We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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This letter from a highly pissed-off AIG senior staffer is worth reading. My own take is that if an employee, under an agreed contract, gets paid a sum of money that later attracts the evil eye of the political class and that money is retrospectively seized, then the rule of law is crumbling. Admittedly, it has been crumbling for some time. I note that those who berated the former Bush administration for its high-handed treatment of legal principles are less noisy about Mr Obama’s own behaviour or that of his colleagues in Congress.
I have been reading Amity Shlaes’ interesting book about the Great Depression, and among the many themes of the book is how FDR, in order to whip up support for his measures, sent his legal attack dogs after various people associated, in his eyes, with the excesses of the preceding boom years. In particular, his victims included the likes of Andrew Mellon. History repeats itself: when politicians run out of money, the easiest option is to bash the rich, bleat about “tax havens”, and the like. We are seeing that now. And of course the politicians are getting away with it so far because they calculate, probably rightly, that the broad public cannot be interested or is not sympathetic.
To get the public interested, we have to figure out how this sort of looter behaviour by those in public office can be shown to be dangerous to the average Joe. That is not straightforward, but a bit of thinking is needed. Today, talking to a friend of mine who works in the City, he pointed out that as a result of the mass bailouts and the central bank’s printing of money, a spendthrift who had a 100 per cent mortgage is being subsidised by a careful, elderly saver who is now struggling, say, to pay for a nursing home. By drawing attention to these sort of regressive transfers from the careful to the spendthrift, and from the productive to the unproductive, we can get the message across. And yes, Mr Cameron, that means support for cutting spending and taxes.
Update: Alex Singleton, who also blogs here, points out that the vandalism to the house of Sir Fred Goodwin, the former CEO of Royal Bank of Scotland, can be indirectly blamed on the government for encouraging hatred of bankers. I am not sure that Gordon Brown can be directly blamed but in his usual, cowardly fashion, he has found it convenient to pin the blame for the crisis on private banks rather than accept that the crisis was in large part driven by recklessly cheap credit as set, ultimately, by central -state – banks.
This is becoming increasingly ugly. Demonstrations are planned in the City to coincide with the totally pointless G20 gabfest in early April. Someone might actually get killed or seriously hurt.
Update: Mark Steyn’s Orange County Register article about the AIG issue confirms what I now fear, that Mr Obama is, even at the most basic level, unfit to hold executive office. And Joe Biden is just down the corridor…..
We occasionally get some pretty nutty comments on the threads but I often think that this blog’s comments are models of coolness and restraint compared with what else is out there. In response to a fairly decent article by Niall Ferguson, the historian, at the Daily Telegraph today, is this zinger from some character by the name of King O’Malley. Enjoy:
What a load of Tosh. Adam Smith is a discredited lackey of the Lord Shelburne camp who promoted the idea of a market based ‘hidden hand’ when in fact the ‘hidden hand’ was, as everyone at the time knew, the supranational elite banking/gold cartels that dictated policy to already indebted British governments. Smith lacked the moral courage and intellectual ability to address the control of money and its value, fractional reserve banking and fiat paper in his laughable diatribe ‘Wealth of Nations’.
As far as I know from reading Adam Smith, the great Glasgow professor was in favour of some form of gold-backed currency, although the exact details escape me. But no matter; what this splendidly nutty comment shows is that its author has heard words such as “gold”, “fiat money”, and “fractional reserve banking”, and is convinced that there was some dark conspiracy by the great economist and the UK establishment to obscure or suppress knowledge of these things, or that Mr Smith “lacked the moral and intellectual courage” to talk about them in his “diatribe” (WoN being in fact a calmly-argued piece, the very opposite of a rant).
The depressing thing is that is that is a bit of a debate – admittedly on the sidelines of the economics debate – about things such as the proper structure of banks, monetary systems, and the like. The danger is that if a person who has not heard of criticisms of fractional reserve banking, etc, encounters comments like the one before without first understanding a bit about the subject, they’ll be put off for life. “These guys are crazy”, he’ll say, and move on back to the same old complacent, wrong-headed consensus view. All the more reason, then, for such gloriously normal characters like Kevin Dowd to set the pace in arguing for free banking.
