* A bunch of Ron Paul fans have been griping about this WSJ article on the Fed, and I assumed they were just being touchy. But seriously just read the first three paragraphs. That might as well have titled it, “Give me a B! Give me an E! Give me an N!…”
In case you don’t see the big deal, consider this excerpt:
“Rallying one charge is Ron Paul, an iconoclastic Texas Republican who wants to abolish the central bank entirely. Mr. Paul’s economic ideas sometimes make him the target of ridicule — in the new film “Bruno,” shock comedian Sacha Baron Cohen tries to seduce the startled congressman in a hidden-camera scene while discussing economic theory.
Still, Mr. Paul has persuaded nearly two-thirds of the House to co-sponsor a bill requiring far-reaching congressional audits of the Fed.”
So my question is, what the heck is that “Still” doing? Are these clowns really suggesting that other Congressmen shouldn’t have supported Ron Paul’s bill, since he suffered ridicule at the hands of a comedian? How about this, “President Barack Obama is meeting with fierce criticism, with some commentators–such as Ann Coulter–suggesting he remove his temple from his anus. Still, Obama enjoys strong support from the Congressional Black Caucus.”
* Von Pepe sends me this link of Bernanke explaining that he has no idea where the Fed’s $500,000,000,000 went, after he gave it to some other central bankers. And this is the guy who says he needs more oversight over the financial sector, to prevent systemic risks and such.
* At MasterResource I have another summary of the economics of climate change, and the relation to policy activism. Most of it is recycled (ha ha) but I dwell a bit more on how economic models deal with uncertainty, if you care.
Hayek [sorry!!] Henry Hazlitt reviews Rothbard’s Man, Economy, and State.
* Bob Roddis has a Rothbard speech (in three parts) at his blog.
* We are now officially in Bizarro World. Conservatives are finally on the anti-Fed and anti-Wall-Street bandwagon, while Paul Krugman concludes: “[I]t’s crazy to cut off our future to spite Goldman Sachs’s face.”
* Mario Rizzo laments the failure of macroeconomics. An interesting excerpt:
As a member of NYU’s Ph.D. admissions committee for the past fifteen years, I have even seen applicants who apologize for taking “too many” philosophy courses in college. I have seen others remind us that although they have been interested in history and literature, they are fully cognizant of the need to express their ideas in precise mathematical terms.
What of a clearly brilliant student who wants to question (or at least think about) these methodological issues? I had a colleague tell me, informally, that he would probably be a disruptive influence in the first-year classes. I guess it depends on one’s definition of “disruptive.”
I was definitely an influence, and perhaps even a disruptive one (especially when it was just the TA running the class) in my first year at NYU. But was I the clearly brilliant student? We will never know.
* Bob Higgs takes the time to blow up the silly petition about “Fed independence.” Don’t get me wrong, I think this audit-the-Fed movement might end up backfiring, but even so the petition is a bit like saying, “All this public scrutiny over Guantanamo is hampering the torturers’ efforts to spread democracy.”
* David R. Henderson somehow manages to relate Frank Zappa to Friedrich Hayek. I enjoyed both in college. (And I never inhaled while reading Hayek.)
* Speaking of college, here’s an interview with Richard Ebeling, conducted one year after I graduated Hillsdale. I think during my last semester I had three Ebeling classes. The best was when the government shut down under Clinton; Ebeling literally came dancing into the classroom that day. (That wasn’t my senior year, and now that I bring it up, I can’t remember if I actually was in his class or if somebody just told me about it. Anyway, funny stuff.) Wow now the nostalgia train has fully pulled into the station. I also vividly remember how excited all the conservative Hillsdale students were when the Republicans took over Congress. Small government, here we come!
* This news story ran a while ago, but it was just brought to my attention. Here’s the photo of the talk I gave to the Houston Property Rights Association (they supplied the signs and flag):
My favorite excerpt from the news story: “The idea that Hubert Hoover was for limited government was a “complete myth,” Murphy says.” Well it was! Get off my back.
This is hilarious. (HT2LRC) The internet is awesome. I’m impressed that someone took the time to make this video without putting in an ad or something at the end. That’s just how much people can’t stand Bernanke; his public repudiation is its own reward.
