One of the most thorough and meticulously documented accounts of the Fed’s inflationary actions prior to 1929 is America’s Great Depression by the late Murray Rothbard. Using a broad measure that includes currency, demand and time deposits, and other ingredients, Rothbard estimated that the Federal Reserve expanded the money supply by more than 60 percent from mid-1921 to mid-1929. The flood of easy money drove interest rates down, pushed the stock market to dizzy heights, and gave birth to the “Roaring Twenties.” Some economists miss this because they look at measures of the “price level,” which didn’t change much. But easy money distorts relative prices, which in turn fosters unsustainable conditions in certain sectors.
By early 1929, the Federal Reserve was taking the punch away from the party. It choked off the money supply, raised interest rates, and for the next three years presided over a money supply that shrank by 30 percent. This deflation following the inflation wrenched the economy from tremendous boom to colossal bust.
The “smart” money — the Bernard Baruchs and the Joseph Kennedys who watched things like money supply — saw that the party was coming to an end before most other Americans did. Baruch actually began selling stocks and buying bonds and gold as early as 1928; Kennedy did likewise, commenting, “only a fool holds out for the top dollar.”
When the masses of investors eventually sensed the change in Fed policy, the stampede was underway. The stock market, after nearly two months of moderate decline, plunged on “Black Thursday” — October 24, 1929 — as the pessimistic view of large and knowledgeable investors spread.
The stock market crash was only a symptom — not the cause — of the Great Depression: the market rose and fell in near synchronization with what the Fed was doing. If this crash had been like previous ones, the subsequent hard times might have ended in a year or two. But unprecedented political bungling instead prolonged the misery for twelve long years.
Lawrence W. Reed, “The Great Depression was a Calamity of Unfettered Capitalism”, The Freeman, 2014-11-28.
March 28, 2016
QotD: Black Thursday, 1929
March 27, 2016
QotD: Down with Godwin
If I could eliminate one thing about the Internet, it would be Godwin’s law. Why? It’s made it next to impossible to make actual comparisons about what is probably the best documented instance of the rise of a populist dictator. The instant the magic words come out, any semblance of rational discussion gets defenestrated and the next thing you know people are shouting past each other and the whole thing dies.
Consider: a nation whose people were known for hard work, for pride in their achievements, who — not without justification — saw themselves as having been betrayed by wealthy elites. Their savings were wiped out by what appeared to them to be a combination of malice on the part of the same wealthy elites who claimed they were shameful warmongers and financial mismanagement. Despite what they were being told, they could see themselves losing ground and becoming less well-off than their parents and grandparents had been.
Simply put, these people were immensely vulnerable to a charismatic populist willing to tell them that they had every right to feel betrayed; that they had been betrayed; and that he was going to change all this and make them a great people and a great nation again.
Sound familiar? It should: there are two populist demagogues spinning their separate flavors of this particular scenario through the USA right now. One of them has deployed rioters against the other, although it’s not impossible that the whole thing was staged the way the early NSDAP supporters would pretend to be opponents of the party to set off violence that made the NSDAP look like the victim. It made for good copy, and gave their leader some really good material for those crowd-pleasing speeches he became famous for… before he became a synonym for evil.
Kate Paulk, “Down with Godwin”, According to Hoyt, 2016-03-16.
March 25, 2016
Why Do People In Old Movies Talk Weird?
Published on 25 Nov 2014
It’s not quite British, and it’s not quite American – so what gives? Why do all those actors of yesteryear have such a distinct and strange accent?
QotD: The infrastructure problem in America
[David Cay] Johnston’s piece is titled America should be more like Disneyland but instead of thinking seriously about what this means he fumbles on the 20 yard line and concludes that what makes Disneyland different is… happy thoughts. If only we were more like W.D., he says, “we could make America into a happy place.”
No, what makes Disney invest in infrastructure is not happy thoughts. Johnston is in fact clear about this:
The Walt Disney Co. invests in infrastructure because it makes the company money.
The problem with America is that our public infrastructure has been turned over to a fickle political process that is not governed by a rational calculation of cost and benefit, market test and experimentation but by a pursuit of power, glory and advantage that only rarely coincides with the public interest.
America should be more like Disneyland and to do that we need to develop institutions that allow more infrastructure to built by the private sector. Most ambitiously we need more cities as hotels, more proprietary cities. As Rajagopolan and I wrote in our study of India (in Cities and Private Planning):
The lesson of Gurgaon, Walt Disney World, and Jamshedpur is that a system of proprietary, competitive cities can combine the initiative and drive of private development with the planning and foresight characteristic of the best urban planning. A proprietary city will build infrastructure to attract residents and revenues. A handful of proprietary cities built within a single region will create a competitive system of proprietary cities that build, compete, innovate, and experiment.
