Mailvox: today is not the 1930s

MP explains why Smoot-Hawley is deemed to have been so important in the 1930s, and why tariffs cannot be a similar concern today even if we accept Jude Wanniski’s original case for its connection to the Great Depression:

I was reading some of your earlier threads and I noticed you had questions as to how the Smoot-Hawley Tariff came to be associated with causing the Great Depression.

The idea was first proposed by Jude Wanniski in his book “The Way the World Works.” Specifically, it is in Chapter 7, “The Stock Market and the Wedge.”

 I recently read the first 10 chapters of Jude’s book and I can say it is excellent overall and well worth reading, but the conclusions are vastly different from the normal interpretations of Smoot-Hawley. Basically, Jude was tracking the reportage of the Smoot-Hawley legislation as it was winding its way through Congress. Every time the legislation experienced a setback, the stock market would rally. Every time it experienced a success, the stock market would decline. When Hoover finally signed the Smoot-Hawley tariff into law, the market took a massive dive. Thus, you have the evidence of the Smoot-Hawley tariff causing the Great Depression.

This is good as far as it goes, but it begs the question as to why the market was so concerned about the tariff to begin with. Was the market really worried about reciprocal tariffs or a decline in economic activity? It turns out that the evidence in Jude’s chapter points to a different reason:

The stock market was tracking the tariff legislation because it was worried about a bond market dislocation. This is my analysis piecing together the evidence presented in chapter 7 of Jude’s book.

 Basically, before WWI, America was the world’s biggest debtor nation, importing capital from all over the world to build and invest in the United States. During and after WWI, America became the world’s biggest creditor. Out of the national income of $30 billion, Woodrow Wilson lent $11 billion to England and France to fight WWI. After the war, America lent an additional $14.7 billion for private and public investment, a lending boom that continued to grow throughout the roaring 20’s. This means that during probably the biggest boomtime in US history up to the period, where the economy grew to $100 billion before the crash, the United States was accumulating a massive bond portfolio where a sizeable percentage of assets were concentrated in foreign bonds.

 Because the US was on a gold standard where $20 bought an ounce of gold, the only way for foreign entities to pay for their dollar-denominated debts was to sell to the United States, exchange goods for cash, and then meet the terms of their bond agreements. To guarantee that they could sell goods, gain cash and pay debts, European firms were dumping product in the United States.

The dumping was at first concentrated in the agricultural sector and it was wreaking havoc on farmers. Because farmers accounted for 25{0e0118f8ae392893e7132af0e0c1b6af259b6ae2f64a392a36423d79bfd12d2b} of the population, they managed to push the Fordney-McCumber Act of 1922, a tariff of not only 34.8{0e0118f8ae392893e7132af0e0c1b6af259b6ae2f64a392a36423d79bfd12d2b}, but with a Tariff Commission whose duty was to equalize production costs as a condition for any tariff removal. Yet, throughout the 1920’s, not only did the dumping continue, it moved upmarket. Wisconsin Senators, by the late 1920’s, were complaining about Belgian cement undercutting Wisconsin cement companies.

Jude’s book provides great insight into what was going on in the 1920’s American economy. Warren Harding ran on a campaign of “returning to normalcy” by repealing the high income taxes of the war years. This caused the US economy to boom. By 1925, the top marginal tax rate was reduced to 25{0e0118f8ae392893e7132af0e0c1b6af259b6ae2f64a392a36423d79bfd12d2b} and the US economy was roaring along.

Unfortunately, the malfeasance of the Wilson administration led the United States to lend enormous amounts of money to the rest of the world, a practice that continued among private sector banks throughout the 1920’s. JP Morgan would lend money to Belgian cement makers that would then export government-subsidized cement to the US, sell it, and then service the bonds, which reflected in higher stock prices for JP Morgan and Belgian cement companies, but would wreak havoc on local businesses that then lobbied for tariff protection.  This process was repeated across hundreds of different industries.

