Multum In Parvo, Spring Break Edition

...no, not the sort of Spring Break that springs to mind: blaring crappy pop music out of a Days Inn window in Florida...drinking Keystone Light out of a McDonald's cup...syphilis.

Merely a few short items that combine some of my favorite things:

• First, sports and economics. Use some economic thinking in making your NCAA Basketball picks.
• Second, the Coase Theorem and reality (such as it is). See how this foundational idea of the relation between law and economics is playing out with a Las Vegas convienence store.
• Lastly, booze and economics. Read Tim Harford's take on alcohol prices and their effect on consumption.

Sorry that there is nothing of substance this week (do read the above articles, though). I am away from Madison until the weekend. That and all the festivities for St. Patrick's Day, my dad's birthday and a trip to Pittsburgh.

I will need to get back to work to get some rest for a change.

Anyway, enjoy.

Read Up And Wither Labels?

Yes, I know. Three posts in a week from a guy that used to disappear for four months. What can I say other than I have a lot to say.

First, please read the below three posts. They examine:

• The situation in Northern Ireland.
• Alan Greenspan's craven ass-coverning attempt.
• Brokers jumping out of windows in 1929 (or not).

Second, I have added some more links to the blogroll and links list at your right. Check them out.

Third, I have been toying with the idea of putting labels on my posts. I did it for a while about a year and half ago, but then I stopped. I suppose that this would make accessing previous (somewhat) related posts easier.

What do you think? Leave your thoughts in the comments to this post (after reading the other posts, of course.)

The Plummeting Brokers of 1929: Popular Yet Wrong

It is an image that is seared on the popular conscience in times of financial crisis.

It is October 29, 1929. Stock markets in the United States had lost $30 billion in the course of a week. This was more than ten times the federal budget at the time and far more than the U.S had spent fighting World War I. This would be roughly $363 billion today.

In response to this financial disaster, brokers in New York were despondent and broken. In their despair, they began to fling themselves from the windows of their buildings. The streets of Manhattan are littered with corpses that represented the broken financial dreams of a nation. Even Winston Churchill witnessed such a suicide with horror.

This image is very evocative, very well-known, very widely-quoted and very wrong.

For the straight dope, well, read it here at Straight Dope.

John Kenneth Galbraith, in his classic 1955 book The Great Crash (whose conclusions I reject, by the way), confronts this issue. Galbraith studied suicide statistics and, while the suicide rate did rise from 1928-1932, the figures show no acceleration in September and October of 1929.

I suspect that there were two reasons for the popularity of this image. First, as the Straight Dope article makes clear, there were several well-publicized suicides that were connected (sometimes tenuously) to the events of October, 1929.

Second, and more powerfully, people who were going through the effects of the crash wanted to believe this. They wanted to believe that the people who had manipulated the market and lost all their money would kill themselves in their shame and despair. People were unhappy and poor so this image, as violent as it was, was an understandibly popular one. It is through this, I suspect, that this myth entered the popular conciousness.

We, as a society, need to find an outlet for our frustrations. When they are financial in nature, the targets will naturally be people in finance. That is why, in my opinion, the media has latched on to (and people have readily consumed) the sordid tale of Bernie Madoff. The full resentment of people and their financial woes are given a face and a dastardly story.

This sublimation of fear and resentment directed toward Madoff (who is doubtless a criminal who deserves to go to jail) springs from the same source as the persistence of the 1929 broker suicide myth. People seem to find this act soothing, expiating, cathartic and worth their time.

My one fear in this, though, is that people will "get it out of their systems" without looking into the deeper implications of the event. They will be glad that the brokers killed themselves, glad that Madoff went to jail and be done with it.

Let's not be so hasty. Let's try to understand these things, though the process be difficult and long.

We will all gain a clearer picture and deeper understanding.

And THAT'S no myth.

Too Late To Cover Your Ass Now, Greenspan

It seems that former Federal Reserve Chair Alan Greenspan is trying to deny that he played a part in causing our current financial malestrom.

Give me a fucking break.

The evidence is becoming more and more clear that allowing Lehman Brothers to fail in September of 2008 didn't freeze credit markets. For an excellent and readable empirical approach, read John Taylor's paper on the government response to the crisis (if you don't want to read the whole thing, check out the charts and skip to the last page and read the conclusions).

For regular readers of COTL, you will remember my discussion of this matter last fall. If not (or if you just want to relive those, ahem, thrilling moments, click here and here.

The problem was not the failure of Lehman Brothers. The problem was the ad hoc and uncoordinated reaction of the government to the situation. Short-term cash injections were not enough. Why? The problem was NOT liquidity. The problem was risk.

