no third solution

Blogging about liberty, anarchy, economics and politics

Comments on Comments #25

October 14th, 2008

About a month’s worth of comments!

+++

Kip Esquire responds to my 401(k) conundrum:

I would hope that your 401(k) has a money-market option.

There is a money-market option. I should have allocated more to that, several months ago. I didn’t. In any event, my 401(k) is rebalanced as of this evening.
http://1955design.com/journal/
1955Design follows up with,

Your fund family that your 401k is in probably has a gold or precious metals fund.

Although I am not sure that now is the time for that investment, either

I looked for this before, admittedly, I did not look very hard. I did not see anything that appeared to be a gold or precious metals fund. Some of these are ETFs or other things, and from what I understand are also highly leveraged. Many of these funds also are insolvent in a technical sense, meaning that they operate on a fractional reserve basis, too.

But, the market is up some 1,200 points since I wrote that. Go figure.

+++
Responding to my comments on anarchism and authority, Damaged Justice says

When a person possesses greater than average knowledge and/or experience regarding a given subject matter, we refer to them as “an authority on the subject.”

This accepted definition is a far cry from the “authority” who presumes to command others solely by the supposed virtue of superior muscle and firepower.

Agreed. This is why I find these discussions to be particularly difficult. Semantic confusion runs rampant when ideology is at stake. Franc has a new post at his blog addressing the immorality of hierarchies, but I haven’t had a chance to read it yet.

+++

Kip responds to my post, Gold is NOT a fiat currency:

You’re still tap-dancing around the core issue: gold only has value because people say it has value (or expect other people to say it has value).

…

The debate is instead whether it is better, in an advanced global economy to argue for a government that cannot debase gold or one that will not debase its currency. I continue to support the latter because I believe the former is simply unworkable.

I will respond to this comment in a stand-alone post, shortly. In the meantime, frequent commenter, Jeff Molby steals my thunder:

No, he’s specifically stating that that isn’t the core issue. Fiat currency has value solely due to government coercion. If the government disappeared tomorrow, so would the value of its currency. Gold would retain a strong value sans government.

You forgot the third possibility: a government that will debase its currency as often and as much as it thinks it can get away with.

+++

Tony, 1955Design, and Kip congratulated me on my marriage. Thanks everyone. Someday I’ll post some pictures maybe to my Flickr account.

+++

Shayou Wang left a comment on Gresham’s Law is Wrong.

In addition, it also works in the presence of Bimetalism fixed exchange rate or face values (also enforced by governments).

Exactly. The proper application of Gresham’s Law is not really an economic law of its own, it’s simply a case-specific formulation of general economic theory with regards to price floors or price ceilings. When a commodity is artificially over- (or under-) valued with regards to other commodities, bad things happen.

+++

Kip and I have a long-running dispute over the subject of jury nullification. In the most recent installment, Kip says,

I just find it utterly preposterous to suggest that it’s the “libertarian” thing to do.

Circumstances dictate the appropriateness of jury nullification. View individuals as moral agents, they are qualified to determine the justness (or injustice) of laws, and should render verdicts in accordance with proper morals. To use the fact that some people have a lousy moral compass as an objection to nullification on libertarian principles is a red herring.

Clay S Conrad comments:

You wrote that “An unjust law is a necessary condition for any appeal to nullification. ” I’d disagree.

Even the best laws can be misapplied, or unjustly applied. …

Clay’s point is that most laws, at one point in time or another, will eventually be used in such a manner that renders their application unjust. Point conceded.

+++

Thanks to No Treason for plugging my post, How Much Will The Bailout Cost You?.

In response to the same post, Azrael comments,

I am at the point where I expect this insanity and just do not see the point in getting angry anymore. As far as I am concerned our whole debt and monetary system is illigitimate because it is forced on us.

I’m not apathetic, yet. I try not to get upset over such things, but they do chap my ass, so-to-speak. There’s nothing I can do, per se, to stop these things from happening. The goal of libertarians, anarchists, agorists, etc., is to find a way to minimize the external costs imposed by this illegitimate system.

Jeff Molby comments:

Assuming that at least some of the assets are performing, some of the $700b will be recouped at some point.

Perhaps. But we, as taxpayers, who are ostensibly funding the TRILLION DOLLAR BAILOUT will never recoup a dime.

+++

Self-described “former AIG customer,” Louis left a comment on On Being Too Big To Fail:

there goes the proverbial credibility of the free market, the big fish falling in the safety net,saved from bankcrupcy by the the little guy…then ill’be dammed if i hear them talk about economy resilience again; help from the little guy, they will call it solidarity, expression he never heard in the mouth of those big fish when HE was in turbulent waters.

