no third solution

Blogging about liberty, anarchy, economics and politics

Comments on Comments #12

April 4th, 2008

Tony comments on “How Much is a Kitchen Worth?“. He astutely notes some of the risks involved in renovating, and says that he expects some return for the installation of hardwood floors,

[P]rimarily through the effort involved in installing and the disruption during the process. (The latter is huge.)

It’s also important to remember that these TV programs generally foot the bill for all the labor which is a substantial component of the price of renovations, and they do it quickly. These factors minimize the material and non-material costs of renovation, and bundle them up with the awe-factor of being on a nationally televised program. As Tony indicates, for many people contemplating a renovation, the non-monetary costs involved are often substantial.

I think the bottom line is that some non-zero return should be expected for most renovations, provided they more closely align the property with its comps. But I think the pie-in-the-sky returns mentioned on these TV shows are a thing of the past.

+++

One of my posts, War Tax Resistance and Agorism, drew some criticism from The Picket Line, a tax-resistance advocate. Picket Line concludes:

I think we probably agree more than we disagree when it comes right down to it, but I’m too impatient to wait for the perfect solution. I’m eager to start right now with less-perfect but still practical solutions, hoping that although “there simply aren’t enough” of us to defund the government right now, thanks to me there’s one more than there used to be, and in order for that “enough” to ever come about, people like me will have to decide, one-by-one, to be the next not-yet-enough one.

My sentiments are that tax-withholding is not an imperfect solution, it’s not a solution! But before I’m accused of being combative and argumentative (I probably am!) I agree with the spirit of tax resistance, I also agree that success needs to be built one man at a time (hopefully at some point it goes viral). But I still maintain that the direction of change is agorism. (I do not yet have a solution for practical agorism.)

If you’re resisting taxes that are used to pay for war, why aren’t you resisting taxes that are used to pay for all the other evils perpetrated by the State? It’s like saying, “Well, if only the State weren’t engaged in these empire-building wars of aggression abroad I wouldn’t have a problem paying my taxes.”

The taxation is evil, in itself. It’s not evil because of the ends towards which those funds are applied.

+++

In response to “What is Your Obligation to Your Lender?“, Logan has responded:

I encourage you to re-read my original post without emotion.

Pot, meet Kettle. Kettle, Pot. :)

I clearly was not talking about people who can no longer afford their mortgage payments; I was talking about people who can afford their mortgage payments but because they are in a negative equity situation freely choose to abandon their promise to a lender (not necessarily a bank, by the way) and borrow again to buy another property and simply walk away from the first property.

Logan has juxtaposed the property leapers into the argument, and therein lies the problem: the focus of my posts has been primarily on “people who cannot afford their payments,” not on property leapers. Specifically, I said “Let me make one thing abundantly clear: I’m not talking about people who are trying to dump a property that they can easily afford, just because they’re upside-down.” I don’t know why Logan decided to flip the script on me and start talking about something else. Hilarity did not ensue!

I’m not aware of a property-leaping epidemic but I’m sure there have been a few attempts here and there. In any event, it would be prohibitively difficult for all but the most qualified buyers to do something like this, profitably. And it probably wouldn’t be worth it in the long-term. I believe I called this “financial suicide.”

I am not a “bank-apologist” or “state-apologist”, but I am a lender myself. Lending and borrowing are a natural part of capitalism, if not a defining part of capitalism. A lender uses money (the principal) to make more money (the interest and fees). Similarly, an investor uses money (the investment) to make more money (the dividends/royalties/rental fees, etc.). There is nothing inherently evil in these two types of capitalist activity; but, there can be evil in how human beings and organizations of human beings behave in such capitalist activity. And such evil can show up on both sides of the transaction. All I was trying to point out in my original post was that evil does lurk in the hearts of borrowers as well. The property leaping by a healthy borrower done to avoid TEMPORARY negative equity is a great example.

It’s a “great example” insofar as red herrings are concerned. But it’s not what I was talking about, except for perhaps insinuating that I have no soft spot in my heart for the banks which have been bending people over for years; something about 1913 rings a bell…

Logan, I’m well-versed in the intricacies of capitalism. Before I considered myself an anarchist, I was an anarcho-capitalist, following the vulgar libertarian path back to Rand. I’ll be one of the last people to tell you that lending and borrowing money is wrong and I will never advocate usury laws. But I’ll be among the first to tell you that the current system of fractional reserve banking is nothing short of fraudulent. There may be some bad apples among the borrowers, but they are dwarfed in number by the bad apples among the lenders, who are of the Barry-Bonds-didn’t-know-he-was-on-‘roids variety.

