GG Strikes Gold Again

I encourage you to read his recent post on tough-guy Thomas Friedman's declaration of war on Iran. But check out the 3-minute clip he posts of Friedman on the Charlie Rose show:

Scoffers of the New Metereology

In the May 10-11 WSJ, there was an obit of George Cressman, who inaugurated the practice (at the National Weather Service) in 1966 of using probabilistic forecasts. According to the story, a writer for the Christian Science Monitor ridiculed this newfangled approach:

"Tell me, every time there's a 50 percent chance of rain do I wear one rubber, and leave the other one home?"

Gene, didn't you raise similar sarcastic questions a few months ago on this blog? Oh wait, Catholics don't wear rubbers...

Ba-DUM. Thanks folks, I'm here through Tuesday. Please remember to tip your waitresses.

Roger Koppl on the Limits of (State) Forensics

Roger Koppl writes in Forbes on the surprisingly low accuracy of crime labs. Some scary stuff in there.

BTW here is my comment on the MR post from which I stole this link:

I loved the article, but I think Koppl doesn't push it far enough when he says the problem is monopoly, and therefore we need the government to require multiple tests, etc. That's like saying the problem with oil prices is OPEC, and that's why we need to ask Saudi Arabia to pump more.

Case in point: Koppl discusses a guy who was wrongly convicted of rape and held for four years. His compensation? $118,000. If those are the penalties the government faces for mistakes, no wonder they are so sloppy. In a voluntary system where people could patronize different legal frameworks (and yes we can argue about how/whether that would work), I think the fines might be such that the agencies that survived the competition fixed the leaky roofs over their crime labs.

Holy cow! I see now that someone responded to this brilliant comment, and actually called it "stupid." !!!! Out of the way, lads, I must fly!

Self-ownership revisited

In response to Gene's response to my response to a short novel I read, "Dirty Weekend" by [I think I remember, book no longer in hand] Helen Zawhiri: I left Gene a phone message that I had come across a short, interesting paragraph on ownership of self that I thought might interest libertarians. The novel is about a weak, unlucky woman who, she thinks on p.17, is incapable of any real self-defense, and, realizing that you can only own what you can defend, surrenders to the knowledge that she cannot own herself, but is in fact anyone's property for the taking. (Happily, she wakes up one particularly miserable morning to the realization that she has quite simply had enough, and spends the weekend murdering men, all of whom clearly deserve it.)

I Love the Questions Tyler Cowen Raises...

...I just often hate his answers. Here he talks about the Master Creator's intentions for us.

Why Intelligent Design Is a Scientific Theory

In the comments to a previous post, Micha took issue with what I think is an absolutely crushing argument in the "Is ID scientific?" debate. To repeat the argument: Many orthodox biologists etc. (whom I shall call "neo-Darwinians" for lack of a better term) say that not only is ID wrong, it's not even worthy of being called a false theory. To them, to explain the first cell as being consciously designed (rather than searching for a story involving lightning, amino acids, etc.) is like explaining thunderstorms by the anger of Zeus.

This is too narrow a conception of what science is. My favorite way to demonstrate is the following consideration: It is certainly possible that life on Earth was seeded by intelligent aliens, who designed a cell with all sorts of sophisticated DNA etc., then set it loose here billions of years ago. Now just suppose that were true. How in the world would we humans ever figure that out? Why, through people doing the exact type of research that the ID people are doing. And a necessary component of that process of learning the truth would be to critique the Darwinian explanations, by saying, "Yeah, you can tell a nice story about photosensitive cells gradually turning into a human eye over millions of years, but you haven't actually listed each specific step."

Now in response to my argument here, Micah in the comments said that this is just pushing back the problem one step: Where did the alien designers come from?

We don't know, because we haven't observed them yet. As a Christian, of course, I think they were ultimately created in the mind of God, as was everything else. But the Darwinian story might work for them.

This is a misconception about Michael Behe's notion of "irreducible complexity." Behe doesn't simply say, "I believe Genesis so shut up." He doesn't even just say, "Wow organisms are complicated; must be God." No, what he says is that there are many organisms whose overall structure could not have arisen step by step, with each intermediate stage conferring reproductive advantage over the previous one.

