Author: Curt Doolittle

From Mish Shedlock:

“Look at it this way: If we take all of the cuts the Ryan has proposed and all of the cuts the administration has proposed, we are still not there. However, if we add them together, then kill the department of energy and the department of education, and cut still more from the defense budget, we might have a solid chance at balancing the budget in 10-12 years. In other words we need more defense cuts + some of Rand Paul’s ideas + some of Paul Ryan’s ideas + some of Obama’s ideas.”

I’ve been thinking exactly the same thing. That’s what it’s going to take. (Wonkish) And as long as we kill the department of education it’s worth it to me. But afterward, we should hang the boomers by the millions for their ignorance and stupidity. (I’m a Jones Generation, along with Gates and Jobs, not a Boomer.)

http://www.capitalismv3.com/?p=2520The Scope Of Cuts Needed: The answer is “all of the above”.

From a Comment on Cafe Hayek: “Marxists must define poverty as a relative phenomenon. Otherwise, they couldn’t in good conscience be marxists.” Or perhaps, better said, they wouldn’t have a semi-rational reason to justify class envy, and therefore attempt to obtain unearned social status through political power rather than through market service of others.

[callout]Social status is important. It’s a cognitive necessity. It tells us who to imitate.[/callout]

The left’s desire is not to end poverty, it is instead, the desire to alter one’s natural, biologically and environmentally determined social status either by gaining access to unearned income or by gaining status through access to political power. And social status is not irrelevant. Social status is important. It’s a cognitive necessity. It tells us who to imitate.

To be happy, people desire access to new stimuli – ‘relishes’ as Aristotle put it, or ‘new experiences’ as we put it today. People prefer working on optimistic ends. They prefer to work successfully to accumulate new stimuli, rather than at planning to prevent negative stimuli, or at planning to conserve resources so that they can preserve the current stimuli. And they enjoy operating at the maximun that their abilities allow while still succeeding in their plans. The human mind craves something to do. It just wants to do something it can succeed at doing. Throughout history, any number of people have tried to take ownership of the term ‘happiness’ and to define it according to their preferences. Usually, someone picks a point on the temporal spectrum and claims that ‘true happiness’ comes from either pleasure, freedom from stress, or a life that is retrospectively well lived. Temporal priority is an important attribute of happiness, because Time Bias (Time Preference) or the tendency for people to pursue outcomes of shorter or longer distance in the future is correlative with social status. These terms below use the temporal spectrum to accommodate the most common priorities.

• ‘Pleasure’
• ‘Prospective Happiness’
• ‘Retrospective Happiness’

Happiness is both a reward for our anticipation of the opportunity for stimulation, and our reward for the exercise of good judgement in obtaining that stimuli. The priority that each of us give to these different properties of Prospective and Retrospective Happiness are different, and dependent upon a combination of our abilities and skill at forecasting, planning, succeeding, obtaining group membership, and avoiding stress. We would all be happier amidst the plenty in the Garden of Eden wherein our basic wants and needs were fully and freely satisfied, and there was little else to do but enjoy one another’s company. At least, we would, until our biological Alphas decided that hoarding the best resources and controlling access to mates was more entertaining than communalism. But in our real world, we are somewhat challenged in achieving happiness because of the unresolveable conundrum of living not in the garden of eden – which is a place of plenty – but in a universe of scarcity. And having to transform the scarce resources of the real world into increasingly complex products and services through a division of labor and knowledge in which many hands may indeed make light work, but which, because of the many hands, requires cooperation among people of different ages and abilities and interests to make that work light. To coordinate people within such a complex system, we must rely upon the information provided by an uncaring and anonymous pricing system rather than our natural empathy, observable interactions, personal commitments and habituated relationships that constitute the much more limited information system inherited from our tribal biology. And it is the conflict between our a) tribal instincts and sentiments, the need for belonging to a group, the status signals that come from that membership, and b) the anonymity and confusion that come from our dependence upon the pricing system, that make our prosperity and freedom from the vicissitudes of nature possible. This conflict appears to be an unresolvable conflict that satisfies our pleasures, but limits our happiness. Never in history have so many people had it so well, but claimed so little happiness – except perhaps since the first invasion of north america by modern man. But it need not be an unresolvable conflict if we separate thinking and acting locally as if we are in a tribe governed by our instincts, from thinking and acting socially and politically as if we are in a market, governed by prices. Unless we understand that difference, happiness will be elusive. You cannot be happy if want the impossible. That runs contrary to our biological want to have our plans succeed rather than fail.

http://www.capitalismv3.com/?p=2491Unresolvable Conflict: Prospective and Retrospective Happiness in the anonymity of the market society.

http://www.bloomberg.com/news/2011-04-08/europe-s-2-trillion-of-distressed-debt-to-outstrip-u-s-market-svp-says.htmlDo you remember the first two months of the crisis, when Europe was heaping daily abuse on americans because of european superiority in banking, lending, policy and judgement? They’re far worse.

http://www.thelocal.de/society/20110407-34257.html?utm_source=email&utm_medium=email&utm_content=185First plausible solution to the popular Victorian mystery. A german merchant seaman was in port in germany, london, and new york for each murder, and was captured and imprisoned in new york, after which the murders ceased.