Alex Tabarrok “How to make America more like Disneyland”, Marginal Revolution, 2014-12-17.
March 23, 2016
QotD: Strategerizing
We need to get out ahead of the game here and start thinking about who’ll look good with one hand on a Bible and the other up in the air when President Trump gets dragged out of the Oval Office in a straitjacket after the coup, foaming at the mouth that the military wouldn’t follow his orders to attack some ridiculous target.
Tam Slick, “Strategerizing”, View From The Porch, 2016-03-16.
March 22, 2016
Il Donalduce and the empty Republican suits
L. Neil Smith on the Republican race:
Consider the Republicans whom we’ve watched and listened to over the past six months (it hasn’t seemed like a moment less than six years). They are, as demagogues of various stripes and flavors loudly declaim, almost uniformly White and male, reflecting nothing more than the politics associated with the demographics in America at the moment. (There aren’t very many black libertarians, either, nor black members of the John Birch Society or the Foundation for Economic Education.) That’s certainly not the fault of anyone at all except the missing candidates, with perhaps an assist from the public education system that teaches neither rational economics nor ideologically untainted history.
That being the case, all the Republicans seem to have rented the same crappy blue suit and boring tie. They are a tone-deaf, faceless gaggle without a shred of personality among them. I probably couldn’t pick Mitt Romney or John Kasich out of a Vice-Squad lineup. The only recognizable quality Marco Rubio possesses is that he’s short. Ted Cruz looks like Dorothy’s Scarecrow pal, impaled above the cornfield on his stick. I’m a political junkie, but policywise, I can’t tell these stiffs apart. It’s difficult to express how disappointed I was with Rand Paul’s campaign. I kind of liked Ben Carson, but he turned out to be an idiot. I liked Carly Fiorina, and I’m sorry she dropped out.
All in all, Republicans are a posse of indistinguishable store dummies, soldier-clones shoulder to shoulder for the collectivist state.
[…]
Donald Trump stands as the exception to all of this. Neither a libertarian nor a conservative, I don’t think ideas mean very much to the Donald. He is, first-and-foremost, a salesman, a wheeler-dealer, a mercantilist who makes the vile Romneys and the evil Bushes (I wonder what ever happened to the Cabots and Lodges) look like amateurish pikers. There is nothing he wouldn’t build — a giant red brick Statue of Liberty with tassles on her golden pasties — if somebody gave him enough money. I do believe he’d dress up in a Bozo the Clown suit and walk a slack wire to get whatever he wants. Make of that whatever you will; it’s certainly no worse than those running against him for President.
Whatever happens next, America is in for another wild and woolly roller-coaster ride. It’s hardly for the first time. For those with long enough memories, it has survived vastly worse. Remember that the first President known to use the IRS as a political weapon wasn’t Barack Hussein Obama, but Lyndon Baines Johnson. In any given election year, none of us ever gets what we really want. That’s in the basic nature of democracy; we all get what the worst of those among us deserves.
QotD: Barbecue, properly considered
I was on the road in Texas last week, addressing Linux user groups in Dallas and Austin. I always enjoy visiting Texas. It’s a big, wide-open place full of generous people who cultivate a proper appreciation of some of my favorite things in life — firearms, blues guitar, and pepper sauces.
And, of course, one of the biggest things Texas has going for it is barbecue. And not the pallid imitation served up by us pasty-faced Yankees here where I live (near Philadelphia, PA) but the real thing. Barbecue, dammit. Red meat with enough fat on it to panic a health-foodist right out of his pantywaist, slow-cooked in a marinade sweeter than a mother’s kiss and eaten with sauces hot enough to peel paint. Garnish with a few extra jalapenos and coleslaw and wash it down with cheap soda, lemonade, or beer. Food of the gods.
I swear your testosterone level goes up just smelling this stuff. After a few mouthfuls of Rudy’s carnivoral bliss you’ll be hankerin’ to cultivate a drawl, wear a Stetson and drive a pickup truck with a gun rack. (I draw the line at country music, though. A man’s got to have some standards.)
Eric S. Raymond, “The Non-Portability of Barbecue”, Armed and Dangerous, 2002-07-18.
March 20, 2016
Germans in the US – Talerhof Internment Camp I OUT OF THE TRENCHES
Published on 19 Mar 2016
It’s chair of wisdom time again and this week Indy talks about German immigrants in the United States, the Austrian Talerhof internment camp and German East Africa.