Now maybe Behe is wrong about this; maybe it is just his lack of imagination. But the point is, if Behe is right about life on Earth, the aliens could have evolved the way neo-Darwinists say it happened here. And if Behe looked at their cells under a microscope, he might be able to say, "Oh, now these cells aren't irreducibly complex! See, they're just this simple pattern repeated over and over. I can see how the aliens could've evolved into their current form from the sludge on their home planet, given enough time."

So again folks, if you want to say the ID people are nuts, and that they're liars who care nothing of science and just want to push their religion on people, OK fair enough. But this claim that ID isn't "scientific" is goofy. It prevents us from ever learning the truth if the alien story just so happened to be true. In that case, how would we ever learn? From philosophers? Theologians?

Hey Barney: I Don't Think That Word Means What You Think It Means

From the May 9 WSJ article, "Mortgage Firms Cool to Principal-Cut Plan":

But mortgage companies may face pressure to use the program. "I want to put the servicers on notice," Rep. Barney Frank (D-Mass.), a co-sponsor of the bill, said at a hearing last month. "If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem...they can expect much tougher regulation in the future."

Cover Bands: The Pattern Continues

I have found in the past that I could stop grudgingly paying respect to bands for catchy tunes, because they ripped them off from someone much cooler. E.g. no need to think Vanilla Ice (Ice Ice Baby) is good, since he ripped off the tune from Queen/David Bowie (Under Pressure). There are a couple of more like this that escape me right now (maybe Dylan songs?), where I realized that someone much cooler had written the original of a song that I associated with more modern punks.

Anyway, I just learned that UB40 ripped off Red, Red Wine from Neil Diamond. Since I don't own a CD past 1985 (OK a bit of an exaggeration but not much), you'd think I would have known that. True story: My dad actually played with Neil Diamond back in the day, and has an autograph to prove it. ("Pat, you're a gas. --Neil")

Now for your enjoyment:

The Two-Door Paradox

Most large buildings in New York have a pair of doors at their entrance. But, almost always, one of the two is locked closed, and you can only enter the building through the other one.

I haven't been able to figure out the reason for this phenomenon. I entertained the idea that fire codes might require two doors where the owner wanted only one, but that doesn't seem to make sense -- what good is a locked door in case of a fire? So, why keep building two doors at the entrance to large buildings, only to keep one perpetually locked? And, given that the two doors are there, what advantage does the owner gain from sealing one of them off? The practice is so common that I cannot believe that there isn't some good explanation for it, but does anyone know what it is?

Today Was a Good Day, I Must Say

...I didn't have to use my AK. (Oh come on, I lived in Bed-Stuy for a bit during grad school. I have to keep it real.)

After some last-minute edits, including a nice quote from Steve Forbes on the back cover, my flat tax study is now posted (.pdf) at PRI's website. I encourage even hardcore Rothbardians to glance through it, especially the first few chapters. I bet you will be surprised at the power of marginal tax rate reductions; I know I was.

But much better than the publication of my study--a culmination of about seven months of work--was my toddler finally going pee pee in the potty. Unfortunately I now know what the next lecture topic is for my son.

Another Murphy Discusses Tax Policies

Some purists have gotten mad that I wrote a study for Pacific Research Institute on tax reform. (I.e. since the best tax rate is zero, I shouldn't be helping politicians fleece taxpayers.) It's a valid concern, but as this op ed clearly proves, it is a different guy doing this stuff.

(BTW the joke is that they got my middle initial wrong. If it has been changed back to "P" in the meantime, then what little humor there ever was in this blog post has been completely drained.)

Why Bill O'Reilly Can't Run for President

My wife sent me this video. I'm not sure I would want to do an internship with him. Note that not only is O'Reilly a jerk, but he's also a moron; look how long it takes him to parse the words on the teleprompter.

There Ought to Be a Law

...against book reviews where the reviewer doesn't include a single quote from the book, and against movie reviews where the reviewer admits he hasn't even seen the film.

