Murphy Finally Gets Some Respect from the MMT Camp
Details here. (I have the 11th comment.)
Landsburg Makes Two (More) Mistakes
Steve Landsburg has a post up talking about the Beatles, so I read it with great interest. (My taste in music is almost as antiquated as my taste in economists.) After explaining that people at the time didn’t know how lasting the Beatles (or rock and roll) were going to be, he asks his readers:
How quickly are great cultural watersheds recognized for what they are? In the few areas I know something about, I think the answer is “usually pretty quickly”….In mathematics, at least in the past century (and I’m pretty sure for several centuries, or even millenia, before that), major paradigm shifts have generally been recognized very quickly. When a Serre or a Grothendieck upends the mathematical world, the mathematical world quickly knows it’s been upended.
On the other hand, it took people [remarkably] long to catch on to the significance of the Internet. I remember trying to tell people in 1992 that this Internet thing was going to be very big someday, and meeting a lot of blank stares. And even I, who was a very early adopter of email, Usenet, FTP and IRC, initially dismissed the World Wide Web as a passing fad.
So here’s the (extremely vague) question of the day: How often are cultural watersheds widely and quickly recognized, and what characterizes those that are and those that aren not? I’m not talking about fads here (so LOLcats don’t count); I’m talking about real lasting world-shaking changes. Feel free to interpret the question in any way you please, and have at it.
My title derives from the following observations:
(1) About 7 years ago, I gave a pep talk to a group of high school students to get them all fired up to go grab their dreams or something. (It was honestly the biggest bomb of a talk I have ever given as an adult. My opening joke failed, and a girl in the front row actually said aloud, “No.”) Anyway, I was trying to list examples of people who were successful but had to ignore the doubters. I mentioned J.K. Rowling getting rejected by at least a dozen (?) publishers before someone finally picked up the first Harry Potter novel, the Beatles not getting a record deal with Decca Records, and–my favorite–the fact that Godel presented his preliminary findings for “Godel’s theorem” at a math conference, and the talk wasn’t even written up in the notes about the conference. (As I remember the anecdote, some big gun–Turing maybe? von Neumann–was in the crowd and came up to talk to Godel after his presentation, but nobody else even recognized there was anything important.) And yes, I realized the irony as I was rushing just to get through the #)$(*#$* talk that I should heed my own advice, and not let the Bueller-esque response of the kids affect the enthusiasm with which I shared my advice for their lives.
(2) I think Landsburg is overlooking the most obvious cultural phenom of our age: Free Advice. Seriously, do you people realize just how big a deal I am? Sometimes I wonder. It kind of reminds me of high school. I just kept waiting for everyone to realize how cool I was, and then we graduated.
More on the Gold Standard
Not too much in the way of pathbreaking theory here for the old veterans, but you might add these to your rhetorical arsenal:
One of the most absurd objections to returning to a gold standard is that “You can’t eat gold.” I am not making this up; Dave Leonhardt of the New York Times actually said that to Ron Paul when he defended the idea on the Colbert Report.
Dr. Paul didn’t really get a chance to answer (Colbert instead made a funny joke about idolatry), but it would have been delicious had he quickly asked the cynic, “Oh, so you make sandwiches out of Federal Reserve notes?” (We also would have accepted, “Oh, so I take it you are proposing a hamburger standard for the dollar?”)
Actually, I did get into some deep thoughts at the end, provoked by Blackadder from the comments in an earlier blog post:
Finally, a critic could (and actually did, on my blog) ask how this arrangement [of the gold price not being a price control] differs from the current one? After all, right now Bernanke “sets” interest rates, but not through literal price controls. Instead, the Fed adjusts the quantity of reserves in the banking sector such that the “market-determined” federal funds rate is close enough to the Fed’s target for this interest rate. So isn’t this basically the same thing as the gold standard, with a different “good” serving as the monetary commodity?
There are two problems with this sophisticated objection. First, in the current system the Fed has a moving federal-funds target. At best, then, it would be analogous only if the Federal Open Market Committee said after each meeting, “We are now setting the target price of gold at such-and-such dollars. However, if unemployment begins rising and core CPI is under 2 percent, we will begin raising the target price of gold in $10 increments over the next few meetings.” That system would be nothing like the classical gold standard.
