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Wednesday, February 13, 2008

Reader Mail #34

I liked this post on Check Your Premises.

Through an innovative survey question, the suffering of one human was found to be equivalent to the suffering of 11,500 farm animals

In other words, one person is equivalent to 11,500 farm animals. Does that mean that, for every 11,500 farm animals, that state gets an extra person for the purposes of forming Congressional districts?



It's always amusing searching for my blog in Google. For some reason, the "link:" keyword yields nothing. Searching for my blog URL is more productive. According to this page, someone did "domain tasting" for fskrealityguide.com. Someone registered the domain and then abandoned it. I'm unconcerned. If I wanted to self-host my blog, there's a ton of potential names I could use. I already own 2 domains that I don't use.



I accidentally published this post too early. I clicked on "publish" instead of "save as draft". Only those of you who subscribe to the RSS feed would have noticed. Otherwise, the post disappeared when I re-saved it as a draft.



I liked this post by Zhwazi. According to Zhwazi, the tone on Ron Paul Internet discussion forums has changed, now that it's obvious he isn't going to be elected. Instead of "Ron Paul is going to save the US government", the attitude is more along the lines of "Who needs the government?" Hopefully, a lot of Ron Paul supporters can be converted to agorism.

I abandoned the Ron Paul Internet discussion forums once it was obvious the trolls have won. I get enough content from blogs that I don't view forums much anymore. IMHO, the problem with Internet forums is the garbage-to-content ratio is typically too high. Reading a good blog, you can get consistent high quality.

This post on Show Us The Law expresses the same attitude as Zhwazi, although the blog author may not have discovered agorism yet. (That ****ing blog doesn't allow comments! I was going to post something about agorism. That's a new item on my blog pet peeve list. Blocking comments in a blog is rude. I like my policy: "Publish and respond to anything that isn't spam." I've concluded that ridiculing the pro-State trolls helps keep up the quality of comments.)



I used to make sure that I provided a link back to your blog if you posted a comment. Now, I just copy the E-Mail Blogger sends me asking for comment moderation. This includes a link to your Blogger profile but not your blog. If you want a link back to your blog, make sure your Blogger profile includes a reference to your blog! This matters if your blog is not Blogger-hosted.

The only person I noticed whose Blogger profile had this defect is David_Z. Make sure you update your Blogger profile to point to your "No Third Solution" blog!



Allegedly, the writers' strike was settled. I don't work as a writer, so I haven't fully analyzed the deal. If you take into account 5 months of lost wages for a 3-4 year contract, it is very doubtful that the writers will have profited from the strike. The benefits gained in the strike will probably not exceed the lost wages due to striking.

The problem is that writing for TV and movies is not a free market. The industry is organized as a cartel. In a monopolistic/oligopolistic environment, employer/employee negotiations are a negative sum game. The employees can't work elsewhere if they're underpaid. The employers are dependent on the employees, if they're unionized.

In a truly free market, there are no strikes or labor unions. Mistreated workers will form competing businesses or go work for competitors. There are HUGE barriers to entry for most industries, so the only defense workers have is unionizing. In a truly free market, there is practically no overhead preventing a small group of skilled workers (or even a single worker) from starting a business.



This post on George Reisman's blog falls under the category of "nice try, but you don't understand how the corrupt monetary system works". He advocates that the government pass a law including a partial gold clause into all existing debt contracts. This would represent a huge interference in the right of individuals to form contracts. If people want gold clauses, they should voluntarily negotiate for them.

The problem is that banks are perfectly happy earning a negative inflation-adjusted return on their loans. The Fed Funds Rate is currently 3%. Suppose banks can borrow at 3%, issue loans at 6%, while inflation is 7%-15%. If the bank uses a leverage ratio of 10x-20x, this is a profit rate of 30%-60%, which is a great deal for banks.

The fact that most loans earn a negative inflation-adjusted return is THE ENTIRE POINT OF HAVING A FEDERAL RESERVE. Negative real interest rates mean that banks will always be able to issue all the loans they can.

The point is: It's *IRRELEVANT* that loans and bonds earn a negative inflation-adjusted return. Banks and hedge funds don't care, because they get to use leverage and borrow at the Fed Funds Rate. Banks and hedge funds get a perk that nobody else gets. They can borrow at the Fed Funds Rate and use extensive leverage, buying bonds or stocks or Level 3 assets.

