The Market "Correction"

Inasmuch as I have publicly predicted that the trade deficits (and relations with China in general) are no big deal, I should probably comment on yesterday's large movements.

Contrary to what my critics (who roost around the mises.org blog) may think, what happened yesterday has little relevance to my ongoing critique of people like Paul Craig Roberts and Peter Schiff. In particular, each of my 3 predictions (no recession in '07, oil under $50 by Christmas, and dollar stronger against euro by year's end) could still come true.

But there's more than that. What exactly happened yesterday? Well, the conventional story (and I have no reason to doubt it) says that the Chinese stock market tanked because on Sunday, the Chinese gov't said it would crack down on stock "speculation" and might impose capital gains taxes on their unconscionable profits. So is this cause-and-effect--namely, gov't threatens to tax and regulate, and this lowers asset values--due to trade deficits? If American households had a 3% savings rate, would the Chinese stock market have shrugged off the threats?

Now as far as the link to European and US stock markets, even here the conventional story doesn't vindicate Schiff (or embarrass me). Here the story is that foreigners don't own much of the Chinese stock market per se, but even so foreign investors are fearful that if the Chinese economy slows, then the market for many exporters will shrivel up.

OK, so let's think that through. Assuming the analysis is correct, that means we are vulnerable to a Chinese slowdown because we export things to them. So, when PCR and Schiff complain that we need to export more stuff to the Chinese to reduce the trade deficit...

One last inconsistency: The same people who worry about the dollar being grossly overvalued against the yuan are also worried about the Chinese gov't printing massive amounts of new money. Don't those two worries offset each other?

In conclusion, let me fully admit that I was stunned by what happened yesterday, and it initially made me doubt my articles on international trade etc. But after calming down, I still stand by my arguments on all this. It is entirely possible, of course, that I will be proven wrong, but I still think much of this hysteria is internally contradictory. I am trying to lure these alarmists into making concrete predictions, so that if and when nothing happens for the next 5 years, they will be clearly wrong.

Chaos Theory Now Online!

That's right kids, for those of you who just shelled out $6 (+$2 s&h), if only you'd waited... The critically acclaimed Chaos Theory is now available online. Now just how would Gene and Wabulon have repelled a Panzer division armed only with their sarcasm and liquor breath? Find out this and so much more!

I'm #1!

According to Dr. Charles Steele--a man filling some big shoes at Hillsdale College--my pamphlet Chaos Theory is "the worst discussion I’ve ever read of how an anarcho-capitalist society could function." (I'm just going to hope he's never hung out at anti-state.com.) I used to wonder why no one (save Rob at strike-the-root and my former student, Gennady, at his Rational Argumentator site) had reviewed my book, but I guess this proves the adage about getting what you wished for...

The present blog post is hardly going to be an official rejoinder (or reply or riposte or reaction or regurgitation or whatever the appropriate noun is). Even so, a few comments:

* I totally concede that I was wrong to motivate the private law discussion with contracts. I still endorse 99% of my discussion, but now I realize that a much more fundamental starting point is the idea of people bringing their disputes to a third party.

* I'm glad that Hillsdale has hired an an-cap Austrian, and a sarcastic one at that. But I think the following refutation of my ideas on prisons in market anarchy (note that this is Steele's entire response on this issue) is a bit weak:

Murphy repeatedly argues that criminals (one of his examples is an ax murderer) will carry personal insurance to pay for the consequences of their crimes. And their insurance carriers will have an interest in keeping these clients isolated (in prison) since otherwise the clients will commit further mayhem and the insurers will have to pay more indemnities. Hence criminals will be kept off the streets in MA [Murphy Anarchy]. None of this makes any sense at all. Why would the ax murderer carry this insurance? And who would want to insure him? As I’ve already argued, this insurance makes no sense, but suppose for the sake of argument it existed. If you were an insurer and had insured someone and so must pay when he commits a crime, and he proved to be an ax murderer, what do you do? Pay the indemnity and cancel his policy! If not, at the very least, his premiums would skyrocket to cover the costs of his incarceration, and he’d not be free to go to work, so how would he pay for this? The argument is absurd, all the more so when Murphy claims that in such prisons the guards would have to treat prisoners well, or else the prisoners would change their insurance to a different company that keeps nicer prisons. “Hello, GEICO? I’m an ax murderer, and I need insurance against the consequences of my homicidal tendencies. And I’m very disappointed with my current insurer, State Farm.”

