July 30, 2011

I’ve covered the saga of DC’s old mayor being thrown out before. Most of his political appointees, notably Michelle Rhee, were also thrown out. Unsurprisingly, the new mayor has been embroiled in a series of scandals. The new mayor also got rid of most of the old mayor’s appointees. Rhee, for example, was replaced by a black woman with similar views (this was apparently enough to satisfy black voters in DC). One notable exception to this trend was the old mayor’s chief of police, a white woman, who is the second most popular political figure in DC (after the President).

In other DC news, here’s a worthwhile story about gentrification across the river. Don’t miss the "no whites" signs being put everywhere.

It’s worth remembering that bankruptcy isn’t the end of world.

Audacious Epigone on the Sailer Strategy

Ferdinand doesn’t seem to think that Eisenhower was a commie. Fine. But it is worth remembering that by the end of Ike’s term in office, people working for the Soviets were effectively running many federal agencies.



July 27, 2011

wcsoto is reading EKL (more and more)

Iran loves Egyptian democracy


July 26, 2011

I had started a rather sarcastic post comparing ABB to John Brown. What if ABB had died, Norway fought a super bloody civil war to rid itself of multiculturalism, and the victors sang songs about ABB’s body? Anyway, the post wasn’t very good and Moldbug says it all better (helpfully supplemented by stats from Illka).

Stratfor: "Under the EFSF all of this debt will in essence be a sort of “eurobond,” a new class of bond in Europe upon which the weak states utterly depend and which the Germans utterly control." . . . "Rather than constraining Germany’s geopolitical potential, the European Union now enhances it; Germany is on the verge of once again becoming a great power."

Devin on Europe.

AMcGuinn on the phone hacking media story.

The price of gold and central bank holding of treasuries and agencies.

The freedom of children: "The truth is, promiscuous feminists want more than total sexual freedom. They want their choices to be celebrated, and for it to be politically unfeasible for anyone to question their morality. They wish to silence those who would call their lifestyles morally bankrupt (or even think it). They wish to shame men for imposing a sexual double standard, or even for simply preferring to partner with women of limited sexual experience."

Ulysses and I had nearly identical weekends (actually, we were just drinking the same stuff, but that’s close enough).

Currently, intrade thinks it’s unlikely that Congress will pass a deal to raise the debt ceiling. Yields on treasuries are declining today. The market seems to not care whether or not the debt ceiling is raised. Pundits, however, are freaking out. Someone is really wrong.

Question for libertarians

July 26, 2011

Bryan Caplan asks conservatives: "What things that are currently illegal do you think people should be free to do?"

My answer would be a very long list. In fact, I think people should be allowed to do most things, I just think that other people should be allowed to judge said people and act on said judgments.

For example, if you want to smoke crack, I don’t really care. However I’d like people to be able to discriminate aggressively against crack-smokers. In a hypothetical world in which property rights were very strong and strongly enforced, smoking crack and sundry other things would effectively be illegal. They’d also be policed a lot better than they currently are. A lot of things that are currently legal would also probably be effectively illegal.

A truly free world would be a highly-discriminatory and highly-judgmental world.

HBD, taxes and segregation

July 20, 2011

If you understand HBD, I think you have to agree that high marginal tax rates are equivalent to segregation.

Neighborhoods that are highly "diverse" have bad schools (i.e. schools filled with NAMs). If rich people (especially if "rich" means recently earned a fair amount above average) live in these neighborhoods and they’re taxed at high rates, they effectively have no choice other than moving to areas that have good schools (i.e. areas that are not diverse). If smart people are more likely to be rich, and certain groups of people are more likely to be smart, then high tax rates will result in segregation.

High marginal tax rates therefore are effectively equivalent to segregation. QED.

Tom Lamont

July 20, 2011

I owe a couple people a some thoughts on my favorite character in the history of American finance.

Here’s the first and last paragraphs of his all-too-brief Wikipedia page (links retained):

Lamont was born in Claverack, New York. He graduated from Phillips Exeter Academy in 1888 and earned his degree from Harvard University in 1892. He became a generous benefactor of the school once he had amassed a fortune, notably funding the building of Lamont Library. After 1910, he became a partner of J.P. Morgan & Co., and served as a U.S. financial advisor abroad in the 1920s and 1930s. During the 1919 Paris negotiations leading up to the Treaty of Versailles, Lamont was selected as one of two representatives of the United States Department of the Treasury on the American delegation. He was at that time a member of the Council of Foreign Relations. He played a leading role for Morgan in directing both the Dawes Plan and the Young Plan. . . .

