Saturday, November 21, 2020

Do These People Even Understand How This Stuff Works?

 From Trump lawyer Sidney Powell at their crazy press conference this week:

They can say that … show of votes from one thing to another, they can say that a Biden vote counts as 1.25, and a Trump vote counts as 0.75 and those may be the numbers that were actually used here. It’s not just the swing States that were affected. The algorithm was likely run across the country to affect the entire election. Like I said, we only discovered it this year because of the overwhelming number of votes for President Trump in the swing States that caused the machines to have to shut down for them to backfill for adding votes.

Uhh, I'm pretty sure a voting reporting system that reported a quarter of a vote would raise suspicions. Even programming one to accept decimals instead of integers would look fishy. 

Friday, June 19, 2020

Movie Review: Mr Jones

I wrote my senior thesis at the Jackson School many years ago on Collectivization, which I have long considered a criminally under-appreciated story in the West, the lone exception being the recent Red Famine by Anne Applebaum, so I was excited to see a review of the film Mr. Jones in today's New York Times.

This work by Polish director Agnieszka Holland, who years ago directed the exceptional WWII/Holocaust drama Europa Europa, covers the story of Welsh Journalist, and former advisor to Lloyd George, Gareth Jones and his trip to the Soviet Union in the early 1930's. I still find it appalling that so little is known about an event in which somewhere between 3 and 10 million people were murdered, so maybe I am biased, but I found it a quite interesting portrayal, if sometimes a bit surreal. Admittedly I was quite the fanboy when George Orwell made a cameo. Well, that and the fact that Walter Duranty is essentially the main villain. Did I mention that I was the president of the local Anti-Walter Duranty Society? Regardless, it is an important story that is competently portrayed in a new an interesting way, and deserving of your attention in an era when we are often left with watching the latest superhero movie for the 4th time.

Wednesday, May 27, 2020

Churchill and Trump

I had to post an Amazon review regarding this ridiculous book, Trump and Churchill: Defenders of Western Civilization.  Who knows if it will stay up.

As a huge Winston Churchill fan who owns most of his books and has made a pilgrimage to Chartwell, I was interested in this book. Unfortunately I couldn't make it past the free Kindle download portion of this ridiculous work.  Aside from the horrible research, which previous reviewers have already covered, the premise of this book is completely absurd. The author argues, not only that Churchill and Trump are similar (based on superficial things common to many politicians like the fact that they didn't get along with the press) but that Trump has actually done more to defend western civilization than Churchill, based on... uhh... owning libs on Twitter as best as I can tell. As a long time conservative, I am all in favor of owning the libs on social media, but I find it hard to compare to, I don't know, DEFEATING NAZI GERMANY?

The author picks out a couple of other superficial things to make his argument, "they love their country". OK, are there many politicians who run around claiming not to love their country? They both are alpha males! Uhh, yeah. Churchill was a Sandhurst graduate who served in 4 wars, and even became famous for escaping as a POW in South Africa. Trump received 5 draft deferments and bragged that avoiding the Clap was "his Vietnam". Yeah, a lot of similarities.

Both of them are good communicators, he argues. Uhh, aside for being one of the highest paid war correspondents for a while, Churchill wrote over 30 books. He received the Nobel Prize for literature. Trump has a couple of ghost written books, and incorrectly misspelled "Noble" several times in a tweet. He is famous for his inability to even read 4 page intelligence briefs, much less write thousands of pages on the Second World War or the Duke of Marlborough. Churchill gave us, "their finest hour" and "We will fight on the beaches". Trump gave us "American carnage" and "Covfefe".

I decided to give the author another shot and watched his CSPAN interview on this book, and it was even worse. He actually cites the scene in the movie the Darkest Hour of Churchill hanging out in the London Tube with commoners as an example of how he related to the average person, just like Trump!  Only one problem though. It never happened. It was made up entirely for the movie.

Doubtless this book will still sell plenty of copies to Trump fans, eager to pump up their hero (Trump himself has even tweeted promoting it) but anyone seriously interested in history should look to serious works. I highly recommend Andrew Roberts "Churchill: Walking With Destiny", Eric Larson's recent "The Splendid and the Vile" and if you want a comparative work Thomas Rick's Churchill and Orwell. This is book is to be avoided unless you are a Trump sycophant, in which case you will probably love it, but then again, Twitter is free.

Monday, June 20, 2016

Throwing Rocks at Throwing Rocks at the Google Bus

I haven't done much posting lately, so here is a review of an idiotic book I had fun making fun of on Amazon.

As I have two decades of experience in tech, and an extensive background in economics, I was interested to check out this book after reading about its controversial claims. I doubted that I would agree with all of its points, but might at least find something interesting in its arguments. Unfortunately it did not succeed even in that meager goal.

Rushkoff, as best as I can tell is a media arts professor (is that even a real academic discipline) who has an interest in technology. Unfortunately he doesn’t even have the most basic layman’s understanding of economics or history, nor the intellectual curiosity to find out.  Instead this book is just a lightly researched polemic, making ridiculous, often unsourced wide-sweeping claims. Even when I checked out the few footnotes he included, his sources did not say what he said they did. For example, the average Google employee does not quit within a year, there are not 1.7 million medical bankruptcies per year (in 2015 there were only 900,000 personal bankruptcies for all reasons) and companies are not gobbling up tech firms with no revenues, left and right. For that last claim I assume he actually meant profit, but it is hard to tell as he uses economic and financial terms loosely out of context, and often meaninglessly.

