That didn’t take long

The advocates of homosexual “marriage” have been proven to be completely wrong, as the push for polygamous marriage has gotten rolling before homogamy has even been made legal in most states.

Three Brazilians in love have their nation up in arms over whether their relationship, now enshrined in a three-way marriage, is legal. The public notary who conducted their marriage says there’s no reason the threesome – or “thruple”, as the internet has charmingly labelled it – shouldn’t enjoy the same kinds of rights imparted upon two people who get hitched…. This is not about the advocacy of patriarchal polygamy that regards wives as unequal to, or property of, their husbands. But if three, or four, or 17 people want to marry each other simultaneously and equally, why should they not be granted the same status as two people who want to become a legal family?

As I pointed out, correctly, once you start messing around with the nouns in “one man + one woman”, you eliminate all the grounds for not messing around with the numbers too. Besides, the multiculti idiots have no choice but to support polygamy, since their precious third-worlders both practice and demand it.

Thus feminism dies, the victim of its own political success. And thus conservatives learn the bitter lesson of how turning to the state to defend your values is short-sighted and counterproductive.


Free society or political equality

The Republicans, like the Democrats, have chosen the latter. And, as Larry Auster points out, in doing so they have also chosen sexual socialism:

Mrs. Romney, along with the GOP which approved her speech, has inadvertently demonstrated once again why women should not have the vote and should not have prominent positions in politics. Because once women have the vote, they become a separate constituency with interests separate from those of men. This inevitably results (1) in female emotionalism and female resentment becoming central in politics; (2) in everyone bowing down at the altar of the mistreated, overworked “moms” of America, who are thus turned into a new type of oppressed ubermensch; and (3) in women as a group demanding substantive equality with men as a group. In short, sexual socialism….

Republicans say they believe in a free society. But the truth is that women’s political equality is incompatible with a free society, because women’s political equality moves society irresistibly in the direction of socialism.

Women will never, ever, be freedom-oriented voters. They will always be security-oriented. Even women who are intellectually freedom-oriented – and what percentage of the electorate is even remotely intellectual? – find it necessary to fight off the emotional appeal of security arguments that appeal to them more powerfully than any man can hope to understand. Mussolini is one of many socialists who knew this, which is why political equality, including a guaranteed percentage of representative seats in the parliament, is the very first plank in the Fascist manifesto.

The Democrats accuse Republicans of fighting a war on women. It’s not true. But they should be. Instead, they are putting the dreadful Ann Romney on display, who I suspect will make for a more baleful influence on American society than any first lady since Nancy Reagan. Hillary only engaged in a bit of financial corruption and fired her lawyer in an unusually untidy manner. Nancy gave us the War on Drugs.

And now we live in John Adams’s DictatorshipTyranny of the Petticoat. How terribly surprising to discover that the nation’s credit cards are maxed out. The choice is between Suffrage or Liberty and you can only choose one.


Sounds like snake oil

“The present administration has made its choices. And Mitt Romney and I have made ours: Before the math and the momentum overwhelm us all, we are going to solve this nation’s economic problems. And I’m going to level with you: We don’t have that much time. But if we are serious, and smart, and we lead, we can do this.”
– Paul Ryan

There isn’t much time, which is why he has proposed a budget that doesn’t balance for another 28 years. Color me dubious. The math is already grim.


Mailvox: logical or empirical?

691 doesn’t do the math:

What you cite as a logical blunder is not a logical error at all. Maybe an empirical error. It’s entirely logically possible for a $1 decrease in spending to lead to a $3 decrease in revenue, resulting in a $2 increase in the deficit.

The deficit, the change in debt levels, is the difference between two numbers: spending and revenue. Does the extra debt come from (relatively) higher spending or (relatively) reduced revenues? You claim that spending and borrowing have increased, which would imply that each $1 in extra spending is leading to less than $1 of extra revenue.

But citing debt levels alone is not sufficient to prove your case.

Very well, let’s look and see if what he’s saying is, in fact, logically possible. I pointed out that the debt doubled from $5 trillion to $10 trillion in four years. 691 is claiming that “it’s entirely logically possible for a $1 decrease in spending to lead to a $3 decrease in revenue, resulting in a $2 increase in the deficit.”

There are two ways to show 691’s criticism is incorrect. First, his statement can only be true if the multiplier effect on government spending can be 3x or more. But is that the case? No, it is not.

