Challenging Landsburg on HFT
You guys thought I was nuts reading my analysis of the Bundy standoff? Well now I’m publicly accusing Steve Landsburg of a basic math mistake. But I have a lot of life insurance, remember. An excerpt of the part where we’re still chums:
Reading guys like Paul Krugman rail against the socially useless financial sector, Landsburg raised an excellent question: Haven’t Keynesians like Krugman for years been lecturing us on the desirability of even pointless investment spending when the economy is stuck in a “liquidity trap”? And yet, I don’t remember Krugman or any other Keynesian thanking their lucky stars that traders had built a $300 million fiber optic cable between Chicago and New York just when–according to their own analysis–there were large multipliers on investment spending. The project actually started in March 2009 and “soon had 125 construction crews working at once.” The timing couldn’t have been more perfect. Talk about stimulus!
Al Pacino Agrees 100% With My Cliven Bundy Analysis
A lot of people flippantly say that Gigli is the worst movie ever made, but that is clearly refuted by Al Pacino’s cameo. Substitute “intimidate” for “extort” and “agency” for “prosecutor,” and you have my response to what’s been going on in Nevada.
WARNING: This is Al Pacino, so there’s f-bombs galore.
Rothbardian Thoughts on Campaign Finance
As usual, I am not satisfied with even the libertarian commentary on the Supreme Court ruling that came out earlier this month. So I am making some points that may be elementary but nonetheless should be stressed. An excerpt:
(2) The reason politicians are interested in “campaign finance reform” is that it gives them even tighter control over who controls the State apparatus. In the logical limit, where all private donations are banned and elections are “publicly financed,” we would have the farce of reigning government officials hand-picking two possible successors every time a position opens up, and then letting the public cast votes on those two people. Call such a system whatever you will, but don’t use the term “democracy.”
(3) If the U.S. Congress really wanted to deter wealthy groups from giving them money, then the Republican and Democratic parties could adopt policies stating that any of their members who accepts donations higher than $X from a single group, will not be placed on any committees and no other Republicans/Democrats will vote for legislation supported by such rogue officials. Until Republican and Democratic parties adopt such internal rules–which they have every right to implement since they are just announcing how their own members will behave–then I don’t believe them when they tell Americans how much they lament the corroding influence of money in U.S. politics.
Yes, You Need to Choose Your Words Carefully When You’re Fighting Against an Evil Empire
As usual, people are misconstruing my remarks (while they get mad at me for not making sure others don’t misconstrue Cliven Bundy’s remarks). “I mean gosh Murphy, are you saying that it’s OK to shoot Cliven Bundy if he uses the wrong word?!”
No, I’m not saying that. But if you believe (as many of Bundy’s supporters do) that there is a group of people coordinating governments around the globe to usher in a New World Order etc. etc., then yes you have to choose your strategy and tactics wisely. I wasn’t saying Cliven Bundy was racist, I was saying he was reckless.
Remember this scene?
Hmm is Han Solo kow-towing to PC? Why didn’t he let those people know how much of a rat-fink the Emperor was?
Two Quick Questions on Piketty
Help me out here. I haven’t read the book yet, but I gather a really important insight is that we currently live in a world where r > g, meaning the real return on capital exceeds the real growth rate of the economy. Everyone takes this to imply that the 1% (or the 0.01%, if someone awkwardly points out that Krugman is in the 1%) will gain a larger and larger fraction of society’s wealth, and therefore we must act now to stop them before it’s too late.
I have two questions:
1) So far as I understand it, the argument isn’t that the 1% have access to investment products / strategies unavailable to everyone else. So if The Elite right now own (say) 95% of the assets, while The Masses own only 5%, and everybody earns the same return r on those assets… In 200 years, won’t The Elite still own 95% of the total assets, while The Masses will still own 5%? The only way to get around that, that I can see, is if you assume The Masses reproduce faster and so have more great-grandchildren, thus diluting their 5% of assets over more descendants than The Elite. But then, that’s an argument about inheritance and population growth, not about r or g.
2) I gather that part of the concern is that the real interest income (or dividends or profits or whatever you want to call it) must constitute a growing share of total real output over time, because by stipulation r > g. Thus, as the years progress, the share of real output going to “capital” increases at the expense of the share going to “labor.” But what happens at the point when K*r > F(K,L), in other words when the total capital stock times the real rate of return exceeds the total output of the economy? That’s impossible, the way people are discussing Piketty’s book, right? So doesn’t that mean that automatic forces must set in, which eventually make r < g? Note, I'm not saying there's something internally contradictory with the Solow growth model, or with Piketty's math. But I'm saying something doesn't sound right to me, in the way people are translating these results from a simplified model into conclusions about the real world.
Old White Rich (?) Guys Complain About Privilege
Krugman links to his panel discussion at CUNY on Piketty’s book. Here’s the screenshot:
Piketty himself is only 42. (But it wouldn’t surprise me if he’s in the 1% himself this year or next, depending on the structure of his book contract.) Anyway it just jumped out at me to make this observation. Carry on.
Lessons From Waco
Regarding the Bundy Ranch standoff, I think everybody should review what happened at Waco. For this purpose, the summary at Wikipedia is good enough:
The Waco siege (also known as the Waco Massacre) was a siege of a compound belonging to the religious group Branch Davidians by American federal and Texas state law enforcement and military between February 28 and April 19, 1993.[4] The Branch Davidians, a sect that separated in 1955 from the Seventh-day Adventist Church, was led by David Koresh and lived at Mount Carmel Center ranch in the community of Elk, Texas,[5][6][7] nine miles (14 kilometers) east-northeast of Waco. The group was suspected of weapons violations and a search and arrest warrant was obtained by the U.S. federal agency Bureau of Alcohol, Tobacco and Firearms (ATF).
The incident began when the ATF attempted to raid the ranch. An intense gun battle erupted, resulting in the deaths of four agents and six Branch Davidians. Upon the ATF’s failure to raid the compound, a siege was initiated by the Federal Bureau of Investigation (FBI), the standoff lasting 51 days. Eventually, the FBI launched an assault and initiated a tear gas attack in an attempt to force the Branch Davidians out. During the attack, a fire engulfed Mount Carmel Center and 76 men, women, and children,[8][9] including David Koresh, died.
Much dispute remains as to the actual events of the siege. A particular controversy ensued over the origin of the fire; a government investigation concluded in 2000 that sect members themselves had started the fire. The events at Waco were cited as the primary motivation for the perpetrators of the Oklahoma City bombing that took place exactly two years later in 1995.
Say what you will, there is no doubt in my mind that when someone fights back and kills federal agents, causing them to retreat, that the gloves come off. That’s the kind of thing that happens in Colombia. If you are in charge of the federal government, you can’t have people observing that if you get a few dozen guys with heavy-duty weapons, you can make federal agencies back off.
And so, as the official media spin made it out, the federal government tried to save a bunch of kids from a religious nutjob, and in the process all the little kids got burned up. “Oh well, what’s on the TV tonight?”
Very few Americans cared about this incident because the media and government had successfully painted the Branch Davidians as a bunch of religious nutjobs who were abusing children. That’s why they could literally be burned alive and nothing happened. Not only did Janet Reno not have to resign (after taking “full responsibility”), Bill Clinton got re-elected three years later.
So yeah I was trying to be humorous with the South Park meme, but I am also deadly serious when I say Cliven Bundy should be choosing his words very carefully. And if he has a death wish (as some commenters have implied), I hope he has told that to the people driving out there to stand with him.
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