* This guy emailed me to say that my Mish article went awry at the crucial point: When the creditor lends out money so that borrowers can spend more, the creditor is content to carry lower cash balances, because he’s now holding a claim on future income. I had considered this at the time I wrote the article, but now I can’t remember how I resolved it. I’m not going to lie to you, I sorta thought Mish himself would blow me up in a response, so that we could move this debate forward. Anyway I might write a future post to tie up these loose ends, but like I said I wish a big gun pro-deflationist would spell out what’s wrong in my Mish critique.
* Today at Mises I criticize CNBC for dissing savings. I shower some love on Tyler Cowen near the end.
I don’t know the “inside scoop” on the bank books, but in purely theoretical terms a bit of chicanery may be socially optimal now. In general, bank moral hazard-induced-risk-taking may move closer to socially optimal, the closer banks are to insolvency. Let’s say that banks are generating high profits now by, one way or the other, pursuing short run profits and “going short” on market volatility. In the long run this investment strategy will bite them, sooner or later but probably later. In the meantime they likely will become solvent. If insolvency has a high fixed cost this can be a good risk, even from the taxpayer or social point of view.
In the comments of Tyler’s post, somebody already beat me to the punch of the gambling analogy. Really, wouldn’t it make more sense to say the exact opposite? Namely, that the very worst time in the world for banks to be engaging in high-risk bets (let alone when backed up by the taxpayers), is when they are on the verge of insolvency?
Tyler seems to be saying, “It’s not a bad idea to take a gamble that pays $1 million with 99% probability, but pays negative $1 billion with 1% probability, so long as you don’t play it very often.” I don’t think that’s right, and even if it were, the time to play it (a few times) would be when you were already up several billion dollars–not when that 1% outcome could ruin you.
Yesterday I sent Scott Sumner a goofy email, to the effect that he needed to blog more because he didn’t realize how much angst it caused me when he skipped a day. He warned me that I wouldn’t like his latest post. This is true:
I used to think that people deserved what they earned, but no longer. Now I think rich people should keep what they earn if and only if trying to take it away from them it will do more harm than good. In other words, I’ve gone from being a dogmatic libertarian who thought the Nordic model was bad, to being a pragmatic libertarian who thinks it’s worth considering. I lean towards Singapore’s slightly less egalitarian forced saving regime for many different pragmatic reasons. But if someone can convince me that Denmark’s undeniably successful social welfare system is better, I’d jump ship in a moment. As far as I am concerned the fact that “millions of individuals” have “chosen” to spend their money on Nicole Kidman films has no more normative implications than if a bag of Federal Reserve notes had fallen from an airplane into her front yard.
Seriously, does Scott really believe this? If so, then don’t let him into your house or watch your kids (he might sell them into slavery if his calculation comes out that way). And what’ with putting “chosen” in quotations marks, Scott? OK you don’t believe people really choose; they can’t help but throw money at the pretty girl, fine.
But more important, what’s with putting “millions of individuals” in quotation marks?! Presumably you still believe in numbers, so I take it that you now question whether individuals really exist?
Say what you will about Free Advice, but we tackle deep issues on this blog. No chatter about Joe the Plumber here (except when it’s important).
In a previous post, I listed some of the major problems with materialism, which is the view that the only “real” things are atoms and energy, and everything else is subordinate to them. So for example, the materialist says that disembodied thoughts are “really” just patterns of electrical and chemical reactions in your nervous system, and one commenter (Tokyo Tom) went so far as to say that “2+2=4″ is just a model we have of the physical universe, which has been falsified by the discoveries of relativity and quantum mechanics.
In the present post, I want to lay out my working hypothesis for how to reconcile the apparently objective laws of physics governing the physical universe, with the equally apparently objective fact that human subjective desires influence events in this physical universe. (In other words, it seems that minds exist and affect inanimate matter, even though staring at the molecular level there doesn’t seem to be mind power coming in from an alternate dimension.) At the same time, my theory will explain how God can be the ultimate Designer of the universe, in which every event happens with His permission, and yet we humans still have free will and can choose to sin or to obey Him.
Imagine a computer programmer who makes a program that simulates a ball moving around the monitor. The program is entirely deterministic; the programmer could tell you beforehand what the exact position of the ball will be on the monitor, at any future time. The ball’s entire life cycle of movements are already embedded at t=0 in the software.
