Tag: government

Joel Salatin’s “Everything I want to do is illegal”

Post author By Justin
Post date July 28, 2009
1 Comment on Joel Salatin’s “Everything I want to do is illegal”

http://www.mindfully.org/…legal1esp03.htm

Richard Nikoley pointed me to this excellent essay by Polyface Farm’s Joel Salatin. It is one of the best things I’ve read in quite some time — a complete indictment of government interference with just wanting to be free. Joel suggests that eventually the noose will tighten too much and a cycle will assert itself once more, throwing off these heinous chains to freedom, individuality, diversity and independence. I hope he is right.

Look, if I want to build a yurt of rabbit skins and go to the bathroom in a compost pile, why is it any of the government’s business? Bureaucrats bend over back-wards to accredit, tax credit, and offer money to people wanting to build pig city-factories or bigger airports. But let a guy go to his woods, cut down some trees, and build himself a home, and a plethora of regulatory tyrants descend on the project to complicate, obfuscate, irritate, frustrate, and virtually terminate. I think it’s time to eradicate some of these laws and the piranhas who administer them.

Tags bureaucracy, control, diversity, farming, freedom, government, independence, self-sufficiency

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Peter Thiel responds to Folk Activism

Post author By Justin
Post date April 14, 2009
No Comments on Peter Thiel responds to Folk Activism

Peter Thiel, the founder of Paypal and the major donor behind Seasteading, responds to Patri Friedman’s article on “Folk Activism” (See here).

It’s always reassuring to find yourself in good company, and in Thiel’s response, he hits on the three frontiers I blogged about back on Freedom is Found at the Frontier. Yeah, it’s not like it’s hard to figure out where there’s no government, but then again, not many people are pointing this out, so I’m going to take this opportunity to pat myself on the back.

Now that I’ve done that, there’s one frontier that isn’t being talked about, and that is the frontier of day-to-day life that transpires outside the purveyance of Big Brother. Indeed, that is most of our lives, so this frontier is immensely important. Indeed, many, many people live most of their lives incredibly freely beyond the view of government. It should go without saying that one of the preeminent goals of any liberty-minded person would be to advance ways to expand this frontier and further shield life from government. And yeah, cyberspace can help do that, but we need more realspace solutions.

Day-to-day-life-steading?

(1) Cyberspace. As an entrepreneur and investor, I have focused my efforts on the Internet. In the late 1990s, the founding vision of PayPal centered on the creation of a new world currency, free from all government control and dilution — the end of monetary sovereignty, as it were. In the 2000s, companies like Facebook create the space for new modes of dissent and new ways to form communities not bounded by historical nation-states. By starting a new Internet business, an entrepreneur may create a new world. The hope of the Internet is that these new worlds will impact and force change on the existing social and political order. The limitation of the Internet is that these new worlds are virtual and that any escape may be more imaginary than real. The open question, which will not be resolved for many years, centers on which of these accounts of the Internet proves true.

(2) Outer space. Because the vast reaches of outer space represent a limitless frontier, they also represent a limitless possibility for escape from world politics. But the final frontier still has a barrier to entry: Rocket technologies have seen only modest advances since the 1960s, so that outer space still remains almost impossibly far away. We must redouble the efforts to commercialize space, but we also must be realistic about the time horizons involved. The libertarian future of classic science fiction, à la Heinlein, will not happen before the second half of the 21st century.

(3) Seasteading. Between cyberspace and outer space lies the possibility of settling the oceans. To my mind, the questions about whether people will live there (answer: enough will) are secondary to the questions about whether seasteading technology is imminent. From my vantage point, the technology involved is more tentative than the Internet, but much more realistic than space travel. We may have reached the stage at which it is economically feasible, or where it soon will be feasible. It is a realistic risk, and for this reason I eagerly support this initiative.

Tags cyberspace, freedom, frontier, government, seasteading, space

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Patri Friedman on Folk Activism

Post author By Justin
Post date April 7, 2009
1 Comment on Patri Friedman on Folk Activism

http://www.cato-unbound.o…-folk-activism/

Unfortunately I can’t add much in the way of comments or thoughts on Patri Friedman’s article titled Beyond Folk Activism published on Cato Unbound yesterday. I just don’t have the time as I have to prepare my 2008 taxes. I’m not joking.

