Optimal Stopping Time
This is a real thing in economics. Applied to “provocative” (not my term) essays, the rule is this: When you read: “the relationship between Nietzsche and the free-market right…is thus one of elective affinity rather than direct influence, at the level of idiom rather than policy,”
…you can safely stop, and turn to something else. Absolutely nothing good will come of it. The writer can insinuate the most absurd things, and yet always claim, “I never said that!” if you object. Just move on with your life.
You still don’t get my point? Okay, as I put it to Daniel Kuehn (who, needless to say, thought the Nietzche/Austrian article was “fascinating”):
I skimmed a lot of the article. I’m not even being snarky; I have no idea what the guy’s point is. It’s like talking about the connection between Ronald Reagan and Star Wars, since they both were popular in the same cultural era, except SDI was actually nicknamed Star Wars, so it makes more sense than this article.
“In the Long Run, People Will Assess You Based on Policy Preferences”
I’m not even going to bother digging up links (here’s a Mario Rizzo discussion, you can follow him to Krugman et al.), but in the blogosphere recently there was a discussion about what idiots/liars people were, who used John Maynard Keynes’ famous line, “In the long run, we’re all dead,” to suggest that Keynes’ policy conclusions were myopic. I have two quick points:
(1) Yes, I agree that if you read the quote in context, it’s not as bad as it first sounds. Here’s the full quote:
But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
(2) Having said that, look again at that quote. What other purpose does the glib “In the long run we are all dead” serve, except to pooh-pooh the focus on the long run as being silly? Here, watch this:
But this long run is a misleading guide to current affairs. In the long run we will reap the full consequences of our actions, and that’s why we must never forget to include the long run in our analysis. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
Does the above make any sense at all?
So when today’s Keynesians ask with incredulity, “How could anyone possibly think Keynes was telling us to ignore the long run with that line?!” the answer is, because Keynes was telling us to ignore the long run with that line. That was the function it served rhetorically in his argument, at that moment.
For an analogy, if a progressive complains about George W. Bush’s line, “You’re either with us or against us,” you can’t then point to his administration’s diplomatic actions with neutral countries on the War on Terror. That line is crystal clear in its rhetorical purpose.
Obama Has Lost (Jon) Stewart
Not sure how long this clip will stay up on YouTube, but it’s good. He starts with playful O’Reilly banter, but you’ll see where he’s going with it…
Noah Smith Shows the Power of Framing
Noah puts “austerians” on the couch:
[M]aybe people like the idea of austerity because they think an economic stagnation is our best chance to address what they perceive to be our long-term challenges. Allowing a crisis might be less terrible than wasting it.
Now, when stated that way, the idea sounds kind of silly – why don’t we just periodically bomb our own cities, in the hope that governance will improve during the rebuilding? But I find it very difficult to state with any confidence that the idea is wrong. When economists discuss the costs of stabilization policy, they limit their discussion to distortionary taxation, unexpected inflation, and things like that. They almost never bring politics or institutions into the picture. The fact is, we just don’t know how institutions really work. So I can’t dismiss the idea that anti-recessionary macro policy might, in fact, rob us of our best chances to make needed reforms.
But what I think we should do is to discuss this idea explicitly. If people really do think that the danger of stimulus is not that it might fail, but that it might succeed, they need to say so. Only then, I believe, can we have an optimal public discussion about costs and benefits.
Yeeees, I actually think I agree with Noah’s assessment of my own view, but give me a chance to put it in my own words. You’ll see I paint quite a different picture:
There was an absurd run-up in the Nasdaq in the late 1990s, which was but one indicator of the structural imbalances in the economy. There needed to be a reallocation of resources, and Americans needed to realize they were poorer than they had thought.
But Alan Greenspan slashed interest rates and replaced the Nasdaq bubble with the housing bubble, just like a few prominent Keynesians wanted. Yes, Noah, that policy “worked,” in the sense that it pushed back the crisis by 7 years and made it ten times worse.
By the same token, Bernanke’s actions from 2008 – today “worked” in that they pushed back the crisis. But it will be much worse when it finally hits. Back in 2008, people were warning about major investment banks and MMMFs going down. Now people are worried about European governments and currencies failing. If the Fed keeps bailing everyone out, eventually it will be the dollar and the US Treasury that collapse.
Notice also that if I oppose Noah’s preferred fiscal and monetary policies because I don’t desire the above chain of events, it’s rather inapt for Noah to say that I (and people like me) oppose “stabilization policies.” No, I view Noah’s recommendations as promoting instability.
Who Said It?
“Always focus on the labor market. Keep that in equilibrium and the free market can handle the rest.”
(A) John Maynard Keynes
(B) Paul Samuelson
(C) Paul Krugman
(D) Robert Reich
(E) Scott Sumner
(F) Super Grover
(After you choose, go here for the answer.)