Like John Derbyshire, I too haven't seen Ben Stein's Expelled--and that's why I'm not going to tell you whether it's good or bad. (Sounds reasonable, eh?) Just take a look at this thing. Now pretend for the moment that life on Earth really didn't originate out of "blind" forces. Yes, that could mean God did it from scratch, or it could mean that the Dawkins account happened on some other world, and then those beings seeded Earth with a cell they designed.

OK but the point is, just imagine for a moment that the people--the ones with the PhDs in biology and chemistry, yes they exist--who are questioning the orthodox views are right. In that mindset, Derbyshire's article is simply breathtaking. He repeatedly voices his outrage over the "sneering, slanderous" attacks of the Discovery Institute, in the same article where he himself openly calls them liars and fools. (You can say, "But they are!" and that's fine, but then the Discovery Institute people would say the same thing about their observations. An attack is an attack, whether or not it is correct.)

Anyway lest I be accused of the same sin of omission, here's a juicy excerpt from the defender of reasoned inquiry:

So what’s going on here with this stupid Expelled movie? No, I haven’t seen the dang thing. I’ve been reading about it steadily for weeks now though, both pro (including the pieces by David Klinghoffer and Dave Berg on National Review Online) and con, and I can’t believe it would yield up many surprises on an actual viewing. It’s pretty plain that the thing is creationist porn, propaganda for ignorance and obscurantism. How could a guy like this [Ben Stein] do a thing like that?

Later on:

And now here is Ben Stein, sneering and scoffing at Darwin, a man who spent decades observing and pondering the natural world — that world Stein glimpses through the window of his automobile now and then, when he’s not chattering into his cell phone. Stein claims to be doing it in the name of an alternative theory of the origin of species: Yet no such alternative theory has ever been presented, nor is one presented in the movie, nor even hinted at. There is only a gaggle of fools and fraudsters, gaping and pointing like Apaches on seeing their first locomotive: “Look! It moves! There must be a ghost inside making it move!”

The "alternative theory" is that these items were designed; hence the name, "Intelligent Design." Of course that doesn't count for Derbyshire; that's not a "scientific" explanation. OK but what if it's true? (Again, don't forget the possibility of aliens. This isn't merely Bible thumping.) And I'm going to go out on a limb--again, I haven't seen the movie either--and guess that Ben Stein and some of the people he interviews in the movie actually look at the natural world, just like Darwin.

Oh, one other thing: Derbyshire literally says that science itself was invented in northwest Europe in the late 17th century. (I went back and re-read it, since I didn't believe it myself when I just typed that.) How do you feel about that statement, Gene?

Momma Mia

The "Economist Mom" has started a blog. (Hat tip to the greenie economists.) I was going to criticize her for criticizing the Laffer Curve (without explaining why the episodes of revenues going up in the 1980s and even under George W. Bush don't count), but that got shunted aside when I saw this:

Deficit financing is a cost-maximizing budget strategy — because of the curse of compound interest. The choice is simple: Pay for it now, or our kids pay even more for it later. For example, the balance on a $1,000 loan swells to more than $3,000 when repayment is put off for 20 years, even under a relatively low interest rate of 6 percent.

I think this is literally a fallacy that Landsburg or Friedman dissected in one of their pop books. I posted a comment, asking her if only suckers take out 30-year mortgages.

If I really wanted to be a jerk, I could have asked if no company buys materials from Japan, because the prices there are like 100 times higher than here. This is the well-known "Japanese cost-maximizing strategy."

(Not only does she have a Ph.D. in economics, but apparently: "From January 2007 to April 2008 she served as chief economist for the House Budget Committee." Wow.)

Boston Globe feature

An interesting piece on a young Austrian economist who is very interested in anarcho-capitalism and went to Hillsdale College. (Did I trick you?) For some reason the writer seems to think that the word democracy is defined as "stuff about society that I like." Strange. (HT2MR.)

Barrons Article on Mechanism Design

Another iteration of a theme I've been hitting since the "Nobel" for economics came out last year. This link is just to the free preview. If you are in Barnes & Noble this week check it out.

I've Found Him!

In books lie The Lord of the Rings, things are always passing "beyond the ken of man."