I can appreciate a book even if I don’t agree with it, but this book doesn’t even agree with itself. On one page the author condemns the low starvation wages paid by major corporations in third world countries, then a few pages later says that this is just a fiction of artificial exchange rates. More than once in apocalyptic terms he talks of companies like WalMart which are massive profitable behemoths strip mining the nation of all resources and ripping off the consumer, it efficiencies paling in comparison to its “extracting”, then he dedicates an entire section to how corporations are becoming less and less profitable. Which is it? He condemns modern “monopolies” such as Facebook, but then laments the demise of taxi cartels which supposedly supplied so many good jobs, and then waxes romantically about medieval guilds, without noting that both of them are textbook examples of cartels which restrict competition.

Historically speaking this whole thing about guilds that becomes a foundation of his thesis is just bizarre and completely ahistorical. He provides no sourcing or even argument to support his contention that they represented some sort of apex of human “peer to peer” commerce; he just asserts it as somehow better than modern corporations. As best as I can tell he learned everything he knows about guilds from playing Dungeons and Dragons in high school. Without defining the terms he refers to them as “value creation” while modern corporations are “value extraction”. Romantic notions aside, however, they create value in the exact same way. Whether I purchase an item from an individual, a guild, or a corporation, I am doing it for the exact same reason, because that good or service is worth more to me than the money or item I am giving up in exchange for it. My trading partner is selling it to me for the exact same reason. Simply labeling one exchange as creating and another as extracting is ridiculous romanticism with no basis in economics, math or logic.  

As an example of this, at one point the author criticizes Facebook and other social media applications for mining user data, as in the modern world that much data on personal preferences is valuable, and that it is ripping off its users by not sharing this wealth with them. How, in fact, are they being ripped off when they are more than happy to use these applications (most provided entirely free) voluntarily. I have been on Facebook several years and I do not know of a single person ever forced to use the application at gunpoint. They obviously see some value in the application to themselves, otherwise they would not use it. Whether Facebook also obtains some value, and presumably they do otherwise they would not invest considerable resources in running it, is immaterial to the user. Ironically Rushkoff also repeatedly mocks these very same Internet startups in other parts of the book for not having revenue, so apparently he expects them to share the money with customers that he claims they are not making. And this is one of his more coherent and consistent arguments.

The book gets somewhat better when it moves from the “history” to the “solutions”  phase, although many of his solutions have absolutely nothing to do with what he claims were the problems. Yes, local currencies and bitcoins are interesting, although as of yet just libertarian thought experiments, but they do nothing to address the issues of income distribution or economic stagnation that he claims are the problem. Ironically in one section he condemns the Federal Reserve of the tool of the rich to enslave the working class, and then promotes local currencies as a solution to shortages of currency and credit, without noticing the fact that the primary goal of the Federal Reserve is to act as a lender of last resort and keep the credit and currency markets functioning properly. Rushkoff then goes on to make the startling discovery that there are a variety of corporate structures such as non-profits and employee owned companies, an entirely unsurprising observation, given their existence for the last several centuries. It all gets pretty bizarre though, at one point Rushkoff goes the full Mao and proposes we all start farming “in shifts”. Hey, when the Soviets and Chinese tried that it only killed a few tens of millions of people. What could possibly go wrong?  I could go on for several thousand more words, but I tire of this.

So in summary, this book easily rates as one of the most mind-numbingly stupid books I have ever read. I hate to make such broad generalizations, but in the hundreds, perhaps thousands, of books I have read in my lifetime no other better examples come to mind. The author fails to make a single coherent argument in this entire work, and we are all worse off for having read it. In fact, one may say that it was value extracting. Hey, maybe he was on to something after all? I award you no points (well, OK, one star because that is the lowest Amazon will allow) and may God have mercy on your soul.

Sunday, January 31, 2016

The Incoherency of Trumponomics

I was flipping through the channels Thursday night during the debate and caught a bit of Donald Trump's counter-rally and noticed this little gem.

 China, this year in trade, will make over $500 billion in terms of our trade deficit. $500 billion. That's no partnership, and I'm a free trader, I love free trade, but we have to use our head and we use political hacks to negotiate with the Chinese and they have the smartest people, I deal with them all the time. I love the Chinese, they buy my apartments for millions. I have the largest bank in the world from China in one of my buildings. I love them. I'm not blaming the Chinese, I'm not angry at them I'm angry at our politicians, because we have people who are incompetent running our country. Why should we be losing in trade deficits $500 billion per year?

The ironic thing though, is how little Trump appears to understand what the trade deficit (more accurately called the current account deficit) is composed of. He is always stating in his usual bombastic overly simplistic terms as "winning" or "profit". It's not though, If China exports more goods to the US than we export to them, the difference isn't profit, it is dollars which they have to hold in some form other than an exported good, so it becomes some sort of security (usually Treasuries) or they keep the money in the United States and invest it in some sort of asset like real estate or a business, like, just picking a completely random example, the largest bank in China starting a branch in a building owned by Donald Trump.

Trump doesn't even realize that the money he is making off the Chinese, is the same exact money that he claims the Chinese are "making" off of us.

Saturday, January 02, 2016

The Interrogator

Available Tuesday from Amazon!