Lamont was an influential member of the Council on Foreign Relations, and one of the most important agents for the Morgan investments abroad. He was an unofficial mentor both to the (second) Woodrow Wilson and the Herbert Hoover administrations, and informed both the Dawes Plan and the Young Plan.

While I’m at it, I can’t resist including the synopsis paragraph of his son’s (much longer) Wikipedia entry:

Corliss Lamont (March 28, 1902–April 26, 1995), was a socialist philosopher, and advocate of various left-wing and civil liberties causes. As a part of his political activities he was the Chairman of National Council of American-Soviet Friendship starting from early 1940s. He was the great-uncle of 2006 Democratic Party nominee for the United States Senate from Connecticut, Ned Lamont.[1]

Is there a better illustration of the Cathedral in action?

Ron Chernow’s book, The House of Morgan, contains a couple of nuggets that we will need to finish our brief portrait:

In extreme cases in the 1930s, the House of Morgan would function as an unfettered government in its own right, conducting secret foreign policy at odds with that of Washington.

In less extreme cases, the House of Morgan would simply direct Washington’s foreign policy.

One more quote, if you’ll indulge me:

His son Corliss, a socialist and later a professor of philosophy at Columbia, saw his father’s foreign-policy views as spotless: "Although my father was a successful banker, and a Republican in politics, he was in essence a liberal, particularly on international affairs."

Following the death of JP Morgan, Lamont eventually emerged as the de facto head of JP Morgan bank. He also conducted US foreign policy, except for rare instances in which USG disagreed with him, in which case he conducted the foreign policy of his choosing anyway until USG changed its mind (sometimes it took a while for USG to catch up to Lamont). Lamont negotiated the agreements that ended WWI and the subsequent plans that dealt with the problem of German reparations. He advised Wilson and Hoover. Did I mention he ran a bank as well? He also went to Harvard, naturally.

His socialist son – don’t forget the "National Council of American-Soviet Friendship" – thought he had "spotless" foreign policy views . . . and Lamont was arguably running US foreign policy. Was this in your history book?

His great nephew beat Lieberman in the Democratic Party – interesting, no? American politics are full of these little quirks if you’re paying attention.

This brief portrait just scratches the surface, but I promise that a little digging, by anyone who is interested, will pay off.

I’m underpaid

July 20, 2011

According to Yglesias, who demonstrates an incredible level of mis-understanding about federal employment for someone who talks about it so much, I’m underpaid. Maybe I should set up a tip jar in case anyone wants to take pity on me.

Here’s his take on what’s going on:

The federal government needs to fill some jobs. But it offers salaries that are less than the salaries that a person doing a similar job could get in the private sector. Naturally, this means that the federal government ends up attracting less-experienced applicants. Hiring is then done from this less-experienced pool. And since the people who are hired are doing jobs they’d be underqualified for in the private sector, they are making more money than they would be in the private sector.

Broadly, there are two types of federal jobs. A minority of the jobs consist of well-educated people doing the actual work of their agencies. A majority of the jobs consist of "support staff" (i.e. diversity hires).

There is no way to say that the latter type of federal employee is overpaid. Many of these people are unemployable in the private sector. They certainly have no options outside of government and everyone (even Congress!) knows it. (Also see Heather MacDonald). A secretary without a college education making $65,000, with a pension, perfect job security and incredible benefits is way, way overpaid.

Yglesias’ analysis applies only to the former type of jobs. In this somewhat limited case, he’s largely correct. Many people with Federal government jobs could get higher-paying jobs – at least nominally. Here’s how it might work.

Let’s say you’ve got a government job that pays you $100,000. You could find some private sector job that pays you $140,000 that requires you to work 50-75% more. Is this a raise?

You might also be able to find a job that would pay you $115,000 but that would have lower benefits and much lower job security. Is this a raise?

For some people, the answer to both questions will be "yes" for others the answer will be "no." Some people leave for these "higher paying" jobs, but most stay and would not consider leaving unless their pay was virtually doubled. This indicates to me that pay is generally too high. However, people value benefits, pensions and absurd job security in different ways.

In my experience, quotas (diversity and particularly with respect to hiring veterans) do more to lower the overall quality of the federal work force than pay.