“For U.S. annual data that include WWII, the estimated multiplier for defense spending is 0.6-0.7 at the median unemployment rate. There is some evidence that this multiplier rises with the extent of economic slack and reaches 1.0 when the unemployment rate is around 12%. Multipliers for non-defense purchases cannot be reliably estimated because of the lack of good instruments.”
– Macroeconomic Effects from Government Purchases and Taxes,
Robert J. Barro and Charles J. Redlick, NBER Working Paper No. 15369 (September 2009)

So, because the unemployment rate never reached 12 percent, the G multiplier cannot possibly have reached 1.0, much less the required 3.0, and therefore it was, as I previously wrote, logically impossible for the post-crisis governments to simultaneously produce large deficits and cut spending.

Concerning the second method, even if we plug in his numbers, we can see they don’t work on an empirical basis either. We’re not dealing in hypotheticals here. What X decrease in annual spending could lead to a 3X decrease in revenue to create a $1.25 trillion deficit? There would have to be a $625 billion decrease in spending as well as a $1.875 fall in revenue to produce it. However, there was a $535 billion INCREASE in spending to go with a $419 billion fall in revenue, thereby providing an empirical illustration of the logical absurdity of his position.


A manifesto for economic nonsense

Read this economic manifesto, realize that it is not only written by professional economists, but signed by dozens of academics from Oxford, Stanford, Princeton, Cambridge, Harvard, and the London School of Economics, and despair for the global economy:

A Manifesto for Economic Sense

More than four years after the financial crisis began, the world’s major advanced economies remain deeply depressed, in a scene all too reminiscent of the 1930s. And the reason is simple: we are relying on the same ideas that governed policy in the 1930s. These ideas, long since disproved, involve profound errors both about the causes of the crisis, its nature, and the appropriate response.

These errors have taken deep root in public consciousness and provide the public support for the excessive austerity of current fiscal policies in many countries. So the time is ripe for a Manifesto in which mainstream economists offer the public a more evidence-based analysis of our problems.

The causes. Many policy makers insist that the crisis was caused by irresponsible public borrowing. With very few exceptions – other than Greece – this is false. Instead, the conditions for crisis were created by excessive private sector borrowing and lending, including by over-leveraged banks. The collapse of this bubble led to massive falls in output and thus in tax revenue. So the large government deficits we see today are a consequence of the crisis, not its cause.

The nature of the crisis. When real estate bubbles on both sides of the Atlantic burst, many parts of the private sector slashed spending in an attempt to pay down past debts. This was a rational response on the part of individuals, but – just like the similar response of debtors in the 1930s – it has proved collectively self-defeating, because one person’s spending is another person’s income. The result of the spending collapse has been an economic depression that has worsened the public debt.

The appropriate response. At a time when the private sector is engaged in a collective effort to spend less, public policy should act as a stabilizing force, attempting to sustain spending. At the very least we should not be making things worse by big cuts in government spending or big increases in tax rates on ordinary people. Unfortunately, that’s exactly what many governments are now doing.
The big mistake. After responding well in the first, acute phase of the economic crisis, conventional policy wisdom took a wrong turn – focusing on government deficits, which are mainly the result of a crisis-induced plunge in revenue, and arguing that the public sector should attempt to reduce its debts in tandem with the private sector. As a result, instead of playing a stabilizing role, fiscal policy has ended up reinforcing and exacerbating the dampening effects of private-sector spending cuts.

In the face of a less severe shock, monetary policy could take up the slack. But with interest rates close to zero, monetary policy – while it should do all it can – cannot do the whole job. There must of course be a medium-term plan for reducing the government deficit. But if this is too front-loaded it can easily be self-defeating by aborting the recovery. A key priority now is to reduce unemployment, before it becomes endemic, making recovery and future deficit reduction even more difficult.

How do those who support present policies answer the argument we have just made? They use two quite different arguments in support of their case.

The confidence argument. Their first argument is that government deficits will raise interest rates and thus prevent recovery. By contrast, they argue, austerity will increase confidence and thus encourage recovery.

But there is no evidence at all in favour of this argument. First, despite exceptionally high deficits, interest rates today are unprecedentedly low in all major countries where there is a normally functioning central bank. This is true even in Japan where the government debt now exceeds 200% of annual GDP; and past downgrades by the rating agencies here have had no effect on Japanese interest rates. Interest rates are only high in some Euro countries, because the ECB is not allowed to act as lender of last resort to the government. Elsewhere the central bank can always, if needed, fund the deficit, leaving the bond market unaffected.