Sunday, March 22, 2015

The Conservatarian Manifesto

I just finished reading The Conservatarian Manifesto, by the National Review's Charle Cooke, a short tract on the intersection of the modern libertarian and conservative movement, and wanted to say a few words about it. I am a fan of Cooke's columns in the National Review, as well as his Mad Dogs and Englishmen podcast (together with Kevin Williamson) so I have been looking forward to this book for a while. Much of this is self-serving, in that I consider my own political leanings to be in this area, a free market conservative with libertarian leanings, although I have never been much of a fan of the organized Libertarian Party as it tends to attract its fair share of kooks who spend most of their time demanding legal pot and spouting conspiracy theories about the Federal Reserve,

The first issue Cooke raises is that of identity, as he explains how he derived the title. I have always found this an intriguing question in regards to modern American political movements. Liberals, after all, with their speech codes and uncompromising unquestioning defense of 80 year old welfare programs, are not really that liberal. On the other side of the aisle conservative is also not a very apt descriptor for everyone who subscribes to the alternative view. As Milton Friedman supposedly said (I can find no actual proof that he ever said this, but it is such a great quote I will assume he did anyway) "People call me a conservative, which implies that I wish to maintain the status quo. This is not true, there is much I want to change." Cooke toys with several possible names, including "classical liberal" which I use on occasion, before deciding on "conservatiarian".  Why, I'm still not completely sure, but I guess it sounds cool.

Cooke's main point is that the conservative movement needs to embrace its libertarian components, although he never really gets into the details of why. The book's biggest failing is its relative briefness, plenty of ideas could be expounded upon in greater detail. In some ways he seems a bit defeatist, for example arguing that conservatives should just accept gay marriage as inevitable, but in others he is ideological, arguing that it is inconsistent to demand that the government should keep its hands off of people's guns, but yet wage a war to prevent them from using whatever drugs they want. One could just justify this as the intersection of philosophy and pragmatism though.

One point he only hints at though, is the practical strategy and priorities political movements must take. He does address the fact that simply because something is allowed does not mean it is approved of, but I have always felt that that conservatives, and Republicans in particular, simply need to just focus on issues that are important. The social conservative aspects in moralizing against pornography, gay marriage, abortion etc., are just not really going  anywhere. No matter how many right to life or pro-choice petitions you passionately sign, abortion is not going to become illegal, it is a waste of effort for either party to expend energy on. Tax reform, smart regulation of business, and free trade, on the other hand, are issues which have real impacts on people's every day lives, and which real progress can be made. Ideology is fine, we should not apologize for having passionate beliefs and guiding principles, but Conservatarians should also focus on actually getting things accomplished to make the world a better place.

Sunday, February 22, 2015

Five Stars

Trying to self-publish a novel, although fun, can be a quite stressful experience. It is hard putting yourself out their, opening yourself up for rejection like an insecure teenager trying to get a date for the prom.  It's hardly a lucrative business, unless you are a EL James or Hugh Howey, but sometimes getting that one good review, knowing that someone appreciated your hard work. can make it all worthwhile.

What a story
It starts with what appears to be a straightforward suicide for Army C.I.D. agent Colby to investigate. But as this story unfolds it becomes far more complex.
Switching between Kentucky and Afghanistan this is a really absorbing tale. It would make a great film.

For some reason I have been doing better in the UK than the US. I guess I have always been a bit of an Anglophile. Will have to move to London to visit with my fanbase.

Sunday, January 11, 2015

Seven Bad Ideas

I was interested in reading Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World by Jeff Madrick after reading Don Boudreaux's comments on it at Cafe Hayek, in which he quotes Madrick as saying:

On the other hand, prosperity hardly guarantees democracy and protection of human rights. Russia became wealthy in the 1930s but was a dictatorship until the 1980s [p. 26].

I wrote my senior thesis on Collectivization at the Jackson School, so I know about as much on this subject as anyone, so I wondered how anyone could honestly make this claim. Upwards of seven million people died from starvation alone, not to mention the millions who died from labor camps and other atrocities. "Wealthy" would be about the last way I would describe it. Is his next book going to praise the "wealth" of 1990's Somalia?

So I picked up a copy of the book from the library to find out. Unfortunately, he doesn't address the issue any further, other than in general to show his bias against free market economics (he spends most of the book railing against the "invisible hand"). Although some portions were interesting, I am actually rather sympathetic to his argument that economics is not as scientifically rigorous as it should be, the book on a whole is full of overly broad statements and strawman arguments. In fact in all honesty the book should be titled "Seven Bad Ideas: How I Misrepresent My Opponents' Arguments and Thereby Defeat Them".

Madrick's central thesis is that modern economics has been taken over by "bad ideas", which are essentially free market economics, mostly those espoused by Milton Friedman, and that Keynesian economics has been banished from mainstream economic thought. This would be news to the faculties of just about every major university, as well as the publisher of every major macroeconomics textbook, since about, oh, 1935. In his view, with the exception of the first 2 years of the Obama administration, the US, as well as Western Europe, has been reduced to some sort of winner take all, no holds barred, unregulated economic free for all out of a Mad Max movie.

How does he support this argument? Well, that is hard to say. The book is largely devoid of analysis (although in his defense 226 pages is hardly enough space to look into a subject this large) and barely mentions any actual economic numbers at all. In the introduction, for example, he argues:

In Clinton's last year in office, the level of federal public investment as a proportion of GDP was lower than in Ronald Reagan's last year in office, especially for physical infrastructure and education spending. It was substantially lower for research and development. The policy was part and parcel of the laissez-faire revolution.

He fails to actually state any numbers though, nor give any idea as to the scope of these supposed cuts. The end notes reference one of his own books, and then point the reader to an OMB Report. After perusing the report for a while, one does find, yes from 1988 to 2000, under the title "Table 9.1 —TOTAL INVESTMENT OUTLAYS FOR MAJOR PUBLIC PHYSICAL CAPITAL, RESEARCH AND DEVELOPMENT, AND EDUCATION AND TRAINING: 1962–2013" one does in fact find that spending decreased from 4.2% to 2.6% of GDP.  This does not tell the whole story though, as almost all of this was in military spending, which decreased from 2.5% to 1.0%, a result of the famous, but short lived "peace dividend". Non-defense spending during that time decreased a barely perceptible 1.7% to 1.6%, and in fact nearly doubled in terms of constant dollars (2006) from $84.5 billion to $157.7.