Louis! THE USA IS NOT A FREE MARKET, despite loads of rhetoric and propaganda to the contrary. What we see happening in the market right now is a textbook example of government interference gone wrong. But you’re right on the money with the second half of your comment: when the big fish goes bankrupt, we have to bail them out. When we go bankrupt, they take our houses.

The entire financial system is broken, beyond salvation.

+++

Ryan left a comment on If You Don’t Like it, Get the Fuck Out!

I agree but I feel that, especially following this coming election, we will have a certain population of Americans taking these people’s suggestion and “getting the fuck out” not because they bail on the ideals of this great country but rather because they feel that those ideals have been forsaken by the likes of whom you speak of and consequently feel threatened by the infringement on their personal freedoms and the consequences of similar ignorance. What do you think?

It seems that Ryan supposes that this year, many people will be exercising their right to “vote with their feet.” I’m not sure this year is any different than any others. And I think voting with ones feet is simply one more iteration of the “lesser of two evils” game. Where are they going to go? Some other country that sucks just as bad in some areas, worse in others, and is marginally better in maybe a few areas?

The point of my post was to challenge the notion that one is obliged to leave if he doesn’t like the system. I don’t think anyone should have to make that choice. It’s unfortunate, if it’s coming to that.

+++

My friend Brad left a comment on Of Greed and Charity

I remember the same conversation we had with Garrett in Grand Bend. Remember how he felt it was okay that rich people (or average income people) should have to be taxed more to help the less fortunate out. This guy Ryan feels the same. Nobody should be taxed on their income.

Mike Gogulski at NoState.com has an excellent post on the topic of this loser mentality, The Golden Rule is Insufficient. According to Mike, some people say,

I want to be taxed to provide essential services for other people. I want this because I know that I, like others, am greedy, and would not otherwise contribute to their well-being. This is especially important with respect to the well-being of others incapable of providing for themselves.

That sounds exactly like what Garret was saying. Mike responds to this idea, probably better than I ever could:

The Golden Rule is a poor ethic to apply when your morality legitimizes violations of yourself. Until you are possessed of a morality which regards other people as ends in themselves, rather than means to be exploited for whatever grand goal the day demands, using the Golden Rule as your ethical yardstick admits all manner of horrors.

Very, very, very well said. I love Mike’s writing.

+++

That’s all for now.

Catching Up

October 9th, 2008

A lot of things I missed while I was gone… Here’s a bunch of short commentary

+++

I liked B.R. Merrick on non-voting. I’m tired of election-year nonsense, and of course, this is the time when the “get out and vote” crowd yells the loudest.

+++

I liked this post at End the War on Freedom. One of his friends wanted him to agree to vote for Obama, he responded with a concise and well-thought out explanation of his principled stance of non-voting, concluding thusly:

[This] should give you some idea of where I’m coming from. I have arrived where I am through many years of hard thought. You’re not likely to change my mind any time soon.

+++

There is a new libertarian manifesto, and you can read it in ten minutes:

Let’s get one thing out of the way: the system has no right to exist in the form it is in today. Those voters have no right to the system they’re voting for. The burden of “love it or leave it” is on them, not me, and it applies to the entire planet, not just the USofA. If they don’t like my way of individual freedom, free markets, and personal responsibility, they can leave, because I’m going to do all I can to take it back…

The political approach puts success and principles at odds, requiring one to be compromised to the other; the agorist approach aligns principles and success. Success is defined as the extent to which principles are lived by.

The political approach strengthens the system by feeding it with activism, money, and moral sanction; the agorist approach removes activist energy, money, productivity, and moral sanction with each new advance.

+++

to serve and protect, indeed. Fucking sick. Absolutely sick. And these are the people we’re promised are going to protect us in need. In case you weren’t paying attention: fascims caught you by surprise.

+++

In Monte Carlo, I saw someone wearing a t-shirt, parodying the “Societe General” logo. Instead of “Societe”, the shirt read “Anarchie General”. It was especially fitting, since SG’s logo is red and black. A google search for said t-shirt returned no promising leads.

+++

I spoke with a 23-year old Frenchman the other day, and he described (albeit, unknowingly) the economic problems of single-payer health care. He noted that the co-pay is a nominal 1 Euro. To review, when goods are priced below market, they will be demanded in excessive quantities, and generally supplied in sub-optimum quantities.

Yet this is precisely the sort of health care that all politicians are promising these days, in one manner or another? Well, he flat out said: Yes, there is a shortage of service providers (doctors, nurses, etc.) and compounding the problem, many people routinely visit the emergency room for mild fevers, headaches, etc.

Scarce resources can be rationed by the price mechanism of the market, or they can be rationed by the politics of pull, special interests, and class warfare. I am particularly fond of Kip Esquire’s ongoing catalogue of Britain’s NHS Universal Health Care failures.

