Thursday, September 03, 2015
Free Kim Davis!
I am skeptical of the SCOTUS ruling in Obergefell, because it was based not on law or the Constitution but, according to Justice Kennedy, the weird notion that marriage is a "freedom." That's nonsensical. Regardless of what one thinks of same-sex marriage (I'm for it) the SCOTUS ruling was incoherent. If we can apply "that's a freedom" indiscriminately to any "popular" (i.e. PC) cause of the day and thus claim it is protected by the Fourteenth Amendment, there are no limits to government power. One could claim, for example a desire to be free from neighbors who own guns, or who practice a religion you don't like, or have political beliefs you believe should be suppressed, and if five members of SCOTUS agree, why, you have a "Constitutional right" that the Founders enshrined from the start. Good grief.
But regardless of this, SCOTUS ruled, that's law, and Davis, as a government official, must follow it, right? Well, no. SCOTUS ruled that it is unConstitutional to discriminate on the basis of sexual preference. Davis has not done that. She issues no licenses to anyone. She cites her inalienable right to practice her religion, protected by the First Amendment. I'm skeptical of this argument, because it could be argued that her job is incompatible with her religious beliefs, and she has no inalienable right to this particular job. I would make this argument myself, except that, as everyone ought to know, government officials have no legal obligation to provide particular services to anyone. For example, the courts, including SCOTUS, have repeatedly ruled that the police have no duty to protect any person. This is not a small point. If you obtain an injunction against someone, the police have no legal obligation to enforce it. SCOTUS says so. If that failure results in, say, the murders of your children, too bad. You cannot demand they "do their duty," because no such duty to perform exists.
So explain to me where, in the U.S. Constitution, the Supreme Court or anyone else in the federal government is given power to demand a county clerk provide services. They claim they have no authority to tell the police to protect you from a murderer, but they can demand a county clerk issue you a marriage license? Bah! I cry "hoax!" It's a fraud.
That's damning, but it's a minor point. Here's the real problem with the persecution of Davis.
SCOTUS ruled that discrimination against same-sex couples is unConstitutional. OK. Davis did not discriminate -- she issued no licenses. Heterosexual couples did not receive licenses. Furthermore, nothing in Kentucky law permits her to issue licenses to same-sex couples,* because 1998 Ky. Acts ch. 258, sec. 4 reads:
402.005 Definition of marriage
As used and recognized in the law of the Commonwealth, "marriage" refers only to the civil status, condition, or relation of one (1) man and one (1) woman united in law for life, for the discharge to each other and the community of the duties legally incumbent upon those whose association is founded on the distinction of sex.
Let that sink in. Nothing in Kentucky law, or any other law, permits Mrs. Davis to issue marriage licenses to same-sex couples. And SCOTUS says she is forbidden by the U.S. Constitution to discriminate on the basis of sexual preference. Never mind her religious convictions, she took an oath to uphold both the U.S and Kentucky Constitutions and laws. Frankly, there's no argument that she failed to do so. In fact, any Kentucky clerk who issues a license has violated their oath, and the law. Davis, on the other hand, did not.
Don't forget, your semi-faithful correspondent favors same-sex marriage, sufficiently that he (er, I) donated 200 USD to the ill-fated effort to defeat California's Proposition 8 that outlawed same-sex marriage. I think the public needs to be persuaded to accept, as a legal matter, same-sex relationships. The idea that it must be imposed by judges, and by means of legislating from the bench, is utterly unacceptable.
That Mrs. Davis should be incarcerated for following the law, instead of political fashion, is tyrannical. The judge involved, Judge Bunning, ought to be impeached, prosecuted, convicted, and imprisoned...after having been tarred and feathered, of course...although I'm sure legal "experts" can construct explanations as to why that's improper and impossible and judges can and should do any damn thing they please without repercussions of any sort.
Well, they are wrong. Free Kim Davis!
*Credit where it's due: The point about Kentucky law is from Mike Huckabee. I don't often agree with Huckabee, but this is an extremely important observation from him.
