31 Oct 2014

IPCC to Emphasize New Marketing Campaign

Climate Change, Shameless Self-Promotion 7 Comments

My latest at IER. An excerpt:

As [the interventionists] themselves are now admitting, the actual situation is much more nuanced, showing that the critics had a point all along. Originally the case for government restrictions on carbon dioxide emissions was portrayed as a “no-brainer” akin to changing the oil in your car, but now the analogy has shifted to buying fire insurance on your house. That shift in the rhetoric is very revealing: Years ago, aggressive government policies were not originally sold to the public as a form of insurance, because such language reveals the inherent uncertainty in the predictions of extreme loss.

30 Oct 2014

Potpourri

Potpourri 49 Comments

==> Richard Tol on the “97% consensus” climate change survey.

==> Tom Woods has a great great podcast on Aquinas’ argument for God. Note: Neither Aquinas, nor any serious theologian, argued that, “Everything has a cause, therefore God.” That sounds boring? OK fine, Tom also specifically addresses the Flying Spaghetti Monster.

==> Richard Ebeling has a nice post on Israel Kirzner, who is shown teaching with Audio/Visual aids.

==> Joe Salerno discusses the NJ politicians arguing about the gold standard (!).

==> When he’s not in “office,” Alan Greenspan goes back to being a good economist.

==> My colleagues at IER put out this informative post on oil prices and production.

30 Oct 2014

New MLI Study on Carbon Tax Swap

Climate Change, Shameless Self-Promotion 3 Comments

Long-time readers have seen most of this before, but this is something I wrote for a Canadian outlet that was released today.

29 Oct 2014

Daniel Dennett’s “User Illusion”

All Posts 20 Comments

Back when I was a materialist, I loved Daniel Dennett’s theory that consciousness was an evolutionarily driven “user illusion.” Gene Callahan actually pulled me out of that by asking the simple question: Who is the user being fooled?

Gene’s question was so poignant that it either was devastating (if you agree with him) or childish (if you disagree with him). That’s how those one-sentence put-downs work.

Well, I still like Gene’s critique, but how do you square it with this? I have had many dreams over the years in which I’m effectively watching a movie (or a TV show), and there’s a surprise ending. Most nightmares are like this, but it’s not just nightmares; I’ve “watched” really entertaining dreams with an ending I didn’t see coming.

So, what the heck is going on there? However you explain it, I think it makes Dennett’s theory of consciousness a lot more attractive, after all.

29 Oct 2014

Yellen and the End of QE3

Federal Reserve, Financial Economics 79 Comments

Although it has been dubbed “surprisingly hawkish” by the financial press, the Fed’s announcement today fulfilled its original plan to wind up QE3 asset purchases this month. Going forward, the Fed will continue to reinvest the principal on its maturing bonds, but it won’t add assets on net to its balance sheet.

In my view, if the Fed holds firm and doesn’t resume asset purchases, we will have a sharp drop in stock prices, as they have moved in lockstep with the Fed’s balance sheet since 2009:

2014.10 Figure 1 SP500 vs Fed Assets

Let me also remind readers of my analysis back in July, when I explained why I thought Janet Yellen was going to take one for the team:

==> Paul Volcker took over as Chair of the Fed in August 1979. A recession officially began five months later, in January 1980. The second “early 1980s” recession officially began in July 1981; the annual unemployment ratewas 9.7% in 1982. This was the worst recession since the Great Depression.

==> In August 1987 Alan Greenspan took over the Fed. Two months later “Black Monday” occurred on October 19, 1987, when the Dow dropped 22.6% that day alone–the worst one-day crash in history.

==> In February 2006 Ben Bernanke became Fed chair. The worst recession since the Great Depression officially began in December 2007, and you may recall there was some trouble in the financial markets in September 2008…

==> In January 2014 Janet Yellen became Fed chair. The US stock market crashed and slipped back into major recession on _____?

Of course, no one knows the future. But given that the people behind the curtain have to let a major crash happen sometime–they can’t repeal Austrian business cycle theory–why not do it when the first black president is in the White House and the first woman is at the helm of the Fed?

29 Oct 2014

“Breaking Bad: Can Regulation Be Fixed?”

Shameless Self-Promotion 10 Comments

My latest article in the Freeman. An excerpt:

The whole schtick of the regulatory State is that we can trust a group of technocrats in Washington, DC, to guard the interests of the people by standing up to the greedy and soulless business tycoons who — left to their own devices — would lie, cheat, and kill in order to turn a profit. Yet, anyone with an open mind can see that this approach has, time and again, utterly failed in practice.

For example, Harry Markopolos had been writing the SEC since 1999 warning that Bernie Madoff was running a Ponzi scheme, yet the SEC (which had ties to Madoff and his family) ignored the obvious red flags. In the end, Madoff’s kids turned him in.

Or how about another classic example, where the federal government stands valiantly in the breach to protect Americans from the big, bad oil companies? The Minerals Management Service (MMS) was the previous name of a group inside the Interior Department. In a major scandal that caused it to change its name, MMS employees in Colorado were caught accepting drugs and sex from the companies they were supposed to be regulating, while MMS employees in Alaska got in trouble for throwing a party with a cake that said “Drill, Baby, Drill” on the frosting.

28 Oct 2014

Focus on “Co-Benefits” Shows Flaw in Carbon Tax Case

Climate Change, Shameless Self-Promotion 12 Comments

My latest at IER. An excerpt:

First of all, consider the title of the new IMF study: “How Much Carbon Pricing is in Countries’ Own Interests? The Critical Role of Co-Benefits.”

I hope the reader’s Spidey Sense is tingling at this point. The IMF study’s entireraison d’étre is that without co-benefits—which we must remember, is a concept enjoying relatively recent attention from the carbon tax crowd—a large carbon tax is not in a given country’s own interest.

28 Oct 2014

I Pity the Fool Who Thinks Money Measures Value

Gold, Shameless Self-Promotion 4 Comments

A follow-up post at Mises CA:

[L]et’s try a different thought experiment. As before, suppose the government locks in the dollar-price of gold, thinking that this will provide a “stable ruler of fixed length” by which people can measure market values. Yet a sudden resurgence of interest in Mr. T causes most Americans to want to wear more gold jewelry on their chests. If the government does nothing, then the dollar-price of gold would increase because of the heightened demand to use gold as jewelry. In order to keep the dollar-price fixed, therefore, the government has to suck dollars out of circulation. This keeps the dollar-price of gold stable, but causes a crash in the dollar-price of everything else. Far from providing a stable unit of value, it seems that locking in gold as the money allowed a sudden bout of “deflation,” at least in the way the public currently thinks of the term.