How Strongly Do Believers Believe?
David Friedman had a post recently asking this question. I didn’t have a problem with David’s thoughts, but one commenter struck me who wrote:
I find it utterly fascinating that most people who believe there is a heavenly paradise to reward the virtuous in the afterlife, nevertheless think the death of a virtuous person or small child, is a bad thing. How could it be bad that someone virtuous has died and entered paradise for eternity?
I found this observation itself to be utterly fascinating, for its implied critique of believers. For one thing, the Christian view is more nuanced than saying a “virtuous person or small child” goes to paradise when he or she dies.
Yet put that aside, and it’s still fascinating. Switch contexts: My son’s teacher (2nd grade) broke down in tears at the graduation ceremony. Should I marvel at the fact that she is sad that she did a good job and all her students will go on to 3rd grade now? Is this really so hard to understand?
Last thing: I’m not saying this particular guy is guilty of contradiction, but notice how Christians get it both ways. On the one hand, we are jerks for believing in a God who would ever let a child die. On the other hand, we must not actually believe what we say, because we’re sad when a child dies.
Common Sense vs. Scott Sumner
I am at Porcfest–lots of video forthcoming–so perhaps I’m missing nuances here, but my understanding is:
(1) The Fed announced it would scale back its purchases of Treasuries and other assets (depending on the situation) in such a way, as to make the markets think that the Fed was going to tighten sooner than previously thought.
(2) The stock market fell sharply.
(3) Price inflation expectations fell.
(4) Nominal Treasury yields rose.
(5) Real Treasury yields went through the roof (e.g. from June 3 to June 21, the 30-year TIPS yield went from 0.95% to 1.45%).
So the common layman would presumably interpret the above by saying, “Bernanke’s massive money pumping and Treasury buying had been propping up stock and Treasury prices, and raising price inflation expectations. When the Fed announced it was backing off, people expecting less price inflation, and with less of a buyer the price of Treasuries fell (i.e. yields rose). Duh.”
Yet if I’ve understood Scott Sumner and Nick Rowe (not going to look up links right now), this is a very ignorant perspective. It’s wrong to think the Fed pushes up the price of bonds when it buys them; the opposite is the norm. Consequently, people who think there is a cozy relationship between the Fed and the government just don’t know macro.
So this week’s situation should at least throw sand in their gears. When something like this happened in Japan recently, I think they had the decency to admit it puzzled them. And to be fair, Scott has the decency right now to write: “I have no idea why real T-bond yields are soaring—no idea at all. However given the rise in real bond yields, the stock market setback is quite small, indicating that the market doesn’t expect significantly slower growth. That also confuses me.”
In summary, my point isn’t here to say, “Aha! Sumner is a fool.” Rather, my point is to remind the free-market fans of Sumner that his worldview doesn’t “explain everything perfectly since 2008” the way his more energetic supporters like to claim. The allegedly naive commonsense approach–which says the Fed is holding down interest rates right now–also has a lot going for it, in addition to being common sense.
P.S. Recently Krugman did a post where he walked through the permutations of stock, dollar, and bond prices to tell whether the Keynesians or their critics were right, in assessing Fed policy. I don’t have time to go look that up right now, but does Krugman’s analysis–which at the time made him look like a genius of course–show, in light of this week’s events, that the Fed is the bad guy?
Off to Porcfest…
Blogging will be sparse this week, as I’m headed to the Porcupine Freedom Festival or “Porcfest” in New Hampshire. Here’s an article I wrote about it before.
This year, amongst other things, I will be having a friendly debate with David Friedman on sundry issues and then it’s time for the “Bob Murphy Variety Show.” What’s that, you ask? I’m not sure yet. I will decide the day before.
Glenn “Kane” Jacobs on Austrian Economics and Other Topics
This occurred a few miles from my house. I took my 8-year-old, we got the obligatory picture with Glenn (I at least waited for someone else to ask him, before I did), and then, a few moments before the talk began, my son accidentally dumped a full glass of lemonade all over himself (and my foot). So we had to leave. But I tried.
That’s My King!
I have to be really brief (my home internet is out). Let me post my favorite short video, which you will probably see quarterly from me if you are a regular reader.
Metal Detectors vs. NSA Spying
Glenn Greenwald and Ari Fleischer have a good debate below, and I mean “good” in the sense that they both put up a case for their position and have serious clash (I’ll say):
The person I saw discuss this on Facebook (and what happens on FB stays there, so I won’t say more) didn’t like Fleischer’s analogy, when he said (I’m paraphrasing), “Hey, we force lots of innocent people to take off their shoes and go through metal detectors at the airports, in order to prevent the small percentage from hurting us. Same thing with the NSA program, so Greenwald doesn’t have a trump card by saying it’s spying on people who haven’t broken any laws.”
Now it’s true, the TSA is also a coercive organization and shouldn’t be used to justify the NSA’s activities (as my FB friend pointed out), but I don’t think that’s really the fundamental problem with the analogy. No, the main reason average Americans are flipping out about this is that the government was doing this in secret and the only reason we know about it, is because of Snowden.
So for a better analogy, suppose the TSA had introduced the “naked scanners” at airports but did it without telling anybody, and then finally a contractor just couldn’t stand it anymore and thought Americans needed to know that TSA agents were routinely seeing their body profiles every time they went to the airport. In that case, people would be flipping out too, probably far more than they are right now.
This is really what’s so insane about these debates among policy wonks. They are acting like it’s a no-brainer that the public will support these measures, that they are an acceptable sacrifice of liberty in the name of security. OK, if that’s true, then why does the government keep them a secret? This isn’t some targeted operation, like sending helicopters to go get Osama bin Laden (another Fleischer analogy), this is a huge dragnet. I have been assuming for years that the government records every email and phone call, and conduct myself accordingly. I doubt actual terrorists naively thought the Obama Administration cared for their civil liberties, and that disclosure of this NSA program will make them change their behavior.
Recent Comments