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The Next Boom Industry

Ever since seeing his comment here, I've been listening to a lot of Stefan Molyneux recently, including podcast "292: Freedom Through Debt".

It has me tinkering with a new meme: The federal government is balanced on the edge of collapse because of debt and a dollar rout. When it falls, what will go with it? How many State governments? Any foreign governments holding US debt? Will it be a relatively peaceful collapse as in South Africa and the former Soviet Union?

Which leads me to the title of this post. If the US federal government collapses, what consensual institutions will fill the vacuum? Is the fed's monopoly so tightly held that these institutions cannot begin to form today? Or are there some, like private schools, which can begin to operate in the current environment and be ready for growth once their government subsidized competitors fail?

Can Obama Lead us out of the Racial Wilderness?

In the wake of Obama’s speech concerning progress in racial conciliation, one pundit, noted that Obama was talking to Americans about the issue as though we were adults.This brought to mind an incident from the past when I was living in an extravagantly racist world. Ask me about it some time. 1967

In my world the only way whites like me got to know blacks was as workers in the same place. In the late Sixties this guy I worked with, Eddie, told me about the Christmas party the white boss put on and Eddie was invited too. Yes, he could be the bartender. I think most blacks have experienced this type of blatant racism, so I can see why they were pissed off. The only trouble was that Eddie sometimes acted childishly. Perhaps it was effects of racism.

For example one time I came in and saw him and his co-worker pretending to sodomize another black employee, an older, introverted Uncle Tom type with a broomstick. These guys were thirty five years old and still acting like high school kids. How do kids act? They are narcissistic and have demands combined with a lack of a sense of reciprocal responsibility. The more you become an adult, the more you move away from this. When two equal adults relate there is ideally equal reciprocity. Betweens equals, non- reciprocity soon leads to tensions. In the case of an infant, there is little expectation for reciprocity. The price the infant pays is that of inequality and submission, because giving non-reciprocal benefits makes the adult more powerful. The infant only gets what he is given and the only way he can get more is to cry more loudly.

What if an adult acts in same way as a child? The same rules apply. If you help someone temporarily there is the joy of altruism in the giver and the relief of suffering in the recipient. But the self respecting person will avoid becoming a sponge. I don’t think I need to go into more detail here, nor do I think it is the whole story. Racism is surely debilitating both to the victim and the perpetrator, as is slavery. The question is does this have any bearing on racism. Is a one way or two way street?

The Old Program

There is a massive ideological program in our society that justifies permanent dependency on the part of some persons. Adults are too old to cry but they can think up slogans or adopt them from some ideology of entitlement. Old former Marxists know what I am talking about. Stalin is dead but the propaganda slogans manufactured in that era live on. Here is a quote from Doris Leesing, Nobel Prize winner in literature for 2007. The subject is not race consciousness but its derivative radical feminism.

Doris Lessing on dogma

Referring one of her books "The Golden Notebook" The book's exploration of a woman's inner life, feelings of hostility and resentment, and unhappy experiences with men came off as inflammatory and "man-hating." Critics initially savaged the book. Feminists, however, embraced it, much to Ms. Lessing's annoyance. "I hated the 1960s feminists," she says. "They were dogmatists, you see. In comes ideology, and out goes common sense. This is my experience of life."

Ms. Lessing points to a current dogma: political correctness. "It's a continuation of the old Communist Party. It is! The same words, the same attitudes. ‘The Communist Party has made a decision and this is the line.'" At first, she says, political correctness had a good beginning; she remembers saying that the language that we use is sexist, racist and so on. But then, "that became a dogma. Because we love a dogma, you know, we really do. We can never just let things develop easily from an idea, it seems to me there's always a group of fanatics who grasp it and make it a dogma."

This is why political discourse has become so negative. Radical leaders maintain power by stoking divisiveness. Ideology justifies the attitude of adults who still act like children. Permanently low expectations inevitably keep the balance of power and status on the side of the dominant culture. This in turn provokes even more anger and a staunch denial of the fact that many grievances are being addressed and that reciprocal activity, not more ranting is apt to be productive.

Does Obama Have a New Program?

How does this apply to Obama’s speech? Is he is calling for an end to this situation, at least for race? Is old fashioned identity politics obsolete? All the working class blacks I know act as though they are ready to move on. Blacks I know and meet don’t fit the stereotypes perpetuated by the media and academia. Real job holding black people seem to want reciprocity, respect and to be treated as adults. Or maybe I am being naive.

I will not quote any of the childish ranting of Obama’s minister saying how he hates America and his Uncle Sam who makes sure that American blacks are the richest black people on earth except to note that he has never threatened to run away from home. Besides, according to many apologists, many black preachers make comments like this in the privacy of their own church as a way to entertain the congregation by poking Whitey in the eye or like my friend Eddie, figuratively using a broomstick on him. Instead I will bring to the attention of the reader the philosophy one of Reverend Wright’s own mentors, James Cone a professor at Union Theological Seminary.

Racial Catch 22 and Black Liberation Theology

Most information from this section was obtained by me reading: Theological Studies December 1, 2000 by MASSINGALE, BRYAN N.
AT A CATHOLIC SPONSORED justice conference, Professor James Cone gave what he called "a theological challenge to the American Catholic Church." What is "Racism"? Where are Catholics wrong?

Fighting racism the wrong way.

The Louisiana Catholic bishops in 1997 wrote: "The teaching of the Roman Catholic Church on racism is clear. Racism is morally wrong.” "Racism is the theory or practice which assumes that one race or ethnic stock is superior to another." "Racism perpetuates a basic untruth that purports an innate superiority of one group over another because of skin color."

No, no, this is all wrong.

OK how about this: “What is racism? Racism is a personal sin and social disorder rooted in the belief that one race is superior to another. It involves not only prejudice but also the use of religious, social, political, economic or historical power to keep one race privileged.... Racism is personal, institutional, cultural, and internal."

And how do the Bishops propose to correct the sin of racism?

They employ a strategy of moral suasion in their ethical argumentation. That is, they assume their audience's goodwill and moral acceptance of the basic faith tenets that they delineate. Therefore, the bishops presume that if the incompatibility of racist behaviors is pointed out to them, this will lead to personal conversion that will result in social transformation.
The faithful are to avoid using racial slurs and telling racial jokes. They are also to challenge such behaviors among their family members, friends and co-workers. Parents are asked to instill in their children the values of racial tolerance and an appreciation for ethnic diversity. Individuals are asked to cultivate interracial and cross-cultural friendships.
Unacceptable! Unacceptable!-- according to Black Liberation Theology.

Fighting racism the “right way.”

All this well meaning stuff is hopelessly out of date. To advocates such as Cone and the multiculturalism the remedy is as frightening as it is vague. The problem is presented in the most puffed up and horrendously exaggerated verbiage. It isn’t just that blacks tend to get a raw deal sometimes both individually and collectively like everyone else.
Cone says "We live in a nation committed to the perpetuation of white supremacy," that is, a nation committed to maintaining relationships of White cultural, political, and social dominance.

“The response of black theologians to white racism (in the past) was based too much upon moral suasion and too little upon the tools of social analysis.-- Although the un-Christian behavior of whites caused us to question their Christian identity, we still assumed that if the contradiction between racism and Christianity was clearly pointed out to them, they would change and act in a Christian manner. We were naive, because our analysis of the problem was too superficial and did not take into consideration the links between racism, capitalism, and imperialism, on the one hand, and theology and the church on the other. --- If we had used the tools of the social sciences and had given due recognition to the Christian doctrine of sin, then it is unlikely that we would have placed such inordinate dependence on the methodology of moral suasion.”
Even when it is manifest institutionally is cannot be reduced to demonstrable manifestations of personal prejudice or the racially pejorative beliefs of individuals that are expressed in interpersonal actions and omissions. Instead racism is a systemic and structural characteristic of the culture which seems float invisibly in the air. Even if a white person tries his best to not do or think racist things it is hopeless. Whitey is still a racist because of cultural determinism and must live in a state of perpetual guilt until the offending culture is reformed or replaced. Whites are automatically the beneficiary of unjust power and privilege whether they know it or not and thus are guilty whether they know it or not.

Correlates of Black Liberation ideology:

1.)Only whites can commit racist acts.
2.)Only blacks are qualified to tell you whether a racist act has not been committed or when racism is cured.
3.)Since white people lack the ability to judge racial matters, the government must be given the power to do what ever it takes to being justice to black people. According to Cone "How, indeed, is a mind to become conscious of its own bias when that bias springs from a communal flight from understanding and is supported by the whole texture of a civilization? Given the racial ethos of American society, there may be only so much that (White) people can "see." An alternate strategy of fostering liberating awareness and "consciousness raising," through moments of interruption needs to be seriously explored and developed.”

Cone’s program has long been in effect.

One irony is that much legislation directed at curing racism was passed almost 40 years ago was explicitly justified as a cure for institutional racism which was blamed for the massive rioting in towns throughout the nation in 1968. These writing by Cone were from at least 15 years after the Voting Rights Act the EEOC, huge affirmative action programs, the War on Poverty and other government programs were established that were explicitly designed to counter America’s racist society. One might ask if they have been effective. If, as I explained in the first part of my post, these programs foster permanent dependency they will never create equality. Politicians need to issue some sort of report card on these activities and accesses their negative effects.

At least Obama declared that there had been some progress and also acknowledged that white people were hurt by these programs which have rolled on relentlessly under every administration since Johnson’s presidency ended in 1969.

My reading of hard leftist and even moderate Democrat literature indicates they believe that American society is still basically racist and requires much more social engineering. I look for Obama to behave as any activist Democrat and try to saddle us with more of these programs, which I repeat, have been enforced and even strengthened even during Republican administrations including the Nixon and Reagan administration. Since many Americans still disagree with the underlying thesis of America’s inherent racism, they will have to decide just what Obama’s national dialogue on race will really mean. Please pardon a little skepticism.

Peter Thiel on bubbles and globalization

This Hoover piece is a fascinating view of Thiel's views on globalization and bubbles, and the importance of macro (that is, thinking about the world economy and what it is doing - not the bogus field of macroeconomics):

Because we find ourselves in a world of retail sanity and wholesale madness, the truly great opportunities exist in the wildly mispriced macro context -- rather than in the ever-diminishing spreads on esoteric financial markets or products. Indeed, one could go even further: What is truly frightening about the twenty-first century is not merely that there exists a dangerous dimension to our time, but rather the unwillingness of the best and brightest to try and make any sense of this larger dimension.

From a contrarian perspective, one could be more optimistic if others were not so naively "optimistic."

Here is a key passage, but you should really go and read the whole thing:

In recent years, the pace and amplitude of these booms has accelerated tremendously, in complete contradiction to the widespread notion that markets are becoming more smooth and efficient over time. During the last quarter century, the world has seen more asset booms or bubbles than in all previous times put together: Japan; Asia (ex-Japan and ex-China) pre- 1997; the internet; real estate; China since 1997; Web 2.0; emerging markets more generally; private equity; and hedge funds, to name a few. Moreover, the magnitudes of the highs and lows have become greater than ever before: The Asia and Russia crisis, along with the collapse of Long-Term Capital Management, provoked an unprecedented 20-standard-deviation move in financial derivatives in 199824 the Nasdaq at 5,000 in 2000 was farther from equilibrium than the Dow at 350 in 1929, perhaps the greatest previous distortion; no 10-year government bond yield ever fell to 0.44 percent in all of history, until this happened with jgbs in 2003; as measured by the buy/rent ratio (or any number of other indicators), U.S. real estate prices in 2005 were more distorted than in 1929<, 1979, or 1989, or at any other time in history; and no emerging market had ever reached a p/e of 62, as China’s Shanghai a Shares index did in 2007. It has not been a good time for those investors who are merely sane.

Consider the strangeness of the American context. One would not have thought it possible for the internet bubble of the late 1990s, the greatest boom in the history of the world, to be replaced within five years by a real estate bubble of even greater magnitude and worse stupidity. Under more normal circumstances, one would not have thought that the same mistake could happen twice in the lifetimes of the people involved. One might be tempted to invoke extraordinary psychosocial explanations — for example, that all of this was driven by baby boomers who destroyed their minds on drugs in the 1960s and therewith merit the dubious distinction of being America’s Dumbest Generation. But when one surveys the many other bubbles that have proliferated throughout the world, one realizes that this cannot be the whole truth.

The most straightforward explanation begins with the view that all of these bubbles are not truly separate, but instead represent different facets of a single Great Boom of unprecedented size and duration. As with the earlier bubbles of the modern age, the Great Boom has been based on a similar story of globalization, told and retold in different ways — and so we have seen a rotating series of local booms and bubbles as investors price a globally unified world through the prism of different markets.

Nevertheless, this Great Boom is also very different from all previous bubbles. This time around, globalization either will succeed and humanity will achieve a degree of freedom and prosperity that can scarcely be imagined, or globalization will fail and capitalism or even humanity itself may come to an end. The real alternative to good globalization is world war. And because of the nature of today ’s technology, such a war would be apocalyptic in the twenty-first century. Because there is not much time left, the Great Boom, taken as a whole, either is not a bubble at all, or it is the final and greatest bubble in history .

I have very mixed feelings about this viewpoint. On the one hand, predictions of extremes seem to always be wrong - the world, so far, has shown a very strong aversion to either utopia or apocalypse, despite numerous predictions of both. On the other hand, as a techno-optimist, I find a lot of plausibility in scenarios of both Singularity and Apocalypse. We have clearly nowhere near exhausted the limits of technological advancement, and enormous prosperity seems quite plausible. On the other hand, the flipside of technology is Murphy's Law of Mad Science - the IQ needed to destroy the world decreases by 1 point every cycle of Moore's Law. The probability of apocalypse temporarily decreased when the Cold War ended, but until we get off this rock, I don't see how anyone can deny that the long-term trend is up.

The Exodus Continues

Today, the Census Bureau released its estimates of how metropolitan area populations have changed in the last year. Here's a pretty nice summary from MSNBC. Basically, it's exactly what you would expect if you've been following these trends. Of the 50 fastest growing areas, 27 were in the South, 20 in the West. Eight of the 10 fastest growing areas were in the South, which is growing a lot: "Four of these fast-growing Southern metro areas were not only among the top 10 in percent growth from 2006 to 2007 but also among the 20 largest numeric gainers during the same period."

Unfortunately, there isn't a breakdown here of suburban versus urban growth. The Census did release the top 100 fastest growing counties, but those are almost certainly biased towards suburban counties. Nevertheless, I'd bet (and when I have more time, I'll dig into the data sets and check) that despite the much vaunted renewal of urban cores, they account for a small fraction of population growth.

People come up with all number of reasons for these trends, both good and bad. But I think it's pretty undeniable that affordable housing is near the top, if not the most important reason. Urbanists and smart growth advocates like to crow about the liveability of older communities, but until they find a way to allow actual working families to afford them, the future of growth is in the suburban South. Only when we are free to build will the migration to more affordable places cease.


Fundamentals will win out

Ryan Avent seems to think that basic economics went out the window in the housing bubble (link via Megan McArdle). I find his criticism of Fed economist Fiona Sigalla completely baffling. Here's what she said:

In addition, house prices [in Dallas] have been stable compared with other areas, Ms. Sigalla said, adding, “We have lots of available land and fewer regulations, so we have a homebuilding boom sufficient to keep home prices at bay.”

Supply expanding to meet increasing demand? Happens in almost every industry. Texas has more land than other coastal areas? That doesn't seem too controversial. Regulations raise the price of housing? Ed Glaeser doesn't think that's laughable, and he's the indisputable king of urban economics. And it's completely true that housing prices in Dallas were relatively stable (increasing only 26% from 2000 to the peak).

It's true that some areas that meet the criteria of open land and relatively lower regulation have seen a bubble (Phoenix and Las Vegas come to mind). But the fact that markets sometimes make mistakes and overshoot when groping for an equilibrium doesn't mean that fundamental economic forces are irrelevant or, as Avent thinks, completely laughable. I don't know of any economist who would even disagree with what Fiona Sigalla said, let alone find it mockable. 


Of Risk and Bailouts

A week ago today, I got to hear an Italian economist (whose name I can't remember) speak at the St. Louis Fed about the current financial mess. During the Q&A I asked him if he was worried that bailing out Bear Stearns would cause moral hazard problems down the road. He balked at me calling it a bailout and dismissed the moral hazard problem because $2 a share "isn't much." I believe the price has moved up to $10 a share now, but that still isn't much, or at least I think he would say that.

He seemed to be working with a different concept of bailout than me. To me, a bailout occurs when the government (Fed or otherwise) intervenes in some way to prevent someone from bearing the full consequences of a financial collapse. In this case, the Fed lent JP Morgan the money it needed to buy out Bear Stearns. Had the Fed not been there to offer a nice loan, JP Morgan probably wouldn't have been willing to spend as much money on the buyout, if at all. It wasn't a direct bailout, sure, but the bottom line is that the shareholders of Bear Stearns lost less than if the Fed hadn't intervened.

Which brings me to the moral hazard problem. For some reason the aforementioned economist at the Fed wasn't thinking at the margin. At the margin, shareholders at Bear Stearns were shielded from loss. At the margin, this encourages risky behavior. So, at the margin, we have a moral hazard problem. The size of the bailout may be small in the end, but by signalling willingness to orchestrate such a bailout at all, the Fed may create the moral hazard problem anyway.

Or am I completely wrong?

Russ Roberts agrees and Arnold Kling disagrees.


Your "Common Dreams" are My Nightmares

Wouldn't it be cool if we remade American society so that all 300 million of us began caring for one another, educating each other and sacrificing our own happiness for perfect strangers -- as if they were our nearest kin? If we replaced our day jobs and our petty little personal hobbies with a shared vision for the future?

To make this dream a reality, we'd probably need a know-it-all chief executive with unlimited power, because lots of people would go kicking and screaming. I think I can name a willing volunteer.

"In America, we have this strong bias toward individual action. You know, we idolize the John Wayne hero who comes in to correct things with both guns blazing. But individual actions, individual dreams, are not sufficient. We must unite in collective action, build collective institutions and organizations."

. . .

"Now we have to take this same language--these same values that are encouraged within our families--of looking out for one another, of sharing, of sacrificing for each other--and apply them to a larger society. Let's talk about creating a society, not just individual families, based on these values. Right now we have a society that talks about the irresponsibility of teens getting pregnant, not the irresponsibility of a society that fails to educate them to aspire for more."

-- Barack Obama, in an interview with The Chicago Reader, 1995.

Terrible tragedy -> bigger government

The young 6-year-old girl
who was badly injured in a pool accident last June has died. [...]

Minnesota lawmakers are also looking into new pool safety regulations on the state level.

It is a shame that something terrible has to happen before action is taken and safety regulations are put in place.


Alternate business structures

In Paul Graham's latest essay, You Weren't Meant To Have A Boss, he applies evolutionary psychology to organizations and discusses how people are naturally ill-suited for working in large corporations. There is a similar libertarian argument about government, which views The State as The Tribe writ large, with people's intuitive belief that the state can work well deriving from their hard-wired expectation of a tribal-sized group. Anti-market biases such as those Bryan Caplan has documented, or Arnold Kling's "Folk Economics" have a similar origin.

As an employee, i've spent the past few years working at, and thus observing, a large corporation. And as an anarchist, a mechanism designer, and a dreamer, I can't encounter a large heirarchical system without wondering whether it could be done better. So, like Paul, I've pondered alternate organization schemes:

A large organization could only avoid slowing down if they avoided tree structure. And since human nature limits the size of group that can work together, the only way I can imagine for larger groups to avoid tree structure would be to have no structure: to have each group actually be independent, and to work together the way components of a market economy do.

That might be worth exploring. I suspect there are already some highly partitionable businesses that lean this way. But I don't know any technology companies that have done it.

It seems to me that there are some clear advantages, if the business is seperable, in seperating it, in resisting the empire-building temptation. Especially if there are alternate suppliers for what some of the units create - that way you stay open to using a different supplier if they are better, and keep competitive pressure on the unit. In a lot of cases, this is just not possible - businesses can be highly interdependent, with some functions that are very speculative or don't have clear bottom-line contributions. But I think this could be done a lot more than it is.

Let's take, for example, a hypothetical technology company. This company has a core business which generates a lot of money, and results in it creating a lot of generally useful infrastructure. As a result of this, it has a variety of small, speculative projects which make use of this general infrastructure. These projects are organized in the standard ways: employees are employees of the main company. Their career path and rewards depend somewhat on the success of the project, but not like a startup.

This seems, to me, like a pretty bad setup. The project's employees are far less invested than if they were at a startup, yet they are basically doing a startup-like job. Why not structure it that way? The big company could invest and provide the general infrastructure along with some cash, the employees could get equity and control, and you get a more "natural" structure.

To be fair, problems of scale are good problems to have - you only achieve them by succeeding wildly. But just as it's worth thinking about whether there are radical alternatives to democracy which might better meet our needs as citizens, it's also worth thinking about whether there are radical alternatives to large corporations which might better meet our needs as employees, consumers, and investors.

Credit Where Credit is Due

(Alternative title: How Curunir Continues to Avoid Studying for Tomorrow's Exam)

The Bush Administration gets a whole lot of deserved criticism around here, not just for its non-libertarian social policy but also for a whole mess of anti-market activities. Nevertheless, when it does something good, we should acknowledge it, and here's an example of administration officials really getting it right.

The Washington Post ran a very nice piece today focusing on the Department of Transportation starting to run experiments with tolling and congestion pricing along with a related article focusing on the DC metro area. Basically, the officials there want to actually start to use the price mechanism to allocate space on the roads. They also proposed actually using prices to allocate airport landing rights, rather than having us deal with the ever-worsening, cascading nightmare of delays of the past few years.

It never ceases to amaze me when putatively pro-market conservatives blanche at the thought of tolls. I'm not a pure enough libertarian (maybe I will be one day, but not yet) to say there's no government role in road building. And given we do not, and probably never will, live in a society where all roads are built privately, we have an obligation not to run them in a way that would make the grizzliest Soviet commissar smile in agreement. Yet if you mention "tolls", you'll see a conservative's blood boil.

I'm sure in 10 months when the White House changes hands these experiments will be abandoned and we'll go back to thinking that light rail boondoggles or bike paths or New Urbanism will be the path to transit Nirvana, as we continue to lose more and more of our lives to pointless congestion because of our flagrant anti-market bias in transportation. But I have hope that little by little, the notion that giving something away for free when it costs real resources to use will be abandoned, and these experiments might help drive us there.

Aside: The second-most hilarious part of the article is when the transit advocates say that the money being spent on these experiments would reduce congestion more if it were spend on mass transit. As if this highly indirect mechanism could compare to actually charging people for using a good. The funniest part, of course, being the description of pricing as a "neocon view of transportation".

Private Benefits, Socialized Costs

Honestly, I'm having trouble caring about the latest meme on the recent Fed actions, namely that they are socializing the costs (i.e., having the taxpayers bear them) of risky actions but allowing the private benefits to accrue to financiers. True, it may be bad (macroeconomics is not my forte, but I am not in the least impressed by neo-Austrian or folk economic explanations of how the Fed steals money from us ordinary peons). Nevertheless, suppose it's completely true that the Fed is handing over benefits left and right to people in finance.

Does anyone seriously doubt that high finance is a net positive contributer to the national government? Between the taxes on corporate earnings (the max rate is what, 35%?) and 35% top rates on income (federal alone), the government siphons off enormous sums during boom times. So during normal times the government takes a large percentage of the proceeds of finance, and every now and again the flow goes the other way. But surely in net, financiers help pay for government and not the other way around.

Now, there's certainly a moral hazard argument against Fed 'bailouts', and I'm sympathetic to them. But forgive me if I refuse to be OUTRAGED!!!! if the house throws a chip or two back at the bankers every couple of years.

ADDENDUM: To clarify a bit, it's not that I don't think bailouts and the like (if that's what this is) are wrong. I do. It's more along the lines of this argument here, regarding how the rich really do subsidize the government. There's a current of populist belief out there that somehow the federal government just lines the pockets of financiers, but I just don't think that's the case on net, and until I'm persuaded otherwise on that fact, emotionally, I just can't get up in arms about these things, even if I think they are wrong.

[Some of the above text was also edited for clarity.] 

Would Increasing Immigration Help the Housing Crisis?

According to a news story I read today (but, convinently, cannot find right now), there are 600,000 houses sitting empty now, owned by investors but sitting unwanted. One would think this is a pretty major reason for falling home prices, which is part of the reason credit markets are so gummed up now. Also, it's certainly probably that both the supply and demand for housing is fairly inelastic (right?), so a small increase in demand could lead to surprisingly large price increases.

So how about this for an 'emergency' measure to help the economy: Issue 1 million extra visas this year. I'm partial to Arnold Kling's visa auction proposal, but it could be done other ways. But if the U.S. could sell 1 million visas for $20,000 each (has anyone ever tried to estimate the market value of a U.S. work visa before?), we have a lot more play money for emergency 'bailouts' and the like, not to mention the housing effects.

Now, I should say as a renter, I'm pretty annoyed that everyone assumes that high housing prices are great, though this is partially counterbalanced by my amusement in seeing self-styled liberals and "affordable housing" advocates screaming about how bad falling housing prices are. Nevertheless, I'd certainly trade slightly higher home prices for avoiding a major recession. And if doing so, we can attract more of the best and brightest, that's a double gain.

To BO from BM. Not Good Enough.

Barack Obama has posted an article at Huffington Post in defense of his involvement with the anti-white ranter, Rev. Jeremiah Wright. Here’s my response.

" I knew Rev. Wright as someone who served this nation with honor as a United States Marine, as a respected biblical scholar, …"

Respected biblical scholar? Respected by whom? Leonard Jefferies, and the "Reverend" Al Sharpton? How can one be a respected scholar of any kind and believe that Jesus was a black man? That doesn’t sound like scholarship.

"He also led a diverse congregation"

The congregation didn't look all that diverse in the videos I've seen. Why should that matter anyway? There's plenty of white people who hate America, and have an unhistorical view that denigrates whites. You'd have to be one to sit through that clownery week after week.

"It's a congregation that does not merely preach social justice ..."

Social justice is a Marxist term for injustice. I was a member of a committee on "social justice" and “racial justice” at my local Unitarian church at Shelter Rock for a while. They taught about "institutional racism" and how every white person was a "hidden racist". Hell they even had this nice little old lady who had worked on behalf of the NAACP for 35 or more years believing she was a "hidden racist". This was, as I pointed out to them, ridiculous. Meanwhile the blacks on the committee were full of the most racially bigoted views. One of those racist beliefs being precisely the idea that every white was a racist.

"Most importantly, Rev. Wright preached the gospel of Jesus, a gospel on which I base my life. In other words, he has never been my political advisor; he's been my pastor. And the sermons I heard him preach always related to our obligation to love God and one another, to work on behalf of the poor, and to seek justice at every turn."

In case you didn't notice he was not preaching for us to love one another. He was preaching for blacks to see themselves as victims and whites as their oppressors. He was teaching them that they were not being treated justly by whites. This is the exact opposite of teaching love for another. Instead it is teaching resentment for the other, teaching envy of the other, and teaching that the other is the enemy. It's teaching blacks to view themselves not as humans but as perpetual victims and whites as their persecutors, something that would tend to increase racial tensions and racism on the part of both blacks and whites. Blacks seeing moral inferiority in every white and whites fearing that all blacks hate whites.

You, Obama, have realized this because you have denounced it, yet you wish to have it both ways. How can he both be a spreader of hateful statements as you have admitted and a spreader of love? Preaching love for one another isn't a one way street, and is wiped out when it's only for some, or contradicted.

"The statements that Rev. Wright made that are the cause of this controversy were not statements I personally heard him preach while I sat in the pews of Trinity or heard him utter in private conversation."

Ron Paul claimed not to have seen the racially controversial stuff printed in his newsletter for about eleven months while he wasn't personally running it and he told us afterward that he didn't believe in that stuff. It's not proof positive he's a racist but it sure isn't a sign the other direction. It certainlyshows that he is not paying attention to something he should be. The fact you picked this Pastor and listend to him for twenty years tends to show the same thing about you. You may well not be a racist but it shows that you were not paying attention for twenty years to what is racist belief about whites.

"Let me repeat what I've said earlier. All of the statements that have been the subject of controversy are ones that I vehemently condemn. They in no way reflect my attitudes and directly contradict my profound love for this country."

Exactly what Ron Paul told us and that's not enough. This is more than about whether you are a racist or not. I don't think there is sufficient evidence to make that conclusion in either case. It's about whether you are willing to let racists run things for you. In this case your personal life.

"With Rev. Wright's retirement and the ascension of my new pastor, Rev. Otis Moss, III, Michelle and I look forward to continuing a relationship with a church that has done so much good."

Well I've seen the Rev. Otis Moss III blaming rich white corporations on the issue of rap music and distribution of crack. He claims that rap was fine until the corporations got hold of it and forced the addition of "n word", "h word", and the "b word". He tells us it is not a coincidence that gangster rap and crack hit the streets at the same time in the black community. Let me tell you that I found rap morally reprehensible the first time I heard it in 1977. That was long before it hit the charts and came under corporate influence, and yes they used the n-word, the h-word, and the b-word.

Yeah, and Johnny Mathas used to complain that the executives at these corporations would make him sing sappy songs. So why didn't they force him to use the "n-word" in his music?

If I was one of the executives at Time Warner, AOL, Sony and MCA I'd sue this guy for slander.

The fact that you, Barack Obama, think this guy is any better than Wright tells alot about you.

"And while Rev. Wright's statements have pained and angered me, I believe that Americans will judge me not on the basis of what someone else said, but on the basis of who I am and what I believe in; on my values, judgment and experience to be President of the United States."

I have no idea who you are, what you believe in, or your values and judgment. You are a politician and as such you speak in generalities. Messages like "I am for hope." or "I am for change" tell me nothing. As you say I won't judge you on the basis of what someone else said. I don't know if you believe these things. I will judge you however on the fact that you do not distance yourself from a church that preaches such a false and warped view of America and of white people.

I’m not voting for a president who seeks the advice of people who hate America and the people who live in it.

Playing at the Margins

Okay, I know that some of you take offense at political action as either ineffectual or immoral, but I couldn't help appreciating the use of this familiar public choice argument at DownsizeDC (emphases theirs):

It is very well understood how government grows, and why it is so difficult for taxpayers to protect themselves from the large-scale looting that goes on in Washington . . .

  • Government confers huge, concentrated benefits on select groups of people, while spreading the cost over all taxpayers
  • The groups that benefit from government favors have large incentives to fight for those benefits, while taxpayers have small incentives to fight any particular instance of looting

This essential insight tells us something very important about strategy . . . NO strategy for curtailing government growth has ANY chance of success UNLESS that strategy makes it EASY for taxpayers to fight government growth, and, as a result, more DIFFICULT for politicians to make government grow. We have built our entire organization, and we are basing all of our future plans, on this crucial insight.

Why Even Have Juries?

Via Instapundit, I'm reading this argument against jury nullification, arguing that they should be fact finders and nothing more.

My question is this: If that's true, why even have citizen juries at all? Surely you could take people well trained in the law and have more accurate fact finders. And it can't be that anti-nullification, pro-jury people think the "facts" themselves would be different if found by different types of juries.

So can anyone think of any purpose for juries beyond their role as a check on government authority? I'm trying, and I honestly can't.

The lesser of two evils

Governor of Montana's got somin' to say about hare-brained schemes.

Sowell on Immigration, evidence?

Today I listened to this podcast with Thomas Sowell and Russ Roberts. At the end, Sowell gives some arguments against relatively open borders. I may be biased because of my own opinion on the subject, but he didn't seem to have as strong as an argument as in previous subjects in the podcast. In particular, he made an empirical claim- that our culture can't handle this many immigrants (at least from certain areas), but didn't provide any evidence. Then it struck me, is Theophanes' link to the article on the amount of americans in prisons evidence for Sowell's claim? To add to this, Daniel D'Amico points out that this number has been increasing in recent years.

It seems plausible that if a relatively high proportion prisoners are (legal) immigrants, then they are causing problems within our culture and our institutions. If this is the case, we should probably be wary because capitalism does depend, to a large extent, on the institutional and cultural foundation we have in the west.

It seems more plausible to me that this is a sign of the drug war or if it is a sign of our slowly crumbling culture, it's crumbling from within because of certain structural problems that help churn out people who are dissillusioned with capitalism and western values for whatever reason. In particular, I'm thinking of inner cities here.

The big question is, what does the evidence say? Can anyone think of/find anything relevant?


B.S. Sentences that I read today..

From my money and banking textbook:

As with adverse selection, the government has an incentive to try to reduce the moral hazard problem created by asymmetric information, which provides another reason why the financial system is so heavily regulated.

I fail to understand why textbook writers in general stop doing economics when the get to government intervention. It's one thing to say that these problems potentially justify government intervention, but the above sentence is simply false.

edit: html

Economic Illiteracy: The Video Game

The posters here are likely a good bit more tech-savvy then me, so they have probably seen ads for this spectacularly strange video game being released today. Here's a trailer for "Frontlines: Fuel of War", a fantasy about peak-oil-induced resource wars coming in 2024. It's actually pretty amusing. Can't wait for those weeks-long blackouts to start rolling across the country this summer!

