The Economist's Cookbook

Recipes For A More Free Society

  • "The curious task of economics is to demonstrate to men how little they know about what they imagine they can design."

    - F.A. Hayek

So I'm exhausted and I don't want to post the Palin Rally pics.

Instead, here is an awesome video on how the US corporate tax affects all the rest of us normal people. Barack Obama specifically wants to raise this tax and doesn't think it will have an effect on American Business. At the same time he wants to give a tax credit to businesses that don't offshore jobs to reduce costs. Kind of a mixed message there isn't it Barry? I'm gonna screw you with more taxes, oh and by the way, when you try and compensate for the additional cost of those taxes by moving portions of your business overseas, I'm going to punish you more for not being 'American' enough to suck it up and pay "your fair share". I don't like McCain, but damn Barry, I really hate you.

Anyway, enough ranting, here's the video: (Hattip to The Agitator)

So I attended a Sarah Palin rally in my hometown. It was an interesting experience.

Honestly, there were points were I wanted to just throw things at the various speakers.

Here is a brief rundown of some of the things that pissed me off during the night.

1.) Morgan Griffith a Republican member of the VA house of Representatives gave the invocation prayer. Now I know this is the south and I don't so much have a problem with the fact there was a prayer as I do the content of that prayer. Griffith seemed to suggest in his prayer that God was on the side of McCain/Palin. I find that to be a strange comment. In fact I find it strange that God would be on anyone's side seeing as how God is all powerful and all knowing, shouldn't God be on ... well ... God's side?

2.) They then had some singer come up and he dedicated a song to Palin ... the song you ask? 'Oh, Pretty Woman' by Roy Orbison. Poor choice. The fact of the matter is that people associate that song with a movie about a prostitute (Though the song doesn't actually say that)! I couldn't believe it. I just kind of went ... "DOH!"

3.) Then they played God Bless America. Now, call me a bit crazy, and I say this as a non-religious person, but I've read the Bible and it seems to me that if you hold what the bible says to be true, or even just good moral teachings, God shouldn't want to bless America. We look more like Nineveh or Gomorrah than we do a "Christian" nation or at least a nation with many "Christian" people. Feel free to disagree, but that's just how I see it. If you're going to claim to be something or ask for that blessing, maybe it's time we started looking at whether we act like it. It's kind of like being a beef farmer and asking the Hindu god(s) to bless you.

4.) The Co-Chairman of the McCain/Palin campaign in VA got up to talk and this guy was actually kind of funny. Until he started railing against individuality, then I got pretty pissed.

"Put aside your individuality to build a better society."
Oh ... that's right because self-interest is eeeevil. You self-righteous political drone. It is the entrepreneurs and the industrialists and the inventors, the capitalists, they are the ones who build a better society. NOT the politicians and their lackeys. Do I really need to point you to the 20th century as an example? We saw Government control and regulation expand over virtually EVERY aspect of our lives, has this made us better off? I doubt it. What made our lives better was the inventions. The refrigerator, the automobile, the telephone, the cell phone, the Internet (Not invented by Al Gore by the way), and other such things were not invented by the government. (I do concede that the ARPANET project was the predecessor to the Internet but it has been private companies that have expanded the usefulness of the network.)

5.) This was said about McCain: "He puts country first." Shouldn't he put the citizens and the US Constitution first? I'm just asking. If you don't think he should, that's fine. I'm just asking people to be honest about what they really think rather then use political buzz terms.

6.) "John McCain sponsored legislation in 2005 that could have prevented the Freddie Mac and Fannie May meltdown." Right so as a student of economics I have to call BULLSHIT! If you don't understand the roots of the mortgage and equity mess we are seeing right now I want you to go and read this post of mine. It's short and dirty and doesn't cover all of the nuances, but it does hit the major effects at work. The very short version is that the US government and the Federal Reserve Bank put us in this mess, why should we expect them to save us?

7.) US House of Rep. member Bob Goodlatte led the crowd in a rousing chorus of "Drill Baby Drill". This was kind of cool actually. Maybe people will figure out that the "Green" movement is largely a bunch of anti-capitalist, self-righteous, panicky morons. What pissed me off was all the talk of energy independence. We get 68% of our oil from Canada ... I'm just fine with free trade.

8.) Virgil Goode US House of Rep. got up and talked about national security. So ... nation-building breeds security? Not as argued by many political economists and NOT by Chris Coyne! Read his book to get my opinion on nation-building.

9.) Jim Gilmore, running for US Senate and he will lose in a landslide (My prediction), continued with national security fear mongering. We have Delta Force for a reason. They go in, they kill people, they get out. That's how you solve terrorist problems, not by bumbling around trying to build a state that shouldn't exist in the first place. Hell the reason Iraq has all those nice straight lines is because the British carved out the territory as part of their Empire.