And neither I nor Don Boudreaux have even left the introduction yet!  In any case, to move along, Madrick then analyzes Adam Smith's "The Invisible Hand" metaphor, and then basically goes on to argue that the theory is invalid if there exists any sort of market imperfection whatsoever, and acts as if he were the first person ever to discover asymmetrical information. He summarizes the chapter with:

 We assume away monopolies, business power, lack of access to information, the likelihood of of financial bubbles, economies of scale.

Except I don't know anybody who actually does that.  Madrick essentially rests his argument on the 2007 financial crisis, which he blames entirely on the unregulated derivatives market (to his credit, he does state that it was Clinton who initially neglected to regulate the market, most liberal writers attribute some unidentified Bush deregulation as having caused this). He manages to make it the entire way through the book though, without mentioning a single time that the government, mostly through Fannie and Freddie, was intentionally encouraging banks to issue sub-prime loans to people who could not afford them. The only time they are mentioned at all, it is entirely the result of those "unregulated" banks. In his world, there is no such thing as a bad government decision in the world of economics.

Skipping on to another chapter, Madrick than argues that economists don't believe in speculative bubbles. He points out the various degrees of the Efficient Markets Theory, and then in a bizarre handwave dismisses the fact that there has been decades of debate on the subject, which he himself discusses, and falsely asserts that economists have en mass adopted the strictest interpretation of this. As evidence he cites Eugene Fama telling the New York Times (actually the New Yorker) "I don't even know what a speculative bubble means".

If you look up the actual interview though, Fama is much more nuanced.

I guess most people would define a bubble as an extended period during which asset prices depart quite significantly from economic fundamentals. 
That’s what I would think it is, but that means that somebody must have made a lot of money betting on that, if you could identify it. It’s easy to say prices went down, it must have been a bubble, after the fact. I think most bubbles are twenty-twenty hindsight. Now after the fact you always find people who said before the fact that prices are too high. People are always saying that prices are too high. When they turn out to be right, we anoint them. When they turn out to be wrong, we ignore them. They are typically right and wrong about half the time.

Much of the book is basically an attack on Milton Friedman, in fact he has two chapters named after him. "Governments Limited Social Role: Friedman's Folly" and "Globalization: Friedman's Folly Writ Large". This subject is way too in-depth for me to get into right now, but suffice to say he distorts and trivializes Friedman's argument (although not as badly as Naomi Klein thankfully). Friedman is described as standing for smaller government, bordering on anarchy, not as part of a philosophy to maximize human freedom and prosperity, but because he is simply an ideologue who doesn't care about other people. Ironically in the last chapter, Madrick mentions "Though reforming education would be expensive, it is more politically acceptable than many other social reforms, such as outright cash grants to the poor, especially those with children."[p209] He neglects to mention, however, who was one of the biggest proponents of this form of welfare, the aforementioned Milton Friedman.

The book ends with a chapter which in other contexts, I might like. "Economics is Science". Madrick argues that economics should not be treated as a science, like math or physics:

Likely nothing has pleased some economists more than giving the impression that they rely almost solely on mathematics to explain economic relationships. Math is the language of universality, of enduring ideas that are appropriate in all contexts. Physics after all is essentially math, so why not economics? [p198]

I would buy this argument, except the economists that he praises, namely Keynes, are the biggest proponents of this school! I have an MBA, and I could barely get through The General Theory of Employment, Interest and Money. It is virtually all quantitative. He had to have known this, because he cites Paul Samuelson, a Keynesian, as an example of this overly scientific school. The economists he attacks on the other hand, namely Adam Smith and Milton Friedman, often read like philosophy. In fact Smith was a philosopher, the science of economics had not been invented yet. Madrick somehow manages to spend the entire book insisting that the entire economy be micromanaged by government policy makers, and then summarizes that these economists must base their decisions on something he insists is a pseudoscience. Even more amazingly, he manages to write this entire chapter without mentioning Frederich Hayek, the Nobel Laureate and free market economist who gave his Nobel lecture on this very subject!

It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences - an attempt which in our field may lead to outright error. It is an approach which has come to be described as the "scientistic" attitude - an attitude which, as I defined it some thirty years ago, "is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed."1 I want today to begin by explaining how some of the gravest errors of recent economic policy are a direct consequence of this scientistic error.

In fact, he fails to mention Hayek a single time in the entire book, an oversight, which could not be accidental. Maybe our eighth bad idea should be intellectual dishonesty?

Tuesday, December 23, 2014

Arthur Laffer Call Your Office

It should come as no surprise to anyone familiar with the Laffer Curve that France's 75% top tax rate raised barely enough money for an Alex Rodriguez contract.

Hollande first floated the 75-percent super-tax on earnings over 1 million euros ($1.2 million) a year in his 2012 campaign to oust his conservative rival Nicolas Sarkozy. It fired up left-wing voters and helped him unseat the incumbent.
Yet ever since, it has been a thorn in his side, helping little in France's effort to bring its public deficit within European Union limits and mixing the message just as Hollande sought to promote a more pro-business image. The adviser who made the "Cuba" gag was Emmanuel Macron, the ex-banker who is now his economy minister.
The Finance Ministry estimates the proceeds from the tax amounted to 260 million euros in its first year and 160 million in the second. That's broadly in line with expectations, but tiny compared with a budget deficit which had reached 84.7 billion euros by the end of October.

