Federalism

Everyone says The Civil War decided once and for all that the individual States could do nothing against an overreaching Federal Government. Whatever the Feds want, I’m good with it, says the States.

Does anyone think that in today’s emotional environment the Federal government is going to wage domestic war? As a culture, we can’t hurt the feelings of a delusional male who thinks he is a female. States that openly allow pot sales against Federal law suffer no repercussions. No one is going to fight a war against the citizens of a State because they don’t follow the Federal line.

What they would do is stop some Fed swag. No highway money. Companies would withdraw business. Entertainers would refuse to concert there.

Perhaps the states would assert what pressure they could against the Feds. Stop local banks from remitting income tax collections until the Feds honor their legal obligations. Stop cooperating with Federal law enforcement. Execute no Federal warrants, particularly for Federal tax issues. Stop all cooperation with Federal police authorities. Require the Federal government to explicitly authorize with a statute anything it wants to impose on the States (the supremacy clause provides that Federal law superceeds State law but says nothing about Federal regulations or administrative dictates). EPA directives, not Federal law, IRS regulations, not Federal law, etc.

Here’s the key. I have learned that the best way forward is often to not ask permission and then litigate afterwards. The best way is often to do and let the other party litigate if it thinks you are prohibited. Many of these questions are unclear. If you ask, “May
I,” it might take years. If the States do several of these things, and the Feds have to exert force or litigate , the entire State / Federal balance of power would shift rapidly.

The Trade Deficit is a Non-Issue

Look, if you have the world’s reserve currency, other countries will need to accumulate your currency. Every country needs dollars in their bank account (could be treasury securities or anything else priced and convertible to dollars).

You can’t conduct trade in dollars when your checking account has zero dollars.

So, to get dollars they sell us stuff.  They need to sell us more stuff than they buy from us to get the dollars they need. Or they could buy the dollars on the foreign exchange market which just means other countries would have to sell us more stuff then they buy from us to get the dollars to sell on the foreign exchange markets.

Having the reserve currency means the really great thing that lots of people have to hold your currency, giving you real value to get it, and the difficult thing that domestic producers have to see more goods come in than go out. The goods have to come in so other countries have dollars to fill their checking account

Trump and Friedman on Free Trade

Takeaway line from what Milton was referring to: “Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war..”

Why are “sanctions” (preventing them from engaging in international trade) punishment for Iran and Russia, but a “good thing” for America?

If Russia were in our position, with the world’s reserve currency and control of the SWIFT bank transfer system, etc., and we pissed them off, say, by making Cuba the 51st state, they would punish us by preventing us from importing Ford trucks from Mexico, and we would suffer from that.. It is just as we are trying to punish Russia for Crimea by restricting their ability to import and export. Trump is talking about self inflicted punishment.

Determinism

Determinism is  au courant. It’s stylish. It’s fashionable. It’s up to date.

Why so much interest today in an obscure and ancient philosophical question?

Of course the negation of free will is vaguely part of Marxism. The collapse of capitalism is predetermined no matter what the participants want. It’s “You didn’t build that.” It’s “the root cause of crime”.

But the best part of the pro determinism frame for leftists is the attack on objective reality and knowledge of objective reality.

They say that what you believe about objective reality is simply an adaptive evolutionary fiction that increases your chances of survival. You know nothing about reality; you know only representations that are useful to you.

If you claim that even if  you are on the wrong side of history, you are nonetheless on the right side of reality. They can respond that there is no knowing reality. If you claim that men and women are different and you can support that by the number of hours worked or choice of occupations. They respond that your evidence is only belief in a manufactured “reality” that forwards your survival prospects.

Of course, since people do have beliefs they are quick to attribute beliefs to social influence. All beliefs are malleable, the ones you subscribe to now are a reflection of a certain societal power structure. If women had more power their choice of occupations would mirror men and their hours worked would be statistically identical to those of men.

The one belief that is not doubted is the belief in their theory of beliefs. There, they are correct. It is not a group of leftists seeking to influence fellow citizens and policy for their own self preservation. It is observation and reason proving that observation and reason cannot prove anything. Science proves that science is meaningless.

Wishful thinking finally is the final determinant of what we should do.

Businesses Do Not Exist to Provide Jobs

If you listen to any politician, the reason we have businesses is to provide good, stable, well paying jobs for the voters.

Absolute nonsense. A business exists for one reason and one reason alone. It exists to add value to the world. A business takes value out of the world. It uses real estate, spending on rent. It consumes people’s time, paying for labor, and creative and administrative services. It uses up energy. It uses or borrows capital (money). Then, if it is an ongoing concern, it adds value to the world. It places a product or service on sale for the voluntary purchase by anyone. Each purchase is a provisional addition to the value the business is adding, until the magic day that the incoming revenue from purchases exceeds the outgoing revenue and the business shows a profit. At that moment the business has added value to the world. Its customers who could have purchased everything it purchased at the same price it paid, or anything else with their money that they desired more, were willing to pay for what it produced more than its costs of producing it. A total net gain of value.

