It Begins: Tyler Cowen Pepper Sprayed in Class
This is on Reason so I’m guessing it’s legit? I see no mention at MarginalRevolution but presumably that’s because Tyler Cowen is too suave to seek sympathy.
Anyway, according to Reason:
Economist, author, and George Mason University professor Tyler Cowen was pepper sprayed in his classroom today by a man trying to place him under citizen’s arrest. ArlNow.com reported on the incident, which took place at GMU’s Arlington, Virginia, campus this afternoon.
Obviously that’s ridiculous and of course nobody should be assaulting economists. (And for real, I’m zapping stuff in the comments that’s over the line.) But I am only half-joking when I warn my fellow economists that the public is going to come after us in a few years, right after bankers.
How Government Wrecks the Economy
My next class at Mises Academy. Full infomercial here. An excerpt:
The fall of the Soviet Union should have spelled the demise of central planning, yet the socialist mentality thrives — albeit in a diluted form — in all governments in the so-called “free world.” No one explained the failures of pure socialism and of (the more moderate) interventionism better than Ludwig von Mises. Whether we want to understand why people are starving in North Korea, why minimum wage laws lead to teen unemployment, or what caused the boom and then crash in the U.S. housing market, the answer is in the Austrian School of economics. As the Obamacare disaster unfolds before our very eyes, it is critical for the average person — both adults and young people alike — to understand how economic science makes sense of these heartbreaking outcomes, and shows the way to solve them.
HL Mencken on Lincoln
I dug this up for something I wrote about Judge Napolitano, and wanted to make sure all of you knew about it. The following is HL Mencken reflecting on the Gettysburg Address:
The Gettysburg speech is at once the shortest and the most famous oration in American history. Put beside it, all the whoopings of the Websters, Sumners and Everetts seem gaudy and silly. It is eloquence brought to a pellucid and almost child-like perfection—the highest emotion reduced to one graceful and irresistible gesture. Nothing else precisely like it is to be found in the whole range of oratory. Lincoln himself never even remotely approached it. It is genuinely stupendous.
But let us not forget that it is oratory, not logic; beauty, not sense. Think of the argument in it! Put it into the cold words of everyday! The doctrine is simply this: that the Union soldiers who died at Gettysburg sacrificed their lives to the cause of self-determination — “that government of the people, by the people, for the people,” should not perish from the earth. It is difficult to imagine anything more untrue. The Union soldiers in that battle actually fought against self-determination; it was the Confederates who fought for the right of their people to govern themselves. What was the practical effect of the battle of Gettysburg? What else than the destruction of the old sovereignty of the States, i. e., of the people of the States? The Confederates went into battle an absolutely free people; they came out with their freedom subject to the supervision and vote of the rest of the country—and for nearly twenty years that vote was so effective that they enjoyed scarcely any freedom at all. Am I the first American to note the fundamental nonsensicality of the Gettysburg address? If so, I plead my aesthetic joy in it in amelioration of the sacrilege.
In Defense of Permabears
In his never-ending campaign to discredit those who warned of financial bubbles before the 2008 crash, Scott Sumner recently quoted with approval the following from Alan Reynolds’ 2010 analysis of Shiller’s thoughts on investing:
On the March 9 anniversary of the stock market implosion a year ago, a front-page story in the Wall Street Journal featured one of the same bears making the same bad argument he made a year ago.
The article, “Worries Rebound on Bull’s Birthday,” was almost entirely devoted to trying to explain a graph by Robert Shiller of Yale, titled “Stocks Still Expensive.” The New York Times ran the same graph on March 15, 2009, to warn us that the ratio of stock prices to earnings “hasn’t fallen as far as the market bottoms of 1932 and 1982.”By then, reports from Barron’s, Bloomberg and the Wall Street Journal had already suggested that the Dow could fall to 5000 and the S&P 500 to 500. The Journal’s headline on March 9, 2009, was “Dow 5000? There’s a Case for It.”
. . .
Here’s the bottom line: Following Bob Shiller’s “over 20” rule would have kept you out of the stock market every single month from December 1992 to September 2008.
Sumner moves on in his blog post as if the above block quotation is a pretty damning indictment of Shiller. But is it really?
The St. Louis Fed conveniently posts the nominal daily value of the S&P 500. Now if I understand Alan Reynold’s critique, he is saying that Shiller’s rule would have told investors to get out of the market in December 1992, and it wouldn’t have told them to get back in until October 2008. So assuming somebody did that, what stock market appreciation would he have missed?