Allow me to explain: Barry says that he never knew he was juicing. This is bullshit for a number of reasons, but principally because only an idiot so dependent on his body and health for his livelihood would put unknown substances into his body. If he didn’t know, it’s because he didn’t want to know. And if he didn’t want to know, it’s because he already knew!

If bankers didn’t know that what they were doing was wrong, it’s because they didn’t want to know. And if they didn’t want to know, it’s because they already knew, or should have known. Another way of looking at it is like this: If they didn’t know they were taking on piles of bad debt, it’s because they didn’t want to know. And if they didn’t want to know, it’s because they already knew!

But it’s not wrong because the government permits or encourages it, right? Wrong! The sanction of a government lends no legitimacy to an illegitimate act! It doesn’t require to strenuous an application of reason to conclude that loaning money into existence, out of thin air, and then asking to be repaid plus interest is in many regards a worse deed than simple counterfeit or theft.

Logan wholeheartedly ignores this charge (for at least the second time) that bankers are profiting from pure monetary inflation/debasement. Moreover, he has neglected to address my response to his own position on “The Golden Rule,” which seemed to be of paramount importance in his last comment, apparently it applies to borrowers, but not lenders.

At this point, I am not interested in any further commentary which does not contribute substantively to the discussion, as it pertains to the nature and morality of the banking system and/or the source from whence it derives profits.

+++

Franc responds to a common criticism of anarchists: our ideals are utopian, and hence impossible.

If Anarchy cannot “work,” then government itself, which must obviously have been created from a state of Anarchy, also cannot “work.” How can an unworkable system produce a workable system? The reverse can happen, of course. A skilled carpenter can create a botched piece, but an unskilled carpenter cannot create a masterpiece. If the initial Anarchist state of affairs was “unworkable,” then where was the potential in this “unworkable” society to create the “order” of government?

So, statism is also utopian in nature, and any criticism on that ground is inherently contradictory.

+++

Coyote wants to know if anyone can solve problems without government anymore. I just read about how the public utilities in Michigan have spent record-breaking amounts of money lobbying in Lansing to secure price increases and thwart competition. Charming. One point that Coyote makes with which I disagree (and I rarely disagree with him, so this might be semantics) is the idea that it would be appropriate for private citizens to buy a bunch of land, and then donate it to the federal government to preserve the parks.

Here is an idea: All you folks who are worried about these “treasures” can pool your money and buy the properties yourselves. That way you can either take charge of the preservations or donate the land to the government to do so. This is how many public parks came into being in the first place, from private donations.

I prefer his first proposal. Take charge of the preservations privately. If the land is given to the government, we can expect market distortions and there is no good reason to believe that it will be managed or preserved adequately. Furthermore, once the park becomes “public” in nature, the burden of its upkeep is spread among all taxpayers. I would rather have the land donated to government, than have government simply take it, but what I really want is for fictional entities to stop “owning” land, and making everyone else pay for it.

+++

At The Distributed Republic, Mark lists a number of ways to replace the safety nets and programs currently provided by the government, and concludes by asking:

With the exception of blatantly coercive acts–waging offensive wars, intimidating other states or individuals, confiscating property–is there a single function of the federal government that couldn’t be replaced? If not, why wait?

Mark! I’m not waiting, but the government is. The simple, short answer is that the government won’t voluntarily disband. It will either be overthrown (violently, or otherwise) and be replaced by another government, or it will crumble under its own weight, presenting the opportunity for the markets to fill the void.

+++

Enjoy the weekend.

Comments on Comments #11

March 28th, 2008

I hate posting these on Fridays, because Friday is typically a low-traffic day. But I also hate waiting until Monday at which time some of my comments are well-past overdue.

Kip Esquire responds in brief to my second post on jury nullification, which was a response to his podcast on the same subject:

1. That libertarians do not have a monopoly on nullification, and therefore the maneuver is not intrinsically libertarian. Just as a gun can be used either for libertarian or anti-libertarian purposes, so too can nullification. It is therefore invalid for libertarians to claim a unique moral proprietorship of the act, as they so often do.

2. The simple truth remains that lying your way onto a jury is not the moral high ground. “The ends justify the means” was, last time I checked, simply not a core libertarian premise — quite the opposite, in fact.

As to (1), I grant that jury nullification is not the only way, nor the best way, and probably not even a moderately successful way to advance the cause of liberty. It’s just one more tool to use as circumstances so dictate. If other libertarians claim stewardship over jury nullification, they are certainly as wrong as the people who claim that guns are intrinsically evil.