By propping up some companies and not others, the government caused the (now) fatal crisis of confidence among investors that made making any investment in fixed-income markets too risky. This caused the drop in the bond markets and thus the drying up of credit.

If we are taking a break from dealing with this situation to point fingers, let's make sure they are pointed in the right direction.

Same As It Ever Was?

This was supposed to be over, right?

After the Good Friday Agreement, this was all to be part of the past, wasn't it?

With devolved government and a power sharing executive, the Unionist and Nationalist communities in Northern Ireland were supposed to put violence beyond their plans, weren't they?

Well, for the most part, it seems that they have.

The Real IRA's killing of two British soldiers in Antrim this weekend and the killing of a police officer in Craigavon (near Belfast) yesterday could not but send a shiver down the spine of those who have followed Northern Ireland's fitful path to peace and reconciliation.

The RIRA is a core of "true believers," made up mostly of former members of the Provos who reject the peace process and the perceived collusion of Republican leaders with the British government. Why did they do what they did? For the same reason that terrorists do anything: to bring attention to their beliefs by the use of politically-motivated violence.

What else might have provoked this violence? It could have been PSNI Chief Constable Sir Hugh Orde's decision to bring in British Army intelligence specialists to deal with a growing threat of Republican activity and violence. It seems, after the events of the past few days, that he might have been on to something.

Will these attacks derail the peace process? I sincerely hope not. That will all depend on how the leaders of the Unionist and Nationalist communities react to the situation and how dedicated they remain to making the peace process work.

It seems that this is what is being done...sort of. For the part of the Unionists, DUP Leader and Northern Ireland First Minister Peter Robinson has called for this matter to be left with the police and also for restraint on the part of Unionists to prevent recriminations and counter-violence in the wake of these attacks. British Northern Ireland Secretary Shaun Woodward has condemned the attacks and called for the people of the province to be united.

For the part of the Nationalists, Sinn Fein President Gerry Adams condemned the loss of life, but intimated that if Sir Hugh Orde had not called in British Army specialists, these attacks might not have taken place.

Why the hair-splitting on the part of Adams and Sinn Fein? I agree with Lord Paul Bew's assessment that Adams is facing a difficult position for himself and his party (click on the link and read the whole thing; Bew is a real expert and has an excellent read on the situation).

Reeling from an unexpected electoral defeat in 2007, the lack of support from the Republic of Ireland (they have their own problems) and the seeming waning of political engagement of some former Republican supporters, Adams is in a political conundrum and he, in reacting, tried to speak out of both side of his mouth. He wanted to show that he supports the police and the justice system to pursue the perpetrators of this violence, but also that he still has the fight to question the actions of the British government in Northern Ireland.

This is all well and good as far as the political leaders go. The real meaning of these events going forward, though, rests with the people of Northern Ireland. It seems that the people of Northern Ireland are, by and large, committed to the peace process and the devolved government as it has developed over the past eleven years. There are, and will in some measure always be, radical elements on both sides of the issue.

The key question is how much support, either direct or tacit, is offered to these elements. If it it is a lot of support, then the killings of this weekend will not be the last. Organizations like the RIRA need the support of people in the community to survive as much as they need the channels of international money and arms smuggling to continue their "military" campaign. The same, naturally, goes for their Unionist counterparts.

The people of Northern Ireland must show that they have the political will to resist the actions of those who would bring back the violence and uncertainty of the Troubles of the past forty years. They also must realize that their leaders, people like Adams, might need to change. I believe that it will take a generational shift in political leadership for real, lasting progress to take root.

The generation that fought the British government and those that were in control of that government need to go by the wayside. The generation that grew up with the beginnings of the peace process in the 1980's, who has known as many years of peace as of violence, is where the hope for the future should lie.

It is these people who will have the will and the ability to support the peace process and its institutions. It is these people who will have to resist the temptation to let frustration lead back to the violence of the past. It is these people that will forge ahead and either make or break Northern Ireland as we now know it.

Is this likely to happen? As a life-long student of Irish history, I surely hope so. I am not naive enough, though, to guarantee any such thing.

We, and the people of Northern Ireland, must hold our breath and wait.

Let's hope it is worth it.