The stock market was not worried that the drop in international trade would tank the US economy. International trade was small as a percentage of the US economy, roughly 4{0e0118f8ae392893e7132af0e0c1b6af259b6ae2f64a392a36423d79bfd12d2b} total. But, that 4{0e0118f8ae392893e7132af0e0c1b6af259b6ae2f64a392a36423d79bfd12d2b} of international trade was servicing the accumulated lending that amounted to anywhere from 30-50{0e0118f8ae392893e7132af0e0c1b6af259b6ae2f64a392a36423d79bfd12d2b} of the value of the entire US economy. The tariff meant that firms would not be able to service the money lent to them by Americans and, thus, lead to massive bond defaults.

What happens to the value of company stock if the company defaults on its bonds? The stock goes to zero.

That is what the market was paying attention to and why it was reacting the way it did to the Smoot-Hawley tariff.

We can see why today tariffs will not have the same effect that they did in 1929: the US is not the world’s biggest creditor. Our debtor status means that we are not vulnerable to a bond-market dislocation. Other nations are. We can safely go back to raising tariffs and building the United States.

Of course, this also explains why creditor nations such as Germany and South Korea are so inordinately terrified of what are, in reality, very small and modest tariffs. It’s not just their massive export sectors that are potentially at risk, but the huge financial Ponzi schemes that have been constructed on top of them. The various camels we call economies are overloaded with debt and there are an awful lot of things that look like straws these days.

Define truth, fellow humans

Jean-Louis Gassée concludes that the Zuckerbot thinks human beings are suboptimally cognitive bio-machines with an inability to penetrate falsehoods perpetrated by advanced forms of bio-machine processing:

Carefully reading and re-reading Zuckerberg’s words puts me ill at ease. Of course, simply complaining that Facebook’s CEO sounds well-rehearsed won’t do. He’s a pro at managing a major crisis. Persphinctery statements are part of the fare (from the NYT interview):

“Privacy issues have always been incredibly important to people. One of our biggest responsibilities is to protect data.”

But we quickly get to the misrepresentations.

“… someone’s data gets passed to someone who the rules of the system shouldn’t have allowed it to, that’s rightfully a big issue and deserves to be a big uproar.”

Here, Zuckerberg glosses over the pivotal fact that researcher Aleksandr Kogan accessed data in a manner that was fully compatible with Facebook’s own rules (see below). It appears that the rule-breaking started after he put his mitts on the data and made a deal with Cambridge Analytica.

Next, we’re treated to the resolute statements. Facebook now realizes what transpired and will make sure it won’t happen in the future:

“So the actions here that we’re going to do involve first, dramatically reducing the amount of data that developers have access to, so that apps and developers can’t do what Kogan did here. The most important actions there we actually took three or four years ago, in 2014. But when we examined the systems this week, there were certainly other things we felt we should lock down, too.”

Three rich sentences, here. And a problem with each one…

First, an admission that Facebook’s own rules allowed developers overly-broad access to our personal data. Thanks to Ben Thompson, we have a picture of the bewildering breadth of user data developers had access to:

(Thompson’s Stratechery Newsletter is a valuable source of insights, of useful agreements and disagreements.)

Of course, developers have to request the user’s permission to make use of their data — even for something as seemingly “innocent” as a game or psychological quiz — but this isn’t properly informed consent. Facebook users aren’t legal eagles trained in the parsing of deliberately obscure sentences and networks of references and footnotes.

Second, Mark Zuckerberg claims that it wasn’t until 2014 that the company became aware of Cambridge Analytica’s abuse of Facebook’s Open Graph (introduced in 2010). This, to be polite, strains credulity. Facebook is a surveillance machine, its business is knowing what’s happening on its network, on its social graph. More damning is the evidence that Facebook was warned about app permissions abuses in 2011:

“… in August 2011 [European privacy campaigner and lawyer Max] Schrems filed a complaint with the Irish Data Protection Commission exactly flagging the app permissions data sinkhole (Ireland being the focal point for the complaint because that’s where Facebook’s European HQ is based).”