Apple software engineers threaten to quit rather than crack encryption for the government
It’s only a rumour rather than a definite stand, but it is a hopeful one for civil liberties:
The spirit of anarchy and anti-establishment still runs strong at Apple. Rather than comply with the government’s requests to develop a so-called “GovtOS” to unlock the iPhone 5c of San Bernardino shooter Syed Rizwan Farook, The New York Times‘ half-dozen sources say that some software engineers may quit instead. “It’s an independent culture and a rebellious one,” former Apple engineering manager Jean-Louis Gassée tells NYT. “If the government tries to compel testimony or action from these engineers, good luck with that.”
Former senior product manager for Apple’s security and privacy division Window Snyder agrees. “If someone attempts to force them to work on something that’s outside their personal values, they can expect to find a position that’s a better fit somewhere else.”
In another instance of Apple’s company culture clashing with what the federal government demands, the development teams are apparently relatively siloed off from one another. It isn’t until a product gets closer to release that disparate teams like hardware and software engineers come together for finalizing a given gizmo. NYT notes that the team of six to 10 engineers needed to develop the back door doesn’t currently exist and that forcing any sort of collaboration would be incredibly difficult, again, due to how Apple works internally.
March 18, 2016
QotD: The war on competence
There is a war on. People who can do things, even just the things our parents could do, or less, are losing.
[…]
But there is worse. Lately I’ve been running into a new category “people who can’t do their jobs.” And these aren’t just our manual labor imports, I mean, people who supposedly are trained and certified and either can’t or won’t do their jobs.
I know everyone was very impatient with me last year when I was fixing the house for sale, but honestly, there is a reason I do all the manual labor I can. The reason is the tile wall I paid someone 1500 to fix (it had fallen. Long story) and which fell in the night, the day after he put it up. He’d mixed the adhesive wrong. So he came back and fixed it. It fell again. The third time I got a book (this was before Youtube) figured how to do it and did it. This wasn’t an isolated incident. It just keeps happening when someone comes over to fix something. So if I can, I do it.
But there’s more serious cases, like the guy who replaced our brakes but didn’t replace the brake cables. Leading to us losing brake power 15 minutes later. (Thank G-d someone was looking out for us. We lost it a) when Dan was driving. I’d have panicked. Well, he did too, but… he works even panicked. b) we were JUST outside a garage c) we’d been going very slowly.) Or the doctor who convinced himself my 13 year old had an STD and wouldn’t listen to the kid when he insisted he was a virgin. If I hadn’t gone over his head to a urologist, and told the boy to stop taking the antibiotic that was making him ill, my son would probably have died within months. (Of the problem, which was rare, but not unheard of particularly in early teens. As in the urologist identified it on symptoms alone.)
I’ve been given completely wrong instructions by someone selling me a machine or a product. I’ve had ghastly things done to garments or objects taken in for repair because the person who was supposedly an expert on this just couldn’t do it.
[…]
Publishing… well, there’s a reason the houses are floundering. And it’s not just the innovation, the end of push marketing, or the fact they can’t wrap heads around Amazon. That’s all I’ll say. Every time someone tells me they can’t go indie because how do they know the book is good if no professional has read it, I remember when I was sitting in a panel with the editor of my friend’s book, (professional, one of the big five) and it became clear not only hadn’t she read the book, but she had only skimmed the proposal. I later watched for the tells and (other than Baen) most of my books were published without anyone but the copyeditor even looking at them. And the copyeditor often sounded like she (it was always a she) had a high school education, even the ones editing history books.
Movie making. Director’s cuts are illuminating. “I filmed that scene, then it didn’t work. I don’t know why” — usually the reason is a gross error in basic storytelling. One anyone who had read a couples of plotting books could fix. But billionaires in Hollywood have no clue. They were never trained.
Sarah Hoyt, “The War On Competence”, According to Hoyt, 2016-03-04.
March 17, 2016
Trump’s possible tactics against Clinton
The November general election is looking more and more like it will be Mussotrumpi against Hitllary. Scott Adams thinks he has an idea how Il Donalduce will attack Adolfillary:
The last time Trump and Clinton mixed it up hard, Clinton called Trump sexist and Trump responded that she was an enabler for her husband’s womanizing. In summary:
- Clinton accused Trump of being anti-woman
- Trump accused Clinton of being anti-woman
I wonder if we have seen all of the permutations of gender politics. I doubt we will see Clinton accuse Trump of being anti-male. That wouldn’t stick.