Yet the deeper problem with the analogy is that on a classical gold standard, the government is (imperfectly) mimicking what would happen if the money were actually gold, with people walking around with gold coins in their pockets, and merchants quoting prices not in dollars but in grains or ounces of gold. The classical gold standard, by fixing the dollar as convertible into a definite and constant weight of gold, doesn’t introduce another price: the dollar is supposed to be a claim-ticket to gold. This isn’t really “price fixing,” any more than defining a foot as 12 inches is “central planning.”
In contrast, what would be the free-market analog of the Fed’s current strategy of targeting short-term interest rates? The only thing I can think of is if the money commodity in a community weren’t something tangible like gold, silver, or tobacco, but rather overnight bonds issued by banks. Yet what is a bond but a promise to deliver money? So how could the money itself be a short-term bond? At this point I am dropping the analogy, lest I become permanently cross-eyed.
Murphy and Friedman Support Palin!
All I mean is, David Friedman has pooh-poohed those going nuts over Palin’s Paul Revere remarks, just like I did.
Friedman makes a point that I thought too at the time, but I didn’t dwell on it because the whole thing is so silly. Yet since Friedman is getting beaten up in his comments, I want to endorse his (modest) point: The people laughing their tushies off about this episode, would have you believe that Sarah Palin thought that Paul Revere was trying to warn the British in order to help the British. But of course, that’s not what she was saying. She meant, he was warning the British the same way I was warning Krugman not to turn his back on an Austrian. I wasn’t actually a Keynesian spy in that video.
I know if I don’t explicitly say this, people are going to get mad in the comments. So here you go folks: No, I don’t think Palin had in mind the subtlety that Revere got captured and then told the British not to mess with the colonists. I personally had never heard that before, so probably neither did Palin (unless she had just taken a tour or something).
But what is so ridiculous about this whole thing, is that I think what the critics are really saying is something like, “Can you believe it?! Sarah Palin can’t repeat the 15%-true fable we all grew up with! It’s as if she said Santa Claus lives at the end of the rainbow, when everybody knows Santa Claus lives in the North Pole. No way would she make a good president.”
Let me also endorse Friedman’s view that you shouldn’t be criticizing Palin (or Obama or Biden or Dan Quayle…) for their “moronic” public statements, unless you’ve given 30 radio interviews yourself. I have said really dumb stuff on the air.
Or take this example. During my Congressional testimony, Rep. Jim Jordan couldn’t subtract 1913 from 2011 (or maybe it was 2008) on the fly. In other words, he was trying to figure out how much the Fed had done in such-and-such years, and he stumbled on the math problem. The thing was, I was trying to do the number too, and I couldn’t. I actually got concerned that he was going to ask me for the number, and I had even prepared a joke to explain that I wasn’t going to do it and risk embarrassing myself on camera.
So: Are we to conclude that, “Oh my gosh Robert Murphy is such a moron he doesn’t know how to subtract 1913 from 2008?!?!” Well maybe some of my interventionist critics will do so in the comments, but I think my math skills are just fine. In fact, precisely because it was so easy, I was choking. If Jordan had asked me to briefly explain Godel’s incompleteness theorem, I would have been much more comfortable at that moment.
Another point, which will probably sound sexist but I don’t think it is: I think the beauty pageant thing is relevant here, but not in the way her critics intend. Rather, I think a lot of pretty girls growing up found it was more advantageous to act ditsy (whether subconsciously or not).
I’ve said this before but I’ll repeat it: The “classic” example of Palin’s moronitude actually showed that she is crafty. When Katie Couric was trying to trap her and asked what newspapers and magazines she read, Palin said “all of them, any of them.” Most people concluded, “A ha! Palin doesn’t even know a single newspaper.”
