Reader Mail #33

I liked this post on Gilligan's corner. As I mentioned previously, if you're a long-term buy-and-hold gold investor, your inflation-adjusted return should be 0% minus your transaction costs. The sad news is this may truly be the best investment out there!

---

I liked this post on RadGeek. If you look at each individual wire, you can't see how a cage can effectively restrain a bird. You need to see the entire cage. Similarly, when analyzing a corrupt political and economic system, you need to both analyze individual aspects and the entire system as a whole.

---

I liked this post on TechDirt. As usual, "patent reform" is making things harder for the small guys. The EFF has a "patent busting" project, which is going to be hindered by the new rules.

---

I liked this post on Lowercase Liberty.

---

I liked this post on Lowercase Liberty.

---

I liked this post on Austro-Athenian Empire.

They have a saying in the Air Force: If you’re not catching flak, you’re not over the target. Well, I’m catching the flak, so I must be over the target.

Technically, this is a logical fallacy. (If A then B, B, conclusion A - FALSE REASONING.) However, you shouldn't be discouraged just because people are disagreeing with you.

---

I liked this post on Scholars and Rogues. A politician who is campaigning for one job while serving another is being dishonest to their constituents. Technically, Hillary Clinton is cheating people living in New York. She is campaigning for President while already employed as a Senator.

The average person does not get this perk. The average person cannot conveniently search for a new job without their current employer getting angry.

---

The discussion on the Ron Paul E-Mail list is starting to get pathetic. Ron Paul is *NOT* going to get the Republican nomination. He isn't even getting enough delegates to get a decent speaking slot at the convention.

The point of Ron Paul's campaign is *NOT* to get him elected. The point was to raise awareness of the problems with the Federal Reserve, the income tax, and excessive government regulations.

The primary season is, for all practical purposes, over. McCain has practically won the Republican nomination. The Democrats will nominate either Clinton or Obama. After the first primary or two, all the "minor" candidates dropped out of the race. Effectively, states that haven't had their primary already have lost their chance to vote in the primary.

Voting is pointless. Since all candidates for President say "There should be a government", they're all the same.

---

I liked this post on No Third Solution.

If you have a 30-year mortgage for $200k, you could be saving something like $500/month, or you could get a 15-year note for roughly the same monthly payment, saving yourself oodles of interest payments.

The fallacy is that, with a 30 year mortgage, most of your payment is interest. Very little of the payment goes towards paying down the mortgage.

There's another factor to include. A 15 year mortgage typically has a lower interest rate than a 30 year mortgage, by about 0.5%. This is important, because the rate on your mortgage is typically negative.

I haven't done the calculations myself. As an individual, with mortgage rates around 6% and inflation of 7%-15%, you probably are better off maximizing your mortgage and investing the proceeds elsewhere. With a 30 year mortgage, you benefit if interest rates skyrocket, in which case you should make the minimum mortgage payment and invest the proceeds elsewhere. With a 15 year mortgage, you benefit from a larger Federal Reserve interest rate subsidy.

If I did own a house, I probably would try to maximize my mortgage and invest the proceeds elsewhere. This means I would need to refinance every 5-10 years as the price of my house rises due to inflation and I pay off my mortgage. An unleveraged investment in a house will give returns less than the stock market or inflation. Property tax rates are typically 1%-2%, and they automatically rise with inflation. Plus, there are other expenses associated with owning a house.

The details of the calculation are tricky. I expect a house to appreciate in value by 6%-10%/year. I expect the stock market to return 10%-15%/year. Mortgage rates are less than 6% right now. Therefore, it pays to maximize your mortgage. You should perform the full detailed calculation if you are comparing a 15 year mortgage with a 30 year mortgage.

Remember: "mortgage" literally means "death contract" in French. If you maximize your mortgage and invest the proceeds, you can be stuck during a recession. If you do this, you MUST make sure you have the cashflow to make your mortgage payments.

---

I liked this post on free market justice, highlighted by No Third Solution. One important point about stateless justice is that insurance and police protection will be bundled together. Combined with a "criminal pays" legal system, the true cost of police protection should be very low. The cost would be far lower than what is currently paid in taxes for police. People could pay monthly for insurance, or only hire police after they're the victim of a crime.

Under the current system, monopolistic government police have *NO OBLIGATION* to protect you. With stateless free market police, they would have an affirmative obligation to protect you. After all, you're their customer!

---

I liked this post by Wenchypoo. An election is merely a form of marketing. With all the hype surrounding elections, people are told what political issues they should care about.

In an election campaign, they never debate "Should there be a government?" If you look at all political debates, the possibility of a stateless society is never mentioned or considered.