10.) Jackasses with signs! I'm trying to see and/or take pictures! No one cares if "Hokies (heart) Palin" or if you think we ought to "Keep VA Red". I don't care and it just pisses off the people behind you, especially when it goes up every 30 seconds! I came to see people speak, not hear them speak and look at your dorm-room art work.

Now there were a few highlights.

1.) Mandi (would you spell that with a 'Y'?) and her friend (I really need to get better at names!). They had the right idea and were drinking Rum during the event, or maybe they just pregamed it. Still not sure. They were cool, cute, loud, opinionated, a bit ignorant on some issues (Aren't we all?), but still kind of cool (even if Mandi's screaming left me deaf in my right ear). The funny thing is that they struck me as the kind of people that would be hard to sway by libertarian reasoning. Mandi had some knee-jerk reactions to my thoughts on drug policy, but she kind of failed to address my arguments. *Shrugs* It would probably have been easier talking about this over a cup of coffee sober than one of us buzzed. Who knows, she might open up to the ideals of liberty if she did a little more reading and thinking.

N.B. I should have tried to get my flask in, scotch would have made the rally more tolerable.

2.) The nice lady and her husband on my left side I got to rub elbows with a bit during the waiting between speakers. She seemed very libertarian in her outlook on some issues, but I'm not sure if she, like so many others, is ready for the ultimate implications of libertarian philosophy. he seemed like a typical knee jerk republican. He kept shouting about Obama being a Marxist (which is true!) but if you asked him to look at the policies his party has put forward he would probably squirm or just say "Well that's not what I believe and better leaders can do better for us." Uh huh. That was the argument made during the Socialist Calculation Debate: If only socialist planners were more moral people, then the system would work better than Mao's, Stalin's, Lenin's, Tito's systems did. Mises and Hayek BOTH addressed this issue. They said, and I agree that the system is geared so that corrupt people rise to the top. In fact I believe that of ANY political system.

In conclusion. I'm glad I'm not voting. I'm convinced most of the people at the rally had no business voting. They DO NOT understand the implications of economic policies and they don't understand that what a politician promises and what happens once they get in office, can be very different things. If I had polled, and asked "What caused the mortgage meltdown?" I would have heard lots about corporate/ Wall Street greed, Fannie and Freddie, and The Democrats. I'm not sure if more than a dozen people would have told me "The Federal Reserve."

I'm very worried about the state of this country.

EDIT: I'll be posting pics of the rally inside this post tomorrow, I don't have the energy to crop and take care of them tonight.

Public Service Announcement

Posted by The_Chef On 4:54 PM 0 comments

Opeth live = Awesome.

Their performance was amazing. High on Fire was pretty awful as far as openers go.

Closing two songs were a couple of my favorites: Demon of the Fall and their encore was Drapery Falls.

The last time I saw Opeth The Devin Townsend Band and Dark Tranquillity (yes I know it's spelled weird) opened and they were both amazing.

Apparently Baroness canceled their appearance. No worries. If High on Fire is any indication I didn't really want to see Baroness anyway.

Out for the weekend

Posted by The_Chef On 11:53 PM 0 comments

Going to a concert.

I don't know how much blogging I'll get done.

The next planned blog is on Keynesian theory and its resurgence following this financial debacle. I'll be taking on the Financial Times. Really, someone should hire me to just rebut pieces published that are socialist leaning.

Anyone know a publicist that's willing to hire a libertarian with no journalistic experience? (yes that is said tongue in cheek).

Why Vote?

Posted by The_Chef On 11:22 AM 3 comments

In fact, don't vote. I'm not voting and I get tons of crap from people for it. Here is a quick break down of the typical arguments. Thanks to Justin over at Intellectual Chaos for prodding me to finally blog on this.

I. The Argument from Duty

"It's your duty to participate in the process."

I'm sick of this argument. This is right up there with Joe Biden's "It's the rich's patriotic duty to pay higher taxes" gaff. Voting is a Right to be exercised when I want. It's like the right to free speech, exercised at will.

IIa. The Argument from Complaint

"If you don't vote, you don't get to complain about the outcomes."

This one drives me up the wall! This is BULLSHIT! In fact, by abstaining from the voting process I have every right to bitch. When McCain gets us into another foreign "democracy building" intervention I don't want to hear ONE gripe from his supporters. On the other hand, if Obama drives the economy into the ground I don't want to hear one whimper from his worshipful masses. You idiot voters put one of these assholes in the office. In fact, by not voting I show that I support none of the candidates, or god-forbid I despise the entire enterprise.