Moreover past experience includes no relevant case where budget cuts have actually generated increased economic activity. The IMF has studied 173 cases of budget cuts in individual countries and found that the consistent result is economic contraction. In the handful of cases in which fiscal consolidation was followed by growth, the main channels were a currency depreciation against a strong world market, not a current possibility. The lesson of the IMF’s study is clear – budget cuts retard recovery. And that is what is happening now – the countries with the biggest budget cuts have experienced the biggest falls in output.

For the truth is, as we can now see, that budget cuts do not inspire business confidence. Companies will only invest when they can foresee enough customers with enough income to spend. Austerity discourages investment.

So there is massive evidence against the confidence argument; all the alleged evidence in favor of the doctrine has evaporated on closer examination.

The structural argument. A second argument against expanding demand is that output is in fact constrained on the supply side – by structural imbalances. If this theory were right, however, at least some parts of our economies ought to be at full stretch, and so should some occupations. But in most countries that is just not the case. Every major sector of our economies is struggling, and every occupation has higher unemployment than usual. So the problem must be a general lack of spending and demand.

In the 1930s the same structural argument was used against proactive spending policies in the U.S. But as spending rose between 1940 and 1942, output rose by 20%. So the problem in the 1930s, as now, was a shortage of demand not of supply.

As a result of their mistaken ideas, many Western policy-makers are inflicting massive suffering on their peoples. But the ideas they espouse about how to handle recessions were rejected by nearly all economists after the disasters of the 1930s, and for the following forty years or so the West enjoyed an unparalleled period of economic stability and low unemployment. It is tragic that in recent years the old ideas have again taken root. But we can no longer accept a situation where mistaken fears of higher interest rates weigh more highly with policy-makers than the horrors of mass unemployment.

Better policies will differ between countries and need detailed debate. But they must be based on a correct analysis of the problem. We therefore urge all economists and others who agree with the broad thrust of this Manifesto to register their agreement at www.manifestoforeconomicsense.org, and to publically argue the case for a sounder approach. The whole world suffers when men and women are silent about what they know is wrong.

Now, let’s count the errors….

1. “we are relying on the same ideas that governed policy in the 1930s” Totally untrue… although like the interventionists of yore, these economists are attempting to blame nonexistent “liquidationists” for the problems their own policies have created. Do they seriously want to pretend that Milton Friedman and monetarism – the very Neo-Classical school whose conceptual models the Fed Chairman openly utilizes – simply never existed?

2. “the large government deficits we see today are a consequence of the crisis, not its cause.” This is partially true, but misleading. The large government deficits were a contributor to the crisis, not its cause. Both public and private borrowing are to blame, but it is true that as of 2008, in the USA, government accounted for only 14.8% of total debt outstanding. Furthermore, note that they disingenuously fail to note that federal borrowing has DOUBLED since 2008 as private debt has deleveraged.

And then there is the obvious logical blunder. If the large government deficits we see today are a consequence of the crisis, how can they possibly claim that those same governments have been cutting spending in an austerity push? From whence did those deficits come?

3. “it has proved collectively self-defeating, because one person’s spending is another person’s income” This is where we see the problem of the Neo-Classical model’s failure to account for debt. It isn’t the reduction in spending that is the problem, the problem is that the spending, and the income, was based on the false foundation of credit money manufactured out of thin air.

4. “At a time when the private sector is engaged in a collective effort to spend less, public policy should act as a stabilizing force, attempting to sustain spending.” No, attempting to paper over private “demand gaps” with public spending only exacerbates the situation. This is completely wrong and it is precisely what Bush and Obama were doing with their stimulus plans, which is why they failed.

5. “At the very least we should not be making things worse by big cuts in government spending or big increases in tax rates on ordinary people. Unfortunately, that’s exactly what many governments are now doing.” Observably incorrect. Most governments have dramatically INCREASED both their borrowing and spending. Austerity is a myth. The US government is not only running record deficits, it has DOUBLED its outstanding debt in only four years.