Regarding (2), the definition of “moral high ground” I suppose, is at least somehow related to whether there exists a law higher than that created by the State. And since many (most? all?) libertarians claim that the State is overstepping some sort of boundary beyond which its actions cease being justifiable, we can surmise that appealing to a higher law is certainly a libertarian principle, and a core principle, at that. Furthermore, we need to examine whether the act of lying, that is, misrepresenting the truth is universally immoral—a claim which I reject. We don’t need to worry about whether “the ends justify the means” if we’re confident that the means are justified of themselves. Of the moral high ground, we can be certain of at least one thing: there is nothing morally superior about acquiescing to the State, and convicting, or participating in the conviction/incarceration of people for acts which are not crimes.

+++

The Picket Line criticizes my argument against the futility of tax resistance, or symbolic withholding. All’s fair, I suppose. It depends on how you define victory. If you really think that by making yourself worse-off, you can ween the State from its violent cycle, by all means go for it. I just don’t think it works.

Mr. Z’s call for anarchists to “lead the way for ‘off the books’ transactions, making them more available” is followed not by some good examples of how he does this, but with what seems to be a demand that these anarchists be more-or-less completely victorious in this task before he joins them: “Find me a way to buy my house, agorist-style, and I’ll listen.”

At the present, agorism is a brand-new subject matter for me. I’ve only just begun studying the idea, let alone have I had the opportunity to put any of it in to practice. The “find me a way to buy a house, agorist style, and I’ll listen” comment was a tad toungue-in-cheek. I don’t want everyone else to be victorious, but it’s not something I can do on my own. For the record, I did note some quasi-agorist transactions of the sort that most people (present company, included) already practice on a more-or-less frequent basis.

This sort of “it’s only symbolic, it’s not really important” thinking is usually accompanied by gestures of capitulation. Mr. Z goes on to say that “all efforts to resist paying a portion of one’s income taxes are essentially futile, because one is still paying all other forms of taxes…” In other words, I may as well not fight the battle, because even if I win, I still won’t have won the war.

“Even if I win the battle” is a red herring, because as long as you’re using FRNs there are no battles! Almost every transaction in which you participate is taxable, so as long as you spend those notes you’re simply choosing a different form of taxation! If withholding $17.76 from your tax return this year makes it easier to sleep at night, by all means, do it. But don’t be fooled into thinking that you’re going to stop the State by so doing. If you’re withholding your taxes, you’re not going far enough.

I think victory is freedom from the State. Symbolically fighting the State with its own laws isn’t going to get anyone very far because it’s only possible to de-fund the government if it were using legitimate currency, which it is not. And even if it were, there simply aren’t enough tax protesters in existence to starve the State by withholding some nominal sum, and therefore their efforts are misguided.

The principal argument, though, is that you can’t de-fund Leviathan by withholding from the State the very fiat money the creation of which it controls! Because the government operates on monopoly money backed only by the people’s general faith in that fiction, I understand that the only way to bring down the system is to stop having faith in that fiction, to stop using that money, and to practice counter-economics. There probably are enough resisters to begin a counter-economy, which has greater chance at succeeding, if you define success as “freedom from the State.”

This is, as I’ve previously noted, easier said than done. Eventually we’re all asked the question, “How do we get from here, to there?” There, being the libertarian ideal. I admit that I’m long on rhetoric and short on practicality, but one thing is certain: the system is beyond broken, and can’t be reformed from within.

+++

The Peak Oil Myth has been popular!

NC Erickson wants to know, “What alternative sources are you imagining?? There is nothing known that comes close to the energy profit ratio of light, sweet crude oil.”

NCE, I’m not imagining anything. I’m just hypothesizing based on the laws of economics. What is true is that at some price point, at some time in the future, there will be an alternative. It may or may not be less expensive than oil, (my conjecture is that it will be less-so) but since we’ll effectively run out of oil anyways, that doesn’t really matter.

+++

Dave McCartney also sounds off on the subject:

The hope and/or assertion that the free market will allow another energy source to usurp oil is inherently flawed.

…Any alternative energy source is wholly dependent upon fossil fuels for it’s extraction, transport, and distribution, and ongoing maintenance.>

Dave, where is your sandwichboard? “The End is Nigh!”

This is a dangerously stupid position to argue, unless you suggest that in-fact there can never be a way to efficiently tap other sources of energy! i.e., to produce more energy than is expended on production. If this is true, there is not a single argument you can advance in favor of continued use of fossil fuels over other alternatives that doesn’t ultimately result in the destruction of mankind.

Of course, on balance, some alternative fuels so-called are net-negative. I’m calling you out, ethanol! But at some level of scarcity, light sweet crude also becomes a net-negative: it will cost more than a gallon of gas to produce a gallon of gas. Although alternative energy’s dependence on fossil fuels may be true now (to my knowledge it is), it certainly won’t be true in the future. As oil becomes increasingly more expensive, other sources of energy become increasingly more viable. This is elementary economics.

