Randoms of the day

Hail to You presents an interesting theory about Watergate. I’ve read enough about Watergate to believe almost anything at this point.

The piece on Watergate goes nicely with John Derbyshire’s musings on the mythical Kennedys.

Random thought: Lots of men’s rights advocates believe that feminism has sought to destroy marriage. It’s odd that the advocates respond by refusing to get married.

About 30 minutes after I wrote the above thought, I read this great piece from Ferdinand [Update: it’s not by Ferdinand, it’s by Maximus]. He’s calling for patriarchy 2.0. "If men agree that we need to unite to defeat feminism, they are also simultaneously agreeing to defend the institution of marriage and family, for that is precisely what feminism was born to destroy in the first place. Therefore, the destruction of feminism is the rise and reinstatement of the institution of patriarchal marriage and family (albeit not in the same way as it was in the 1950s, obviously) as the primary locus and focus of societal organization." I couldn’t agree more.

Don Boudreaux:

Proponents of unfettered free trade have long claimed that lowering trade barriers will allow America to import more and more goods, eventually leading to greater economic prosperity. Period.

Proponents of unfettered free trade – at least those who understand economics – don’t give a damn about trade ‘deficits’ or ‘surpluses.’

I wonder how far one could take this. Assume there are only two parties in the economy – A and B. Is it really super awesome for A to borrow money from B to buy goods produced by B? I guess the answer is "yes" . . . until the answer is "no".

Joseph rounds-up some laws.

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27 Responses to Randoms of the day

  1. Red says:

    “Lots of men’s rights advocates believe that feminism has sought to destroy marriage. It’s odd that the advocates respond by refusing to get married.”

    I believe feminism sought to redefine marriage and the female role in general. Problem is when we redefine something you effectively destroy the old version of it. The people refusing to get married are refusing to join marriage 2.0 in the hope this will force the return of marriage 1.0. It’s a laughable hope.

    The majority of men end up opting for marriage 2.5 “the shack up” which has already lead to places like Australia refining the shack up into marriage 2.0 including such things as support after the breakup, using the courts to divide up community property, ect.

    Remember that progressives use a ancient technique: Rather than calling a new way of doing things new they just redefine an old thing to the new way and get people to do the new thing under the guise of tradition. I believe the Romans were quite fond of this method of social change.

  2. JManon says:

    Is it really super awesome for A to borrow money from B to buy goods produced by B?

    Since the end game is for B to get something for nothing, It seems pretty good to me. Imagine the grocery store accepted IOUs for groceries, but had no ability to force you to pay back the IOUs. Now imagine if the store stopped giving you groceries in exchange for IOUs, it would ruin the secondary market for IOUs and render all the IOUs functionally worthless. If the grocery store actually reached the point of cutting its losses and torching its IOU holdings, you could look it in the eye and say, “thanks for all the free groceries, sucker.” Of course, one would hope to have saved up enough free groceries to last through the necessary transition back to subsistence farming.

    • Foseti says:

      I don’t see how that is substantively different than theft

      • sconzey says:

        No, nor do I, but the problem here is not the trade, but the borrowing. Specifically, that B is lending money to A without demanding collateral.

        Whether A then chooses to burn this new money or buy groceries from B is no matter.

        Anyway, I thought anti-free-traders advocated running a trade surplus — as B is?

      • Foseti says:

        Correct. My concern, in the example, was not with B . . .

      • JManon says:

        It’s different because this isn’t a secret. B is not holding a gun to A’s head or stuffing groceries down his shirt and sneaking out the back door. A knows exactly what is going on and is choosing to give B groceries anyway. Letting someone voluntarily make a bad deal is not stealing from them. I’ll admit that the whole scenario reminds me of the scene in Goodfellas when Henry Hill describes how the mob would loot a restaurant.

        In my view, if a country is depending on anything other than self-intereted behavior from other countries, it run by fools in the first order. B is not going to honor its IOUs at any given time unless it thinks doing so is in its own interest. A is counting on the fact that it will usually be in B’s interest to pay up when a call is made. At some point, the balance will reach a breaking point, and B will turn on the printing presses.

      • JManon says:

        I swapped A and B in this reply, but you get the point.

      • rightsaidfred says:

        To extend this a little bit we should have A (the borrower) paying back B partly with money (or IOUs) and partly with real goods (chickens, gold). “A” can thus extend the game a bit by playing an ultimatum game, stretching out his ratio of goods vs. IOUs, if he reads that B is weak in some way. Strong B, on the other hand, could demand a trade in his favor.

      • Anonymous says:

        Correct. My concern, in the example, was not with B . . .

        Well it should be! B has voluntarily entered into what is — on the face of it — a very bad deal with A. B is getting shafted, and A is getting groceries for free.

        I fail to see how A is the loser and B is the winner in this scenario.

  3. Correction – that post was written by Maximus, not me. The new In Mala Fide is here, and we’re starting out with style.

  4. Cerberus says:

    Marriage avoidance is not done because feminists are trying to destroy marriage, but because they succeeded quite some time ago.