It’s a thoughtful article and I wish I could force* all of my libertarian activist friends to read it.

The underlying reason my original blog autoDogmatic has fallen by the wayside (as far as my own writing is concerned) is because it wasn’t doing much, if any, good — that is, other than to encourage my own teeth-gnashing and bitterness at the current busted systems of control. There was a point where I just realized: this is all nothing more than talk. It’s toothless.

I have no idea of Patri’s specific solution of seasteading will work. However, he’s absolutely right that we need more competition in government and a means to escape the entrenched power structures in place with existing governments. The only way to get “there” from here is to create new frontiers (See my post on Freedom is found at the Frontier), and going to the sea is one way of doing that.

One thing I’d like to add to Patri’s discussion is that governments tend to consolidate power and grow. Thus, not only is the scarcity of frontier-space a problem, but it’s a problem further compounded by the tendency of new government iterations to consolidate power over time. Just look at the transition of individual States in a Union after the Revolutionary War to the United States of America we have today.

I wonder if the search for the most functional and free government is a leprechaun we’ve no hope of catching. This could be because governments are inherently anti-freedom (After all, they are: monopoly of force is always anti-freedom), so their very existence unavoidably negates the goal. I’m not sure it matters. It seems the best solution is to seek out new frontiers. Seasteading, space exploration, and “more fences” via digital encryption all work to achieve more frontier. We need it.

And now I go to work on my taxes. Here’s a clip from the article (be sure to check it out!):

Government is just another industry, where countries offer services to citizens, but it has some unfortunate features. It is a geographically segmented monopoly, and since all land is taken, the industry has an enormous barrier to entry. To start a new government you have to beat an old one, which means winning a war, an election, or a revolution. And it has very high customer lock-in: there are barriers to emigration and immigration, and switching countries involves both high financial and emotional costs. These characteristics result in a horribly uncompetitive industry, so it is no surprise that existing firms tend to exploit customers instead of innovating to attract them.

This analysis neatly avoids moral debates and has clear practical implications: if the problem is an uncompetitive market, the solution is to make it more competitive. It also exposes the futility of strategies that don’t address this issue, like trying to win the war of ideas. While appealing and noble, this is ineffective. Without competitive pressure, our institutions generate flawed policies which benefit the political class, not those that reflect the consensus of academic economists. We need more competition in government, not more academic papers or mindshare.

P.S. Also added Jonathan Wilde and Patri’s new blog, Let a Thousand Nations Bloom to Google Reader.

*Joking, sort of.

Tags freedom, frontier, government, libertarians, patri-friedman, policy, seasteading

articles

Freedom is Found at the Frontier

Post author By Justin
Post date March 17, 2009
1 Comment on Freedom is Found at the Frontier

photo credit: patrissimo

I’ve heard it said that the success of the creation of the United States was due in part to the American society being founded on a frontier. Of course the Native Americans were already in North America when the “white man” showed up, but the land was sufficiently “up for grabs” for some element of force and technology to overtake “we were here first.” How that unfolded is unfortunate, but I believe generally moot.

The overarching nature of North America was a place without property rights or government. This frontier paved the way for the establishment of a new form of government, a Constitution, and the United States.

Today, what is left unclaimed? Where are the frontiers? How can we experiment with new forms of government if we have no more frontiers left? I think Patri Friedman has enumerated this problem: lack of competition due to both a lack of options (frontiers) and high transaction costs to changing governments means society stagnates within archaic, increasingly bloated and controlling bureaucracies. We need a lot more frontiers if we want to see alternatives to the status quo. However, all the land save the uninhabitable Antarctica has been claimed, so where can we find any frontier, much less the needed abundance to really see a plethora of options take form? And of the options available, which are actually likely to take form? After all, putting “practicality aside” is easier said than done.

Revolting against current regimes can create a frontier of sorts, but if history is any guide (a poor guide), post-revolution governments (again U.S. being excepted for various reasons) don’t tend to be much better than the one’s they replace. Out with the old boss in with the new boss. To some extent, the New Hampshire Free State Project is taking this approach. I wish those liberty-minded folk the best of luck.

