Curt Doolittle

Category: Economics, Finance, and Political Economy

  • DEATH (From Peter M. Van Coppenolle) —“Bernanke suggests that the Great Depres

    http://bit.ly/1untQxqFIAT DEATH

    (From Peter M. Van Coppenolle)

    —“Bernanke suggests that the Great Depression ended with the advent of World War II….Ugh… Instead try this for 100% correlation:

    1) Long Depression (1870 +) Capital Destruction by Silver Demonetisation

    2) Great Depression (1929 +) Capital Destruction by Gold Confiscation

    3) Greatest Depression (right now) Capital Destruction by Fiat Death

    Me thinks Gold and Silver Capital is Constructive. No need for an economics degree to figure that out.”—

    Source date (UTC): 2014-05-10 02:55:00 UTC

  • THE END OF THE MYTH OF THE ECONOMIC VIRTUE OF DENSE CITIES Now this is something

    THE END OF THE MYTH OF THE ECONOMIC VIRTUE OF DENSE CITIES

    Now this is something that I wasn’t sure was going to play out. But it appears that the data is starting to work in favor of suburbia (the ring around a city) more so than the downtown itself. The places that are experiencing growth are those that are not benefitting so much from the immigration of numbers (poor) but the immigration of talent.

    So I suspect that the next progressive myth that science is going to undermine, is the virtue of well managed big cities, rather than a number of closely related suburbs.

    I’ve sort of been watching the data that’s been slung around for the past decade and I assumed that it was just a matter of cities making it easier for bureaucrats to seek rents. And that’s actually the ‘first cause’. But it didn’t really occur to me that the “seattle/bellevue/redmond” model was actually the one that worked best.

    Now, I’ve looked at various Georgist theories, and there is definitely something to e said there since density increases productivity (of smart people) so much. And I’ve also worked at my preferred solution: pay people to do the work of policing laws, commons and norms. And you know that they accomplish slightly different things. My solution would actually distribute the poor into the surrounding territory where their lower value in production is not hampering the productivity of more productive people by forcing them out. Unfortunately the less well off want the value of the city even if they’re a net drag on the generation of tax revenue because really all they serve to do is allow vote buying that allows political and bureaucratic rent seekers to capture more of the revenue for themselves. Also, normative pressure is higher in rural areas, so the more ‘troublesome’ populations are more subject to normative pressures to ‘behave’ than in urban environments. ALso we are stuck with the fact that raising children in a city in no way is as awesome as raising them in a suburban home. (Spoken as someone raised in a small rural farm town, but who has lived in cities or suburbia for most of his adult life.)

    Anyway, I want to keep working on this a little more before taking a better position on it.

    Net is, that the progressive fantasy is the walking dead at this point. The conservative fantasy is impossible. The Rothbardian fantasy is immoral and impossible. So, what is our solution to the problem of formal institutions that is both moral and possible, even if it’s not ‘efficient’.

    Source date (UTC): 2014-05-08 15:11:00 UTC

  • OF RUSSIA’S STRATEGIC ECONOMIC FACTOIDS: 1) “Russia supplies about a third of th

    http://www.thefiscaltimes.com/Articles/2014/04/10/How-Europe-Could-Finally-Call-Putin-s-Bluff#sthash.KHmNFCMK.dpufTWO OF RUSSIA’S STRATEGIC ECONOMIC FACTOIDS:

    1) “Russia supplies about a third of the European Union’s energy but that supply is responsible for 40 percent of the Russian government’s budget,”

    2) “50% of Russians live off income provided by the government”

    TWO DEMOGRAPHIC FACTORS

    “Even in Russian speaking areas, a minority want federal ties to Russia. The majority want a unified Ukraine”

    “Only old people who remember communism want ties with Russia. The young want ties with Europe. In ten years the 15% who want ties with Russia will disappear.”

    MY BIAS IN ALL THIS

    I didn’t know all of this because while I live in Kiev, and Keiv is a “Russified” area (meaning everyone speaks Russian), I both associate with and employ young people in their 20’s. All of whom have some sort of extended family ties to Russia.