I always wondered, "Just who is this 'ken of man.'" Well, folks, I've found him.

The Unfinished City

Sandy Ikeda on the character of New York.

Damned Multiculturalists

Leon Hadar excoriates globalists at Taki's Magazine.

I second his emotion with the following remarks:

Man, those multi-culturalists! I recall the story of one Jewish dude who apparently was not satisfied with his local folkways. He imported a melange of ideas from Greek philosophy and Eastern religion into his native inheritance and came up with some weird hybrid mix. His followers, after his death, immediately became "rootless cosmopolitans," trotting all around the Mediterranean world, asserting that the culture you came from didn't matter as long as you accepted their new "globalist" creed. They sucked into their "ideology" an obviously incompatible blend of Greek philosophy, Roman civic and political ideas, and Hebrew revelation.

Good thing that nonsense had no lasting impact on the world!

Those Peaceniks!

Clark Stooksbury reveals a shocking fact: the Nobel Peace Prize committee rewards anti-war activists!

One Bad Apple

OK, I'm sticking with Macs for now, because I was a UNIX programmer, Mac OS X is UNIX, and I can work smoothly at the command-line interface.

Otherwise, I think Apple's user interface group has lost their minds. For instance, if I'm getting my Mac mail on the Web, my session will time out after 30 minutes. OK, cool, there's some security concern here. But what happens? I'm presented with a dialogue box that says my session has timed out, with an 'OK' button. I click 'OK,' and am brought to a screen that says "Your session has timed out," and presents me with a button that says "Log back in." I click on that, and finally get to the login screen. Yo, yo, Apple dudes, why not send the logged out user straight to the login screen? The two screens in between do nothing but require me to click 'OK' twice. What the hey?

In the Mac OS X native mail application, the up or down arrow at first moves you between messages. That's OK -- let's shift the focus by clicking in the window pane showing the text of the current message. Then hit the up or down arrow -- CRIKEY, MATE! It still moves between messages, not within the current message. Didn't Apple develop this idea of one part of the UI having the focus, and that all user actions should relate to that focused area? What in the world has gone wrong with their software developers?

Bear's Choice

So, I'm standing on my front porch in Pennsylvania, surveying the garden, when I catch movement out of the corner of my eye. I look in that direction, and see a 200-pound or so bear ambling down my driveway. He (she?) is about 150 feet from me. What to do?

I decide that bears are kind of Brooklyn critters, so the best thing to do is to go all Brooklyn on his ass.

"Yo, yo, wassup?" I shout up the driveway.

He turns slowly and looks at me for several seconds. Then, with no haste, he continues in the direction he was headed.

He begins walking slowly along my stonewall. "Yo, are we cool?" I shout out.

He again turns and stares at me. Very nonchalantly, he continues walking down the wall. He turns and looks back at me a couple of more times, and then heads into the woods.

The lesson to be learned: if you see a bear, go all Brooklyn on his ass. They're basically all from Brooklyn.

The Most Fundamental Human Right

Apparently, James Madison was collecting suggestions for inclusion in the Bill of Rights. (The lecturer I heard say this did not make it clear whether he was asking for them or just getting them anyway.) The Pennsylvania legislature wanted the following included in the Bill: "Every farmer has a right to be paid a bounty for every squirrel pelt he turns in to the government."

They said that one could easily deduce this right from the axiom of self-ownership.

(That last bit is the only part that's not true, btw.)

Gang Warfare

Another episode of, "The policeman is your friend." Just watch the first two minutes or so.

Food Prices: Big Oil or King Corn?

I and the rest of the IER team take on some particularly exaggerated claims by the corn growers.

Lohan Lohan

The NY Post just ran a story entitled "Lindsey Lohan Stole My Coat."

But Masha Markova, the complainant, has nothing on me: Masha, baby, Lindsey stole my virginity.

France II

A public square in Haguenau, France.



Adam makes a new, French friend. (Aren't they so artistic over there?



They actually spent millions of Euros to cover that lovely old train station with a giant glass bubble. Rudolph told me that party that did this was crushed in the next election.



A street in Haguenau.

Good Job, Ms. McArdle!