Multum In Parvo

Just a few short items of (possible) interest:

• Los Angeles County has apparently banned swearing this week. The kid that proposed this said that he wanted people to be more civil to each other. What he forgets is that swear words are as much a part of our language as any other word and they indeed have their place. What he also forgets is that his idea would be accepted from the start...when have you ever known the government to turn down a chance to tell people how to behave? To gain some perspective, take a lesson from Professor Carlin. Don't agree with me and George? Well, fuck you.
• New Illinois Governor Pat Quinn seems to have paid some of his own expenses when he was Lieutenat Governor. You know the political state of affairs is pretty sad when we are overjoyed that a guy paid for his own dinner from time to time.
• Maureen Dowd on the Obama Administration's silence on pork in the bailout legislation. At least John McCain tried to say, "no se puede."
• How low will stock markets finally go? Wall Street icon Henry Blodget thinks a lot lower. Steve Forbes is worried too. I tend to agree with them, though more with Blodget than Forbes. Look at the open interest in March SPX puts at the CBOE. Those numbers are too big to be an accident.
• The White House contiunes its assault on CNBC, this time on Jim Cramer's charges of "wealth destruction." I find Jim Cramer to be smarmy, unseemly and just plain wrong a lot of the time. He did, in this famous blow-up, have things right on interest rates in 2007.

Roland W. Burris Will You Please Go Now!

After being questioned by the FBI last weekend, the news that his son got a sweet patronage job and hearing the growing chorus calling for his hide, I hope Roland Burris listens and resigns soon. He won't, but one can hope...

Rather than express my feelings on this in prose, I thought I would attempt to make it entertaining.

So, here is my advice to Roland Burris (with apologies to Dr. Seuss for the content theft and to Art Buchwald for the idea theft):

Roland W. Burris will you please go now!
The time has come.
The time has come.
The time is now.
Just go.
Go.
Go!

I don't care how.
You can go by foot.
You can go by cow.

Roland W. Burris will you please go now!
You can go on skates.
You can go on skis.
You can go in a hat.
But
Please go.
Please!

I don't care.
You can go
By bike.
You can go
On a Zike-Bike
If you like.
If you like
You can go
In an old blue shoe.
Just go, go, GO!
Please do, do, do, DO!
Roland W. Burris
I don't care how.
Roland W. Burris
Will you please
GO NOW!

You can go on stilts.
You can go by fish.
You can go in a Crunk-Car
If you wish.
If you wish
You may go
By lion's tale.
Or stamp yourself
And go by mail.

Roland W. Burris
Don't you know
The time has come
To go, go, GO!
Get on your way!
Please Roland B.!
You might like going in a Zumble-Zay.
You can go by balloon . . .
Or broomstick.

You can go by camel
In a bureau drawer.
You can go by bumble-boat
. . . or jet.
I don't care how you go.
Just get!
Roland W. Burris!
I don't care how.
Roland W. Burris
Will you please
GO NOW!
I said
GO
And
GO
I meant . . .
The time had come
So . . .
Roland WENT."

We can only hope.

"Losers" Was An Unfortunate Choice. But, Still...

(This is in partial response to Josh's comments on my last post. I thank all of you who responded and who continue to read this space. I appreciate even more when I get to respond to criticisms of what is written here. It keeps me on my toes).

O.K., Rick Santelli should not have called people "losers." That was a bad choice.

I also realize that his lively personality is a mix of trading floor bluster and the sort of invective that makes for entertaining television. Bearing that in mind...

While I agree that the "American Dream" has, for some time now, included home ownership, I guess I see it a little differently.

I focus on the "Dream" part of it. It is an aspiration, something toward which people strive. It does not equal the right to own property. Property ownership should, naturally, be absolutely guaranteed by our laws. What they should not do, however, is guarantee property ownership to everyone.

Is there a component of home-ownership that goes beyond rational self-interest? Sure, I suppose there might be, something tied in with sense of home and place. This is surely, though, a higher-level concern when property is involved. At the base, a person's relationship to property is an economic one. People should be able to buy property if they can reasonably afford to do so.

At the core of this must be a frank honesty with oneself about one's limits and expectations. If we are honest about our financial situations and our likely prospects, the ability to own and maintain property should be clear. If we cannot afford it, we should not be blinded by some ideal vision of property ownership. It is this sort of thinking that led people into the difficult situations that we see today. At the heart of every forclosure is someone not willing to be honest with themselves.

While I also agree that the housing issue goes to larger issues of public safety, health and welfare, I cannot agree that these issues are dealt with merely through having a big house. There is plenty of housing stock available, older but serviceable homes and rental units that would be ideal for people starting out their lives or suffering some economic hardship.

This is not what people wanted during the housing boom. Against better judgement, people could borrow more so they did. Not being able to fight this urge, people took on more debt than they could reasonably handle. Thus the Santelli remarks of last week.

Another thing that I cannot forgive is anyone who thought that they were safe because the housing market would keep going up. Give me a break. You don't have to know much about finance or economics to realize that the value of anything is not stable - prices always fluctuate.

To the issue of people being thrown out of their houses and then showing up on the dole later, I say that I would rather pay for their unemployment and welfare benefits (which are temporary) than to pay off an underwater thirty-year mortgage. I have not run the numbers on this, but I suspect they may bear me out.

