Smoot-Hawley Fnord

I've been watching the Communism Channel (CNBC), and I've noticed a lot of references to the Smoot-Hawley Tariff. The reasoning is "We blame the Smoot-Hawley Tariff for the Great Depression. The current Congress has passed no stupid law similar to the Smoot-Hawley Tariff. The current Congress had the foresight to preemptively bailout the financial industry. Therefore, the current economic crisis has no parallels to the Great Depression."

The fnord is "The Federal Reserve was not responsible for the Great Depression. The blame lies 100% with other causes." The Great Depression was 100% caused by the Federal Reserve.

Via deficit spending, Congress has bailed out the banks. Such a bailout is inflationary. The Federal Reserve has cut interest rates to 1.5%. That causes further inflation and a further bailout for banks.

There were three distinct phases of the Great Depression.

1. Before 1929, the Federal Reserve slashed interest rates, causing an inflationary boom.
2. In 1929, the Federal Reserve jacked up interest rates, causing a crash.
3. The Federal Reserve started inflating to bail out banks. The gold standard placed a limit on how much the Federal Reserve could inflate. After awhile, people started demanding the right to redeem their paper dollars for gold. In 1933, President Roosevelt defaulted on the dollar and confiscated all the gold. From 1933-1941, there was massive inflation to bail out the banks. During this time, the financial industry was ridiculously profitable while the rest of the economy suffered. Also during this time, the welfare state apparatus was put into place, along with extensive regulation of most industries. There was a massive transfer of wealth from the productive sector of the economy to the parasite sector.
4. When World War II started, the Federal Reserve adopted a more reasonable monetary policy, ending the depression. It was merely a coincidence that World War II started around the same time.
   

Even though the banks were recently bailed out, that's not the end. Due to the bailout and inflation, the financial sector should show huge profits over the next few years. However, the rest of the economy will probably continue to suffer. The nominal value of the stock market will rise, but when you measure real purchasing power, it will continue to decrease. The profits of the financial sector will show up as inflation in the rest of the economy. Exactly as occurred from 1933-1941, there will be massive inflation, massive bailouts/profits for the financial sector, while the rest of the economy struggles.

The State and Federal Reserve and financial industry cannot create wealth. They can merely transfer wealth from the productive aspects of the economy to politically connected insiders.

The CPI is less than the true inflation rate. Over the next few years, huge "inflation-adjusted" GDP growth will be reported. Due to the CPI bias, money supply inflation will be misreported as economic growth.

I saw another interesting bit on the Communism channel. Only a handful of large banks participated in Congress' bailout. They are using some of this money to buy out smaller banks. Small banks that are ineligible for a bailout are not a viable business. The Communists were talking about how wonderful this consolidiation is. The reality is that Congress entirely caused the problem.

Massive consolidation will practically guarantee that the next bust will be even more severe. With 1000 small banks, the bankruptcy of one does not threaten everyone. With only 5 big banks, one bankruptcy will wreck the entire country. Via its bailout policy, Congress has effectively declared that there's no point operating a bank unless you're "too big to fail".

Blame for an economic crisis is always deflected from the true cause. The real problem is the Federal Reserve, the income tax, and extensive State regulation of almost all industries. It's pointless to talk about "deregulating" the financial industry while there is a central bank. The US banking industry was effectively nationalized when the Federal Reserve was first created.

Most mainstream economics discussions are fnords designed to distract people from the true issues. It's pointless to talk about "failure of the free market", when there already is extensive State regulation of the banking industry. Even before 1913, the financial industry was heavily regulated. Via the usual "Problem! Reaction! Solution!" paradigm, a crisis allows insiders to write more severe regulations that favor them. In turn, this practically guarantees that the next crisis will be more severe.

I see Alan Greenspan saying "I was wrong. An unregulated free financial market is a disaster." That's one huge fnord. It's pointless to talk about an unregulated financial market when you have a central bank. Alan Greenspan admits that his philosophy was wrong. However, his conclusion is "Regulate the financial industry more." instead of "Who needs a central bank?" Like Warren Buffett, Alan Greenspan is a pro-State troll; considering he's a former Federal Reserve chariman, it shouldn't even be necessary to explicitly mention that.

