What can be done about political hatred?

November 10, 2012 Leave a comment

Bob Kerrey, loser of a senate race in Nebraska, has pointed out the growing climate of political hatred in the country. He says:

Sitting in his midtown Omaha home a day after Tuesday’s election, Bob Kerrey said a shout from outside made him reflect on what he believes is political hatred that has grown increasingly intense.

… “Hatred is a dangerous thing,” he said.

I completely agree, both about the growth of hatred in politics and about its danger to individuals and the polity itself. In the wake of a presidential election that split the country as never before, we have seen the emergence of class warfare and identity politics writ large.

Instead of changing the almost-universally unpopular status quo, Americans cast their votes as blocs, with blacks almost completely separating from whites, women and men a chasm apart, the wealthy and those of limited means at loggerheads like we haven’t seen in decades. So much for Obama being the great uniter.

However, I get the feeling that Mr. Kerrey and I would not agree about the causes or cure.

I believe it is a simple problem, and it can analogized as follows. If you are infested with mosquitoes, you can kill them one by one. You can curse the gods for plauging you with insects. You can suffer in silence. On the other hand, if you want an end to the problem, you can drain the swamp.

Political hatred is always and everywhere a product of political overreach. When people peacefully and voluntarily exchange without government interference, there is no political hatred. However, when politics reaches into our wallets, our bedrooms, our private lives – that is where hatred begins.

A vote for an intrusive public policy is akin to a personal attack, because although the state is used as proxy, the result is the same. If we do not want people picking our pockets one-on-one, how can it be legitimate just because enough people voted on it? If the natural response to theft is anger, why would we respond the opposite way just because the government is the middleman?

You want less political hatred, Mr. Kerrey? Try less political force.

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The incredible vanishing multiplier, and economics as a science

November 9, 2012 2 comments

Here is a blast from the past. In this .pdf file, economist Robert Barro talks about the Keynesian multiplier in 2009. 2009, as we recall, was the edge of the precipice. This article was published in February of that year, concurrently with the passage of the “American Recovery and Reinvestment Act,” commonly known as the first stimulus, which granted roughly $800 billion of taxpayer money to political cronies.

Here is an excerpt:

If the multiplier is greater than 1.0, as apparently assumed by Team Obama, the process is even more wonderful. In this case, real GDP rises by more than the increase in government purchases. Thus, in addition to the free airplane or bridge, we also have more goods and services left over to raise private consumption or investment. In this scenario, the government spending is a good idea even if the bridge goes to nowhere or if government employees are just uselessly filling holes. This free lunch would make Charles Ponzi proud. If the deal is genuine, why stop with only $1 trillion or so of added government purchases?

It seems as though the best way to judge macroeconomic predictions is with the benefit of hindsight. Indeed, when economists using the same data set come up with estimates that vary by the trillions, one must wonder whether foresight per se exists at all.

With the benefit of hindsight, it is clear that the stimulus did not stimulate. Many excuses have been made for the poor performance of ARRA, but the fact remains that it has failed.

In my view this is not surprising. Most economists, whether classical, monetarist, Keynesian, or whatever else, have been consistently missing the point for decades. They have become so caught up with making their math look legitimate that somewhere along the line they forgot that it should have some connection to the real world.

Perhaps when applied to mainstream macro, “voodoo economics” is a tautology.

Why Government Debt Blows Up

November 8, 2012 Leave a comment

Here is a link from the Daily Reckoning of Australia, showing why government debt blows up. It has a liberal dose of Bastiat (pun intended), and it draws some interesting parallels between Japan and the United States.

I suggest that you read the whole thing. (It’s not that long, you whiners!) But here’s an interesting excerpt to pique your interest:

What really happens is this: the private sector gets too deeply in debt (thanks largely to the Fed’s artificially low rates and EZ money policies). Then, it panics. It cuts spending. Lenders – who over-extended credit – should go broke.

Instead, the feds bail them out, shifting the public’s real resources to failed businesses and incompetent managers. The bad debt is transferred to the public. Then, the private sector… attempting to build up savings and improve its financial health… puts its money in the safest possible place – government bonds! Still more debt, in other words.

The government takes the money and gives it to its favourite sectors… its clients… its pets… its campaign contributors and vote-getters. The public would be appalled if it realised how its savings were being thrown around. But it wants safety above all. And it believes the feds will be good for the money; they always have been. After all, if you can’t trust the government, who can you trust?

