Archive for August, 2009

Denying Darwinism

Tuesday, August 18th, 2009

There is on the blogs a lot of debate as to when the idea of common descent and the tree of life originated – “genetic future”, as usual, gets it correct, “Panda’s Thumb” gets it correct, and “genetic inference”and “evolving thoughts” as always, get it politically correct.

From any political post of “genetic inference” and “evolving thoughts” you can deduce that they will lie about Darwin, and conversely from the fact that they are lying about Darwin, you can deduce their position on every question of political significance. (more…)

Chinese GDP to surpass US by about 2016 or so

Friday, August 14th, 2009

We are already seeing some people heading off to China and opportunity: “Shut Out at Home, Americans Seek Opportunity in China”

According to the CIA, not always a reliable source, China’s 2008 GDP is about 7800 000 000 000$, US 2008 GDP is about 1429 000 000 000$.  Since China is growing about nine percent faster than the US …

In many important respects it has already surpassed the US.  Innovation in the US is very rapidly drying up, while we are seeing dramatic and important innovations coming out of China – for example improvements in the synthesis of liquid fuel from coal, the new CBHD (High density DVDs at low density prices), and critical advances in the most esoteric of the pure sciences, General Relativity.  They are on the leading edge in heavy industry, consumer goodies, and basic pure research.

Although Mainland China is in part still a centralized command economy based on terror, pillage, and murder, in other important ways it is vastly more capitalist than the US. It absorbed capitalism from Hong Kong, which was a lot closer to the hard core capitalism of Manchester and the Industrial Revolution than the diluted and castrated capitalism of the US and Europe, therefore can expect rapid growth rates that catch up to Hong Kong and Singapore, thus massively surpass the US and Europe.

It is often said that America has rule of law and China does not, yet we have lost track of the difference between rule of law and rule of lawyers:  Reflect on the numerous outrageous patent-the-wheel lawsuits and the destruction of the light plane industry when lawyers discovered they could sue people who build planes for not building them as wisely and well as lawyers and courts supposedly would have.  The car industry and the vaccine industry nearly went the same way, requiring federal interventions that suspended what we are now calling rule of law for some industries, but not others.

A big Chinese advantage is that their political elite is less arrogant and less out of contact with reality.  It is willing to acknowledge that government interventions can fail, can have bad results.  When government intervention fails cataclysmally in the US, then that branch of the government is immediately given more wealth, power, and prestige, that area of the economy promptly becomes more socialist.  When government intervention fails in china, then that branch of the government eventually loses wealth, power, and prestige, that area of the economy becomes less socialist.  Thus remaining socialism in China are those parts of socialism that are functioning well, while newly expanded socialism in the US, for example accounting, finance, and perhaps soon health care, is failing disastrously.  The American governing elite is solidly immersed in a cloud of lies and denial, rationalizing away, or simply lying barefaced, about all their failures.  The Enron case led to increased government intervention against truthful accounting, rather than diminished government intervention against truthful accounting, the disastrous losses from affirmative action lending led to an increased takeover of the finance industry, and we are likely to soon see the same in health care.

The Chinese elite still tends to the traditional chinese and communist view that the political elite are the genuinely productive ones, and the entrepeneurs are parasites, and if they were to act on that view, they would return China to the poverty and chaos it has long endured.  Because of this continual threat, the entrepeneurial class in China is to a substantial extent overseas based and cyberspace based.  Chinese companies are largely run through servers located in tax havens, but such non violent defenses could easily fall to a sufficiently determined attack.  Meanwhile, however, the US government is engaged in a sufficiently determined attack on tax havens, having recently successfully pressured the Swiss to deny financial services to Americans, blissfully unaware of the increasing dependence of the American economy on entrepeneurial skills and knowledge mediated through such havens.  Interpreting the golden goose as a parasite, as a challenge to their authority and a rejection of their superior wisdom, they prepare to slay the golden goose.

Purple shirts:

Sunday, August 9th, 2009

And so it begins: Purple shirts

In democracy, it is always a winning move to raise the ante, for example politicize car designs, or to politically determine who gets the job and who gets the promotion with the state enforcing political correctness in the workplace. Since democracy is all about building the biggest coalition, and splitting the other guys coalition, it always an advantage for political activists have more stuff, and more important stuff, politically determined.

And once what is at stake is large enough, it is always a winning move to become violent, and the only answer to violence by one faction is violence by the other, thus the end stage of democracy is exemplified by the Wiemar parties, where the major parties were the commies and the nazis, and all the other parties were necessarily remaking themselves into something very similar.

Hotair thinks this will rebound against the Obamessiah, but history tells us otherwise. People love the strong horse, and despise the weak horse, and beating people up looks very much like strength if you can get away with it.

The vast majority of defaults were black and hispanic

Friday, August 7th, 2009

Hat tip Steve Sailer who provides the breakdown of defaults.

The proximate cause of the international crisis is that the US$, the international reserve currency, lost much credibility.  The proximate cause of the US$ losing credibility was massive defaults by blacks and Hispanics, and the proximate cause of the massive defaults by blacks and Hispanics was affirmative action lending to people whom I could tell at a glance from twenty paces were highly unlikely to repay their debts.

In the last days before the crash, I saw in California a steady parade of people buying expensive houses no money down whose own mothers must have been reluctant to lend them ten dollars. Lax though credit standards were, not one of them would have been able to borrow money had he been non Hispanic white.

Laderman and Reid of the Federal Reserve Bank of San Francisco have done the unthinkably politically incorrect, and though they do not directly reveal the proportion of defaults that were affirmative action, they tell us:

We also find that race has an independent effect on foreclosure even after controlling for borrower income and credit score. In particular, African American borrowers were 3.3 times as likely as white borrowers to be in foreclosure, whereas Latino and Asian borrowers were 2.5 and 1.6 times respectively more likely to be in foreclosure as white borrowers.

They also argue that CRA loans were just fine:

a CRA lender significantly decreases the likelihood of foreclosure

They obtained this contradictory result by controlling for race – in other words, they are not saying CRA loans were unlikely to default, but that a CRA loan made to a non hispanic white is (unsurprisingly) unlikely to default – in other words, affirmative action loans have no harmful effect, indeed beneficial effect, to the extent that they were not in fact affirmative action loans.

They do not directly tell us what proportion of defaulters were black and Hispanic, but since the great majority of defaulters were subprime, and 77% of subprime borrowers were black and Hispanic, and blacks and Hispanics three times more likely to default than whites …

The government can inflate its way out of debt

Thursday, August 6th, 2009

The official, on the books, on budget US government debt is troublesomely large, and growing at an unprecedented rate, but it is not intolerably large, not so large as to be unpayable, not so large as to predict ruin.  The off the books, off budget deficit is considerably larger, and no one knows how large it is or how fast it is growing, which situation may well foreshadow national insolvency. (more…)

Off budget deficit

Tuesday, August 4th, 2009

Long ago, the government found a new way to run a deficit:  Create a nominally private business with government appointed management, to carry out a government directed mission.  (more…)

The nomenclatura

Monday, August 3rd, 2009

“Hot Air” has a wonderful post:“the peasant plan”.  It lists all the benevolent interventions your beloved leaders are imposing on you for your own good – and points out that each benevolent intervention either by its nature does not effect people like the beloved leaders themselves , or, as with the health plan, people like the beloved leaders are specifically exempted from this kindly help.