The State is the only business where failure leads to more resources. Imagine you were the boss giving the State and financial industry a performance review. "Your performance was lousy. You practically bankrupted the business. Many people died due to your negligence. You personally caused massive layoffs. I'm giving you a huge raise and a huge promotion!"

Troll Mathematics is Theft

I liked this article. The subject was "Is Modern Mathematics Reliable". This refers to research-level Mathematics, and not the calculus/algebra/logic/topology that everyone knows.

The problem is that, when a Math professor publishes a paper, he does not publish a fully detailed proof. He merely gives an outline. In turn, this makes the paper incomprehensible to someone who isn't already an expert. For most math papers, there are only 3-5 people who could read the proof and fully understand it, and even then it'd take them a few months.

This means that a lot of research level Mathematics may be wrong. There's nobody who bothers to check that published results are actually true. With "peer review" and State-funded research grants, the incentive is to do small incremental improvements of previous research. There is no incentive to read old results, polish them, and republish them in readable format.

That certainly matches my experience in Math grad school. Over 98% of the lectures I attended were incomprehensible. How can you determine which Math professors are good and which are lousy, when none of them know what each other is talking about? The "peer review" system makes academics a popularity contest, instead of supporting truly original research.

I liked this comment.

Is mathematical complexity then an excellent cover for the most intricate of deceptions?

Yes. In economics research, there are lots of fancy calculations and derivations. Such calculations are useless when your assumptions are wrong. Most economics papers have several major mistakes that are hidden assumptions:

1. Taxation is not theft.
2. The CPI is a fair and unbiased measure of inflation.
3. The Fed Funds Rate is the fair market-determined interest rate.
4. The USA has a fair monetary system.
   

Each of those wrong assumptions invalidate almost every calculation by a mainstream economist.

Legal language is another example of Mathematical obfuscation. Legal language is incredibly complicated, on purpose. This makes law inaccessible to the average person. Legal language is intentionally hard to read, because lawyers are protecting their turf. There is no reason for legal language to be so hard to read, except that lawyers intentionally obfuscate the law. Just like there's an obfuscated C contest, lawyers have an "obfuscated law contest".

Whenever you see unnecessary complexity, that's a sure sign that some funny business is occurring.

The Identity Theft Problem

The "identity theft" problem always seemed bizarre to me.

Suppose someone finds out my Social Security Number and other personal identifying information. That person is able to take out a bunch of loans using my credit history. Now, it's *MY* problem that someone else has committed fraud. I'm presumed "guilty until proven innocent". I'm now unable to borrow money. My bank account or wages may be garnished to pay this illegitimate debt.

Why should someone with a few numbers and names be allowed to borrow money and pin the blame on me?

Even worse, suppose I actually am the victim of identity theft. The bank is legally the victim, and not me. I don't have the ability to press charges or collect damages for the inconvenience. If the bank and police decide it's better to write off the loss, then the criminal gets away with it.

The criminal is protected by the State! The State has granted the criminal sovereign immunity, even though the criminal has broken the State's law! If something is illegal, but there's no punishment for doing it, then it's effectively legal. In identity theft cases, frequently the bank and the State write it off as a loss, instead of pursuing the criminal.

The identity theft problem is a symptom of a corrupt system.

FSK Asks - Facebook vs. XNA?

One of my business ideas is "write a game".

Based on my experience jobsearching, everybody seems to be writing Facebook applications now.

I was considering writing an XNA game. Would my efforts be better spent writing a Facebook game, especially if there's a multiplayer component?

What is a better investment of my time, learning XNA, or learning Facebook development, or just working on blogging?

I'm probably better off blogging and working towards agorism, than working on an XNA game.

Heroic Incompetent Policemen

I found this story interesting, cited many other locations.

Undercover policemen were in a New York subway station, looking for fare evasion and other "quality of life" crimes. Someone was using a student Metrocard, yet didn't look like a student. (The turnstyle lights an indication that says someone used a student farecard.)

Even though the State transportation monopoly is immoral, fare evasion is a real crime. If you use the subway, you should pay for it. Cracking down on fare evasion is an example of legitimate behavior by police. (In most cities, public transportation is subsidized. In New York City, the subway is subsidized by high tolls on bridges and tunnels.)