Sunday, August 30, 2015
Champions of racism and violence: "Black Lives Matter"
One of the more ridiculous manifestations of political correctness is the "Black Lives Matter Movement" (hereafter BLMM; BLM is reserved for an agency of the Department of the Interior). In comments on my previous post, an anonymous reader took me to task for misunderstanding the BLMM. "Of course Alison's life matters, what happened to her is an absolute tragedy but you're an ass for bringing race into this. You have missed the entire point of the black lives matter movement. Everyone wants to be the victim" writes Anonymous.
Whether I'm an ass or not is not for me to say, but if I am it is not for what Anonymous charges. There's no point in debating Flanagan's racism. In his manifesto, Flanagan imagined himself waging race war. He, not I, brought race "into this." I had already heard this when I wrote my post. Victim? Anon misses my point -- I despise victimhood and people who make victimhood an important part of their identity. But let's get to Anonymous' real charge -- that I have missed the point of the BLMM. Well, no I haven't. BLMM is a racist, pro-violence, leftist totalitarian movement. Consider the following BLMM claims:
- To say "all lives matter" is racist.
- To say "white lives matter" is racist.
- To say that police officers should be killed is not racist but a perfectly legitimate act of political expression.
* It may seem a minor point, but the very name "Black Lives Matter" is stupid. What is a "black life?" There are black people's lives and white people's lives, etc. But "black lives?" I wonder if Clarence Thomas is leading a "black life..." or Peggy Hubbard, for that matter.
Wednesday, August 26, 2015
Don't forget, it's racist to say "White Lives Matter."
Tuesday, August 25, 2015
Back in Action
Wednesday, July 08, 2015
Other views on Greece
Peterson Institute for International Economics (PIIE) does very good work. This post by analyst Angel Uribe nicely documents that austerity worked until Syriza upset economic growth, and that the entire Greek debacle has become a battleground for differing economic schools of thought.
Jacob Funk Kirkegaard, also of PIIE, has quite a few posts on Greece. Here's one of his best, in which he nicely sums up the intransigence and irresponsibility of Syriza and why Greece's creditors must be unforgiving with them.
There are numerous other worthwhile posts on this subject on PIIE's Real Time Economic Issues Watch.
How many people are aware that over the five years of the Greek crisis France has managed to shift almost all of its holding of Greek debt -- both by banks and by the French government -- to Germany, Italy, and Spain? No wonder it's the French who are most adamant that Greece be given another chance while nearly everyone else in Europe is disgusted with Greece.
And despite the new Finance Minister, Syriza continues to be a clown act.
The Independent Institute's analyst Ivan Eland concisely summarizes the argument that it is Greece's own financial irresponsibility to blame and simultaneously documents (and nicely criticizes) Paul Krugman's position that continuing to pour other peoples' money into Greece indefinitely is the answer. And in the comments you'll see hostile responses from readers who imagine themselves "libertarians." Don't these "libertarians" realize they are endorsing raising taxes on people in the rest of Europe (and all over the world since IMF is a party here) to pay for Greek government spending? Good grief!
I cited previously, but in sp!ked Tim Black makes a good case for why Greece should simply get out of the eurozone.
Analytic philosopher John Pepple has two nice posts on Greece that distill the complex issues to a few clear basic points, something he tends to do quite well. The first, on the disadvantages of debt, I don't fully agree with since, as I've argued, there can be good reasons to take on debt, but he is largely correct -- a person, family, firm, or country should avoid debt unless there's darned good reason for it. Pepple's second looks at the (IMO ridiculous) argument that the Greek referendum was a triumph for democracy, and asks if perhaps all the people in other countries who are expected to bail out the Greeks shouldn't also have a referendum to see if they want to have to pay. Like most impertinent questions, this one is quite appropriate.
Finally, from an otherwise hideous blog on personal debt restructuring (from which I took the "debt free" picture a few posts down), some very perceptive advice:
Here’s the biggest tip anyone could possibly give you to reducing your debt and staying out of debt once you get everything paid down; stop spending more than you make!!!
Greece, are you listening?
Tuesday, July 07, 2015
The Greek Debacle
Initially, austerity worked. The Greek economy began to grow. But being self-supporting was, apparently, unacceptable to too many Greeks, and the radical left Syriza party was brought to power. Prime Minister Tsipras, former Finance Minister Varoufakis, and current Finance Minister Euclid Tsakalotos seem to be a pack of madmen. They appear never to have serious proposals to offer to fix anything, and have nearly destroyed the Greek economy which, since Syriza came to power, has been declining. All are Marxists, an utterly silly and bankrupt philosophy... so what did we expect?