6. “After responding well in the first, acute phase of the economic crisis, conventional policy wisdom took a wrong turn – focusing on government deficits, which are mainly the result of a crisis-induced plunge in revenue, and arguing that the public sector should attempt to reduce its debts in tandem with the private sector.” Again, factually false. In Q1-2008, the U.S. federal government owed $5.3 trillion in debt. In Q1-2012, it owes $10.9 trillion. The US government has already been doing exactly what the manifesto demands and it clearly is not working.

7. “Every major sector of our economies is struggling, and every occupation has higher unemployment than usual. So the problem must be a general lack of spending and demand.” No, the fact that you only have a hammer does not mean that every problem you encounter must be a nail. The problem is not a general lack of spending and demand, it is a problem of excessive debt, both public and private. The Neo-Classical models have no means of either explaining the crisis or fixing it, which is why economists who utilize them keep turning to the same Keynesian and Friedmanite solutions, both of which have already failed repeatedly.

8. “In the 1930s the same structural argument was used against proactive spending policies in the U.S. But as spending rose between 1940 and 1942, output rose by 20%. So the problem in the 1930s, as now, was a shortage of demand not of supply.” Now, what happened in between 1940 and 1942? Anyone recall a certain historical event? WWII generated a massive demand for ships, planes, and tanks, which the government went into massive debt to purchase. It was paid for by the profits realized from the destruction of the industrial infrastructure of Europe and Asia.

The fools don’t realize it, but they are making an economic appeal for global war against China, Japan, and the EU.


Mitt Romney, Republican Totalitarian

Keep this shenanigan in mind if you still think that Mitt Romney is a fine, upstanding man who will turn the country around:

Listening to the announcement of delegates for the candidates, from the podium they are omitting any votes for other than Mitt Romney. But not all the votes are for Mitt Romney. Ron Paul and Rick Santorum have some votes. They’re being intentionally ignored. Not counted and then announced that he didn’t win, ignored as if they never happened.

For those who claim Obama is orders of magnitude worse than Romney, note that even the famously narcissistic Obama didn’t try to pretend that no one voted for Hillary Clinton at the 2008 DNC. The vote totals were 3,188.5 for Obama and 1,010.5 for Clinton. And while I no longer read National Review on a regular basis, I correctly anticipated that they would have some mention of this. John Fund explained what was going on behind Team Romney’s attempt to present a false front of party unity:

The proposed rules package surfaced last Friday as Team Romney moved to grant sweeping new powers to the Republican National Committee — and the Romney forces who now control it – to amend the governing documents of the Grand Old Party just about any time they want without a vote of delegates from the grassroots…. Team Romney was able to ram the proposed changes through the Rules Committee but a substantial minority, some 40 percent, vociferously objected.

Mitt Romney has revealed himself to be a centralist and a totalitarian with no respect for the rule of law. I don’t see how anyone who supported Ron Paul can, in good conscience, vote for the man this fall.

UPDATE: “The Republican National Committee is not transparent and does not have integrity. They stole votes. They stole delegates. They refused to send busses for our delegates. It’s a totalitarian process. This is not democracy. It’s a really sad day for us. I’ve worked for Republican candidates since I was 16. We believed the Republican Party had more integrity. Boy, did they prove us wrong.

UPDATE II: Republicans demonstrate their respect for the rules: Delegates from Nevada tried to nominate Mr. Paul from the floor, submitting petitions from their own state as well as Minnesota, Maine, Iowa, Oregon, Alaska and the Virgin Islands. That should have done the trick: Rules require signatures from just five states. But the party changed the rules on the spot. Henceforth, delegates must gather petitions from eight states.



Tucker Max on Obama

I tend to agree with those who believe that you can learn a lot about a man’s character from how he plays sports. In that vein, Tucker Max’s recollection of playing basketball with a mid-30s Barack Obama at the University of Chicago is informative indeed:

“I do remember that he had a good understanding of the game. He knew when to backdoor cut, how to pick and roll, when to take his man away so you could drive, how to block out for rebounds, etc. And he would hit open jumpshots if left alone. He was not some doofus out there trying to get exercise. He understood the basics of basketball very well, which is better than most people who play pick-up. Just this knowledge of the game made him fun to play with.”

“But the thing is, even though he knew the basics and could execute them, his performance wasn’t anything beyond that. He didn’t have what basketball players call ‘old man game.’ Old guys who have that know every trick, use every advantage, and kill your youth and quickness with their guile and strength. That wasn’t Barack. He would beat you if given space, but if you played even half decent defense on him, you could take him out of the game.”