Two policemen attempted to stop the criminal, and arrest/ticket him for fare evasion. The criminal resisted arrest. During the struggle, one of the policemen dropped their gun. The criminal picked up the policeman's gun, and he shot the two policemen who attempted to arrest him. While attempting to escape, he fired at another policeman, who shot him.

The media spin is "The policeman who caught the criminal was a hero! Hooray for the police!"

My interpretation of the story is different. I see gross incompetence by the police. The policeman who dropped his gun bears a huge amount of responsibility for the incident. A professional policeman should not drop his gun. Also, there is digital fingerprinting technology that prevents a gun from being fired by anyone besides its owner. If the police department were using this technology, then this would not have been a serious incident.

The criminal was resisting arrest because he had previously been arrested and jailed for possession of drugs, which is another "victimless crime". The criminal was an "illegal immigrant", which is another crime that does not exist in a true free market. The criminal had been previously deported for "illegal immigration" and he had successfully re-entered the USA.

This would not have been a big story if the policeman was not careless and dropped his gun. This would not have been a big story if "possession of drugs" and "illegal immigration" were not crimes. The criminal resisted arrest because he had a prior bad experience with the State and police.

The media spin is "Hooray for the policeman who caught the criminal!" I see gross incompetence by the policeman who dropped his gun. The issues of "Is possession of drugs a crime?" or "Is illegal immigration a crime?" are never discussed.

The mainstream media always present monopolistic State police in the most favorable possible light. The underlying serious issues are never discussed. The policemen who shot the criminal did his job properly, but the policeman who dropped his gun bears a large amount of responsibility for the incident. If "possession of drugs" and "illegal immigration" were not falsely labeled as crimes, then the fare evader would not have been so afraid of the police.

Kangaroo Court Fnord

I've seen a lot of headlines in the news lately. "The State is pursuing criminal charges against former executives at AIG/Lehman Brothers/FRE/FNM."

The CEOs have a valid complaint. The charges against them are merely a kangaroo court. A lot of money was lost in a high profile fashion. Someone must be blamed. Those CEOs didn't do anything more dishonest than any other CEOs. They merely were following "generally accepted practices". They had the bad luck of being unable to find a chair when the music stopped playing. (Of course, certain insiders control when the bust occurs.)

If you subpoena all the E-Mails of almost any corporate executive, then it is practically guaranteed that some criminal behavior will be discovered. There are so many laws that practically everyone is guilty of a crime! Corporations are so heavily regulated that it's doubtful that any CEO has strictly followed all the laws. For a high-profile bankruptcy, all it takes is an E-Mail from a subordinate saying "We may have a problem!" and then the CEO is guilty of a coverup. (For this reason, any employee who has a tendency to point out problems is *NOT WELCOME* in most/all corporations.) Almost any CEO has an obligation to publicly say "Our profits are awesome!" no matter what the actual circumstances.

The fnord is "Certain individuals went to jail. They will be replaced with other people. Therefore, everything is all right. Move along! There's nothing to see here!"

When there is a dishonest CEO or politician, the answer is "Replace them. Send the scapegoat to jail or fire him. The corrupt system must never be blamed."

Suppose a person owns a gun and shoots people. Then, the message is "The system that allows individuals the right to buy guns is broken. We must eliminate it!" If there's a crazy armed person and everyone else is unarmed, then lots of people may be killed. If some of the victims are able to defend themselves, then they could stop the criminal before many people die. Paradoxically, an unarmed population makes it easier for a single person with a gun to kill many people.

As another example, suppose a person labeled with a mental illness does not take their medication, and then commits a crime while suffering withdrawal symptoms. The message is "All people labeled with a mental illness must be forced to take their medication!"

Whenever there is a problem due to "too much freedom", the solution is to restrict freedom, and not to blame the individual that committed the crime. Whenever there is a problem due to a corrupt system, then the individuals are blamed and never the corrupt system.

Whenever you see a high-profile criminal trial of an executive or politician, the fnord is "This person got caught. Therefore, the system is not corrupt." Blaming individuals distracts blame from the corrupt system.