In Sunday's referendum, nearly two thirds of Greek voters rejected curbs on spending. They also rejected paying for it themselves. That is, this was a vote not to leave the euro, but to have the rest of Europe continue to finance, indefinitely, Greek over-consumption. (You're over-consuming if you systematically consume more than you produce.)
Most rational observers think this vote is a tragedy. I tend to think this. However, not all agree. Radical socialists (they hardly qualify as rational observers, I admit) are quite happy with the result -- the revolution against the neoliberal hegemony has begun, I guess. Keynesians (e.g. Paul Krugman) also seem to be supportive. After all, in Keynesian theory what is needed is demand side stimulus -- pour money into Greece, let Greeks spend like crazy, and the place will explode with productivity!...only Greece's problems aren't from a business cycle but are from systematic, long term fiscal irresponsibility. While Keynesianism is nonsense on stilts, even on Keynesian terms the Keynesians are wrong, Greece isn't suffering from a business cycle downturn. And there's one other nutty band that seems gleeful over the "no" result -- these are clueless libertarians who imagine that somehow the Greeks have rejected the EU, ECB, IMF, and all the rest of that "new world order" stuff. I've read a fair amount of commentary, mostly in blog comments, by these confused people. They don't seem to realize Greeks generally remain insistent that ECB and IMF bailouts keep coming in. Yes, the Greeks rejected raising taxes in Greece, but this simply means they want German, French, UK, and American taxes raised. Marxists, Keynesians, and clueless libertarians... what strange comrades-in-arms!
There's one other group that likes the "No" vote, and this is those who believe this will help destroy the euro and EU. I have some sympathy with this position as well. But I hasten to add it is quite a different one from any of those in the previous paragraph, since it readily admits the contemptible irresponsibility of Greeks as a whole. But anything that helps break the grip of EU bureaucrats on power can't be all bad. Tim Black's piece in sp!ked makes this case rather nicely.
My own official Unforeseen Contingencies position has already been made public: kick Greece out of the Eurozone. Greece will be in economic hell for a period (no economy can survive without a medium of exchange). And unless Greece becomes more, rather than less, free market, it will be there a very, very long time. While I am not a fan of fiat currencies, I am not anti-euro, but euro-ambivalent. Having a single currency across many trading partners greatly lowers transaction costs and facilitates trade. True, it also makes it nearly impossible to use monetary policy for macroeconomic stabilization, but that may well be another benefit. (Friedman says so, and Mises and I concur.) Would the world really be better off with a return to lira and drachma and such? And even though I hate the bureaucratization of Europe via the EU, I don't want to see a "hard unwinding" that would strengthen the hand of Putin, Islamists, and other threats. So may the European leaders kick Greece out of the eurozone, hope they get on with fixing their country by themselves, and start fixing Europe.
And because there seems so little clarity in so much of the public discussion, let me emphasize something else: Greece's debacle is a tragedy, and many innocent people are being hurt in it. Some are Greeks, who are watching their economy go to pieces and have no control over anything, and many more are taxpayers in Europe and elsewhere who will ultimately be stuck with the burden when Greece defaults or gets further debt forgiveness. When I condemn Greece and Greeks in general, the reader should understand that responsibility is always an individual matter, never a collective one.
Well, OK, maybe this is a lengthy post. Links will appear in a separate post.
The basic principle is simple: borrow to invest, do not borrow to consume. Suppose some investment -- e.g. capital for a business, education and training, a road or bridge -- would generate an expected return of, for example, 5%. Suppose further one can borrow at a lower rate, say, 3%. In such case, borrowing for the investment is probably warranted; certainly it is sustainable. One could indefinitely borrow under these conditions, so long as they last. (Note, BTW, everything is in real terms -- adjusted for inflation -- and I am abstracting from considerations of discounting, i.e. time preference, as well as risk aversion. None of these concerns change the basic principle here.)
