Yearly Archives: 2016

There is a limited case for reading Keynes today

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I am returning to the question of whether it is worth one’s while to read The General Theory since I may have been a little hasty in my previous advice. It is not to be read for entertainment, nor to understand how an economy works. But if you are interested in the history of economic theory, then that is a different story altogether. I have now replied again.

Thinking over what you had written, of course since you are an historian of economics you have to read The General Theory. You are not looking for enlightenment in the normal sense but to see how economics has “progressed”, and to understand in detail the steps along the way. Importantly, you will be reading it backwards in time, so that you are looking at it from now and trying to understand the origins of what we find in our texts. My original copy of The GT has become so fragile that I had to buy a second copy that I look at instead since the older one is disintegrating. And while I have probably read at one time or another every page of the book, I have not read them in order, from page 1 to the end. But I have read the index! And all of the footnotes. Never ignore the footnotes.

As for his definitions, Keynesian terminology is now so pervasive you will not stumble on a thing. Even his idiotic term “marginal efficiency of capital” is straightforward enough so that won’t be the obstacle it was at the start – his adoption of “marginal” concepts was a stroke of genius given when he was writing, although there is nothing “marginal” about mec and the mpc. The general problem will be that the presuppositions of the classical era will have evaporated so that it is less obvious what he’s going on about and why any of it matters. In it’s own way, because of my focus on Say’s Law, it was the first three chapters and then Book VI, which are the last three chapters, where I began and that led me to the rest. But since everything since 1936 has depended on acceptance of aggregate demand, which everyone now does accept, the book seems less idiotic to a modern reader than it did to Frank Knight and Henry Clay. And even then, since there was a consensus even among classical economists to increase spending to diminish the impact of The Great Depression, the radical nature of The GT remains in disguise. Seriously, can anyone really understand what this means and why it is so important?

“Say’s law, that the aggregate demand price of output as a whole is equal to its aggregate supply price for all volumes of output, is equivalent to the proposition that there is no obstacle to full employment.” (GT: 26)

This may be the least controversial statement in the entire General Theory over which literally no controversy of any serious kind occurred. Yet it is this statement that has made economics into the useless mess it is, wrecking our economies without hardly a soul understanding what’s involved and why it matters.

Keynes knew what he was up to. So once you understand that the entire book is aimed at demonstrating that Say’s Law as Keynes understood it is wrong, reading the book is then a walk in the park – at midnight in the midst of a hurricane.

Monumental error

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A donation request I am going to ignore. It’s a joke, and I don’t really take pleasure in piling on Hillary since she is gone for all money. I only put it up because I think it is crucial to remember how monumentally rotten Obama was as president. I give him no marks for effort, since I think of him as nothing other than an Alinskite liar, with an incredible ill will towards the United States and the West in general. But it’s nice to read all the same.

Dear Friends:

I have the distinguished honor of being a member of the Committee to raise $50,000,000 for a monument to Hillary R. Clinton. We originally wanted to put her on Mt. Rushmore until we discovered there was not enough room for her two faces.

We then decided to erect a statue of Hillary in the Washington, D.C. Hall of Fame. We were in a quandary as to where the statue should be placed. It was not proper to place it beside the statue of George Washington, who never told a lie, or beside Barack Hussein Obama, who never told the truth, since Hillary could never tell the difference.

We finally decided to place it beside Christopher Columbus, the greatest Democrat of them all. He left not knowing where he was going, and when he got there he did not know where he was. He returned not knowing where he had been, and did it all on someone else’s money.

Thank you,
Hillary R. Clinton Monument Committee

P.S. The Committee has raised $2.16 so far.

My thanks to TMc for sending along.

If this is true, how can Malcolm continue to lead the Libs?

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I’m on annual leave and away from it all with only the occasional look at the papers. But there was this at Andrew Bolt, Hinch blames Turnbull for ABCC backtrack. If it is true and nothing is done about the leadership of the party, then they are preparing for dishonourable defeat the next time we have an election.

Derryn Hinch was attacked as a CFMEU stooge for telling the Turnbull Government to add a two-year delay in making the anti-union provisions binding on companies in exchange for his vote. Now he says it was Malcolm Turnbull who suggested it to him.

Malcolm is the politically most inept person I have ever witnessed in politics, but for him this would be even more idiotic than his typically abysmal norm. The implication, as I read it from Hinch, is that he would have voted for the legislation in any case but added this two-year delay because he was asked to by Malcolm. So the two questions, in order, are:

1) Is it true?

