General Wesley Clark Tells an Interesting Tale
What do you think, kids? Is he making this up to please the Democracy, Now! crowd? (HT2 LRC)
For those Free Advice readers who are geographically challenged as I am, here’s a Middle East map:
When the New York Times starts quoting anonymous CIA officials explaining the discovery of terrorist cells in Turkmenistan, I think the Iranian regime could start smelling a rat.
Open Mic Night at Mises Brasil
Peter Klein told me beforehand not to try to make too many opening jokes, because of the language barrier. I answer to no man.
My Critique of MMT
…is up at Mises.org. An excerpt:
According to many proponents of MMT, “deficits don’t matter” when a sovereign government can issue its own fiat currency, and all the hand wringing over the government’s solvency is absurd. In fact, the MMTers claim that given the reality of a US trade deficit, a sharp drop in the government’s budget deficit would hamper the private sector’s ability to save. Thus, the Austrians are unwittingly calling for a collapse in private saving when they foolishly demand government austerity.
…
Thus far I have accepted the MMT premises on their own terms, and shown that MMT’s proponents often read more into their neutral accounting relationships than is justified by the relationships per se. However, in this final section I want to point out something even subtler.One way to describe MMT is that is a “nominal” model of the economy, looking at flows of money without inquiring too deeply about the economic significance behind the flows. This article is already lengthy, so let me illustrate the problem with an analogy.
Suppose Tabitha has an income of $100,000, out of which she consumes $90,000. Tabitha takes her savings of $10,000 and lends it at 5 percent interest to Sam, who signs over an IOU promising to pay Tabitha $10,500 in 12 months.
Now let’s stop and ask, did Tabitha save money in this scenario? Yes, of course she did. Another question: did Tabitha accumulate net financial assets? Yes, of course she did: she is holding a legally binding IOU from Sam, which possesses a current market value of $10,000 and will grow in value over time as the payoff date approaches. (Changes in Sam’s solvency and interest rates of course might inflict capital gains or losses along the way.)
Now let’s tweak the scenario. Suppose I tell you that Sam plans to raise the money needed to repay his loan by selling services to Tabitha. For example, suppose Sam used the $10,000 loan to buy equipment that he will then use to perform landscaping work on Tabitha’s property over the course of a year. Every month Tabitha pays Sam a fee for his services, and after the 12th month Sam takes these fees, which are equal to $10,500, and hands them back to Tabitha.
In this revised scenario, is it still true that Tabitha acquired a net financial asset when she bought the $10,000 IOU from Sam in the beginning? Yes, of course it is. Tabitha voluntarily purchases the landscaping services from Sam; the flow of money back and forth is a bookkeeping convenience. Economically, what happened is that Tabitha exchanged a stock of present goods up front for a stream of services over the course of the year.
Now let’s tweak the scenario one last time: Suppose that Tabitha lends $10,000 to Sam, who gives her an IOU promising $10,500 in 12 months. After the year passes, Sam walks up to Tabitha and sticks a gun in her belly, demanding $10,500 in cash. She hands it over to him, and then he gives it right back and tears up his IOU.
In this scenario, did Tabitha acquire a net financial asset when she originally lent the money to Sam? No, not really — especially if she knew how he planned on “repaying” her. In this case, Tabitha’s savings of $10,000 would have simply been confiscated by Sam. He can go through the farce of giving her an IOU and then robbing her in the future to “redeem” it, but economically that is equivalent to him simply robbing her of the $10,000 upfront. From Tabitha’s viewpoint, her $10,000 in savings vanished, while Sam’s consumption can rise by $10,000 without increasing his own indebtedness.
Now let’s expand the groups. Instead of the individual Tabitha, consider the group of all Taxpayers. And instead of the individual thief Sam, consider the institution Uncle Sam. The MMTers correctly tell us that the Taxpayers can’t accumulate “net financial assets” — i.e., drawing on income streams that originate outside the group — unless Uncle Sam runs deficits and issues them bonds.