I have been critical of her in the past, but Megan McArdle does a good job explaining how you assess tax incidence. This is good too (HT2MR):

Hillary Clinton's proposal is particularly stupid, in my humble opinion, because it tries to get the money back from the oil companies with a windfall profits tax. Tax incidence is tax incidence: if the oil companies can make consumers pay most of the excise tax, then probably consumers [sic?] can stick them with your windfall profits tax too. Meanwhile, the instinct to mess with the oil companies every time prices rise is thoroughly counterproductive. We (at least, those of us who want cheaper oil) want the oil companies out foraging for more supply. If you lower the returns on finding new oil, you kill their incentive to do so--more importantly, you kill the incentive of investors to give them capital to do so. All her plan does is make us take the trouble to build new administrative capacity to collect the tax, while keeping all the old administrative capacity for collecting the excise tax (since, after all, it's not actually going away permanently), while scaring the bejeesus out of investors. It's lose-lose-lose.

I Don't Think He Liked the Book

Robert Zubrin reviews Robert Bryce's Gusher of Lies. You folks might have assumed that people writing for National Review oppose federal mandates for inefficient schemes that raise food prices. (I am referring to ethanol.) Nope, sometimes there's more at stake than abstract economic freedom. And Zubrin deals with that objection, too.

DISCLAIMER / interesting tidbit: Bryce used to be loosely associated with the Institute for Energy Research; Zubrin takes a shot at them too. I am doing a lot of work for IER lately. Hence I have a special reason to dislike this review.

The (Limited) Usefulness of Formal Economic Models

(This post is dedicated to Robert Wegner.)

As a graduate of New York University, I was forced to learn formal models of the economy, which would have horrified me when I was in college and hooked on Austrian economics. However, even though I never would have gone to NYU had I realized what I was getting into, after the fact I was glad that I had done it. There really are benefits of these formal modeling techniques. This isn't to say the benefits outweigh the opportunity costs; obviously graduate students could be doing something else with their time that might be much more valuable in terms of producing good economists. Nonetheless, in this blog post I want to give an example of the power of formal modeling.

The specific issue is whether a consumption or income tax is less distortionary. As usual, we are going to try to compare apples with apples by insisting on revenue neutrality, and we are also not going to worry about issues of privacy.

Following Rothbard, my intuition had always been that an income tax was better (on these limited grounds). I thought, "The government takes a certain amount out of your income, and then you're free to do what you want with it. If you want to invest it, go ahead. If you want to blow it at the racetrack, that's fine too. The government shouldn't be trying to encourage you to save more than your time preferences indicate."

If you ask me now, though, my answer would be the exact opposite. If we make enough assumptions to render the question meaningful, then it is clearly the case that a consumption tax respects people's intertemporal preferences, whereas an income tax penalizes savings. In this sense, then, a consumption tax is Pareto superior; a consumption tax leaves consumers with more utility than an income tax that yields the same (present value) in tax revenues.

In defense of Rothbard and my earlier self, a lot of proponents of consumption taxes aren't clear on this point. They either imply or explicitly claim that their plan "encourages savings and investment" above what would happen in the absence of any taxation, and that is clearly inefficient. (After all, it would be crazy to force everyone to save 99% at gunpoint, even though this would lead to very high GDP growth.)

But as I said, studying a really simple model led me to reverse my earlier position. Under reasonable assumptions, a consumption tax doesn't alter the consumption/savings tradeoff. Yes, people are obviously worse off because their consumption is lower in every period, but they are not hurt by distortions in the intertemporal tradeoffs they face.

Before continuing, let me give the caveat: Of course you can always come up with ways to disprove any sort of "rule" in these types of analyses. E.g. if people had religious views favoring income taxes, then they would obviously be worse off with a switch to consumption taxes. But if we assume people don't care about the tax system itself, that there are equivalent costs of compliance, etc., and just focus on the incentives on individuals' saving rates and preferences for consumption at different points in time, then the consumption tax is clearly superior.

So here's the verbal reasoning: From the individual's POV, the purpose of saving and investing is simply to consume in the future. So really the issue is consumption now versus consumption later. Without any taxes, people refrain from consumption today until the point at which the marginal utility of present consumption is higher than the present utility of the future consumption which that investment would yield.