Finally, Zuckerberg tells us that upon closer examination Facebook realizes that it still has problematic data leaks that need to be attended to (“So we’re going ahead and doing that” he reassures us).

The message is clear: Zuckerberg thinks we’re idiots. How are we to believe Facebook didn’t know — and derived benefits — from the widespread abuse of user data by its developers. We just became aware of the Cambridge Analytica cockroach…how many more are under the sink? In more lawyerly terms: “What did you know, and when did you know it?”

Once more, sociosexual analysis provides useful insight. Remember, the Zuckerbot is not merely a Gamma, it is a Super King Gamma Emulation. And what do Gammas always believe? That their ludicrously transparent deceptions are impenetrable, of course.

Meanwhile, one of the Zuckerbot’s human assistants has let the sociopathic cat out of the bag:

On June 18, 2016, one of Facebook CEO Mark Zuckerberg’s most trusted lieutenants circulated an extraordinary memo weighing the costs of the company’s relentless quest for growth.

“We connect people. Period. That’s why all the work we do in growth is justified. All the questionable contact importing practices. All the subtle language that helps people stay searchable by friends. All of the work we do to bring more communication in. The work we will likely have to do in China some day. All of it,” VP Andrew “Boz” Bosworth wrote.

“So we connect more people,” he wrote in another section of the memo. “That can be bad if they make it negative. Maybe it costs someone a life by exposing someone to bullies.

“Maybe someone dies in a terrorist attack coordinated on our tools.”

Zuckerbot doesn’t care at all about its “fellow humans”. And it’s simply grotesque parody when it tries to pretend it does.

Facebook alternatives

Barron’s contemplates them.

The proverbial sky seems to be falling on Facebook (FB), with founder and CEO Mark Zuckerberg agreeing to finally answer questions from Congress in the coming weeks.

Lawmakers will be pushing Zuckerberg about the company’s privacy controversy, but the issues go deeper for Facebook. The fallout from the Cambridge Analytica data-harvesting episode has exposed Facebook to two risks that aren’t getting much attention: One is the possibility, slight as it might be, that Facebook is newly vulnerable to competition. The other very real risk is Facebook’s ability to retain and recruit top talent in hypercompetitive Silicon Valley. The biggest names in the Valley routinely poach workers from one another.

First, those plucky competitors. I need not look further than my email folder. Idka, an advertising-free social network, on Wednesday announced its subscription-based platform would be free to new users through October 2018. The company, which has vowed not to sell or share user data, claims a 50{0e0118f8ae392893e7132af0e0c1b6af259b6ae2f64a392a36423d79bfd12d2b} increase in new users and an 800{0e0118f8ae392893e7132af0e0c1b6af259b6ae2f64a392a36423d79bfd12d2b} increase in website visits in the past week.

I wonder where all those new users came from…. Seriously, though, if you’re not on Idka yet, give it a whirl. We’re going to establish a new Voxiversity group there later this week.

Anonymous Conservative, take a victory lap

Science is gradually confirming his amygdala-based theory of politics:

Psychologists conducted brain scans on a total of 93 adults (first they studied 48 Caucasian adults, 58{e4703c56c4188c228685943b148064279a37085e2b6bbaf4ff431841da5c8102} of whom were female, and then replicated the effects with 45 adults from diverse ethnic backgrounds, 67{e4703c56c4188c228685943b148064279a37085e2b6bbaf4ff431841da5c8102} of whom were female) and found that the size of the bilateral amygdala, which governs emotions, survival instincts, and memory, was strongly correlated with support for the existing social order.