But what is the point of accumulating bonds that will only be redeemed when Uncle Sam coercively raises the necessary funds from the same group of Taxpayers in the future? Any individual taxpayer can justifiably look at a Treasury bond as a net asset, because his or her own tax contributions will not vary significantly based on his or her investment decisions regarding Treasuries. But the private sector as a whole surely shouldn’t naively assume that if the government runs a $1.6 trillion deficit this year, this foretells of a shower of new income flowing “into the private sector” down the road.
Paging James Galbraith, is your Google Alert activated? I’d be interested in your thoughts…
Reconciling God’s Sovereignty, Mercy, and Justice With Our Free Will
An ambitious post title, to be sure. When I would get a really hard question in grad school, often I could “get inside the head” (actually the mind) of the professor and guess “what the answer would look like,” even though I couldn’t actually compute the answer as the Japanese guys could.
I feel a similar way when some of you post excellent criticisms of my Christian views every week on this blog. I understand why you are unsatisfied with my attempted responses, but at the same time I am still confident that I am right and that one day, this will all make perfect sense. In the present post, I want to sketch what the answers will probably “look like.”
For starters, I want to note that atheists/agnostics often present me with two contradictory complaints. On the one hand, they demand that I explain every last action of the God of the Bible, and justify it, rather than simply accepting “on faith” that God is good by definition. On the other hand, whenever I talk about the nature of God, they tell me I am incredibly arrogant for thinking I could possibly understand the mind and attributes of such a being, if He existed.
There is no problem here for the Christian. I haven’t deduced the Christian worldview from reflecting on the nature of existence and the human condition. No, doing that can lead you into despair.
On the contrary, the reason we Christians think we know a thing or two about God is that He told us.
Remember, one of my primary arguments in my first “Why I am a Christian” post was that I would never have designed Christianity. It does sound absurd when you first encounter it, and process it using the standards of this world. When I was an atheist and was getting ready to write the definitive treatise, I thought I had a pretty snappy argument that would go like this:
Let’s put aside all of the physical impossibilities of the Biblical accounts–Jesus walking on water, feeding 5,000 people, and so on. The thing that’s really nonsensical about Christianity is the motivations of the chief characters. We can suspend disbelief and watch The Matrix or some other movie, so long as the characters’ actions make sense. But the God of the Bible behaves completely irrationally. He starts out, furious at humans for their sinful ways, and is going to cast them all into eternal hellfire. But, after He sends His Son and we murder Him, then God forgives us our sins and lets us into heaven. That doesn’t make any sense.
I recently went to a Bible study where an Eastern Orthodox guy led the presentation. The next day, three of us (who were all Protestants) were discussing the worldview of these folks, because I had no idea of the various sects and their tenets. (Note that I am just reporting what my friend told me; I can’t vouch for the accuracy of the description.) My friend said that these guys, though Christian, nonetheless rejected (our interpretations of) the doctrines of Original Sin, of predestination, and of salvation through faith alone.
I pointed out that this was internally consistent. In other words, if you rejected the idea that we are all guilty sinners by our very nature because of Adam and Eve’s transgression, then it makes sense that each person has to earn his or salvation through works, and we can’t know who will get a passing grade until after we observe the person’s actions in life.
This issue of consistency affects the atheist/agnostic critics of my worldview as well. I think a lot of people would argue like this, “Holy cow those fundamentalist Protestants are out there. Not only do they think rapists and murderers can get into heaven, so long as they ‘accept Jesus’ two seconds before they die, but they also think that a guy who ate a forbidden fruit thousands of years ago, somehow affects my guilt or innocence. Talk about compounding error with yet more error!”
But actually, these two views go hand-in-hand. It’s precisely because of Original Sin, that you can’t try really hard and live a life pleasing to God. By your very nature, you were born a corrupt, sinful being. And that’s why only Jesus’ work can save you.
Taking the God Hypothesis Seriously
Sometimes I get frustrated arguing with atheists/agnostics because they don’t take my worldview to its logical conclusion. For example, some libertarians keep trying to prove to me that God is a thief, murderer, etc. because of His actions in the Old Testament in particular.