Another solution to the shortage of frontier is to go to the oceans. The oceans make up a huge amount of “unclaimed” frontier. Sure, they are water and not land — slight problem. But there is an ounce of historical precedent to support new sovereign nations at sea: see Sealand. This solution to the frontier-problem is what the Seasteading Institute is pursuing. I’m lending my support to TSI however I can, and I wish Patri the best.

Assuming mankind doesn’t blow itself up and we eventually learn to cheaply blaze a trail through the universe, space truly will be the “final frontier” (Save transdimensional pioneering). There are untold millions of planets out there that are just waiting for bungalows and Wal-Marts. Human existence in space could look something like Firefly or perhaps a new frontier is made from the Moon a la Robert Heinlein. Homesteading space just presents a few teeny logistical hurdles.

So where does that leave us?

What about the Internet? Even having advanced radically over the past two decades or so the Internet is still very much a wild west. Could the Internet be the frontier we have available right now to secure increased human freedom?

The logistical problems are fairly obvious, of course. The internet is virtual and as much as our lives become digitized, we still have to eat and live in real space. However, the government can’t tax what it doesn’t know you have. Encryption creates frontier by obscuring information from the taxman. Further, there’s a natural progression that increases the likelihood we move more of our lives beyond the purveyance of Big Brother: as governments make our existence in real space more onerous, there will be ever-increasing incentives to take life to cyberspace, encrypt it, and thereby restore freedom. For practicality purposes, this may be the best option we have for at least increasing our freedom in the near term. To some extent, it is already happening (i.e. see The Pirate Bay’s fight against the RIAA and MPAA).

The frontier problem is real, but human ingenuity is vast. Are there other frontiers out there worth pursuing? Freedom where art thou?

Tags final-frontier, freedom, frontier, government, homesteading, patri-friedman, seasteading, seasteading-institute, space

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President Chuck Norris, of Sovereign Texas?

Post author By Justin
Post date March 13, 2009
1 Comment on President Chuck Norris, of Sovereign Texas?

http://www.worldnetdaily….ew&pageId=91103

photo credit: cloune

Now this is just all sorts of awesomeness not because it is likely to happen (I’m skeptical), but because it puts pressure on the Feds to behave. Apparently, Chuck “When I do a push-up I push the world down” Norris quipped recently on The Glenn Beck show that he may run for President of Texas. Even said in jest, something like this has to have been contemplated or at least joked about by Chuck Norris before in order for it to just sorta come out on national television. And based on Chuck’s recent write-up (the link), he’s clearly thought a great deal about the notion of Texas reasserting itself as a sovereign nation.

Time to move to Texas? I hear Austin is a great place to live.

Chuck is far too religiously minded for comfort, but then again, so is Ron Paul (and mind you it gave me similar pause there, as well). I’m far more worried about acolytes of the State than conservative Christians these days though. It’s also encouraging to hear someone mainstream (As Patri noted) seriously discuss the notion of secession. As I see it, it’d only take one state to break the Union before others would follow. The “United” States is so overrated — why don’t more people see that?

Here’s would-be President Norris:

When I appeared on Glenn Beck’s radio show, he told me that someone had asked him, “Do you really believe that there is going to be trouble in the future?” And he answered, “If this country starts to spiral out of control and Mexico melts down or whatever, if it really starts to spiral out of control, before America allows a country to become a totalitarian country (which it would have under I think the Republicans as well in this situation; they were taking us to the same place, just slower), Americans won’t stand for it. There will be parts of the country that will rise up.” Then Glenn asked me and his listening audience, “And where’s that going to come from?” He answered his own question, “Texas, it’s going to come from Texas. Do you agree with that Chuck?” I replied, “Oh yeah!” Definitely.

It was these types of thoughts that led me to utter the tongue-n-cheek frustration on Glenn Beck’s radio show, “I may run for president of Texas!”

I’m not saying that other states won’t muster the gumption to stand and secede, but Texas has the history to prove it. As most know, Texas was its own country before it joined the Union as its 28th state. From 1836 to 1846, Texas was its own Republic. Washington-on-the-Brazos (river) served as our Philadelphia, Pa. It was there, on March 2, 1836, where a band of patriots forged the Texas Declaration of Independence. (We just celebrated these dates last week.)