Well, if you let me pick the low point in October 2008 (which was not the overall market bottom, by the way), then I calculate the average annualized nominal return from December 1992 through October 2008 as 4.7%. Now it’s true, this doesn’t count dividends, so that understates the actual total return from being in the S&P 500 for that 190-month stretch. But still, that’s not an obviously amazing return that you would mock Shiller for having you avoid. Up through the fall of 1998, the yield on the 10-year Treasury was higher than 5%, and during the entire period there were only two brief periods where the yield dipped below 4%. So it’s not obvious to me that someone who was in 10-year Treasuries the entire period from December 1992 through October 2008 would have done worse than someone who was 100% in the S&P500 (especially if you get really specific about the fees for management and the fact that your holdings of Treasuries would have skyrocketed in market price in the winter of 2008), but even if the latter did moderately outperform, there is still the huge issue of the underlying volatility of the return. The S&P500 dropped more than 30% in the single year from September 2000 through September 2001, and it was down some 48% yr/yr in March 2009.
I guess it’s because Wall Street has become synonymous with “capitalism,” but there is an odd habit among mainstream free-market analysts to identify with equity markets. It is true that since Nixon finally took the dollar off of gold, the average investor has been increasingly forced into considering stocks as a way to protect himself from a debased currency. Yet we shouldn’t ignore the tremendous volatility that this monetary policy–and corresponding investment strategy–brings.
Every Breath Bernanke Took
I dug this up for somebody on Facebook, and I was pleasantly surprised at how (unwittingly) prescient it was (particularly if we define inflation as an increase in the quantity of money).
(The backstory is that the dean of Columbia Business School [CBS], Glenn Hubbard, had been in the running to replace Greenspan, but obviously Bernanke was picked instead. So the students at CBS made this spoof video, and apparently the singer has a passing resemblance to Hubbard.)
Potpourri
==> A funny Twitter response to the Obama Administration’s attempts to build intelligent military machines.
==> Nikolay Gertchev offers a different type of objection to Bitcoin.
==> Interesting Mankiw post on the temptations of the policy economist.
==> A very funny Jim Grant lecture on Hazlitt at the recent Mises Institute academic conference.
==> Powerline vs. WashingtonPost on Keystone, Koch brothers, conspiracies in politics, etc.
Do What Jesus Says, Not What I Do
Every once in a while I like to make sure nobody thinks I am arguing, “Look at how moral I am, therefore Christianity is true.” The worst part about my inflation bet wasn’t that I was out $500, or even that my personal forecasting reputation was cast into doubt, but rather that I hadn’t bent over backwards to say, “This is coming from my own guess about when financial markets will turn on Bernanke, this isn’t popping out of Human Action.” So by the same token, I want to make sure that if and when the NSA dumps my email history on MurphyHypocrite.com, nobody can fairly say (they will still say it unfairly of course), “Oh isn’t that interesting? And yet Bob talks about God all the time.”
Obviously, none of this is to suggest that Christians “can live however they want.” Of course not. If you are going to call yourself a follower of Jesus, then you certainly have a moral duty to be “salt and light” for the world; you are to set an example. But when you fail to live up to that ideal–and you will–that is hardly evidence that the doctrines of Christianity are wrong. On the contrary, it shows how right they are: Christianity teaches that we are natural born sinners and need a Savior to redeem us.
Here we run into yet another example of how Christianity sounds nutty if you just look at pieces of it in isolation, but taken together it’s not as ridiculous as it first seemed. Considered by itself, the idea that there is an invisible Person of infinite goodness who sees everything you do and knows every motive in your heart, would drive you insane. That is horrible, and I understand why someone like Christopher Hitchens says not only does he not intellectually believe in that kind of universe, but he wouldn’t choose it if it were an option.
But hold on. Another reason skeptics dismiss Christianity as nutty, is its doctrine that we can gain entrance to paradise simply by accepting God’s free gift of grace, and joining His family through the work of His Son. “What?! You mean a serial killer gets to heaven just by accepting Christ as his personal Lord and Savior?! That’s monstrous!!”
Yet if you put both “nutty” doctrines together, they cancel out. Yes, every time you sin–even if it’s just envying, hating, or lusting in your heart, not something any human would bust you on–you feel ashamed of yourself, and not because some other human is better than you (we are all awful), but because you let God down, and He knows it. But on the other hand, you can shake it off and get back in the game, because you know that your Father has truly forgiven you for it.
The older I get, and the more I learn about human beings work, the more I recognize that this is the only path to even earthly peace. It makes sense that it’s the way to eternal salvation as well.
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