Consulting by RPM || Free Advice Blog

I Don’t Think That Word Means What Obama Thinks It Means

I was confused when Obama said, “It’s tempting not to negotiate with hostage takers, unless the hostage gets harmed.” If there were no danger of being harmed, they wouldn’t be hostages. They’d be guests.

Potpourri

* Citigroup comes up with a new catchphrase to justify its continuing reliance on bailouts.

* Gerald O’Driscoll gets pretty feisty, for the Wall Street Journal. (HT2 the photosynthetic von Pepe.)

* Check out Andrew Jackson’s explanation for why he killed the 2nd Bank of the United States. BTW mark your calendars, the Night of Clarity 2011 will be July 22-23. The theme will be Jackson’s killing of the bank, and retiring the national debt. (Yes that’s right, he didn’t simply balance the budget, or pay down some of the debt–Jackson paid off the federal government’s debt. He was the only president to do so.)

* I do believe that Krugman is even less sympathetic to free trade in this post, than in the last time he addressed this issue. Now, not only does free trade not create jobs (in the midst of a global recession), but it only “may” make the world more efficient. At least a year ago, he wasn’t hesitating in doling out praise for what free trade did do. (BTW here is my response to that original post.)

* I am going to nominate myself for “Wittiest EconLog Comment of 2010.” I’m not saying I should win, but that I definitely should be nominated for this coveted award.

* I continue with my boycott of the Amazon boycott.

* Here’s my appearance on Judge Napolitano’s “Freedom Watch,” talking about my good friend Ben Bernanke. Napolitano asked me to psychoanalyze The Bernank at the end.

Murphy TSA Twin Spin

Here’s the full version of privatizing airline security, complete with a numerical example:

[An] actuary could tell the airline, “Using only conventional metal detectors and X-ray machines on luggage, you should expect 10 terrorist incidents, each costing on average $300 million in legal damages, for every 100 million passengers who fly on your airline.” The airline would then need to charge at least $30 per passenger per ticket in order to fund the premium for its terrorism-insurance policies.

Further suppose that the actuary reported, “However, if you required your passengers to completely strip down and submit to a full-body cavity search, then you should expect only 1 terrorist incident for every 100 million passengers.” The airline in that case would only need to charge passengers $3 per ticket in order to fund the insurance policies.

Should the airline implement the new strip-search policy? It depends on its customers. Would the airline sell more or fewer tickets if it charged $27 less but required its passengers to be randomly subjected to such an invasive procedure? The answer in the current United States is probably “fewer,” meaning that it would be unprofitable for the airline to ramp up its security measures.

If you are pressed for time–or if you are curious to see how I distilled the above into a ~700 word op-ed for the masses–then check out this article which ran on AOL (unless of course you are boycotting AOL). I got the following email in response, which yes I did get permission to reprint and yes the asterisks are mine:

hello
i read your story on the tsa,well i start by saying that tsa does a great job.i know because i worked for them.
this country like it or not IS at war do you understand that….when 9/11 happened it was privitized and anything went through.
it was a low pay job with no standards,the tsa is standardized the process and that is good…..and your crack at unions ,well lets just say
for a man with a PHD that piece of paper you can wipe your *ss with!you think with a phd every thing you say is correct..did HENRY FORD have a phd…he was a machinist ,and look what he did…
take a good look around in the usa ,get away from your oak desk and get on the streets
the smart people running things ,are not so smart…
REMEMBER …WHEN YOUR AT 35000 FT IN THE AIR AND AND SOME GUY PULLS OUT A BUTCHER KNIFE YOU WILL SH*T YOUR PANTS AND WISH TSA WAS THERE TO SCREEN HIM !!!!!!!.
GOD BLESS THE TSA AND UNIONS……….

Murphy on “Freedom Watch” Tonight…

I am going to be talking about deflation, Bernanke, etc.

