Curt Doolittle

Category: Economics, Finance, and Political Economy

  • DEEPER RETHINKING OF MACRO POLICY. MUCH DEEPER. I’d like to posit a broader gene

    http://www.bradford-delong.com/2015/04/things-i-probably-will-have-time-to-say-rethinking-macro-policy-iii-conference-washington-dc-april-15-16.htmlA DEEPER RETHINKING OF MACRO POLICY. MUCH DEEPER.

    I’d like to posit a broader generalization that not only keeps up with current events but looks past them.

    Political behavior since the beginning of this correction – particularly the expression of moral intuition as austerity – is evidence that all human organizations, at all scales, act to advance their interests, and those interests remain heterogeneous and irreconcilable. The optimum economic performance in any political order is determined by the homogeneity of their interests – not the maximum velocity under the assumption of common interests. As such, we must construct any science of economics – the study of cooperation that is predictive, within those constraints – or it is ideology: meaning persuasive, not science: meaning descriptive.

    I believe we could argue that – as we did in 1913 – we have reached the maximum tolerable homogeneity in both the country, and the world. And with that maximum tolerable homogeneity, the limit of the generalization of the principles of the 1930’s. And the limit of the origins of those principles in the generalization of the Anglo, German and Jewish enlightenment visions of man, in which each group attempted to advance its group strategy as a universal good. All theories fail at some scale, but we never know in advance, that limit. All those theories persist today unmodified and irreconcilable. And to their visions of the future we have now added the economic, political, demographic and military force of other civilizations once again. We call this effect ‘globalization’. Which is in itself the implication of homogenous universal interest among those who cooperate.

    Yet, man cooperates because it is a more beneficial means of competition, not a de-facto good. But in the end, within and without, intra and inter, we compete. Cooperation is only as sustainable as it is beneficial. Its benefit has limits, and those limits are political.

    Without the abandonment of the myth of a monopoly of interests, and the introduction of polycentric morality, and political reality, into economics, we will remain unable to forecast, or even describe events.

    But that said, Braid is right: without reforming the financial system we will not stop the unnecessary privatization of the commons endemic to the distribution of liquidity through an unnecessary distributor.

    So I think the necessary reformation of our thought is the one in which we bypass the financial system, instead of one in which we attempt to improve it. I think the discourse then becomes one of fiscal policy and not one of monetary policy. I think we then avoid the monopoly of interests assumed in monetary policy, and conduct exchanges between the interests of heterogeneous classes, rather than manipulate those classes in an attempt to conquer the middle and upper by the lower. And that world is likely the only one that can marginally improve on the universalist model of the 20th century, which is an institutional expression of the anglo enlightenment, and our friends Smith and Burke.

    Source date (UTC): 2015-04-21 23:06:00 UTC

  • THIEL GETS IT RIGHT “I would bet on globalization slowly being in abeyance,” tec

    THIEL GETS IT RIGHT

    “I would bet on globalization slowly being in abeyance,” tech entrepreneur Peter Thiel said in a video interview with George Mason University economist Tyler Cowen. “I think with the benefit of hindsight, we will realize that 2007 was not just the peak year of the finance boom, but also the peak year of globalization, like maybe 1913.”

    His reference to 1913 was surely meant to be — and should be — chilling. That was the last full year before the outbreak of World War I, a conflict in which about 16 million people died. In its wake, Communists took over Russia and Hitler took over Germany. The war made the world safe not for democracy, as Woodrow Wilson had hoped, but for totalitarianism.

    The globalization resulting largely from British policies — free trade, the gold standard — was not re-established after World War I. Instead, trade protectionism and unstable currencies led to the Great Depression.

    World trade fell about 90 percent between 1929-33, as shown in the famous spiral graph in MIT economist Charles P. Kindleberger’s classic The World in Depression 1929-1939. The result was not, as current critics of globalization might suggest, good for the workingman. It was economic disaster, political instability and World War II, in which about 60 million people died.

    Source date (UTC): 2015-04-21 22:08:00 UTC

  • WRITE FOR AVOCATION, NOT VOCATION —“The research, commissioned by The Authors’

    WRITE FOR AVOCATION, NOT VOCATION

    —“The research, commissioned by The Authors’ Licensing and Collecting Society, found the top 5 per cent of writers earned close to half of all the income received by professional authors in 2013. The median income for professional writers is just £10,432, less than the minimum wage. Technical and academic writers are among the worst paid.”—

    Source date (UTC): 2015-04-21 17:12:00 UTC

  • DENIALISM HAS NO FUTURE IN ECONOMICS (useful arguments)(libertarians should read

    http://www.ritholtz.com/blog/2015/04/u-s-taxes-low-compared-with-other-developed-economiesMORAL DENIALISM HAS NO FUTURE IN ECONOMICS

    (useful arguments)(libertarians should read) (conservatives should read)(reactionaries should read)

    BARRY:

    We have high tax efficiency (people pay), high productivity (we work more), higher employment (more of us work, and work longer), vastly more entrepreneurship, risk taking, and innovation, and much, much higher consumption. (We also have counter-productive higher corporate taxation.)