By the same token, Steele could blow up proposals for a private Post Office: "Hello, FedEx? I'm an anal customer, and I like cheap stamps. And I'm very disappointed with my current letter deliverer, the USPS." Ha ha, how absurd! The very idea that competition would work in such an environment.

* It was touching that my former students apparently told Steele I was a stand up guy. (That's in the beginning; you don't need to wade through the an-cap arguments to see my props.)

Bottle of Red / Bottle of White

A few days ago my wife and I went to see Billy Joel. He was GREAT. I've always been a fan, but even putting that aside, he put on a terrific show. His song arrangement was perfect, starting with ones like Allentown, building up into bigger hits, then getting the crowd on their feet with River of Dreams (or whatever the title of that song is), then doing all rock (for Billy Joel) songs like Big Shot, and finally doing encore performance of Scenes from an Italian Restaurant and then, of course, Piano Man.

He's a cool guy, too. Lot of self-deprecating jokes in the beginning (e.g. referring to his age: "It's not about having less hair, it's about getting more head"), shaking his head wryly at the Vanderbilt students in the front row cheering when he'd announce a song from a 1971 album, and all kinds of energy. His voice is still great in the lower ranges. I.e. he didn't try to hit the very highest notes of the songs he picked, and he avoided impossible songs from the Innocent Man album.

So basically, if he is touring near you, and you always liked Billy Joel, you will definitely love this concert.

Life Is a Highway?

Our son is addicted to the movie Cars (it's good, btw), and now the song "Life Is a Highway" is stuck in my head. I realize the churlishness of analyzing a pop song's lyrics, but even so:

Life is a highway /
I want to ride it all - night - long.

Okay, so does that mean the singer wishes to die by daybreak?

"No!" you say. "What he means is, he wants to take life by the horns, to live on the edge, to rush at life with enthusiasm etc."

Well OK, if the way one drives on the "highway" represents one's approach to life, then isn't the philosophy suggested extremely bad? Isn't that what every wise person warns against, namely rushing through life without taking time to (in the analogy) get off frequently and explore the various towns along the way?

The News Is Disturbing

I was listening to CBS News Radio in the car today, and the announcer said, "Coming up: Some very disturbing news about Iran's Nuclear plans." (I quote from memory.)

When the story arrived, it turned out that the "very disturbing news" was that the UN had confirmed George Bush's contention that Iran is continuing its uranium enrichment program. What disturbed me is that:
1) Per IAEA rules, Iran is allowed to have a uranium enrichment program; and
2) Iran publicly has stated that it would not stop its uranium enrichment program.

So why does CBS deem it "very disturbing" that Iran is going ahead, as it said it would, with a program permitted by the international treaties it has signed? Is it because it is in the interest of the current administration to portray it as disturbing?

Honoring the Dead?

Today, coming down the FDR to the Brooklyn Bridge, I noticed I was getting on the "Ari Halberstram Memorial Ramp." Ramp? They honored the guy by naming an on ramp after him?

I want one of the little, dashed white lines in between lanes named after me when I'm gone.

Ungrateful Iraqis Kick Us in the...

My wife alerted me to this Salon article. It details an attempt by US soldiers to win hearts and minds by handing out soccer balls. I don't want to spoil it. I'm sure a clever anti-war cynic would expound on how this is a metaphor, but all I'll say is: Make sure you read the "official" response at the end of the article. It's scary it's so... this-is-my-official-position-and-I-refuse-to-use-common-sense.

Chinese Libertarians Back in the Day

I can't vouch for its authenticity, but someone we knew at Hillsdale (Rachael found this) had the following blog post:

=========================================================
The quintessential statement of libertarian individualism from 500 BC:

The Tao Te Ching, Chapter 57

If you want to be a great leader,you must learn to follow the Tao.
Stop trying to control.
Let go of fixed plans and concepts, and the world will govern itself.
The more prohibitions you have, the less virtuous people will be.
The more weapons you have, the less secure people will be.
The more subsidies you have, the less self-reliant people will be.