But hold on a second. If God really did create the entire physical universe de novo, then by standard libertarian ethics He owns everything. (I have never been convinced by attempts to prove self-ownership as the default position. I agree that they sound nice and intuitive with regard to human beings vis-a-vis each other, but ultimately every such argument I’ve seen is ad hoc. Indeed, Gene Callahan and I pointed out that this is one of the reasons Hoppe’s celebrated argument fails: He doesn’t deal with the possibility of a God creating everything.) And note that this doesn’t work at the human level: Your parents don’t own you, because they really didn’t create you in the same sense that Christians believe God created everything. (Also, their parents would own them, and so on.)
For a specific illustration, consider Avram’s rejection of my views of heaven and hell in a comment on a previous post. He wrote (edited slightly):
Let’s say some really cool kid, who is otherwise really nice and does all these great things decides to have a party. Rumors start circulating that it’s gonna be the best party ever. When you get to the kid’s house with some of your friends the kid says, “I have just created the best party ever known to this world, now before you come in you have to declare me as the best person ever, your owner, your sovereign and king for all eternity, now say I am your god.” Well you’d think this guy has problems, because that’s a pretty petty way to get people to say nice things about you.
Well I think the same about your god, Jesus. If he were really a merciful god, he would leave the doors to heaven open for anyone to come in as they like. When they are in there they would have to do by his rules of course but there is no (good) reason to restrict access to people who don’t announce you as their ruler, that’s just petty.
Notice the part I put in bold. Avram totally concedes that when you are on Jesus’ property or “in His house,” you have to abide by His rules. Avram has no problem with that. But Avram seems to think that when you are on earth, you are on territory where God’s rule have no jurisdiction. Yet God created the earth too. You are always on God’s property, living as a guest at His pleasure, and thus subject to His rules–even according to standard libertarian principles.
Furthermore, the reason the hypothetical kid sounds like a jerk is that the kid is not our ruler or god. But if the kid instead said, “In order to come into this house, I expect that you call me by my name Bill–rather than calling me Jake, which for some reason a lot of people do–and don’t go around to the other guests saying I don’t really exist,” that might be a little odd, but it wouldn’t sound as bad as Avram’s hypothetical kid.
Well, if Jesus actually IS our savior and we actually DO need Him for our salvation, then it’s not obviously petty for Him to expect us to utter true statements.
God as Author
Lately I’ve been thinking through these apparent paradoxes by an analogy to a fiction author. Quick: Who is the architect for Winston’s torture in 1984? Why, it’s O’Brien of course, or perhaps Big Brother if you want to look at it that way.
Ah but are you so sure? The person who actually decided to have Winston tortured was George Orwell. In the context of the story of 1984, O’Brien had free will. He chose to commit many crimes. But it’s also a true statement to say O’Brien was an instrument mechanically carrying out the will of George Orwell, who was trying to teach people something with his tale.
That’s “how the answer will look,” I submit, when we die and all things become clear. Our minds right now can’t comprehend the actual nature of our existence and of God, for obvious reasons. But after death, for those of us who choose to be in communion with the Lord, we will see exactly why He told His story (history) the way He did. And of course it will be a beautiful, incredible story, infinitely better than anything humans could create–for the simple reason that all human stories are subplots within God’s overarching story, in the same way Stephen King sometimes has his characters write novels inside his novels.
Last point for today: On the issue of salvation, I stand behind what I said before:
…I disagree strongly that an agnostic who helps little old ladies across the street and doesn’t use the f-word is “a good person.” Yes, he might be good compared to most other humans, but he’s far from perfect. And until you contemplate the life of Jesus, and the standard He set for us (both in His commands and His actions), you don’t even realize how badly you are playing the game of life.
So this is why the most important “act” or “work” you can do in this life, isn’t to refrain from homicide (as I think many agnostics believe). Rather, the most important thing is for you to humble yourself and admit you have a problem. Then you can start improving, and ironically you will end up living a much better life (even according to conventional standards) once you do that.