Businesses exist to make us all richer, to offer us more ways to satisfy our needs and wants, to promote innovation (because it requires effort and creativity to produce a profit), and to make the dollars we earn so valuable that countless people think day and night about how to  convince us to part with a fraction of one of them. And we are never required to do so unless we are sure what we get is more valuable than the dollars we give up.

Another way of looking at it is, businesses exist to meet people’s needs and wants. There is no revenue if you do not meet  people’s needs and wants.  Under capitalism, the buyer is king; the producer is a poor naive bowing and scraping. Just look at how powerful companies bow and scrape in America for customers.

Now you may want businesses to provide “good jobs”. What that translates into is you want someone else to identify a need or desire of other people, to devise a thing or service that meets it, to risk capital, effort, and time in setting up an enterprise, to manage expenses so that the good or service produced is something people will buy, to pay the taxes, take responsibility for regulations and laws, etc.

You are not entitled to any of that. If you want to earn money that allows you to buy things you need and want, you need to somehow give value to other people so they will give you their money. A job is simply a way to join someone else’s team in that project. As Peter Shiff says, nobody wants a job, everyone wants money. A job is a avenue to money, but the way to get money from others voluntarily is to do something for them. Do it yourself or join a team but the essence of the project is serve others so that others will serve you.

In the former Soviet Union, businesses existed to provide jobs. There, they used to say “we pretend to work, they pretend to pay us.” Because the businesses had no concern about the customer, after you were paid your money would have little power. In America, when you get your pay in your wallet, countless people court and flatter you.

In Latin American socialist countries, businesses exist to provide jobs. The Mexican state owned oil monopoly was used to give high paying jobs to friends of the elite, and lesser jobs to the public to quell unrest and poverty. The state run oil companies are poorly run (as you would expect) and the state is appropriating the value of the natural resource wealth and dissipating it. If Mexico simply sold the rights to drill oil, the state would get great revenue and private enterprise would manage it for a profit, a net value gain to the world.

 

Shaming

Scott Adams of Dilbert fame is on a roll over at Scott Adams Blog. His recent post Shame Shaming just plain annoyed me so much I have to respond here. I would respond in comments to his post but he gathers 1,000 comments per post so my comment would be lost. Also you have to register to comment there and that is a pain.

Basically, his thesis [in my interpretation]  is that people are moist robots and free will is an illusion. Nothing should be shamed because everything about people is determined.

He starts with fat-shaming. You should not shame fat people because a person’s appearance is outside of their control. I question that assumption. I have always contended that anyone could lose a pound of weight if some super NSA or CIA agent arrived at their home in the middle of the night and put a gun to their head and said, “There is nothing you can do to stop me from coming back for you in one year wherever you go, and when I do, if you do not weigh one pound less than you do now I will kill you.”

Many fat people who later shape up report that they were just not willing to do something about being fat before and later became motivated and could take the fat off. Scott claims that most civilized people reject fat-shaming, yet my daughter goes to school with many international students and she reports that the Japanese engage in merciless fat-shaming of other Japanese. She thinks it is terrible because the Japanese students are afraid of putting on pounds. She likes the American non-judgmental  attitude. Still, the shamed Japanese have less obesity with fewer health problems cause by it. And their women look much easier on the eye to men, in general.

Mr. Adams says nothing is worthy of shame because no one is actually choosing anything. Even if that is true, in their non-choices people are influenced by incentives. You do not need free will to draw your hand away from a flame. If you are a Japanese student in an American University and you eat french fries to your hearts desire and your friends start to avoid calling you to study together and having a supportive social network is important to you, you might be “determined” to avoid french fries and loose some pounds. You might not actually be choosing of your free will, you might be responding to conditions as a wet robot. In this case shaming is promoting a health and aesthetic good.

More importantly, there is an epistological problem in asserting, as Mr. Adams does, that all your thoughts are determined.  If all your thoughts are determined, it is not relevant if your thoughts comport with reality. If it seems to you that certain thoughts are more logical and align more with evidence, that is merely a determined phenomenon. If I believe that I have free will and judge ideas on their merits, that is just something I have to believe. If Mr. Adams believes he has no free will, it is a conclusion he has to draw. Moreover there is no reason to try to resolve the apparent conflict. The concept “truth” becomes something like “authenticity”. If I am reporting my beliefs accurately that is the best it is possible for me to do. Mr. Adams makes mountains of arguments why Donald Trump is a better persuader than average. Why bother, if what everyone believes they have to believe.  As Pangloss believes, it is the best of all possible worlds.

