Tuesday, September 30, 2008

OH MY GOD! IT'S A CRISIS! WE NEED TO PASS THE BAILOUT RIGHT FREAKIN' NOW!

Rational Self-Interest

Except that it's not such a big crisis that we can't take a break from fear-mongering to take a two day holiday that we would take anyway, whether or not there's a CRISIS THAT WILL COLLAPSE THE ENTIRE ECONOMY UNLESS WE ACT IMMEDIATELY!

Happy Rosh Hashanah, Congress. Do us all a favor and don't come back.

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Sunday, September 28, 2008

Election 2008

Rational Self-Interest

My sole criterion for deciding how to vote is this: Which candidate will improve my life the most by getting government further out of the way of living like a human being? On that score, if the extent to which I expect candidates to improve my life is represented on a number line, both John McCain and Barack Obama score negative numbers. Neither will actually improve my life, both will make it worse. They are both statists, they both advocate increased government control over me. In different ways to be sure - McCain says he wants to sacrifice me to country, and Obama says he wants to sacrifice me to others. What they both mean is that they are going to use the power of government, which in the end is nothing more than pointing a gun at my head, to exert more and ever more control over me.

So the best I can hope for is an answer to the question: Which will do the least advancing in the negative direction? That is, which will make my life less worse? In the long run, both their methods (it would be too charitable to call them philosophies) will turn the United States into a socialist nightmare. However, I'll be dead in the long run, so odds are I won't live to see that happen (though those odds seem to get shorter every day). So which will increase statism the slowest while I'm still alive and need to be free so I can live as a human being?

McCain.

Everything about Obama except what he says in public as a presidential candidate screams that if he could he would seize dictatorial power on inauguration day. I am convinced that in his heart he actually believes that he's The Chosen One. Obama will do the wrong thing, the statist thing, every single time.

McCain doesn't want to be a dictator and doesn't believe he's a messiah. He actually thinks he stands on the side of freedom. That means that the slide ending in the complete loss of liberty will take longer with McCain, even though he will only occasionally do the right thing, the individualistic thing, and then only by accident.

So, if I were going to put a campaign banner in my front yard, it would read:

McCain Sucks.
Obama's Worse.

Vote McCain.

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How the Media Sees the Banking Crisis

Reason, Rational Self-Interest

On Thursday, The Financial Times published an editorial about the banking crisis. It's representative of the views of the vast majority of news organizations:

In praise of free markets

In praise of free markets? If by praise you mean, faint, damning, insincere praise, then yes. Let's go on a journey of philosophical detection...

The financial system has reached the point of maximum peril.

This is debatable, but I'll accept it.

After years of profligacy, banks have all but stopped lending to each other as the US Congress decides whether to extend support. If the unravelling of the banking system continues, the economic consequences will be dire. Yet there is an even greater risk: that the politicians now contemplating Wall Street’s follies draw the wrong conclusions and take the wrong decisions, losing their confidence in markets altogether. It would not be the first time. After the Wall Street Crash, markets were deemed to have failed and US lawmakers attempted to regulate short-cuts through the crisis. The widely-copied Smoot-Hawley Tariff Act quadrupled the effective tax rate on thousands of imports and deepened the “Great Contraction” of 1929 to 1933. The price of popular anti-market sentiment was much higher in some of Europe’s fledgling democracies: fascism.

Despite the severity of the current crisis, such extreme reactions remain very unlikely. Yet there is plenty of room for policymakers to compound the damage already inflicted by the irresponsible conduct of the financial sector.

Well, that's a half-decent start, except for the irresponsible conduct of the financial sector bit, since the financial sector was just obeying the rules imposed upon it by the government and relying on the not-so-implicit promise that the government will bail out anyone and everything that ever goes bad. But why do I get the feeling that you're setting me up?

It is time, then, to remember what open markets have achieved, and what lies in wait for societies that suppress them.

So, what memories do you then have to offer? None, in the entire article.

It is no help that some of the loudest critics have little interest in what went wrong, less in how to fix it, and none at all in safeguarding against problems in future. Rowan Williams, the archbishop of Canterbury, this week applauded the UK government’s ban on short selling. His colleague, John Sentamu, declared that the short sellers of bank shares were clearly bank robbers and asset strippers. These are the words of a well-meaning man who can see no moral or practical difference between a car thief, a scrap-yard mechanic, and a person who insures a car and thus profits if it is stolen.