2) If it is true, why is Malcolm still the leader?

Maybe everyone already knows the answer and I will find out when I return from the moon. But if not, then how can this be allowed to stand?

If I had a hammer

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There is another discussion, picked up at Instapundit, on folk songs and in particular, on Pete Seeger. Where we find:

What passed for “folk music” in the 1940s and 1950s, by contrast, was the remnant of English ballad preserved in isolated Appalachian communities, as rediscovered by musicologists. Joan Baez made a specialty of such things. John and Alan Lomax gathered Appalachian music, African-American music, and other scraps and shards distant from the American mainstream as an expression of authentic “folk” culture. The entire “folk” movement was Stalinist through and through (including Woody Guthrie, who was a Communist Party hanger-on and probably a member. How do I know this? My late mother was Arlo’s nursery-school teacher in the Red Brooklyn of the 1940s).

Of course, it was all a put-on. Woody Guthrie was a middle-class lawyer’s son. Pete Seeger was the privileged child of classical musicians who decamped to Greenwich Village. The authenticity of the folk movement stank of greasepaint. But a generation of middle-class kids who, like Holden Caulfield, thought their parents “phony” gravitated to the folk movement. In 1957, Seeger was drunk and playing for pittances at Communist Party gatherings; that’s where I first met him, red nose and all. By the early 1960s he was a star again.

To Dylan’s credit, he knew it was a scam, and spent the first part of his career playing with our heads. He could do a credible imitation of the camp-meeting come-to-Jesus song (“When the Ship Comes In”) and meld pseudo-folk imagery with social-protest sensibility (“A Hard Rain is Gonna Fall”). But he knew it was all play with pop culture (“Lone Ranger and Tonto/Riding down the line/Fixin’ everybody’s troubles/Everybody’s ‘cept mine”). When he went electric at the Newport Festival to the hisses of the folk purists, he knew it was another kind of joke.

Pathetic stupidity. Here is the top comment which captures my mood although he is not hard enough on these cultural vandals.

You know, sometimes I think we overthink these things. John Steinbeck was never an Okie, but he wrote a good book about them, and followed that with a lot of other good books about people he wasn’t. And sure, he was an Upton Sinclair socialist (at least) but he grew up, and his Nobel Prize address is something everyone should read.

Woody Guthrie was a child of the middle class, but he also spent some years as a hobo, and he wrote some good songs that people still love.

Bobbie Zimmerman wrote a helluva lot of songs people loved, and if he was *ever* a lefty, he’s over it now. And he clearly isn’t taking this Nobel Prize thing seriously, unlike, say, Sartre, who practically made a second career out of declining.

What purpose is served by the agita?

As for Pete Seeger, this is what I wrote when he passed away. If you don’t like folk music, or the 1960s folk revival, or folk singers or their politics, well that’s great. If you can think what purpose is served by any of this rummaging through the political past of some of the greatest folk musicians who ever lived, well I would like to hear it. Whatever you might think about their politics, their music is among the treasures of our culture which we must do what we can to preserve and protect. Listening to these critics, I am reminded of Islamists as they topple ancient monuments in the Middle East to prove some political point of their own.

Should you read The General Theory?

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I have been asked by an economist friend, who is quite well versed in macro, whether it is worth reading The General Theory and if not, what should be read instead to get a sense of what Keynes wrote. This was my answer:

My view is that there is no reason that I can think of to read The General Theory cold without some specific purpose and question in mind.

Today, it’s a book for scholars alone, even more so than in 1936 when it was published. But then, all the presuppositions of classical theory were alive so that many of the issues and statements made were clear enough to everyone so that they knew what he was on about. A great deal of time of mine has been understanding the presuppositions of classical theory – the beliefs that were so entrenched that no one even bothered to state them – so that I can read what Keynes was saying against the background of a classical understanding of how things worked. Since that is basically what I do believe is true, I can read Keynes almost the same way as Frank Knight, say, and can see things as they might have.

