Argh… I am working on a payment plan with the IRS. (For a while my business wasn’t incorporated, and so I just got checks made out to me personally. You’re supposed to file quarterly tax payments as that income rolls in. Well, I was always going to do it, next month. And then it was April 15.) As soon as I navigated through the automated menu to where I needed to be, the computer voice said, “Your estimated wait time is greater than 15 minutes.”
Having said that, I must admit the IRS was–believe it or not–pretty “fair” in dealing with my delinquency. They told me how much I owed them, assessed penalties that actually weren’t all that bad, and then started the thing rolling over at interest. But the rate wasn’t outrageous by any stretch; I don’t remember off the top of my head but it was nothing compared to credit cards if you let your balance start rolling.
Don’t get me wrong, there is still a huge difference in that I signed up for the credit card. But dealing with back taxes isn’t nearly as awful as I would have thought, from watching movies and listening to talk radio.
P.S. If you want to call me a sellout for paying taxes even when there’s an unjust war going on, etc. etc., that’s fine. But please don’t discuss anything illegal in the comments, because then I’ll have to take it out, you’ll be even more convinced I’m a stooge for the feds, etc. No fun for anyone.
Just when you thought the “green recovery” plans couldn’t get more inefficient:
Green investment is a major pillar of the president’s economic recovery plan. Yet, America’s dependence on foreign countries to produce green technologies may undermine this recovery strategy. Using a list of green goods derived from the Organization of Economic Cooperation and Development (OECD) and the Asia-Pacific Economic Cooperation (APEC), we have determined that the United States ran an overall green trade deficit of -$8.9 billion in 2008, including a deficit of -$6.4 billion in the critical category of renewable energy, one of the main targets of the Obama administration’s green agenda. The U.S. economy also suffered a significant deficit in the pollution management category. On the positive side, the United States ran modest surpluses in two categories–energy efficiency and a grouping of other environmental goods related to water purification and sustainable agriculture.
If current trends continue, the green trade deficit can be expected to widen further as the administration’s agenda increases domestic demand but without sufficient measures to increase domestic production. If the deficit continues to grow, the United States will forego the creation of millions of high-wage, high-skill green manufacturing jobs and lose its potential to be a global producer as well as a consumer of green technologies.
And liberals love to guffaw at General Turgidson when he says, “Mr. President, we cannot afford to let the Soviets create a mineshaft gap!”
Recently I discovered this great public radio station. (It’s 98.9 FM in the Nashville area; I don’t know the call letters.) The first time I stopped on it, there was a guy who didn’t sound insane, talking about how all the Osama bin Laden videos after a certain date were obvious fabrications.
Then a few days later I heard some woman reading a lengthy treatise on why the charging of interest was a harmful social practice. This isn’t “Go Obama!” programming like NPR; this is seriously hardcore stuff.
Anyway, today I was on the way to my office and I was listening to some activist fighting rhino hunting in Africa. She explained to the radio show host that the hunters sell the ivory horns to be used for dagger handles and to be ground into aphrodesiacs in China. The host was horrified.
Then the activist said, “Yes, we actually started a rumor that it would give you AIDS.”
The host immediately approved: “Oh that’s a good idea.”
Isn’t that rather shocking? I thought two, fairly important, official progressive goals were to (1) tell the truth and (2) dispel rumors about how you can catch AIDS. But I guess they were trumped by (3) save the rhinos.
For a while, I think Mario Rizzo and I were the two contributors to the geeconosphere who most succinctly pointed out the micro-coordination problems that macro stimulus would distort. But in a short post, I think Jerry O’Driscoll crystallizes it even more tightly:
Consider the current economic situation. A financial crisis has been brought on by, first positive, and then negative monetary shocks. In the short run, individuals are increasing their demand for money (velocity is declining), and are simultaneously increasing their long-run, desired savings to a more normal rate. These effects combine to place downward pressure on nominal demand in many markets.
But the decline in nominal demand is not evenly spread across all markets. If demand is to be stimulated consistent with the new consumption/savings equilibrium, it would need to be supplied in the precise proportions that correspond to the new pattern of demand across markets (including inter-temporal markets). The information requirements to accomplish that task are nothing short of what would be required for comprehensive economic planning of the economy. Moreover, Public Choice tells us that stimulus will always be applied according to political, not economic, criteria.
If nominal demand is falling at uneven rates, then relative prices are changing. The same self-regulating forces are at work as described in microeconomics. Resources are being re-allocated across markets even as this is being written. A macroeconomic model with one good (output), one price, one interest rate, one wage rate, etc. is incapable of capturing those forces. The rationale for stimulus makes sense only in terms of such models and not in terms of how market economies actually work.
* Aww shucks, the wusses at Fox News have officially repudiated the original story. Now apparently the Pentagon robots are just supposed to eat plants. Hmm…
* Another favorable review (of my first Politically Incorrect Guide) at FrontPageMag.
* My radio interview with Michael McKay, from the Mises Institute.
* Betsy Hansen was a summer fellow at the Mises Institute this year. Last week (during the conference) we started talking about mark-to-market and it soon became apparent that she had done a lot more research on it than I had. (She was citing specific regulations and such; go figure.) I like her take in this article; she basically says that yes the government screws up financial regulation, but changing accounting rules mid-game isn’t going to solve the crisis.
Lately I’ve realized how much it bums people out when I calmly explain to them that Bush, Ben, and ‘Bama are doing a great job…if their goal is to re-create the Great Depression. So in the present post, let me explain why I’m not devastated.