I don’t think that’s what happened. I think she realized she was stuck (since she doesn’t regularly read newspapers or magazines–a practice I share with her) and she decided to just fold the hand and move on. If she had said, “The New York Times,” then Kouric might have said, “Oh, what columnists in particular?” or, “Oh, what recent events have you been following?” I think Palin knew she was dead on this point, and wanted to just take her lumps and move on, rather than digging deeper.
So in conclusion: I think Sarah Palin knows that Paul Revere supposedly warned the colonists “the Redcoats are coming the Redcoats are coming!”, and I think Sarah Palin could name a newspaper and a magazine. Just like I know how to subtract 1913 from 2008.
Newfound Humility
No, I’m not referring to a deflation of my excessive ego. What I mean is that I have a newfound understanding of the humility of Jesus’ apostles at the Last Supper. Here is the passage in question:
20 When evening had come, He sat down with the twelve. 21 Now as they were eating, He said, “Assuredly, I say to you, one of you will betray Me.”
22 And they were exceedingly sorrowful, and each of them began to say to Him, “Lord, is it I?”
When I was younger, I thought this was ridiculous. They don’t know if they are going to betray Jesus?!
But on the road trip to Auburn today, I was flipping through the channels and listened for a bit to a sermon on this passage. The preacher pointed out that actually, this was a very humble thing for them to say. (At this point I am back to my words; I’m not paraphrasing the preacher.) They had been following Jesus around, and never really quite got the full impact of His words when He first said them. But the more wisdom He uttered–not to mention the growing number of miracles–the more they would have realized just how far above them He was.
So when Jesus says “one of you will betray Me,” the true apostle will know one of them will betray Him. That might seem inconceivable, but then again so did raising Lazarus from the dead.
Unfortunately, the apostles had apparently recovered their cocksure confidence later that evening:
31 Then Jesus said to them, “All of you will be made to stumble because of Me this night, for it is written:
‘ I will strike the Shepherd,
And the sheep of the flock will be scattered.’[d]32 But after I have been raised, I will go before you to Galilee.”
33 Peter answered and said to Him, “Even if all are made to stumble because of You, I will never be made to stumble.”
34 Jesus said to him, “Assuredly, I say to you that this night, before the rooster crows, you will deny Me three times.”
35 Peter said to Him, “Even if I have to die with You, I will not deny You!”
And so said all the disciples.
Turns out Jesus knew what He was talking about.
Another Nuanced Hip Hop Artist
Jacob Huebert posted this video on LRC. Check out the lyrics; it’s surprisingly sophisticated. (By that I mean, “I agree with this guy on a lot of issues.”)
You’d think with a name like Lupe Fiasco, this poor kid wouldn’t have amounted to anything. But he played the hand he’d been dealt.
Silas Barta Gives a Bit of an Explanation
Word for word, this is by far the best explanation I’ve read about the nuts and bolts behind BitCoin. Yes, I’m writing on it very soon, it’s just that I have to coordinate with my technical co-author.
(And some of you thought I should have banned Silas from the blog years ago. You see, I am the Dr. Xavier of libertarianism. Don’t make a bald crack.)
Talking to the Man
A reader writes:
Thanks for all you do.
I recently relocated to my hometown area in the midwest (iowa/illionois border) and I work as a dotNet applications developer/programmer for a local community bank (about 1.8 billion in assets, 57million in gross profit, and 6.6 million in net income/year).
I take pride in what I do because on net, I do help the operations of our business be more productive and automate many mundane tasks.
I am well aware of the [insights] of Rothbard, Hayek, and Mises. I wish we could abolish legal tender, centrally controlled fiat paper money, and fraction reserve banking among other things even though my bank benefits from these things.
We have an upcoming lunch with the bank president and I would like to ask him some questions. Im a self-taught austrian via the mises institute/peter schiff/ron paul/tom woods/your blog persuasion. I don’t want to come off as an arrogant smarty pants with esoteric questions, but I do want our bank to be successful in the long run and serve the needs of our customers.
If you were in my shoes, what question(s) would you ask if you had an hour with a bank president?
Thanks for your thoughts.
P.s. maybe you could pose this to your readers and omit my last name. Thanks!
The only thing I would ask him, is if he could give me a line of credit. But that’s just me.
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