This mindset is known as “system justification,” and is highly correlated with conservatism, says Jay Van Bavel, professor of psychology and neural science at New York University. “A system-justifying psychological orientation favours the social, economic, and political status quo, and may promote vigilance to social hierarchy and a preference for ideologies that characterize extant inequality as legitimate and necessary,” explain the authors in the paper, published in December in Nature Human Behavior. The study evaluated this by the system justification scale, which poses questions such as, “In general, you find society to be fair,” and “Everyone has a fair shot at wealth and happiness.”

Earlier research (notably one paper co-authored by the actor Colin Firth) found a link between conservatism and the volume of the right amygdala, with higher volume linked to conservatism. Van Bavel says his research found that system justification, more than specific political ideology or the tendency to legitimize economic inequality under capitalism, was the strongest indicator of variations in the size of the amygdala.

The authors followed up with 20 participants and found that those with larger amygdalas were less likely to take part in protests. “Although the sample size was small, this link between amygdala volume and protest behaviour provides initial evidence that the amygdala may not only be related to beliefs about society but also willingness to take action to change certain aspects of the social system,” note the authors.

This is why you simply cannot fix SJWs. It’s no more possible than trying to make them taller, or smarter. Their shrunken, tiny little brains are the problem.

Here we go

It looks like some of the damning information is beginning to leak out to the press:

Newly uncovered text messages between FBI officials Peter Strzok and Lisa Page suggest a possible coordination between high-ranking officials at the Obama White House, CIA, FBI, Justice Department and former Senate Democratic leadership in the early stages of the investigation into alleged collusion between the Trump campaign and Russia, according to GOP congressional investigators on Wednesday.

The investigators say the information provided to Fox News “strongly” suggests coordination between former President Barack Obama’s Chief of Staff Denis McDonough, then-Senate Democratic Leader Harry Reid, and CIA Director John Brennan — which they say would “contradict” the Obama administration’s public stance about its hand in the process.

There will be far more than this coming to light. But just this would be enough to land some very high-ranking government officials – and former government officials – in prison.

Big tech in the crosshairs

Q asserts that it isn’t only Facebook that is in the crosshairs.

FACEBOOK data dump?
Who made it public? 
Who sold shares -30 days from announcement?
You can’t imagine the magnitude of this.
Constitutional CRISIS.
Twitter coming soon.
GOOG coming soon.
AMAZON coming soon.
MICROSOFT coming soon.
+12 
Current censorship all relates to push for power [mid-terms].
LAST STAND.

Sounds like a fascinating spring and summer.

Thank you, we accept

Instapundit is troubled by Marquette University microaggressions:

During a recent forum at Marquette University, students and faculty members enthusiastically agreed that the university’s seal is a “microaggression” because it depicts a white explorer being guided by a Native American. “According to one professor at the forum, the seal shows how Marquette’s namesake, French explorer Fr. Jacques Marquette, ‘took advantage of an economic disparity to have a Native American as his guide.’”

I agree. Shut down Marquette and give the land back to the Indians.

On behalf of my people, I accept the good professor’s gracious and historically sensitive offer. This will take Voxiversity to a whole new level!

A Hollywood hit?

The Hollywood Values crowd apparently doesn’t want Corey Feldman talking anymore as accusations of child abuse swirl around a major Nickelodeon producer:

Corey Feldman has been hospitalised after being stabbed by a man in what he claims to be a ‘revenge attack’ after his allegations about sexual abuse in Hollywood.

The actor tweeted two pictures of himself in a hospital bed and revealed the attack happened while his security guards were distracted.

Three men approached him while he was out in public, before another man pulled up in his vehicle.

Now, Feldman is shady enough that one can be excused for being a little suspicious about the nature of the attack. I certainly would not put it past him to stage something like this for attention. But if it was a legitimate attack, then it is a clear message being sent to all the young actors and actresses who were abused by people in Hollywood.

Which is why they are better off talking immediately, openly, and loudly to every media outlet that will listen. Otherwise, they will be quietly silenced, one way or another, as has been happening for decades.

