Inflationistas

I have a request for you all, particularly Nate. I’ve been working again on my next inflation video and in doing so ave assembled a surprising collection of competing inflation definitions from the monetarist economists. So, given this imprecision, I would like to know precisely what your definitions of inflation are. I’d like two things for each definition, the description and the statistical metric.

For example, you might describe inflation as an increase in the money supply and define the statistical metric as being M1. Or M2. Or M2 less Eurodollars, whatever. The reason for this request is that I intend to address the common monetarist conceptions of inflation as well as the more technical ones; there isn’t much point in disproving the significance of velocity when no one of a nominally monetarist position is taking it into account in the first place.

The Conscious Women’s Manifesto

Now that the text is done, where is the video?

I appreciate the great gift men gave to women – civilization. I apologize for refusing to acknowledge just how nasty, brutish and short my life would be without this gift. I apologize for not acknowledging that men created civilization because women are incapable of doing so because of our limited capability for and general aversion to abstraction. I promise to remember that without men, civilization would grind to a halt in short order. I promise to remember that men build houses and women live in them.

I’m not sure which I find more amusing, the Manifesto for Conscious Women or the fact that the Huffington Post was afraid to publish it: “We submitted this to the Huffington Post in December 2010, but they felt it was too “edgy” and “not a fit” for their audience.” Either way, it is as humorous as it is historically true, although it could never hope to reach the inadvertent heights provided by the GammaConscious Men video.

Naturally, it took a man to write the first draft….

Keynesian reductio ad absurdum

Courtesy of the Secretary of the Treasury:

Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.”

The administration’s plan to raise the tax rate on small businesses is part of its plan to raise taxes on all Americans who make more than $250,000 per year—including businesses that file taxes the same way individuals and families do.

Believe it or not, Geithner’s position makes an amount of sense so long as you accept a failed economic model and then misapply it. After all, if economic growth is equal to the rate of increase of C+I+G and G is supplying all the GDP growth, then obviously everything that feeds G should take absolute priority over that which sustains C or I.

What is lost from C or I will be more than made up for by G, therefore higher rates of taxation that permit higher levels of G should be considered pro-growth policies. QED.

Voxic Shock 1.3: Officer Nick Novello

In this week’s Voxic Shock podcast, I speak with officer Nick Novello of the Dallas Police Department about his membership in Law Enforcement Against Prohibition, his experience in fighting the War on Drugs, why he now supports the legalization of marijuana and other prohibited substances, and his perspective on the increased militarization of the American police.

In related news, Representatives Ron Paul and Barney Frank are reported to be introducing federal legislation to legalize marijuana and remove the federal government from at least one aspect of the drug war.

Better hope for a breakup

Because the USA as a whole is rapidly going the way of DC and Detroit:

For the first time, minorities make up a majority of babies in the U.S., part of a sweeping race change and growing age divide between mostly white, older Americans and predominantly minority youths that could reshape government policies.

Preliminary census estimates also show the share of African-American households headed by women – made up of mostly single mothers – now exceeds African-American households with married couples, a sign of declining U.S. marriages overall but also continuing challenges for black youths without involved fathers.

The findings, based on the latest government data, offer a preview of final 2010 census results being released this summer that provide detailed breakdowns by age, race and householder relationships such as same-sex couples.

Demographers say the numbers provide the clearest confirmation yet of a changing social order, one in which racial and ethnic minorities will become the U.S. majority by midcentury.

I understand that a lot of people believe that this increasing vibrancy is a good thing for the nation because “diversity is strength”. The fact that this charming equalitarian belief happens to fly in the face of every relevant historical example as well as the recent societal patterns doesn’t appear to bother them in the slightest. One need only look at the governance of any non-white majority city to see what is in the cards for the USA as a whole; when Los Angeles or Mexico City are your rosy scenarios, well, you’re pretty much out of luck.

The thing that the multicultural and racial fantasists can’t seem to understand is that culture is malleable. The non-European immigrants, forced and voluntary, are not going to be magically transmogrified by the laws and social mores they find, they are instead going to transform them to their liking. Victor Davis Hanson describes, in ominous detail, precisely how that process has taken place in his California valley:

Last week was another somewhat depressing chapter in a now long saga of living where I was born. I returned to the farm from leading a European military history tour, and experienced the following — mind you, after a number of thefts the month prior (barn, shop, etc.):

1) I left my chainsaw in the driveway to use the restroom inside the house. Someone driving buy saw it. He slammed on the brakes, stole it, and drove off. Neat, quick, easy. Mind you there was only a 5-minute hiatus in between my cutting. And the driver was a random passer-by. That suggests to me that a high number of rural Fresno County motorists can prove to be opportunistic thieves at any given moment. The saw was new; I liked it — an off-the-shelf $400 Echo that ran well. I assume it will be sold off at a rural intersection in these parts, or the nearby swap meet for about $60. I doubt the thief was a professional woodsman who needed a tool of the trade to survive.