The laws of thermodynamics ultimately constrain and limit us, and no combination of human inventiveness or money can make energy, only manage it.

When left to their own devices, entrepreneurs will see to it that the market embraces opportunities to engage in what Schumpeter called “creative destruction.” New industries rise on the backs of the old. Previously unimaginable concepts become commonplace.

The market should be able to manage the (nearly) infininite amount of solar power beamed down to us from the heavens, every day. Nuclear power is an alternative energy source, provided the market develops the appropriate means of disposing waste and quarantining contaminants. Of course solar power can’t make tires and clothing, but for the most part, plastics are pretty recyclable. Clothes can be made from renewable resources like, oh, I dunno: cotton or wool. People can live in earthships, for instance, which consist of a fair amount of recycled materials, they require no fossil fuels to operate, and are self-sustainable/energy independent.

There is a finite supply of fossil fuel-oil in the world, and in light of this fact, the only conclusion I can draw from Dave’s pessismistic argument is: “The only source of energy that mankind will ever be able to use is oil.”

If this is true, then we’re all pretty much fucked anyways.

Franc chimes in:

Bla bla bla, who gives a fuck? Oil might be more efficient, but that doesn’t mean people will keep using it even if the price skyrockets.

Y’all are fucked.

I think the point that Dave was trying to make is that not only is oil more efficient, but also that it’s the only efficient source of energey, being defined as a source of energy that has a positive net balance. This may be true, for now, but I don’t believe it is a universally true statement. If it is, as I’ve outlined above and as Franc notes: we are all fucked.

+++

I haven’t heard from Olly in a while, but glad he’s back. He adds to the discussion in What is your Obligation to your Lender:

I guess I just don’t understand the confusion here. If you signed a contract that said “if I can’t afford to pay X then I’ll give you this collateral” then what’s wrong with saying “well, can’t afford it, here you go.”

…Everyone is to blame for this crisis

Everyone, including the lenders and the investors who bought these toxic asset-backed securities (RMBS, anyone?) If you don’t understand how commodities are traded, you probably shouldn’t be investing in commodities. If you don’t understand the intricacies of forex, you shouldn’t be writing options on Yen. There is probably a rule in investing: If you don’t know what the fuck you’re buying, you can’t value the asset in question, or you don’t understand the fundamentals of its valuation, then you probably shouldn’t be buying it.

If this isn’t a rule in investing, I propose that it should be one.

+++

On the topic of the Detroit mayor and his recent perjury/hooker/adultery/whistleblowing scandal, (Detroit Mayor Guilty of Perjury?Jorge comments:

I think Congress should pass a law prohibiting any kind of inquiries on marital/sexual behavior of people (while on office or not). Exceptions would be, of course, if the inquiry is proven to be absolutely necessary to clarify other sorts of misconduct. Still, even in such cases, the details of the investigated’s sexual lives should be fiercely protected by Justice.

I don’t think Congress should pass any laws. I also don’t think that public officials should be using “public” funds to protect the secrecy of their extramarital affairs especially as they are materially related to the whistleblower suit in question.

+++

That’s all for now, I’m working on a handful of drafts which may or may not bear fruit.

The Peak Oil Myth

March 25th, 2008

Some people find my blog by searching for “peak oil myth.”

Although I’ve previously said things like, “Oil isn’t running out, yet. And it never will,” I’d like to clarify here: peak oil is definitely not a myth. There will come a time when the production of oil will diminish at accelerating rates, and the price of oil will rise proportionally.

What I mean when I talk about the “peak oil myth” is the conclusions so often drawn from the concept of peak-anything. The presumption, mistaken of course, is that as oil becomes more expensive, mankind will be impoverished and perhaps cease to exist in a bloody armageddon over the last drops! This can’t be so, can it?

Of course not! As oil becomes more expensive, the opportunity costs of other fuels becomes comparatively less expensive. These are some of the same sources of energy which my callous inner-economist decries as socialist drivel, like solar power or hydrogen. These are only bad ides insofar as they’re economically unviable at the present, and therefore any State subsidization of these sources constitutes outright waste.

As other sources of energy become more viable, economically, investment in these resources will be stimulated. Competition among market participants will lead to technological innovations, and the accompanying savings brought about by competitive price reductions. Ultimately in real terms, the prices of these alternative energy sources will probably be lower than the current price of oil, because some alternative sources are economically abundant.

Because of this, there is no justifiable reason to make people pay more now (through tax-subsidies) for something that will ultimately be less costly in the future!