Tuesday, March 31, 2009
Because of the housing market bubble, falling home prices is going to be a necessary part of an economic correction. Unfortunately, this must come at a certain cost for current home owners, as the value of their homes also falls.
However, this news also means homes continue to become more affordable for those who want to buy them, and will spur sales. Recently we saw an increase in new home sales, one of the very few good economic signs in recent months (as opposed to news of government redistribution and corporate welfare schemes).
If the government had adopted John Allison's more aggressive 10% home purchase tax credit plan and done it sooner, the effective home price could have been lowered without costing owners and sellers.
As I suggested here, the government's plan also contains a bias against wealth, excluding those with the most money -- and most power to help the recovery -- and the cost of that bias will be to delay the recovery for all. We could have been farther along by now. It is a clear example of the destructive power of altruism, a credo which appears to preach kindness to others, but in fact means tearing down things of value, such as the productive power of people motivated to make a profit from investments.
The practical cost of such sacrifice on a macroeconomic scale is to send us into the type of commercial downward spiral we have witnessed recently. The only cure is to praise the productive and wealthy members of society, and set them free, rather than discriminate against them, order them around, and haul them in front of legislature to grovel in front of their tormentors.
And it actually worked as advertised. There was not a single Vista- or 64-bit-related glitch.
Frankly, I initially had my doubts about Vista itself, based solely on a review of second-hand information, before working with it full time at my new job. But now that I've spent hands-on time with it, I'm a fan. It looks good, it functions well, it has some nice new features, and it will see all the RAM I put into my laptop (32-bit Windows versions usually allocate a maximum of about 3 GB of address space to user RAM, whereas I actually had installed 4 GB). There are even 6GB RAM kits available for the MacBook, although they're too pricey for me at this time.
Yes, it does seem to use a lot of RAM, but that's why I got 4 GB: so I had options.
Interestingly, my Apple hardware scores very well on the Windows Vista performance tests (scale is 0 to 5.9):
This is a highter score than my new quad-core system at work, mainly due to a faster hard drive and graphics card.
There are definitely more issues to navigate when using a 64-bit OS, although none have been show-stoppers. For example, in one case I had to run both the 32-bit and 64-bit updater for a software package because it had components targeted to each of the architectures. But for someone in the technology business like myself, writing software for various processors, at the very least it's a good learning experience.
Saturday, March 21, 2009
Actually, Stranahan's article wasn't really a portrayal, it was a misrepresentation. I like to say there aren't any critics of Objectivism, because few people actually understand the philosophy well enough to talk about it, rather than a misrepresentation of it. That will happen, when you challenge the meaning of common and ambiguous terms like "selfishness", "capitalism" and "egoism". It takes some time to really digest her views before you can understand and apply them correctly.
NOT THE REAL STORY
Mr. Stranahan, having been around Objectivists and alleging to understand the philosophy does not qualify you as an expert. If you think Objectivism is a destructive force in people, society and the economy, then you simply didn't get it. What you are criticizing are certain people's distortions, betrayals and misunderstandings of it.
From this account, readers might be surprised to learn that the three cardinal virtues of her ethics are reason, purpose and self-esteem. And that she believed in an objective reality that we can understand, and she sought out what is heroic in humanity. Sounds absolutely terrible, doesn't it?
A BETTER IDEA
Readers would be better served by looking at the work itself.
For example, try a first-hand account of Ayn Rand as a person, from someone who liked her and knew her: http://www.aynrandbookstore2.com/prodinfo.asp?number=AR68B
Regarding the economy, here's what the Ayn Rand Institute has to say: http://www.aynrand.org/site/PageServer?pagename=arc_financial_crisis
Check out this commentary on Atlas Shrugged and Greenspan: http://www.pjtv.com/video/PJTV_Daily/Is_Atlas_Shrugging%3F/1530/
Try her novels: http://www.aynrandbookstore2.com/products.asp?dept=13
Or her nonfiction: http://www.aynrandbookstore2.com/products.asp?dept=14
And for her effect on people, check out the excellent OBloggers blog feed, and see for yourself what Objectivists are thinking and doing: http://www.google.com/reader/shared/user/02510836286699598014/label/OBloggers
UPDATE - Here's a good post by Jim May at The New Clarion on the same article by Mr. Stranahan.