2) On the next night, three 15-hp agriculture pumps on our farm were vandalized — all the copper wire was torn out of the electrical conduits. The repairs to each one might run $500; yet, the value of the wire could not be over $50. I was told by neighbors that reports and descriptions of the law-breakers focused on youthful thieves casing the countryside — in official parlance a “gang,” and in the neighborhood politically-incorrect patois “cholos” — like the fellow who recently drove in, in his new lowered shiny red pickup (hydraulic lifters are not cheap), inquiring about buying “scrap” and “just looking” before I ran him out….

I conclude that most Americans would agree that chain-sawing a peach tree or pumping irrigation water enriches the nation, while cruising around looking to destroy such activity does not. The latter represents the sort of social parasitism that I read about each Saturday night in our environs (and, in terms of illegal immigration, once wrote about in Mexifornia — a book I seem doomed to relive in Ground Hog fashion each day — nearly a decade ago): gangbanger A shoots up gangbanger B; B goes to emergency room for publicly funded $250,000 worth of surgery and post-op treatment by C, an MD, who otherwise would have been insulted and intimidated by A or B should he have met either earlier in the day. Indeed, C is more likely to be ridiculed or sued by B than thanked. And yet C does not need either A or B; both need the former in extremis.

Where does this all end — these open borders, unsustainable entitlements and public union benefits and salaries, these revolving door prisons and Al Gore-like energy fantasies?

We are left with a paradox. The taxpayer cannot indefinitely fund the emergency room treatment for the shooter and his victim on Saturday night if society cannot put a tool down for five minutes without a likely theft, or a farmer cannot turn on a 50-year old pump without expecting its electrical connections to have been ripped out. Civilization simply cannot function that way for either the productive citizen or the parasite, who still needs a live host.

Where VDH and other nominal social conservatives go wrong is to imagine that this has anything to do with illegal immigration. It has to do with the ethnic and racial makeup of the country. As we have seen everywhere from Atlanta and Afghanistan to Zimbabwe, a society can not only survive, but thrive, with a small dash of vibrancy. A country that is 90 European, 5 percent African, and 5 percent Hispanic might well benefit from the additional heterodoxy provided by the minorities, while a country that is 40 percent European, 20 percent African, and 40 percent Hispanic is going to be riven by a constant battle for government spoils of the sort that distracts the elites of most of the nations in the third world.

But it is obviously too late now to save the nation as a whole. There is no coherent nation anymore. Those who hope to save a vestige of what was once America would do well to ally themselves with the likes of La Raza, who will probably be one of the more important forces in ultimately ending the ill-starred Union.

“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded- here and there, now and then- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as “bad luck.””
— Robert A. Heinlein

The apocalypse is nigh

A laundry detergent commercial. Directed by Rob Zombie. If this is not an indication of the End of Days, I don’t know what could be. I now await the second sign of the apocalypse, Al Jourgensen’s first feminine hygiene ad, with great anticipation.

Burning inside, burning inside….

The first domino falls

The Allied Irish Bank has been determined to have officiallyeffectively defaulted:

The International Swaps and Derivatives Association (ISDA) yesterday said that a “credit event” had occurred on Allied debt, meaning the bank has effectively defaulted on its debt, a situation the Irish government has gone to extreme lengths to avoid. Credit default swaps (CDS) sold on Allied subordinated bonds and, crucially, its senior debt, have been activated by the decision of the ISDA determinations committee that decides whether a borrower has defaulted.

We should not be surprised that just as the rules about accounting for failed assets have been bent, the rules for being in default are also being actively danced around. But those interested in collecting on their derivative bets are not going to be inclined to permit a zombie bank to continue the charade enabled by the government regulators.

In tangentially related news, it appears that Bernanke finally blinked. There will be no QE3, at least not for the time being. There will, however be QE Lite, which is totally different because it will not be called quantitative easing and will be done on a smaller scale. For the moment.

The WSJ salutes Keynes

There was a time, as a boy, that I read the Wall Street Journal and marveled at its apparent erudition. Now, I can seldom read a single article without rolling my eyes. But this pro-Keynesian article by Alan Blinder is remarkable for its cluelessness.

The generic conservative view that government is “too big” in some abstract sense leads to a strong predisposition against spending. OK. But the question remains: How can the government destroy jobs by either hiring people directly or buying things from private companies? For example, how is it that public purchases of computers destroy jobs but private purchases of computers create them?

One possible answer is that the taxes necessary to pay for the government spending destroy more jobs than the spending creates. That’s a logical possibility, although it would require extremely inept choices of how to spend the money and how to raise the revenue. But tax-financed spending is not what’s at issue today. The current debate is about deficit spending: raising spending without raising taxes.