    Ukrainian’s are very reserved, quiet and gentle people. I rail all the time about how I love them so much. And they sort of think of Russians as ‘rude, drunk people who start fights’ – but they’re cousins so to speak. So they’re like ill behaved family members. And when someone is behaving badly in public (or in my case, starting a fight in a club) you here “It’s Ok. (he is/they are) Russian.” (My favorite weapon is the ubiquitous ceramic coffee mug. Much better than brass knuckles, and less visible than bottles, which also break.)

    So I don’t have a lot of experience with people who look to Russia. Everyone I know looks to Europe for the future, and to Russia for family. And Until I’ve started to see reliable polls, I simply have been using voting data to tell me what people think. And it turns out to be “vote for people like me” just like everywhere else. But only a weird minority want to be something other than Ukrainian. An those that do, too many are part of the gangster-tribe out of Donetsk that knows if they lose their ‘protection’ from the (russian sponsored) government, then the gangster days are over. The older people who were better taken care of under communism I agree with and sympathize with. But the only moral position that I know how to take on this matter is self determination. and the numbers are pretty clearly, universally in favor of “I’m a Ukrainian”.

    Now my personal bias is obvious:

    (a) I have invested a good portion of my worth here and I don’t want to risk it because of external aggression.

    (b) I watched people I care about fight for freedom from one of the world’s most corrupt governments – a vast criminal enterprise that preys on people that I love.

    (c) I believe I must support self determination. In no small part because that is the problem MY PEOPLE face.

    (d) I don’t think to much of the Russian government, and I shouldn’t, but I freaking love russians – more so than I americans. I would rather spend my time with russians than with americans. And I love everything about them. I just am not sure this is a people who are terribly good at self government for very complex cultural reasons.

    Source date (UTC): 2014-05-07 23:25:00 UTC

  • AUSTRIAN ECONOMICS. Richard Ebeling has been posting old photos of Austrians we

    AUSTRIAN ECONOMICS.

    Richard Ebeling has been posting old photos of Austrians we admire. Today we see Roger Garrison. (I have a long standing man crush on Roger Garrison’s brain, and am profoundly envious of his lecturing skills.)

    The post reminds me that my criticism of Austrian Economics is limited to the positioning by Mises and then Rothbard of Praxeology as a deductive a priori ‘science’ rather than an empirical science like any other. And that they confuse introspective observation and conclusions from introspection as somehow different from external observation, instrumentation, and the reduction of complexity to analogies to perception, which are then subject to introspective analysis. In other words, this whole kantian nonsense is an erroneous edifice upon which to build the mythology that economics does not require instrumentalism for the purpose of observing emergent phenomenon. Just because we can never predict those phenomenon, does not mean we cannot learn the nature of man and cooperation from them. And as such we are open to terrible criticism for anti-empiricism which is merely an error in the fundamental understanding of the human cognitive process.

    As I’ve stated, praxeology is not so much ‘true’ as it is ethical. Because by reducing economic statements to operational langage, subject to individual perception as a series of actions, it becomes possible to test wether or not any action is moral – ie: a change in state of property is rationally voluntary. So the value in praxeology is not in its ability to assist us in deducing economic rules, but it is in ensuring that economic statements adhere to moral realism, by requiring moral operationalism. That this is the same requirement we hold scientists to in the presentation of their theories might be lost on people. But it is precisely for this moral constraint that we hold scientists accountable for their statements. The same is true for economic statements. They are as immoral as unscientific statements in the physical sciences, whenever those statements are not reducible to a sequence of operations, each of which we can sympathize with and test for the rationality of the incentives, as to whether the change in state of property would be rationally voluntary or not. That we have been on a century long dead end because of Jewish Cosmopolitan logic compounded by German Continental logic (if you want to take the great leap of calling either of them logical) is unfortunate but a common mistake in philosophy readily solved yet again by science – this time cognitive science.

    However, other than this argumentative fallacy, the basic insight that (a) political intervention is immoral and unethical (b) that it exacerbates booms and busts (c) that it may in the long term distort an economy, a state, a culture, and even a civilization to the point of collapse is something I see no way of contradicting. And the only reason it is a problem is because we are victims of well meaning fools, rather than a set of small states all experimenting so that we ‘fail small’ even if we wish to experiment with economic immorality.