Monday, March 16, 2009
Critics of Rand will be disappointed to know that her books are selling better than ever. And no wonder, when today's events are seemingly taken right from the pages of Atlas Shrugged.
Sunday, March 15, 2009
Note: this video is part one, there are two more after this:
What I'd like to point out about these videos are a) Jon Stewart is a fervent altruist displaying a poor understanding of the banking/finance industry and b) Jim Cramer totally concedes the moral high ground by agreeing with Stewart's moral condemnation of Wall Street. You can see in vivid detail how morality trumps knowledge: even with what should be greater expertise, Cramer appears to be the loser in this exchange, because he has accepted moral guilt.
This is because he has accepted the moral code of altruism, instead of rational egoism. Altruism says that actions are moral only if they benefit others. Actions benefiting the self are wrong, i.e. evil. Since finance inherently involves benefiting the self (or one's company), this brands Wall Street as evil, and there is no way he can come out looking good in such an exchange.
Cramer may have personally accepted guilt, but Wall Street per se is not guilty, at least not in the way Stewart thinks. Some counterpoints:
- Investment businesses have every right to trade with our 401k funds. It's what they do. If the investments perform poorly, we must pick another location for our retirement funds. The main problem with mortgage-backed securities is that the government created a host of artificial problems related to mortgages, thus making them more risky than they would be in a free market. Additionally, the legal restrictions on how we may save for retirement are absurd and represent barriers to free markets. With more flexibility, we'd be able to invest as we see fit, and would not be tied to certain vehicles that used investments we did not like.
- Life entails risk, and this is something Stewart does not accept when it comes to investment. There is no guarantee that mortgage-backed investments or any other type will always be profitable, and there is nothing wrong with this. His anger is directed at the investment and its investors, but instead should be directed against the federal policies that caused the housing bubble and the various pressures that made these risky ventures seem like a good idea.
- Stewart claims that CNBC is "in bed" with Wall Street, the assumption being that this influences their objectivity. CNBC should support Wall Street. Many of the things Jon Stewart thinks are wrong, such as manipulating stock prices and insider trading, are objectively right and should be legal. Buying and selling stock is not fraudulent, no matter when or why you do it. Such rules are anti-individual rights rubbish. Therefore, to support these things is objective and right. NOTE: Starting false rumors about companies to manipulate stocks, however, appears to constitute fraud, and should be illegal.
Something I had not noticed before is that altruism inevitably creates two classes of needy: the poor and the rich, and that this drives those same altruists crazy with resentment (I wonder if part of this is guilt)! Liberals pity the former and revile the latter. Altruist policies operate by supporting failure and crippling the successful, for example: welfare, bank bailouts, and antitrust laws. All of these things reward failure and punish success, in the name of rejecting selfishness and supporting "need". Much to the chagrin of the altruists, there is no escaping the creation of a class of corporate beggars (i.e. GM, AIG). This is a very dangerous situation for freedom, because it irritates the altruist like nothing else to see people profiting by their efforts to correct imaginary injustices. This creates immense and inflammatory pressure to further shackle business, which threatens the very heart of production in our society.
To his (small) credit, after all this, Jon Stewart says that recent events have unfairly painted Wall Street as a whole as bad, and that he personally knows hard-working and smart people in that profession (I can attest to that -- some of the smartest people I've met in my life were traders). I was heartened by this, and while it does not excuse his other errors, it indicates that even staunch Wall Street critics may have some beliefs upon which we can build.
All we have to do is keep getting the right ideas out there.
Friday, March 13, 2009
Updated - 3/14/2009 10:11 PM MST
This post will be a running log of factors that could improve the US economy and help pull us out of the recession. My intention is to document potential causes of long-term improvement, rather than evidence of such improvement.
This is going to be a short list, because I regard much of what is being done as counterproductive*.
- The $8000 home buyer's tax credit on the purchase of existing homes, which was part of the recent stimulus bill. Although the credit is somewhat small and biased against expensive houses, it is something.
