The Best Argument for Decentralization I Have Ever Seen
This is real. I heard NPR interviewing one of the instigators from the Oregon state legislature. They decided it would be funny to Rick Roll the official legislative proceedings by having various people insert snippets into their prepared remarks. The video below is a collage of their individual efforts.
Potpourri
* Of course political pundits contradict themselves all the time, but Newt Gingrich’s positions on Libya are impressive. (HT2 Gene Callahan)
* “Analysts surprised” by the latest inflation numbers… The producer price index (PPI) for finished goods, up 5.8% over the last 12 months; for intermediate goods, 8.9%; and for crude goods, 16.4%. But don’t worry kids, Nobel laureates and Fed officials keep reassuring us that with high unemployment, there is no chance of a wage-price spiral developing and leading to significant inflation.
* Speaking of inflation, the way ShadowStats’ John Williams calculates it, he says that right now old-school consumer price inflation is running about 10%, if we calculated it the way it was done before 1979. (HT2 LRC)
This is obviously a very significant point in our debates over Fed policy. I sent the above article to Scott Sumner and David Beckworth to see what they had to say, since it was a chink in their armor that they should plug. (At least I think I sent it to Beckworth; the address in my account was db something, hopefully I didn’t just burden David Bowie with a CNBC article.) Here was Scott’s response (with permission): “No chink in my armor, because I care about NGDP growth, not “inflation.” NGDP growth is running around 4% to 5%, so if inflation is 10% then RGDP is falling at 5% to 6% a year. How likely is that? In other words, the 10% inflation argument is too crazy to respond to.”
The funny thing is, I would have thought free-market fans (like Scott) would welcome such evidence. “Oh OK, I couldn’t understand why the biggest interventions since the New Deal were having such little effect on the economy! Now it all makes sense.”
All joking aside, I have been astounded by some free-marketeers who think we should be optimistic about the economy. If you really believe that, then why are you wasting your career on something that obviously doesn’t matter very much?
* Don’t get too mad at Scott; he writes post like this and all is forgiven.
* Here’s a pretty good summary of the bankruptable Fed. The writer makes a good point that hits one of mine from a slightly different angle: Fed officials pooh-pooh worries of asset losses by saying they will hold them to maturity, and yet they pooh-pooh worries of (price) inflation by saying they will sell off assets at a moment’s notice if they need to.
* Another good analysis of possible Fed insolvency.
* Can you guess the closet Austrian who wrote: “[T]he introduction of the euro led to a period of low interest rates in southern Europe, triggering an inflationary boom; when the boom ended, they were left uncompetitive with northern Europe.” ?
* Bryan Caplan complains about his experiences growing up, when religious people just wouldn’t leave him alone. I mean poor Bryan went through this: “My response, from age 15-19 or so, was to wage a one-man intellectual war on religion. I didn’t just object to religious claims that happened to come my way. I was on search-and-destroy mode, vainly trying to argue every crucifix-wearer onto the path of reason.”
* Speaking of religion, Jeff Tucker on its tension with economics.
* Great article by Anthony Gregory on “Why the Left Won’t Stop the Wars.”
* Krugman ups the ante. Originally, I thought the whole deal with Keynesian economics was “sticky wages.” In other words, sure, markets would clear instantly with perfectly flexible prices, and so you’d never have involuntary unemployment. But in the real world, prices (especially wages) are sticky, and so that’s why we need government intervention.
But then Krugman lately has been saying no, the problem isn’t sticky wages. Even if we cut wages across the board, that wouldn’t help things, because it would just magnify our nominal debts.
Yet in this latest post, he seems to up the ante and say even if it weren’t for nominal debts, falling wages still wouldn’t boost employment. So at this point I’m thoroughly confused. Krugman seems to be saying that even with perfectly flexible wages and no nominal debts, the economy can still get stuck in a liquidity trap where we need an outside agency to boost demand. Is that right? If so, how is that possible? Why wouldn’t the naive Chicago School model hold?
* Speaking of Krugman, in this post he implicitly says that anybody who sides with the Confederate states must be in favor of reintroducing slavery. (In fairness he is possibly just being “funny.”)
* I was curious about the Heritage Foundation’s explanation for their alteration of the table showing unemployment numbers for the Ryan budget plan, but this is all I could find for their take on it.
* Some more Point campaigns (here and here) that the organizers said were inspired by my Krugman debate… One of them seems not to have taken off.
* Chaos Theory now in ePub.
* I talk about the case of Bernard von NotHaus, but be sure to read Bill Rounds’ alternate take.
* It’s here! The full infomercial for my upcoming class on Rothbard’s Man, Economy, and State.
Once more on the comments
Some of you had trouble posting comments on the previous post. Again, I have no idea why, but for some reason WordPress decided to turn off the ability to comment after I posted some replies. Rest assured, I wasn’t shutting down discussion. So I think I turned them back on.
UPDATE: Now, as an added bonus, not only are the comments turned back on, but you don’t have to log in to post them. (WordPress not only turned the comments off, but changed the default settings on me.)