Therefore the Master says:
I let go of the law, and people become honest.
I let go of economics,and people become prosperous.
I let go of religion, and people become serene.
I let go of all desire for the common good, and the good becomes as common as grass.
=================================================

Gene, you're into this stuff... Is this legit? (The attribution, not the advice itself.)

He's Come Undone...

Paul Craig Roberts has finally gone over the edge. Up till now he's been very careful to hedge his claims, saying (in his piece co-authored with economic whiz Chuck Schumer) things like, "Of course old-fashioned protectionism isn't the answer."

But now he's finally admitted that being anti-free-trade is the same thing as being pro-protectionism. (Kinda like how Pat Buchanan went from being anti-NAFTA to anti-free trade.) The best quote:

Economists need to inject some realism into their dogmas. The U.S. economy did not develop on the basis of free trade. Whatever the costs of protection, the costs did not prevent America's economic rise.

Decaying Things Seen in Brooklyn

Click for larger image.

Preservation

Julius Blumfeld and I comment on government preservation efforts.

Cool Christian Anarchist / Pacifist Site

I saw this site through an ad on LRC. Contrary to the example of Bush and mainstream churches, I believe that true Christianity is pacifist and hence anarchist. You could also make a case--and some do at this site--that it is anti-capitalist, but that doesn't imply government ownership of production.

I.e. if you're an atheist an-cap, you don't need to worry about neighboring Christian pacifists messing with (what you consider to be) your property. If they don't believe in using violence to stop a rapist, they're certainly not going to take your stock shares.

Trade Deficits and Fiat Currencies

Another article in my never-ending quest to alienate as many readers as possible...

Michael Crichton Speech on Science

This is another bit of history that passed me by at the time. Anyway, Michael Crichton's speech on global warming and other politicized science is fantastic. The beginning is OK, standard stuff, but then it gets really good.

Cold Irishmen

The NYC area was once again visited by those cold Irishmen, the "wintery micks."

Learning Squat from History

From Arthur Silber:

"The overall pattern at work here is exactly the same one utilized for Iraq: phony diplomacy, then U.N. action which will similarly make compliance by Iran impossible, then a few speeches accusing Iran of defying the will of the "civilized world" and of being too great a threat to be tolerated -- and then the bombing. And almost no one will be heard to say that the "crisis" was created out of thin air, and that in fact no crisis exists at all.
"Let us state the final conclusion boldly and unmistakably, so we may appreciate its full horror: the Bush administration has already decided, and probably decided some time ago, that it will attack Iran. They want a wider war. Everything that is now going on is simply the cover for the moment when the bombing begins, intended to provide what will be accepted as "justification" for the attack by the American public and the world.

"And all of it is a lie from beginning to end."

Read the whole shebang.

The Corporate-State Partnership

From Roderick Long:

"The main plotline of the Star Wars prequel trilogy concerns an apparent conflict between the central government (the Senate) on the one hand and a coalition of mercantile interests (the Trade Federation, the Commerce Guild, etc.) on the other. As events unfold, however, it quickly becomes obvious to the audience (though much less quickly to the protagonists) that the conflict is largely a ruse, with the leadership of the two sides (Chancellor Palpatine and Count Dooku, respectively) secretly working hand in glove...
"Unfortunately, this is not just science fiction.
"During the first half of the 20th century, there was a widespread perception that big government and big business were fundamentally at odds. Free-market individualists generally regarded themselves as defenders of peaceful business interests against the rapacious state. Those on the left saw the same opposition though with the reverse evaluation; for them government, especially (in the U.S.) the federal government, was the champion of the common people against rapacious business interests."

Read the whole post.

Animal Training Regimens

(The end of a long conversation about training cats and dogs)
C: I want to punish them.
W: You mean you would rather use punishment than reward?
C: Yes.
W: Reward works better.
C: Punishment is all I know. It's how I was raised.

Surrealism Run Amock

So, I'm listening to the radio the other day, and REM comes on, and what-his-name, Michael Stripe, is singing:

This one goes out to my one-eyed love
This one goes out to my one-eyed left behind

Hey, if his girlfriend is handicapped, that's cool, but the part about the "one-eyed left behind" makes no sense at all. Kids these days! Back in my day, lyrics used to make sense:

You have many contacts
Among the lumberjacks
To get you facts
When someone attacks your imagination
But nobody has any respect
Anyway they already expect you
To just give a check
To tax-deductible charity organizations

You've been with the professors
And they've all liked your looks
With great lawyers you have
Discussed lepers and crooks
You've been through all of
F. Scott Fitzgerald's books
You're very well read
It's well known

Profit from the Mispellings of Others

(Before you pounce on my ironic "mistake" give me the benefit of the doubt.)

