31 Jul 2018

No, Brett Kavanaugh Doesn’t Think Killer Whale Shows Are a Professional Sport

Law 2 Comments

People I respect like Judge Napolitano have raised serious concerns about Brett Kavanaugh because of his rulings on privacy issues related to the Patriot Act etc.; see Judge Nap’s appearance on the Tom Woods Show for more details.

But what is a completely bogus criticism is that in his (in)famous dissent in the SeaWorld case, Kavanaugh had to stoop to the argument that putting on a killer whale show was the same thing as a professional sport, and since OSHA doesn’t interfere with safety in sports, therefore it shouldn’t mess with SeaWorld. (“Ha ha, what a right-wing tool, Kavanaugh can’t tell the difference between LeBron and Shamu.”)

For example, here’s a ThinkProgress piece repeating the claim, accompanied by an apparently smoking-gun quote from Kavanaugh’s opinion:

Now to be clear, this is totally wrong. Kavanaugh did NOT say that putting on a killer whale show was a sport. He repeatedly talked about the “sports and entertainment industries” in his decision, and was making arguments pertaining to both of them.

And the author of the ThinkProgress piece knew that, because he clipped the above quotation. Here is the context taken from Kavanaugh’s decision (starts on page 24 in this PDF), where I have continued the quote to the end of the sentence:


29 Jul 2018

David, Goliath, and Gladwell

Religious 1 Comment

Say what you will about him, Malcolm Gladwell is a great storyteller. In conjunction with his 2013 book, here he gives a 15-minute TED talk on a new perspective regarding the famous underdog story:

As some of the outraged people in the comments brought up, the one glaring omission here is David’s faith. (Even if purely from a secular perspective, I wish Gladwell had mentioned it.) Surely it is relevant that David was absolutely certain of his victory, again, even in purely secular terms. Here’s the actual story:

 32 And David said to Saul, “Let no man’s heart fail because of him. Your servant will go and fight with this Philistine.” 33 And Saul said to David, “You are not able to go against this Philistine to fight with him, for you are but a youth, and he has been a man of war from his youth.” 34 But David said to Saul, “Your servant used to keep sheep for his father. And when there came a lion, or a bear, and took a lamb from the flock, 35 I went after him and struck him and delivered it out of his mouth. And if he arose against me, I caught him by his beard and struck him and killed him. 36 Your servant has struck down both lions and bears, and this uncircumcised Philistine shall be like one of them, for he has defied the armies of the living God.” 37 And David said, “The Lord who delivered me from the paw of the lion and from the paw of the bear will deliver me from the hand of this Philistine.” And Saul said to David, “Go, and the Lord be with you!”

41 And the Philistine moved forward and came near to David, with his shield-bearer in front of him. 42 And when the Philistine looked and saw David, he disdained him, for he was but a youth, ruddy and handsome in appearance. 43 And the Philistine said to David, “Am I a dog, that you come to me with sticks?” And the Philistine cursed David by his gods. 44 The Philistine said to David, “Come to me, and I will give your flesh to the birds of the air and to the beasts of the field.” 45 Then David said to the Philistine, “You come to me with a sword and with a spear and with a javelin, but I come to you in the name of the Lord of hosts, the God of the armies of Israel, whom you have defied. 46 This day the Lord will deliver you into my hand, and I will strike you down and cut off your head. And I will give the dead bodies of the host of the Philistines this day to the birds of the air and to the wild beasts of the earth, that all the earth may know that there is a God in Israel, 47 and that all this assembly may know that the Lord saves not with sword and spear. For the battle is the Lord‘s, and he will give you into our hand.”

28 Jul 2018

Contra Cruise 2018 Contest Winners

Contra Krugman No Comments

I can’t remember if I posted these already? Anyway, here is the runner-up video, and then the two winners for this year’s contest:

28 Jul 2018

A Thought Experiment on Fractional Reserve Banking

Banking, Economics 62 Comments

Enrico in the comments of my FRB lecture writes:

“if someone lends 100$ to a bank for a fixed time period, and then the bank makes a loan of 90$, no boom&bust cycle will happen. The reason is that the 90$ loan granted by the bank is “backed” by (at least) 90$ real savings from the initial lender. But the same conclusion is true in fractional reserve banking. If someone deposits 100$ into a bank, he is saving (= not consuming) that money until the moment when he’ll withdraw it. Thus, if bank reserves are sufficient for satisfying depositors’ withdrawing, it means that bank loans are backed by real savings. If banks reserves happen to be insufficient, the bank goes bankrupt and the depositors will have to wait for getting their money back (= not consuming in the meantime); therefore, they will be “forced” to save such amount of money. In conclusion, in a free banking system, bank credit is always backed by real savings, and thus cannot generate boom&bust cycles.”

Before we ponder this, let’s think about a different scenario.