    Source date (UTC): 2014-05-07 10:36:00 UTC

  • “How can you have evolution if those who do the right thing have to finance thos

    “How can you have evolution if those who do the right thing have to finance those who did the wrong thing?” — Nassim Taleb

    You cant. But you also cant morally or practically hang those who did the wrong thing out to dry. And you have limit the damage that they can do.

    Source date (UTC): 2014-05-07 04:31:00 UTC

  • THE VALUE OF DIFFERENT COLLEGE DEGREES THE BEST 1% DEGREES (most likely to assis

    THE VALUE OF DIFFERENT COLLEGE DEGREES

    THE BEST 1% DEGREES

    (most likely to assist in becoming wealthy)

    1. Engineering / Computer Science

    2. Economics / Commerce / MBA / (Bachelor’s) Business Administration (BBA)

    3. Law / Politics

    4. Finance / Accounting

    THE BEST-RIGHT OUT OF COLLEGE DEGREES

    (you can’t go wrong if you want to always have earning potential)

    1. Engineering: $80-90,000 (of any kind at all, and there are LOTS of kinds)

    2. Computer Science/ Mathematics: $100,000 (engineering where you don’t get your hands dirty)

    3. Pharmacy Pharmaceutical Sciences and Administration: $105,000

    THE BEST GUARANTEED INCOMES (INSULATED OVER THE LONG TERM)

    1. Universal Demand: Doctor / Medical Specialist / Nurse

    2. Protected Class: Teachers and Professors and other Bureaucrats.

    USELESS DEGREES

    1. Liberal Arts. (You know who you are.)

    THE WORST DEGREES – DEGREES THE HARM YOUR LIFE’S TRAJECTORY

    (you will be poor unless you are a statistical anomaly. These degrees mean you will earn 30K or less per year. When the median income is 48K. This means you are barely better off than working minimum wage.)

    (Institutionalized Motherhood – Stay home and have kids instead.)

    Human Services and Community Organization

    Social Work

    Counseling Psychology

    Early Childhood Education

    (institutionalized childhood – save your money and don’t go to college – just volunteer or go to training schools)

    Drama and Theater Arts

    Studio Arts

    Visual and Performing Arts

    (Institutionalized introspection – you don’t need education.)

    Theology and Religious Vocations

    (fields flooded with applications and which do not require skills)

    Communication Disorders Sciences and Service

    Health and Medical Preparatory Programs

    CLOSING COMMENT

    IMHO, you are better off taking the lightest possible load, at one of the least expensive and least difficult colleges, in one of the top four fields than you are taking any load in any other degree. You MUST learn to use abstractions at some point. Your intuitions and perceptions are limited to what any other animal can make use of. Only through using abstractions – the mental equivalent of tools – will other humans pay you for your time. Everything else is a useless commodity by comparison.

    (I studied fine art. But god gave me gifts. I could tolerate self-enlightenment.)

    Source date (UTC): 2014-05-07 00:59:00 UTC

  • Juan Sebastian Ortiz —“Yet thanks to the division of labor and capital accumul

    Juan Sebastian Ortiz

    —“Yet thanks to the division of labor and capital accumulation even those who leech on producers, the welfare, food stamp, state pension and state income dependent can live an extremely wealthy life in the most Smithian of senses despite not producing any value. “—

    This brings up an interesting point. The assumption in libertarian thought, is that adherence to moral codes (NAP) gain one access to the market – access to opportunity created by participating in the market. This assumes, as was true in ancient and medieval (pre-industrial) eras, that we all had labor to contribute. Further, that we gained right to hold property by fighting for the property rights of all members of the polity. These were entry costs, if not also entry-cost-rituals.

    Adherence to norms is costly. Respect for rituals is costly. Observance of private property rights is costly. Production is costly in effort. These are very high costs that the individual must bear whether or not he obtains rewards from the market, by paying those costs he makes possible the reduction of transaction costs, that makes the voluntary organization of production (capitalism) possible.

    Thought experiment: What happens if only 10% of the population is capable of engaging in production, but their production was sufficient to both keep say 80% of that production, and leave 20% of it for the remaining 80% of the population? The 80% have no means of engaging in production. And adherence to norms, including the norm of property rights, is of no value to them. Yet we could either exterminate them, or pay them to police the social order and make possible the low transaction costs, so that for the minority 10%, the voluntary organization of production remains possible.