 Sure, class warfare can fire up the voters, but it won't balance the budget.

Sunday, November 09, 2014

Redefining Adam Smith

I'm a big fan of philosopher and the father of modern economics Adam Smith, I have three copies of his seminal Wealth of Nations, including a rather interesting Depression Era edition.  So I was rather annoyed to read this "reinterpretation" of Smith by a Harvard researcher named Jonathan Schlefer. H/T Don Boudreaux at Cafe Hayek.

Adam Smith, often called the father of classical economics, told a very different story. Smith believed that each society sets a living wage to cover “whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without.”

Except, as Boudreaux points out, Smith isn't referring to a "living wage", not even parenthetically,but about social customs and what are considered luxury goods. Here is the sentence in context.

Consumable commodities are either necessaries or luxuries
By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.

I don't suppose they teach academic ethics at Harvard, do they?

Wednesday, July 30, 2014

Das Kapital in the Twenty-First Century

I finally finished Thomas Piketty’s envy economics bestseller Capital in the Twenty-First Century, which according to those fine people at Amazon, is actually an accomplishment in itself. I was debating for sometime whether to buy the thing, the irony of shelling out nearly $30 for a mass produced book to someone who already makes more than me decrying income inequality was certainly a factor, but was curious as to what all the fuss was about and don’t like criticizing something I haven’t read based purely on other people’s opinions.

The short story, it’s not too terrible, actually fairly readable for a voluminous book on an arcane subject. Did I find it world changing? No. Were there plenty of parts that left me shaking my head? More than a few.

First of all, the books has received a fair amount of criticism for playing fast and loose with the facts. Most famously from the Financial Times. In the scope of things, that probably isn’t the worst of his sins. The most egregious is where he completely reverses the history of minimum wage hikes in the United States. This is bad since it could not have happened as the result of a typo or misplaced cell on a spreadsheet. The only reasonable explanation is that Piketty either falsified the facts intentionally, or just neglected them in an attempt to fit his political biases. He also does a similar thing when he falsely claims that the top marginal tax rate under Herbert Hoover was 25%.

In the end, this is really what the book is about. While it makes some interesting points on investments, his research into investment returns in university endowments actually interested me enough to research further, the book is basically a political tract to rally against income inequality. Marxist references aside, the book really shouldn’t be named Capital, as capital is only incidental to the real theme of the book, income inequality. Piketty makes no analysis of capital whatsoever, aside from how he thinks it contributes to income inequality. To him it is just one amorphous blob completely devoid of distinction, which grows ad infinitum until it consumes the entire universe, leaving impoverished widows and orphans in its metaphorical wake.

This is perhaps the greatest weakness of the book. Despite its nearly 700 pages it is quite weak in the details and makes an incredible amount of logical leaps without even a theoretical support. For example he bases his predictions of the future of capital growth on the assumption that all capital gains taxes will go to zero.

Wha…? Now I know many countries are reducing capital gains rates to spur investment, and some libertarian economists have proposed reducing rates to zero, but I know of nobody who actually thinks it will be, much less that will be the global standard for the next century. It seems nothing more than a convenient way for him to apply his argument than any rational expectation.

Also in this line of thought Piketty just starts with the presumption that income inequality is not only bad, but that it is the economic measure that all others revolve around. In the introduction, he mentions that mankind has greatly improved it average economic well-being over the last 200 years, but then the subject is promptly dropped. The entire rest of the book rests with the sole concern of economic inequality, with no thought whatsoever to changes in overall well -being. Without even the slightest analysis all reduction of inequality is presumed to be good, all increases bad.

Piketty also gives no thought whatsoever to investment decisions or the behavior of the “capital class”.  Ironically, he even repeatedly refers to Bill Gates amassing great wealth as a classic example of the reason steps need to be taken to eliminate the wealthy, with only a passing parenthetical reference to the fact that Gates is giving his money away voluntarily and doing an incredible amount of good with it . In Piketty’s mind all wealth is equal. It almost reaches cartoonish levels, where he almost seems to imagine wealthy people piling their ill gotten gains in a giant vault and diving into it Scrooge McDuck style, cackling evilly. One example of this is his repeated references to the movie Titanic as an example of class distinctions in early 20th century America. Seriously? I was half expecting him to use Unobtanium as an example of resource consumption and the exploitation of native cultures.

This brings me to yet another issue with his analysis, his conflation of capital, wealth, and consumption. Piketty, like many left wing economists employs a static zero sum analysis where any wealth, especially in the form of capital, is seen as being stolen from the poor, in fact he even says at one point that wealth is partially based in theft. Piketty calls for a series of taxes; on both income and wealth so that society may take back this stolen loot. Ironically, he fails to even make a moral argument for why society is justified in confiscating property. It is just accepted as good. He doesn’t even limit this to the rich, although he argues for the elimination of their wealth, but he also calls for massive tax raises on the middle class in the United States, even though that has actually nothing to do with the subject of the book as far as capital or income inequality go. He just throws that in there because he thinks government should confiscate wealth.

His biggest fallacy though is that invested capital does not detract from society, it provides the investments needed for society to improve itself. In Piketty’s superficial view it is bad though. His logic essentially argues that a billionaire who blows through his money wastefully consuming large amounts of resources, wrecking sports cars, buying off abused girlfriends and running yachts ashore in the Mediterranean is benefiting society by reducing his capital. Meanwhile that same billionaire who lives frugally in a three bedroom  house in Omaha and builds a successful and profitable business, is detrimental to society and must be punished.