By the way, I make no apology for keeping banging on about this free banking issue. It is a subject where a steady stream of blogging commentary can make a difference, I hope.
I am not exactly a great fan of Richard Curtis’ films – here is a hilarious spoof of the film, Notting Hill – but this looks like a bit of fun to watch. Radio Caroline, the radio station that was based on an old lightship vessel off the Suffolk/Essex coast in the 1960s, embodied that glorious, British two-fingered gesture at overweening authority that, when allied to a bit of entrepreneurial dash, often explains the rise of many a business sector. It is hard to believe that in a world where radio was dominated by the BBC, that listeners to rock and pop music of the time had to resort to listening to stuff broadcast by a bunch of sea-sick DJs on a boat. Radio Caroline, alas, closed in 1967 when the BBC unveiled what was to become its Radio 1 station. On the television last night, the-then government minister who presided over the old monopoly, the “national treasure”, Tony Benn, claimed that shutting the station was necessary since the buccaneering RC station was “messy”. It is an example of the Soviet mindset that lurks beneath the infantile grin of that old man.
There are obvious parallels with the current assault on the citadels of the MSM by Internet-based writers and broadcasters. As Patri Friedman, grandson of the great Milton Friedman, prepares to head out East to tell us all about seasteading, the story of how a group of DJs briefly enlivened the airwaves via the North Sea is very timely.
Meanwhile, on the whole subject of radio and the rebellion against state-backed monopolists like the BBC, here is a good American perspective from Reason magazine’s Jesse Walker. Recommended.
David Cameron, Tory leader, appears determined that it will not be just the current government that comes out with serious errors on policy. This refusal to not state that a new, higher tax band of 45 per cent “on the rich” will be repealed is a serious error. The error is to ignore the history of what happens when marginal tax rates are cut – these cuts lead to more, not less, revenue. Now of course, as small-government folk, we support tax cuts because we want taxes to fall, and not because we want higher revenues. But if it is revenues you are worried about, then raising taxes is dumb.
The UK and many other economies are falling down the wrong side of the Laffer Curve. It is profoundly depressing that the lessons I thought had been learned have been so totally lost. It makes me wonder whether any senior politician has a clue about economics whatever. On an earlier Samizdata discussion thread following on from my post about the Kevin Dowd lecture, was a long and very involved debate about the issue of fractional reserve banking, for example. You commenters are a smart bunch and I say, without false modesty, that we rate consistently above many other UK blogs in that respect. I wonder whether there is now a single major politician who has a clue about FRB, the arguments for or against, etc. Seriously, does anyone in the major parties understand even the most basic concepts of economics?
Maybe the most gloomy answer is that some do understand but are too frightened or cynical to do anything about it.
Maybe someone should put this on Mr Cameron’s summer reading list.
This is pure genius.
I must say that things are going sour for The Community Organiser quicker than you can say the words “Andrew Sullivan”.
“‘Cant’ is a four-leter word we don’t use much now. Most people of my generation have never heard of it, never alone use it in conversation…to apply it to someone is to accuse them of sloppy thinking, if you are being kind, or, at the very worst, of a total lack of sincerity.”
Ben Wilson.
Of course, when it comes to sincerity, one should remember as Milton Friedman once put it, that sincerity is a much overpraised virtue. People can sincerely believe in all manner of utter rubbish, while others insincerely pay tribute to things that are right and true. Oh, the crooked timber of humanity.
“I am not in favour of any parental choice in education. You will go to your local school.”
– Former London mayor and Hugo Chavez buddy, Ken Livingstone. Not too up to speed with the concept of choice, is he? No wonder the unions loved him.
As promised, I have some thoughts following on from the talk given by Kevin Dowd, a professor at the Nottingham University Business School and a noted advocate of what is called “free banking”. He gave his talk at the annual Chris R. Tame Memorial Lecture as hosted by the Libertarian Alliance. (The LA was founded by Mr Tame, who died three years ago at a distressingly young age after losing a battle against cancer.)