To the point on the government actually helping people take risks, there are two sides to this issue. In the short term, moves by the government might help to restore confidence and get those capital flows out there again. More generally, though, these moves by the government will hurt risk-taking and speculation.

How? By constantly changing the rules of the game, the government is making it hard for the investing public to say anything definitive about the direction of markets. One look at a one year chart for any market index shows the reactions of the market to this ever-changing landscape.

Oh, and one final thing about Frontline and Paulson. I think it was specious to suggest that the decision to let Lehman Brothers fail had anything to do with a personal vendetta of Paulson against Dick Fuld. Did the two guys hate each other? You bet your ass they do. Enough to do a thing like that? Please.

Thanks again, Josh. I hope that I have spoken to your objections and concerns. I appreciate anything that sparks discussion and keeps people talking. That's the only way we will come to figure these big things out.

Santelli Nails It Again

In public life, you know you are doing something right when your actions are officially rebuked.

This is exactly what happened to CNBC's Rick Santelli today for his indignant invective against the Obama Administration's mortgage bail-out plan.

The rebuke came from White House Press Secretary Robert Gibbs, who offered to buy Santelli a cup of coffee...decaf. Cute. Really cute.

Well, I think we should all buy Santelli coffee, whiskey, Chianti, Upper 10 (remember that?) or whatever the hell he wants to drink. Why? Because he has continued his streak as probably the most on-the-money (pun intended) financial reporter out there.

He has had it right-on over issue after issue. To wit:

• Santelli takes down the odious Jim Cramer over his market predictions in 2007.
• Santelli speaks the truth about the bank bailouts.
• Santelli calls it on the Fed and interest rates.
• Santelli explains why speculation didn't cause high oil prices last year.

Now, I know that those clips were filled with financial jargon and guys in ties yelling at each other, but I hope you can forgive me for that...it's the world I used to live in.

He was right on those issues in the past, but his insight was more technical and based on his background. This background is what make me like him so much. He cut his teeth trading bond futures at the Chicago Board of Trade. To do that well, one needs an understanding of the wider economy and enough knowledge of the credit markets themselves to trade successfully. In other words, this guy paid his bills because of how well he knew credit markets.

This time, though, he is right because he simply states the idea of moral hazard. This idea basically says that people who are sheltered from a risk behave differently than those who are not. The hazard part comes in when the party doing the sheltering has to choose who to shelter and who to leave aside.

Put very simply, Santelli, myself and I suspect a lot of people don't want to pay for the mistakes of others. People took out mortgages at insane terms that they could never pay back? Too bad...that's their problem. Banks lent too much and leveraged themselves to a ridiculous level? Tough shit, that's the game.

Now, I know what you are thinking: "Will, you always jump in to defend the big capitalist interests against the little guy. Aren't you a little guy? You aren't one of these pirates in neckties on Wall Street, are you? Why the sympathy for them? They got their bailout, now why can't we get ours?"

Well, to that I say that, in this situation, neither big capitalist interests nor the little guy are blameless. In a perfect world, I would say that we bail neither of them out. This is not, however, possible.

Why? Systemic risk. Just how this was defined and implemented (remember all the talk about "too big to fail?) was a bit of a muddle and was charged into without any idea of a coordinated plan or a desired outcome. For a great telling of that tale and it's implications, watch this great episode of Frontline from this past week.

I just thought that Santelli was expressing the frustration of people caught up in this financial crisis and also expressing the idea that was leading to that frustration.

And for that, I say, "Amen and preach on, Brother Santelli!"

Misreading Darwin And The Most Important Box In The World

...comprise the essence of today's two new posts. Check them out below.

What's that? How am I celebrating Valentine's Day?

Silly question. You should know by now that Valentine's Day is not a recognized observance in the City of Tiny Lights.

Is it because it is too commercial? No. Is it because I find the treacle and underlying message of the observance distasteful? That's closer to the truth.

Better yet, get the low-down from St. Valentine himself.

Following The Big Red Box

Every now and then, an idea comes along that is novel, educational, profound and entertaining.

Such an idea is embodied by the BBC's Box Project.

In short, the BBC painted a shipping container with their logo and website. They attached a GPS tracking system. They then sent it in September of 2008 to Southampton where it entered the great, global pool of shipping containers owned by NYK Line. They then have proceeded to track its progress around the world.

It has carried Chivas Regal from Scotland to Shanghai, household goods and make-up from Shanghai to Pennsylvania via Los Angeles and household goods from Newark to Santos, Brazil.

You can get all the details (and follow the box yourself) at the above BBC Box Project link.

There are so many great things about this project. First, it pays tribute to one of the unsung heroes of the modern global economy: containerized shipping. If you consume, well, nearly anything that you didn't grow or make yourself, there is about a 90% chance that that thing spent some time in a shipping container.