So is the book worth reading. Yeah, if you have the time and interest. Is this next word in economics? Unfortunately no, it actually takes us back a couple of generations, to a superficial understanding of the way the world works.

Saturday, July 12, 2014

Tuesday, July 08, 2014

Enough With the Soccer Politics

OK, I wasn't too surprised by Ann Coulter, like her or hate her she pretty much lives to be incendiary, it's her raison d'etre, but enough of the conservative commentators trying to make soccer political. Bernard Goldberg from the National Review:

But it’s not just because it’s so dull that I don’t like soccer. Another reason I don’t like it is because of the Americans who do like it. Most of these sports fans — a term I use with no regard for either word, “sports” or “fans” — wouldn’t know a fumble from a first down, a hit-and-run from a double play. But every four years they show up at bars and go wild when the American team ties the Tunisians zero-zero, or nil-nil, as they call it.
OK, I'm a veteran, college graduate and libertarian leaning conservative, I have been a football fan since I was 7 (although admittedly it is easy being a football fan in Seattle right now). I used to go to 20-30 Mariners games a year, back in my college days when I had more free time, but now I am a Sounders season ticket holder and a big supporter of the national team (and Liverpool FC when Luis Suarez isn't biting people). It's a fun game with lots of complexities. I enjoy watching it. It doesn't mean I want national healthcare or amnesty for illegal aliens. Although I do have to admit I love the Mexican announcers.  Gooooooooooaaaaaallllll!!!!!!

It's a game. Move on.

Friday, July 04, 2014

Book News

I've decided to publish my first novel "The Team" on Amazon Kindle, and had this excellent cover commissioned by Brandi Doane McCann. Finishing up the final formatting issues, and should be available next week. Targeting July 8th!

Tuesday, May 27, 2014

A Few Thoughts on Inequality by Age Group

The subject of economic inequality has raised a lot of interest lately, with Obama making it the centerpiece of his hold-the-senate campaign, and a book on the subject by an obscure French economist named Thomas Piketty (more on that in a future post) hitting the bestseller lists. While I think this is a fine topic for debate, I have not been very impressed by how informed the debate has gone. One thing I have been disappointed about is that nobody is discussing the terms and what they mean by inequality, everyone is just throwing out terms they don’t understand, particularly with regard to what measures are relevant, and how much inequality is not only expected, but beneficial.

In this I am largely referring to inequality across age groups. Most discussions of this subject just use vague statistics like “the top 1% have X percent of the wealth” or “the top 10% of households have more income than the bottom 50%” without defining who makes up those households. This is particularly troublesome when comparing for long periods of time, when the make-up of the demographics might change significantly and in fact the same people often move between groups at different stages in their lives.

Here is a simple example. Just to keep things easy, we will measure individual income, and leave out children and such in the small fictional country of Elbonia, of Dilbert fame.  Each 10 year period of Elbonians has an equal population of 1,000 citizens. Elbonians enter the workforce at the age of 20. They start at the low, low pay (these are low skilled Elbonians after all) of $10,000 per year, but receive a healthy 50% raise every ten years (not so much on a yearly basis really but it keeps the math easy.)

Oh, and Elbonians have a mandatory retirement system into which they are required to pay 10% of their income, at a 5% interest rate, compounded every 10 years. And when they retire, they get their retirement paid out in 20 equal installments, until they die at the mandatory age of 80 (it is a very strict country).
Now keep in mind, this is a country with absolutely mandatory inequality. Every single person in each demographic gets paid absolutely the same wage and receive exactly the same return on their pension.  There are no Warren Buffetts or impoverished unemployed Appalachians. Now let’s see how the numbers work out.

This is obviously an extremely simplistic representation, but let’s see what happens when we compare the demographics in this completely “equal” society. For simplicity's sake once again, we will assume each 10 year group has the same population.

Percentage of Income
Percentage of Wealth

Now what we find is that one demographic, those in their 50s, have 37% of the income, and more than those in their 20s, 30s, 60s, and 70s combined! Conversely, if we look at wealth, those in their 50s have nearly half the wealth. Combined, those in their 50s and 60s have over 10 times the wealth of those in their 20s, 30s and 70s, combined. And this is in a country where everyone is on the exact same payscale.

Now what would make this worse? Well, obviously if some Elbonians drew larger paychecks than others, or made more on their investments. But what else would make it worse that had nothing to do with economic inequality as we normally see it? Notice that in our example each demographic is the same size, but in a normal country with a high birthrate there are far more young people than older people, there would also be a greater disparity in income and wealth. Also, if people merely lived longer, and thus were able to work and save longer, there would also be greater disparities. These are not bad things, a growing society with healthy people who live to a long age is supposed to be good, but critics of inequality would fret over this development.

This does not mean, of course, that all inequality is good, but it does mean, that we need to look into the details of things, and realize that changes in life, getting an education, getting married, having a family, saving for retirement, and finally retiring, have a huge influence on these statistics for reasons other than some form of economic discrimination by the rich and powerful, and we need to consider this.

Thursday, May 22, 2014

Paul Krugman is an Economics Genius

Yeah, wonder when he is going to walk back this previous statement.
Well, I know about a health care system that has been highly successful in containing costs, yet provides excellent care. And the story of this system's success provides a helpful corrective to anti-government ideology. For the government doesn't just pay the bills in this system -- it runs the hospitals and clinics.
No, I'm not talking about some faraway country. The system in question is our very own Veterans Health Administration, whose success story is one of the best-kept secrets in the American policy debate.

