Wednesday, February 27, 2008

Taubes Lecture

Thanks to comments on a previous post, I started looking into Gary Taubes' views on nutrition, and in so doing came across this lecture which I think provides a good introduction to why he's come to some views which sharply contradict conventional wisdom.

Another longer, more detailed, lecture can be found here.

Friday, February 22, 2008

Liberate Don't Stimulate

Dr. Brook has an excellent article up at Forbes discussing the latest "stimulus" plan.

For those wishing to encourage more such articles, I think that adding comments helps show publishers that people find the material useful and interesting -- which increases the odds that they will publish more of a given author’s work. My personal approach in commenting is to try to either amplify a point that perhaps space limitations made impossible for the author to treat at length, or to address a reasonable objection made by other commenters. For this article, here is my attempt at the latter:
Thank you, Dr. Brook, for this insightful and principled article. I hope that Forbes continues to bring us more like it.

As to the comments, I think cejocejo’s (#6) reflects a common misconception, one that seems to be shared by many nightly newscasters and, unfortunately, by policy-makers in Washington. In this case, as is so often true of errors, there is a grain of truth to their idea that consumption drives production -- but it is not a primary in the way they construe or present it, rather its only explanatory value is to see that production must ultimately be understood as being for the sake of consumption, i.e. it is not an end in itself. But this of course does not mean that consumption makes production possible, manifestly it’s the other way around.

This would be all too evident if you lived on a self-sufficient farm or a desert island where for every item you wished to consume you’d find that the order must be: produce then consume. In a civilized society however -- one which features the enormous benefits of the division of labor and of trade – there is an extra step, so that the order becomes: produce > trade > consume. And only here is there a perspective from which we can say consumption “drives” production, that is, if one wishes to trade the goods one produces, someone else must want them, i.e. there must be a consumer for them. For instance it would serve no purpose for me to spend my time producing 8-track players or buggy whips because I couldn’t exchange them for anything I’d want to own/consume, and therefore I’d simply be wasting my time and resources. Yet this consideration only sets the boundaries on which productive activities are reasonable in an exchange-based economy, it emphatically does not mean that consumption can occur without production, or that lack of demand is the reason there is not enough production. Indeed as Jean Baptiste Say pointed out long ago, in a trade-based economy there can be no demand without supply: each party offers the good they are exchanging (their supply) for the good they wish to receive (their demand). Thus supply from one perspective is demand from another.

Once we see through the myth of “insufficient demand”, we also see that the Bush plan is not a “stimulus” at all, it is simply another case of the redistribution of wealth (the government collects taxes and then gives a small portion of them back). It therefore can, and does, add exactly nothing to the economy. To achieve that goal, one must follow the prescription outlined by Dr. Brook in his article.

Thursday, February 21, 2008

Hatred of the Good

The NY Times has a story today showing another example of the failure of socialized medicine, this time in Britain. When reading it, ask yourself what kind of motivation is required to design a system explicitly geared towards making everyone suffer equally?

That is, in the case below, or in the others mentioned in the article, the person wishing to pay for extra care is in no way reducing the choices or resources available to others, indeed she is increasing those resources by allowing medical practitioners and drug companies to make a profit on her purchases -- thereby helping them remain in existence a little bit longer. Yet, by the egalitarian morality underlying the whole system (and animating many of its advocates here in the US), she must be punished in order that she suffer equally with everyone else.
One such case was Debbie Hirst’s. Her breast cancer had metastasized, and the health service would not provide her with Avastin, a drug that is widely used in the United States and Europe to keep such cancers at bay. So, with her oncologist’s support, she decided last year to try to pay the $120,000 cost herself, while continuing with the rest of her publicly financed treatment.

By December, she had raised $20,000 and was preparing to sell her house to raise more. But then the government, which had tacitly allowed such arrangements before, put its foot down. Mrs. Hirst heard the news from her doctor.

“He looked at me and said: ‘I’m so sorry, Debbie. I’ve had my wrists slapped from the people upstairs, and I can no longer offer you that service,’ ” Mrs. Hirst said in an interview.

“I said, ‘Where does that leave me?’ He said, ‘If you pay for Avastin, you’ll have to pay for everything’ ” — in other words, for all her cancer treatment, far more than she could afford.

Officials said that allowing Mrs. Hirst and others like her to pay for extra drugs to supplement government care would violate the philosophy of the health service by giving richer patients an unfair advantage over poorer ones.
Update: Paul Hsieh has several good posts on this topic over at the FIRM blog.

Wednesday, February 20, 2008

Links from Rule of Reason

Nick Provenzo over at Rule of Reason has several good posts up, including this Berkeley Postscript (congrats on your efforts Nick!), this interview with historian Scott Powell, and this link to a Diane West column which quotes John Lewis' must read article in the Objective Standard.

Tuesday, February 19, 2008

Mike on Regulation

Mike over at Mike's Eyes has a good post on regulation. It ends with this fantastic line which I admire both for its insight and its pithiness:
In closing I'll say that a regulated economy is a dumbed down one and a dumbed down one is an unsafe one.

Saturday, February 16, 2008

In Defense of Corporate America

I very much enjoyed this article in the Undercurrent by my OAC classmate Noah Stahl. Here's an excerpt, but be sure to read the whole thing:
Given that corporations represent an enormous benefit to our lives, what then explains the hostility they are confronted with on a daily basis? Why do so many people despise and distrust all things corporate?

