08 Jun 2018

Lara-Murphy Interview With Scott Horton

Banking, Foreign Policy No Comments

Because Scott is one of the leading foreign policy experts from a libertarian perspective, we decided to make his interview in the LMR publicly available. Scott talks about central banking and war, and then specifically about Afghanistan and the Iran deal.

07 Jun 2018

Another Bold Sumner Thesis

Scott Sumner 28 Comments

UPDATE: See my remarks below.

Say what you will about Scott Sumner, he’s not afraid to take on conventional wisdom, even when it sure seems to be backed up by staring-us-in-the-face evidence.

For example, Scott believes the Federal Reserve adopted an incredibly tight monetary policy and that’s the fundamental explanation for the financial crisis and Great Recession. Even though the Fed’s assets look like this:

Now, Scott is praising a new Mercatus study by Kevin Erdmann, and in doing so Scott denies there was a housing bubble. [Edited slightly. Originally I thought Kevin was denying there was a bubble, but upon second reading it looks like he’s just offering a different explanation. Scott is the one who thinks “bubble” is a useless term.] Even though the national home price index looks like this:

06 Jun 2018

Krugman Unwittingly Compliments Conservatives

Economics, Energy, Krugman 3 Comments

I really think this is a case where Krugman’s argument blew up in his face. The Trump Administration came back to the idea of subsidizing nuclear and coal-fired power plants, and so Krugman naturally screamed hypocrisy. Yet the link Krugman gave to the news story showed why conservatives were being consistent on this; I spell it all out in this IER post.

Even worse for Krugman, since his column came out there have been lots of free-market groups condemning the proposal. E.g. here’s the WSJ editorial board comparing Trump to Obama on this score, and here’s a CNBC article explaining all the conservative and libertarian groups publicly condemning the plan. From that article, there’s a quote from Cato’s Peter van Doren saying, “If you can find anyone who’s market-oriented or says they’re conservative and supports this, they should turn in their badge.” (I quibble only with the grammar…)

HONEST QUESTION: For my progressive-ish friends reading this, can you point me to an analogous episode under the Obama Administration? I.e. where the Obama Administration did something that was blatantly a violation of standard “progressive Democrat” principles and then Obama’s own appointees, as well as ThinkProgress and Paul Krugman for that matter, criticized the proposal?

05 Jun 2018

Potpourri

Potpourri, Rothbard, Shameless Self-Promotion, Social Security 8 Comments

==> The latest Contra Krugmans: Episode 140 on fascism in Europe, and Episode 141 on the Swiss “sovereign money” referendum (i.e. 100% reserve banking).

==> OK in this David Roberts column for Vox, he is reviewing Infinity War. (Caution: Major spoilers in the review.) I can’t quote him here since I don’t want to spoil anything, but if you’ve seen the movie, go ahead and look at his discussion of World War II. Is Roberts just playing along with Thanos’ worldview, or is that really what Roberts thinks happened?

==> FEE has a heartwarming post showing excerpts from Rothbard’s discussion of his discovery of FEE. What I found amazing is that Rothbard was overjoyed to have an economics professor (Stigler) at Columbia with the courage to challenge rent control and the minimum wage! Stigler apparently told him that the study against these controls that he’d co-authored with Milton Friedman was only carried by FEE, because they couldn’t get anybody else to publish it. (!)

==> Paul Krugman’s old paper on interstellar trade is very clever.

==> The media are reporting that Social Security and Medicare are going to be “insolvent” earlier than expected, but actually they’ve been insolvent for years (decades?). And I’m not being a cranky old man. The term “insolvent” means liabilities exceed assets. That’s been true for a long time; that’s what the phrase “unfunded liabilities” or why wonks always talk about “reforming entitlements.”

==> Incidentally, for EconLib I wrote what I thought was a very practical proposal to reform Social Security. It let people opt out while also saving the government money.