Tuesday, February 25, 2014

An Ode to the OED

I was just a young undergrad in Russian and East European studies at the University of Washington when I first discovered the Oxford English Dictionary, in the hallowed stacks of the reference section of Suzzallo Library. Suzzallo, for those of you unfamiliar with it, is an absolutely massive library even by the standards of major universities.  There are over half a million items in its Russian collection alone. Although I had no academic use for it, the OED always held some sort of fascination for me. Whenever I passed by its score of volumes I would always grab one at random, turn to an arbitrary entry, and read through its remarkably detailed and descriptive histories of words, marvelling at the ridiculous effort it must have taken to compile it, its OED OCD, if you may.

Years later my interest only became stronger when I read Simon Winchester's fascinating history of the writing of the OED The Professor and the Madman, a rather entertaining recitation of the 8 decade long development of the first edition. It was then that I truly understood the depths of the obsessive personalities, and the sheer love of language that had gone into creating this remarkable history of the English language.

Because the OED, for those who have never spent much time reading it, is not a conventional dictionary, with a pronunciation guide, a list of definitions, and an entry for its etymological origins, it is rather, a history book of the English language, with citations for words going back a thousand years, covering the development of the word and all its meanings, connotations and subtleties.

So it is with this in mind, that I stumbled upon a 1973 compact edition of the OED in a used bookstore in Seattle the other day. Naively, I didn't even realize that this existed. How could you shrink a telephone booth sized collection of massive tomes costing as much as a mortgage payment into just two volumes and keep even a fraction of the content? I pulled it from its cardboard sheath and discovered how, they had shrunk the typeface so that each page was 4 regular pages, and had even included a cheap plastic magnifying glass, to aid those without superhuman vision.

Years removed from my OED experiences, I didn't purchase it immediately, despite the discount price, but it nagged me for weeks, so the next time I was in the neighborhood, I dropped by the used bookstore, ostensibly to look around, but really with only one target in mind.

I snatched it up and returned home, only to discover the cheap plastic glass, was in fact too cheap and too plastic. I was only with difficulty able to make out the text. A venture the next day to Cost Plus World Market though, and I was set. I returned with an old fashioned style magnifier. An item perfect in both presence and practicality.

It was now that I could pour over the text. A discussion with my significant other lead to looking up the first word, panache (movie reference: "Really, I had to look it up."). Original meaning, not flair or flamboyance, but feathers, then became plumage in military caps. Who knew?

Is it practical? Probably not. I could look up just about anything I wanted on the Internet, and wouldn't have to strain my eyes or my arms, lifting 10 pound volumes and balancing it on the edge of my desk peering through a magnifying glass, but that isn't really the point. Sometimes you just have to do something for the love of it, and because it represents something that is important to you, in this case the beautiful history of the English language, as represented in the hallowed tomes of the Oxford English Dictionary.

Sunday, November 17, 2013

Book Review: S, Classical Writers and the Meaning of Literature

I am a book guy, for lack of a better term. When I bought my new house, the first major project I started on was remodeling the basement, with built in bookshelves on which to stack my collected tomes. I have nothing against e-readers, in fact I own both a Nook and a Kindle (I prefer the Kindle Fire, quite useful device) but still when I decided to take the leap and read Ulysses I went with an old hardback version (A US first edition I proudly managed to pick up at a used book store for the paltry price of $7) even at the risk of damaging it, rather than simply reading it off the screen.

So I suppose it should not come as a surprise that I would be fascinated by a book that I had come across at the local Barnes and Noble, not for its content, in fact I was completely unfamiliar with the author (although not the creator, more on that later) or the subject of the book, but by its physical appearance.

There it was, lying on the table in a cardboard sleeve and shrinkwrapped, the story S, created by noted film and television director J. J. Abrams, and written by relative unknown college professor Doug Dorst. I could make out the format of the book based on the description and what I could see of this spine, but it was not until I got it home and ripped off the plastic with my greedy little hands, that I truly saw what I was in for.

S, is the story (as opposed to the actual novel) of a mysterious character and amnesiac who knows himself only by that initial, and the mysterious stylized letter that keeps on popping up everywhere. What S consists of though, is much more complicated, but that is not the book itself. The book itself is in the form of an old library book, published in 1949, titled the Ship of Theseus, written by the entirely fictional enigmatic author V. M. Straka, a world renowned literary legend and contemporary of Ernest Hemingway and F. Scott Fitzgerald.

OK, following along? Now the story, as opposed to the novel, is that of Straka, which is taken to the second level by the translator F. X. Caldeira, who uses the foreword and the footnotes to communicate to both the original author, and the reader, both overtly and through codes and clues scattered throughout the text.

But wait, we aren’t done yet! The story, once again as opposed to the novel, begins not with the text of the novel, or the comments of the translator, but with a handwritten note scribbled in the margins in blue pen:

Hey – I found your stuff while I was shelving. (Looks like you left in a hurry!) I read a few chapters & loved it. Felt bad about keeping the book from you, though since you obviously need it for your work.
Have to get my own copy!

Jen, who we soon find out is an English student at the fictional Pollard State University then begins communicating with the original owner of the book, a grad student named Eric. So the book itself, an aged yellowed and stained library book, complete with stamps bearing the checkout dates of previous patrons, we discover that Eric swiped it from his high school library, becomes the medium for the story, not the story itself!

So Eric and Jen communicate their personal stories and develop a relationship as they analyze the book the Ship of Theseus to discover more about what the identity of the great literary legend V. M. Straka. As a result, this work ends up existing on several different levels, not just as a book, but a tribute to books itself. The book not only contains the story, it is part of the story itself. It is the book as theater, and its pages are the stage upon which the play is presented.