    The left’s argument is that under a democratic government, we can tax – without equilibrating effect – a divided, heterogeneous American domestic empire, via the same means as we do small, homogenous European extended-tribal nation-states that are not responsible for policing the world system of finance and trade, nor of their seas, borders, or neighbors. It is one thing to redistribute to kin, another to redistribute to free riders, and another to redistribute to one’s kin’s competitors

    So what you mean, if stated truthfully (meaning: fully informed), is that we should exchange efficiency, productivity, employment and consumption for the production of additional redistributive commons of unequal desirability, against the wishes of the producers. Yet this would only increase the divisiveness of the heterogeneous population.

    It is true that through immigration, the left, with the support of the academy, has perpetuated a conquest of the European people’s in exchange for income and status signals. And that via this conquest, that it will shortly be possible to engage in further appropriation, and greater dependence upon redistribution, providing fewer incentives to pay, to produce, to employ and to consume.

    But it is not yet certain whether the heterogeneous polity will come to dissolution over it or not. And as we have seen from the success of the austerity movement, people will pay high personal costs to punish free riders. Yet, ignoring human instinctual morality that is necessary for the evolution of cooperation, mainstream economists – and particularly left-leaning mainstream economists – assume that democratic electorates will tolerate inter-cultural redistribution from high productivity to low productivity peoples without invoking moral demand for altruistic punishment.

    Austerity is a normal, irrepressible result of the instinctual and evolutionarily necessary requirement to suppress free-riding.

    It is anti-empirical (unscientific) to suggest (and possibly genocidal to suggest) that we should not, or under democracy that man will not, engage in the punishment of free riders.

    Just how it is. That’s the science. Or has economics evolved from anti-operational, into a full-fledged anti-empirical, anti-rational religion?

    Your opponents succeed politically because of moral intuition, even if they lack a rhetorical language to articulate those intuitions. Some of us are working on giving them that language. We just hope it is not too late to end yet another pseudoscience as we are systematically ending the rest of the progressives pseudosciences.

    Moral denialism has no future.

    Cheers 🙂

    Curt Doolittle

    The Propertarian Institute

    Kiev, Ukraine

    Source date (UTC): 2015-04-16 04:15:00 UTC

  • make you a deal. Eliminate collective bargaining laws and I am in

    http://www.shakesville.com/2015/04/we-need-jobs-to-support-people-not.htmlI’ll make you a deal. Eliminate collective bargaining laws and I am in.

    Source date (UTC): 2015-04-14 15:25:00 UTC

  • THE NECESSITY OF PRIVILEGE (DISCOUNTS ON OPPORTUNITY COSTS) AS INFORMATION (wort

    THE NECESSITY OF PRIVILEGE (DISCOUNTS ON OPPORTUNITY COSTS) AS INFORMATION

    (worth repeating) (from elsewhere) (hayek)

    While, as I’ve written before, I agree with the general argument that women sense some things and men others (and progressives, libertarians and conservatives different things as well) I have a more complete theory of the inter-temporal division of perception, cognition, knowledge and labor than Hayek (and one that eliminates equality, and monopoly decision making). And so there is a minor error in the logic of the first paragraph, and that is that it is irrelevant that we understand others – it is only relevant that we conduct exchanges with them.

    Because their reaction to their senses are not accurate or ‘true’ in any meaningful sense other than as a reflection of the individual’s reproductive strategy – any more than any of the rest of our senses are all that accurate – they themselves are fragments.

    This single insight is the principle cause of why democracy does not work, and the market does. The market allows us to cooperate on multitudinous means even if on disparate ends, with our successes and failures informing both us and others.

    Whereas a monopoly government prevents us from learning anything of value, and the institutionalization of foolish policy by unexpriable law, and the accretion of bureaucratic self interests, prevents adaptation outside of catastrophic chains of failure.

    In fact, monopoly government (monopoly production of commons by majority rule) promotes failure because it is precisely failed policy that permits the greatest rent seeking for all involved.

    It is not that we should prohibit government (as Hayek warns) but that we should prohibit monopoly government. It is not that we should prevent taxation, it is that we should allocate our dividends from the commons we live in to the production of commons we prefer, and not to commons we do not.

    As, furthermore, so called ‘privilege’ is precious information. It is information that informs you whose behavior you should imitate in order to gain discounts on opportunity costs. Privilege is as necessary to the human information system as is status, property rights, rule of law, money and interest.

    Privilege, if it exists, is an inter-temporal store of value that informs others as to the behaviors that they should imitate in order to obtain a discount on opportunities. Likewise, hygiene, dress, manners and language are advertisements for one’s worthiness to engage in increasingly complex inter-temporal risks and returns.

    Those who accumulate such behaviors obtain opportunity at the lowest discounts. Those that fail to adapt, and ask others to ’empathize’ with them, are seeking discounts without bearing the cost of adaptation.

    In other words, they’re free riders participating in an act of fraud.

    Source date (UTC): 2015-04-10 16:10:00 UTC

  • 2001 to 2007, 3M-4M Units per year. (Steady) 2009 increases to 5.6M units. 2010

    2001 to 2007, 3M-4M Units per year. (Steady)

    2009 increases to 5.6M units.