IIb. The Write-In Argument

"Well if you don't like any of the candidates, go write someone in."

That's the equivalent of telling me: "Go piss on that forest fire just to show that you are doing something about it." I think not.

III. The Argument from Guilt Trip


"Soldiers died/are dying for your right to vote."

Bullshit. The soldiers today are nation building, just like the ones in Vietnam and Korea and WWII in Europe and WWI and about every other war where we weren't attacked or invaded. That nation-building is not better for my liberty as is argued by Chris Coyne in his book After War: The Political Economy of Exporting Democracy. Oh are you talking about the Soldiers from the American Revolution? They died to give me freedom from tyranny, they didn't die to impose responsibilities on me and the other future residents of the USA. The last soldiers to die for that freedom from tyranny surrendered on June 23, 1865.

The system is rigged, broken, and slowly grinding up our liberties. Why the hell do I want to support such a travesty?

Please watch these. They should piss you off, make you want to throw things, and make you question the entire house of cards that the politicians in DC have built.

Part 1 of 6:

Part 2 of 6:

Part 3 of 6:

Part 4 of 6:

Part 5 of 6:

Part 6 of 6:

Time for a Gun Post

Posted by The_Chef On 12:16 PM 0 comments

We have heard lots about how Obama is NOT against the Second Amendment from the likes of the AHSA. So what's the truth?

Here is a letter from the lead lobbyist with the Illinois State Rifle Association: Link.

Allow me to quote a few passages.

I lobbied Barack Obama extensively while he was an Illinois State Senator. As a result of that experience, I know Obama's attitudes toward guns and gun owners better than anyone. The truth be told, in all my years in the Capitol I have never met a legislator who harbors more contempt for the law-abiding firearm owner than does Barack Obama.
That's okay, I harbor contempt for politicians in general.
Although Obama claims to be an advocate for the 2nd Amendment, his voting record in the Illinois Senate paints a very different picture. While a state senator, Obama voted for a bill that would ban nearly every hunting rifle, shotgun and target rifle owned by Illinois citizens. That same bill would authorize the state police to raid homes of gun owners to forcibly confiscate banned guns.
Sure. Nothing like a little jackbooted thuggery to get this country to hope for more change.
While a state senator, Obama voted 4 times against legislation that would allow a homeowner to use a firearm in defense of home and family.
Because your life, is the property of the state, you are not allowed to defend it, and the gods help you if you try to defend this life that you live that doesn't actually belong to you. Yeah, that doesn't really make any sense to me either. But Hey, the Messiah holds this view, it must be true.
The AHSA is headed by a group of left-wing elitists who subscribe to the British view of hunting and shooting. That is, a state of affairs where hunting and shooting are reserved for the wealthy upper-crust who can afford guided hunts on exclusive private reserves.
Yeah, and let me tell you the British have built themselves a violence free society ... oh wait ... No they haven't.

Now, please be advised. This is in NO way an endorsement of John McShame. I'm not voting and I suggest you do the same. I recommend that instead of wasting your time at the polls you go to a gun store and start stocking up on ammo and go buy an AR-15 before they get banned.

How should we then regulate?

Posted by The_Chef On 10:31 AM 3 comments

A valid question from Mark over at The Soul of Atlas:

Question: What is the appropriate role of regulation (by government) of the financial system (specifically, banks)?

While ultimately I really am an anarchist, I tend toward minarchy for the sake of initial practicality. As a result I believe that general laws against theft and fraud are essential to a free and just economic system. The only other regulation that I really want to see is something along the lines of full disclosure. I don't want JP Morgan to be able to arbitrarily not tell me things about certain investments. Aside from that, I don't really want to see any regulation.

However I should note that this is assuming stable money. So I've essentially already thrown out the Federal Reserve and gone, at least in this gedankenexperiment to a privately issued currency backed by some sort of bullion or commodity backing.

So yes I'm making some major assumptions. Honestly, if we truly had a free market, capital movements would be so much more fluid and maybe, just maybe people would get over this absurd idea that certain businesses are "too important to fail". On the contrary, it is the most important businesses should be the ones that get wiped out when they fail so that someone else can absorb their resources and put them to a more highly valued use.

Now I'm quite sure that there might be some readers that are true anarchists and will say "Ah but the imposition of the power of the state ... blah blah" and they will cite Robert Higgs work on the 'ratchet effect of government power'. I agree with their fundamentals, but all changes are marginal. Without those marginal changes, we won't get anywhere because just saying you want anarcho-capitalism is akin to putting a loaded gun in someone's hand and putting it to your head intellectually.