But what has given me an entirely different perspective is that I came to Keynes not just with the presuppositions of the 1930s in my mind, but also with the presuppositions of the 1840s. It’s with the conceptual approach of John Stuart Mill that I read the GT, and from that perspective, the book is so backwards, so incoherent and so illogical, that it defies belief to me every time I open it. But the presuppositions of almost all economists today are founded on the Keynes-Hicks-Hanson-Samuelson axis which make Keynes seem sensible and Mill incomprehensible. For me, as for Mill, it is so unmistakably true that demand is constituted by value adding supply that I am amazed that no one else can see it or why it matters. And even though a Keynesian stimulus has failed on each and every occasion it has been applied, the belief in aggregate demand independent of aggregate supply remains so entrenched that it is literally impossible for an economist to understand why the latest attempts at a stimulus did not work, and must come to the conclusion that things would have been even worse had the stimulus not been applied. It is not that they are dishonest or lack the most intensive economics education we can provide today. It is that their professional deformation, that began with their first principles course, has never gone away.

What to read instead? All I can say is that I wrote my Free Market Economics at the start of the post-GFC stimulus because there was then no other economics text anywhere to explain why a stimulus would make things worse. The best I can therefore suggest is the second edition which is the economics of Mill brought up to date as best I could do it.

Dealing with the despicable, disgusting, depraved and deranged

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I don’t think I broke any friendships during this election and only one in 2012. It’s not me, of course. I am always ready and willing to discuss politics with anyone, any time, and usually in a civil way, even if they are idiots. Here are the ten from Dennis Prager’s list of 10 Reasons Left-Wingers Cut Trump Voters From Their Lives.

1. Just like our universities shut out conservative ideas and speakers, more and more individuals on the left now shut out conservative friends and relatives as well as conservative ideas.

2. Many, if not most, leftists have been indoctrinated with leftism their entire lives.

This is easily shown.

There are far more conservatives who read articles, listen to and watch broadcasts of the left and have studied under left-wing teachers than there are people on the left who have read, listened to or watched anything of the right or taken classes with conservative instructors.

As a result, those on the left really believe that those on the right are all SIXHIRB: sexist, intolerant, xenophobic, homophobic, Islamophobic, racist and bigoted. Not to mention misogynistic and transphobic.

3. Most left-wing positions are emotion-based. That’s a major reason people who hold leftist views will sever relations with people they previously cared for or even loved. Their emotions (in this case, irrational fear and hatred) simply overwhelm them.

4. Since Karl Marx, leftists have loved ideas more than people. All Trump voters who have been cut off by children, in-laws and lifelong friends now know how true that is.

5. People on the right think that most people on the left are wrong; people on the left think that most people on the right are evil. Decades of labeling conservative positions as “hateful” and labeling conservative individuals as “sexist,” “intolerant,” “xenophobic,” “homophobic,” “racist” and “bigoted” have had their desired effect.

6. The left associates human decency not so much with personal integrity as with having correct — i.e. progressive — political positions. Therefore, if you don’t hold progressive positions, you lack decency. Ask your left-wing friends if they’d rather their high school son or daughter cheat on tests or support Trump.

7. Most individuals on the left are irreligious, so the commandment “Honor your father and your mother” means nothing to those who have cut off relations with parents because they voted for Trump.

8. Unlike conservatives, politics gives most leftists’ lives meaning. Climate change is a good example. For leftists, fighting carbon emissions means saving human existence on Earth. Now, how often does anyone get a chance to literally save the world? Therefore, to most leftists, if you voted for Trump, you have both negated their reason for living and are literally destroying planet Earth. Why would they have Thanksgiving or Christmas with such a person?

9. The left tends toward the totalitarian. And every totalitarian ideology seeks to weaken the bonds between children and parents. The left seeks to dilute parental authority and replace it with school authority and government authority. So when your children sever their bond with you because you voted for Trump, they are acting like the good totalitarians the left has molded.

10. While there are kind and mean individuals on both sides of the political spectrum, as a result of all of the above, there are more mean people on the left than on the right. What other word than “mean” would anyone use to describe a daughter who banished her parents from their grandchildren’s lives because of their vote?

I think “mean” is too good for them. Despicable, disgusting, depraved and deranged is much closer.

Socialists everywhere you turn

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My wife knows I don’t read The Oz any more so she opened the paper to the page while I sat down to dinner. And on the page there was this: Does the National Broadband Network work? What a question! Initiated by Labor and then taken up by Malcolm, with a pair of socialists responsible for the outcomes you shouldn’t even have to ask. But the newspapers have got to pretend, but it’s hard going. This is the contrast the story will provide.

(1) It’s a huge drain on the nation’s finances and a source of political division and grandstanding.

(2) But Australia’s National Broadband Network is starting to pay dividends for some everyday users.