  5. Handle says:

    It’s not really helpful to discuss the economic issue in the abstract, because it doesn’t take real problems of our actual situation into account. Let’s listen to Mark Felt and follow the money.

    1. American Consumer (AC) looks at two identical products at the store – one American-made and one China-made, which is cheaper. He doesn’t know why, he doesn’t ask why, he figures it’s all about “labor costs”, and he doesn’t really care. He buys the Chinese product. Next month he’s out of a job. He blames evil greedy Wall Street capitalists for this.

    2. The dollars go to the retailer, to the wholesaler, to the shipper, and all the way back to the Chinese manufacturer.

    3. This manufacturer cannot pay his workers in dollars, so he goes to the bank and exchanges them for Yuan at the government’s dictated rate. He has every incentive to do this because the Renminbi, as everybody in the whole world knows, is undervalued – and because of the distortion, the Yuan he receives have higher real purchasing power than that dollar does, both right now, and expected to have even more so in future as it appreciates. For example, someone who held Yuan 6 years ago have made 20% in that period vs. the dollar – anyone not expect that to happen again?

    4. The local bank gives the dollars to the People’s Bank of China (PBoC) who gives them Yuan, also at the guaranteed rate. Why doesn’t the local bank go to the ForEx market? Because of capital controls – you can’t trade in Yuan, and the PBoC is the only game in town. But if there is a trade imbalance (which is by design), that means dollars are accumulating in China and the PBoC can’t just operate an internal currency-trading desk – there aren’t enough “Yuan to Dollars” traders to clear the market of the “Dollar to Yuan” traders at the fixed-price. But the market does “clear” at the fixed price. How? The supply adjusts. Where does the PBoC get the Yuan? It just prints more. Constantly. Everyday. By the Trillion. China is in a constant state of QE to levels undreamed of in the rest of the world.

    The effect of all this is essentially a giant employment subsidy program – where rates are help artificially low so households are taxed the real interest on their savings and the difference is transferred to labor-intensive exporters in order to promote high levels of employment and development of future productive capacity. Gee, the Chinese seem to thing those things are really socially valuable and worth the cost – I wonder if that has any application to the US? Nah – couldn’t be.

    5. But wait, if you are just printing Yuan willy nilly, how come they don’t have hyper-inflation? Sterilization. In China sterilization is easy because they can force the banks to hold as many of these below-0 real interest rate bonds as they want. This control is so absolute that they can simultaneously fund the government by monetizing all its debt *and* sterilize. Another massive distortion which creates the global imbalance. Another hidden wealth-transfer for strategic geopolitical and social-policy reasons.

    6. All those dollars eventually accumulate at the PBoC. They would have more than a 1,200 Billion of them (2/3 of current M1) had they decided just to hold the cash. What should they do with them? Maybe they should spend them? They can’t – that would set into motion a chain of events which would, gasp, heaven-forbid it, create a trade balance, just like Adam Smith said. But they won’t permit that. So they need to sterilize these dollars too. But only the Fed can sterilize dollars.

    7. Fortunately, we have a deficit problem big enough to accommodate China’s needs. The Chinese buy US Government debt (and artificially low interest rates, because of the artificially high demand), and they just hold the notes which is a de facto sterilization. The US Government spends the money, and it’s now the Fed’s problem to try and keep the inflationary impact of this at bay without dropping us into a recession with high unemployment.

    This is impossible. It can continue for a short while only if rates are kept artificially low and there’s some outlet that soaks up all the additional cash and credit flowing around that doesn’t “count” in the inflation metrics. These are “asset” prices – like stocks and houses, which are blown into bubbles (in both countries) that can last for years but must eventually pop.

    In this way, the Fed, because it operates in an open, free-market system, is essentially a reactive and complicit automaton that accommodates China’s anti-market distortions, instead of a strategic player that attempts to neutralize both their short and long-term negative impacts on our economy. Now we have to monetize our own debt just to keep up with China’s ultra-easing policy.

    And China is only one of many countries doing the same thing to us (and, to a lesser extent, to Europe) and for the exact same reasons. East Asia (China, Japan, Hong Kong, Taiwan, Singapore, Thailand, and Korea) and OPEC already cumulatively hold $25K in US debt for every US worker.

    This is so impossibly distant from “unfettered free trade” that it’s just insane to make abstract theoretical arguments in the face of what is clearly classic mercantalist and predatory strategic behavior on the part of our major future peer competitor about which we are doing nothing to counter or remedy. When all these imbalances unwind there will be pain aplenty, and Don Boudreaux will look more that a little foolish.

    • JManon says:

      So, China artificially keeps down the value of its currency, which allows us to give them paper without long-term value in exchange for real stuff, like CPUs, furniture and TVs. In exchange, they get what, exactly? High employment at slave wages? I’ll bet the Egyptians had no unemployment when they were building the pyramids.

      Meanwhile, even the poorest among us tend to have cell phones and flat panel TVs, and their biggest health problems are caused by consuming too many calories.