I think in God’s value system, somebody who did something really bad, but has sincerely repented and understands just how bad it was, is a “better person” at this moment than the person who did a litany of lesser offenses, but now offers no apology for them and in fact is outraged at the very idea that a God might hold him in judgment. And I have to say that this seems eminently fair to me.
I think I found a good way to make my case. Consider the following clip, and I want you to actually watch it through (there are some surprises to keep you interested):
Now then: If Vader hadn’t been injured, and escaped with Luke back to Endor, I agree that he would have to face the legal consequences of his actions. Luke couldn’t just say, “It’s OK everybody, my father is back. All is forgiven.” No, there would be lots of problems with a legal system that worked like that, such as the problem that humans can’t really judge the hearts of others, and so wouldn’t be able to distinguish genuine repentance from a cynical ploy to escape punishment.
However, since Vader died, that’s not the issue. At the end of the movie, we see that the spirit of Anakin Skywalker is in communion with his old friends, Yoda and Obi Wan. Clearly, the message is that at the last moment, Anakin turned back to good. He renounced his horrible crimes, he realized the awful things he had done because of his seduction by the Dark Side, and he turned his life around before it was too late. So that’s why he gets to spend eternity hanging out with the good guys.
Are you agnostics and atheists telling me that this strikes you as repugnant? Do you think George Lucas is being too soft on murderers here? Don’t forget, Vader blew up a whole planet and tortured Han Solo.
Guest Post: Jesus and Ethics
[Brian Shelley had made some interesting remarks on previous religious posts, and I asked him to elaborate. — RPM]
What Jesus introduces in the Sermon on the Mount and then the Apostle Paul expounds
on in Romans is an exposition on why personal ethics are of limited value and
unnecessary. This is what separates Christianity so dramatically from Judaism and Islam.
Jesus replaces ethics with two concepts:
“‘Love the Lord your God with all your heart and with all your soul and with all your
mind.’ This is the first and greatest commandment. And the second is like it: ‘Love your
neighbor as yourself.’ All the Law and the Prophets hang on these two commandments.”
Matthew 22: 37-40
The problem with personal ethics or moral laws is that they are poor at producing the
desired ends. Even though moral attitudes against stealing are pretty universal, it still
happens with frequency. The underlying premise to this moral law is that stealing feels
really good, but you shouldn’t do it because of some altruistic reasoning or supernatural
punishment. As economists know, altruism is a poor motivator. Exhortations
like, “What if everyone stole?” sound nice, but because the idea offers no personal
incentive, it fails to produce the desired result. A far off hell or ethereal cosmic forces of
justice clearly haven’t cured us.
At the core of any ethical system are logical presuppositions. Mises folk like to
say, “Taxation is theft,” and as Gene Callahan likes to say, “Only if you accept the
Rothbardian worldview.” There are no objective ethics, they are chosen to fit our desires.
We want to live, ergo killing people is wrong. Intense desires and emotions can make
us drop our ethics in the blink of an eye. A building gets blown up and suddenly we can
kill foreigners without due process. The stock market plunges so now we can confiscate
private property. We do it as a society and we surely do it as individuals.
It’s unlikely that any man has ever woken up in the morning and thinks to
himself, “Today, I will cheat on my wife.” It’s a slow rationalizing progression. He
meets a pretty woman, decides that it’s okay to flirt, then it’s okay to e-mail, then it’s okay to
go to lunch, then it’s okay to call, then it’s okay to have dinner while his wife’s out of town,
then it’s okay to lie about working late so that he can meet her, and after quite some time he
is finally convinced that it’s okay for him to sleep with her. His mind slowly rationalized
what he wanted to do, while not intending at first to go so far. His ethics might have
slowed him down, but they are no guarantee to stop him. Our minds will change our
ethics to achieve the things we desire.
The Pharisees of ancient Israel recognized this phenomenon and put up extra rules
beyond those that God had given to the Israelites in the Old Testament. Rules-based
religions fall prey to the habit of adding extra rules so you don’t break the “real” rules.
You can’t flirt with a pretty woman if you ban women from working in the same office,
refuse to eat at the same table with them, or hide them with yards of fabric.