So what we find are first discussions about what a pile of junk it all is:

The just-released Telecommunications Industry Ombudsman annual report cites a doubling in complaints about the NBN from July last year to July this year. New complaints about faults with NBN services jumped by 147.8 per cent and complaints about NBN connections rose by 63.2 per cent. NBN complaints represent 11.9 per cent of new complaints to the ­ombudsman.

Complaints span all modes of NBN delivery: fibre to the home, fibre to the node, the Sky Muster satellite service and fixed wireless. “But the rate of growth is lower than the growth of active services,” says ombudsman Judi Jones. “Delays in connections, faults including unusable services and dropout of services were regularly reported, which is of concern.”

In the bush, people battle to get NBN satellite connections and suffer prolonged outages and high costs. Being offline in the bush means not only digital isolation but potential safety hazards such as missing a bushfire alert.

All this is contrasted with Mr and Mrs Untypical who have experienced an improvement from their dial-up.

But there are some happy NBN customers. For Geoff Quattromani at The Ponds, in Sydney’s northwest, the NBN transition was effortless. Quattromani and his wife simply walked into a new home with the pre-installed NBN fibre to the home.

In their previous home in Windsor, the family had ADSL1. It forced them to be “picky and choosy” about visiting websites — those with autoplay videos were a no-no. The family could connect online only one device at a time. They couldn’t watch YouTube, and Netflix, subject to pausing and data buffering, was a pain to watch.

Great, they move from the bush to Sydney and find their internet service has improved. Billions of dollars later, we are dealing with possibly the most expensive white elephant ever, but since both sides are complicit, it will remain a political secret. Let me add a couple of comments that follow the story just to round it off.

1) I have had nothing but trouble since connecting to NBN. It is a bit like the little girl with the curl. My main complaint is with the complaints process. The call centre, which sounds as if it is in India, seems incapable of communicating with local service providers. The steps one is asked to perform to get the same advisor do not work and no notice is taken of information one gives to the ‘support person’.

I had a technician working in the Telstra pit outside my home and the Internet and phone ceased working while he was there. He assured me he would check with me before leaving. He did not. It took me a month, several no shows and two technician visits before somebody went to the pit and discovered wrong connections. I was then told I should not attribute the loss of Internet to any action by the technician in the pit.

There is poor communication between Telstra and the NBN and the inability to speak to a local technician is maddening, particularly when one has to identify oneself over the phone with full name, date of birth and drivers licence number every time one communicates with someone with an alias in a call centre.

2) I have fibre to the home in an apartment in inner city Melbourne. After multiple inconvenient and unpredictable contractor visits in the installation process, none of whom seemed to be in communication with the others, I now have a considerably worse service than prior to NBN. There are times when it is so slow during the day that it is impossible to work and frequently the internet drops out altogether. Progress??? i don’t think so. It has been suggested that I should complain to Telstra, but I know the frustration that is involved with that process so I will just battle on with a lesser service than I had before.

It is just socialism “at work” which both parties seem to prefer. And if you think that we will be spared from these idiocies by our journalist class even within our major financial press, right opposite the story on the NBN was another about Cuba, reprinted from The Wall Street Journal, which is about as cluey nowadays as The Economist. The sickening part of the story is how benign the transition appears, as if the past fifty years have not been a horror story of the deepest kind. Two examples.

1) The economy has been hit hard by the decline of Venezuela, its key ally and a source of billions of dollars in free oil for the past decade.

2) “Would a new leader be able to secure legitimacy without free elections?” said Carlos Pagni, a ­renowned Argentine political commentator.

These people are so ignorant that “the decline in Venezuela” is simply isolated from the even greater decline in Cuba. And the notion that the Cuban terrorist government that has existed since the 1950s is in any way concerned with legitimacy is an idiocy almost too breathtaking to believe. Do these people have any idea about anything?

Trump is really going to be president after all

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After a bit of a flurry of activity, the inevitable has overcome the Democrats and the left. This was not a matter of 600 or so votes hanging by a chad in Florida. This required the overturning of the results in three states in which thousands of votes would have had to be reversed, and thousands more overlooked ballots suddenly discovered sitting in a warehouse. It must have been decided that no good could come of it, so the process has now been brought to an end. Even Obama has called a halt, which makes me suspicious but this is what he has said: White House insists hackers didn’t sway election, even as recount begins.