…

On March 1, 1845, then-President John Tyler signed a congressional bill annexing the Republic of Texas. Though the annexation resolution never explicitly granted Texas the right to secede from the Union (as is often reported), many (including me) hold that it is implied by its unique autonomy and history, as well as the unusual provision in the resolution that gave Texas the right to divide into as many as five states. Both the original (1836) and the current (1876) Texas Constitutions also declare that “All political power is inherent in the people. … they have at all times the inalienable right to alter their government in such manner as they might think proper.”

Anyone who has been around Texas for any length of time knows exactly what we’d do if the going got rough in America. Let there be no doubt about that. As Sam Houston once said, “Texas has yet to learn submission to any oppression, come from what source it may.”

By the way, I actually didn’t know the Texas Republic history. I probably learned it in some social studies class but subsequently forgot all about it. Neat.

Tags chuck-norris, constitution, freedom, government, oppression. submission-to-authority, president-chuck-norris, secession, texas, texas-republic, union, united-states

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Your home garden may soon come under Federal Regulation

Post author By Justin
Post date March 12, 2009
7 Comments on Your home garden may soon come under Federal Regulation

http://blog.friendseat.co…es-small-farms/

Looks like big business is making another power grab via lobbying government officials to pass onerous laws that would shut down smaller businesses, and may be so poorly written and loosely defined that your regular gardener would fall under purveyance of the Feds.

Just look at this definition of a “Food Production Facility” from the bill (HR 875):

(14) FOOD PRODUCTION FACILITY- The term ‘food production facility’ means any farm, ranch, orchard, vineyard, aquaculture facility, or confined animal-feeding operation.

Note that what qualifies as a farm is not defined. I’m skeptical about this bill for two reasons:

In an economic crisis like now, that the government would actively try and stifle growing your own produce seems beyond absurd. However, I have almost no faith in government being reasonable, rational, or competent enough to stop special interests from ridiculously offesnive power grabs such as this.
A law that stopped home gardening could cause revolt. Americans do not want to be told what they can do on their own land. When that is growing illegal drugs like marijuana, most Americans will bend to puritanical beliefs. But when we’re talking about growing tomatoes? That’s a whole ‘nother can of worms.

The more bills I see that go before Congress, the more my fundamental distrust and conclusion of rampant government corruption is confirmed. For further reading, see HR 600 which would put back into practice the sort of borrowing practices that led to the subprime debacle, housing boom, and housing bust.

This bill is designed to allow corporations, with the help of their hired government guns, to force small competitors (you and me) out of business. This is as evil as it gets, folks. Since the dawn of man we have hunted and farmed our own food——it’s second nature. To be stripped of the most fundamental act of survival is equivalent to the kind of mass enslavement you only read about in history books, like the kind under Pharaohs in ancient Egypt.

Lurking within the maze of technical lawyer-like jargon, the bill places wildly restrictive regulatory incumbrances on the average vegetable growing Joe-The-Plumber, small organic farmer, or anyone for that matter who may one day decide to grow a small garden. The bill would require anyone associated with growing, storing, transporting or processing food to be subject to inspections by federal agents of their property and all records related to food production; you would be required to conduct specials tests, maintain samples and records, and allow government officials to mandate the use of chemical pesticides, fertilizers, specific types of nutrients, packaging, and temperature controls. Violation of any of these provisions would subject the offender to property seizure, imprisonment and fines up to $1,000,000. The implementation of these bogus regulations are designed to be so cost and time prohibitive, no one would bother to grow their own food or risk being jailed and fined for participating in a black market.

(H/T Implode)

Tags food-production, gardening, government, home-gardening, hr-600, hr-875, laws, recession, regulating, regulation, responsibility, self-sufficiency, small-business

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“Making money is that easy . . . You make it yourself, with your friends, as you create value for another.”

