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Following from my previous article about the alleged size of the role played by China/Asia in the current financial troubles, an eagle-eyed commenter by the name of Marc Sheffner pointed this excellent article out which clarifies a lot. My thanks to Mr Sheffner. God but I love the internet. March 9th, 2009 | 5 comments - (Comments are closed)
 Remember that email I got from Tim Evans flagging up this? Well someone called James Tyler responded to it, also sending his reply to all of us on Tim’s list, with a link to this, which I likewise recommend. It’s a piece in Portfolio.com called “The End of Wall Street”, by the guy who wrote Liar’s Poker. I’m still reading the piece, but this is my favourite bit so far, about the observations of a man called Eisner:
Paragraphs like that make me optimistic that statists just will not be able to pass the catastrophe off as a mere failure of unregulated capitalism. Yes the whole Sub-Prime thing was aided and abetted by Wall Street, big time. But it was set in motion by Washington politicians, and in particular politicians of the Democrat persuasion. This was, as we cannot repeat too often, a failure of the mixed economy, not of the extreme free market of the sort we here favour. The folly of the Republicans, which has already been electorally punished, deservedly, was that most of them didn’t see it all coming and panicked when it did, and those that did smell the coffee were unable to do anything to soften the blows when the coffee exploded, or whatever. My guess is that there will soon be a cull of Washington Democrats as soon as the voters next get a culling opportunity – two years from now, right? And the big question is, what will the new intake’s take be on it all? But, as I often say on my personal blog when discussing gadgetry of various kinds beyond my understanding, what do I know? UPDATE: Although, I’ve now finished reading the piece, and it is clear that its author derives no such anti-statist moral from his wretched story. Wall Street is the villain, and Wall Street is being justly, although very insufficiently, punished. Not a word about Democrats, or for that matter Republicans. March 9th, 2009 | 19 comments - (Comments are closed)
Once every month until I get sick of it, I intend to remind anyone whose attention I can get of this…
It was the redoubtable Thaddeus Tremayne who first mentioned this back on January 25th of this year in an article called ‘Narrative narcosis’. So next time some purblind fool tells you that our economic woes have been caused by ‘capitalism’ rather than ‘regulatory statism’ and ‘big government’, make a print out of that Times article on good high quality paper, roll it up tightly, and shove it very forcefully wherever your imagination and their complacency will allow. March 9th, 2009 | 17 comments - (Comments are closed)
Britain is to cut the speed limit from 60 mph to 50 mph on most roads to ‘save lives’. Does anyone seriously believe this is not in fact to raise more revenue from speeding tickets? The solution is obvious. Break the law and smash the cameras. And when they replace them, smash them again. And again. And again. And again. We are way way way past the point where words are enough. If you actually expect to make a difference, you better get used to the idea that this sort of ‘direct action’ is the only thing that will make any impact at all on the powers-that-be. Don’t believe me? Well do you think radical muslims in the UK and elsewhere could have eroded deeply entrenched ‘givens’ on free speech if their objections to any public criticism of their religion were not backed with explicit or implicit threats of actually real world violence? No, I do not like it either but that is where we now find ourselves, so get use to it. Be willing to pick up that brick and actually throw it or you are irrelevent. Push has come to shove. March 8th, 2009 | 62 comments - (Comments are closed)
It is said that pragmatism trumps ideology in a crisis. What actually happens in a crisis, certainly in this one, is that the ruling party gets to rechristen its ideology as pragmatism. He is talking about the Democrat’s addiction to protectionism. But it is happening all over, and not just with ruling parties, but with would-be ruling ones. The wicked world is disintegrating, and it is all the fault of an evil which whatever commentator you are reading especially hates, and offers a superb opportunity for the bees in his bonnet to rebuild the social honeycomb so that mankind can buzz happily in unison ever after. I am reminded of the Trotskyist red-greens I met in the 80s, who had the merit of putting it very clearly. Unlike the merely conservation-minded, or deep-green nature-worshippers, they welcomed a predicted ecological collapse: chaos and mass-starvation would turn people to The Revolution out of desperation. A lot of those purveying their own patent medicines for the depression seem to be unconscious that they are engaged in the moral terrorism of the transitional demand. March 8th, 2009 | 11 comments - (Comments are closed)
Are you optimistic about the future? Several months ago I was not, but I am now. From what I can see, governments are walking down the path of their complete moral and financial bankruptcy far more quickly than I ever imagined they would. I thought that it would take our overmighty governments several slow, demoralising decades of decline and eventual collapse to completely discredit their authority and control in the eyes of the people. However, our governments appear to be going supernova right now and I suspect they will burn themselves out over a few painful and tumultuous years – destroying a great deal of wealth in the process, no doubt. However, as worrying as that prospect is, it was always going to be that way. And in spite of that, I feel particularly upbeat about the longer term future. Those who know nothing more (and expect nothing less) than widespread government authority and control over all aspects of our lives will have their imbecile – sorry, umbilical – cords to the State cut sooner than expected, thanks to the overwhelmingly reckless (but entirely predictable) government response to the current financial crisis. I really do believe that future historians will pinpoint this crisis as marking the beginning of the end of the big-government era. Do you agree? March 8th, 2009 | 45 comments - (Comments are closed)