---

I liked this post on No Third Solution. When the government sends aid to victims of a natural disaster, this is a form of communism. First, dependence on the Federal government discourages self-reliance. Second, this intervention means that people living in areas with a high natural disaster risk don't bear the true cost of their risky home. Free market insurance and aid programs could perform this role far better than the government. Of course, since the government "helps" whenever there's a natural disaster, free market aid organizations can't develop.

---

I liked this post by Wenchypoo. If a drug company performs research that shows a drug is harmful or not beneficial, then that research is never published. This causes *HUGE* selection bias. Suppose a drug company performs 10 experiments involving a drug, and due to random chance one of them shows a benefit, and the other 9 show no benefit or harm. The drug company can just publish the one study that showed benefit.

My experience with anti-psychotic drugs is that they are VERY HARMFUL. They had negative side-effects, such as the inability to read or concentrate, that would not be measured by any drug company study.

The drug studies I've read NEVER do a proper placebo test. You need *4* groups of people to do a proper placebo test. The 4 groups are:

1. Diagnosed with illness, given placebo
2. Diagnosed with illness, given test drug
3. Not diagnosed with illness, given placebo
4. Not diagnosed with illness, given test drug.

Almost every drug study IGNORES (3) and (4)! With anti-psychotic drugs, their harmful effects on "normal" people would be obvious if a proper placebo test were performed. The point of (3) and (4) is to make sure the drug doesn't cause much harm in an otherwise "normal" person.

---

I liked this post on No Third Solution about gold clauses. Gold clauses are useful in long-term contracts where one party desires protection from inflation. There is a risk that Congress could tamper with gold clauses and declare them legally unenforceable, as happened in 1933 with the default on the dollar. Is that an unconstitutional "ex post facto" law?

---

I liked this post on No Third Solution. Someone reads "FSK's Shared Items", so setting that up wasn't a waste of time.

---

I liked this post on Stumbling and Mumbling. It refers to the term "bansturbation". This means that the government bans things just for the sake of banning them. The ban on low-mpg cars falls under this category. Also, the ban on incandescent light bulbs falls under the category of "bansturbation". More controversial, but more accurate, the ban on marijuana also falls under the category of "bansturbation".

---

I liked this post on Techdirt. A newspaper in Madison, Wisconsin is changing its print edition to only twice a week.

With good online content, this may not be such a bad strategy.

---

I liked this post on Techdirt. In West Virginia, someone was planning on publishing a "tax map" on the Internet. Presumably, this is property taxes by area, either as a % or absolute $ amount. The red market is seeking an injunction preventing the map from being published.

My reaction is: "WTF? Why would it be illegal to publish a list of property tax rates?"

---

MadMoneyMachine.com asked for permission to include my post on the Remnant in one of their podcasts. According to the site owner, they're one of the top 25 investment podcasts on iTunes.

Surprisingly, according to Google Analytics, MadMoneyMachine.com has only directed 7 visitors to my blog! That's an embarrassingly small number.

I don't recognize intellectual property as being a legitimate form of property. I consider this blog's content to be "public domain". When you post something on the Internet, for all practical purposes it *IS* placed into the public domain. It isn't practical for me to go around sending DMCA notices. Besides, as an obscure author, you WANT people to copy/link/read your stuff.

However, if you do copy my stuff, I ask that you provide a link back to my blog. That is not a legal requirement. I get offended when I see someone copy my stuff without a citation. The worst offenders are spam sites. A spam site is a bunch of text snippets and links, trying to game Google's search engine. Originally, my blog got banished to Google's "supplementary results" due to a spam site copying my blog. I have enough incoming links and original content to avoid being banished to "supplementary results" again.

My only comment for MadMoneyMachine.com is: "Only 7 referrals! You couldn't do better?" By comparison, lewrockwell.com directed over 200 visitors to my blog when they cited my post on Real GDP Growth Has Been Negligible Since 1990 (my #3 all-time post now!). That post still gets a lot of traction from search engines.

---

I liked this post on No Third Solution. David Z is hosting the Market Anarchist Blog Carnival for February 2008. As I observed when I hosted, most of the posts submitted were garbage. The most relevant posts that I've made recently are:

• Agorist Example - The Midwestern Bread Club
• The Remnant
  

For now, I consider each "Reader Mail" post to be its own mini-Carnival. From my point of view, hosting and submitting to blog carnivals is a waste of time. If you like something on this blog, just write about it on your own blog and post a link. When I see something I like, I'll include it in a "Reader Mail" post.

I think Francois Tremblay is angry with me for saying "Most of the submissions were crap." I think that is a problem with blog carnivals in general, and not specific to the Market Anarchist Blog Carnival. Until there's enough content that the crap can be filtered out, it's going to be that way. Plus, I think there are a bunch of people who go around submitting to as many blog carnivals as they can, even if they're off-topic.