“He played point guard a lot, but I don’t remember him as a dominant court leader, controlling the flow of the game…. Weirdest thing about him — I always thought he would be better than he was. I mean, here was this guy, in good shape, relatively young (mid 30s at the time, I think) clearly likes and knows the game, and is black (so there’s the quasi-racist assumption that he’s good at basketball)… but he was never that great. Even after I knew the limits of his game, I always half-expected one day he would just decide to turn it on and light everyone up, but it never happened. He had everything that you’d think would make him great, and he definitely looked the part, but he never really turned that look into serious production in an actual game. I saw so many people pick him first, and then get burned because he didn’t play up to that pick.

This very much jibes with my perspective on Obama, which is that he is not a competitor and is naturally disengaged. That’s why I expected him to step down after his first term and why I don’t expect him to put in much of an effort in competing against Romney this fall. It’s also why I never put any credence in those who worried, needlessly, in my opinion, about Obama the Would-be Socialist Dictator cancelling the elections and ruling with an iron fist.

He simply doesn’t have it in him to try that hard. He doesn’t see the point of working that hard. This is a pattern that goes back to his high school days in Hawaii and can be seen in his graduate career at Harvard Law, his faux-literary career, and his political career. If someone is going to open the door for him, he’ll certainly bother to stroll through it, but he’s not interested in pushing on the door himself.

I’ve played against a lot of half-hearted competitors like this in a wide variety of sports. The one thing they all do is hang their heads and give up once the tide begins to turn against them. I suspect one reason the Democrats running his campaign already appear to be in panic mode prior to the Republican convention is because they know that if Romney gets a serious convention bounce and starts running ahead of Obama in the polls, Obama is going to quit on the campaign, quite possibly in literal fashion.

Already, he seems to be doing little more than going through the minimal motions necessary. When was his last major speech, his last big press conference? As for the potential for rumored October surprises, particularly from the Fed, ask yourself this question: why would Ben Bernanke prefer a lukewarm banker’s ally like Barack Obama to an enthusiastic quasi-banker like Mitt Romney?

UPDATE: Steve Sailer puts in a lot more work to reach a similar conclusion: My last word: it’s easy to overthink Obama. Don’t overlook the largest element in his make-up—the “apathetic quasi-intellectual sports fan.”


With a bang

The Baltimore public schools began classes today and lots of that all-important socialization is already underway:

Baltimore County Police are investigating a confirmed shooting at Perry Hall High School. Police say a 17-year-old student has been shot and one suspect, a student, is in custody…. The shooting reportedly happened in the school cafeteria and the victim was shot in the back.

Public school is child abuse.


Currency incoherency

Karl Denninger points out the observable difference in theory and practice on the part of those who deny that credit money is money:

I happen to find the esoteria between the gold bugs and various other flavors (and, in my view, mis-flavors) of Misean thought to be highly amusing. From my perspective there’s only one point worthy of consideration in this regard, and that is whether or not the particular economic model under debate counts all credit and currency as “moneyness” and therefore innately fungible when evaluating the impact of various policy decisions and strictures.

Sadly, few if any do, and thus I find them all flawed.

I further find it amazingly frustrating that those who claim that such a distinction is unimportant (or, at least, less important) think absolutely nothing of waltzing into the closest restaurant, bar or other establishment and whipping out their VISA card, pretending that it is currency. There’s a certain level of intellectual disconnection required to do that, you see, and it appears in people on both the left and right, conservative and liberal and among all particular monetary theorists. Indeed, most will simply argue that credit is nothing more than a time shift for which one pays a privilege in the form of a thing called “interest.”

Another observed monetary inconsistency is that those who claim to believe in inevitable inflation are not borrowing heavily. The logically correct thing to do, if you are sure that an inflationary or hyperinflationary scenario is in the works, is to borrow as much money as possible at today’s low interest rates, then purchase real assets such as gold that will appreciate in value and permit the repayment of the loans in the significantly less valuable dollars of the future.

If someone is proclaiming “inflation is coming” and “get out of debt” at the same time, the chances are that their monetary model is less than perfectly coherent.

This doesn’t mean that a gold standard isn’t to be vastly preferred to other monetary models, in that it is somewhat harder to abuse by banks and governments. But anyone versed in economic history will know perfectly well that the gold standard isn’t some sort of economic miracle cure either.