Bottom line: Borrowing for investment can be justified if the investment has sufficient chance of paying for itself, including the cost of borrowing.
Well. what about borrowing for consumption that one otherwise could not afford? In general, this is a terrible idea. It can almost never be justified, and it is certainly not sustainable indefinitely. If the borrower does not and won't have sufficient productivity or assets to pay off the debt, she/he/it becomes insolvent. Imagine borrowing for an expensive vacation or an expensive house, knowing you'll likely never have enough to make the loan payments, or imagine a country, call it Greece, borrowing to pay for salaries for legions of unproductive bureaucrats, free health care, munitions, and retirement pensions. None of them -- not the vacation loan, the home loan, nor the loan from the IMF or ECB -- finances anything that has a chance of ever earning a return that will pay off the loan. If the borrower doesn't have sufficient productivity or assets, default ensues. Borrowing at 5% to finance things that pay 0% (or anything less than 5%) is unsustainable and -- usually -- foolish.
These are very simple principles, but they seem to be entirely missed in much of the public discussion of debt. Take student loans, for example. It makes perfect sense to borrow for a college education in, say, chemical engineering. People with bachelors degrees in Chem E have the highest starting salaries of any specialty in the U.S., near zero unemployment, and excellent prospects for growth. If borrowing will help your future productivity to soar, borrow! Contrast this with majors such as Queer Studies, Feminist Studies, or Islamophobia Studies. While a few snake oil salespersons might make a killing with these disciplines, the average student would be ill-advised (i.e. damned stupid) to take out expensive loans to finance a major in such self-indulgence... this would be nothing but consumption, and of something that very possibly reduces one's future productivity by interfering with one's ability to think clearly. (Digression: I confess that Islamophobia Studies doesn't yet seem to be a major anywhere in the U.S., but give it a year.) (BTW, I recommend reading the first "Islamophobia" link carefully -- the editorial statement is so grammatically boggled it verges on being illiterate... quite funny!)
I've been careful to say that there are exceptions to the rule that one should never borrow to consume, i.e. for a purpose that doesn't pay for itself. Why? Suppose one finds oneself in a temporary shortfall. Say, a person is unemployed, but knows that eventually they'll have good job prospects... borrowing for consumption makes sense in such a case. I did it myself, just after receiving my Ph.D. I had a period of two semesters with little income, but knew I would have a good paying position by the next year. I survived largely on credit cards (plus a little consulting work and my elk hunting skills). When I did begin working, I was able to pay off my debts from the year in less than a semester, and even began enjoying the game of seeing how much austerity I could impose on myself to get them cleared faster.
For a country in a crisis -- say, a war for survival, or a business cycle downturn,* it is arguable that the situation is similar -- borrowing to sustain non-productive consumption over the short term might be defensible. But it certainly cannot be a way of life -- it is not sustainable.
These principles seem largely to have been missed in public discussions of Greece. For a long time, Greece has been borrowing for consumption. Sunday's "No" vote wasn't a vote to leave the Euro; it was a vote to not cut consumption spending and to not have Greeks themselves pay for this spending... it was a vote for unsustainable borrowing and for further economic ruin for for the Greeks.
* I don't actually believe in borrowing for Keynesian countercyclical fiscal policy as a business cycle remedy, but that's an argument about macroeconomic theory rather than debt per se.
Sunday, July 05, 2015
Memo to the EU
From: Unforeseen Contingencies
EU, the Greeks have overwhelmingly rejected your offer of further funding. Your request that in return for other peoples' money they cut defense spending, reduce government bureaucracy, stop giving tax breaks in tourist areas, cut pension bonuses, and start working were too much for them (their absurdist Finance Minister deemed these "terrorism.")
The Greeks have spoken. Stop discussing bailouts with them. Let them go their own way, on their own. They will suffer like crazy, and go through economic hell, but it will be good for them. As this Greek entrepreneur correctly points out, they can make their country work if they stop whining, get off their crybaby Greek arses, and start producing at least as much as they consume.
No further funding. Cut them off. In the long run, it will be good for them.
Note: I regret I can't figure out how to post the video interview with entrepreneur Nektaria Kakousi. everyone should hear her insightful analysis. Click the link. It's short and beautiful as well.