Wednesday, July 31, 2013

Timeline to War

For those wondering why I have disappeared for so long....

About a week ago I decided it was important for me to begin building a timeline of events for the period leading up to World War II.  I begin with only one section from the book “1939 – The War That Had Many Fathers.”  What a time consuming decision! 

I don’t know what further, if anything, I will do with this information.  I might build on it as I read more about this history.  I might go back to the several books I have already read on this subject and capture the information here.  I might do nothing.

I have not attempted to create any narrative; I am merely trying to capture events in the order they occurred.  In some cases, this proved quite difficult – toward the last weeks, even the time of day was important.

In any case, here it is.  If I add anything substantial, I will post a note on the blog.  Items in parenthesis refer to book:page.

Monday, July 22, 2013

Suggestions for the Pope

The Pope is concerned about youth unemployment:

Widespread youth unemployment is creating a generation of the jobless, Pope Francis said Monday, setting the tone for a weeklong visit to Brazil that marks the first foreign trip of his papacy.

The Argentine pope, speaking to reporters at the start of a 12-hour flight to Rio de Janeiro, criticized labor markets that he said treated young people as "disposable."

"We risk having a generation that hasn't held a job. Personal dignity comes from working, from earning your bread," the pope said. "Young people are in a crisis."

I have a few suggestions for the Pope.  Very humbly offered:

  • Eliminate minimum wage laws.
  • Eliminate statutes giving unions extra-market power.
  • Eliminate financial and administrative burdens for laying-off employees and otherwise restructuring a workforce.
  • Eliminate central banking, the root of the boom-bust cycle that has devastated the global economy.

That would be a start.

Sunday, July 21, 2013

Deflation? Never!

 I have argued in the past (for example here, here, and here) that there is no need at all to be concerned about deflation – most certainly not in monetary policy, secondarily not in commonly measured CPI, and likely not again in asset prices.  The Fed will inflate until commonly measured CPI reaches politically unacceptable levels – double digits at least, I suspect.

The Fed will inflate at any time there is any risk of commonly measured price deflation.  The Fed will buy any asset necessary to meet its objectives.  Every hint of credit contraction will be met with more-than-offsetting inflationary policies.  At least until the pain threshold of consumer prices ends the game.

In a blog post at the Peterson Institute, Joseph Gagnon makes my point.  In arguing against the possibility of a “liquidity trap,” Gagnon suggests:

The liquidity trap hypothesis has some validity, but only if one arbitrarily restricts the definition of monetary policy to purchases of short-term risk-free bonds. There is no economic reason, and not even a historical precedent, for such a limited view of monetary policy.

Unlike Bernanke, Gagnon has no qualms about properly labeling central bank operations: “Monetary policy consists of printing money to buy assets.”

Central banks can buy anything, as necessary to support monetary policy:

Central banks have always held risky assets, including long-term bonds, loans to banks, gold, and foreign exchange reserves. Some central banks also hold equity and real estate….There is no reason to doubt that central bank purchases of equity or real estate could significantly influence the prices of those assets.

There is no limit in quantity, quality, or type of assets purchase: auto industry needs a jolt, buy up auto loans; colleges lack funding, buy up student loans; municipal government bonds lacking support…well, you get the idea.

The only question is why the major advanced-economy central banks have been so timid in using their powers and allowed inflation—and for the United States, employment—to fall below their targets.

“Timid” is not the word I would use to describe balance sheets that have tripled in just a few, short years.  Nevertheless, his point is well-taken: central banks will buy whatever they need to buy, whenever there is a hint of deflation.

Until consumer price inflation wins.  That’s when things will become really interesting.

Obama on Martin

President Obama gave a brief speech regarding the Trayvon Martin verdict and outcome.  I have no doubt it was heartfelt; I would only comment on a couple of points:

First of all, I want to make sure that, once again, I send my thoughts and prayers, as well as Michelle’s, to the family of Trayvon Martin…

It would seem to me appropriate to at least recognize the trauma for George Zimmerman and his family.  I in no way equate the situation of the two, however it cannot be denied that his life and the life of his family is also changed forever; he will always live at personal risk.

The African American community is also knowledgeable that there is a history of racial disparities in the application of our criminal laws — everything from the death penalty to enforcement of our drug laws.

Obama could absolutely do something about this – repeal all federal drug laws.  Setting aside the more principled reason – if one does not have property in his own body, there is no property – the laws are designed to invade the lives of the public; give the police reason to search where there otherwise would be none.  This is disproportionately aimed at minority populations.

Now, this isn’t to say that the African American community is naïve about the fact that African American young men are disproportionately involved in the criminal justice system; that they’re disproportionately both victims and perpetrators of violence.

I think the African American community is also not naïve in understanding that, statistically, somebody like Trayvon Martin was statistically more likely to be shot by a peer than he was by somebody else.

It was statements like these that gave some balance to his speech.  Pat Buchanan addressed just these issues here.

I know that there’s been commentary about the fact that the “stand your ground” laws in Florida were not used as a defense in the case. On the other hand, if we’re sending a message as a society in our communities that someone who is armed potentially has the right to use those firearms even if there’s a way for them to exit from a situation, is that really going to be contributing to the kind of peace and security and order that we’d like to see?

Would the same apply to those who wear badges?