I've decided that my "Reader Mail" posts are my own Carnival. If you're a regular reader of this blog and are hosting a Carnival, go ahead and include any relevant posts. According to Google Analytics, it isn't worth my time going around submitting to Carnivals. The ROI, compared to writing more good content, isn't worth it.

At this point, IMHO my blog has a decent number of regular readers. I should focus on "good content" instead of "promoting my blog"

---

It looks like I'm nearly fully recovered from my illness. However, as soon as I start feeling better, I'm at risk for relapsing again! It seems that my abilities increase and then crash when I get hospitalized. I need to figure out a way to break the cycle. I'm working on improving my diet and vitamins and supplements.

---

I liked this post on Techdirt. Some people were discussing local political issues at an online discussion forum. The city council sought an injunction that the online discussion forum be shut down!

That sort of policy seems completely silly to me. It's like the politicians are saying "We don't want discussion occurring in a forum we don't completely control." Even if some of the participants were being rude, that's NO REASON to shut down an online forum. Besides, some of the participants could have been acting rude just to create an excuse for shutting the site down!

---

I've seen this story on several sources. The NFL has a rule that public viewings of its games are limited to a 55 inch screen. This has caused several church "Super Bowl" parties to be shut down, due to copyright violations by the NFL.

Why are sports bars exempt? There is an exemption written into copyright law. Bars are allowed to show the Super Bowl on screens larger than 55 inches, and there's nothing the NFL can do. In fact, the NFL would have to legally pursue them if it could, because the NFL would forfeit its copyright if it didn't aggressively pursue violators.

As usual, government laws have no sense or legitimacy.

---

gilliganscorner has left a new comment on your post "Reader Mail #32":

There's nothing intrinsically evil about a group of people getting together and pretending they're a corporation. The problem is the massive government subsidies provided to corporations, backed up by state violence.

---

I don't like the concept of a corporation. I can't remember if you said it before, or I thought of it myself, but it seems to me that a corporation behaves like a psychopath because of the limited liability aspect of it. If the people in charge of the corporation were held personally liable for decisions that caused harm to others, those said people would not behave as to cause harm to others.

In other words, a corporation invites a moral hazard. If an amoral person thinks they can get away with something, knowing that a judge will not likely pierce the corporate veil, they will likely perpetrate harm.

The entire problem with corporations is the government subsidies and legal perks they receive. In a stateless society, a group of people can get together and pretend they're a corporation, if they want to. However, they receive no legal benefits for doing so.

The biggest subsidy that large corporations receive is negative real interest rates. Currently, the Fed Funds Rate is 3% and inflation is 7%-15%. When a large corporation borrows money, it gets to borrow at a rate of 5%-6%. When an individual or small business borrows money, they have to pay 8% or more. This difference alone is a huge benefit for large corporations over individuals.

Government regulations protect large corporations and their market position. The cost of compliance with a regulation is typically fixed. This means that a large corporation can more easily afford the cost of regulation compliance, compared with a smaller competitor. Management and owners of large corporations love regulations, despite all they publicly say to the contrary!

Another big problem with corporations is "sovereign immunity". In the days of a king, the king had "sovereign immunity", which meant he could do whatever he wanted, because he was the king. Corporations get a similar perk in the present. Unless their conduct is truly egregious, corporate management is typically immune from prosecution or personal liability if they do something wrong. Corporate management gets the same "sovereign immunity" perk that kings used to get. In a stateless society, corporate management and owners would always be held personally liable if they do something wrong.

Another negative aspect of corporations is anonymous ownership. In a stateless society, all property must be owned individually or jointly by a group of people. In the case of joint ownership, each would be assuming full liability in the event of a loss. In the late 19th century, the Supreme Court ruled that corporations had the right to own property and enter contracts, citing the 14th amendment.

These perks are the primary reason why corporations are evil. They receive a direct financial subsidy from the Federal Reserve in the form of negative real interest rates. They receive protection from competition via government regulations. Corporate management receives "sovereign immunity", protecting them from responsibility when they do something wrong.

You might say "Without corporations, how will large ventures be funded?" Businesses would have to grow by selling bonds or with reinvested earnings. There would no longer be a massive government subsidy to large corporations. Associations of people acting together could replace many of the features of large corporations. For example, an "air conditioner manufacturer's guild" could agree to mutually repair and guarantee the work of other members. That would have the same practical effect as a large corporation that manufactures air conditioners.

Ismail has left a new comment on your post "Reader Mail #32":

I am a Muslim who finds your views interesting, nothing to worry about as to why you keep getting pro-Islam people on this board.

Islam is not a slave religion. 'suffering' is a fact of life, we get old, we lose loved ones, we get ill, we get hurt, we get divorced, we feel lonely etc. To say that this is just random with no reason to it is nihilistic.