Why I Am a Christian
For some time now skeptics have been asking me in the comments of the Sunday religious posts to explain why I am a Christian and not (say) a Muslim or a Jew, or for that matter a follower of Zeus. I have been putting off the question since the full answer would literally require a book. However, I still post arguments in defense of the free market on this blog all the time, even though there are some critics who would never be convinced by my piecemeal remarks. In that light then–knowing full well a staunch atheist will not be converted after one reading–I’ll try to shed some light on this issue.
In the first place, the character of Jesus as portrayed in the gospel accounts is a far better man than I am. In contrast, I am not impressed by the gods of Greek/Roman mythology. By the same token, if it weren’t for Jesus, I would in haste have rejected the God depicted in the Old Testament as petty and unjust.
So for me, everything starts with the character of Jesus. I use the word “character” in two ways, meaning a literary figure but also Jesus’ moral fiber.
To put it succinctly: The older I get, the more I am convinced that if there were a God who decided to become a human being and walk the earth, then His time here would look a lot like the gospel stories. These are not the stories I would have designed from scratch. The accounts of miracles are easy enough; sure God would have gone around healing people. But in terms of His wise teachings, His interactions with the Pharisees, the way He formed His church, and so forth…it would not have occurred to me to do it that way. And for a long time, I thought the gospel stories were pedestrian, and that Greek mythology was much more interesting fiction.
But as I said, the older I get the more I realize that the gospel accounts are magnificent precisely because they are authentic. To repeat, I’m not talking about the miracles, except insofar as the disciples can observe a bunch of miracles, and yet continuously doubt the power of Jesus. I do believe that in this universe, it’s possible for a man to walk on water, cure the blind, etc., but what I’m really sure of, is that if a man went around doing such things, his followers would still doubt him after three years. That’s just the way people are. Yet if I had set out to write a story about a miraculous guy, I might not have added such realistic flourishes.
Another example is the fact that the religious authorities try to nab Jesus for working on the Sabbath (as He heals people). That seems like such a ridiculous thing, that it wouldn’t have been plausible enough for fiction. And yet, of course that is exactly the sort of thing humans would do, if God Himself came to earth and did nothing but help us.
Following Jesus literally provides me with strength in my day to day to life. For example, if I get frustrated that certain people aren’t doing enough (like for a project at work), and that people aren’t appreciating all my contributions, I can quickly nip that self-pity in the bud by reflecting on the life of Jesus. In other words, I don’t have the right to bellyache because Jesus was a lot more “carrying the team” and “unappreciated” than me. And what did He do in His circumstances? Did He mope around and heal people, but with a chip on His shoulder? Hardly.
Another aspect of all this is that Jesus’ teachings seem wiser to me, the older I get. When I was younger, for example, I didn’t interpret His commands about turning the other cheek, or being able to cast a mountain into the sea, literally. But now I am a full-blown pacifist, and I really do think that if someone had the faith of Jesus, he could heal people and perform other miracles. Again, that is just what you would expect if Jesus really were the Son of God: At first His teachings would seem obviously wrong, yet right “in spirit,” but as you gained more knowledge of the world and people, you would come to realize that actually His teachings were exactly correct.
One thing I’ve noticed lately when reading the gospels is that Jesus was like an alien walking among men in these stories, in the sense that He was qualitatively superior to everyone else. Someone with Jesus’ demonstrated wit and wisdom would of course perceive that Judas was going to betray Him; He would see that coming a mile away. Jesus’ superiority to mere mortals is beautifully illustrated when He is arrested:
47 And while He was still speaking, behold, Judas, one of the twelve, with a great multitude with swords and clubs, came from the chief priests and elders of the people.
48 Now His betrayer had given them a sign, saying, “Whomever I kiss, He is the One; seize Him.” 49 Immediately he went up to Jesus and said, “Greetings, Rabbi!” and kissed Him.
50 But Jesus said to him, “Friend, why have you come?”
Then they came and laid hands on Jesus and took Him. 51 And suddenly, one of those who were with Jesus stretched out his hand and drew his sword, struck the servant of the high priest, and cut off his ear.
52 But Jesus said to him, “Put your sword in its place, for all who take the sword will perish[a] by the sword. 53 Or do you think that I cannot now pray to My Father, and He will provide Me with more than twelve legions of angels? 54 How then could the Scriptures be fulfilled, that it must happen thus?”
Every time I read these passages, I am astounded by the character (in both the literary and moral senses) of Jesus. It literally takes my breath away. I actually had to get up from the computer and walk around the hotel room for a few minutes to process it. So if you “don’t get it” then I really think you aren’t appreciating how significant this story is. (I’m deliberately saying “literary character” and “story” to convey that even if you don’t think these things really happened, you should still be able to appreciate why these myths have such a powerful grip on some people. That was actually the first step in my own conversion to Christianity; there was a point at which I scientifically could understand the success of the historical Jesus, even though I didn’t think he was actually divine.)