And for those who resist that idea that we should think about something like these “stand your ground” laws, I’d just ask people to consider, if Trayvon Martin was of age and armed, could he have stood his ground on that sidewalk?

But he was armed – not with a gun, but with his fists.  According to evidence, Martin stood his ground by beating Zimmerman’s head into the sidewalk.  A firearm does not have to be involved, does it?

And do we actually think that he would have been justified in shooting Mr. Zimmerman who had followed him in a car because he felt threatened?

The jury did not find that Martin was justified in standing his ground; else they would have found Zimmerman guilty of being the aggressor. 

Number three — and this is a long-term project — we need to spend some time in thinking about how do we bolster and reinforce our African American boys.

Stop subsidizing dysfunctional behavior.  Children born out of wedlock should not result in reward to the mother and allow for avoiding responsibility by the father.  Leave such care in the hands of private citizens, churches, and voluntary community action.  This is not only an African American issue; it is an issue wherever such behavior is subsidized.

Stop turning non-violent drug users into hardened criminals.  How many fathers are locked up in prison for such non-violent crimes, kept away from their sons?

There is no doubt that the African American community is disadvantaged. Much of this comes directly from the federal government in the forms of drug laws and in the form of subsidizing dysfunctional behavior.  Obama looks at the federal government as a source of positive change toward minorities.  Perhaps he should consider the significant harm caused by it instead.

He could do something about this.

Tuesday, July 16, 2013

Daily Bell, RIP

[Updated since original posting; see below]

Effective 16 July 2013 The Daily Bell has ceased publishing new material. It will remain online as an archived educational resource. The editors wish to thank Daily Bell readers and members for previous participation.

With that note in the banner, and a final editorial by Anthony, The Daily Bell is no more.

My relationship with DB goes back more than three years.  I have no idea how I first came upon the site; perhaps something at LRC?  Needless to say, it was an eye-opening experience. Certainly, it was clear to me that things in this world were not as they seemed on the surface.  DB helped me to peel away layers from the onion. 

I had, for a time, felt a desire to write, to focus my thinking, and to develop discipline in my reasoning.  There is nothing like a conversation on the internet to bring out the critics – and at DB, enough of the critics were reasonable and intelligent – sufficient for my purpose.  I learned not only from DB, but also from the feed-backers.

So, after a time, I began posting comments.  Bionic Mosquito was born at The Daily Bell.  But I had a problem – for some reason I couldn’t get more than a few hundred characters through the tube. Very limiting….

For a while I had considered writing a blog.  This was the motivating event.  If my comments couldn’t get through the tube, I would post to my blog and then ask DB to copy from my blog to their comment section.  DB was always very gracious and accommodating in this.

Eventually, I figured out the problem was buried deep in my browser.  I changed browsers…and voila!  But in the meantime, necessity forced me to start this blog.

I truly enjoyed the comment section – as much as the editorials.  Even in this, DB gets the credit – it was the quality of the editorials that attracted quality feedback.  I learned so much through this interaction – aside from a better understanding of the string pullers.  Money, credit, inflation, wars, history, etc. My participation in the dialogue forced me to hone my thinking on these and many other subjects.

Like many feed-backers, my relationship with DB hit a few speed bumps.  I would take some time off from comments, occasionally also some time off from reading.  I never felt the break would be permanent, and it never was.

Saddest of all was when some really good feed-backer would permanently check out – never publicly, just silently.  (Forgive me, as I will forget more names than I remember) John Danforth, Lila Rajiva, Leonardo Pisano, and Adam come to mind.  Fortunately, many stayed on – Abu, gpond, and Dave jr., and Lyn, for example; and new ones joined, like taxes.  Some became quite rare, but still showed up occasionally, like Bluebird and Weeble (in all of his forms).  Always present and active for as far back as I can remember was Bill Ross.  And I can never forget my personal foil – Ingo!

I also remember some of the trolls – Al Kyder comes to mind, a real terrorist towards Lila as I recall.  Say his name with a New England accent and you will see my point.

Eventually, I settled into a nice place with DB – a sign of my development more than anything else.  And because I was forced to take a step that I procrastinated – starting a blog – I began to write more.  In this, I have been truly humbled, with many posts picked up at LRC, a few at EPJ, and even one at Mises!  All of this began with my writing at DB.

But now Anthony tells us that DB is no more.  No surprise: just as when DB stopped taking comments for a time, no reason is given.  Anthony certainly doesn’t owe one, although he developed a site that came to be a community for many.  I suspect there are many that would like to hear something about this decision.

In the meantime, we move on.  Daily Bell, you have provided a valuable service.  You will be missed by many.  Rest in Peace. 

Update: I have received several emails in the few short hours since initially publishing this post reminding me: just a few days ago, Anthony wrote an editorial, promising bigger and better things to come at The Daily Bell:

Here at the Daily Bell, we're positioned to be an honest broker within this emergent market and we'll do our best to fulfill this role in terms of consulting, advisory work and by providing other resources as necessary. We'll certainly make the most of this opportunity on behalf of readers and those who wish to actively advance their interests within the context of the avenues now presenting themselves.

We'll do our best to keep faith with you and to be the same honest broker that we've been regarding the news and analysis that we've provided all along. We're not changing ... just getting better. And bigger. So stay tuned.

There's lots to come.

The sudden shut-down yesterday is even more confusing in light of Anthony’s statement to “keep the faith with you and to be the same honest broker….”