March 29th, 2012

Si se puede

Monthly Topic: Economic Consolidation

The Austrian school of economics makes the case that central banking leads to "malinvestment." There is a chicken-and-egg issue here because central banks were developed as a method to rein in the excessive speculation associated with malinvestment. One may ask, "How does the solution to a problem perpetuate the problem?" We need look no farther than the problems caused by prohibition to see that excessive controls tend toward chaos.

Where the Austrian school falls down is in the romanticization of capitalism. They see the mangy chicken that eventually grew from the pristine egg and deny the fact that the egg was the product of another mangy chicken. A completely laissez-faire investment environment leads to economic consolidation, speculation, and misappropriation of capital. These are the ills that the Austrians associate with central banking. In order for some investors to succeed, others must either be brought under control of the same boat or sunk to the bottom. The central bank is the fulfillment of capital accumulation, not its antithesis.

Alexander Hamilton founded the predecessor to the federal reserve system. His detractors accused him of corruption because his friends made handsome profits by buying up revolutionary war debt at pennies on the dollar. Some of these "stock jobbers" were associated with loyalist and collaborationist elements in New York. Hamilton was himself a proponent of a royalist federation. The anti-Federalists saw the national bank as a counter-revolutionary ploy to allow British investors to continue taxing the American populace, albeit indirectly.

What is the ultimate conclusion of economic consolidation? Is it a world like that portrayed in the science fiction film Rollerball where the Earth is owned and managed by one monstrous monopoly? Some Marxists go so far as to promote that path as the fulfillment of Karl's prophesy. It would be the mangiest of chickens to hatch from the biggest of Austrian eggs.

Police video shows Zimmerman claims of injuries may be false

I was just about the be done with the topic, but the hits just keep on coming...

Police video from when Zimmerman was brought in for questioning seem to contradict his claims of injuries and even the physical description of the stains on his clothing after a "life and death struggle".

Having trouble embedding so here is the link:

Again, nothing is conclusive but if this video accurately shows Zimmerman's injuries and physical state -- then his claims of fearing for his life and the injuries he allegedly sustained may be called into question

and again, question the basis for his "Stand your ground" defense.

My thought is this new evidence plays well into what we've been saying:
a 17-year old kid being chased around a neighborhood is not likely to turn around
and run up on someone who is trying to leave the area and attack them.

My response to "Drill baby, Drill"

Note, all figures that follow are from 2010, which I know is old, but they may still act as a valid basis for comparison. Their source is:

I began thinking in this direction after overhearing some co-workers complain about gas prices and laying them at the feet of Government restrictions on drilling (a lah ANWAR, etc.) They were repeating a media narrative which I'll call the "Drill baby, Drill paradigm", essentially expecting to reduce gas prices at the pump by creating more oil (supply) such that prices fall. Lowering prices by increasing supply is indeed economically sound.

But what is often not considered by American consumers/voters is that Oil and the petroleum products made from it are worldwide commodities. Ignoring idiosyncrasies like the effects of speculation and short term availability issues, price is a function of world supply versus world demand, not U.S. production versus U.S. demand.

So, lets consider the ramifications of that fact.

U.S petroleum production (crude oil, NGPL, and other oils) is 7,513,000 barrels/day. Whereas world production of same is 86,790,349 barrels/day. So, the U.S. represents 8.6 % of worldwide production. If the U.S. were to, say, double production (as unlikely as that may be) this would add another ~8% to world supply, so we can presume around an 8% 'strength of effect' on world prices.

Now, U.S. Petroleum consumption is 19,148,000 barrels/day, and world consumption is 85,294,571 barrels/day. So, U.S. consumption is 22.4% of total world consumption. If the U.S. were to say, halve consumption (as unlikely as that may be) this would decrease world consumption by ~11%... we could expect that change to have an 11% 'strength of effect' on world price.

What I take away from this consideration: If our goal is price reduction, and we want to effect government policy in ways that do this, we should be somewhat more interested in those policies aimed at decreasing consumption, than at those increasing production. Furthermore, any political entity that throws all its efforts into effecting policies aimed at increasing production, but ignores those aimed at decreasing consumption, likely has some agenda other than controlling gas prices at the pump.
Godzilla, default

On the concept of Westernization of "Non-Western" societies:

I might note that for the purposes of this post, the West is defined in the sense it usually means: the rich white countries of Western Europe. "Western values" are identified with the subset of these countries with established liberal democracies, not the others with longer histories of autocracy.