Government is an institution that has evolved along with we humans as our best means of applying violence. When you want to break things and kill people, there is no better institution for the job. The problem comes when we attempt to use it for other purposes. Its true skills will out even when the goal is entirely different, as with the current attempts of States to ‘help’ the economy. What I see happening in the US and UK and other places with maximally ‘helpful’ governments is much like what happens when you accidentally spill Nitric Acid on the rug. It steams, bubbles, gets hots and makes a bit of sound and for a short while it appears that ‘something is happening’. Then the smoke clears and you see that it has ruined your rug. Government ‘help’ is like that. March 7th, 2009 | 7 comments - (Comments are closed)
Regular commenter here Nick M takes a wack at Vernon Bogdanor:
I was going to put that up as a Samizdata quote of the day, but I reckon the feline enumerator has his sneer quotes around the wrong “progressive” there. Still, good stuff, albeit sweary. Talking of which, I do wonder about this swear-blogging thing. The bad news is that respectable bloggers who might give particular (swear-)blog postings of merit lots of new readers are put off by the swearing from linking to such postings. (Telegraph Blogger Alex Singleton recently told me exactly this.) On the other hand, a lot of people are very angry just now, not just, you know, in a state of respectful disagreement with the powers that, for the time being, be. Such angry persons deserve voices around which to rally, voices which communicate their feelings rather than just their thoughts. Swear-blogging may also mean that, by assembling all the angry ones in a cursing, seething internet mob, in a way that completely alienates our present version of Polite Society, the angry ones will achieve a far greater degree of tactical surprise come the storming of the Winter Palace, or whatever will be the equivalent event or events during the next few years. Polite Society just won’t see it coming, because it simply cannot now bear to look. It will consequently swing in far greater numbers from lamp-posts (or again, whatever will turn out to be the modern equivalent) than would otherwise have happened. Which just might be a rather fucking good thing. March 6th, 2009 | 23 comments - (Comments are closed)
“If you have a mortgage and are celebrating record low repayments, then enjoy it for now. Ask what the consequences will be for your household budget of interest rates of 10 per cent or higher, which will be needed to tame the rising prices that will result from this mad experiment. But there is another great British consensus emerging around the idea. “It is essential,” say analysts. “No other option,” sighs many a fiscal conservative. “Everyone” is in favour of it, we’re told. I have just about had enough of “everyone”. It was “everyone” – most economists, politicians, etc – who thought that the bubble would never burst. They were wrong then, and are now. “ Iain Martin, on the Bank of England’s descent into monetary madness. Milton Friedman must be spinning in his grave. March 6th, 2009 | 7 comments - (Comments are closed)
Following on from this, is another theme that came out of that seminar with media/City luminaries I went to the other day. One point that Anthony Hilton mentioned was the “global imbalance” issue. This is all about how the West, which is in net terms, up to its eyes in debt, has been living high on the hog thanks to oodles of surplus savings generated by countries such as China and Japan. In looking to figure out how to play the “global financial crisis blame game”, one argument goes like this: China, with its cheap exports, kept cheap by its artificially low and fixed exchange rate, earned huge amounts of money by selling this stuff to the West; in turn, the Chinese needed to reinvest the proceeds – there would be no point earning money you cannot spend – and they reinvested those proceeds in things like US government securities. As a result, long-term bond yields in the US fell, which enabled Mr and Mrs Westerner to renegotiate their long-term mortgages, release equity from their homes, and spend even more of their inflated wealth on – yes you guessed it – Chinese consumer goods. Result: a whacking great housing and consumer spending boom that inevitably crashed. This argument sounds quite convincing. If it is true, then it also suggests that, contrary to what some of the critics of the Fed or other central banks might say, that there is not much that someone like Alan Greenspan could have actually done to curb domestic US monetary growth if there were such enormous inflows of hot money coming into the country’s debt markets from abroad. Well up to a point, Lord Copper. Much depends, I think, on what proportion of monetary growth in the West was driven by Asian inflows, and what was basically driven by domestic factors. I haven’t seen a lot of commentary on this. If you buy the “Asian connection” argument, a problem, it seems to me, is that it would not have been realistic, for various reasons, for the US to have tried to curb these supposedly dangerous inflows of Asian money by protectionist measures such as capital controls or exchange controls. If one believes that capital and trade flows are good things, then imposing such controls would and could cause more damage than it solved. Exposure to capital flows has, in many ways, driven beneficial economic change. But the argument about Asian money does suggest that had the Fed, etc, raised rates to curb inflationary pressures, all that would have achieved would have been to suck in even more Asian money from investors seeking a higher yield. But presumably, with higher rates, it would have curbed, and did eventually curb, US consumer spending, and hence dent the demand for Chinese and other non-US goods. China is now starting to feel the effects of the global slowdown rather sharply. Even so, the “global imbalance” argument highlights the fact that in a world of fiat money without capital controls, it is now very hard for state central banks, even those with powers as wide as the Fed or the European Central Bank, to set interest rates effectively. Of course, the idea of a central bank setting rates for a complex economy is itself a version of state central planning. Globalisation has exposed its limitations. One of the things I really want to ask Kevin Dowd at his Libertarian Alliance Chris R. Tame memorial lecture next week is how this sort of issue can be addressed. The “Asian dimension” to our current predicament could be the proverbial big gorilla in the living room. Or maybe it is just a small and rather distracting rodent. March 6th, 2009 | 34 comments - (Comments are closed)