- Other tax credits for individuals and businesses that are part of ARRA. I see in my pay stub that withholding is reduced by an amount that will give me the $400 tax credit by the end of the year. Excellent, it's already in effect. That's almost 1% of GDP worth of spending that will not be wasted on legislated purposes this year, but on freely chosen ones. That may help to offset some of the damage caused by redistribution measures such as green energy funding.
- Home prices have fallen significantly in the last year or so. This is obviously bad for those selling, but represents bargains for buyers.
- Mortgage rates are at their lowest level in several years.
Thursday, March 12, 2009
The caption on this sign reads (click image to enlarge):
BIBLE! BASIC INSTRUCTIONS
BEFORE LEAVING EARTH!
ONION RINGS - CURDS
SPECIAL FLOATS 99¢
99¢ CORN DOG
Frequent visitors to Frisco, CO are probably familiar with the sight in this image. The A&W restaurant on CO Highway 9 in Frisco sports a sign that usually contains equal parts menu specials and religious proselytizing.
I've always found this sign amusing; it causes eye-rolling and a faint sense of mystery, as if as a customer I might be required to perform a mysterious ritual before taking possession of my hamburger.
The sign has also been the object of legal contention. The owners are Messianic Jews, i.e. Jews who believe that Jesus was the Messiah, rather than well, just another eccentric mystic with a beard. The owners have tangled with both the Anti-Defamation League and A&W, both of whom object to the religious messages. However, in the absence of any contractual promise to abstain from such messages, I can't imagine what valid complaint there could be. This seems like a clear-cut free speech case, and the complainers seem like legal bullies with too much time on their hands.
Now, if we could just get free trade constitutionally protected like fast-food religious statements.
Wednesday, March 11, 2009
I've gotten used to my Shuffles not having any text or images, and that's fine. If I'm exercising or driving I don't really need the distraction.
But that's the great part about this new model: you still don't have a distraction from such activities, because it simply talks to you. Duh!
Hopefully the digitized voice is not that of Gilbert Gottfried.
Tuesday, March 10, 2009
For anyone who is not familiar with it, The Objective Standard is a quarterly journal written from the Objectivist perspective covering a wide range of issues from politics, to art, to book reviews and beyond. I've been a subscriber for a couple of years now, and it's well worth the cost. If you find mainstream political and cultural analysis wanting, give it a try. I highly recommend it.
Monday, March 9, 2009
I am for stem cell research, because stem cells are not people. Therefore, they should be used for any research purposes scientists desire.
However, I am not for using tax dollars for such research, because it violates our right to use our income as we see fit. It's a perfect example of the inherent injustice of such funding, because those who oppose stem cell research have no choice but to fund it. This produces an intractable tug of war between interest groups, as they seek to force their views on others.
It would be 100% different if the issue were not federal funding, but an outright ban on all such research, regardless of where the funding comes from. I would oppose such a ban wholeheartedly.
In this case, I find myself in the paradoxical position of having to choose between:
- George Bush's religiously-motivated ban, because I regard federal science funding as wrong, and
- Supporting government science funding, simply because I reject Bush's particular mysticism-based policy.
UPDATE - The Ayn Rand Center just posted this article on the same topic. I agree with it precisely: lifting the ban is a good thing, with the caveat that we (Objectivists) do not condone such government funding per se. Because so much of our income is siphoned off in taxes, there's less and less left over for private research, so it's at least an improvement that the research is allowed, rather than banned on religious grounds.
Friday, March 6, 2009
However, you can find information about the various bills passed, and so I decided to look at the recently passed recovery act to see if it might help.
Below is a chart listing the various amounts in by the bill (including tax breaks). Bear in mind that the total is about $780 billion, which if we assume a GDP of about $14 trillion, is roughly 5% of our economy's value. That's a significant sum. Will it do any good?
Below, I have summarized the various types of allocations, with positive portions in green (that is to say, positive or at least neutral), and negative portions in red.
Unfortunately, much of the bill plays the usual shell game of aspiring to "create" jobs and growth, but it really won't. The fundamental reason is that the government does not create anything. It only has the power to move money around and mandate actions. Spending money trying to create jobs simply takes money from some and gives it to others. Basically, it takes it from private, profitable uses, and moves it to less-profitable mandated uses, such as "green energy".