Suppose there is a rich man in a small community. He has (say) 1,000 ounces of gold stored in his personal vault at his house. Depending on the vagaries of his income and expenses, the man dips into his personal stockpile, but typically he can go for months at a time without the stockpile ever falling below (say) 500 ounces.

Some workmen come to the rich man’s house to add another bedroom. One of them realizes that he can surreptitiously carve out a small opening into the vault from the outside, which is invisible to a casual passerby.

From that point on, this workman makes regular trips to the vault. He sneaks out anywhere from 100 to 200 ounces of gold at a time, taking them from the back end so that the rich man wouldn’t notice it when he enters his vault from the inside. The workman isn’t a fool; he doesn’t blow the money on consumption, but instead makes loans in the community that he thinks will pay off. When someone pays back a loan, the workman puts the principal back in the vault (at night of course), and keeps the interest for himself. Obviously, if someone defaults on a loan, then the workman has to eat the loss out of his gross earnings on the other loans.

My question: ECONOMICALLY (I’m not talking about ethics, morality, or legality), is there any problem with this? Will some investment projects be funded that otherwise would not? If so, is that a problem?

28 Jul 2018

Is It Intellectually Honest to Chortle About This?

Krugman 2 Comments

Major Freedom tipped me off to this Bloomberg interview with Krugman, which aired in March 2017:

So in the interview, Krugman says 3% growth is not possible, even if they made him dictator. (Really.) Krugman goes on to say that 2% growth is the reality we now face, for various reasons (like demography), unless there is a productivity “miracle” which no one knows how to engineer through policy.

The reason people on reddit are mocking this, of course, is that the latest GDP numbers show 4.1% quarterly growth, but even year/year it’s 2.8%.

So my question: Is this yet another example of Krugman being wildly wrong in his prognostications? Or in context, did he mean in the interview that 3% sustained growth over the next decade (say) was impossible?

More specifically: At what point would even Krugman’s defenders admit he was wrong? (Note well, I too am worried about a crash as the Fed hikes rates, so I’m not saying I am optimistic about the future. But I *do* think Krugman doesn’t understand how much marginal tax rate reductions can boost growth.)

27 Jul 2018

So Much Winning: Football and Trade

Steve Landsburg, Trade, Trump 14 Comments

A certain football team drove the ball down to the other team’s 1-yard line, but failed to score on the first three attempts. So it was 4th and goal, on the other team’s 1, and the coach called a running play. The QB took the snap, handed it off, and the running back dove over the line for a touchdown. The crowd went wild.

After the game, the owner of the team called the coach in for a meeting. It went like this:

========================================
OWNER: Jim, what did I tell you when I first hired you?
COACH: That you wanted me to win football games.
OWNER: Exactly. Now how do you win a game?
COACH: We score more points than the other team.
OWNER: Exactly. So, we agree that if the other team scores on us, that’s bad. Right?
COACH: Totally.
OWNER: Okay, now in today’s game, there was a point at which it was 4th and goal, and we were on their 1-yard line.
COACH: Yes, I remember it well.
OWNER: And then you called a running play.
COACH: Yes.
OWNER: Even though that meant we had a decent chance of scoring, meaning we would have to kickoff to them.
COACH: Uh, right?
OWNER: Do you agree with me, that it’s harder for the other team to score on us, if they start from their own 1-yard line, rather than receiving our kickoff?
COACH: Uh, sure. I agree.
OWNER: So, since we agree that them scoring on us is bad, and we agree that it’s harder for them to score on us when they start from their own 1, next time you’re in that situation, you tell the quarterback to take the snap and then kneel. I don’t want to have this conversation again.

========================================

If you found the owner’s position compelling, you will also enjoy Steve Landsburg’s latest critique of the Trump Administration.

23 Jul 2018

Rothbardians vs. “Free Bankers”

Banking 33 Comments

This was a new talk I gave at Mises U this year. Among other novelties, it contains an exchange between Dr. Evil and his subordinate, #2.

12 Jul 2018

Potpourri

Potpourri No Comments

==> Lots of people are talking about this Mexican town that overthrew its government. Seemed like the moral was: Once they secured their border, everything got better. (Oh I kid folks I kid.)

==> On that Scott Alexander post on Piketty, I was glad to see David Friedman has material posted about the History of Economic Thought.

==> John Taylor links to pieces in the debate on the Fed’s balance sheet.

==> Someone (I think Jeff Tucker?) linked to this 1996 Mario Rizzo lecture on coordination.

==> I’m really getting into Malcolm Gladwell’s podcast (not sure if I talked about it before). Here are some good episodes if you want to give it a try:
— On Wilt Chamberlain’s foul shooting.
— On the alleged acceleration problem in Toyotas.
— On the pros and cons of political satire.
** Incidentally, my reaction to these podcasts is the same as to his books (the ones I’ve read, at least): I love the material that Gladwell digs up, but I often disagree with his take-away conclusion.