Goods in shipping containers get loaded and unloaded quicker which allows for a greater volume which, in turn, allows for lower prices for producers, shippers and consumers. Products get to their destinations quicker because shipping containers are intermodal, meaning that the containers can go from ship to rail or truck without being unpacked. Goods also pass through customs faster and there is little deadheading (empty containers...not at all related to Jerry and the boys). Shipments enter large container terminals and can be on the way to their final destinations within hours.

Think about the implications of all of this. This forty foot long metal box and how it is handled influences all aspects of your life every day and has done so for almost the last forty years.

To put it another way, and relate it to a previous post, it makes the idea of the "Iowa Car Crop" possible.

So, the next time you are driving down the highway (or stopped at a railroad crossing) and rusty metal boxes are whizzing past you, think of how they influence your life and how you live it on a daily basis.

The most profound notions often emerge from the simplest of things. I think this is a great example of just that.

The Survival Of Misunderstanding

This post is, in a way, about something Charles Darwin said.

Mostly, though, it is about something Charles Darwin didn't say.

There were two important 200th birthdays yesterday: Abraham Lincoln and Charles Darwin. Both born on February 12, 1809, they had their bicentennials celebrated this week. In the USA, it seems that (perhaps understandibly) that the Lincoln celebrations overshadowed those for Shrewesbury's favorite son.

As for Lincoln, by the way, check out this balanced assessment of Lincoln's legacy and this book

that connects Darwin and Lincoln and their influence on the modern world.

The media coverage of Darwin this week (and any time that Darwin's name gets mentioned) always seemed to mention the two key phrases connected to Darwin and his ideas: "natural selection" and "survival of the fittest."

Well, that's what Darwin was all about, right?

Not exactly.

Darwin did use the phrase "natural selection." As for "survival of the fittest," it is more complicated.

Darwin DID use the phrase "survival of the fittest," but it didn't have the connotations that have become ascribed to this loaded concept. In Origin of Species, Darwin uses "survival of the fittest" as a metaphor for his idea of natural selection, not as a scientific concept or description.

The meaning of "survival of the fittest" as we have come to know it traces its origins to the British philosopher Herbert Spencer.

Spencer used the phrase in his 1864 book Principles of Biology after having read Darwin's work. He used the phrase as a characterization of Darwin's ideas. In fact, Spencer disagreed with Darwin's notions, preferring Lamarck's idea of use inheritance, which argues that the use or disuse of an organ or trait could be inherited by subsequent generations (Jenks, did I get that right?)

That's not the way, incidentally, that "survival of the fittest" is usually used, though. The more popular use is more polemical, incendiary and mistaken.

"Survival of the fittest" is bandied about as a catch-phrase for all that is wrong with society and all this wrong is blamed (mistakenly) on Darwin and (also mistakenly) on Spencer.

What is this great societal wrong, you ask? Well, social Darwinism, that's what.

Social Darwinism is often linked with the (perceived) evils of capitalism. This is done thusly: if capitalism is based on competition between competing parties in pursuing incentives, then it is no small step to see that those who are successful are in some way inherently better than those who are not. This means that capitalists believe that the poor are somehow inherently deficient and therefore lesser beings than the rich.

Spencer believed this. Francis Galton, the originator of the idea of eugenics, believed this. Thomas Malthus may have hinted at aspects of this.

But...is this connection appropriate?

While it is certain that Herbert Spencer thought that society was evolving toward greater freedom for individuals, it is less certain that he believed that he thought the poor were inherently inferior. Francis Galton, while he believed that "more fit" people should reproduce more, he certainly didn't advocate genocide on the poor. He merely wanted to reform morals so that the poor would (in his estimation) become more fit. Thomas Malthus, while related to these notions, was more concerned with food supply and land reform. In any event, furthermore, he might have been wrong.

These qualifications, while interesting, do not answer the above question. So, is capitalism inherently flawed and elitist?

The best answer to this (in this situation, anyway) comes from Ludwig von Mises, one of the leading lights of the Austrian school of economics.

Mises argued that social Darwinism fundamentally contradicts the classical liberal ideas that helped give birth to our modern notion of capitalism and competitive markets. He says this is the case because the traits that lend to social cooperation (rather than "natural" aggression) are those that lead to maximize offspring in a given environment.

So, great. Where does this leave us?

It leaves us with the idea that, before using a phrase as loaded as "social Darwinism," it would behoove all of us to understand what it means and that in reducing complex ideas to tag-lines, we often do those ideas a disservice and make them less (rather than more) clear.

So, keep it simple, stupid, but don't make it so simple that it becomes stupid, stupid.