One concept that I see appearing with great regularity in this community and elsewhere is the idea that if a society adopts Western values that the result is an automatic improvement, just because it adopts them.
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I really don't think that this has applied in the cases where this is done *without* the brutality of the West imposing its values by the crash of the bomb as has been done with regularity since the age of imperialism. I think that first of all, there is the most straightforward and obvious problem with this: Western "values" come with associated Western *institutions* that by and large were imposed by violence everywhere in the West. There is nowhere in the West where these institutions did not arise through violence and bloodshed *in the West*. To impose institutions with such a basis on societies which lack the institutions and inbuilt safeguards arising from these origins is inherently self-contradictory. The West did not learn how to contain, for instance, problems of democracy until the Sans-Cullottes were parading through the streets cheering the thunking sound of the guillotine.

The West did not learn how to contain issues of nationalism until the wholesale horrors of World War II led to European states "resolving" their ethnic problems by simply creating mono-ethnic societies and having most European Jews killed off. The West did not "resolve" racial matters in the New World, it either ignored them or waged war amongst itself over it with high losses for no gains. If the West could not resolve these issues evolving more or less organically without gruesome horrors, how then is it that societies to which these concepts have *no* equivalent roots would do any better? How can values not established in the West until mutual bloodshed came into play be established wholesale in other societies that are expected to do by peace what the West was incapable of doing without mutual self-destruction?

Another problem that uneven Westernization creates is the pattern of the Westernized elite, which often resorts to brute force to sustain itself, and an uncomprehending and hostile masses which come to identify the Western concept of the state with brutality and evil. The oldest example of this is the post-Petrine Russia of the Romanov Dynasty, where Imperial St. Petersburg/Petrograd was a very European city.....and the blundering idiots and doddering dinosaurs of Russia engaged in wholesale brutal repression without any noticeable benefits of it for any save a small number even of the Russian nobility, while their foreign wars invariably ended in disasters after the Napoleonic invasion. As a result the crude and distorted mirror images of the West that developed in Russia guaranteed that in a Russian context, Westernization would serve primarily to strengthen and streamline existing horrific institutions, not to create a new society built upon and based upon liberty. This of course meant very bad things as an improved Russian autocracy winds up resembling not the United States or United Kingdom but is very akin to Stalinism, complete with secret police, all-powerful state ruled by a thug with a personality cult, and a clumsy, blundering paranoid system.

Another pair of more recent examples would include Mustafa Kemal's Turkey and the Pahlavi Empire in Iran. In both cases Westernization was imposed purely from above by elites that never bothered to make any attempts to even pretend to speak the same language as the masses, or to so much as make token gestures so that both sides would see the same word in the same way or the same concept in the same way. The result is that people come for damn good reasons to identify the West with oppression and brutality, and if that's what it is to them, why would self-respecting people want such a thing?

To me I think that any concept of Westernization from without is bound to fail for these reasons. Your thoughts?

US Ambassador in Russia called Russia "the country of savages" ("дикая cтрана")

U.S. Envoy Claims Russian Harassment

My note:

This article does not tell the whole story ( see the original video - ). Specifically, Michael McFaul used the expression "дикая страна" that in this particular context means "the country of savages". Various media is trying to downplay the episode by translating it as "barbarian country", "wild country" or not translating it at all. But in my opinion, usage of this expression by the US Ambassador in Russia is an approximate equivalent of using N-word by any US politician in the US.

Ironically, McFaul may learn this expression from one of so-called Russian "oppozitsioner", opportunistic self-appointed advocates of American way of life in Russia. Usually this kind of people are pretty clueless about the real life. For example, one of them. Novodvorskaya, believed there were no economic crises in the US until "socialistic reforms" of XX century. This kind of people wants to be backed by the US so they meet American politicians and tell them various stories about how bad the Russians are (except, of course those "oppozitsioners"). "Дикая страна" is one of the expressions those confused "oppozitsioner" people use to describe their own country and their own culture.

In my opinion the US Ambassor should never ever ever use that expression.

Do you think the Ambassador of the United States of America can use the expression "the country of savages" toward the country he is working in?

Yep, Freedom of Speech
No, because it does not help to sell our good old US of A in that country
Another opinion (please comment)