Post author By Justin
Post date March 9, 2009
No Comments on “Making money is that easy . . . You make it yourself, with your friends, as you create value for another.”

http://hplusmagazine.com/…on/2009-spring/

An interesting, brief article in H+ magazine titled Hacking the Economy by Douglas Rushkoff speaks to times long gone — centuries ago when barter was the common means to transact locally and centralized currency was scarcely used at all. The author explains that the aristocracy effectively compromised this system by pushing centralized currency, which was “a way to extract value from the periphery and bring it back to the center.”

Whether things occurred as simply as Rushkoff describes is up for debate. Governments (via banks or perhaps its vice versa!) have long been incentivized to centralize the management of currency. Currencies throughout history have been based on gold and silver (as they are scarce, divisible, and uniform). However, via centralization’s corrupting influence (i.e. no checks and balances), the central monetary authority has always slowly but steadily debased the currency spurring inflation and leading to all sorts of unfortunate consequences — the most noteworthy of which is robbing the common man of his wealth.

In our modern days, we’ve gone completely to a credit-based society whereby all money is based on the assumed credit of the centralized authority. Dollars don’t represent gold or silver (though they once did). I won’t go into further detail on this here, but you should check out Rothbard’s What has Government Done to our Money? (Buy it off amazon or grab it free in pdf or audio off mises.org).

What I like about Rushkoff’s concise piece is how it makes two fundamental conclusions, both of which I happen to agree with:

Centralization tends to result in perverse systems — i.e. our productive hours don’t lead to our own wealth. Money is made simply by moving electronic balances around. Finance replaces production in society (I.e. the United States’ FIRE economy).
Money is easy to make. Money is merely efficient barter. No matter what happens to the general economy, the dollar, the yuan or yen or gold or silver, trade will continue on. You just better hope you have some assets to barter around, and if you don’t, you can always get creative and find things that you can trade.

Here’s a summary snippet of Rushkoff’s article found on page 37 / 38 of the online magazine. The rest of the magazine looks fascinating and I only wish I had the time to skim all its pages!

The economy we live in is a rigged game, established around the time of the Renaissance in order to promote the welfare of earlychartered corporations and the monarchs who gave them license to monopolize world business. Until that time, there were many kinds of money in use simultaneously. People used centralized currency to conduct long-distance transactions, and local currency to transact on a more day-to-day basis. . . .

Like most innovations of the Colonial era, centralized currency is a way to extract value from the periphery and bring it back to the center. . . .

A majority of the money earned under our current currency system is earned by people who don’t actually do anything. As such, all this speculation is a drag on the system. Speculators just bet on various companies’ ability to pay back what they have borrowed. . . .

The way out — as I see it — is to begin making our own money again. I’m not talking barter, but local currency. Money is just an agreement. And the more a community trusts one another, the more effi ciently the moneys they develop can function. We can create units of currency based on anything . . .

Thanks to the current economic meltdown, a restaurant in my town called Comfort has been unable to secure a loan from the bank to expand. Instead, John the owner has turned to us. We are buying “Comfort Dollars” at a rate of 1 US dollar for every $1.20 worth of restaurant food. So if I invest $1000, I get $1200 to spend at the restaurant. I get a 20% return on my investment, and — since he’s paying in food — he gets money a lot cheaper than he can borrow it through the bank.

Plus, I have a reason to promote his restaurant, invest in my town, and extend the good will. everybody wins.

Making money is that easy. You don’t get it from a corporation or a bank. You make it yourself, with your friends, as you create value for one another. This is the ultimate hack in a society addicted to the market: pretend it doesn’t even exist, and go about your business.

(H/T boingboing via Ritholtz)

Tags barter, centralization, economy, gold, government, h-magazine, h-plus, h-plus-magazine, history, money, precious-metals, silver, systems, trade

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Stop “FHA Subprime” – Defeat HR 600 and SFDPA

Post author By Justin
Post date March 6, 2009
No Comments on Stop “FHA Subprime” – Defeat HR 600 and SFDPA

http://ml-implode.com/sfdpacampaign.html

While flying the flag of “helping” would-be homebuyers in lower income brackets, “seller funded downpayment assistance” inflates the home price via “laundering” a downpayment from seller to buyer in order to get the homebuyer in an FHA approved loan. This process instantly puts the house into negative equity.