WikiLeaks / Amazon Bask

Hey kids, I am working on a response to Justin Raimondo’s love letter. Can someone help me out with the timeline of events? For example, I am pretty sure that right-wingers were calling on people to boycott Amazon for hosting WikiLeaks, before Lieberman got involved. Can someone help me out with that? (E.g. link to Bill Kristol or Sean Hannity or somebody ripping on Amazon, at an earlier date than Lieberman’s phone call?)

Also, can somebody pin down exactly when Amazon must have known its client was WikiLeaks? In other words, I’m trying to figure out if the top dogs at Amazon knew for months that WikiLeaks was signed up to use their servers, or if they might not have even realized it until Amazon’s main host went down and they switched to Amazon.

Stiglitz Is a Murphyite

Pratik Talole brings this clip to our attention… Start it at 10:35 and you’ll see Stiglitz say that there is no danger of the government defaulting, because it can print money. Then the interviewer clarifies and asks if those dollars will be worth something, and Stiglitz starts laughing, saying that’s a different question.

Now you might think he’s just being cutesy and refreshingly candid, but then listen to him give the serious answer. He says he’s worried that Bernanke’s analysis is leaving out the possibility of a scenario in which unemployment stays high, squeezing wages, while the prices of commodities continue to rise. Where have I heard that before?

Blatant Falsehood at Financial Times

[UPDATE below.]

Robin Harding of the Financial Times starts her article, “Fed Critics Run Risk Their Attacks Will Backfire,” like this:

Bigamy, grave robbing and passing false checks are pretty much the only crimes that Ben Bernanke and the Federal Reserve have not been accused of in the past few weeks.

That is a flat-out lie, Ms. Harding. Why, just this past Saturday, in my Mises Institute-sponsored private seminar in Rochester, I explained that Bernanke is going to write checks for $600 billion “drawn on thin air.” To drive home the point, I said, “It’s not as if Bernanke cut lawns all summer, building up a stockpile of $600 billion that he is now drawing down.”

So yes, I accused Bernanke of passing bad checks, insofar as that would even mean anything regarding the Federal Reserve.

UPDATE: Oh my gosh, I hadn’t even read the whole thing yet. It gets better:

Republicans in Congress decried a Fed policy that, through some voodoo, they think will not only fail to stimulate the economy but will also create inflation.

Although I took some flak from Free Advice readers in the comments, I have no regrets of my post a week ago, reminding people that stagflation is a possibility. No witchcraft needed.

Faith Is a Work

I am sure I have written on this before, but I came across a great passage that illustrates my view on the issue…

One of the standard controversies among Christians is “faith versus works.” Specifically, do you get into heaven by doing certain things (whether that means helping old ladies across the street, or receiving certain sacraments if you are a Catholic, etc.) or by believing certain things (that Jesus died for your sins, is your personal savior, etc.)?

(Note: I am just giving the context for my perspective. I’m obviously not doing justice to, say, the Catholic view on this important issue. Feel free to spell out your own views in the comments.)

What’s interesting is that if you go to the Bible to see “who’s right,” you can (as so often happens) apparently come up with smoking-gun proof of either position. For example, if you want to argue that faith alone is necessary and sufficient for salvation, the following are apparent trump cards:

John 3:16 (New International Version)

¹⁶ For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.

and

Ephesians 2:8-10 (New International Version)

⁸ For it is by grace you have been saved, through faith—and this is not from yourselves, it is the gift of God— ⁹ not by works, so that no one can boast. ¹⁰ For we are God’s handiwork, created in Christ Jesus to do good works, which God prepared in advance for us to do.

So that’s pretty good, right? We’ve got a direct (and seemingly unambiguous) quote from Jesus, as well as one from an author of a New Testament book.