Felix Salmon writes:

… it’s maybe no coincidence that the Russian clients of Goldman Sachs who are falling over each other to bid ever-higher prices for Facebook shares are much the same people as the Russians paying $100 million for trophy Picassos, or Los Altos mansions. The theory here is that Goldman Sachs, SecondMarket and the like have identified a group of buyers who are willing and able to pay through the nose for assets which are rare and special and which few other people can have. So long as companies like Facebook and Zynga meet those criteria, the winners in any auction for their shares are likely to be cursed — or, to put it another way, the final auction price is likely to significantly overvalue the company. Looked at in this way, the market in private equity is less an opportunity for plutocrats to get excess returns, and more an opportunity for intermediaries to extract large profits by selling them overpriced equity in overhyped tech stocks.

That’s true. And you’re right that it’s not an advantage for plutocrats to have access to shares that common investors dont. But, that rather pejorative language is not the way to look at it. Instead, business men are finding a product that has extra-monetary value to investors and charging them for it. Or, more simply, Social status is a ‘good’ that people will pay for. If I have a Ferrari, two Porsche’s an a Jaguar, and my wife has a gucci purse and a hanoverian horse, the fact is that cars, purses, and horses are not scarce. So social status is what we pay for. Why is it that shares of stock in companies should be regulated such that people cannot buy status in companies the way that they buy status in products? And in a market economy, paying for social status is about the only way of achieving social status. There is nothing fraudulent about selling social status. There are plenty of ways to lose money. There are plenty of ways to spend money getting something that you want.

Marxist doctrine states that steps are required to create the utopian communist society. The eventual result of marxism’s destruction of the system of property was for the purpose of creating an anarchic society where everyone had what they wanted, and wanted nothing more – the fixed-pie fantasy. The state was only necessary as a first step in order to make it possible to get to that utopia. Socialism was simply the first step in reaching the marxian utopian dream of the non-propertarian, anarchic, left libertarian society. Socialism means ‘state ownership of the means of production’. Communism means that there is no property whatsoever or the need for it. Communism was the next evolutionary step after Socialism. People tend to treat communism and socialism as synonyms but they are not. They are a sequential strategy for achieving the marxist utopian society.

[callout]Once you understand how ridiculously impossible communism is, you can also understand how ridiculously impossible anarcho capitalist libertarianism is.[/callout]

Once you understand how ridiculously impossible communism is, you can also understand how ridiculously impossible anarcho capitalist libertarianism is. Socialism is impossible because of the problem of knowledge (distributed and fragmentary), prices (provide the information system), and incentives (encourage people to produce). Communism is impossible because humans never cease to want new stimulation and because we are unequal, and our reproductive strategy insures rotation such that we shall never be equal. So effectively, communism is impossible because populations need property in order to produce prosperity. Anarcho capitalism is impossible because of the problem of creating and maintaining complex forms of property. Men will no more stop seeking better mates and more stimuli, than they will stop seeking to benefit by fraud theft and violence. We need political institutions to channel men’s actions into market activity rather than hedonism or predation. We need very few of those institutions. and the fewer the better. But we need them. If you think communism is impossible, then logically anarcho capitalism is impossible. They both depend on a belief in the nature of man that is counter to self-reflection, observation and history.

Newsweek did another poll that purports to measure our cultural ignorance.

How Dumb Are We? NEWSWEEK gave 1,000 Americans the U.S. Citizenship Test–38 percent failed. The country’s future is imperiled by our ignorance.

Which brings to mind a chain of reasoning: 1) To increase productivity and therefore decrease prices, we must all participate in a division of knowledge and labor. 2) As productivity in the division of labor increases, the total stock of human knowledge increases. 3) As the stock of human knowledge increases, each of our shares of that knowledge decreases. 4) As our individual shares of that knowledge decrease, our knowledge consists largely of those things that we can act upon given the resources at our disposal. In other words, people aren’t so much ignorant as they are knowledgeable about what actually matters. They may not have room for the irrelevant.

[callout]The general perception, and the presupposition of the boomer-era article’s sentiments, is that political knowledge is valuable.[/callout]

The general perception, and the presupposition of the boomer-era article’s sentiments, is that political knowledge is valuable. And it implies that we can possess the knowledge needed to understand the issues that our government must manage given it’s current constitution. And it further implies that political freedom is a ‘good’ – when, it’s evident from the record of history that personal freedom is absolutely a good, but political freedom is simply a necessary evil in order to prevent the government from forming a predatory bureaucracy, and treating the population as it’s property. So people only need the minimum knowledge of government needed to preserve their personal freedom. People aren’t ignorant. They’re too ignorant of political knowledge and economic principles to make political and policy decisions. And that’s not surprising because political decisions are of necessity made in ignorance. And decisions are made in ignorance either out of political necessity or political contrivance. They must be. Because we do not possess sufficient knowledge or DATA in government to make any other form of decision OTHER than decisions of political necessity and political contrivance. Politics has become ridiculous and irrational because at the scale of our empire, the data no longer exists with which to make rational arguments in real time. The political structure cannot operate without data. And so, like the chinese, we have devolved into sentimental moral arguments rather than practical, political and economic arguments — the furtive gestures and spittled pontification of silly Keynesian probabilists to the contrary. So it’s good that people are ignorant of it. There is no value in the study of falsehoods. Maybe Americans are wiser than we think after all.