Perhaps I am missing a subtly of the position. Perhaps the actions of other people on your beliefs are part of what determines what you believe? Of course that is true, I can see it every day. Wait a minute, what I think I see is just a belief I am determined to have. Reality may be that the actions of other people have no effect on my beliefs, or have the opposite effect that I believe I see. Why do I believe in causality? My belief in causality may be determined regardless of the evidence for or against it. Contra-causality may be the rule of the world, but I just can’t see it. Everything that I believe, I should know is suspect.

Most importantly, why believe the belief in determinism, or in evolution, or that living organisms die, or that certain beliefs have a survival value? The whole theory states that theories have no validity, but, take this on faith, they help organisms survive, and, more faith, organisms need to survive, and, more faith, some beliefs are better at forwarding survival than others, und so weiter.

 

Government is also Unaccountable

Not only do governmental organizations favor the rich and connected over the middle class and the insignificant, but they are also unaccountable.

In Flint, MI apparently the entire city was poisoned by lead in the water supply. City officials were allegedly aware of the situation for a considerable period of time while their citizens were being damaged. Yet no one can identify a person who is responsible for keeping the water safe, or even revealing the problem to the public.

In today’s (3/20/16) Sunday New York Times there is an editorial titled “Poisoned Water in Newark Schools”. The school system acknowledged it was aware of high levels of lead in the schools for years. Is the Times calling for criminal charges against administrators and employees? Lets let the Times speak for itself:

This is shocking but, sadly, not surprising given the neglect of public schools, especially those in poor communities, by Congress and state governments.

This morning I was watching “Due Process,” a Rutgers law school produced TV program. The show reminded me of the $100 million dollar gift Mark Zukerberg made to the Newark Schools about five years ago. With the matching funds the Newark Public Schools received a nearly $200 million windfall. Use of the money was determined by the local politicians: the NJ Commissioner of Education, the Legislature and the teacher’s union. If only the Newark Schools haven’t been neglected these last five years.

Over the last four years capital expenditures for the schools averaged about $12 million, so the $200 million gift could certainly have made a difference to the school infastructure.

I’m sure Mr. Zukerberg preferred that his money go to innovative changes in the organization of the Newark schools, and a significant amount was spent on charter schools. However, politicians determined the final spending, and $89 million went to contract and labor costs and $21 million went to consultants (each amount more than the entire capital budget for a year).

Protectionism

Some debates keep going on forever. Does the minimum wage hurt, or help, poorly skilled workers? Do gun control laws reduce “gun violence,” or do permissive carry laws reduce violent crime? Is free trade a good or an evil?

Surprisingly, there is a lot of empirical evidence to help us evaluate these claims. As Thomas Sowell keeps pointing out, before minimum wage laws unemployment among black youth was lower than unemployment among white youth. After minimum wage laws, the opposite was true: black youth unemployment is higher than white youth unemployment. States that changed to a shall issue gun control scheme often had a reduction in violent crime.

A huge experiment in protectionism versus free trade has already taken place.

Many of the United States States have economies the size of European nation states. The US Constitution through the Commerce Clause gives exclusive jurisdiction over interstate commerce to our Federal Government. The Federal Government has never permitted States to impose tariffs against the goods of other States, but it could. Consider it a huge experiment in free trade.

At one time the US economy probably had half the World GDP, and there was a huge free trade zone comprising all of it.

What do the advocates of trade restrictions claim as benefits? They say well paying US manufacturing jobs are “exported” to low paying Mexico or China or Vietnam. Isn’t the same true of Michigan and South Carolina?

Just think, if New York put up a $ 100,000 tariff on cars imported from any other State, the automobile industry in New York would flourish. The Corzone-Trablant factory would have many high paying jobs. Only New York residents could not buy a Telsa, or a Porsche, or a BMW, or a Ford Focus.

Of course other States might, or would, impose a tariff on New York jewelry and paintings.

Could you imagine having to buy everything you buy from producers in your home State? Why limit your choice to products from producers in your home country?

The United States free trade zone has sometimes hurt individual States when they had to complete with more productive higher capital people from other States, but, all in all, it has been a blessing in capitalistic competition and productivity. Allowing the citizens of each state to produce and specialize in what they excel at has made all of us richer.

The largest experiment in free trade of all time has proved itself. No politician even advocates intrastate domestic trade barriers. Yet every claimed benefit of international trade protectionism is available on the State level. All the unheralded detriments are there also.

Opposite Day

I used to joke that most of what is taught in elite American universities about society is wrong, but I’ve come suspect that it is not wrong.

