WWII redux

From Robert Higgs:

Maybe it would be better if the government scrapped its present budget entirely, and provoked the Japanese to bomb Pearl Harbor again. Then we could fight World War II over. Yes, yes, many people would have to die, but the Pentagon could compensate these unfortunates by awarding each of them a posthumous Silver Star, and in a strictly financial sense, this plan would be much cheaper than what the government is doing now.

Short Treasuries

Obama's total budget is $3.6 trillion, which works out at $34,000 per household; median household income is about $50,000. Which basically means that for every dollar that a US household earns, the US government plans to spend 68 cents next year. And the ten-year T-bond still yields less than 3%. Extraordinary.

From Felix Salmon.  I've been short long-dated Treasuries for awhile now, and it's been good to me.  I'm not covering anytime soon.

Knocking charities

What's up with this proposal?  I don't what to say.  I think it's really stupid, it may be a huge power grab, it's likely to piss off everyone and it has no chance of passing.  It literally unites every charity and lobby against it.  I'm at a total loss for why anyone would suggest something like this.

Review of "Boomsday" by Christopher Buckly

Human life is basically a comedy.  Even its tragedies often seem comic to the spectator, and not infrequently they actually have comic touches to the victim.  Happiness probably consists largely in the capacity to detect and relish them.  A man who can laugh, if only at himself, is never really miserable.

– H. L. Mencken

As the tragedy of our looming entitlement debts gets closer and the ridiculousness of our political system becomes more and more apparent, we might as well take Mencken's advice and laugh at it.  What better way to do so than with this book?

I won't add much to other reviews.  The book is definitely worth the short read.  I think it would make a great movie.

If only we could get Tom Wolfe to write a book set in DC . . .

Review of "Minority Report" by H. L. Mencken

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This is also a highly recommended book.  It’s just short notes that Mencken put into a book.  There really is no way to review the work, so I’ll simply cite some of my favorites in no order and with no grand intent:

The difference between a gentleman and a bounder is the difference between a duel and a fight in a barroom.  In the latter the contestants yell while they are fighting, and gloat horribly in victory.  The duelist fights without heat, and offers his hand to his fallen antagonist.  This is pretty much the difference, too, between civilized war and the kind of war that is carried on by democratic countries.  The latter is always accompanied by a tremendous amount of moral indignation.

And:

                There is nothing harder to do than nothing.

And:

The average American college fails doubly to achieve its ostensible ends.  One failure, I believe, flows from its apparent inability to find out precisely what a given student, A, is fitted by nature to learn, and what sort of learning will yield him the most benefit, considering his congenital capacities and environmental background.  Anything else that he is taught is wasted.

And:

I seldom give much heed to the faces and forms of females, and I almost never notice their clothes.  But when one of them has a low-pitched and soft voice, with a good clang-tint, she is free to consume my wealth and waste my time whenever the spirit moves her.

And:

When a Catholic historian deals with the saints he is as ridiculously hobbled as a writer of American school histories dealing with the Mexican War, the Spanish-American War, or the first two World Wars.  In order to account for them at all he must ascribe to them magical powers that had no actual existence, and are not believed in by any rational man.

And:

The fact that I have no remedy for all the sorrows of the world is no reason for my accepting yours.  It simply supports the strong possibility that yours is a fake.

And:

It was not until skepticism arose in the world that genuine intelligence dawned . . . it was probably not more than ten thousand years ago.

And:

                Jefferson would have killed himself if he could have seen ahead to Roosevelt II [FDR].

And:

The boorishness cultivated by Communists is analogous to going into company without a necktie.

And:

The thirst for liberty does not seem to be natural to man.  Most people want security in this world, not liberty.  Liberty puts them on their own, and so exposes them to the natural consequences of their congenital stupidity and incompetence.

And:

                What we confront is not the failure of capitalism, but simply the failure of democracy.

Review of "Albion’s Seed" by David Hackett Fischer

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This is a truly remarkable history book.  In brief, the books traces the four migrations that shaped America – the Puritans in New England, the Cavaliers to Virginia, the Quakers in Pennsylvania and the “Scots-Irish” to the “backcountry.”  In tracing these migrations, Fischer shows the tremendous impact that all four cultures had on their regions, on American history, and even on present events.  When the book is finished, Fischer has made a very plausible case for a new way of seeing history.  As he says in the intro:

This work is organized around a third idea—that every period of the past, when understood in its own terms, is immediate to the present.  The “immediatist” solution cannot be discussed at length here; it must be defined ostensively by the work itself, and especially by the conclusion.  Suffice to say that the temporal problem in this volume is to explore the immediacy of the earliest period of American history without presentism, and at the same time to understand the cultures of early America in their own terms with antiquarianism.

I believe Fischer achieves his goal admirably – and a hell of a goal it is.  It will be tough to read other history after reading one that gets so close to avoiding presentism.  For this, if nothing else, Fischer should be saluted.  But there is more, Fischer’s cultural explanations for events are much more persuasive than other explanation, e.g. materialist explanations.  I don’t think it should be possible going forward, for American historians to write without reference to Fischer’s work in this volume.

We hear how colonists for each reason were chosen.  We see how the weather effected settlement and effected who survived.  We see how events in England determined who was settling and when they were settling.  We see how each group solved conflicts, made decisions, built houses, ate food, talked, believed in different meanings of liberty, etc.  We get portraits of great leaders like Sir William Berkeley – one wonders how it is possible that there are only 3 paragraphs on Berkeley in Wikipedia.

I must cut myself short, as there is important stress-testing of troubled financial institutions to attend to, but what emerges from Fischer’s treatment is a series of continuities – a continuity from the border lands of England and Scotland to the backcountry of America all the way down to redneck culture today; a continuity from the East Anglican traditions of the Puritans to the ways in which New England still differs dramatically from the rest of the States.  Understanding these continuities is American history.

I really should say more, but I must stop here.  It’s too good to summarize anyway, read the book.

Debt repudiation

On US repudiation:

The result is obvious: an ever greater quantity of Treasury securities, backed by ever decreasing cash flow to the government, and topped off by ever increasing monetization of both Treasuries and Agency debt. . . .

The private sector debt in the United States exerts the same power over the banking system as the public debt of the United States exerts over our international creditors. Collectively, the debtors are in control. Not the creditors. This is why the the Creditors, not the Debtors, will be making most of the concessions in the years ahead. Whether the US public debt is inflated away, rescheduled, or repudiated–or some combination of all three–it doesn’t matter much. The process is already underway. And only an improbably quick return to a very high GDP in the United States could halt the process. We’d need a pace of growth that the United States has not experienced in decades. I don’t see a quick return to high GDP in the US anytime soon, do you?

Douche-bag of the year nominee

This is amazing.  You can see the logical consequence of higher education in liberal arts in America in action – and it's not pretty.  The universities better be careful not to let too much of this stuff get out.  If it does, people would have no reason to give them $160,000 for a woman's studies degree.  People could get the same education by watching a few videos on Youtube.

Gaussian Copula function

Felix Salmon has an article on The Formula – the Gaussian Copula.  It's a good, basic summary.

The real question is: what should make of mainstream economists (using the term broadly here to include financial economists) who fell for this?

Online gambling

Radley Balko links to this story about removing the ban on online gambling.  Should libertarians be happy about such a repeal?  I don't think so.  I don't think we should be sad either.  It's simply a neutral.  We should be happy if government decided it didn't have the power to regulate online gambilng, but that's certainly not the case.  But I'm not holding my breath for that.