Now based on what I have said, it should be no surprise that I enjoyed it immensely, although by its very nature it is an extremely complicated read without a clear ending. At some point I am going to have to go back through it and reread it to see what I missed. I think much of this intentional, as the story exists in much more than just the text of the novel, but in the actions of Jen and Eric and the backstory of the author itself. Another clue to this is that the publisher has also provided other resources to follow the story, chief among them two websites and which provide even more about Straka. Of course it is no surprise that fan generated sites have already been created to discuss the secrets of the book and share insights and discoveries.

The theme of the novel, which is even hinted to in its title The Ship of Theseus, is that of the nature of identity, which is of course also the subject of the wider narrative as to the identity of Straka. An even more intriguing point it raised though, is what is the nature of literature? What defines a great work of literature and what quality makes up a classic?

As I mentioned earlier, the original concept for this story was created by J. J. Abrams who apparently being too busy making Star Trek and Star Wars movies then had his production company Bad Robot search for an author to bring his concept to life. They found Doug Dorst, a writing teacher at Texas State University – San Marcos, known mostly for a comedic ghost story called Alive in Necropolis. Now Dorst seems like a reasonably talented writer, although I have not read his previous work, but Abrams obviously had a rather difficult challenge in front of him in casting his author.

A quick aside – I am a big fan of the HBO show Entourage, a series about a movie star named Vincent Chase and his childhood friends who make up the show’s title. A few years ago I watched one of those “making of” specials where they discussed the difficulties they had casting the young stars in the show (the only really established actor being the super agent Ari Gold, played by Jeremy Piven). The main problem being, who do you cast to realistically play a movie star, who isn’t already a movie star? The show’s producers ended up going with the completely unknown Adrian Grenier, an actor with movie star looks, if limited acting ability, which is indicated by the fact that despite the popularity of this award winning show, he has appeared in little else.

So Abrams was left with a similar dilemma, how do have someone pull off writing a classic novel written by a literary genius, without having a classic literary genius to write it in the first place? This also brings us to the more basic question, as to what defines a classic work of literature in the first place?

Now this is a subject I can hardly answer in one short essay, and this review is getting too long to begin with, but I would argue that it would consist of three things.

1.       The use of prose in a sophisticated and stylistic manner.
2.       Thematic depth which goes beyond just the storyline.
3.       A book which is appreciated over time and not just by one generation.

Now the collaborators of this work certainly can’t directly address the third point, since they won’t know the lasting effect of this book for quite some time. As enjoyable as I thought it was it may just be a flash in the pan, all but forgotten in a few years and relegated to the clearance bins of history. The first two are where they seemed to have focused their effort.

First of all, the style, while this is entirely subjective of course, and hardly universal, nobody would argue that James Joyce and Ernest Hemingway write in similar styles, literary fiction is generally regarded to have been written in some unique and well thought-out style, not just generic prose as one would find in a newspaper column. Dorst addresses this through the use of flowery, period specific vocabulary, and almost Kafkaesque imagery.  For example from the text on page 274:

He is swimming in a mountain lake, and she is waiting for him on the far bank. They are at high elevation: the flora consists solely of twisted krumm-holz formations, and the moon, fat and gold, takes up an eighth of the night sky. He strokes and kicks through ink-dark water but gets no closer to her. She waves, calls out something that might be his name, and he strokes faster, kicks harder, but gets no closer – he might even be drifting backward- and this is when he feels tiny punctures breaking the skin of his belly, thighs, feet and legs as leeches begin feeding on him, and the dread that grips him has nothing to do with losing blood or realizing he has become some other creature’s prey but rather has to do with fear of what he will look like to her when he gets out of the water, and he wonders whether perhaps it isn’t better to drown-

The second point, the use of multiple layers of meaning,  I have already addressed, which of course exist in this story even one layer deeper through the further story of the author and Jen and Eric. So does the author create the illusion of a classical work of literature through this? This is entirely subjective of course, but I would argue yes. Like any book it has its weak points, some strained metaphors and awkwardly worded passages, but it at least gives the impression of a novel which could have been considered a classic at some point in time.

Now this doesn’t necessarily mean that what we perceive as “literary classics” are the most successful novels, but that they fit into a certain perceived class, as opposed to the controversial taxonomy of what is often referred to as “genre fiction”. One can certainly have an incredibly popular and well received novel and not have it considered literary. Consider the works of John LeCarre and Tom Clancy. They both wrote spy thrillers, but the former is considered literary, while even rabid Clancy fans would not consider him a writer of literary fiction, even though as far as thriller writers go he was arguably much more successful.

This is of course an argument with no true boundaries or solutions, but that is what I found most intriguing about this work, S, it is a tribute to the book, in its physical form, worn and tattered pages yellowed and smelling faintly of mold and mildew, and it is also a tribute to the written word in general, great writers in all of their eccentricities, and the never ending question of what great art truly is. As such, it succeeds in existing beyond mere printed words on a page.

Monday, October 07, 2013

The Brilliance of James Madison

I have to shake my head at all the people who are incensed by the fact that Congress is using its budgetary powers as a check on executive authority, as if this is some new overreach. This is not a bug, it is a feature. The system was designed that way.

From Federalist 58:

The House of Representatives cannot only refuse, but they alone can propose, the supplies requisite for the support of government. They, in a word, hold the purse that powerful instrument by which we behold, in the history of the British Constitution, an infant and humble representation of the people gradually enlarging the sphere of its activity and importance, and finally reducing, as far as it seems to have wished, all the overgrown prerogatives of the other branches of the government. This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.