And Now...Choice Of Reading At COTL

Well, you have two bright, shiny, new posts today at COTL. They can be found below.

One concerns short pieces of brilliant writing and how I often fail in my aspiration to emulate them. The other is a collection of items about economic stimulus, "Buy American," the value of partisanship, the uselessness of the GRE, the new miracle drug "Stimulis" and much more.

I am planning longer examinations for the near future. Particularly, the parallels between themes in this and this and this intrigued me.

Barring that, I ask you, dear readers, is there anything you are dying to get my take on? Anything, large or small, that would benefit from the perspective of a grumpy libertarian barstool philosopher?

Or should I have a big plate of shut the hell up with mind your own business sauce served with a side of we don't give a shit?

What say you?

Brevity Is Indeed The Soul Of Wit

I guess I could have retitled this post, "A Lesson Will Shannon Should Have Learned Long Ago."

Oh well, it might be too late for me...

Anyway, for any of you who have done any amount of writing, there is one piece of (seemingly)counterintuitive thinking that is absolutely spot-on.

This idea is the notion that it is harder to write a short piece than it is to write a long one.

It is much, much harder to write a short, well-argued piece of writing than it is to do the same in multiple times the space. Think you would have a tough time explaining something in fifty pages? Try doing it effectively in three. Hell, try doing it on one side of an index card.

I am reminded of this whenever the semester begins and my supervising professor and I try and impress this idea on a new group of students.

Let me tell you from experience: they never believe you. They also often never believe how low a grade they got.

So, whenever I run across a well-argued, clear, convincing, provocative, tight and compelling piece of writing, I think it is simply a joy to read.

I figured I would share two of my favorite examples of this with you:

• David Friedman's "The Iowa Car Crop." It explains concepts like comparative advantage and trade theory in a clear, succinct and engaging manner. It is simply stupendous.
• Steve Landsburg's "Why I Am Not An Environmentalist." I have never heard the case against environmentalism stated any better. My personal favorite line: "My county government never tried to send me a New Testament, but they did send me a recycling bin."

Anyone who writes or reads should appreciate the ability to express oneself in an engaging, succinct manner.

I aspire to this. This website shows that, on this score, I win some and I lose some.

Just how many W's and L's I have is really up to you.

I am a little bit afraid of what you think about this, but if you want, tell me anyway.

I can occasionally accept limited amounts of constructive criticism.

Multum In Parvo

A few items of interest:

• Bryan Caplan comments on the new edition of Henry Hazlitt's classic book Economics in One Lesson. Be sure to read his rebuttal of Brad De Long's "fears" about this book. It was this book that was partially to blame for my interest in economics. It is clear, elegant, well-written and convincingly argued. If you read one book on economics in your entire life, this would not be a bad choice.
• Carmen Reinhart and Ken Rogoff's lessons from past financial crises. I mainly agree with them, especially in the phrase "prolonged slump." Think 1970's, not 1930's.
• Martin Feldstein and Greg Mankiw on economic stimulus. I mostly agree with Feldstein, I agree less with Mankiw. I know Mankiw is a partisan of ideas like this and this, but I am more convinced with these critiques of those positions.
• For a more, ahem, arousing take on stimulus, watch this hilarious video from reason.tv.
• Burton Malkiel, author of a classic book on finance and investing, opposes the idea of "Buy American." So do I. It sounds too much like this to me.
• A great piece at Cato Unbound on political parties, appreciation and the need for partisan organizations. Read responses here and here.
• An English professor's tale of retaking the GRE. Not surprisingly, he did well. Not surprisingly (to me, at least), he found the test lacking.

Journey Into The Heart of (Leftist) Darkness

Y'know, it's funny where you find yourself on some Saturday nights.

Last Saturday, I attended a discussion forum entitled "Obama and the Left," sponsored by a progressive publishing company.

Before you call the Mendota State Mental Hospital and get the commitment papers rolling, allow me to explain.

I attended this event with my good friends and intellectual fellow-travellers Greg, Rick and Jessica. Greg and Rick ran across the flyer, thought it was a "can't miss" sort of event and invited me along. As a grumpy libertarian, I thought it would be a frightfully good wheeze and besides, I hadn't been angried up in a while.

Before going, we steeled ourselves with shots and beers at the corner tavern near Greg and Rick's house. This being done, we descended upon downtown Madison to see what we could see.

The first thing that struck me, before the presentations even started, was the amount of people in attendance. I mean, think about it: they filled a 300+ seat theater to standing room only capacity on a Saturday night for a political discussion forum...only in Madison.

The other thing that struck me immediately was the smug, self-satisfied, humorless air of unbearable earnestness that permeated the attendees. Oh yeah, they laughed on cue at the appropriate forced jokes of the speakers, but it was more a cry of acclimation than a show of the common human emotion of joy. We were even told to be quiet by someone behind us. Honestly, what am I, a fucking five-year-old?