Andrew Cuomo, New York’s Attorney General, went one step further—looters after a hurricane was his ill-judged analogy. Are short sellers also to be shot by the National Guard? The trouble with such sentiments is that they solve nothing.

[Why do you claim that insurance companies profit when cars are stolen? If that were the case, surely some of them would be in the grand theft auto business in a big way. OOPS! Click here for a correction.] Other than that, those are good points, but...

Criticise in metaphors—unbridled capitalism; unfettered greed—and you duck the tiresome task of specifying what bridles and fetters you have in mind.

...as we shall see, you do not believe in your own admonishments or you think that the bridles and fetters that you would approve of are reasonable.

Consider the Washington rescue package first. Why should taxpayers bail-out millionaire bankers, and what should we force them to give back in return?

So you're recommending a double use of force? First to coerce money from taxpayers: you're not asking why taxpayers should bail out the bankers as a rhetorical device meaning they shouldn't, you're asking as a preface to justification. Next you recommend coercing something from businesses in return for receiving the money extorted from the taxpayers.

Those are natural questions but not the only ones. We should also ask whether taxpayers will profit, directly or indirectly, from spending money to shore up the banking system.

I'm going to be spending my money to shore up the banking system? Spending presupposes execution of my free will; taking the money from me in the form of taxes is extortion, not spending—forcing me to put my money to a use which I would never choose for it. Calling this spending is like calling the forced redistribution of wealth investment. And since when is it government's job to provide profits to anyone?

The answer is yes.

Yes, taxpayers will profit? I will see a return on my $5,072.461 investment? Really? Let's look at that...

The system is close to collapse, and the consequences of collapse would be misery for Main Street. Profitable businesses and creditworthy consumers would suffer. A successful rescue would prevent that and there is even a small chance that it would be profitable in its own right.

While preventing hardship is a good thing, avoidance of misery and suffering is not the same as profit. Also, profitable in its own right here must mean monetary profit, so I expect a check for my $5,072.46 plus the gains I've earned on it. What's that? You say the government will never write such a check? I'm shocked I tell you. Shocked!

That is the justification for the rescue.

Well, that eases my mind. How wonderful that I get to pay for the government's disasterous intrusion on freedom, and business's reliance on it, and get at best a maintenance of the status quo in return. Oh, wait, not my status quo, but my status quo minus my $5,072.46. I'm so happy!

Congress was right to scrutinise it—especially its lack of oversight—but has become distracted by a desire to clip Wall Street’s wings.

Governmental desire to exert more control over the people is a distraction? From what, its otherwise laissez-faire benevolence?

The case for more effective regulation is nevertheless undeniable.

The praise of free markets continues.

It is hard to defend a system where top banking executives walk away with millions in compensation when their businesses are, in retrospect, fundamentally flawed. This looks like a reward for failure. We have witnessed two financial crises—the dotcom crash and the current banking disaster—in the first decade of this century. That is hardly a record which inspires confidence in the current efficiency of capital markets or their transparency.

Right, because those are examples of the failure of the free market, as opposed to a system (I won't dignify it by calling it a market) dominated by the crushing sands of government regulation.2 The dot com crash can be dated to the exact moment Alan Greenspan said the words irrational exuberance. I know this because, among other things, I watched my investment portfolio begin to collapse immediately following that statement.

The current crisis is routinely described as a symptom of deregulation, but it is equally the child of earlier, ill-fated interventions. Subprime mortgages grew because the prime mortgage sector was dominated by Fannie Mae and Freddie Mac, two institutions founded, regulated and effectively underwritten by the government. Securitisation was an effort to sidestep capital requirements. But it also created instruments that few could understand and, in Warren Buffett’s prophetic words, really were financial weapons of mass destruction.

Except for equally, which should be removed, this is good, I'm with you.

Capital markets clearly need better regulation

Huh? Wait a sec, you just said...

but policymakers should guard against unintended consequences.

Gee, ya think? Then again, when have policymakers (read: legalized gangsters) ever guarded against, well, any consequence of their commandments...oops, I mean policies?

Markets are places of trial and, very frequently, error. Their genius is not perfect efficiency, but the rewarding of success and the weeding out of failure. No better alternative has ever presented itself.

Implied here is that a better alternative is possible, implicit support for more intervention in the hopes that some day we'll get it right.

This is a difficult time to defend free markets.

Indeed. It's extremely difficult to defend that which does not exist. Unless...are you saying that you think that what we've had to this point are free markets? And you get to write editorials for a major news organization?

Nevertheless they must be defended, not only on their matchless record when it comes to raising living standards, but on the maxim that it is wise to let adults exercise their own judgment.