Who can you trust indeed? I’m not in the business of giving investment advice, but I’d suggest tangible assets. Check out the article to see what the stock market has done relative to tangible assets over the last 15 years or so. It will either shock you or depress you, or possibly both.

Will the Zero Stroke return?

November 8, 2012 Leave a comment

I was recently made aware of an interesting phenomenon called the “Zero Stroke” or the “Cipher Stroke.” It has an article on Wikipedia, so it must be a real thing.

Zero stroke or cipher stroke was a mental disorder, reportedly diagnosed by physicians in Germany under the Weimar Republic and said to be caused by hyperinflation of the early 1920s. The disorder was primarily characterized by the desire of patients to write endless rows of zeros, which are also referred to as ciphers.

Now that we’re in for the four more years of the Obamar Republic, with Ben Bernanke getting free rein to dump Benjamins out of his fleet of helicopters, I wonder whether the Zero Stroke will return?

Maybe it’s the next big thing in psychology!

The “Hateful Bigots” “Argument”

November 8, 2012 Leave a comment

If there’s one thing that gets me, it’s poor argumentation. You should feel free to hold positions that counter my own, but you should have valid reasons for them. Reasons that are not reasons will be savaged.

Which brings us to the “hateful bigots” argument. You know exactly the kind of argument that I’m talking about: “Those who believe in ____ are nothing but hateful bigots.” We’ve seen it with gay marriage, we’ve seen it when people who refuse to vote for Obama, we’ve seen it leveled at people who want to do nothing but spend less.

The problem is that the “hateful bigots” accusation is a monumentally poor argument. For one thing, it’s an exercise in question begging. Follow the steps.

  1. “You disagree with me, so you must be a hateful bigot.”
  2. “How do I know that you’re a hateful bigot?”
  3. “It’s obvious – you disagree with me.”

That is circular reasoning par excellence. The next time you are tempted to call someone hateful, or label them a bigot, take a look at your reasons for doing so and ask yourself whether you’re presuming that they have no reasons themselves. They probably do.

Finally, this “argument” is ironic in the extreme. The presumption that an opponent must have no valid reasons and therefore is necessarily a hateful bigot sounds an awful lot like bigotry, doesn’t it? And it certainly isn’t nice. Dare I say it’s hateful?

Four More Years…

November 7, 2012 Leave a comment

…of abject failure.

I resolve that I will blog consistently in the coming days/months/years. The Nazis had the French resistance, and if the French are willing to resist tyranny even in the slightest little bit, so must I be willing.

Posts may be smaller than normal, however. But read them.

Categories: Uncategorized

I was at the grocery store today…

September 16, 2012 Leave a comment

…and I saw something that made my jaw drop. I couldn’t help but laugh at the time, but ultimately, it’s not that funny.

It is about 11:20 as I write this, and I was at the store some 10 minutes ago. It is too late to cook, and the nearest grocery store to me that doesn’t charge an arm and a leg has a deli. I went to grab some chicken for a late dinner.

The young men in line in front of me were buying three kinds of soda, Oatmeal Cream Pies, Swiss Rolls, Ho Hos, and Mini Donuts. Before they paid, they waited a few moments for another of their group to come back from the candy aisle. Apparently they forgot Gummi Bears.

Their purchases lined up on the conveyor belt, the clerk checks them out. When the provisions are totaled, what should the young man reach for as payment but a Minnesota EBT card. For the uninitiated, that means he was paying with food stamps.

I feel like I should add the disclaimer that this is real. It sounds so silly, you might think I am embellishing or making the whole thing up. But I assure you, I was just there. And that really happened.

Taking the longer view, it is frankly amazing to me how many people discount the fact that these types of programs are rife with fraud and abuse. Under the guise of helping the poor, we are creating a permanent underclass with no skills save the ability to game the system.

People often accuse those of us who would like to see the end of these types of programs of taking food out of the mouths of poor families. That is simply untrue. Having people take care of themselves and, more importantly, allowing them to do so makes everyone better off, including the very poor. The evidence is clear, and the social welfare state is a failure.

But beyond that, I wouldn’t consider taking the Ho Hos away from a group of twentysomething boys who are clearly about to go smoke weed because none of them has a job to go to tomorrow a violation. That’s not taking food from poor people. That’s preventing the theft of the productive by the useless.

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