The blame is almost always with the corrupt system and not with any individuals who exploit that system. If you replace one politically connected insider with another politically connected insider, then that does not solve the underlying problem. The recent financial crisis was 100% caused by a corrupt monetary system and the Compound Interest Paradox.

Pyschiatrists are Muderers!

If you research on the Internet, there's a lot of stories of abuse by the psychiatric/mental health/murder industry.

My blog isn't a random sample of the population, but I've heard several stories of abuse. (Some people comment that they're "psychiatric survivors" by E-Mail or on their own blog.)

When I was first hospitalized, I was living in a city by myself. When I called 911 for help, I never imagined that the medical care I received would be so horrible. While I was waiting to be forcibly injected, I kept wondering "When am I going to get to talk to someone who has a clue?" It was obvious to me that the doctors and nurses who spoke to me had no clue about anything. I didn't even know they were doctors! Based on a 2 minute examination, I was involuntarily hospitalized and forced to take harmful drugs against my will. According to the medical records, I had a "history of non-compliance with medication and needed to be forcibly given drugs". This was the first time I was hospitalized!

I was totally doped up and oblivious. Somehow, I figured out that calling my parents collect for help was a good idea. They came to get me bailed out of the hospital. According to my parents, the hospital staff was *MAD AND DISAPPOINTED* that my parents came to rescue me. The hospital staff thought that I was now their property. They would have me institutionalized for the rest of my life, milking me for Medicaid payments.

The withdrawal for those drugs is awful. Even 3-6 months afterwards, the withdrawal effects still linger. The withdrawal symptoms look like the outbreak of a mental illness! Whoever designed those drugs was really clever and evil! It's been 9 months since my last hospitalization. I hope I'll be able to stay out this time. If I can stay "clean" for another 6-9 months, I'll have more confidence that I'm recovered.

Anecdotal evidence isn't "proof", but when the official custodians of power are corrupted, situations like this occur. You can't rely on psychiatrists and the pharmaceutical industry to tell the truth, so anecdotal evidence is all there is.

Based on my personal experience, the "chemical imbalance" theory of mental illness is complete bull****. Anybody who prescribes anti-psychotic or anti-depressant drugs is a murderer. Anybody who forces people to take those drugs, via lying or outright violence, is a murderer. Most people don't have the intellectual capacity to realize "Is my psychiatrist full of ****?"

Some people in the government and pharmaceutical industry are probably aware of the harmful effects of anti-psychotic drugs. They are suppressing this information. I can't prove it, but there's a ton of circumstantial evidence.

A psychiatrist is worse than a policemen who enforces illegitimate laws. A policeman shows you his badge, gun, and uniform, which creates a certain level of fairness. A psychiatrist will murder you while he's pretending to help you. The fact that the psychiatrist believes his own lies, doesn't make it morally acceptable.

I only was forced to take anti-psychotic drugs for a few months, so hopefully I wasn't permanently damaged. I wonder what the effect is on people who take them for years?

Most FDA approval studies only cover 6-12 weeks. A psychiatrist will put his patient/victim on anti-psychotic medication for years. Every psychiatrist I've ever had told me "You will be required to take these drugs for the rest of your life. Your complaints about side effects are proof that you are in fact sick."

When I tell other people "The anti-psychotic drugs had a severely negative effect on me.", they rationalize it by saying "The drugs affect everyone in a different way." That makes absolutely no sense. Does a polio vaccine have different effects on different people? Do antibiotics have different effects on different people? I found these drugs incredibly damaging. I conclude they are harmful to nearly everyone. Most people don't have the ability to question and say no to their psychiatrist. Most people would confuse the withdrawal symptoms with the outbreak of a new mental illness. If a drug would give a mental illness to a healthy person, then it shouldn't be given to people labeled with a "mental illness".

If a doctor or psychiatrist ever asks you if you can hear voices, ANSWER NO! Even if you can hear voices that are actually there, don't tell your psychiatrist or he will murder you!

It's unclear if "hearing voices" is a natural reaction to extreme stress, a symptom of reaching a higher level of consciousness, or if they're actually real (aliens?). If what you consciously want doesn't match what you subconsciously want, then you start hearing voices.