The common objections are not economic—that the corporate form is economically efficient is rarely debated. Rather, the complaint is a moral one, all centered on a single word—profit. The corporation was explicitly created to achieve a single goal: making a return on investment. Those who create and manage a corporation openly seek to turn their ideas into profits, and the investors they attract are openly motivated by the same purpose. Hence the common refrain of the critics: “all they care about is making money.”
The other articles in this quarter's issue are also good and I must say that I find it very encouraging to think that students are putting out such high quality material and that their voices are being heard on campuses across the country.

Wednesday, February 13, 2008

Maybe the West Can Learn...

Good news: Danish Papers Reprint Muhammad Cartoon
To "Unambiguously Back" Freedom
Denmark's leading newspapers on Wednesday reprinted a caricature of the Prophet Muhammad that sparked deadly rioting in Muslim countries two years ago.

The papers said they wanted to show their firm commitment to freedom of speech after Tuesday's arrest in western Denmark of three people accused of plotting to kill the man who drew the cartoon, which shows Muhammad wearing a turban shaped like a bomb with a lit fuse.

The drawing by Kurt Westergaard and 11 other cartoons depicting Muhammad enraged Muslims two years ago when they appeared in a range of Western newspapers.

Islamic law generally opposes any depiction of the prophet, even favorable, for fear it could lead to idolatry.

The Jyllands-Posten newspaper, which first published the 12 drawings on Sept. 30, 2005, reprinted Westergaard's cartoon in its print edition Wednesday. Several other major dailies, including Politiken and Berlingske Tidende, also reprinted the drawing.

"We are doing this to document what is at stake in this case, and to unambiguously back and support the freedom of speech that we as a newspaper will always defend," said the Copenhagen-based Berlingske Tidende.

Tabloid Ekstra Bladet reprinted all 12 drawings.

At least three European newspapers - in Sweden, the Netherlands and Spain - also reprinted the cartoon as part of their coverage of the Danish arrests.

Sunday, February 10, 2008

Berkeley's Attack on the Marines

I've just signed a petition to protest this vile attack. See Noodlefood and Rule of Reason for details (many additional follow-ups at Rule of Reason).

Saturday, February 09, 2008

Evolutionary Perspective on Diet

I've been trying to learn a bit about nutrition, and while I don't yet have the knowledge to assess all the claims made in the low carb vs. high carb debate, I very much appreciated the straightforward and logical presentation in this paper outlining some of the evolutionary arguments favoring a paleolithic diet. HT Art De Vany.

Friday, February 08, 2008

WSJ: "Mail in the Keys"

This WSJ piece provides a good analysis of how the mortgage market will self-correct if left alone. It's well worth reading in its entirety, but here's a taste:
In most cases, once a homebuyer splits, the mortgage-securities investors are stuck with the loss. In some states, including California and Arizona, this provision is the letter of the law. In others, the bank forgives the balance of the loan -- a common practice that's unlikely to change now, given the criminal and civil investigations banks are already sweating through.

Essentially, mortgage-bond investors, seemingly unwittingly, sold homebuyers a put option, without properly pricing it, and now homeowners are exercising that option. Moreover, prime borrowers in many markets face the same incentives.

Yes, this behavior is new -- but only when it comes to houses. Americans have long been able to cut their losses from bad investments and start over. It stands to reason that when the market made houses into yet another speculative investment, Americans would do the same.

Borrowers acted rationally in response to market forces and incentives during the bubble: Buy a house because prices always go up; you can't lose. Many are acting rationally now: Mail the keys back and un-borrow the money, because prices are sinking fast while the debt isn't. When the house was purchased not as a first home but as a rental investment, the decision is even easier.

Imagine: Politicians keep saying that Americans need protection from their big, bad lenders -- but that protection is already there.
The article doesn't purport to analyze how we got into this situation, and I'm not capable of doing so either, but in general, for those who would argue that the market caused the problems so shouldn't be relied on to fix them, I'd note that while I don't think that markets are perfect, i.e. the perfect competition and rational expectations models seem to imply that markets will always and instantaneously price in all known information, I do think that much of the current malaise in the credit market comes from market interference, most notably the Fed's long-standing easy money policies -- not from a general market failure.

Friday, February 01, 2008

"Gifts From Heaven"

I just finished reading John Lewis’ masterful article on what in his words is “America’s greatest foreign policy success” i.e. America’s victory over Japan in WWII. Like his previous articles in TOS, this one forms a chapter of his forthcoming book: Nothing Less than Victory: Military Offense and the Lessons of History from the Greco-Persian Wars to World War II. I can’t wait for the book to come out, and in the meantime I highly recommend people who haven’t yet read this article to do so now. (I believe individual editions of TOS are available to those who don’t wish to subscribe, though I’d suggest subscribing since up to now the quality of the articles has generally been outstanding.)

Dr. Lewis does an amazing job of presenting the historical facts and their meaning, and without ever deviating from his subject, he manages to impart the many similarities that exist between the enemy that faced America in the 40’s and the one we’re now faced with in the form of Totalitarian Islam. From their cultures of death, to their authoritarianism and blind obedience, to their rampant collectivism, to their incessant indoctrination -- all of these are vitally important in understanding the nature of our enemies (and thereby of defeating them and permanently removing their threat).

Of course the contrast between how America prosecuted the war against Japan and the way we’re failing to prosecute our current war is tremendous and tragic, but the article sheds much light on how simple it would be to win our current war, if only we had the right ideas and the will to win.

I must admit too that at first I was a bit disheartened to think how far America has fallen, but then I chose to look at the facts as illustrating how fast things can change, if we manage to get better ideas out. Indeed, I think it’s realistic to consider ourselves as fighting for a vastly improved society in our own lifetimes, not for some ideal society 500 years down the road, when it won’t really matter to us.