The programmer asks his buddy to sit down in front of the computer and watch the ball. Now here’s the freaky thing: Wherever the guy moves his eyes, that’s where the ball goes to on the monitor. So if the guy stares at the ball, it’s motionless. But then if he slowly starts looking to the left, the ball follows his gaze. He can try to “trick” the ball and suddenly dart his eyes to the opposite corner of the monitor, and BAM the ball instantly responds to his eye movement.
The guy keeps this up for a good 10 minutes, and it never fails. So he is obviously perfectly certain that he is controlling the ball. He hypothesizes that there must be a camera in the computer that notes his eye movements and then translates them into the appropriate pixels to light up on the monitor.
But actually, the programmer tells him that’s not what’s going on at all. The ball’s movements are completely pre-determined by the software. The trick is, the programmer predicted perfectly what his buddy’s eye movements would be. This is inconceivable to the buddy, because how could the programmer have known that RIGHT NOW he would zoom his eyes to the top left of the monitor? And yet, he can call in computer experts who can look over the machine, and they assure him that there is no way his eye movements are transmitting information into the computer. The ball’s movements “originate” entirely from within the hardware and software; there is no mechanism for the guy’s eye movements to influence the state of the machine (in any relevant sense–of course in reality if he flicks his eyes around a lot, the room gets hotter and this influences the computer etc.).
So that’s my theory of how God designed the physical universe to interact with our souls. (As C.S. Lewis said, you don’t have a soul, you are a soul–you have a body.) The physical universe is completely distinct from the spirit world (I’m sorry secularists but that’s an accurate term for what I’m talking about), and the quarks or other elementary particles in it, obey the laws of physics. Maybe our scientists are wrong in the exact nature of those laws, but the point is, there is a body of very economical laws governing physical matter and its behavior.
However, God designed these laws (and the initial state of the physical universe) such that it appears to us that we exercise (limited) control over the material universe. That’s why I can apparently control my fingers as I now type. It’s true, scientists can bore ever deeper into the processes governing the cells in my fingers, and they are never going to see injections of commands coming from my soul. But it sure seems as if my mind controls my fingers, and by the positivist’s own criterion of predictive power, it is a very strong hypothesis indeed.
As far as free will goes, God designed our souls such that we really do have free choice. In principle, our wills are independent of His. Yet God is also omniscient, and so He knew beforehand what we would choose to do when we (somewhat simplistically) think we are influencing the physical universe.
In other words, God had to solve an unimaginably complex problem when designing the universe. It is akin to solving a huge economics model to find the equilibrium. God had to choose the initial state of the universe, and dictate the laws governing those physical particles, such that every human who would ever live, would be fooled into thinking his or her subjective desires influenced the unfolding events, and that things could go one way or the other, depending on the person’s choice. Even though that belief was mistaken, in a sense it would still be true, since the laws of the universe (and its state at any moment) were originally designed with those choices in mind.
As a final point, “miracles” do not occur, in the sense of a violation of the laws of physics. The laws of physics are simply patterns describing how the atoms operate. If Jesus walks on water and thus violates the “laws” of physics, then they weren’t really laws, were they? In my interpretation, Jesus really did walk on water, raise the dead, etc., but nothing miraculous happened at the subatomic level. Rather, God had designed the universe such that these “impossible” (from a normal everyday human viewpoint) events were the necessary unfolding of the laws of physics, preordained from the first moment of creation.
I am 95% persuaded by Stephan Kinsella’s classic article “Against Intellectual Property” [.pdf]. However, I think if we take Kinsella’s views seriously, it means that “identity theft” isn’t really theft. Let’s say someone fills out a credit card application claiming to be Robert Murphy, and has my date of birth, my address, my (anti)Social (in)Security number, etc. He runs up a huge tab, which ruins my credit score and prevents me from being able to charge anything again.
So long as I’m not forced to actually pay the bill for his charges, but merely have my credit score ruined, I don’t think this counts as a violation of my property rights. After all, I don’t have a right to borrow money from people; they are always free to refrain from lending to me. And it is standard in Rothbardian libertarian theory that
blackmail defamation isn’t a crime, because you don’t have a right to your reputation. (How can you have a property right in what other people think of you?)
At best, I think you could only claim that the “identity thief” violated the property rights of the creditor, by extracting a loan from him/her under fraudulent pretenses. But the “thief” didn’t steal anything from you.
Is that right? If so, does it pose a problem for Kinsella’s approach to IP?