I’m beginning to entertain the possibility that  everything the media, academia, politicians, big businessmen, the judiciary, “the establishment” and all “right thinking people” believes about society is not only wrong, but directly opposite the truth.

Progressives have been ruling the US and determining the acceptable narrative since about 1960, which is fifty six years. Yet for fifty six years they have blamed all the tragedies of the human condition on the power and influence of non-progressives. So that is the first opposite.  They ran the place for most of living memory yet our problems are due to their defeated enemies.

Progressives condemn capitalism and attribute all sorts of ills, injustices and unsociable behavior to the quest for profits. In truth, under laissez-faire capitalism, profits are a sign of virtue and the strong benefit rather than exploit the weak. Think about the fate of some below average schlub  in Havana or North Korea as opposed to some below average schlub in Palo Alto or New York City.

Progressives condemn white Americans as racist. I don’t know a way of measuring racism, but they sidestepped the impossibility of measuring racism by defining racism as racial prejudice combined with power. By definition white people are in power so only they can be racist.  The institutions controlled by white people, the universities, the courts, the media, corporations, seem to me to be even handed.  Does anyone contend that movies and TV are bigoted? that university admissions disfavor blacks or university administrators dismiss black grievances? that a black man shot by a policeman gets less due process and justice than a white man? I cannot see into the hearts of my fellow man but I am beginning to suspect that whites may be less bigoted than other races. Opposite day.

Progressives decree that women are subjugated to male patriarchy in America. Yet a twenty one year old woman in New York City can walk out alone in a mini skirt, expect not to be sexually assaulted, pick and choose among the many men attracted by the sexual display, stay out until the early morning hours for her pleasure and walk home alone, unmolested. I would say that the majority of women in the world do not have that freedom. Its amazing that there can be such a honorable culture.

Progressives say that income inequality is bad. Maybe income inequality is good. If income inequality is bad, are not other forms of inequality bad?  Slim attractive women live better lives than fat unattractive women. Most of the times I see a woman driving a luxury car like a BMW or a Range Rover, she looks hot. No one agitates for less inequality in political power.

Diversity is supposed to lead to more points of view leading to better results in whatever project you are engaged in. No empirical study of the theory have ever been performed to my knowledge. Perhaps the opposite is true. Diversity could lead to misunderstandings, sand in the gears, annoyances caused by radically different cultures, resentments, petty score keeping by race, tribal loyalties superseding institutional loyalties. Who knows.

The premise of Opposite Day is that it is not a mistake in knowledge. It is not innocent error. Perhaps it is a calculated program of lies. The purpose of the lies? To take power from some people and give it to others.

 

 

 

 

To the Left, Western Civilization is Irredeemably Evil

If you want to unseat the elite who have power now and replace them with you,  you need a reason why you are preferable to them.

One could pledge to reform and improve sclerotic institutions, but where is the percentage in that? Running fair institutions that give no favor to you and your supporters is pretty weak beer for all the effort.

No, a much better rationale for replacing the current power elite with you is to convince people that the current institutions are irredeemably unfair. Then you get to take over the institutions and run it according to your lights. Universities are not overpriced, over administered, and failing in their missions to educate. No, they are full of rapists, racists and privilege. Only by throwing out the current administrators and professors can they be made fair.  You get to keep the overpriced, over administered, and failing features.  Once you start running the place you can get some of that swag, reward your supporters with useless administrative positions and keep goofing off in the work (educating) department.

Marx and the Bolsheviks claimed that capitalists were exploiting the workers.  Power must be moved from whomever had it now to the Bolsheviks to right the injustice and make life better.  Strong medicine had to be applied by the new leaders least society slip back into injustice.  I don’t think the condition of the  proletariat were improved much by the Russian Revolution.   In the USA the working class got richer, more secure and freer with no radical change of leadership or institutions. Soon all revolutionaries seeking power for themselves needed a new grievance to justify the revolution.

Our government is very corrupt but it is not a system that is irredeemably evil.  One could change the tax code so it did not blatantly favor one person or business over another.  One could stop bailing out banks ran into insolvency by their management. One could prevent the government from taking an ownership stake in a business, like General Motors, and then regulate the safety of the product of General Motors. One could stop politicians from getting millions in ex post facto bribes for favors by having politicians forfeit their pensions and secret service protection if they engage in remunerated work after office (or accept gifts). One could dry up the student loan money that is funneled into rich failing institutions. One could make the Justice Department independent of the Executive Branch.  One could end the Federal Reserve.

Those are all possible things – there would be reduction in the discretionary power of our elite if they were instituted.  Naturally it would be hard to accomplish such things, since the elite would resist them and the reformers would not get a large amount of personal gain. Not to say it would be impossible for determined people of good will.