18
Feb
2012
Answers to Reddit “Ask Me Anything”
I know the synch gets way out of whack on this, but I’ve already put a bunch of time into this and I really have to move on with my life. Pretend it’s a kung fu movie, or that I’m transmitting from a Martian base.
If you could pay your taxes in bitcoins …
Have you considered the possibility that bitcoins in fact DO NOT violate the regression theorem, i.e., can be used as a commodity whose purpose is facilitate anonymous transactions, in the sense that other tools like TOR or torrent allow people to exchange information anonymously and thus also indirectly can be used for anonymous transactions?
More on this view: http://www.lewrockwell.com/blog/lewrw/archives/90456.html or
http://www.lewrockwell.com/blog/lewrw/archives/90453.html
Hey murphy, I didn’t get a chance to ask you this, but didn’t you say at one point that you were working on a review of David Graeber’s book for the American Conservative? Is that still on the way?
Just passing through but I saw this comment and it made me chuckle, as I had just gotten done reading what seemed like a book-length 8-part review of Graeber’s book. It’s funny that both he and Murphy got the same treatment from Graeber:
“David Graeber is an author given to different tones. There are his personal views on current events and his academic views while making his case and rubbishing others. He challenged me to read his book first before daring to criticise his reported views, as expressed, incredibly, in what he wrote himself and put into the public domain on the internet. This is an aggressive polemical style. Who can protest that when David Graeber says something about ideas with which a reader is familiar, side-swipes with put-downs, implying that what he says in one forum is beyond criticism unless a critic first reads his 534 page volume, “Debt: the first 5,000 years” (if nothing else, an arresting title)?” – from here http://adamsmithslostlegacy.blogspot.com/
I think you mean Menger when you mention Mises and the regression theorem.
Naw he meant Mises, not Menger – he was right. Menger is marginal utility / subjective utility. Mises did the regression theorem on money.
Bob should have led with moar (moar) of his deadpan humor. I think he might have lost viewers with rambling answers. Not that I’m against rambling – I ramble all the time. So the video was fine for me.
But Bob should have frontloaded some of that trademark deadpan humor, to hook the NORPs.
(P.S. do they teach deadpan humor at those LvMI seminars? All the good presenters are pros at it. There must be a hidden seminar that teaches it. I’d like to see them upload those to U-Toob, plox).
It is interesting how many times students and laymen (like me) ask for empirical evidence to support or refute this economic hypothesis or that. Even more interesting (and somewhat disheartening) when asking those studying and advocating praxeology as the best way to study, explain and understand human action in the economic realm to offer empirical evidence supporting the assertions obtained through aprioristic deduction.
I’ll take this opportunity to offer Mises’ opinions regarding the epistemological problems of empiricism: http://mises.org/epofe/c1p1sec5.asp
An excellent contribution the the great Hayek v. Keynes debate are the words of Mill taken from http://mises.org/journals/qjae/pdf/qjae13_4_1.pdf offered in reassertive support of Say’s Law:
“The utility of a large government expenditure, for the purpose of encouraging industry, is no longer maintained…. it is no longer supposed that you benefit the producer by taking his money, provided you give it to him again in exchange for his goods. There is nothing which impresses a person of reflection with a stronger sense of the shallowness of the political reasonings of the last two centuries, than the general reception so long given to a doctrine which, if it proves anything, proves … that the man who steals money out of a shop, provided he expends it all again at the same shop, is a benefactor to the tradesman whom he robs, and that the same operation, repeated sufficiently often, would make the tradesman’s fortune. (Mill, 1874 [1974])”
With regard to the last questioned answered, that it was increased savings from Asian countries flowing into the U.S. that created the housing bubble and not Fed policy, there are two more points than can be made.
The first deals with the ‘problem’ that M1 and M2 didn’t increase ‘enough’ when the Fed funds rate was pushed down. Actually, this is a bit of a puzzle in that to achieve the magnitudes of decrease, M1 and M2 should have moved more. Friedman and Kuttner (Friedman, Benjamin and Kenneth Kuttner (2010). “Implementation of Monetary Policy: How do Central Banks Set Interest Rates?” NBER working paper w16165.) address this puzzle, and point out that over the past ten years or so the announcement effect has played a much more prominent role than actual increases or decreases in money supply.
I view this as the Fed having an extremely credible commitment to following its mumbled policy goals, such that when the Fed announced a reduction in the Fed funds rate, banks react as if more money is available and therefore reset rates lower, following the Fed’s action.
The second point is that the U.S. wasn’t the only country to experience a real estate bubble. This coupled with the fact that global savings rates are essentially unchanged over the last twenty years (about 25% of income) leads one to be suspicious of the Asian savings rates fueling bubbles in all sorts of countries, including China (in my view, but we’ll see).
Bob, Krugman would say that it is certainly true that there haven’t been that many examples of fiscal policy working in a liquidity trap, only because liquidity traps are relatively rare, and when they do occur they are often met with austerity responses. But he makes the point that there are countless empirical studies showing the efficacy of monetary policy, and he says it’s hard to make a model where monetary policy is effective and not fiscal policy.
You want scarcity? Then forget bitcoins and gold.
Bring in the moon dust standard!
http://www.bbc.co.uk/news/magazine-16909592
Bob, if the Recursion Theorem is really a rigorous result, does it matter at all what Mises had to say about it? Can’t you just derive it from first principles rather than doing an argument from authority?
Quit using the word austerity. The left uses it to confuse spending cuts and tax increases. Just say spending cuts.
Bitcoin IS a commodity. A bitblock is roughly 15 minutes of burned computational time of the bitcoin network doing payment processing. That is itself a commoditized service.
I should clarify. A bitblock is 50 bitcoins.