UPDATE: Apparently not.

Desperate for more funds, this former child/teen actor who was mostly in movies is resorting to cheap publicity stunts to try and raise more money from what he hopes is a gullible public. Those vacations aren’t going to pay for themselves. 

I think it’s safe to assume the reference is to the unfortunate Mr. Feldman.

The sustainability of nationalism

More from The Seneca Effect by Ugo Bardi.

Japan escaped the boom and bust cycles of many other pre-modern human civilizations and managed to create a stable and relatively prosperous society. Of course, that doesn’t mean that Edo Japan was Paradise on Earth. It was a tightly regulated society where individual freedom and individual rights were unknown concepts. Social inequality was also very pronounced and political power was concentrated in the hands of a small number of wealthy landlords.

Still, we can learn a lot from ancient Japan on how to create a society that doesn’t overexploit its resources and maintains the natural wealth of its territory. The Japanese interpretation of the concept of sustainability made it possible for them to develop a remarkably sophisticated society. The skills of the Japanese craftsmen are still legendary today, while Japan attained achievements in poetry and figurative art that are a cultural heritage of all humankind: from Hokusai’s prints to Basho’s sophisticated poetry. In comparison, it is truly heartbreaking to note how the cultural treasures that Ireland had produced during its long history were destroyed by the greed and the carelessness of the foreign rulers of Ireland.

So, how could the Japanese attain sustainability whereas Ireland couldn’t? It is, of course, a complex question, but I can list here the main factors that differentiated Japan and Ireland during the ninetieth century.

  1. Japan had a strong national government. Ireland was governed by a different country.
  2. Japan had a well-developed commercial system and a national currency. Ireland had neither.
  3. Japan was isolated, practicing no commerce with other countries. Ireland was integrated with the British worldwide commercial system.
  4. Japan is a country of steep mountain ranges and low coastline. Ireland is mainly flat, with high coastlines.

What can we reasonably conclude from this in light of the current situation? Among other things, this: the neo-liberal world order, which increasingly depends upon globalization, international migration, and multiculturalism, is unsustainable, unstable, and intrinsically fragile. Nationalism is the solution, which is why both progressivism and conservatism are irrelevant and the Alt-Right is inevitable over time.

Christian nationalism is the one and only way to preserve Western civilization, as well as the many fruits of the West such as science, human liberty, and inside plumbing. You may not wish to accept that reality for one reason or another, but your excuses and your alternatives are rapidly vanishing.

The pedowall cracks

I suspect there is more than “creative differences” behind this unexpected parting of the ways:

Nickelodeon and prolific TV producer Dan Schneider have opted to end their longtime partnership.

“Following many conversations together about next directions and future opportunities, Nickelodeon and our longtime creative partner Dan Schneider/Schneider’s Bakery have agreed to not extend the current deal,” the Viacom-owned cable network said Monday in a statement. “Since several Schneider’s Bakery projects are wrapping up, both sides agreed that this is a natural time for Nickelodeon and Schneider’s Bakery to pursue other opportunities and projects.”

Translation: someone is about to get Weinsteined and DisneyViacom is proactively attempting to create distance in order to protect its other orientationally-challenged creators.

UPDATE: Some details are beginning to come out. Apparently the three young actresses coming forward do NOT include Amanda Bynes or Jamie Lynn Spears, the two most obvious names considering the identity of the alleged abuser. More details on the WereNotSorry video, which explains the way in which the Hollywood media acts as quasi-defense attorneys for the Hollywood values creeps.

Bombshell Dan Schneider info on @ROTCRadio w/ @GabeHoff of @AnOpenSecret
3 actresses, names “everyone would know”
2 are 100{e4703c56c4188c228685943b148064279a37085e2b6bbaf4ff431841da5c8102} ready to talk, other not sure b/c of career
Gabe confirms “major child sex abuse scandal at Nickelodeon”