If an investor really wants inflation protection, he needs to invest in tangible assets. Don't make an unleveraged bond investment if you want inflation protection. If you make a leveraged bond investment, you risk being blown out of your position due to margin calls during the next economic bust phase. This is entirely what happened in the subprime mortgage lending problem; extensive leverage combined with an economic bust cycle led to many insolvent loans.

For inflation protection, your best investment options are stocks, physical gold or silver, or real estate. Currently, I'm 100% invested in stocks, but I'm considering buying some gold or silver. There's no need to rush, because the current economic system isn't going to collapse for awhile; until then, both stocks and metal are a reasonable inflation hedge.



I liked this post on neuticles on the High Weirdness Project. If you have a male pet dog and have it neutered, you can buy it plastic surgery. Your dog will have the appearance of testicles, even though they're gone.

It's just like using Federal Reserve Points as money! Federal Reserve Points have the superficial appearance of money, but they're as close to real money as neuticles are to actual testicles.



I liked this post on the Technology Liberation Front. It gives the details of the exemption sports bars get from copyright law, regarding broadcasting a football game on a large screen or multiple screens.

It seems silly that sports bars get an exemption but churches and other private organizations do not. I don't recognize copyright law as a legitimate form of law. Intellectual property is not property.



I liked this post on Cafe Hayek. The New England Patriots have been accused of spying on other teams by videotaping them contrary to NFL rules. Congress is considering investigating.

This is completely ridiculous. This rule is a private rule set by the NFL. This is none of the government's business. As a private organization, the NFL is responsible for enforcing its own rules. In this case, the only injured parties are other NFL teams, who agree to follow the NFL's rules and policies.



I liked this post on Cafe Hayek. It compares forecasting the Super Bowl winner to economic forecasting. If you make enough predictions, then statistically, you're bound to have a certain number of correct predictions. If you loudly tout your successes and ignore your errors, you can seem like a genius.



I liked this post on Cafe Hayek.

There once was a man on a Manhattan street corner snapping his fingers over and over again. What are you doing, someone asked. Keeping away tigers, he said. You don't think that really works, do you? It's working so far, he answered.




I liked this post on Cafe Hayek. Poison pill anti-takeover provisions are decidedly anti-free market. The only purpose they serve is to protect the jobs of a corporation's current management. Is CEO pay excessive? If there are provisions preventing a takeover if he is inefficient, then it is possible.

Poison pill provisions are one of many reasons that the current market is not a free market. In a truly free market, an inefficient business would be exposed BOTH to a buyout AND market competition. In a truly free market, it would be easier to start a new business. You wouldn't need to buy out an existing company to enter an industry.

It is ridiculous to say "There is a free market in CEO pay." A CEO is merely a red market employee, leveraging state violence to line his pockets. Most CEOs are unaware that they are recipients of a massive government subsidy; they sincerely believe they work hard/smart enough to justify their pay. The US economy is not a free market. The most overpaid workers are those most skilled at manipulating state bureaucracy for their own benefit. A large corporation is effectively an extension of the government.



I was watching the "million dollar mission" epsiodes of Deal or no Deal. With the intermediate-valued cases replaced with $1M, the contestant is either going to win a lot of money or practically nothing.

The correct strategy appears to be "play until you only have one $1M case left, and then take the deal" OR "accept a deal worth at least 90% of your fair value". With over ten $1M cases, you probably will be down to 4 or fewer cases until you've eliminated all but one $1M case, at which point the banker will offer you close to your fair value.

The contestant will only win $1M if their final 2 cases are $1M. What are the odds of this? There are 25*26/2 possible pairs of final cases. There are n*(n+1)/2 possible ways to have two $1M cases left at the end. This means that, even with eleven $1M cases, the odds of someone winning the grand price is only 20%! The full calculation results are:

The left column is the number of $1M cases, and the right column is the odds of the final two cases both having $1M.
5 0.046154
6 0.064615
7 0.086154
8 0.110769
9 0.138462
10 0.169231
11 0.203077
12 0.24
13 0.28
14 0.323077
15 0.369231
16 0.418462
17 0.470769
18 0.526154
19 0.584615
20 0.646154
21 0.710769
22 0.778462
23 0.849231
24 0.923077
25 1

In other words, it will likely be several more episodes before someone wins the $1M prize.

If your final two cases are $1M and a small amount, the average person would HAVE to take the deal. The average person cannot afford to risk nearly $500k on a coin flip.



Zhwazi has left a new comment on your post "Reader Mail #33":

I agree completely about blog carnivals. Francois tried to get me to submit something to a few of them, but I never did. There's this technology that's less work and gives better quality results at getting content by multiple authors into one place. RSS aggregators. Blog carnivals were obsolete when they were invented.