So close, so very close, to defending freedom. You just missed it. Which was to be expected: you don't believe in freedom, because...

Market freedom is not a fundamentalist religion. It is a mechanism, not an ideology, and one that has proved its value again and again over the past 200 years.

...it's just a mechanism, just one of any number of policies from which the government can choose to manage the economy, which you clearly believe it ought to be doing. If a better alternative presents itself, well, we should jump all over it!

The Financial Times is proud to defend it—even today.

Kewl! I'm glad you're proud to defend freedom (even today, as if there's a time not to defend freedom). So let's see your defense, because this article ain't one.

See Also:

America vs. Congress et al. by Edward Cline

John Allison takes a stand by Nicholas Provenzo

Correction, 2008.09.28:
A friend at THE FORUM pointed out that I misinterpreted the article's reference to car insurance. The article is talking about the person who owns the car, not the company that insures it. Still, I don't see how the owner profits from having the car stolen: he receives fair value for the car, so he's lost and gained an equal monetary amount. If there are differences between cars' values and insurance payouts, they're surely so small on average that it's not possible to make a living by stealing cars for the insurance money. Besides, any given owner won't get away with that for very long.

Anyway, from now on I'll take a Reading Comprehension Super Pill before I comment on anything.

1The $700,000,000,000 figure most often stated for the bailout divided by approximately 138,000,000 taxpayers in the U.S. as of 2007. It's even worse if we accept the estimate in that Wikipedia article that a third of those pay zero income tax. That changes the amount each paying taxpayer owes to $7,608.70.

2Nice metaphor, eh? Oh, one little regulation won't hurt, if it's for the public good. ... Hey, how did I wind up at the bottom of this giant hourglass?

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Friday, September 12, 2008

Thursday, September 11, 2008

Save American Liberty from Environmentalist Tyranny

Rational Self-Interest

The following is an email I received from my friend, Paul Saunders. I am taking action by contacting every government official I can. I urge you to do the same.

To ALL of You Who Value Your Liberty and Your Life, This is a CALL TO ACTION.

In July the federal Environmental Protection Agency (EPA) issued an Advance Notice of Proposed Rulemaking [ANPR]: Regulating Greenhouse Gas Emissions under the Clean Air Act, which details their plan to force Americans to reduce emissions of CO2 and other so-called greenhouse gases. This follows on an Executive Order signed by President Bush, which was made possible by a U.S. Supreme Court decisions ruling that CO2 is a pollutant. (!)

This plan will strip the American people of their freedom, and place them under the control of a single, all-powerful, federal agency. Industrial permits, furnace regulations, auto emissions testing, building permits, transportation, your home’s temperature, and food production—all will fall under the boot of the EPA. Environmentalists will use lawsuits to pressure the EPA to tighten an ever-shrinking noose around the neck of every American.

This EPA Proposed Rulemaking would after November 11, 2008 force Mandatory, 70 percent reductions in CO2 emissions by 2050 which means Mandatory, 70 percent reductions of energy usage by 2050. This action would be destructive of, at first, your freedom and prosperity, but ultimately would endanger your life.

The EPA is inviting public comment on this plan. John Lewis and I have submitted our own objections. To see these objections—along with instructions for how to register your own comments—go to this website: http://www.classicalideals.com/EPA_Ruination.htm

Do it before November 11, the deadline for public comment.

IMPORTANT!!—Identify your comments as: Docket ID No. EPA-HQ-OAR-2008-0318.

Our comments to the EPA objecting categorically to their ANPR appear in two separate documents:

First, a Cover Letter (3 pages): http://www.classicalideals.com/EPA-AnprCommentsCoverLetter.html.

Second, our reasons for the objections (33 pages): http://www.classicalideals.com/EPA-AnprComments.html.

Our objections in this second document, Comments to the EPA, are focused on six major grounds (moral, natural historical, scientific, logical, technological, political) and each appears as a separate Comment section (one to six) with supporting evidence and arguments. I do not believe that anyone else is objecting to this EPA Rulemaking on moral and political grounds as we are.

I already sent this notice to numbers of organizations that are active in refuting the scientific ignorance of the man-made global warming advocates. I urge you to work with us to Save American Liberty, from the marauders marching under the banner of Save the Planet.

Please choose to either send a comment to the EPA supporting our Comments to the EPA or generate and send in your own comments on this freedom-destroying Rulemaking.

The EPA invites public comment—until November 11, 2008. That is the deadline for opposing this horrific, tyrannical plan.