04 Jun 2018

Jordan Peterson on Peter Pan Syndrome

Jordan Peterson 64 Comments

I just saw some guy on Twitter proudly declaring that he was a libertarian even though he likes CNN and hates Jordan Peterson; he ended his tweet with “fight me.” I scrolled through his feed (partly to see how many followers he had; it was not pretty) and saw him RT a meme that said Jordan Peterson teaches his fanboys that all their problems are due to feminism. It took me a whopping 38 seconds to locate this counterexample:

03 Jun 2018

Was the City of Babel (Site of the Famous Tower) the First Kingdom?

Religious 3 Comments

A friend sent me this interesting essay talking about the Bible’s treatment of political government. The author acknowledges that traditionally, Christians think the Bible establishes God’s support of the State as an essential institution for the maintenance of justice. (The most obvious passage is Romans 13. Here’s one of many posts I did on that topic.) You can of course read his whole commentary (and buy his book) if you want, but here I just wanted to note this intriguing argument:

According to Scripture, the nation-state began with the scattering at Babel. As I pointed out in Insurgence, the first use of the term “kingdom” in the Bible occurs in the city of Babel in Genesis 10:10.

Speaking of the enterprise at Babel, one scholar rightly said, “Here the whole city-building tower-erecting project is one that God condemns.”

Essentially, the people of Babel desired to create a centralized government, a concept that ran contrary to God‘s will.

Of course, those who build empires rarely perceive themselves to be wicked. They often begin with good motives, the chief one being to promise humans a better life. This is why Jesus said the rulers of the Gentiles were seen as “benefactors” (Luke 22:25).

But what we have at Babel is the beginning of the nation-state, the origin of the kingdoms of this world. Put another way, at Babel we have fallen man‘s endeavor to centralize domination and organize power. And God‘s response is to diminish this power by dispersing the people and creating multiple nations. [Footnotes removed.]

For those of you who have studied the Old Testament, how do you feel about the above? It certainly affirms my biases, but wondering how controversial his claims are?

02 Jun 2018

Trump Gives the World Financial Information; Free-Market Economists Outraged

Scott Sumner, Trump 9 Comments

Folks, this post is about 65% tongue-in-cheek.

Anyway, Scott Sumner called it literally an “outrage” that Trump tweeted that he was looking forward to the jobs report at 7:21am, when the numbers weren’t officially released until 8:30am. When arguing with someone in the comments (who had claimed this actually helps the average Joe, because it gets the information out sooner rather than leaving it to the insiders for an extra hour and 9 minutes), Scott elaborated:

[I]t’s less wasteful for the announcement to be made publicly to everyone precisely at 8:30am. No one is disadvantaged. If released randomly, those with the resources to monitor all possible release points will have an advantage over me, who is only aware of the 8:30 announcement.

Someone is only disadvantaged if someone else has the info and they don’t when a trade occurs. But normal people don’t trade in the nanosecond after the 8:30 announcement, they’d wait until they heard the news a nanosecond later. But a normal person might trade between a Trump tweet they don’t see and the 8:30 announcement.

Who follows Trump on twitter? Mostly Republicans, and now the financial insiders. Good luck if you are not a Republican and not an insider.

Here’s my claim. If this had been ANY OTHER CONTEXT, and you grabbed a random free-market economist and asked him to evaluate the above argument, he’d roll his eyes and explain patiently why laws against insider trading are bad. (Scott is against them, by the way, once writing, “I oppose laws banning payday lending and insider trading, so I certainly don’t care if the government does it. (And I might add that Congressional staffers can legally do insider trading, so obviously the government also sees it as OK.)“)

To be clear, I understand that on this example and many, many others, Trump is not “acting like the president is supposed to act.” There are pros and cons to that statement, and I am not going to pretend as if I don’t understand why his “breaking all the rules” is freaking some people out.

My modest point here is that the particular way Scott tries to spin this as harmful and inefficient, would not be something he or any other free-market economist would say in any other context. The very idea that now only those wily insiders will know to monitor a Twitter account, and how that is screwing over poor Scott in his trading… Come on. And anyway, even if Scott’s argument were right, all he’s done is look at the cost of the tweeting policy. He hasn’t considered the benefits, which is that the markets now get access to information an hour+ earlier. Scott doesn’t even make an argument to show why the cost exceeds the benefit.

01 Jun 2018

When Robert Reich Watches My Lecture

Private Defense, private law 7 Comments

This happens: