On political opposition

“The great Yankee comandante” William Alexander Morgan on why he joined the Cuban revolution in 1957 at the age of 29. At the time, Castro had been seen as “fighting for democracy”.

4 years later, when the revolution had fractured, leaders began destroying each other for power. As such, Morgan was lined up with his friends in front of a firing squad. He was first shot in both knees to make him kneel. Then he was shot in the face.

The lesson here is that fighting a dictatorship does not mean you’re fighting against dictatorships as a rule. For there are 3 different types of protest to a government:

1. Those who wish to throw off the chains of authoritarian regimes in earnest, be they domestic or foreign, for liberty and democracy;
2. Those who wish to enhance or expand government power for their own benefit, typically in the form of benefits and entitlements at the expense of others;
3. Those who have no real qualm with authoritarian regimes in principle, but would rather be the ones holding the power according to their own values.

Of Sand and Dreams, part I

The torn, beige fabric flapped in the wind beat against my chest. Sand, blown in circles, stuck itself in the hairs on my legs.

My sandles, my dear faithful friends, worn from the trek, had long grown thin. I had betrayed them.

I craned my neck as I heard a faint drumbeat, a scarce reflection off the stoic dunes, a sound that camouflaged itself, its origin obscured.

My shoulders collapsed forward with my back arching, I lurched forward. Deep yawns filled me with the abrasive, dusty air, leaving the bitter taste of earth in my mouth. Specks of the terrain found their home on my wetless tongue.

Ahead of me, in 50 paces, laid the detritus of military men long-defeated, a fate strewn on rocks.

Bones revealed by the pulverulent remains of their articles, a sheathed sword remained, unscathed.

A good instrument to use before I lay half-conscious, my eyes the warm, succulent delicacy for some black fowl.

The percussion sounded again, this time louder. I could have been closer.

Or perhaps I circled the source on some pedestrian’s futile orbit, spiraling until fatigue guided me down. The earth enticed me with its warm, dry hands - offering to cover me with its ubiquitous tender blanket.

My sandals slipped off; my calloused feet didn’t mind the scalding landscape. I could go no further: my knees had locked in their inflammation.

I sprawled out on the ground, looking skyward.

the distant flickering utopian mirage out of view.

Memories of places I’ve been, people I’ve known, drifted in. The visualizations becoming all the more vivid as a short time passed. Be warned:

Sleep is a silent predator, it slips into your mind hidden behind memory and abstract thought. Memories serve as pleasant, deceptive bridges to the unconscious.

adumbrate

The skies have grown dark with a cold ash blown south from a distant summit

I remember it when the sun still shone, the ground felt hot to my feet

my toes digging their own shallow ditches in the ground

that unconscious circumstance of standing idle

the trees’ pollen rocked into the air by careless spring zephyrs

Before the light outside began diffusing, the flight of these dark strands of murk had at first appeared to us as migratory birds

a harmless progression

it slowly turned to a thick, spilled ink running over tilted glass

the leaves began to turn, not as autumn clears flora

but as though the colors aged

in resemblance to landscape paintings left in attics

fully oxidized with pocked surfaces

The house on our solitary hill remained our simple luxury

crisp linens, folded neatly in closets

woven patterns of wool quilts, abrasive and dense

hot water boiled in the teapot, the sound attenuated by its porcelain enclosure

that old familiar smell of well-read books, and seasoned broth simmering on the stove

How I miss that yearly decay

childhood tableau

In the garden there was a haze

not yet blown by summer’s breeze

with the summer’s breeze, your mother said

“let in the air, air out your bed”

On the trees outside you pick the plums

take them all back to your room

it smears your fingers, the mother’s woe

a childhood painting, painting tableau

every single part of you

every single molecule

and every single quark

has no mind nor reason

to call you its own

every single part of you

has existed in a star

we’re all made up of energy

just vibrating very slow

the synapses, the firing

connections in my mind

are plentiful and wondrous

but none are really mine

I own no atom nor molecule

individually of course

they don’t know who I am

nor do they care

the sum of what we are is

plainly greater than its parts

crystal cups singing

dry ice sublimates to air

tangible physics

creative destruction 

a deconstruction of production needs a reintroduction to grow

in the minds of the creative fuels burning

make our hearts ache for a change 

in the exchange of technology

it’s in our biology

this specialty of the exponential human potential and we

in agreement

tell the younger in expositions

to compositions

ancient propositions, about encumbered expeditions

that to us, in the present, were never admitted

experiment, analyze, rest, rewind, revitalize

try it again 

reiterate, review and recapitulate

we all have a limit, but few people commit

standing out is uncomfortable, the jealousy’s palpable

to a point

until you’re standing far above, from such a great height

they’ll have to unite

until one day, long after you’re gone

someone might refute you, rebuke you, dilute you

then it’s their time in the sun

but that glory is ephemeral

My personal list of axioms, maxims and so forth.

Every now and then I observe a phenomenon that gives me an opportunity to comment on it, and occasionally be correct.

1. Anti-capitalist axiom: the less free a market becomes, the more the free market is to blame.
2. Anti-capitalist corollary: the less an institution has in common with the free market, the more it is associated with the free market (or capitalism).
3. Charts, graphs and statistics: quantifying outcome is good, it gives us reference, albeit often misleading; identifying cause is infinitely better. The man who sees that the color of the table is black is no more nearer to discovering the truth of why it is black.
4. The crafty politician will take credit for the creation of productive sector jobs; he will dismiss capitalism just as quickly when it doesn’t, therefore enabling him the power to intervene.
5. Socialist axiom: it is infinitely better for the monopolist to be an agent of the state than a private business that is an agent of the state.
6. Socialist corollary: the crime of the federal reserve, in the opinion of socialism, is not that the federal reserve board of governors is a monopolist, it is that it has shareholders.
7. A deceived zombie is more dangerous to freedom than a sleeping one
8. Statist axiom of taxation: Because growth in federal budgets is a given, independent variable, a cut in taxes must necessarily cost the state money because taxation is the dependent variable.
9. Statist corollary of taxation: Because the state has the monopoly on money, all money is necessarily owned by the state. Therefore, your income is a cost to the state.
10. Statist axiom of corruption: It was the private business that created corruption in government, even before there was private business.
11. Statist axiom of politicians: The politician is an unthinking vessel that is always under the control of someone else; therefore, they are not ultimately to blame for their actions.
12. Statist axiom of regulations: more regulations necessarily means a more honest economy. Inversely, all economic problems are caused by a lack of regulations.
13. Reason is the root of compassion, not its antithesis; Otherwise, compassion without reason can be misdirected towards unknown, but negative ends.
14. Mob’s law of incoherence: in order to organize an angry mob, be sure to have a common, yet intangible object of hatred. Recognize axiom #3, use charts and graphs. Tell them how to fill in the blank, namely the intangible object of hatred. This allows for avoiding rational debate, rational debates are the bane of angry mobs; Indeed, a quantified argument is the only argument that can be defeated.
15. Statist patriotism: The American colonies revolted against the British for many reasons, but one such reason was taxation. Whereas under British rule the British tax man was tarred and feathered, after independence the American tax man was tarred and feathered. Despite this, the statist will now assert “paying taxes is patriotic”. 
16. National borders are merely an excuse for keeping national governments. They are a vestige of the colonial age when European nations cordoned off swaths of uncharted land under the auspices of monopolists chartered by the crown. The national government believe they are still entirely necessary to keep order. State governments want to keep a national government, for without the national government, they would have to be a lot more competitive.
17. Nothing is scarier to the crony capitalist than free market competition. My god, they’d have to actually compete for a change! When the statist cries “more regulation!”, the crony capitalist sighs in relief as one more barrier is erected around his domain.

If you have some good suggestions, let me know. 

My neighborly advice about learning piano

This can also be advice to anyone learning piano on their own.

Dear neighbor,

I’ve been listening to your piano-playing for some time through my ceiling, and as a longtime professional pianist, I believe you are in need of some basic advice. 

1. Buy a metronome. Always use it. Always. Few things are more vital to learning and performing music as keeping a steady tempo. In the last 14 months I’ve listened to you, you have never played with a steady tempo.
2. If you are new to a piece of music, try finding an extant recording of it performed by someone else. You don’t have to play it exactly like them, but it will give you some inkling as to how it should be performed.
3. Also, if you are new to a piece of music, do not under any circumstance try to play the full thing at full speed with both hands. You will fail, it will frustrate you, and it will demotivate you. For the last 2 days I’ve listened to you try to blaze through Canon in D to no avail. Stop. One hand at a time, and use that metronome.
4. In the last 14 months I have never heard you play a single scale, arpeggio or technical exercise. You cannot improve your playing without these. Without them, it’s like you’re trying to perform ballet without having first mastered walking in a straight line. And of course, always use a metronome for these.
5. A piece of music is not an equation. Nor is it a race. The goal of performing a piece of music is to not somehow play it as fast as possible. It is a medium of expression, and like all mediums of expression, you must first master the rules before you can truly understand how to break them.
6. Focus on phrases, on a few bars at a time. Don’t expect to play a new piece of music majestically even with just one hand. Shorten it down to 4 bar phrases. If you are having difficulty with a certain passage, slow down the metronome and gradually raise the tempo as you get better at it. There is no shame in this.

with respect,

your downstairs neighbor

On the downgrade and the continuing, pervasive problem with GDP calculation

[The downgrade of the US economy to AA+] is a good thing, albeit a bit late. It’s like someone told a joke and the ratings agencies are the last to get it and start laughing when it’s quiet.

Those of you out there who don’t normally pay attention to bond ratings, this is largely symbolic. The credit ratings agencies are late to the party. Everybody knows already, the credit agencies are not looked at as some omniscient deity.

The markets have already known for a while that the debt can’t be paid off, at least with current policies. So long as politicians declare that “tax cuts cost the government money”, so long as a “cut” is actually just a reduction in future growth in spending, it will not happen. Default will happen. We’re already defaulting by proxy of monetary inflation and it’s manifesting itself.

In short, the more people who admit the emperor has no clothes, the better. It is vitally important that even the great and all-powerful American politician recognizes that he cannot legislate economics, that actions have consequences and spending your way out of debt makes as much sense at the macro level as it does on the micro level.

My criticism now is actually that AA+ is too good of a rating. For example, New Zealand is AA+ with its strong dollar, and its net public debt around 10% of GDP. I’d buy NZ Bonds way before I’d buy US T-Bonds. Why is the US then rated equally to NZ? That’s a question for S&P.

The retort by the administration about how S&P got sub-prime wrong and must therefore have gotten this wrong, well. So did the other two. Moody’s and Fitch also got subprime wrong, yet they haven’t changed their ratings as they ought to. This line of reasoning is of course faulty anyway (a sort of abusive ad hominem), and it’s little more than shooting the messenger.

So thank you, S&P. Good on you.

Many people wonder, “what is the solution” ? Declaring in the same breath that there isn’t one. The solution is, tragically, quite simple. A 1% real cut in the budget every year for the next decade. I don’t mean a 1% cut in future spending growth. I mean from now on, a 1% cut in spending at today’s levels. I would personally recommend more than that, but that’s the bare minimum in my opinion. Or we could simply go back to the 2004 budget. Keep it there.

For those of you who think cutting public sector jobs is a bad thing, let me ask you. If there are huge losses in the private sector, what’s going to pay for these public jobs? Another question, even more pertinent: what do you think is more important, quantity of GDP or quality of GDP? Those in favor of public sector jobs seem to believe in quantity. This is the Keynesian problem in general. You can spend and spend, but it’s smoke and mirrors if it’s on things that no one wants. Wealth comes by creating things people want.

Hypothetical Scenario

Say I have $100. I want to spend this $100 to buy a pair of new shoes from the shoemaker. In this case, the wealth is the shoes created for me and their subsequent use. For the shoemaker, his time has been paid for with $100. I want the shoes more than the $100, he wants the $100 more than the time and materials it takes to make the shoes. It’s a mutually beneficial, voluntary agreement which leaves us both satisfied. The addition to the GDP is $100.

Alternatively, due to taxes, that $100 was taken from me by the government. They use this $100 to dig 5 ditches in my backyard at $20 each. Would I have paid $100 for 5 ditches? No. I didn’t want 5 ditches. So no value was exchanged for that $100. So in essence, the time I spent to earn that money (in voluntary exchange for the creation of something of value) has just been nullified. This is a loss of wealth. A further loss of wealth is the use of my time to fill in those unwanted ditches, time I could’ve better spent on other value-creating activities. Or I’d have to pay someone else the same cost to fill in those ditches. Before, I had $100 and no ditches, and now I have -$100 and no ditches. However, the government economist would declare that the GDP would reflect this as a $200 gain in the economy. Well that’s certainly better than a $100 gain, isn’t it?

To make it more interesting, Keynesians seem to argue a pray-and-spray approach with government investment. As long as the money is spent, they argue, it doesn’t matter where. The hope is that it’ll hit upon something that’ll then multiply the effects of this investment. 

Pray & Spray

The $100 was taken from me, the $100 I could’ve spent on shoes which was taken from me to dig 5 ditches. Well, as it turns out, I needed 2 of those ditches anyway so I could plant trees.

There are a couple additional things are wrong with this though. I still needed the new shoes more than the ditches, the ditches were a lower priority and thus didn’t maximize the marginal utility of my money (it was far less efficient). I wouldn’t have spent $20 per ditch, and would’ve only offered $10. Knowing this, and knowing the cost of filling in the ditches. It’s still a net loss. But GDP is up (in the short term) well over $200! This is one way in which using GDP as a measure of wealth is bogus. It is a measure of spending. That is all.

In conclusion, it’s not simply an economic matter of asking “who’s better at determining the best way to use your money, you or someone else?” it’s a matter of asking an even more sensible, albeit more philosophical question at the crux of free-market economics itself, “who is better at determining what you value and how much you value it, you or someone else?”.

edit: I swear I keep trying to add the “read more” so I don’t flood other feeds with this post, but it won’t add it.

On commonly misunderstood conceptions of reality

It is quite common to hear through various media outlets about the concept of a post-recession recovery, or “road to recovery” after a recession. This is incorrect, the recession is the recovery. It’s a market adjustment. Intervening to stop a recession (already caused by interventionism through mechanisms such as credit expansion via low interest rates) stymies a real recovery and adjustment period. It only causes more malinvestment, where businessesmen are deceived into believing there are more resources available for allocation than there actually is. Eventually the interest rate must be raised, the malinvestments will become clear, the boom will end, and another bust will necessarily follow where malinvestments will have to be liquidated. So goes the cycle. The steps listed in the following quotation may seem familiar to modern readers.

If government wishes to see a depression ended as quickly as possible, and the economy returned to normal prosperity, what course should it adopt? The first and clearest injunction is: don’t interfere with the the market’s adjustment process. The more the government intervenes to delay the market’s adjustment, the longer and more grueling the depression will be, and the more difficult will be the road to complete recovery. Government hampering aggravates and perpetuates the depression. Yet, government depression policy has always (and would have even more today) aggravated the very evils it has loudly tried to cure. If, in fact, we list logically the various ways that government could hamper market adjustment, we will find that we have precisely listed the favorite “anti-depression” arsenal of government policy. Thus here are the ways the adjustment process can be hobbled:

(1) Prevent or delay liquidation. Lend money to shaky businesses, call on banks to lend further, etc.

(2) Inflate further. Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Further credit expansion creates more malinvestments, which in their turn, will have to be liquidated in some later depression. A government “easy money” policy prevents the market’s return to the necessary higher interest rates.

(3) Keep wage rates up. Artificial maintenance of wage rates in a depression insures permanent mass unemployment. Furthermore, in a deflation, when prices are falling, keeping the same rate of money wages means that real wages rates have been pushed higher. In the face of falling business demand, this greatly aggravates the unemployment problem.

(4) Keep prices up. Keeping prices above their free-market levels will create unsalable surpluses, and prevent a return to prosperity.

(5) Stimulate consumption and discourage saving. We have seen that more saving and less consumption would speed recovery; the more consumption and less saving aggravate the shortage of saved capital even further. Government can encourage consumption by “food stamp plans” and relief payments. It can discourage savings and investment by higher taxes, particularly on the wealthy and on corporations and estates. As a matter of fact, any increase of taxes and government spending will discourage saving and investment and stimulate consumption, since government spending is all consumption. Some of the private funds would have been saved and invested; all of the government funds are consumed. 

(6)Subsidize unemployment. Any subsidation of unemployment (via unemployment “insurance,” relief, etc.) will prolong unemployment indefinitely and delay the shift of workers to the fields where jobs are available.

These, then, are the measures which delay the recovery process and aggravate the depression. Yet, they are the time-honored favorites of government policy, and, as we shall see, they were the policies adopted in the 1929-1933 depression, by a government know to many historians as a “laissez-faire” administration.

- Murray Rothbard, America’s Great Depression (emphasis mine) 

The implications of this are two-fold. First, the commonly held belief that it was “the failings of laissez-faire during the great depression” is patently false. Secondly, while holding this false belief, later administrations (including the current one) have nearly identically followed the same flawed policies while simultaneously believing it’s the opposite of what actually happened historically. They think they are not repeating history, but by their own disinformation, actually are. We should feel no surprise when articles like this appear.

In a related subject, there is new empirical evidence that provides further evidence that Murray Rothbard and the Austrian school of economics are correct in their assertions.

…a one unit change in the initial level of economic freedom between two countries (on a scale of 1 to 10) is associated with an almost 1 percentage point differential in their average long-run economic growth rates. In the case of civil and political liberties, the long-term effect is also positive and significant with a differential of 0.3 percentage point. In addition to the initial conditions, the expansion of freedom conditions over time (economic, civil, and political) also positively influences long-run economic growth.

In contrast, no evidence was found that the initial level of entitlement rights or their change over time had any significant effects on long-term per capita income, except for a negative effect in some specifications of the model. These results tend to support earlier findings that beyond core functions of government responsibility—including the protection of liberty itself—the expansion of the state to provide for various entitlements, including so-called economic, social, and cultural rights, may not make people richer in the long run and may even make them poorer.

We actually see this now, the problem with entitlements leading to severe public debt problems. This is in yet another study here. Apparently we are worse off than Greece and Portugal, but still better off than the UK and Japan.
I was recently lambasted for being “all doom & gloom” and being a “know it all” and a “I told you so”, that I “only criticize but don’t offer solutions” in my posts. My intention is to provide a working understanding for me and those who might read this because I think it’s important. If you think it is incorrect, if things are fine, I would gladly like any “doom & gloom” I post to be refuted. I would like nothing more than to see everything be fine, even if it means I wear a dunce cap the rest of my life.