+++

According to this post on The Agitator, Paul Krugman recently made a huge mistake in a debate about health care. He asked Canadians whether they thought their system was terrible. They mostly all said it was.

Recently, I was in Canada and talked to a Canadian, of about my age. He had just gotten back from Burning Man festival. He said he couldn’t afford health care. (But he could afford to travel 2,500 miles to listen to music, walk around naked, and do drugs? I kid, I know I’m stereotyping the BMF) He said, with all seriousness, that the American ideal is great because it allws everyone the opportunity to succeed. But, in practically the same breath, he said that Canada is better if you’re poor.

I really thought this was a loser, slave mentality. Do you want to live in a place that’s good at providing a modicum of basic, necessary care for the poor? Or would you rather live in a place where nearly everyone has (arguably) the opportunity to extricate himself or herself from poverty?

+++

When businesses go under, it cripples the employees dependent upon them for wages. When employees strike, it cripples the businesses dependent upon them for labor. Some people are proposing the idea of a general strike, but that it should be combined with productive, counter-economic activity like agorism and tax resistance/avoidance.

+++

Notablog talks about the current crisis, and the misnomer of “laissez-faire.” Notablog says that the USA is not a free market:

The current state and the current banking sector require one another; neither can exist without the other. They are so reciprocally intertwined that each is an extension of the other.

Remember this point the next time somebody tells you that “free market madmen” caused the current financial crisis that is threatening to undermine the economy. There is no free market. There is no “laissez-faire capitalism.” The government has been deeply involved in setting the parameters for market relations for eons; in fact, genuine “laissez-faire capitalism” has never existed.

+++

I liked this post at Social Memory Complex about the difference between Capitalism and Free Markets.

I’m not about to say that one definition is more correct than any other, but it is important, when discussing these matters, to make sure you’re working with the same definition

+++

Mike Gogulski says that being against all authority is silly.

What some anarchists oppose is all authority. What I and the (I would like to think) more sensible anarchists oppose is all unjust, illegitimate, coercive authority. There’s a big difference between those two sets, and I must admit to have little patience for those of the “against all authority” mindset if they fail to add this important qualification.

Another semantic confusion, mostly, IMO. What one man considers “authority”, another might consider “cooperation.” The difference, as far as I’m concerned, is that “authority” is present whenever and wherever one party to a co-operation is forcibly prevented from acting upon his own moral judgment. I may contract with an advisor for financial matters, but the moment he does not allow me to A)stop doing business with him, or B)direct my business in a manner that is in accord with my values is when we have a clear-cut rights violation. As an apprentice, I take instruction from the authority of the foreman, using my own judgment to determine that he knows better than I how to build widgets, and that I can learn from him. If he enslaves me and forces me to make widgets, then there’s a problem.

I don’t know. Maybe such circumstances are not really authority.

I’d like to agree with Mike’s reference to Bakunin, that “authority” per se, is perfectly legitimate, and that I may subject myself willingly to “authority”, per Bakunin, “as long as may seem to me necessary, their indications and even their directions, it is because their authority is imposed on me by no one, neither by men nor by God. Otherwise I would repel them with horror.”

+++

Vinay Gupta has an idea about how to provide health care to the poor, what may work in the third world may also be a model one could follow with the western poor.

you can’t provide 99.9% health care on $10 per year. But you can provide 80% health care, and right now, that’s far, far better access to medical support than the poor can get any other way.

+++

SURPRISE! The Government determined that charities alone are not be able to cope with catastrophe relief:

In a worst-case, large-scale disaster, the projected need for mass care services would far exceed the capabilities of these voluntary organizations without government or other assistance

Except there never seems to be a shortage of charitable giving:

Wal-Mart wanted to give, but wasn’t allowed to do so. A flotilla of boats wanted to help, but wasn’t allowed to. Meanwhile, a hundred thousand formaldehyde FEMA trailers, unoccupied. Doubt me?

When some folks look at these trailers, they see formaldehyde. When I look at them, I see a cool, dry, clean place for a family to live until they can get established.
— Mike Miller, FEMA’s field coordinator in Mississippi

+++

DetroitBlog comments:

It’s not worth the bother to wonder why some people live by subtracting from the world rather than adding to it, or have nothing to offer but the destruction of what others offer. Vandals are boring because they’re all the same.

+++

After five years of speaking (literally) no French, I’m learning that the readjustment process is difficult, especially where nearly everyone speaks English. Despite a pretty thorough and formal education in the language, after a five-year hiatus, I’ve re-acclimated well enough to converse, e.g, I’m able to fairly easily explain to the girl at the Acceuil (Information) booth, and the Security officer, and the Controlleur (Train conductor) that “The ticket window closed, the automatic ticket machine doesn’t accept foreign credit cards, I don’t have a ticket and (apparently) no way of acquiring one. I need to be in Monaco, tonight! What are my options?”