For example, the large fiscal stimulus enacted in 2009 was not “paid for.” Yet it has been claimed that it created essentially no jobs. Really? With spending under the Recovery Act exceeding $600 billion (and tax cuts exceeding $200 billion), that would be quite a trick. How in the world could all that spending, accompanied by tax cuts, fail to raise employment? In fact, according to Congressional Budget Office estimates, the stimulus’s effect on employment in 2010 was at least 1.3 million net new jobs, and perhaps as many as 3.3 million.

A second job-destroying mechanism operates through higher interest rates. When the government borrows to finance spending, that pushes interest rates up, which dissuades some businesses from investing. Thus falling private investment destroys jobs just as rising government spending is creating them.

There are times when this “crowding-out” argument is relevant. But not today. The Federal Reserve has been holding interest rates at ultra-low levels for several years, and will continue to do so. If interest rates don’t rise, you don’t get crowding out.

I’m not in the mood to rip Blinder’s article apart; I’ve still got the third section of Hazlitt’s Chapter 11 to complete. But a one word rebuttal should suffice: malinvestment. My main object with regards to this post is to point out the sheer chicanery Blinder uses in making one of his points. He claims that there can be no “crowding out” if interest rates don’t rise; since the Fed has kept interest rates low, then government borrowing must not be having any effect on private borrowing.

But don’t you think it’s just a little strange to appeal to a supposedly causal factor rather than simply looking at the relevant metric? Which is to say, the amount of government borrowing compared to private borrowing. As it happens the Q1-11 Z1 report on total debt was released two weeks ago and the chart below shows exactly what has happened since 2005.

In 2005, government debt accounted for 16% of all debt, (11.6% Federal). In 2011, it accounts for 23% of total credit market debt, which has declined about $280 billion since its peak of Q3-08. In that time, household sector debt has fallen from 28% to 25% and the financial sector has reduced its debt from 32% to 27%. This would appear to show the very “crowding out” that Blinder claims cannot be possible due to the low interest rates.

But the key word is “appear”. It doesn’t actually show any crowding out, because Blinder’s entire economic model is incorrect. What it actually shows is the expected contraction of the private sector due to the ongoing economic depression as well as the utterly futile attempt of the Federal Reserve and the federal government to do exactly what Blinder wants them to do more of, which is to fill in the gap created by the private contraction. This is why the GDP numbers have held up despite all of the obvious signs of severe economic contraction; it is also why the Congress is going to raise the debt ceiling no matter what the Red Faction members say.

The problem is that it only digs the hole deeper. What we are seeing is the transformation of a mixed economy into a fully centralized command economy, where all of the economic production and consumption is directed by the State. The good news, or at least what will have to pass for the good news, is that the system will collapse of its own weight long before the red line reaches 100. But there is almost no chance that the economic interventionists will succeed and that yellow and blue lines will reverse course. They are unlikely to do anything but head downward at a faster weight, since they have already realized significant losses that have not yet been accounted for.

Just based on a very rough off-the-top-of-my-head calculation, both the blue and yellow lines would be down around 20% already if the housing market debacle was being realistically reported. To put it in perspective, if total credit market debt had been expanding at the rate it was expanding from 2005 to 2009, it would stand at $62.6 trillion, $10 trillion more than it is today. This indicates a total private debt-demand shortfall of around $14 trillion – or an entire year’s worth of GDP consumption.

Mailvox: in defense of Ann Coulter

RC still believes Miss Coulter was correct to attack libertarians as “cowardly frauds”:

Your article was interesting, but never addressed the substance of Ms. Coulter’s presentation. You offer several examples that purport to contradict her statements.

Let’s look at one:

“It is worth noting that in some states, such as Washington, all marriage-related information was kept at the county level until 1968. And yet, civil society somehow managed to settle these issues without devolving into total chaos.”

What’s missing? The fact that there was never previously a major societal push by homosexuals to attack the millenia-long history of traditional marriage. Somehow you fail to identify and address that significant departure from world and US history that you purport to address.

What else is missing? Never have historically bedrock institutions of morality like mainline religious denominations been so tolerant – nay supportive – of aberrant social behavior such as homosexuality.

There are a plethora of arguments and examples that could be given along these lines, all having to do with the current breakdown of societal mores and values at a level unprecendented since perhaps Roman times.

Don’t you see the difference? I think Ms. Coulter was completey correct in her wry observations concerning Libertarians. Hopefully you will, too.

Do I see the difference? No, I see a conservative who didn’t acknowledge a single one of the errors in Miss Coulter’s article that I pointed out. Of course, RC is clearly a historical illiterate with no clue what he’s talking about, given his assertion that “the current breakdown of societal mores and values” is unprecedented since Roman times. He should read Boccaccio, Solzhenitsyn, or the history of the Spanish Civil War if he wants to see what a real breakdown of societal mores and values looks like.