Murphy on Peter Schiff Show (Guest Host, Tom Woods)
Starting at 10:30am Eastern time, on Monday May 13… Listen online here.
Physical Determinism and Free Will
An interesting discussion about free will and whether the physical universe is deterministic, which makes me reiterate my own view on these matters. When it comes to the vexing problems of dualism and also evolution, I think belief in an intelligent Designer (I have to make it a capital “D” since I’m talking about the universe itself with the former issue, not just life on earth) solves the problems–or at least, pushes them back a step. In contrast, if you don’t believe in an intelligent Designer, then I think you run into some serious philosophical problems.
==> There is an obvious sense in which humans have free will. In our subjective experience, we certainly seem to be able to “control matter with our minds.” I can look at my fingers, and make them move with my will. We just take this for granted, but if I could do the same thing with a mannequin’s fingers across the room, then people would think I was a wizard.
==> At the same time, the whole enterprise of modern physics, chemistry, and biology seeks to explain the mindless laws governing the operation of the objects in the material universe. They need to proceed in this way; in order to be intelligible to us, these “laws” have to be laws.
==> So already we see the problem. If my fingers are moving at time T2 because of the state of the physical universe at time T1, then it doesn’t seem as if there’s any room for my discretion. At best, my “free will” is correlated with my finger movements due to a third factor. In other words, the state of the universe at T1 causes my fingers to move, and causes my mind to think “I want to move my fingers,” at T2.
==> Some people (like Gene and Ken B. at the link above) handle this by saying they are just different levels of explanation; others try to handle it by saying the physical universe is NOT deterministic, and that quantum mechanics can reconcile the apparent paradox. I personally don’t see exactly how this is supposed to work, though I confess I would need to really get into it before saying for sure. Yet here’s my quick reaction: If the future state of the physical universe is indeterminate (in a particular sense, specified by quantum theory), that doesn’t leave a window through which one’s mind can influence the future. For example, if the electron has a 50/50 chance of going through the top or the bottom slit, then we have no more control over what happens, than if there were the Newtonian 100/0 situation.
==> However, I realize that one of the best ways to explain the experimental results of the two-slit experiment is to say, “The electrons/photons don’t choose a slit, until we know they went a particular way,” and that certainly seems to link the human subjective mind with the objective, physical universe in a fundamental way. So my guess is that these “quantum mind” theorists are on to something, I’m just saying I don’t think it is as simple as saying, “Phew! The physical universe is NOT deterministic, so free will isn’t an illusion after all.”
==> To (finally) recapitulate my own solution to these vexing problems: Imagine that a filmmaker could perfectly anticipate where everyone in the movie theater would look, for 2 hours straight. He makes a film accordingly. The people then go sit in the theater, and they soon realize as they’re watching the screen, that each person apparently has a little colored dot assigned just to him/her. That is, each person is looking at the screen, and sees a dot (or the person’s name spelled out, if you prefer) and–no matter how the person moves his/her eyes–that dot (or letters spelling the name) moves around perfectly in response. After just a few moments of this, the people in the theater would be certain that there was some kind of advanced technology, whereby sensors in the theater tracked their eye movements, and then in response moved the images on the screen. But nope, there is no such interaction at all; the dots (or letters) on the screen are just light that is being shot out of the projector in the back of the theater, using the same processes as the Disney move in the next theater. The crucial difference is (to repeat), the filmmaker on this particular film somehow knew exactly what everybody would choose to do, beforehand.
==> If you get my analogy, then you can see why I think an intelligent Creator can solve the mind/body problem. You have a soul with free will. You perceive the unfolding universe through the perspective of your physical body, and you appear to have (limited) control over what happens in the physical universe. However, if we focus on any portion of the physical universe, it doesn’t seem to be controlled by your intangible soul at all; that doesn’t even make sense. We can “explain” everything perfectly well without invoking a soul at all, except we’re left with this gaping hole of why the heck are we conscious and does it sure SEEM like we’re controlling things with our minds?! (My answer is that God created our souls and the physical universe such that there was a symmetry between them, where our truly free choices dovetailed perfectly with the mindless operation of the laws of physics in the material universe.) Yet we just ignore that question as “unscientific,” and don’t really worry about it because it’s so commonplace–just like new, human minds coming into existence and being based inside of organic creatures that shoot out of mother’s wombs every day.
Religious Potpourri
Hey it’s Sunday, this is permissible…
==> On old review by Tom Woods of Edward Feser on the “new atheism.”
==> Ayn Rand was not a fan of C.S. Lewis’ The Abolition of Man. (HT2 Jason Clemens on FB, who got it from Tyler Cowen I think.) But what did she think of Narnia?
On a more serious note, I’m amazed at how informative her marginal notes were. When I’m making notes like that, I usually just use punctuation marks: stars, exclamation points, and question marks. I do this partly for brevity, but also because I assume I will know why I flipped out over a passage, if I look it up again in 5 years.
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