what’s really crazy is that if you pushed the average business owner or investor, and said, “Actually, this time is different–the government and the Fed have been doing things that they haven’t done since the 1930s,” then the response would probably be, “I know! That’s what’s so perplexing! Even with all of the government stimulus and Fed easing, for some reason this particular recession is dragging on forever. What the heck?!”

20 Aug 2009

Dress Rehearsal for 2010? Nixon Defends Dollar From the Evil Speculators

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This has been floating around the internet (e.g. LRC), but I just watched it this evening. Rarely have I seen such a video clip packed so densely with economic fallacies and simple lies. But for our purposes, note the emphasis on protecting American workers and the dollar from international speculators. I think we will be hearing the same justification for some more government interventions into the financial system very soon.

UPDATE: After I posted this, I listened to it again. Wow, what a liar. At around the 2:00 mark, he says, “The effect of this action, in other words, will be to stabilize the value of the dollar.” In context, he is talking about domestic purchasing power; he at least admitted in the previous sentence that the dollar would buy less in terms of foreign goods.

OK Mr. President, let’s see how well your promise held up. You took the dollar off gold (“temporarily”…) in August 1971, in order to stabilize its domestic purchasing power. Let’s check out what happened to the annual percentage increases in the Consumer Price Index (CPI) twenty years before and after your merciful move:

Surprise surprise. It looks like when Nixon took away foreign central banks’ ability to turn in dollars for gold, that the Fed decided to print up a lot more dollars, which in turn caused US prices to soar. How odd.