When the program began, it was obvious what we were in for that night. All of the preposterous remarks need not (and should not) be repeated here, but here are some highlights:

• One speaker taking lines from FDR's inaugural address in 1933 as a great new rallying cry for the progressive movement. Specifically, he stressed the portion where FDR recounted the "chasing of the moneychangers from the temple" story from St. Matthew's Gospel. The speaker was obviously monumentally ignorant of the anti-Semitic overtones of FDR's usage of this story...or he was an anti-Semite himself and wanted to clothe his damnable beliefs in the mantle of progressive politics.
• Another speaker reading loaded rhetoric about the United States and the Middle East that was shot through with half-truths, prevarications and outright lies. Her invective (if it could be called that) was made more odious by the fact that she read it out from a sheaf of paper without looking up. Lack of rhetorical force is hardly the term.
• Yet another speaker calling for the impeachment of George W. Bush and Dick Cheney, seeming to forget that they are no longer in elective office...hell, the only thing that GWB is controlling now is a golf cart and a case of Lone Star Beer. This speaker also dragged Naomi Klein's awful book The Shock Doctrine into the discussion. This book, treated as scripture by the left, is filled with distortions, mischaracterizations and flat-out shoddy research into Milton Friedman's life and work. Click here and here for complete discreditings of Klein's shabby piece of lies and character assassination.
• A member of the audience talking about a "warm, safe socialism" where everyone would (apparently) get everything for free and government would care about everyone and everything equally. Where the free stuff is to come from, who is to pay for it and how it is to be distributed were problems that were not addressed, oddly enough. Perhaps the idea of economies of scale has no place in a socialist utopia.
• A veteran of the U.S. Army who, in giving a political speech wearing military insignia, was clearly breaking both Department of Defense and Army codes. Oddly, no one pointed this out to him. Hmmm...

I could go on, but you get the idea.

Greg, Rick, Jessica and myself had to retreat to the corner tavern and drink and eat pizza until things made sense again. Thanks again for everything, booze and food.

In general, the speakers and attendees dragged out the same old tired shibboleths of the left. Our new president, who at the time had been in the job for less than a week, was mentioned to call attention to his failures (in five days?) or to project their far-fetched and unworkable agenda onto the canvas of President Obama.

In a way, I feel sorry for all the people who are seeing Obama as a transformative figure and therefore projecting all of their desires and expectations onto the man. They seem to forget that he is, first and foremost, a politician. This means that nobody gets everything they want. Sorry, that's how it goes.

This event, furthermore, shows that the left's supposed tolerance and open-mindedness is a sham and a lie. They are tolerant of people who believe the same way they do. They cheer if you repeat the right slogans and curse the right (pun somewhat intended) targets. If you don't, then they cannot grasp the concept that someone might respectfully disagree with them, in whole or in part. Greg and Rick, for example, submitted questions (and good ones at that) that were ignored by the moderator. Where's your tolerance now?

They never compromise. They never listen to dissent. They won't admit to other views. They treat their opposition as stupid, backwards and ignorant...in a way, as lesser beings. They never feel the need to have their facts straight or to understand the basis of their arguments. They won't retreat even when they appear to have lost.

In a word, they are extremists. True-believers. Bigots.

My only comfort is in knowing that their brand of extremist nonsense is exactly that, and that I have faith that, given the choice of their ideas or those of others, the great American public would reject them soundly.

Do I reject their right to speak freely. Of course not. This does not mean, however, that I agree with their baseless claims, evangelical devotion to untruths, unrealistic expectations, shocking ingorance or outright intolerance.

I close with a quotation from South Park co-creator Matt Stone that pretty much sums up what I thought of the whole affair and its connotations:

"I hate conservatives, but I really fucking hate liberals."

Inaugural Leftovers

Just a few interesting pieces in the aftermath of this week's coronation inauguration:

• A supposedly easy question with an interesting answer: who was our first African-American president? Would you be surprised to know that it might have been Condoleeza Rice? Read here for more of this interesting (if somewhat far-fetched) argument.
• Watching all of the inauguration hoopla, this question plagued me. Might there just be a hint of a double standard in American political discourse (that's a rhetorical question).
• Barack Obama, Libertarian? His first few days on the job have been encouraging.
• I am not afraid to admit that George F. Will nailed my take on the inaugural address. Not that I agree with the substance, but that is how I interpreted it.
• A great piece on the drama of civil religion that are inaugurations. Another interesting article from the same site on the "Oprafying of Obama."

Did Blago Win?