Slapping on a consumption tax doesn't alter this tradeoff, it simply lowers the level of consumption in every period. Think of it this way: Suppose you were a farmer trying to decide how much corn to eat and how much to plant for next year's harvest. After you made your decision, what if you learned that the cook who makes your meals is a klutz, and so it takes 10% more corn to make a meal than you previously estimated. With this new information, that shouldn't alter how much of your harvest this year you devote to feeding your family, versus how much you plant again. Yes, the amount you set aside to eat right now yields fewer meals, but that is true of the amount you are planting.

In contrast, an income tax does give you an incentive to consume more in the present than you would have without any taxes. It's as if there are locusts that destroy 10% of the crops before you harvest them. Now that you've got the 90% in your possession, you can either eat them or plant them again, when they again will be subject to the locusts. So the technology for converting potential present meals into future meals has changed; now abstaining from one present meal yields a smaller amount of future meals than it did originally. Thus you consume a larger fraction of your harvest, and plant less for next year.

Let me address something that bothered me for a while, even though the above reasoning seemed impeccable. In intermediate micro, professors love to go over indifference curves to show that an income tax is better for the consumer than an excise tax on a particular good. E.g. if there are beer and donuts with their market prices, it is better to take $10 from the consumer and let him spend the remaining $90 however he wants, rather than placing a unit tax on beer (let's say) such that in equilibrium the consumer buys enough of that good to give $10 in tax revenue to the government. The intuition is that not only is the consumer $10 poorer, but under the excise tax beer is made artificially more expensive, and so the individual's options get a double-whammy from the government.

But that's not what's happening here. Specifically, it's not true that you have a "given" amount of income, and then the government let's you spend it on present versus future consumption. If you save and invest, then your future income is higher than it otherwise would be. So that's one difference from the typical intermediate micro demonstration (with a fixed endowment of income that the consumer is allocating between two goods).

The other difference is that with a consumption tax, the government isn't slapping a tax on one possible good, while leaving the other untaxed. Again, the whole purpose of saving is to consume in the future (or to allow your heirs to consume). So there's no distortion, encouraging individuals to save more than they otherwise would (the way there was in an excise tax on beer, which would encourage spending on donuts).

========

Now why did I title this blog post the way I did? Because I was only led to the above realizations through working out a very simple model, with two periods and a consumer with utility function U = ln(C1) + ln(C2), and interest rate of 50%, and wage income in each period of $100. I slapped on a 50% income tax and had the consumer optimize, and calculated how much (in PDV in period 1) revenue the government would collect. Then I figured out what rate a consumption tax would have to be in each period to yield the same (PDV in period 1) revenue to the government. In the second approach, the consumer's utility (from the after-tax consumption) is higher than with the after-tax stream of consumption under the first setup. Also, in the consumption tax approach the gross amount of saving is unaffected by the tax; i.e. it is the same whether the consumption tax rate is 0 or positive. This isn't true with the income tax.

Another benefit of using the model: When I first tried to solve for the revenue neutral consumption tax rate, it came out to something like 116%. So I thought I had messed something up, because that was clearly crazy. But then I realized that no, there is nothing illogical (though grossly immoral of course!) about consumption tax rates being higher than 100%. If your wage income is $100, you can, say, save $10, consume $30, and pay $60 in taxes to the government, if the consumption tax rate is 200%. That would be awful, but it's not unsustainable the way a 200% income tax would be.

So the lesson for Austrian purists? I think that formal models allow us to check our intuitions on complex things, such as comparing different tax regimes. Of course you can't rest with the model results; if the results are surprising, you need to figure out whether it's because you made a bogus assumption, or because your intuition is wrong.

I know Rothbard has argued that this is superfluous at best; why translate economics into formal symbols, get a result, and then translate back into English? But the answer here is the same as for why they do this in symbolic logic: Because sometimes the argument is very complex, and you might make a mistake in your reasoning if you try to do it in English.

I never would have come to the understanding that I can now give in purely Austrian terms, had I not known how to create a very crude neoclassical model. I would still think that consumption taxes distort intertemporal decisions vis-a-vis consumer preferences.