What I'm wondering is this: Has anyone ever studied (very doubtfully) or wrote about (possibly) the impact of video games on political belief formation? I shudder to think of a generation of teens being taught about resource wars through first person shooters.

I've actually thought about this for a while. I remember playing SimCity and the various iterations of it, and I wonder if, subconsciously, games like that train people to think as planners. Houses in the way of progress? Switch to the bulldozer button and let the good times roll!

Schumpeter said that capitalism contains the seeds of its own destruction, subsidizing the intellectuals who would bring about its downfall. I doubt he thought the intellectuals would be sitting around learning resource economics from their XBox360s though.

I killed libertarianism!

Arnold Kling suggests in TCS that the way to libertarianism is carefully structured civil disobedience. I think this is an absurd idea, as does Ken Silber. Bryan Caplan weighs in with a short post I totally agree with that ends:

Libertarian ideas have been ably defended by an army of smart, thoughtful people for decades. And yet only a tiny minority remains convinced. Clearly these ideas are not "compelling enough" to win out in political and legal competition

Ken Silber makes the absurd reply "My advice: try harder.", which is so wrong-headed I want to scream. It's like if your friend is complaining about not being able to knock down a concrete wall with his head, and you say "My advice: try harder".

Brian Doherty mentions the discussion on Hit & Run, which has some wonderful comments, like:

jj: We can't get 20,000 people to move to New Hampshire to promote freedom.
How are we going to get millions to act is ways that will get
themselves jailed?

ithaqua: "[W]e would be counting on a civilized society not to engage in severe repression." Two words: Waco, Texas.

But my narcissistically favorite part is a response to my reply on Caplan's post:

Patri Friedman writes:

And if they aren't compelling enough to win in public discourse, you
aren't going to get a social movement together to promote them via
civil disobedience. (And even if you did, the movement wouldn't work,
as Silber points out. So Arnold's strategy is doubly absurd).

Libertarians need to suck it up and accept that their case is
hopeless in existing large countries. They can either accept that
statism is inevitable, or get involved in a frontier (seasteading /
spacesteading / cryptoanarchy...)

greg newburn writes:

when future citizens read about that long-dead philosophy,
"libertarianism," they will be taught that the end began with patri
friedman's comment, above.

Look, I know it feels good to think you are fighting against the state, standing up to the man, even though the odds are long, you're gonna make a difference. It's a load of bullshit. Well, sort of.

What I mean is, if you enjoy doing that sort of thing, great. Just don't fool yourself into thinking that you are accomplishing something besides giving yourself enjoyment. That's a slight exaggeration - there is some value in keeping the dream alive, spreading ideas, etc. But inaccurately estimating the effects on the world of your actions will only hurt us. And most of what I see people do and propose are totally hopeless wastes of time.

Ron Paul is a perfect example of this principle. To the degree to which he increases support for libertarianism (or any of the individual, sensible ideas he campaigns on), his campaign has a positive impact on the world. But many of his supporters seemed to think he had an actual chance to get nominated, and made their donations of time and money on that basis. And that's just crazy. He never had the slightest chance, and any decisions made under the illusion that he did were bad decisions. And I think Arnold's proposal is similarly hopeless.

I think we should be very leery of hopeless efforts, and more self-aware of what we are doing and why. Yeah, it's good to keep the dream alive. On the other hand, it's brutal and wearying to keep fighting for a dream that never comes. I'm just saying, know when you're saving some embers and when you might actually be able to fan a flame. And know that it's almost always the former, unless you are at a really unusual leverage point. Think about how previous similar proposals may have failed and why before you put significant effort into something.

Yeah, it totally sucks that one vote doesn't matter, and one person can't make a difference in politics. But pretending it ain't so don't change 'nothin. The same theories which tell us why government sucks also tell us that it isn't worth our time to do anything about it. In fact, you might say that what the theory says is that government will suck because it isn't worth our time to do anything about it. It blows my mind that libertarians, the very group that ought to have the best understanding of this problem, still fall constantly prey to it and get mad when I point it out.

Arnold's proposal (like Ron Paul's candidacy) doesn't plausibly explain how it changes any of the sad facts about the world that make government suck. Contrast this with the Free State Project, Seasteading, or Anarcho-Capitalism. It's not clear that any of them are actually possible, but at least there are real reasons why each of them might substantially affect the systematic factors that lead to sucky government.

Sorry for the rant.  Really, I just view y'all as a potential market for floating condos, and so I get bitter about anything that distracts you from that prospect, especially if it gets you to cough up any cash :).  More generally, I deeply, passionately want to live libertarianism, not just talk about it, and so I get angry and frustrated about memes that I think reduce the chance of that happening.