      China’s policies mean we get to buy things for less than they would be worth in an unregulated market, to the detriment of China’s citizens, who will be left holding dollars or bonds the real value of which will have been inflated away. Why are we the prey?

      • Foseti says:

        How can the scenario that you set up possibly not end in disaster for us? It would be one thing if China were a weak an inconsequential country, but, increasingly, they’re not.

      • JManon says:

        China is not going to invade us or start a mutually assured destruction nuclear war. So how are they going to force us not to monetize the debt?

        I agree that it will suck when we have to return to working for what we have rather than getting it on the cheap from the developing world. But if we were doing some sort of planning for this situation to end, this would be an outstanding situation for us. But we are not doing so, and the correction will hit us quite hard.

        But the alternative you seem to favor is protectionism. All that will do is make us, in the aggregate, worse off now without preventing us from being worse off later. How does protectionism save us from the end results of borrow and spend governance?

      • Foseti says:

        As time goes on, I think it’s less and less likely that we could possibly return to a world in which we actually have to work for a living. This would put us in a position of having to do whatever China tells us to do.

      • RS says:

        If it’s so obviously bad for them why are they doing it?

  6. sardonic_sob says:

    I don’t understand your random thought on refusal to marry at all. It is *ironic,* perhaps, but it’s not odd. If I like Disneyland, but the Walt Disney Corporation decides to start dumping raw sewage all over the streets, would you say it was odd that I both complained about their ruining Disneyland and refrained from visiting it?

    It is one thing to back down from a challenge formed by a barrier to entry to some valuable thing, and quite another to acknowledge that someone has been successful in their campaign to negate the value of the thing and therefore while you appreciated that thing’s value and resent its diminishment, you now have no interest in obtaining it.

    • Foseti says:

      I’m not sure I like your analogy. It’s more like 1) you like Disneyland; 2) a group of people don’t want you to go to Disneyland so they put lots of obstacles in your way . . . and 3) you respond by hating Disneyland.

      • sardonic_sob says:

        I am distinguishing between obstacles and spoliation. If the problem were mere obstacles, you are quite right that the noble thing to do would be to try to overcome them. However, there are no obstacles – in fact, it’s easier to get married now than it has been, historically speaking, for many decades prior. (In fact in fact, lots of people, in a few jurisdictions, can now get married who couldn’t have gotten married under any circumstances prior to the present Day of Enlightenment.)

        It’s just that the thing itself is now so utterly diminished that it’s no longer worth the risk it entails.

        To respond to your criticism, it’s not that I hate what Disneyland was: I hate what Disneyland is – namely, an open sewer. It may be quite rational both to complain, and to lobby anyone with authority over the business to remove the sewage, but it is not rational to say, “I will go to Disneyland and stand in sewage because I liked Disneyland without sewage.” That way lies cholera, not rationality. I might picket outside the gate, but if I pay money to go in and stand in the sewage, whatever my words say, my actions and my money are telling WDC that their renovations are a success. And as any number of examples can illustrate, money speaks louder than words.

    • sconzey says:

      There’s marriage and then there’s the legal institution of wedlock. I see no reason why — if you live in a State without Common Law marriage, and object to the current legal status of marriage — you couldn’t just have the ceremony, change your names, etc. just not sign the marriage register?

      Just cus you don’t want to get married doesn’t mean you can’t find a nice girl, settle down, have kids and be monogamous. Marriage in all but name.

      • Foseti says:

        I have a friend who’s doing this in Maryland, which doesn’t have common law marriage. I think it’s a great idea.

      • sardonic_sob says:

        I think it’s an idea worth looking into for those with interest, but I would still be concerned that ten years or so down the road some enterprising lawyer could find a way to treat it like a marriage to the detriment of one of the parties, even in a non-common-law marriage state.

        If I were going to go the “non-state-endorsed” marriage route, I think I would seriously look into drafting a partnership agreement of some kind, as well as setting forth a pre-nup-analogous contract (maybe they’d be one document, depends.) This still wouldn’t defeat some clever attacks, but at least you’d have some understanding to point to if you needed it.

        Keep in mind that once kids enter the picture, the father is screwed, blued, and tattooed if the court decides it wants to SBT him. Period, end of sentence, anyone who says different is misinformed at best and lying at worst, full stop. Of course, in theory the court could also SBT the mother, and once in every three or four hundred cases that happens. But “best interests of the child” is judge-speak for, “Rights? You ain’t got no stinkin’ rights.”

  7. tenkev says:

    There is no such thing as a trade surplus or deficit. When it looks like there is a trade surplus that is just because country A is selling financial products to country B in exchange for physical products.

    Net Exports always equals Net Capital Outflow. So, if you are importing more than exporting that must mean more capital is flowing into your country than out. Which is a good thing.

    • Foseti says:

      But one form of “financial product” is a loan. Country B may buy a loan to country A. If A then uses the proceeds to buy goods from B we have an interesting circle, no?

  8. […] In the comments, Handle some thoughts on Chinese monetary policy and "free trade" with China. […]

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