First, I have my religious faith. I won’t delve into such matters here, but longtime readers know that on Sundays we bring up the J-word. Needless to say, if you “actually believe that stuff?!”, then it brings a certain degree of peace of mind.
Second, and on purely rational grounds, what we need to remind ourselves is that we are all standing on an unbelievable hunk of natural resources, just waiting to be tapped. In terms of the riches that can be showered upon us from this oblong spheroid on which we circle a star, we have–quite literally–just scratched the surface. With the stroke of a pen, President Obama could change policies regarding offshore and Alaskan oil drilling. That would magically place billions of barrels of new oil in the hands of the free world.
(And by the way, my new term for “the private sector” will be “the free world.” If the enviros are going to start calling it “clean energy,” then I’m calling my special interest group “the free world.”)
It’s not even just a matter of natural resources. The government could legalize all forms of currently heavily regulated commerce. There would be an explosion in productivity and wealth creation from such a movement, which would include drug, prostitution, and gambling legalizations. (And part of the newfound prosperity would be due to the drop in gang violence, mafia revenues, and STDs.)
This is what the government did during the Great Depression. In his first month in office, FDR ended alcohol Prohibition. (As he signed the bill, he reportedly said, “I think this would be a good time for a beer.”)
I get so amused by all these Fox News commentators explaining how Obama’s gonna be another Jimmy Carter. No he won’t; he will legalize marijuana coast to coast if things get really awful. You’re telling me liberals are going to vote for the Republican, and repudiate the administration of the First Black President, after he drives the price of the best pot these people have ever smoked, down to $10 per eighth of an ounce? I think not!
Things are a little creepier with health care. They will install some asinine program this year, and it will indeed make things much worse. Yet when the plan is quite evidently bankrupt, the government can at that point allow people to trade away their bodily organs for “health care credits.” For example, a poor guy who needs a heart transplant can trade in his spare kidney in order to bid on the available (compatible) hearts.
So it’s true, once we are in the throes of Obama Care, at that point it will probably help people to allow them to sell off body parts. In the example above, the poor guy is choosing between life and death; taking away his option would spell his death. And it’s not even a matter of him getting the heart, versus somebody else. Because everybody is selling their organs into circulation, there is a greater supply and more people can get life-saving operations. (Keep in mind people could sign away the right to their organs after they die.)
And yet, this logic breaks down when the government virtually monopolizes health care. Then it might literally adopt policies to allow them to harvest some people’s organs. I am NOT saying that the present administration is planning to do that. What I AM saying is that if you allow the government to take over health care, then you have to hope that you never get some really evil people in office, because they could look at everyone as cattle.
In conclusion, we will get through this depression. The people in power need the society to function at a basic level. There’s no point in running the world if you can’t trust the airplanes to work! During the 1930s, the people in charge realized they had miscalculated; things were worse than they had anticipated. (Remember, these people presumably aren’t experts in classical liberal thought. If you spend your whole life plotting to become senator, you probably haven’t read de Tocqueville in the original French.)
So in the 1930s, they pulled back and repealed Prohibition. They actually had to amend the Constitution, to undo the previous Amendment. Now I suppose a true conspiracy theorist will say that too was all part of the diabolical plan; perhaps the point was to show that the formal amendment process was too annoying, and that the Supreme Court should just interpret the document as a living thing.
In any event, they allowed people to buy and sell liquor again. Can you imagine how great a boost that would have been, had the country not been in the depths of the Great Depression?
Many economists wonder what magic spell FDR spun, since he got the economy to turn around on a dime virtually the moment he was sworn in. A lot of the economists think it was FDR’s decision to take the dollar off gold, giving the green light to the Fed to print money. But maybe, just maybe, it was the legalization of alcohol.
If things get really bad, they can do the same with pot or organ selling. We are incredibly, fantastically wealthy. The government will have no choice but to lift some of the shackles in the coming depression.
* I take on my buddy Brad DeLong at Mises.org. DeLong had tried to use Wicksell to defend Greenspan, and I cracked that Knut. (OK that was awful, sorry.)
* Jeffrey Rogers Hummel says that the U.S. government will default on its debt.
* David Friedman has a very interesting post on responding to climate change. Unfortunately, his numbers were off and it became clear in the comments that he was shooting from the hip (he didn’t even realize there had been a 4th report of the IPCC). Nonetheless, his central point remains: Right now there are successful human societies spanning a large range of average temperature. If the entire globe were to move upward over the course of a century within this range, then adaptation seems rather doable. And his point about our houses etc. already being calibrated to the current temperature distribution is great: Friedman points out that most buildings will be replaced or seriously modified anyway, within the next 100 years, so it’s not that much of a marginal cost to have to install more AC or whatever.
* A young and dynamic pastor here in Nashville has just released a new book on Jesus. I haven’t read it yet but the pastor, Jared Wilson, is a great combination of punk young guy and serious Christian.
* Scott Sumner can’t stop thinking about me.
* Tom Woods gave a really funny talk [.mp3] about his experience in marketing the bestselling Meltdown. This was an especially impressive talk, since the poor guy gave it on Tuesday night at Mises U, following my performance the night before. (I’m still waiting for them to post my talk on LRC’s podcast, because their interface is so much easier than having to download an mp3. As the internet becomes ever cooler, my laziness increases pari passu.)