But we haven’t seen Trump accuse Clinton of being anti-male. And that would stick like tar. He might be saving that one for later.
Remember that Linguistic Kill Shots such as low-energy, little Marco, and robotic generally have two characteristics that make them work:
1. The label must be a fresh one you have not seen in politics.
2. Voters must be reminded of the label every time they see or hear the subject.
I’ve never heard a politician call another one anti-male. So this approach qualifies on the freshness dimension. And any time you hear Clinton talk about making the world better for women – which is obviously a legitimate goal – it would remind you she cares less about men, even if that isn’t true. (We don’t know what is in her head.)
Trump could frame Clinton as anti-male without ever saying “anti-male.” The exact words matter less than the concept. But the words do need to be catchy in some way, so everyone wants to repeat them.
My gut feeling is that men will abandon Clinton every day from now until November unless Trump murders a baby on live television. Otherwise, I think Trump wins easily with men.
Coolidge: The Best President You Don’t Know
Published on 4 May 2015
Americans today place enormous pressure on presidents to “do something”…anything, to get the economy going. There was one president, though, Calvin Coolidge, who did “nothing” — other than shrink government. What happened? America’s economy boomed. Is there a lesson to be learned? Award-winning author, historian, and biographer Amity Shlaes thinks so.
QotD: Trump’s populism
It is too late to challenge Trump when he talks about the wall. It does not matter how stupid the idea, taken literally, may be. American politicians spoke Parseltongue to the working class, the people who contend with and live beside immigrant labour, for too long. They are ready to vote for the only guy who will think about a wall.
Of course a bad collective conscience is the key to any populist movement like Trump’s. He really is like Hitler in this: he sells absolution to those too inarticulate to explain or defend their prejudices. It is universally acknowledged that less-skilled American workers are in a bad state. Millions are on federal or other disability schemes and food stamps, millions are at least half-zombified on prescription drugs and the overlap between these groups is obviously great. Mortality statistics among the middle-aged show the results. What they don’t show is the shame that dropouts from honest labour and bourgeois aspiration must suffer — how unlike their fathers and mothers they feel. If I were a worse writer I’d drop the word “alienation” here.
[…]
And so Trump materializes with a garbled, but not totally unfounded, account of what went wrong: globalization destroyed traditional jobs, illegal immigration took more, Mexican heroin salesmen swooped in. Idealistic America has been hornswoggled by tricky foreigners who know their own interests. Trump won’t stop saying how “smart” they are. This isn’t white supremacism: it’s American inferiorism.
If Trump is a charlatan who saw the conditions for populist agitation and crafted an opportunistic message, all I can say is: well played. What I ask of Americans who deplore him is, what did you do about these conditions when something might have been done? Did you not think your civilization was particularly vulnerable to hucksters and loudmouths?
America is the land of, and I’ll put these in alphabetical order, Frank Abagnale, Jim Bakker, P.T. Barnum, Scott Boras, Dale Carnegie, Bill Clinton, Enron, Chris Kyle, Bernie Madoff, Charles Manson, Billy Mays, Dr. Phil McGraw, Joe McCarthy, Norman Vincent Peale, Charles Ponzi, Al Sharpton, Charlie Sheen and Orson Welles. It is the dynamo of cultivated marketing crazes: flagpole sitting, Cabbage Patch Kids, hula hoops, the Lambada. It is mother and nurse of kooky sci-fi religions: Mormonism, Jehovah’s Witnesses, chiropractic, Scientology, Erhard seminars. The glories and powers of America are inseparable from this trait, and it has never been a secret to outsiders, not since Tocqueville.
So how can any self-aware American look at Donald Trump — who, again, even before his candidacy, might have been the first person a Chinese peasant thought of when someone said “name an American” — and imagine him as novel and unfamiliar? You don’t think his architectural sensibility is characteristically American? You don’t think his habit of overstating his fortune is American? You don’t think his hair and his tan are American? Where on Earth, dear friends, do you think you live? Do you never look in the mirror?
Colby Cosh, “Dear America: We need to talk about Donald”, National Post, 2016-03-03.
March 16, 2016
QotD: The Great Depression
How bad was the Great Depression? Over the four years from 1929 to 1933, production at the nation’s factories, mines, and utilities fell by more than half. People’s real disposable incomes dropped 28 percent. Stock prices collapsed to one-tenth of their pre-crash height. The number of unemployed Americans rose from 1.6 million in 1929 to 12.8 million in 1933. One of every four workers was out of a job at the Depression’s nadir, and ugly rumors of revolt simmered for the first time since the Civil War.