One last thing: If I still haven't sold you, consider comparative advantage. If you haven't worked through a ridiculously crude two-good, two-country numerical example, then I submit you probably don't really "see" why free trade makes all countries richer. Sure, that Ricardian model doesn't prove anything, but a simple numerical example illustrates the principles very efficiently. And that's why everybody I've ever seen teach this--including people at Mises University--rely on simple numerical examples.

Economists and Their Frameworks

I go over some pitfalls when thinking about international trade. The article is unusual in that I discuss a mistake I had made.

Overly Literal Flies

OK, OK, I know it's in their name, but on April 30, I'm working in the yard and nothing is flying up my nose, but on May 1 dozens of mayflies are doing so. Guys, give iut a rest! You're not going to lose the name if you show up on the 4th or 5th.

Worst Theodicy Ever?

Theodicy, as you all know, is the term for reconciling the existence of God with that of evil. The word was coined by Leibniz, and actually generated enough confusion at the time that some French readers thought "Theodicy" was the name of the author.

The problem was first posed by Epicurus in the form, quoting from Nicholas Jolley's Leibniz:

1) God is omnipotent.
2) God is just and benevolent.
3) Evil exists in the world.

The full set of 1, 2, and 3 seem to conflict; the "problem of theodicy" is to show that they don't.

Father Malebranche, a Cartesian contemporary of Leibniz, posed a solution that I think would strike most people as making the problem worse rather than better. As I see it, the average person uninterested in theology and faced with this problem is actually likely to give up 1, and think something like "God is great and really powerful but just hasn't figured out a way to beat that Satan fellow yet -- but in the end he will." While this may be theologically unsatisfactory, it gets him through the day and, more importantly, his religious life.

Malebranche's solution is likely to make him pissed, though. What he contends is that God is morally obliged to act to maximize his own glory, and that a world obeying the sort of laws that permit evil does so to a greater extent than would one that does not. Yow! If Malebranche was seeking to "justifie the ways of God to Man," I think he missed the mark by a wee bit: "You mean I have leprosy so that you can have a little more glory?!"

Leibniz, on the other hand, offers a much more satisfactory solution to the problem, based on his metaphysics, which holds that everything is related to and reflects everything else, and in a way that makes each thing what it is. As Jolley puts it, it is not possible for there to be a world with Mother Teresa but without Hitler, since they are each, in a sense, a part of the existence of the other. So, a world in which the most possible minds achieve the most possible happiness may be one in which great evil exists as a necessary component.

It is also interesting to note that, in some other theistic religions, this problem does not really arise at all. For instance, in Vedic theology, every individual really is an aspect of the one supreme soul -- "that art thou" -- and thus, whatever evil experienced is always befalling God, and is not something He is imposing on creatures from the outside.

They Never Taught Us This in Grad School

OK I know someone who had bought some shares of IAU, an ETF that holds physical gold. (The point was to have some exposure to gold in case things got really bad, late-1970s style.)

With gold falling so much since early April, the person decided he would sell off his IAU shares if it ever hit $84. He had bought in at $93 or so, and so that cutoff would limit his losses to an amount that was acceptable. I pointed out that he should have a point at which he would get back in, in case this dip down was just a temporary thing and gold really did soar up to $2,000 / oz. as some alarmists are suggesting. He agreed this was a good idea, and so decided $95.

OK, so everyone gets the idea? He bought in at $93, it was tanking, and if it hit $84 he was getting out to limit his losses. If it kept falling, that was good he got out. And if it zoomed up to $250, he would have gotten back in at $95, so he would only be out from the zig-zag, and would still be protected in case things really went to heck with the economy.

Now here's the kicker: He was incommunicado yesterday, when IAU sank below the sell-point. So he obviously didn't sell. (He hadn't set up anything automatic with his broker.)

Now today, IAU is back up above the sell-point.

So should he sell or not? On the one hand, you could say, "Yes! He should have sold yesterday; the fact that it got so low was a warning that things weren't playing out the way the alarmists had said, and so now just be grateful it bumped up a buck right before you sell."