Not surprisingly, “SFDPA” is very profitable in fees to the companies who make it possible while stacking the cards against the “assisted” homebuyer, who research has shown, is considerably more likely to go into foreclosure.

As if putting homebuyers into instantly underwater homes that are much more likely to go into foreclosure under the “auspices” of helping them out wasn’t bad enough, when the loans default, they dump back onto the FHA and thereby the taxpayer.

So who wins in this mess of “charity?” The companies lobbying for its re-legalization via H.R. 600.

And if H.R. 600 gets passed, let there be no doubt, our elected officials have learned nothing from the credit collapse.

More on Seller Funded Downpayment Assistance and HR 600 at ML-Implode.com:

This practice has been criticized or ruled against by the FHA, the GAO, the IRS, the FBI, and even US Congress itself, which outlawed it (for the time being) in the 2008 Housing Bill. Yet those who profit off the practice are trying to revive it.

So What is it??

The contentious practice is called “seller-funded downpayment assistance” (SFDPA). It is used to allow home buyers getting Federally-backed mortgages to bypass the need for a downpayment, supposedly for charitable reasons.

On the surface, it sounds benign, but it is actually fraud and money laundering inflicted on the Federal Housing Administration (that is, taxpayers), the housing market in general, and in a sense, even the buyers!

One of these companies, Global Direct Sales (which runs the “Grant America Program”) has sued us in an attempt to stop us from revealing the existence of SFDPA and discussing it frankly. SO FAR A FEDERAL JUDGE HAS BLOCKED THEIR ATTEMPTS TO SILENCE US. (Read More about our battle here. Help us to fight this NUISANCE lawsuit which is a blatant attack on free speech!)

Tags credit-crisis, downpayment-assistance, fha, fha-subprime, government, homeowners, house-price-inflation, hr-600, implode, lobbyist, ml-implode, political-campaign, politicians, seller-funded-downpayment-assistance, sfdpa

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“The Tale of the Slave”

http://www.duke.edu/web/p…aleofslave.html

Via Patri comes Nozick’s “The Tale of the Slave,” a thought experiment that illustrates how a system of democracy is little more than enslavement to a faceless master, the multitude, the majority.

I’ve alluded to this out elsewhere (and been misunderstood, unfortunately; another post on voting). We aren’t comfortable with the idea that we are slaves, and don’t think I’m in any way equating outright slavery as suffered by people throughout history with the part-time slavery of state control. I’m not.

Imagine a spectrum whereby liberty and freedom are on one end and slavery the other. Where on this spectrum do we fall? And is being a slave to faceless mass really any better in the long run than a tyrannical master whose face we know?

I’m not sure.

Consider the following sequence of cases, which we shall call the Tale of the Slave, and imagine it is about you.

There is a slave completely at the mercy of his brutal master’s whims. He often is cruelly beaten, called out in the middle of the night, and so on.

The master is kindlier and beats the slave only for stated infractions of his rules (not fulfilling the work quota, and so on). He gives the slave some free time.

The master has a group of slaves, and he decides how things are to be allocated among them on nice grounds, taking into account their needs, merit, and so on.

The master allows his slaves four days on their own and requires them to work only three days a week on his land. The rest of the time is their own.

The master allows his slaves to go off and work in the city (or anywhere they wish) for wages. He requires only that they send back to him three-sevenths of their wages. He also retains the power to recall them to the plantation if some emergency threatens his land; and to raise or lower the three-sevenths amount required to be turned over to him. He further retains the right to restrict the slaves from participating in certain dangerous activities that threaten his financial return, for example, mountain climbing, cigarette smoking.

The master allows all of his 10,000 slaves, except you, to vote, and the joint decision is made by all of them. There is open discussion, and so forth, among them, and they have the power to determine to what uses to put whatever percentage of your (and their) earnings they decide to take; what activities legitimately may be forbidden to you, and so on.
Let us pause in this sequence of cases to take stock. If the master contracts this transfer of power so that he cannot withdraw it, you have a change of master. You now have 10,000 masters instead of just one; rather you have one 10,000-headed master. Perhaps the 10,000 even will be kindlier than the benevolent master in case 2. Still, they are your master. However, still more can be done. A kindly single master (as in case 2) might allow his slave(s) to speak up and try to persuade him to make a certain decision. The 10,000-headed monster can do this also.

