Tuesday, August 31, 2010

Reinvestment plan sparks FOMC debate

As investors, we encourage what we anticipate, even government stupidity. As humans, we discourage stupidity. As quasi-government agents, they ought to be more intelligent about seeing how every action they take blossoms into a new problem. As members of the ruling class, they probably do, and new problems mean a bigger role for them - at least until the masses catch on. But with enough TV and terrorism out there, they can prolong such a day of reckoning. Hopefully not indefinitely.

I think our best bet is to get in tight with our state legislature and start working on nullification of most federal regulation, especially the tax code, legal tender, and the central bank charter. One of the states will get this right first, and that will be a watershed moment.

Saturday, August 21, 2010

Compare and Contrast Critiques

There are a few very useful tools that make certain people stop and think.  I don't want to call them "bad" people, but that's how I think of them.  Usually, they aren't really bad, it's just that they put more effort into avoiding the truth when they're wrong about it than into actually figuring out that they're wrong.  Yeah, that's a lot of people.  It is unfortunate that most of them have good hearts, and so I like to try to help them.  This essay is one of my attempts.  Let's call them Flamingos, since they tend to bury their heads in the sand.

There are some people that understand the truth, but they work to hide it.  Think Big Tobacco, or Timothy Geithner, or Ben Bernanke (sorry guys, but I've seen you sweat and I've heard you grasp authoritatively at straws.  They are both convincing acts.)  I won't bother coming up with a word to describe them, and these useful tools I referred to usually won't make them stop and think because they already know their best bet is to alter the subject enough to distract you from the truth that these tools uncover.

The tool I'd like to describe here is a comparison of critiques.  The general strategy allows you to distinguish between a critique that is propaganda and one that is honest without considering the actual facts presented in the critique.  It is the style of the critique that matters. 

When critique is propaganda, it tends to subtly (the smart authors are subtle, at least) describe its subject in a poor light, and works on generalities.  It tends to address the weakest pieces, or those most difficult to understand, or sometimes the least well-known.  It generally ignores any elements that are agreeable to the author, or agrees with them in a sentence using the word "but".  It tends to use opinions that are popular and often based on differences in belief systems (for example, some believe that legislation is the best way to increase good behavior, while others believe freedom works better) to conclude that the elements that are addressed are incorrect or bad.  Having brought together several elements and conclusions, the critique finished up by providing a feeling that the thing being critiqued is just no good.

In comparison, an honest critique will generally identify both the agreeable and the contentious elements (in the author's opinion).  When it does rely on popular opinion to judge an element, it often explains what the popular opinion is and how a person who does not share the author's belief would not have a problem with that element.  It openly identifies problems that stem from beliefs.  Of course, some honest critiques don't do this because their author isn't bright enough to recognize that there is a belief system difference.  An honest critique attacks the elements of its subject, rather than the subject itself.

Here's the nutshell version:  An honest critique will not leave you with the feeling that there's no use looking into the subject discussed.  Only a fool (or a propagandist) would spend time critiquing something they believed had no value.  When you read something that leaves you with a feeling that its subject isn't worth studying further, be sure to check for the subtle digs and denigrations, and the failure to honor the good intentions of those who support that subject.  For example, try an Internet search on Krugman and Austrian.

Saturday, August 14, 2010

Helpers Who Fear Arrest

"Frustrated by red tape, some officials have been warned they'll be arrested if they take matters into their own hands."
  - Patrik Jonsson, July 1, 2010, in The Christian Science Monitor, regarding Deepwater Horizon cleanup.
In my opinion, the best strategy to handle this is PR, but it must contain names.  The same article has Coast Guard Adm. Thad Allen (incident commander) saying "There is nothing standing in the governor's way from utilizing more National Guard troops," and Louisiana Governor Bobby Jindal relaying an instruction from the White House saying "Coast Guard and BP had to authorize individual tasks."  Is Thad Allen unaware of instructions issued by President Barack Obama?  We have the names of these two, and since Allen was directly quoted, but Obama was not even named, and there wasn't any explicit threat, this isn't a very good example of warning officials of arrest if they act responsibly.  Who warned officials of arrest if they take matters into their own hands?  Were any officials brave enough to try anyway?  Were any of them smart enough to do it in a way that helped?  Were they arrested?  If so, what are the names of the agents responsible for arresting them?

Every species swarms, and when they do so, it is generally in the best interest of the species.  The behavior is an evolved response which, evolution has proven, is beneficial.  Humans do it too, though to a lesser degree because they fear each other in addition to Mother Nature.  When that fear of each other is private, it protects the cautious from the crazies who go out and kill each other.  But when that fear is institutionalized with laws and the threat of arrest, it ceases to protect, and merely hinders.

Contrary to the foundation of most of the legislation that attempts to control us, humans are not idiots who blunder around all the time and mess everything up.  Such behavior requires centralized control and limited liability: governments and corporations.  Individuals acting in their own self-interest nearly always trump centralized control when it comes to effective solutions.  For one thing, they provide myriad competing solutions, the best of which are recognized and copied, rather than monolithic solutions that fail catastrophically when they fail.  For another, individuals have a sense of reputation to be maintained.  They have names to protect.  Adam Smith called these effects the "Invisible Hand" because they seem to bring about balance without any centralized control.

So I appeal to Mr. Jonsson and other journalists, officials, and anyone who would like to help in any situation where problems are big: Please name those who show more respect and honor for laws than they do for life.  I must admit a bias against centralized control, and if that rubs you the wrong way, please go be a mindless slave on some other planet.  This one needs real human beings.