Old myths never die; they just keep showing up in college economics and political science textbooks. Students today are frequently taught that unfettered free enterprise collapsed of its own weight in 1929, paving the way for a decade-long economic depression full of hardship and misery. President Herbert Hoover is presented as an advocate of “hands-off,” or laissez-faire, economic policy, while his successor, Franklin Roosevelt, is the economic savior whose policies brought us recovery. This popular account of the Depression belongs in a book of fairy tales and not in a serious discussion of economic history, as a review of the facts demonstrates.
To properly understand the events of the time, it is appropriate to view the Great Depression as not one, but four consecutive depressions rolled into one. The late economist Hans F. Sennholz labeled these four “phases” as follows: the business cycle; the disintegration of the world economy; the New Deal; and the Wagner Act. The first phase explains why the crash of 1929 happened in the first place; the other three show how government intervention kept the economy in a stupor for over a decade.
The Great Depression was not the country’s first depression, though it proved to be the longest. The common thread woven through the several earlier debacles was disastrous manipulation of the money supply by government. For various reasons, government policies were adopted that ballooned the quantity of money and credit. A boom resulted, followed later by a painful day of reckoning. None of America’s depressions prior to 1929, however, lasted more than four years and most of them were over in two. The Great Depression lasted for a dozen years because the government compounded its monetary errors with a series of harmful interventions.
Lawrence W. Reed, “The Great Depression was a Calamity of Unfettered Capitalism”, The Freeman, 2014-11-28.
March 14, 2016
Plumbing through the ages … in rural Maine
Sippican Cottage continues the tale of the busted sewer pipe:
… The cable was going to come out of the pipe, and it was going to bring things out with it. You don’t visit Beelzebub’s Disneyland without exiting through the gift shop. Over one hundred years of other people’s foolishness could appear from that pipe. I jerked my thumb to indicate REVERSE, held on to the whipping cable to avoid a proper drenching, and prepared to be surprised.
Out they came. The feminine pennants snapped in the breeze from the yardarm stay of my drain augur cable. Dracula’s teabags. The things no man is supposed to buy at the Rite Aid. Tampons emerged like an army on the march.
Now, it’s not up to me to decide exactly how tough a tampon should be. Smarter men than I have determined that feminine hygiene products should be able to withstand a shotgun blast and an acid bath at the same time. It’s a given that they should be more durable than space shuttle tiles. Fall protection harnesses and parachute cord should be made from the little strings, if you want them to last. Kevlar? Pfffffftt. That’s OK for stopping a high powered round and all, but if you need real protection, head to Walgreens and sew a vest out of these babies.
Every length of the sewer cable is ten feet long, and each one appeared from the poop soup with twenty-five or so little Tampax ornaments whipping around from it. I took a pliers and grabbed each one as it emerged from the pipe, but they held on like grim death. Some were tangled four or five in a bundle. I was required to return the machine as clean as I’d found it, so they all had to be yanked from the cables. They fought like Japanese army holdouts in a cave.
We pulled out fifty feet of cable, and the little devils made a substantial pile at my feet. I shoveled them aside, and we sent the cable back down the pipe. The second round brought out more than the first trip down the pipe. I could have stuffed a futon with them. I’ve slept on a futon, if you can call that sleeping. I just assumed that’s what a futon is stuffed with. I could be wrong. It could be dead cats.
I quickly realized I wasn’t playing Current Events. The little pillows were ancient history. They didn’t say Johnson and Johnson on them. They just said Johnson, talk to the Old Man. These were bungs from the Baroque, Always from the Jazz Age, postwar Playtex, Tampax from the Tang Dynasty, Ottoman Empire occlusions, Seleucid sanitary napkins, and stopples from the Silurian. This was a museum, not a sewer system. I wondered if I could get some kind of grant to look them over and catalog them.
I began to suspect that hunter-gatherer societies had been flushing these things down my toilet. The former residents of my house must have invited people over to join in the fun. They probably ran ads in the Grover Cleveland Craiglist to come on over and flush your troubles away. It seemed like a determined effort to my eye.
My son and I went back and forth, fifty to sixty feet of cable at a stretch. I don’t remember how many times it took. When we were properly lulled by exhaustion and repetition, it finally came. The magic sound. It was the sound a nurse hears while walking down the hall in the nursing home late at night. A horrible gurgle, as the whole organism lets go and slides away to a better world. The poop in the pipe was gone.