On the other hand, you could argue, "No, right now IAU is at a price that would not have warranted selling two days ago. So if your strategy was to hold it unless it dipped below $84, you shouldn't sell it now when it's trading at $84.50 or so."

BTW, I really am talking about another person. All of my savings are in cheese curls (.wav).

Phone Etiquette Innovation

You know how you're listening to a voice mail, and then the person starts giving you his or her number, and you rush to get a piece of paper?

And you thank the heavens if the person is cool and repeats the number, so that you are actually ready to write it down.

Well, I think from now on I'm going to start my message by saying something like, "Hi so-and-so, this is Bob Murphy from blah blah blah. I'm going to be leaving you my number if you want to start hunting for a pen. Anyway, I'm calling about..."

I think this will spare needless anxiety in the world. I estimate an increase in human lifespans of 1.2 years if everyone adopts my plan. It may also cut down on phone bills, because people on their cell won't have to play the message again. (Do you get charged minutes when checking your voicemail? Maybe not.)

Mysticism

As I said in a comment, I'm reading a book today, Why God Won't Go Away, by two neurologists who have shown that mystical states can be shown to be empirically real, and are like states involving the genuine perception of real things, and not at all like delusion or brain disease.

There are some sceptics whom, I believe, might be swayed by this -- as these neurologists were. But most will simply ignore it. Their resistance to any evidence on this issue is sometimes astonishing. Often, I feel I'm in a dialogue like the following. (The house and man metaphor aren't meant to be anything too profound -- I just happened to be looking at the path to my neighbors house as I was writing this.)

"There's a nice chap in the house at the end of that path through the woods."

"There's no house there, and there's certainly no chap!"

"No, I was just there -- there is a house, and a man lives in it."

"That's just a childish fantasy."

"Well, go down the path and look for yourself."

"No."

"Why not?"

"It's a waste of time -- there's nothing there!"

Of course, if no one else could walk the path and find the house and the man, there would be a good reason for me to start to suspect I'm a little off my rocker. But when I discover that thousands and thousands of other people have walked down the path, seen the house and the man, and described them in similar terms as me, and that those people otherwise seemed sane and intelligent, then the evidence is overwhelming: there is a house and a man down the path, it can be confirmed empirically, and atheists -- you just haven't gone down the path. If you're just not interested, or are still sceptical, fine -- we can still be friends. But isn't it a little arrogant to confidently declare to me that to "believe" in the house and man is nuts? ("Believe" is in quotes because I "believe" in God in the same way I "believe" in the tree outside my window.

See how they run like pigs from a gun, see how they fly.

Now some posters on Crash Landing don't see what the big fuss is about. How could anyone possibly take umbrage at the hard-hitting journalists over at Reason, who will stop at nothing to bring truth to their readers? Case in point: David Weigel's recent blog post about Ron Paul's book hitting #1 on Amazon.

So what is the point of Weigel's post? Does he note the amazing success Paul is having in getting his (geeky and boring, I would have thought) message out to average folks? Nope. Oh, I know! Maybe he doesn't agree with Paul's arguments, and so goes through and criticizes certain parts of the book? Nope.

Rather, what Weigel does is remind everyone that Lew Rockwell is a big fat racist, liar, and coward, and then ties this in to Paul's new book because Paul has the audacity to tell his readers to visit LRC. Then, Weigel further enlightens us by saying:

The Revolution is the best-selling book at Amazon.com today. I've read the book, though, and anyone expecting another bigot blow-up is going to be disappointed.

Aww, what a gip! Is it too late to cancel my order?

(Note: I too thought it was ridiculous that Paul said he had no idea who wrote those newsletters. But OK, he handled that poorly. Are we going to bring that up every time we discuss Ron Paul from now on?)

This Just Wasn't the Year for Jesus

When Zach Johnson won the Masters Golf Tournament last year, he credited the victory to his faith in Jesus. This year, that faith placed him well back in the pack. My goal in pointing this out is not to make fun of faith in Jesus, but of the heretical idea that this faith is a route to worldly success. Augustine trounced that view 1600 years ago -- isn't it time we gave it a rest?