What happens after death? Basically you appear in existence from nothing, you construct and identity...an 'I' if you are sane and have a 'normal' unbringing...you live for a while and then you die.

The atheistic assumption that you appear by chance, live by chance and die by chance...is foolish. You are contingent and you are sustained by the non-contigent. The non contingent created and manifested you, to be its mirror. When you sleep dreams are similar to a life that is unlike your waking life. Sometimes dreams are so vivid it is difficult to know if you are not really living it until you wakeup...death is a state when your soul will be something you either like or hate..if you had a clear conscience in life, your soul will be clear and happy. If you were envious, angry, arrogant these staind will cause you pain and suffering.

You can consider me a fool for believing this stuff, to each their own.

I fail to see how if there is no life after death, no God or anything else how it cannot lead to nihilism and genocide. There is no difference in killing lots of people just because one feels like it. Stalin is a good example, Bush (a fake Christian) and Blair are other more recent examples.

Of course, you have a right to believe whatever you want. A strict interpretation of Christianity or Islam would be far superior to what the "leaders" do in practice. Even better, it's possible to live a morally just life without fear of some sort of divine retribution or payment for doing so.

I agree that Bush is a "fake Christian". He didn't convert until after he got politically active. Similarly, many of the political Islamic leaders are also "fake Muslims".

Christianity and the monopolistic State grew in popularity at the same time. The idea of "a single, all-powerful god" and "a single, all-powerful State" are the same! Subconsciously, God and the State are the same!

Are you going to issue a fatwa against me for saying "Christianity and Islam are a bunch of lies"?

Kevin Carson has left a new comment on your post "Reader Mail #32":

While we're on the subject of nutritional supplements, lithium orotate is also worth checking out. It is far more biodeliverable than the lithium carbonate MDs prescribe (and so you can take maybe one-twentieth the amount of elemental lithium), and without the bad side-effects. Although it promotes production of serotonin, unlike SSRIs it doesn't interfere with your body's normal feedback loop, so there's no danger of all the mania and homicidal/suicidal tendencies that go with serotonin syndrome.

Really? I didn't know that, naturally, people need a certain amount of lithium? I thought that lithium was pure poison?

I've battled chronic depression for several years. Drastically cutting back the dosage of metoprolol I was taking for blood pressure solved most of the problem, but I started taking lithium orotate (an OTC trace mineral supplement you can buy in most healthfood stores or probably from Amazon) and noticed a significant improvement in my mood in the past several weeks.

This is something worth mentioning. *EVERY* drug has side effects. If you take blood pressure medication, there are almost definitely negative side-effects. Currently, I'm taking nothing but some dietary supplements and vitamins. Does anyone know anything about SAM-e? I noticed that does seem to be helping.

I mentioned earlier that the sort of food coming out of America's corporate agribusiness system has drastically increased the ratios of Omega-6 to Omega-3 oils, which has a terrible effect on brain chemistry. I failed to mention that mineral depletion by agribusiness has also had a similar effect on the amount of trace lithium in the soil, and therefore the standard American diet is much lower in natural levels of lithium over the past several decades.

What's the story with "Omega-6" vs. "Omega-3" oils? Should I get some of those "fish oil" pills, or just start eating fish more often?

I didn't know that a certain amount of lithium is needed. Of course, the level of lithium prescribed by my psychiatrist would be *WAY* too high. Also, lithium occurring naturally in my food would be preferable to the toxic lithium prescribed by my psychiatrist.

Kevin Carson has left a new comment on your post "Reader Mail #32":

BTW, Ismail: I was struck by how Thomistic your argument from contingency sounds. But I know so little about the history of Scholastic philosophy, I wouldn't be at all surprised if Aquinas got it secondhand from the natural theology of Avicenna or some other Islamic Aristotelian.

What is "Thomistic"? This comment isn't addressed to me, and I don't understand it anyway.

Kevin Carson also knows a lot about religion?

Anonymous has left a new comment on your post "The Defect of Schools":

Agree with all but the last, that home schooling is the only alternative. http://en.wikipedia.org/wiki/Montessori_method is great for parents who can't do home schooling. Mixed ages, learn at own pace, no emphasis on formal testing, kids help teach each other.

I hadn't considered the possibility that there were schools that followed non-standard techniques that work. I'll put Montessori schools on my "consider" list when/if I have children.

Anonymous has left a new comment on your post "The Defect of Schools":

fantastic piece of work, short and without jargon, can be understood by even very simple readers.

I don't consider my readers to be "simple". I like to explain things clearly and understandably.

It would be nice if I could blog as a source of income. I'm not at 100 visitors/day, so that isn't a serious option (yet).