I happen to think that he won, lost and drew all in the same week. To wit:

Roland Burris: Blago's Win

I know I painted a bleak picture for Roland Burris's chance of being seated in the Senate.

I was wrong.

I will explain why below, when I talk about Blago's Draw.

Through a circuitous route, an unlikely (or not) roll-over by Senate Democratic leaders and a series of dramatic removals of Burris from the Senate precincts, it appears that he will be sworn in this week.

For Burris, these unlikely events must seem like walking out of the fog to find yourself somewhere new and wonderful. He pretends to be surprised, but as I will discuss below, I think he knows exactly how this all went down.

So, on the affair of Roland Burris (click here for Saturday Night Live's take), it seems that Blago won.

Something else happened to him, though...

Impeachment: Blago's Loss

Yes, this is a pretty BIG loss.

This week, Blago became the first Illinois governor ever to be impeached.

Seeing as all the members of the General Assembly save two voted to impeach, it seems like a pretty resounding message to Blago, even from scions of his own party.

The message: "Your ass is grass. Your career will soon be over. You might even go to jail."

The particulars of the trial are being worked out and the lawyers are being sized up.

One thing that you can be sure about, though, is that the Senate wants this over quick and they want the decision to be decisive. Keep an eye on that.

Blago's Draw: How The Deal Went Down

So, it seems that Blago won on Burris and lost on impeachment. How could he also draw.

Here is what I think happened (CAUTION: SPECULATION AHEAD).

All of the noise around Roland Burris and the Senate seat in Illinois grabbed national headlines along with the crimes (alleged, for now) of Blago. This all was happening at the same time that a new Democratic administration is taking over the White House, filled with no small count of people from Illinois.

The most important Prarie Stater there is, of course, President-Elect Obama. He saw that the Senate Democratic leadership, mainly Harry Reid and his former colleague from Illinois Dick Durbin, were holding Burris back. By doing this, Senate Democrats were keeping this story in the public eye for too long and questions were being asked about Democrats that Obama didn't like.

This situation was about to become Obama's problem, like it or not. He wanted it killed. Now.

So, I suspect that he went to Reid and Durbin and told them to seat Burris, stop holding this back and end the arguments over the wisdom of this political move. He also made them force Burris to agree to not seek re-election in 2010. Burris gets his two years in the Senate, that top line on his tombstone and all are happy. Illinois will have an election for a new senator in November of next year.

Do I think Obama talked to Blago through all of this? No, because Blago is a pariah at present and an imcoming president would do well to steer clear of him as much as possible. Obama could deal with it without having to talked to the doomed Blago.

So, Blago really drew on this whole thing and will most likely lose in the end. He got his guy into the Senate, he will most likely be impeached and Roland Burris will be more an interim senator than anything else.

As for the deal, I fully realize that this is a cynical view of The One, and how dare I say such things when we are on the verge of what is being hyped as the most important event in American history that has ever or will ever be.

Well, I cannot help but point out that Obama got his political education and his first political experience in Chicago and, in Chicago, that is how things often get done. Not through official channels, but through an unwritten "understanding" between people.

Let's just hope that this vaunted "change we can believe in" is not the nationalization of Chicago machine politics. I suspect it won't, but I don't think you can blame me for thinking about this more than a little.

So, Mr. Obama, keep a close eye on Springfield over the next few weeks. Hell, keep a picture of Blago in your wallet.

Look at it whenever you feel those old lessons from the wards of Chicago creeping into your mind.

Let's hope that the lesson of Blago is a lesson learned for our new president.

Multum In Parvo

A few more items of interest, taken from the blogs listed on the left sidebar of this very site...

• Arnold Kling and Michael Cannon's paper on why "corporate" medicine is a good thing.
• Edward Glaeser's excellent article on the need for "small government egalitarianism."
• Eugene Volokh's take on the curious move by a U.S. Representative to repeal the Twenty-Second Amendment.
• Stephen Dubner's exploration of the effect of eliminating trays in college cafeterias.
• Don Boudreaux and Brad DeLong duke it out over partisanship and economic stimulus. Richard Posner takes a different view.

Multum In Parvo

Here are a few things of (possible) interest:

• An interesting post from Tim Harford on becoming happy by association.
• A very funny spoof on Blago's quoting of Kipling's "If."
• Stephen Dubner's take on the cost of fearing strangers at Freakonomics.
• Tyler Cowen's musings at Marginal Revolution on the geography of Johnny Cash songs.
• Also at MR, Alex Tabarrok discusses historians, economists and the Great Depression.
• A great essay by William Burns at Cato Unbound about terrorism and risk assessment.
• David Friedman's ideas on using World of Warcraft to teach economics.
• Yesterday was Elvis's birthday. Enjoy this clip from the '68 Comeback Special. You can get the whole thing at YouTube.