But hold on a second, the person who thinks faith alone is not enough, could understandably point to these excerpts:

Matthew 7:21-23 (New International Version)

²¹ “Not everyone who says to me, ‘Lord, Lord,’ will enter the kingdom of heaven, but only the one who does the will of my Father who is in heaven. ²² Many will say to me on that day, ‘Lord, Lord, did we not prophesy in your name and in your name drive out demons and in your name perform many miracles?’ ²³ Then I will tell them plainly, ‘I never knew you. Away from me, you evildoers!’

and

James 2:14-24 (New International Version)

¹⁴ What good is it, my brothers and sisters, if someone claims to have faith but has no deeds? Can such faith save them? ¹⁵ Suppose a brother or a sister is without clothes and daily food. ¹⁶ If one of you says to them, “Go in peace; keep warm and well fed,” but does nothing about their physical needs, what good is it? ¹⁷ In the same way, faith by itself, if it is not accompanied by action, is dead.

¹⁸ But someone will say, “You have faith; I have deeds.”

Show me your faith without deeds, and I will show you my faith by my deeds. ¹⁹ You believe that there is one God. Good! Even the demons believe that—and shudder.

²⁰ You foolish person, do you want evidence that faith without deeds is useless^[a]? ²¹ Was not our father Abraham considered righteous for what he did when he offered his son Isaac on the altar? ²² You see that his faith and his actions were working together, and his faith was made complete by what he did. ²³ And the scripture was fulfilled that says, “Abraham believed God, and it was credited to him as righteousness,”^[b] and he was called God’s friend. ²⁴ You see that a person is considered righteous by what they do and not by faith alone.

Let me lay my cards on the table: In terms of the standard divide, I come down on the “faith alone” side. I subscribe to the view that there is nothing we can do to “earn” our salvation, and that it’s simply wrong to imagine that God is keeping track of your good deeds and bad ones, and holy cow you’d better hope your account is in the black when you get hit by that bus next week.

However, it’s actually not correct for me to say, “I believe in salvation through faith, not works.” First of all, if that were my position, then I basically have to say that James doesn’t know what he’s talking about, above.

But beyond that, I view the whole thing as a false dichotomy. Faith is a work. If you accept Jesus into your heart, you have consciously chosen to do something. You have “acted,” in the sense of Ludwig von Mises.

(Note that in this post, I am not going to grapple with the view that you don’t really choose to accept Jesus, that rather Jesus chooses you. I actually think that this too is a false dichotomy of sorts, where both positions–free will versus predestination–are correct insofar as they are presented in standard expositions, and that a deeper understanding reconciles the two apparently contradictory stances.)

And I have my own smoking-gun scripture on this interpretation:

John 6:25-29 (New International Version)

²⁵ When they found him on the other side of the lake, they asked him, “Rabbi, when did you get here?”

²⁶ Jesus answered, “Very truly I tell you, you are looking for me, not because you saw the signs I performed but because you ate the loaves and had your fill. ²⁷ Do not work for food that spoils, but for food that endures to eternal life, which the Son of Man will give you. For on him God the Father has placed his seal of approval.”

²⁸ Then they asked him, “What must we do to do the works God requires?”

²⁹ Jesus answered, “The work of God is this: to believe in the one he has sent.”

Ahhh, just gorgeous.

Here is a quick synopsis of all this:

Throughout the gospels, Jesus is trying to get people to focus on the big picture, the stuff that is really important. For example, He tells people not to worry about money, food, and clothing–not because these things aren’t important, but because they’re not the most important. I believe what Jesus is saying here is that if you focus on God, those other things will naturally fall into place. But if instead you try to take care of those earthly things first–thinking you will then tend to your spiritual life–you are going to miss the boat entirely.

So by analogy, I believe that Jesus is telling us it is wrong to walk around, aiming to “be a good person.” That is actually a very narcissistic attitude, and moreover it’s absurd on the face of it, compared to the life Jesus led. It would be like walking around, trying to be a really bright star. If your goal in life is to break as few of God’s rules as possible, to “be the best you can be,” you are actually going to end up a miserable sinner.

On the other hand, if you accept the fact that you are useless on your own, and you just follow Jesus, then you will (perhaps paradoxically) end up committing far greater deeds than the person who consciously tries to do so. Knowing you are saved, and that every moment on this fallen world brings paradise that much closer, you have a fantastic attitude and can be a light to others. You are not a miserable sinner, but a joyful child of God.