Brian Micklethwait, over at his personal blog, links to a sentiment that states that it is wrong to blame the private sector banks for the current problems, given that the underlying cause of the credit/property bubble was cheap credit as supplied, ultimately, by central banks. Central banks are not creatures of the free market and would not exist in a world of pure laissez faire. So obvious to us, it hardly needs to be said. But outside our little intellectual bailiwick, you’d be be surprised – or perhaps not – to realise that saying such things still gets you a funny look. As purely personal evidence, let me cite an experience last evening. I went along to a financial seminar in London’s Bloomsbury district, where various folk, including Anthony Hilton of the London Evening Standard and Angela Knight of the British Bankers’ Association were holding forth. Q&A ensued. Yours truly asked a question about what the panelists thought was the role of central banks and governments in causing the current SNAFU. You could almost smell the palpable relief on Knight’s behalf that she had heard someone not try to pin the blame entirely on private banks. My god, she thought, here’s a guy who has not bought the statist line that what is happening was caused by big, evil private banks. I have to say I found her answer on how the central banks mucked up was quite convincing although she by no means accepts the idea that the existence of central banks as such is a problem. As a lobbyist for the existing fractional reserve banking industry, she is certainly no Ludwig von Mises, but still. I sense that some of the banking industry’s more independent-minded figures are getting really angry at being pilloried for sins outside of their control. The banking industry, however, cannot win any battle for hearts and minds until they are absolutely transparent about their own financial affairs, and until some of the leaders of the banking industry begin to embrace genuine free banking rather than the quasi-statist mess that we have now. Let’s face it, given the reputation of banks at the moment, what do they have to lose? The current option – hope for the best and take taxpayer’s money – is not proving to be very successful. March 5th, 2009 | 7 comments - (Comments are closed)
This (which I just had trouble getting back to – it was linked to from here today, top left) is very strange:
Very strange because it seems to me that with about five seconds thought one can easily arrive at an evolutionary advantage associated with a belief in eternal life, and accordingly an evolutionary explanation of it. Tribes of ancient humans often battled each other to death – literally to death, the losers being completely wiped out – and in these battles, a willingness to die might be the difference between victory and defeat, between your gene pool spreading, and your gene pool being wiped out. Tons of stuff has been written about the prisoner’s dilemma associated with infantry battles. If you all stand together and fight, your side has its best chance of winning. Anyone breaking and running exposes all others to annihilation. Etcetera. Military cultures ancient and modern were and are suffused with ideas of honour and courage and self-sacrifice, all of which resulted and result in everyone in your army standing firm and holding the line. In such a world, a belief in some kind of Valhalla of dead heroes is pretty much a certainty. Even now, effective military units do everything they can to ensure that their heroic dead-in-battle are treated with tremendous solemnity and never forgotten, giving them eternal life of a limited kind, and pour encourager les autres. Such notions have even greater force if eternal life is literally what everyone in the front line of battle believes in. I am amazed, absolutely amazed, that any academic could be unaware of such notions, or if aware, then unpersuaded. It’s as if this guy Scott Atran has never seen a war memorial, and never even read The Selfish Gene, which is all about how our selfish genes cause us, in certain circumstances, to become raging altruists, sacrificing ourselves for the greater good of society. You do not have to have to have any particular view of the truth of religion in order to see the force of this explanation. As an atheist, I am obviously on the look out for evolutionary explanations of the phenomenon of religious belief, given that I don’t think such beliefs are correct – so why do people persist in believing them or in their absence, invent them? But religious people often use such genetically-enhanced-altruism notions to argue for religion, on consequentialist grounds. In a similar spirit they also argue, perhaps rightly, that religious people are more inclined to have children, and hence to outbreed us atheists, childbirth being, for a woman, not unlike taking part in a battle, especially in earlier centuries. Religion makes your society stronger, because it make you more willing to sacrifice yourself for the collective! Notice that if you didn’t care at all about the collective in the first place, the argument in the previous sentence would have no force for you. It’s somewhat off topic, but this is one of the many reasons why I am, although an admirer of her in many ways, not a devotee of Ayn Rand. Her stated plan of saving the world by abolishing altruism flies in the face of the known facts of human nature. The trick is to do altruism well, not to try to abolish it. Which is easier said than done, as our current economic troubles illustrate well, and which is actually, I would argue, what most of Ayn Rand’s stories and heroic characters were really all about, despite what she and they insisted on telling us. March 4th, 2009 | 75 comments - (Comments are closed)
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