Read this, and act! Please spread the word. Send this website far and wide, put it on the blogosphere, copy it in whole or in part, and write a letter to the EPA and to any media you can reach!

Paul Saunders
Bethlehem, PA
Retired Chemical Engineer (Semiconductor and Opto-electronic processing)

Dr. John David Lewis
Visiting Associate Professor of Political Science, Duke University
Author, Solon the Thinker and Early Greek Lawgivers
http://www.classicalideals.com/
esse quam videri

Update, 2008.09.28:
Capitalism Magazine has published Paul's and Dr. Lewis's objections to the expansion of EPA power as a seven-part series, EPA Fascism versus America. Here are links to the parts: 1 2 3 4 5 6 7

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What are the Four Rs?

The Four Rs are Reality, Reason, Rational Self-Interest, and Romanticism. Each represents corresponding branches of philosophy: Metaphysics, Epistemology, Ethics/Politics, and Aesthetics. In this blog I will from time to time examine various topics by applying the principles of these four domains.

Reality (Metaphysics)

The primacy of existence (of reality) is the axiom that existence exists, i.e., that the universe exists independent of consciousness (of any consciousness), that things are what they are, that they possess a specific nature, an identity. The epistemological corollary is the axiom that consciousness is the faculty of perceiving that which exists—and that man gains knowledge of reality by looking outward.1

Reason (Epistemology)

Reason is man’s only means of grasping reality and of acquiring knowledge.2

Reason integrates man’s perceptions by means of forming abstractions or conceptions, thus raising man’s knowledge from the perceptual level, which he shares with animals, to the conceptual level, which he alone can reach. The method which reason employs in this process is logic—and logic is the art of non-contradictory identification.3

Rational Self-Interest (Ethics)

Do you ask what moral obligation I owe to my fellow men? None—except the obligation I owe to myself, to material objects and to all of existence: rationality. I deal with men as my nature and theirs demands: by means of reason. I seek or desire nothing from them except such relations as they care to enter of their own voluntary choice. It is only with their mind that I can deal and only for my own self-interest, when they see that my interest coincides with theirs. When they don’t, I enter no relationship; I let dissenters go their way and I do not swerve from mine. I win by means of nothing but logic and I surrender to nothing but logic. I do not surrender my reason or deal with men who surrender theirs. I have nothing to gain from fools or cowards; I have no benefits to seek from human vices: from stupidity, dishonesty or fear. The only value men can offer me is the work of their mind. When I disagree with a rational man, I let reality be our final arbiter; if I am right, he will learn; if I am wrong, I will; one of us will win, but both will profit.4

Romanticism (Aesthetics)

Romantic art is the fuel and the spark plug of a man’s soul; its task is to set a soul on fire and never let it go out.5

Romanticism is the conceptual school of art. It deals, not with the random trivia of the day, but with the timeless, fundamental, universal problems and values of human existence. It does not record or photograph; it creates and projects. It is concerned—in the words of Aristotle—not with things as they are, but with things as they might be and ought to be.6

I have no credentials in philosophy. I'm merely a sincere student, for the purpose of living my life:

Philosophy is a necessity for a rational being: philosophy is the foundation of science, the organizer of man’s mind, the integrator of his knowledge, the programmer of his subconscious, the selector of his values.7

I speak for no one but myself, and I will gladly hear both commendation and condemnation from civilized readers.

1Rand, Ayn. The Metaphysical Versus the Man-Made. Philosophy : Who Needs It. Ayn Rand and Leonard Peikoff. New York: Signet, 1984.

2Rand, Ayn. The Left: Old and New. Return of the Primitive: The Anti-Industrial Revolution. Ayn Rand and Peter Schwartz. New York: Plume, 1999.

3Rand, Ayn. Faith and Force: The Destroyers of the Modern World. Philosophy : Who Needs It. Ayn Rand and Leonard Peikoff. New York: Signet, 1984.

4Rand, Ayn. Atlas Shrugged. New York: Dutton Juvenile, 2005.

5Rand, Ayn. Art and Moral Treason. The Romantic Manifesto. Ayn Rand. New York: Signet, 1971.

6Rand, Ayn. Introduction to The Fountainhead. The Objectivist Newsletter, 1962-1966. By Ayn Rand. New York: Second Renaissance Books, 1994.

7Rand, Ayn. From the Horse’s Mouth. Philosophy : Who Needs It?. Ayn Rand and Leonard Peikoff. New York: Signet, 1984.

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