This is pretty neat.

The Farce of Customer Service

I called my insurance company yesterday because their website didn't sort local providers according to whether they were independent or part of a larger practice. After I told her what I wanted, the lady put me on hold for a minute or so and then came back. She gave me 3 doctors, then added that she couldn't tell if they satisfied the criterion. She mentioned that if I wanted to see other names besides the 3, that I could try their website.

"Oh, well I already tried the website before calling you guys," I explained. "But it didn't list the information I needed."

"Well, all I have access to here is what's on the website," she said. After I said I had no further questions, she asked, "Thank you Mr. Murphy, have I addressed all of your insurance needs today?"

Isn't that absurd? She knew full well that she didn't help me with the one thing I had called about.

What's even more ridiculous is that I said, "Yes."

Deepak's Dad

I watched an address by Deepak Chopra at the Commonwealth Club on KGO-TV last night. In case you didn't:

He was asked whether people could ever foresee their death in advance. Chopra--who was educated as a neuroendocrinologist (Western style)--said of his father, a cardiologist (Western style):

On the last day of his life, in his 80s, he saw patients as usual, and then watched the inauguration of G. W. Bush on television. Thereafter, he remarked to his wife that he thought he'd be leaving now, and died.

Our ADD Lord

Another news story that caught my attention recently was the sad tale of an Orthodox Jewish couple driving from Canada to New York City recently. (The relevance of my mention of their religion will be made clear soon.) Somewhere up in the stretch of NY state highway that passes through the Adirondacks, their car slid off the road. Unfortunately, they were in a dead zone for cell phones, and could not call for help. What's more, they were both injured, and could not get out of the car.

Over a matter of hours, the wife watched helplessly as her husband frozee to death. A bit later, the woman was moaning, "God, I can't take another minute." Just then, she heard a voice (as it turns out, of a state trooper) asking, "Are you people OK in there?" She was saved!

The paper quoted her son as saying, "That shows you the hand of God at work."

Now, I don't want to get into an argument about the existence of God here. What I do want to note is that the sort of God posited by the son's comment is really odd. If there is a Supreme Being who really takes actions like sending a rescuer in response to some individuals plea, then clearly he could have sent a rescuer hours earlier and saved the woman's husband, as well. Was this God, perhaps, distracted, maybe contemplating whether he could create an object so heavy he could not lift it, and then he suddenly stirred from his reverie and said, "Holy Schmokes! Those folks are in deep doo-doo"?

I think there are at least a couple of reasonable views theists might take towards an episode like the above, such as:
1) God created and set the world in motion, but does not interfere in its operation;
2) The ways of God are opaque to man; or
3) For some reason, these people's past actions led to their fates.

But I think it is total nonsense to attribute every outcome you like to "the hand of God" while absoving Him of any responsibility for the ones you don't like. One more example of that silly sort of thinking: I recall the congregation of a church in Alabama(?) that was hit by a tornado claiming that it was "a miracle" that none of them were killed when a tornado destroyed their church. OK, but then don't they have to blame God for hitting it with the tornado in the first place?

Mercenary

Yes I engaged in an intellectual battle, lured by the tantalizing offer of $1000. But I still believe in my conclusions. I shall not be bought! (Just rented.)

It's a Snake! No, It's a Rope!

Listening to news stories on the radio, I sometimes feel like one of the blind men who's trying to figure out he's next to an elephant by touching just the trunk or tail. They have so little time for each story that they leave a lot out.

Like today, I hear about some seal that traveled from Canada to New Jersey. (Left out was how anyone knew the seal had done that.) Then, last night, it was killed by a car while crossing the road in Jersey. The announcer concluded, "Police are investingating to make sure it really was an accident."

Say what?! They think it might have been planned? "Yo, Frankie, this is Tony di Salva. We hear da seal gonna be crossing 9th St. about half past six. You know what to do, Frankie -- make sure he don't talk!"