American culture is filth, but it is a mistake to confuse the media’s Hollywood version of it, very much skewed by its gay Jewish perspective, for the reality. In the real world, the quarterback didn’t dump the pretty blonde cheerleader at prom in favor of the ugly Barbara Streisand wannabee, every school bully isn’t a self-hating homosexual, everyone doesn’t want to move to New York City*, and a crack team of Jewish commandos didn’t win the war in Europe.

In any event, the column sufficiently demonstrated that Coulter is very poorly situated to be labeling anyone, let alone libertarians, as “cowardly frauds”. As Paul Gottfried noted in “The Mainstreaming of Michelle Malkin“, it’s only a matter of time before a fame-driven media whore learns to dance to the crack of the party establishment’s whip. No doubt Dana Loesch will be the next to look beautiful in chains.

“A recent syndicated column by Michelle Malkin indicates what happens to interesting conservative commentators when they sign on as GOP flacks: They become predictable Republican mouthpieces and attack dogs against the Dems…. As a Republican journalist and media entertainer, Michelle is following in the well-trod path of others such as Ann Coulter. Like Michelle, Ann started out as a very feisty rightwing news commentator, but unlike Michelle, Ann could be devastatingly witty as well as edgy. But she, too, succumbed to various pressures and became a sharp-tongued version of Sean Hannity rather than remaining a figure of the traditional right.”

The explosive growth of atheism… in prison

Atheists often like to erroneously claim that Christians are more likely to be imprisoned than atheists. Both Sam Harris and Richard Dawkins have made this bizarre, and irrelevant, appeal to atheist “morality”. But these arguments are inevitably based on nothing substantive, and more importantly, they are belied by actual prison statistics. While the USA doesn’t keep comprehensive statistics related to religion, the UK does, and it’s here that we can see the actual facts of the matter.

What is interesting is that it appears atheists have become significantly more criminal since I found the 2002 statistics when writing TIA. (Since then, the UK Ministry of Justice has gotten its online act together and it’s much easier to find the relevant annual statistics.) In the seven years between 2002 and 2009, the number of imprisoned High Church Atheists rose 475%, from 0.17% of the England and Wales prison population to 0.84%. That’s still fairly small, of course, but it’s worth noting that it is a larger percentage of the prison population than is represented by any of the following religions and denominations:

Baptist, Congregational, Methodist, Pentecostal, Presbyterian, Episcopalian, Quaker, United Reformed Church, Hindu, Jewish, Sikh, Christian Scientist, Coptic Christian, Greek/Russian Orthodox, Mormon, Jehovah’s Witnesses, Seven Day Adventist, BaHai, Jain, Pagan, Rastafarian, Scientologist, Zoroastrian.

That’s only a partial list, as I left out about an equal number of more obscure denominations and religions. It was also the second-fastest rate of growth, surpassed only by the agnostic population, which increased 812% to 0.64% of the total prison population.

However, as I pointed out in TIA, the correct comparison between Christians and atheists is not between all Christians and self-identified High Church Atheists, but rather between all Christians and all No Religion atheists, less agnostics. It is easy to demonstrate why this is so, the inevitable Atheist Dance notwithstanding, given the correct definition of an atheist as “one who believes that God does not exist” rather than “one who calls himself an atheist”. This assertion is supported by the action of the atheists at the British Humanist Association and their census campaign, which asserts that is an individual’s identification with a religion – or presumably, identification with a specific appellation – irrespective of the extent of their religious belief or practice is not the appropriate concept to measure. And while one could argue that “no religion” is not perfectly synonymous with “belief that God does not exist”, it is safe to assume that most, though not all, no religion individuals are practical atheists even if they are not inclined to call themselves atheists. It is also in keeping with the practice of Richard Dawkins, the British Humanist Association, and many vocal atheists to consider “no religion” a form of atheism.

The reason this matters is that is the Low Church atheists of the No Religion variety who make up 33.1% of the prison population, more than twice the 15% of the general population. (The 15.1% number is from 2001 and will likely be around 20% in the 2011 census; I will update the numbers accordingly when they become available.) The statistical overrepresentation of no religion atheists in prison is surpassed only by Buddhists (0.3% general, 2.2% prison) and Muslims (2.8% general, 11.9% prison).

So, keep this in mind the next time that an atheist attempts to claim that atheists are more moral or less criminal than Christians. All they are doing is cherry-picking the most intelligent subset of the atheist population and comparing it with the entire intelligence spectrum of the Christian population. Since low IQ tends to correspond highly with criminal behavior and imprisonment, it should come as no surprise that self-styled Atheists are less likely to be found in prison than no religion atheists.