A word amongst travelers: apparently, you’re able to purchase tickets from the conductor under such circumstances, who knew?

Routine day-to-day (e.g., checking in to hotel, ordering dinner, asking directions) hasn’t been any trouble, but the less-frequent day-to-day things have stumped me completely, when the barman told me to take the elevator to floor “moins quatre” (minus 4): stumped; because “minus 4” in that context simply didn’t make any sense to me, so I assume I misunderstood him.

After he said “minus 4” in english, at which point I knew I wasn’t misunderstanding, I remembered that our hotel is cantilevered on a cliff outside Monaco, and that from the ground floor where you enter, it’s conceivable that there would be a floor “minus 4”. Sure enough, that’s where breakfast was served.

Or, after our waitress asked, “Quelq’un s’occupe de vous?” (Have you been taken care of, yet?) I was utterly speechless until she re-posed the question in fractured English, at which point I knew exactly what she had asked! It’s just that I’m so not used to hearing these words, these phrases, that even though they’re up in my brain somewhere, it’s taking way too long for them to register, coherently.

Privatizing Social Security, in Light of TEH BAILOUT

October 7th, 2008

Radley Balko responds to those who want to use the current financial meltdown as an argument against the privatization social security which constitutes a good portion of workers’ retirement accounts. For the unititiated, these “accounts” are now largely controlled and owned by the government under the fragile ponzi-scheme known as Social Security. Privatization, writes Balko, would allow millions of poor people “to accumulate inter-generational savings that could help their children or grandchildren escape the cycle of poverty.”

His opponents have argue that, had we private retirement accounts, they would’ve been decimated by the recent turmoil in financial markets, and that private investment is simply too risky. Mark Cuban is one such detractor.

I’ve found myself reading his weblog occasionally, he has some pretty smart things to say. Including, for instance, this gem (I get the feeling that Cuban didn’t know the half of what he was saying, more on this below) while blogging about last week’s orgy of Wall Street Bailouts:

And one last thing I have to mention. Does everyone realize how much bigger a disaster last week would have been had Social Security been privatized ? Please, let us all remember that when the topic comes up again in the future.

Lest anyone mistake my stance on “Social Security” privatization, let me put it front and center: Social Security is a fraud of the worst sorts and it should be abolished, forthwith. In this sense, I favor “privatization” of long-term care, a/k/a Social Security. How then, do I look favorably on Cuban’s position? And what was that bit about him not knowing the half of what he was saying?

Oh, I think he knew what he was saying, and I’m pretty sure he knew what he thought to mean. It’s quite likely that Cuban and I have vastly different assumptions about what is (or what ought to be) “private”, that is, were we to discuss the pros and cons of privatization, we’d be discussing two very different things. The hidden assumption in Cuban’s position is probably more-or-less: The market is free.

From which he concludes that privatizing Social Security would likely lead to more (and worse) of the same.

We can both look at the turmoil of the past week (or weeks, or months, or whatever) and agree that something is terribly wrong. But from those divergent premises, consensus is practically impossible.

This is because one unspoken assumption in my position is: the market is not free. This is evident by the fact that Government permits, encourages, and subsidizes businesses which are too big to fail.

If you go out of business, they take your fucking house. When they go out of business, you bail them out, prodded of course, by the cold steel barrel of a government gun. Am I the only one who sees something fantastically wrong with this arrangement?

To Cuban’s point, however, he is certainly correct on this: had all of our Social Security been tied up in Wall Street’s Toxic Assets we’d be up the proverbial creek, sans paddle. In a very, very bad way. If, and essentially only if, we had invested all of our money in financial companies in 1999, and were to retire tomorrow. This, of course, would not be the case for practically anyone. But I digress… Neither would I want the fund managers at Bear Stearns, or the financial gurus at Fannie Mae, managing my long-term security.

But I get the feeling that this is where our similarities end.

The whole mess is a product of a system in which profits are privatized (and how!) and losses are socialized, this was always implicitly the case. To be sure, AIG might not have known they’d be bailed out, Lehman might not have known they’d go bankrupt. But the industry as a whole could always be reasonably certain that Papa Government wouldn’t let them all be liquidated, couldn’t let go of the decades of accumulated power and paper wealth.

Balko’s clincher is matter-of-fact:

You think the stock market is risky? The federal government currently has obligations it will never be able to keep. And none of this accounts for trillion-dollar bank bailouts, inevitable wars or the new entitlements promised by the current candidates for present and future occupants of the White House.

Bravo!