Though still not having the vote, you are at liberty (and are given the right) to enter into the discussions of the 10,000, to try to persuade them to adopt various policies and to treat you and themselves in a certain way. They then go off to vote to decide upon policies covering the vast range of their powers.

In appreciation of your useful contributions to discussion, the 10,000 allow you to vote if they are deadlocked; they commit themselves to this procedure. After the discussion you mark your vote on a slip of paper, and they go off and vote. In the eventuality that they divide evenly on some issue, 5,000 for and 5,000 against, they look at your ballot and count it in. This has never yet happened; they have never yet had occasion to open your ballot. (A single master also might commit himself to letting his slave decide any issue concerning him about which he, the master, was absolutely indifferent.)

They throw your vote in with theirs. If they are exactly tied your vote carries the issue. Otherwise it makes no difference to the electoral outcome.

The question is: which transition from case 1 to case 9 made it no longer the tale of a slave?

Tags democracy, enslavement, freedom, government, liberty, robert-nozick, slavery, tale-of-the-slave, thought-experiment

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Paul Volcker: “Not an Ordinary Recession”

Post author By Justin
Post date February 23, 2009
No Comments on Paul Volcker: “Not an Ordinary Recession”

http://www.ritholtz.com/blog/2009/02/paul-volcker/

Paul Volcker recently gave a speech that has gotten a lot of replay action on the blogosphere. I believe most are saying that Volcker is calling for a return to “narrow banking” (see Jesse).

A lot of people listen to Volcker as he led the charge at the Fed over taming inflation back in the late 70s and early 80s. I wonder more if he wasn’t just at the right place at the right time, doing what had to be done — raising rates. I’m convinced that most people give entirely too much credit both on blame and accolades. Don’t get me wrong, the Fed has enormous power, but my estimation is that they are almost always messing things up. The Fed is reactionary always and almost always reacts too far.

Therein lies the problem. The Fed fails at regulating. Hardly surprising, really. Is it not a joke to pay lip service to free markets, which are incredibly dynamic decentralized systems, and then use a central body to regulate the blood of the system, money? It’s a sad joke.

I could go on, but I’ll hold off. There are two pieces of Volcker’s recent speech I want to quote and comment on briefly. First:

One of the saddest days of my life was when my grandson – and he’s a particularly brilliant grandson – went to college. He was good at mathematics. And after he had been at college for a year or two I asked him what he wanted to do when he grew up. He said, “I want to be a financial engineer.” My heart sank. Why was he going to waste his life on this profession?

A year or so ago, my daughter had seen something in the paper, some disparaging remarks I had made about financial engineering. She sent it to my grandson, who normally didn’t communicate with me very much. He sent me an email, “Grandpa, don’t blame it on us! We were just following the orders we were getting from our bosses.” The only thing I could do was send him back an email, “I will not accept the Nuremberg excuse.”

There was so much opaqueness, so many complications and misunderstandings involved in very complex financial engineering by people who, in my opinion, did not know financial markets. They knew mathematics. They thought financial markets obeyed mathematical laws. They have found out differently now. You know, they all said these events only happen once every hundred years. But we have “once every hundred years” events happening every year or two, which tells me something is the matter with the analysis.

So I think we have a problem which is not an ordinary business cycle problem. It is much more difficult to get out of and it has shaken the foundations of our financial institutions. The system is broken.

The system is broken. The system was too opaque. Finance is incredibly complex. It is here where I actually started wondering if Volcker “gets it” as far as understanding that our system is far from robust as centrally controlled and designed. As it is, Nassim Taleb is the only person I’ve seen who seems to glimpse the complexity of the financial system. However, I’ve seen even Taleb defer in theory to people “who saw this coming,” like Nouriel Roubini, for potential ways to “fix” the system.

Volcker’s comment about his grandson also hits home with me as I went into finance/accounting. When everyone you know is running into a field, that may be cause to rethink your choice of education (Everyone I knew in college was getting into Real Estate — this was back in 2001). Then again, I still wish I had gone and pursued computer science, but the dotcom crash (2000) scared me away.