My "Reader Mail" posts are their own sort of RSS aggregator. I also have "FSK's Shared Items" in the left sidebar of my blog homepage. IMHO, if you have a blog, you should have a "Google Reader Shared Items". If you set up a feed aggregator, let me know.

There is one big defect with Google Reader. A blog can have an RSS feed and an "Atom" feed. Google Reader doesn't recognize articles published to both feed-types as identical. For the "libertarian left" feed, I'm already subscribed to most of the member feeds, making the "libertarian left" feed itself kind of useless, because Google Reader doesn't recognize both posts as being identical.

I've come to the conclusion "Submitting to blog carnivals is a waste of time". Actually, the "Market Anarchist Blog Carnival" made my "Best of FSK" posting list. I'd consider hosting it again. I think Francois Tremblay is angry with me for saying "Most of the submissions were garbage", even though David_Z made the same observation.

I'm content having my "Reader Mail" posts each being their own mini-Carnival.

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

FSK, yet another well written article. I actually have a draft queued up that addressed the very same thing, but I have it on hold until I complete reading the book: "The Deliberate Dumbing Down of America". It looks promising, but I need to see if the author is going to come to the correct conclusion(s) as to why it is happening.

If you already know the correct conclusion, then why are you reading the book? This book is available for free online, so it falls under my "Things I'm willing to look at" list.

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

Another comment. The first poster is indeed correct about the Montessori method. I have my two children in a Montesorri school, and I think it is a good method of teaching. Their motto is "Follow the child" meaning they recognize each child as an individual and tune the child's learning accordingly.

However, any private school can use the "Montessori" label in order to attract dollars. Caveat emptor.

I'll look into "Montesorri" schools when/if I have children. I may not be able to afford a full time stay-at-home parent.

I didn't know that "Montesorri" was not copyrighted or trademarked, and that any school could claim to follow that methodology. I'll have to do my own research when it's time to shop around for schools.

Charles Johnson (Rad Geek) has left a new comment on your post "Reader Mail #32":

Kevin,

You're right about the origins of St. Thomas's Third Way. In On the Power of God, a work dated after the Summa contra Gentiles but before the Summa Theologica, he explicitly attributes the argument to Ibn Sina, with developments added by Ibn Rushd. (In fact, all of the arguments used in the Five Ways are explicitly attributed to other philosophers at some point or another in St. Thomas's work.)

This comment isn't addressed to me. I don't follow old religious authors.

Charles Johnson (Rad Geek) has left a new comment on your post "Reader Mail #33":

FSK wrote: What is "Thomistic"?

Of or pertaining to the thought of St. Thomas Aquinas, a Doctor of the Church and the leading figure of the revival of Aristotelian philosophy during the High Middle Ages.

St. Thomas famously believed that, although many of the mysteries of Christian faith could not be discovered by natural reason, and had to be revealed by the grace of God, there were at least some doctrines of natural theology, and in particular, the existence of an uncaused, necessary, and perfect Creator of the visible world), which could be proven through rational demonstration, and set out his Five Ways to prove the existence of God. The third of the Five Ways, the argument from possibility and necessity, is intended to demonstrate that there must be a single necessary being -- i.e. a being which could not possibly fail to exist -- to explain the existence of contingent beings -- i.e. beings which do exist, but could fail to exist.

Kevin's right about the origins of the argument; in an earlier book, Aquinas explicitly attributes the development of the argument to two Muslim commentators on Aristotle -- the Persian philosopher-physician Ibn Sina (known in Europe as "Avicenna") and the Spanish-Arab philosopher Ibn Rushd (known in Europe as "Averro√ęs"). Generally speaking, a lot of the revival of Aristotelian philosophy in Christian Europe during the High Middle Ages was deeply influenced by the work of Muslim scholars a century or two before; indeed, without the texts that Arab scholars preserved and copied, the renewed interest in classical Greek learning in Christian Europe would hardly have been possible: most of the work of Plato and Aristotle, among others, had been completely lost in Western Europe for hundreds of years, until Muslim scholars re-introduced it.

I don't follow old religious authors. All I know about Aquinas was a fraction of a day in history class.

1 comment:

Francois Tremblay said...

I'm not "angry" with you, I just think that you should look at the next editions and see what you think. So far you seem to be right: our submission level is lower than ever.

This Blog Has Moved!

My blog has moved. Check out my new blog at realfreemarket.org.