Professor Dowd covered some territory that is already pretty well-trodden ground for Samizdata’s regular readers, so I will skim over the part of the lecture that focused on the damage done by unwisely loose monetary policy of state organisations such as central banks, or the moral-hazard engines of tax bailouts for banks.
→ Continue reading: The Kevin Dowd lecture on free banking
“It was John Maynard Keynes, a man of great intellect but limited knowledge of economic theory, who ultimately succeeded in rehabilitating a view long the preserve of cranks with whom he openly sympathised.”
F.A. Hayek, Choice in Currency, a Way to Stop Inflation, Institute of Economic Affairs (1975), page 10.
Prof. Hayek was usually a restrained and polite demolisher of nonsense but in this quote, I think we get a sense of the rage that he must have felt at how Lord Keynes, with his easy charm and confident manner, could persuade politicians of what they wanted to hear anyway – that you can create wealth by spending other people’s money. But even later on Hayek tries to argue that Keynes would have been alarmed at how his ideas have been used as cover for monetary insanity. I think that is a mark of how basically decent an intellectual opponent Hayek was.
Meanwhile, following on from Kevin Dowd’s lecture last night – which I thought was very good – I will have more to say about his talk later on.
Tyler Cowen has an interesting post up about the whole business of pundits betting their own money on their views. Economics students may remember a particularly satisfying one involving the late, great Julian L. Simon and the alarmist writer Paul Ehrlich. Simon, who might be thought as a “cornucopian” writer, bet that the price of a basket of commodities would not, when adjusted for inflation, rise over a certain period. Erhlich had been claiming that commodities were running out at an alarming pace and their price would therefore skyrocket. He lost the bet. Simon suggested they have another go but Erhlich, being at least not totally stupid, decided not to accept the offer. The affair has not blunted his views, a fact that demonstrates the incorrigibility of some so-called academics.
I wonder if there controversies over which you’d be prepared to stake a few pounds, dollars or pints of beer?
Regular Samizdata commentator Ian B made a good point on this comment thread (scroll down) about the issue of economic cycles. As he says, many of the boom-bust cycles have been associated with new products and markets where there is scanty information about how large a market might be. For instance, the technology boom of the 1990s involved an area – the Web – which was still unknown territory to most of us. Yes, most of us now are familiar to the nth degree with the Internet but that is because a lot of bold, not necessarily reckless, investors, geeks and entrepreneurs took a punt. With hindsight, some of these investment propositions were pie in the sky. Well, without perfect knowledge of the future, malinvestments get made. The same can be said of the 1840s railway boom. There were shysters and boosters like the 19th Century financier George Hudson, but out of the inevitable mistakes and broken dreams came a country that was criss-crossed with railways. Out of the bust of the tech boom came the Googles, Yahoos, Amazons and Facebooks of today. These technologies, for instance, have changed how I can do my job in all manner of ways, almost all of them for the better. Out of the hundreds of automobile companies set up at the start of the last century came the motoring titans of today. The examples multiply.
As Ian put it, if people don’t want these busts, then maybe they are expecting the impossible if they also want to get still all the good things that a boom can produce. For sure, it would be good to stop fuelling mad cycles with fiat money, and that is why I want genuine free market banking, and not the quasi-statist dog’s breakfast, instead. But I am most certainly not in favour of the “calm” that comes when there is no change or disruptions at all. That is to demand the peace and quiet of the grave.
Update: via the National Review’s Corner blog, I came across this in a similar mood to my point.
The BBC does not even pretend to be impartial these days. Iain Dale, the blogger for those junkies of Westminster politics, notes that for the second week running, the Andrew Marr Sunday politics show did not have a single guest from the opposition Conservative or Liberal Democrat parties. There may be a suggestion that the broadcaster is going along with the government’s refusal to put on any ministers if their opposite numbers appear on the show.
I happen to think this is, unwittingly of the BBC perhaps, a good thing. By making the bias of that channel so blatant, it advances the BBC closer to the guillotine. At least when Fox News puts “fair and balanced” on its strapline, we know it is having a bit of a snigger.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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