Randoms of the day

For those you interested in diet, my brother sends this link.

Deflation disaster.

John Derbyshire on government:

A government is not a person, and the qualities I admire in a person, and hope to find in my friends, and strive to cultivate in myself and my kids, are in most cases the opposite of those I desire in my government.

I want my friends to be trusting, generous, kind, and flexible. I don’t want my government to be any of those things.

One time when I was in Safeway, one cashier asked another what she should do with her boyfriend’s stuff while he was in prison. The other cashier gave the first one the name of the storage place that she uses when her boyfriends go to prison (inspired by the first item in this post).

I don’t disagree with many of these – though I do disagree with the statement that we don’t know which “cultural factors” are important. I also disagree that direct democracy is good – real true direct democracy is chaos.

Bruce Charlton: “Could it be that the decline of smoking among creative intellectals may have contributed to the decline of genius?”

A couple weekends ago I had a very nice drunken debate with a friend. He was arguing that ancient people were violent against children. I was arguing that the modern practice of abortion is worse because we practice it on such a large scale and we consider it a “right” (inspired by this post).

Elusive Wapiti: “Myself, Simon Grey, and OneSTDV have been having a discussion of sorts about the inability of capitalism, materialism, pragmatism, or whatever one wants to call a governing philosophy that purposefully neglects man’s spiritual nature, to provide the sort of support necessary to sustain a moral culture in a right-wing minarchist society.” RTWT

When free-market economists see that the market declines on news that the trade deficit (which they believe doesn’t mean anything) has widened do their heads explode?

Germany is now setting fiscal policy in Ireland and Greece.


7 Responses to Randoms of the day

  1. wm tanksley says:

    Seriously, given all the bad news today, why would you point to a trade gap as the cause? Of all things, a trade gap is the last thing that should surprise any insider. Here’s what Drudge thinks (i.e. the headlines HE chose to put below the stock chart graphic):

    “Stocks dive on Saudi report…”
    “Oil, gold pop…”
    “Economist warns of double dip recession if oil hits $140…”

    That proves only that other people have different opinions; but at the same time, the news he’s pointing to is widely considered as SERIOUS, and was fairly hard to predict with any reasonable certainty. Both attributes are the opposite of the trade gap.


  2. Handle says:

    That’s “Relative Deflation” not (Absolute) “Deflation” and yes, there are critically important differences between the two Economics concepts. Relative Deflation derived from technological improvements to total factor productivity of some particular output is indeed a great thing and a boon to mankind. Absolute Deflation, on the other hand, is a disaster given the way the Federal Reserve manages our Fiat-money regime. I should say “unexpectedly accelerating absolute deflation” but no need for that right now. A lot of people in the Austrian Economics sphere get this issue slightly wrong because “deflation” under a different monetary regime (i.e. commodity-based) wouldn’t necessarily be so harmful, but under our system it definitely is.

    Without getting too technical, the reason is basically because the predominant form of credit issued in our society are instruments written in terms of nominal currency. For economic stability, aggregate debt must remain correlated to aggregate future production. Otherwise, more promises will have been made than the economy can actually deliver.

    This also has to do with the nature of savings in the current system. What are you doing when you are “saving” if you’re not actually hoarding physical objects? You are purchasing promises to deliver those objects to you in the future based not only on the faith that your particular debtor will deliver but also that he can deliver, that is, on an assumption that the capacity to produce those objects at certain nominal prices will even exist at that future time.

    It is better when that future production unexpectedly exceeds the promises than the other way around – this is the origin of the fundamental asymmetry between the effect of inflation (mild) and deflation (severe – and again, this is a feature of our current Monetary order).

    The Federal Reserve (not a popular entity among The Right, I know) manages the currency in part to keep the severe mismatch effects of debt-deflation from shocking the system before it can self-correct and reestablish equilibrium.

    Actually I should say “mismanages” because they are still using obsolete and incoherent techniques – like having a “CPI-inflation comfort zone”. They should be level-targeting the forecast of NGDP (something Hayek favored and is currently championed mostly by professor Scott Sumner) but that’s also a technical discussion.

    As far as hard-drives go, I’ll excerpt a message from a friend of mine,

    … by my calculations, the real price of digital storage has declined by a factor of around 14 million. But we can’t just consider space alone. You’ve got to think of other real quality improvements like speed (over 1000 times faster than a 1981 hard drive), reliability, compactness (1000 times more compact), noise, power consumption, etc. I’m going to say that, per megabyte, current hard drives are also at least 70,000 times better than they were in 1981.

    That adds up to a total deflation factor of something almost everybody uses of of about One Trillion (give or take an order of magnitude) in a single generation. We probably won’t see another “Trillioning” like this again.

  3. JManon says:

    though I do disagree with the statement that we don’t know which “cultural factors” are important

    How do we know the arrow doesn’t, at least in part, run the other way on this correlation (i.e., rich –> high IQ)? It’s at least plausible that the wealthier, higher growth nations have better nutrition during development and better educational systems that lead to better performance on IQ tests.

    • Foseti says:

      I think this idea – which is admittedly plausible on the service – has been refuted by various methods. For example, American blacks don’t have worse nutrition and healthcare than American whites when you control for income, yet IQ differences persist. They even persist in adoption studies.

      • omg says:

        actually, they do, not least (or solely, but def. a factor)because they are likely to be single-mother households, even with relatively high income.

        American-born blacks are deficient in omega-3 (correlated with, uh, short tempers, among other things) and vitamin D (correlated with all manner of diet regulation problems and general health issues).

        American-born black mothers start from a position of pretty insane nutrient deficiency (passed along to the infants) compared to white women for a variety of reasons too long for a blog comment. Also, if you have to be nutrient deficient, it’s better to not be deficient in the fat solubles like vitamin D.

        Black Americans (esp. urban, though not exclusively) have quite different (and problematic) nutritional habits to other American populations, including black immigrants and the various types of Hispanics.

    • RS says:

      Here be graphs of mean SATs by race – by family income and by parental education attainment.


  4. Thanks for the link, Foseti!

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