    2010 maintains 5.6M units.

    2012 spikes to 8.6 million units.

    2013 a record 10.8 million units.

    In other words, the consumption of guns has tripled under Obama.

    (ATF Data)

    Source date (UTC): 2015-04-09 13:38:00 UTC

  • IMMORAL DECEITS MUST BE CAST ASIDE. WE MUST PROVIDE PEOPLE WITH INCENTIVES TO CO

    IMMORAL DECEITS MUST BE CAST ASIDE. WE MUST PROVIDE PEOPLE WITH INCENTIVES TO CONSTRUCT THE VOLUNTARY ORGANIZATION OF PRODUCTION

    (important sketch)(capitalism)(efficient uses of capital)

    There are many more empirically efficient allocations of capital at any given moment. But there are not necessarily more efficient allocations of incentives. Since the voluntary organization of production requires an efficient allocation of incentives, then the maximum efficiency of any allocation of capital, is one in which we produce the widest distribution of incentives. The reason being that the construction of the voluntary organization of production that we call capitalism is not (as libertarians fantasize) natural behavior or rational choice, whatsoever. People must be provided with incentives to voluntarily organize production.

    This means that the entire cosmopolitan fantasy promoted by Rothbard on one side, and Soros on the other, and other advocates of immorality like Walter Block, is a justification. The most efficient use of capital is that in which the population is incentivized to construct and preserve the foundation of the economy: the voluntary organization of production.

    And so we seek a Pareto optimum between incentives to produce the voluntary order, and the efficiency of capital allocation in production within that voluntary order. And any increase in capital efficiency that produces a decrease in incentives is actually destructive.

    In Propertarianism I have tried to demonstrate that if people cannot join the market for production, that we must compensate them for the work of constructing the voluntary organization of production that makes the high productivity, high trust, high velocity and low friction under the voluntary organization of production possible.

    From this perspective, most rothbardian thought, like most cosmopolitan thought, is merely an elaborate obscurant art of fraud for the purpose of declaring without cost, that which is hugely expensive: high trust, high velocity, and the voluntary organization of production.

    If you understand this you will abandon libertinism (cosmopolitan libertarianism) and revert to aristocratic libertarianism (classical liberalism). Because we had it right. We did. But the American Neo-Puritans put a dent in it, women put a hole in it, and Jews and Catholics made a fissure out of it.

    Thankfully it isn’t impossible to fix: truth telling is enough.

    Source date (UTC): 2015-04-08 02:38:00 UTC

  • OF THE MOST IMPORTANT NEW DISCUSSIONS IN ECONOMICS. I gave a talk to Ascentium s

    http://www.overcomingbias.com/2015/04/firms-are-56-dark-matter.htmlONE OF THE MOST IMPORTANT NEW DISCUSSIONS IN ECONOMICS.

    I gave a talk to Ascentium staff about this trend and how it would effect marketing and advertising in 2009. But it was too far over the horizon for the audience.

    What does this mean for policy. What does it mean for accounting and reporting. What does it mean for brands?

    I was more interested in what it meant for executives and finance and reporting than brands.

    And I think brand people work in much shorter time horizons. So there isn’t advantage to being an early mover as much as moving once the old habits stop working.

    But for the c-level, we work on long horizons. And we must be aware that the government trails us.

    So developing internal management, information and accounting systems that adhere to policy is a death trap.

    Instead we must separate external financial accounting from management accounting. And we should account for and measure our “dark matter”.

    That returns us to measuring brand value.

    As these numbers indicate, that is your MOST IMPORTANT ASSET.

    Culture is you next most important asset.

    Capital will remain free through 2025 at the earliest and under deflationary pressure.

    So IP, culture that attracts talent, and brand loyalty are your only material assets.

    Let the government tax you as if we still lived in the age of telegraph and sail.

    But measure culture, build talent, and measure customer loyalty. And brand value.

    Business norms like cultural norms and policy adapt more slowly than circumstances change.

    Overcoming Bias : Firms Now 5/6 Dark Matter!

    Source date (UTC): 2015-04-07 06:21:00 UTC

  • Sophisticated People In The World Are Not Necessarily Stupid or Selfish

    [T]he USA’s budget consists roughly of 1/3 defense, 1/3 mandatory payments (Social Security and Medicaid) and 1/3 discretionary payments (everything else).

    We finance 1/3 (the military), and inflate it away. The world pays for our military through indirect taxation on the price of oil bought in dollars. This was the invention that the Nixon administration achieved with the Petro-Dollar and it was how we were able to run up the credit to defeat world communism under Reagan.

    So technically speaking, 1/2 is discretionary, 1/2 is for redistribution, and the remainder – the military – is effectively free.
    Possessing this knowledge radically alters your perception of the world.

    It is why Iran wants nuclear weapons – to control oil, and to create a bourse, and to capture that ability to tax currency for itself.

    Sophisticated people in the world are not stupid, nor necessarily selfish. They merely take advantage of stupid people.