It is a fatal conceit of government planners that they think they know how to use our money better than we do. Such uses will result in less economic growth and draw out the recession by leaving productive businesses with less capital. It will likely result in inflation down the road. And it will create business sectors dependent on government funding, which if removed, will cause them to fail: a recipe for more spending in the future.
|$237.0||Tax relief for individuals||OK, but not as effective as business cuts, because they are the ones who will make investments to grow the economy.|
|$51.0||Tax relief for companies||This is 0.3% of GDP. That does not seem like enough to do much for such a depressed economy.|
|$147.7||Healthcare||Ultimately the government should not be in healthcare. This will not produce more prosperity.|
|$90.9||Education||Same for education. This will not produce prosperity, and the solution to the woes of public education is to end it. (I am aware that a good education is necessary to do well in some jobs, I simply don't think it should be provided by the government)|
|$82.5||Employment||This is partly paying people to be out of work. Some of it, such as food bank funding, needs to be left to private charities, who would have more money if government would stop ruining our economy.|
|$80.9||Infrastructure||Inasmuch as government has infrastructure to maintain, this is OK, but government's role in infrastructure should be reduced.|
|$49.7||Energy||This is a 100% boondoggle. Most of this moves money from profitable ventures into less profitable ones (green energy). It will not help growth, it will result in economic dislocation and stagnation, and create more businesses dependent on government funding.|
|$12.7||Housing||Some is infrastructure repair, but much is just welfare.|
|$8.9||Scientific research||Dr. Stadler would be disappointed, but I have to nix this one. Government should get out of science.|
|$17.2||Other||Some of this is for law enforcement, the rest should be cut.|
The best items in the bill are the tax cuts, although the usual altruist mistake is made of shortchanging business. It is businesses that will drive the recovery, not people paying rent and buying TVs, because business has the power to expand capacity and create new jobs.
Furthermore, if you look at the details of the business tax portion, $7 billion actually refers to the repeal of a credit, and $15 billion is for credits for renewable energy activity, which encourages economic growth in unprofitable areas. This will not spur growth, this is simply a policy decision, which will actually cost us in growth.
If I understand correctly, only $116 billion of the individual tax items will result in cash in hand in 2009 (the payroll tax credit, which I think means less will be withheld) and it's only $400 per individual; the rest are applicable for filing 2009 taxes next year, which means they will not help the recovery. This represents less than a 1% shift in the way money is spent in 2009, and it really does not address the fundamental problem: housing.
There is an $8000 home buyer credit, which I discussed here. That is a small positive, and is the only thing that addresses one of our real problems. Unfortunately I have been unable to determine what percentage of the unsold housing market this represents, but I can't imagine that $8000 is going to get people to run out and buy up all the existing homes. The dollar value of $6.6 billion is 5/100 of 1% of GDP.
Bottom line: I give the bill a grade of "D" in terms of recovery potential. Most of the spending consists of bad investments that will delay recovery, and the tax credits that could spark recovery are not big enough, or come too late. The rest is maintenance on existing programs, which of course keeps money out of the hands of private investors. I predict a very small effect for this bill on our economic recovery in the housing sector, and a small effect in terms of household spending. Of course, a spending bill does nothing to increase the fundamental freedoms of business to operate effectively. At best, it looks like a very small nudge.
Wednesday, March 4, 2009
respectful of the Venezuelan government decision
Wow. Even now, I find it shocking that we live in a time where U.S. businesses are taken over by foreign governments by fiat, and the company simply says OK, sure, whatever.
There could be more than meets the eye, and perhaps this is just pretty talk until the U.S. State Department gets involved. But given the dismal state of American morals, I don't hold out much hope. Instead, I wonder what Chavez wants to exchange for his corporate hostage, and what the U.S. will give him for it.
Monday, March 2, 2009
I see far too much Wal-Mart bashing and there needs to be some counterbalance. Why do I like Wal-Mart? I'll tell you.
First and foremost, because I shop there and save money -- and enjoy doing so -- which is enabled by their smart business practices and cost-cutting.