    So, if ordinary people, engaged in production or not, respect AND enforce property rights necessary for the voluntary organization of production, they are in fact doing labor. If we do not pay them for their efforts, I think that this is free riding. And they are right not to respect property. Or other norms for that matter. And they have no money to function as consumers unless we do so anyway.

    So, rather than treat moral rules and private property as natural laws – spurious as that magical term is – I prefer to hold myself to the constant rule of voluntary exchange. If we want people to adhere to and enforce rules so that we can engage in the voluntary organization of production, then we can pay them to. I don’t think they have a ‘right’ to compensation. But then, I don’t think we can hold them to adhering to property rights, which is a very high cost, if we don’t pay them for it.

    By applying property rights CONSISTENTLY I end up with this logic. And with that logic, and that consistency, all the fallacies of moral argument disappear. Every human action at all times in favor of cooperation is an exchange.

    How does one price payment for adherence to norms? I’m still working on that but it actually looks pretty simple.

    Maybe too many jumps there. Think it should be easy for you. Happy to clarify otherwise.

    Curt

    Source date (UTC): 2014-05-05 02:10:00 UTC

  • AUSTRIAN ECONOMICS: THE PROBLEM IS NOT ONE OF MATHEMATICS, BUT OF MORALITY 1) If

    AUSTRIAN ECONOMICS: THE PROBLEM IS NOT ONE OF MATHEMATICS, BUT OF MORALITY

    1) If you look at mainstream economics as the study of human behavior demonstrated by the record of human actions, then I think it’s an excellent means of conducting research in social science. And, by and large, that is what the economic community engages in, and how most of them describe their work. Because the canons of science suggest that such a claim is all that they can make.

    2) If you look at mainstream economics as the source of government policy which can be used to maximize all available opportunity for consumption, then some economists might argue that is true although a lot might also argue that their work is used for that purpose but should not be, since their science is too young to be used for that purpose.

    3) if you look at mainstream economics as a means by which to justify ‘dishonest socialism’ under the Keynesian model of forcible redistribution without control of the means of production, and a tool by which to undermine western exceptionalism, then it’s really not hard to make that argument.

    4) If you look at economics as the study of moral human cooperation, then austrian economics (or at least, praxeological analysis) exposes the immorality of political intervention in the economy and the consequences of that intervention over the long term. Unfortunately the progressive argument – which can only be settled empirically if and when we demonstrate that they are wrong by catastrophic failure – is that the short term good accomplished (the acceleration of the reproductive rates of the lower classes) compensates for any harm in the long term, and in the long term technology (and our supposed infinite wisdom) will solve that problem in the long run for us.

    CLOSING

    The problem is that under majority rule and monopoly government, we cannot allow the dishonest socialists, and moral and honest austrians to conduct their experiments in parallel. Were we able to divide our polity either internally (by class) or externally (by separate states) we could run this empirical test. I would assume that under that test the keynesian group would reproduce and generate consumption through reproduction that could not be matched by the innovation of the austrian group – since generating demand through innovation is more expensive a research program than generating demand through malthusian reproduction.

    Cheers.

    Source date (UTC): 2014-05-04 12:22:00 UTC

  • How Would You Respond In This Version Of The “ultimate Game,” A Famous Economic Experiment?

    Half.

    The problem with this particular ‘dilemma’ is that the amount is enough to split.

    RESPONSE
    The question is unclear that the beneficial idea would somehow be hidden. For those of us who work in this field, we know that it is impossible to promote than intentionally hide such an idea.

    Like most moral dilemma questions, the structure of the question is the problem, not human morality.  There are no moral dilemmas.

    https://www.quora.com/How-would-you-respond-in-this-version-of-the-Ultimate-Game-a-famous-economic-experiment

  • How Would You Respond In This Version Of The “ultimate Game,” A Famous Economic Experiment?

    Half.

    The problem with this particular ‘dilemma’ is that the amount is enough to split.

    RESPONSE
    The question is unclear that the beneficial idea would somehow be hidden. For those of us who work in this field, we know that it is impossible to promote than intentionally hide such an idea.

    Like most moral dilemma questions, the structure of the question is the problem, not human morality.  There are no moral dilemmas.

    https://www.quora.com/How-would-you-respond-in-this-version-of-the-Ultimate-Game-a-famous-economic-experiment