So in the passages above, Jesus doesn’t simply decry the use of violence; anybody could have done that. No, He goes further and demonstrates that His supposed follower obviously doesn’t think much of Jesus. Why would the Man who fed 5,000 people need His follower to bring out a sword to defend Him?
Note too that Jesus doesn’t say, “I know kung fu.” No, when Jesus wants to explain the actual power at His disposal, He refers to “twelve legions of angels.” When I read about this episode, I try to imagine the poor guys with clubs who are out there at night trying to arrest this guy. They’ve heard stories about Him healing people, and now when they are about to take Him–in a situation where they have presumably seen other men cower in fear, or look at them with defiance and rage–here’s Jesus turning to lecture His followers about His ability to call down twelve legions of angels on His persecutors. And He would have said it with more confidence than these guys had ever heard any other man possess when uttering a sentence. They may have brushed it off afterward, but I imagine the armed mob was intimidated at that moment. Even in this situation, Jesus is clearly in charge, running the show.
Last thing: How does Jesus the man keep from blowing up into a narcissistic monster? I mean, psychologically we know what happens when people have tremendous power: Lord Acton correctly reports that it corrupts them. So if Jesus is walking around, thinking He is God’s gift to the world, why doesn’t He become a jerk, just like the guys for whom we have invented the saying, “He thinks he’s God’s gift to women”?
The answer is that in addition to all His other attributes, Jesus exhibits the most perfect subservience to the will of His Father. Once again–in retrospect–that is exactly what you would expect God to do, if He turned Himself into a man to better identify with us and provide an example for how we should live.
At the Copa, Copacabana
For those of you who will be in the southern hemisphere over the weekend…come check us out.
I am going to settle once and for all whether the Coriolis Effect really means toilets flush the other way. I may talk some Austrian econ too, if I can fit it in.
Keynesian versus Keynesian
Somebody help me out here: How is it possible that Brad DeLong is now talking about jigsaw puzzles etc. as if that is totally consistent with what he (and Krugman) have been saying all along? It’s not merely that he and Krugman over the last two years have been focusing on Aggregate Demand, while remaining agnostic about the necessity of “recalculation.” No, they have pointed to empirical refutations (in their mind) of the proposition that there are sectoral imbalances. E.g. here’s Krugman from just a few weeks ago:
Mark Thoma leads us to new research from the San Francisco Fed showing that recent college graduates have experienced a large rise in unemployment and sharp fall in full-time employment, coupled with a decline in wages. Why is this significant?
The answer is that it’s one more nail in the coffin of the notion that employment is depressed because we have the wrong kind of workers, or maybe workers in the wrong place.
In some ways I think framing the discussion in terms of “structural unemployment” isn’t helpful. It may be better to say that a number of influential people want us to believe that Great Recession is serving some useful purpose — that the economy is “recalculating”, that it’s getting carpenters out of Nevada to jobs where they’re needed, etc….
The right question to ask, with regard to all such arguments, is, where are the scarcities? If we have the wrong kind of workers, then the right kind of workers must be in high demand, and either be in short supply or have rapidly rising wages. So where are these people? If the problem is lack of skill, then highly skilled workers — such as recent college graduates — should be doing well. If the problem is too many carpenters in Nevada, then non-carpenters somewhere else must be doing well. Who? Where?
Well, if there are such people, they’re doing a very good job of hiding.
This is a demand-side slump; the evidence is grossly inconsistent with any other story.
Let me anticipate two possible responses:
(1) “Not all Keynesians are the same, Bob. Krugman and DeLong are allowed to disagree with each other, since they are actual scientists, unlike you ideological Austrians.” No, not on this point. I’m not going to bother digging it up, but for sure DeLong has pushed the exact same argument in the past. He has written that if our current malaise were due to sectoral imbalances, then we’d see excess supply in some sectors and excess demand in others. But we don’t, ergo it isn’t about a need to move resources around.
(2) “It’s not an all-or-nothing proposition, Bob. One can consistently say that the economy suffers from misallocated resources and that the best way to reallocate them is to restore Aggregate Demand.” No, not according to Krugman above. Go re-read him. He’s not saying, “This is only one component among several.” No, he says the Fed evidence is “one more nail in the coffin” of the recalculation theory. Unless you’re talking about Dracula, people don’t take naps in coffins–they go there to die. You don’t take a secondary explanation–that’s worthy of a full article unto itself–and put it into a coffin.
Murphy Article and Radio Interview
Last week I was on the Peter Mac radio show. It was actually a very pleasant, smoothly flowing discussion of the Murphy-Krugman Debate and then more general issues (including the Liberty Dollar stuff).
Today at Mises.org I have an article responding to the anti-pin-head Andolfatto.
Jeff Tucker Owns Stossel Appearance
Wow Jeff really does a great job in this appearance on Stossel’s show. Just look at how he takes over the whole room from the get-go. Jeff has really cornered the “I’m a real guy, and c’mon let’s be honest, the government is screwing us” persona.
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