The Obama administration said it has seen no evidence of hackers tampering with the 2016 presidential election, even as recount proceedings began in Wisconsin.

“We stand behind our election results, which accurately reflect the will of the American people,” a senior administration official told POLITICO late Friday.

“The federal government did not observe any increased level of malicious cyber activity aimed at disrupting our electoral process on election day,” the official added. “We believe our elections were free and fair from a cybersecurity perspective.”

There are, of course, other perspectives besides cybersecurity, such as illegal voting, voting by illegals and the rest, which the Democrats would prefer left undisturbed for use another day. Even so, it’s been something of a mess, pretty well as you might expect from the Democrat side.

I also think that the presence of Donald Trump on the other side suggested that there would be zero tolerance for any messing about. Trump is non-standard-issue Republican in every way, and the most important way may be that he really does intend to prevail in every encounter. He will not go down without a fight, an attitude I could not imagine Romney, for example, taking.

So bless my soul, President Trump it will be. We have been saved from Hillary so it’s all benefit from here. And then, he might even do what he promised, and how extraordinary that would be as well.

Funny business

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I get asked all the time how I can go to Woody Allen movies when he married his step-daughter and he’s such a lefty. And while I won’t deny that I have my own personal index of Hollywood types I won’t see at the movies, Woody Allen is not on it. I like his movies because they make me laugh and because they are often extended example from a course in Philosophy 101. I also like his movies because they are so conservative. I actually think he crossed the divide into my side of the political divide some time ago, but can never say it since it would ruin his reputation among those who he depends on. If you can go to Cafe Society and not see that he is raising moral dilemmas in a funny way – “you can’t kill someone just because they play their music too loud” was one of the funniest lines I have seen in a movie in a long time, specially since he sets up the situation where you might just think that there is a case. Anyway, this is all in aid of directing you to an article of mine at Quadrant Online, The Left’s Gag Reflex which is a discussion on why all genuine humour is conservative. The left likes to laugh at people and show how superior they are. But for true funny, you have to go to the conservative side. Here is a bit from the article with an extension of the point I make there:

Here is an excerpt from Ann Coulter’s In Trump We Trust:

The media successfully smeared Romney as an out‐of‐touch multimillionaire, whacking working‐class Americans with his polo mallet. He was helpless. Tasteful people don’t talk about themselves, and they certainly don’t talk about money. Not Trump! Early in Trump’s campaign, journalist Mark Halperin asked him about the “backlash against rich candidates like Mitt Romney—any chance of that with you?” Trump said, “First of all, he wasn’t rich.”

And that was that. How do you attack someone for being rich who is constantly bragging about how rich he is? Yes, yes, I’m a WASP, too—it’s appalling, embarrassing, awful—but oh, my gosh, does it work! Luckily, voting machines register only yes or no—not yes, but I hate myself.

I see this as a series of factual statements interlaced with jokes. Various statements or observations, each of which is followed by a funny bit. Here is what she wrote as a set of assertions.

The media successfully smeared Romney as an out‐of‐touch multimillionaire. He was helpless. Tasteful people don’t talk about themselves, and they certainly don’t talk about money. Not Trump! How do you attack someone for being rich who is constantly bragging about how rich he is?

I find her writing pure genius. And because I write other things with the same kind of background research, I appreciate how much goes into it, and even more how much goes into making it look like nothing has gone into it. I wish I could write like that, but such is life. I’m just happy enough that she can write like her, which no one else can, and certainly no one on the left.

ADDING A BIT MORE: I really liked this bit from Faye in the comments and I wish I had said what she said, which is what I certainly think. She was commenting on where I had written, “The left likes to laugh at people and show how superior they are. But for true funny, you have to go to the conservative side.” She then wrote:

I thought you were going on to say that conservatives laugh at themselves and are happy to set themselves up as the joke. I love this. It means they aren’t afraid.

If not being afraid is part of the conservative ethos, I am certainly not that. But laughing at oneself and the ridiculous nature of life is a conservative trait. If you would like to see an example of what I mean, you can go back to an earlier post of mine from four years ago on The best shower scene since Psycho.

As good a marker of your politics as anything

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castro-justin

Your attitude to Castro is a pretty exact measure of how out to lunch your political attitudes are. If you can find it in your heart to excuse any of what Castro has done since 1959 then you your beliefs are the very essence of what it means to be a fascist.

With Justin Trudeau, however, there is the possible excuse that he is showing paternal filial piety, but even so.