What Jesus says is, “…anyone who looks at a woman lustfully has already committed
adultery with her in his heart.” For the Pharisee this is a frighteningly strict expansion of
adultery. What they misunderstand is the overall point that Jesus was making. You don’t
need rules, you need to change your desires. You need redemption. Stop trying not to
cheat, remove the lust from your heart. Paul corroborates the need for redemption over
ethics when he says that the law was powerless to do what was accomplished by Christ’s
redemption of man on the cross.
Jesus also tells us of personal incentives to righteous living, in the form of the Kingdom
of God and eternal life. He could be speaking strictly of heaven, but I doubt it. He told
the woman at the well, “…whoever drinks the water I give him will never thirst. Indeed,
the water I give him will become in him a spring of water welling up to eternal life.”
The reward appears to be fulfillment and purposefulness. Paul also speaks of rewards
with, “The mind governed by the flesh is death, but the mind governed by the Spirit is
life and peace.”
What Jesus is saying is the opposite of what many Christians think today. We often
treat righteousness as an onerous burden of arbitrary rules that we suffer through until
we die and go to heaven. Both Jesus and Paul give clear indication that rewards for
righteousness begin now, not after death. Sin is therefore unmasked as a fraud. If
righteousness yields life, fulfillment and purpose, then sin yields death, emptiness and
meaninglessness.
This reward is not some ethereal experience, but an outflow of how we and the world
around us were designed. You hate, you suffer. You lust, you suffer. You covet,
you suffer. You love, you feel joy. You follow Christ, you feel joy. We become
disconnected from this truth because we idolize things other than God. In our arrogance
we have decided that we already know the answers and we cloud our minds with
cognitive bias, seeking only the evidence that reinforces the truth we “know.” Until we
submit to Christ’s redemptive power, we will rationalize ourselves away from joy and the
ultimate satisfaction we all long for.
A Bunch of Drunks Must Have Edited Wikipedia
I am still trying to contain my disbelief that Paul Krugman has doubled down on his claim that Casey Mulligan must have gotten his views about New Keynesianism at a bar. Specifically, Noah Smith pointed out (and I paraphrase), “Gosh, well, I hate to disagree with the mighty Krugman here, but you know there are a whole class of New Keynesian models that focus on sticky prices… So maybe that’s what Casey Mulligan had in mind?”
But nope, Krugman will have none of it. Don’t show any sympathy for those Chicago School morons–they hate us for our predictions. You need to be tough with these guys. No mercy! They only respect strength.
Anyway, when I was looking into something unrelated, I came across the Wikipedia entry on “New Keynesian economics.” Apparently a bunch of drunks from Chicago got a hold of it and changed everything, because look at how it reads:
New Keynesian economics is a school of contemporary macroeconomics that strives to provide microeconomic foundations for Keynesian economics. It developed partly as a response to criticisms of Keynesian macroeconomics by adherents of New Classical macroeconomics.
Two main assumptions define the New Keynesian approach to macroeconomics. Like the New Classical approach, New Keynesian macroeconomic analysis usually assumes that households and firms have rational expectations. But the two schools differ in that New Keynesian analysis usually assumes a variety of market failures. In particular, New Keynesians assume prices and wages are “sticky”, which means they do not adjust instantaneously to changes in economic conditions.
Wage and price stickiness, and the other market failures present in New Keynesian models, imply that the economy may fail to attain full employment. Therefore, New Keynesians argue that macroeconomic stabilization by the government (using fiscal policy) or by the central bank (using monetary policy) can lead to a more efficient macroeconomic outcome than a laissez faire policy would.
Yes yes, we can all make jokes about the validity of Wikipedia, but give me a break. When Krugman says that Mulligan is getting his views on New Keynesian economics from hanging out at the bar, he is completely full of crap. If he weren’t such a bully, I think more of his colleagues would be standing up to him and pointing this out.
To clarify: Krugman of course can claim that Mulligan’s critique is wrongheaded, because we are in a liquidity trap blah blah blah. But to just keep ripping Mulligan as totally ignorant of New Keynesian economics is absurd.
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