Robert Hanson observes we are less inclined to kill, rape and plunder than in past centuries, and proposes some explanations for this: (more…)
Archive for the ‘economics’ Category
Moral progress
Thursday, August 20th, 2009Social decay
Thursday, August 20th, 2009Whatsoever the government sponsors, tends to turn bad. Since government funds are ill defended, grantsmanship based government funded memetic diseases will always outcompete truth based science, and similarly grantsmanship funded memetic diseases will always outcompete art based on beauty. Government funded art will rapidly become ugly and stupid. Government funded science will rapidly become untruthful and stupid, string theory as much as global warming theory. (more…)
Chinese GDP to surpass US by about 2016 or so
Friday, August 14th, 2009We 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.
The vast majority of defaults were black and hispanic
Friday, August 7th, 2009Hat 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, 2009The 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…)
“We may be seeing the beginning of the end of the recession”
Friday, July 31st, 2009
“We may be seeing the beginning of the end of the recession”, says Obama
It has become apparent that the way for economists to become important, respected, even get Nobel prizes, is to tell politicians and bureaucrats what they want to hear, which is usually that there is sound economic reasons to do whatever pleases lobbyists, special interest groups, and strategically important voting blocks.
Here is Bernanke on the housing boom back before it burst – he is telling us that the there is no bubble, that the government inflating prices will not cause crash and recession – were he to tell us something different people might think that the government pressuring banks to throw trillions of dollars in the general direction of people of the politically correct race but economically incorrect credit rating might lead to serious problems.
That does not of course mean the recession is going to get worse. What it does mean, however, is that all the very clever economic experts around Obama will tell him that things are going to be fine, regardless of whether they are going to be fine or not.
Because some of the people around Obama are crazies, notably his science Czar, craziness automatically becomes mainstream, and the good and the great start figuring out clever rationalizations why those programs are not crazy at all.
Well Obama has stuck his neck out a little, and made his prediction, so it is only fair that I stick my neck out and make my prediction: My prediction is for high unemployment, high inflation, or both, leading to ballot box stuffing and heavy intimidation of white and aged voters in the vicinity of the voting booth in 2010 and 2012
Kaufman predicts soaring unemployment
Monday, July 27th, 2009In U.S. Still Melting Jobs, Let’s Count The Ways Kaufman argues unemployment will continue to rise because of numerous hostile federal law changes and initiatives aimed against employers and entrepreneurship.
Meanwhile, the mainstream keeps predicting that unemployment is near maximum, that things will shortly start getting better.
I expect that the mainstream will be proven wrong. You just cannot go forth and smash capitalism and expect everything will just continue to work fine – though as everything goes to hell, doubtless capitalism will be blamed, and Krugman and the rest will declare that they have been proven right – that all the bad things happening are proof that capitalism does not work and therefore they did not crush it enough.
British political prisoners.
Tuesday, July 21st, 2009Two british nazis, Simon Shappard and Stephen Whittle, were charged with writing heresy. They fled to the USA, but last month were forced back to Britain, where they have each been jailed for two years and two months for publishing thought crimes: They posted on their web site that Hitler did not exterminate the Jews, but that he should have. (more…)
Goldman Sach’s hand caught in piggy bank.
Friday, July 17th, 2009They admit their hand was in the piggy bank, but say they were just feeling the money, not stealing it. (more…)
A politician speaks the truth!
Wednesday, July 15th, 2009Usually, any statement or report emanating from government, any government white paper, is a lie, but in a remarkable fluke outburst of truthfulness, the U.S. House of Representative Committee on Oversight and Government Reform has issued a report: The Role of Government Affordable Housing Policy in Creating the Global Financial Crisis of 2008
The long and the short of the report being that the government pressured financiers to issue easy money bad loans to irresponsible borrowers, which government policy eventually blew up. Of course, if you have been reading the blogs, that is not news to you. For several years you heard that was going to happen, and then for a couple of more years you heard that is what did happen, but it is most astonishing to hear it from the government itself!