Guns and Religion

Posted by The_Chef On 12:30 AM 3 comments

Ya know, people are still making a stink about the Obamessiah's "guns & religion" quote.

And it got me thinking. What do I cling to (if anything)?

My ideology of freedom perhaps.

My belief in individualism.

My belief that the state is the greatest threat to our liberties.

My belief that I have the right to defend myself against all foes, foreign and domestic, with lethal force.
Do I cling to these? Or are these simply truths? What do you 'cling' to?

So I've been promising this for a long time. It's about time I got around to it.

I'm looking at the Sept. 29th 2008 version of TIME magazine. Ya know what's on the cover?

Here have a look:


Right off the bat I'm scratching my head. Wall Street sold us out? Really? So if you will flip to page 32 of this issue you'll see a nice picture of our new finance czar Paulson and the article is titled "The Price of Greed". I'm already rolling my eyes. And they start in on "The Roots of the Problem".
Allow me to quote the article:

Warren Buffett, the nation's most successful investor, back in 2003 called these derivatives -- which it turned out almost no one understood -- "Weapons of mass financial destruction." But what did he know? He was a 70-something alarmist ... who had cried wolf for years.

Besides a few prescient financial sages ... who could have seen this coming in the fall of 2006...?
I have an answer for that: The Austrian School of Economics. Rothbard, Hayek, White, Horowitz, and Garrison have all written extensively about the problems created by "easy credit" and a fiat money system that is backed by nothing but the word of a government. I know people are going to try and dismiss me as one of those nutty Gold Standard people, and they are more than welcome to take that shot. The simple fact of the matter is that it is absurdly dangerous to give a central bank the power to print money as it sees fit and then on top of that, you allow them to inject money into the economy in such a way that completely distorts the market for loanable funds.

Please please go to Dr. Roger Garrison's Website here. Download the Time and Money powerpoint presentation for a rundown on how the Federal Reserve's Open Market Operations distort the entire loan market.

So TIME spends paragraphs talking about easy money. But they neglect to clearly state that the easy money is the fault of the Federal Reserve! It's asinine to blame all of this on the greed of wall street. Greed is a constant factor of life. It's like blaming gravity when a plane crashes.

The federal government's over regulation of financial securities might actually have contributed to all this mess as is argued by Frank Partnoy [Hat Tip to Marginal Revolution for this bit]
...[Frank] Partnoy is a former derivatives salesperson, and he clearly suggests that regulation is often the derivative salesman's best friend. Complicated rules encourage complex transactions that seek to conceal or re-shape their true nature. Regulated entities create demand for complex derivatives that substitute proscribed risks for admitted risks. If a new risk is identified and prohibited, the market starts inventing instruments that get around it. There is no end to this process.
So is more regulation the answer? I doubt it. though that's what all the pundits and candidates are saying. This is the fault of wall street and "corporate greed".

So ... let me get this straight. The Federal Reserve sets the stage, the lighting and the soundtrack. The Government writes the script and the stage directions and then when we find out the production sucks you all want to blame the actors who did exactly what they are going do given the incentive structure put in place? That sounds ... odd to me.

So here's the final deal folks. The Austrians called it a long time ago. The Federal Reserve and Government regulation of both the accounting methods and politically motivated BS like the Community Reinvestment Act (CRA) have constructed a house of cards out of the housing market and then the government and the people get really pissed off when it falls apart. And this anger is well justified, the problem is that they are directing their ire at the wrong people!

Now I should note several things at the end of this.
1.) The CRA did not cause the sub-prime meltdown. It did contribute to it, but in a smaller way than many conservative critics want to make it out to be.

2.) Actors on Wall Street did do things that I believe are morally and ethically questionable. Some of these acts include the absurd AA or AAA ratings of some of these collateralized debt obligations (Essentially investments which package portions of mortgages and then are supposed to return a portion of all interest profits) No one really knows what the value of these are right now (my guess given the instability is damn near zero). How can an investment with an unknown value be given a AAA security rating?!

Still despite these things people want to address the smaller more short term issues rather than deal with the long run effects. The gold standard is NOT politically viable in the beltway. The idea that by relaxing regulations we get a more stable system, is not politically popular.

The problem was created by the Fed and government agents ... why look to them for salvation?

Hayek's Knowledge Problem has never been more important.

EDIT: Please please read this article at Reason: What Would Mises Do?: Confessions of a free-market, anti-bailout operator

Hiatus

Posted by The_Chef On 11:10 AM 1 comments

I'm taking a break from this for right now, I know I've promised to take on Time, I will eventually.

Sorry, but things have been busy.