Second, I like success. Businesses have a right to engage in whatever peaceful practices will make them successful, i.e. provided they have the consent of all involved.
Third, I believe in the absolute, inalienable moral right of consenting adults to decide what is or isn't good for them, which is why I advocate laissez-faire capitalism (a system that has never been fully implemented). This pertains to all aspects of dealing with Wal-Mart, and in my opinion, silences all arguments on issues where consenting adults deal with that company: employment (including agreeing to benefits), being a supplier, being an overseas laborer creating products for them, etc. As long as someone willingly engages in activity with Wal-Mart (directly or indirectly), there should be nothing for anyone else to say about it. Period, end of story.
But, there's the rub. Inevitably, critics are not believers in the sanctity of voluntary agreement, or that human adults are sovereign beings capable of making their own life decisions. They want to coerce Wal-Mart and its partners (using government force) to conform to their chosen standards, rather than those of Wal-Mart and its partners, who have -- by definition -- already made up their minds, by agreeing to work together. You see, those partners like Wal-Mart also.
Let me say first that if Wal-Mart is truly doing something that violates individual rights, they should be punished; that principle is essential to capitalism and is necessary for it to work properly. Examples would be: they violate a contract with a business partner or employee, they commit fraud, they physically coerce someone*.
However, most of the standard criticisms of the company do not constitute wrongdoing by objective standards.
Sales tax subsidy - I'm putting this first because it's the only criticism I've seen that I agree with, provided it is true. I understand that in some cases, Wal-Mart has been given the sales tax proceeds from stores in a certain location, as an incentive to locate there. This is looting from customers, plain and simple, because sales tax is taken by force from paying customers. However, this is equally the fault of government; Wal-Mart cannot do this without government's cooperation.
Tax breaks - Since money earned by Wal-Mart (or anyone else) is theirs by right, to allow them to keep it cannot be wrong. If others are forced to bear the resulting burden, it's not Wal-Mart's fault; the equitable solution is to remove the burden elsewhere, so such critics should be pushing for equality of tax breaks, not condemning Wal-Mart.
Low wages - If you don't like whatever wage Wal-Mart offers you, don't work for them. There is no such thing as a moral right to a certain wage level, minimum wage laws notwithstanding. Such laws are a violation of companies' and workers' rights (yes, workers, because some people would willingly work for lower wages).
Job benefits - If you don't like the benefits, don't work for them. Again, there is no moral right to certain benefits.
Driving local business away - There is no right to exist for local businesses. I have personally lived in a somewhat remote community with limited shopping options, and having a Wal-Mart Superstore nearby was a huge plus. I did not like the local stores nearly as much, and to be able to buy everything at once was great.
Competition - Being successful and being the only option in a given market area is not problematic. There is a prevalent misconception that freedom requires more than one competitor in a given market, and that the government must use its powers to forcibly keep certain businesses on life support to preserve "competition". This amounts to a prevention of competition, not a preservation of it. The disappearance of competitors is sometimes the result of competition, and it should be embraced, not treated as a crime, as it is by the Sherman Antitrust Act, for example.
As you can see, most criticisms of Wal-Mart evaporate if you accept the premise that we are adults capable of deciding what is right for us, and further, that we have a moral right to do so. Frankly, such criticisms are insulting to the people who willingly partner with Wal-Mart, and dangerous because they can only be put into action by using government force to nullify such voluntary agreements, violating the rights of both the company and its partners.
Wal-Mart is an innovative, highly successful company that increases our standard of living and convenience, and provides jobs for millions. It should be given our highest praise, not scorn.
*The closest thing I've seen to this is reports that Wal-Mart locked employees in at night. Unfortunately the stories I found did not contain sufficient details to allow a judgement, because they were not written from a contractual perspective, i.e. did the employees agree to this somehow, and if not, what were the exact facts involved? This also approaches a tricky borderline case in rights: is it right to voluntarily give up your right to voluntary action, such as putting yourself in prison? Frankly I have not thought of such cases and will not pass judgement at this time. Again, if it turns out Wal-Mart violated rights, they should be punished. However, most criticisms have nothing to do with such borderline cases.