Saturday, July 30, 2011

"I Just Have to Stay One Lesson Ahead of the Kid"

The title is Marge Simpson's explanation of how she's going to teach piano lessons. It's how I feel sometimes about teaching economics. And it might be how the government ends up feeling about inflation.

Earlier I blogged about the coin seigniorage proposal that "solves" the debt crisis by producing several hundred billion dollars in platinum coins. Some might consider this inflationary. Mostly because it is.

Tyler Cowen quotes John Hussman pointing out that short-term debt (like most federal government debt) can't be inflated away easily. I guess it can if the money creation outstrips the price adjustments. In that sense, the Fed just has to stay one lesson ahead of the people.

It should be obvious that that type of incentive is not really one we want our monetary authority to have.

Finding Your Life's Calling

My wife got this book from the library recently.

I saw the name of the author and thought, "Well, of course a lady named Dorothy Dougherty is going to grow up to be a speech therapist; she probably was meeting with therapists herself until she was a teen just to learn how to say her own name."

If my parents had been as prescient as Dorothy's parents, they would have named me Poverty Layabout.

Professor of Economics

Okay, I waited a little bit to make sure this is true, but I'm a professor now. I mean, I know I have the job teaching economics, but I didn't know if calling myself "professor" was getting ahead of myself. It turns out that my department's support staff refers to me as "professor" when they send out e-mails, and that's good enough for me.

As a professor of economics (I promise not to call myself that in every paragraph), I have some cache with my students. Whereas before I was just a crank with a love of commodity money, now I'm a serious holder of serious opinions.

Last week we covered the chapter on the federal budget, which ended up sounding a lot like the cause of all our problems is Baby Boomers. (It sounded that way because it's true.) Anyway, one of my students came to my office hour to ask some follow-up questions, including what I thought would happen in the current budget impasse.

Here's how I see the problem: we bought a bunch of things in the past (hand-outs and wars in the 1960s and -70s), and have to pay for it now. There are three ways to do that.

  1. Take all the money now.
  2. Stop giving things out now.
  3. Take value from the money everyone gets to keep.

The first option isn't going to fly. Beyond the current state of economy, which would not support tax hikes, good luck telling folks they are paying for services rendered 40 years ago.

The second option isn't going to fly. You have a powerful faction that derives its power from the power of government patronage. Honestly, what's really the point of voting Democrat if they can't give you free stuff? To feel like a member of the "smart set," I guess. That explains those who have the degree to back their egoism, but those folks are a pretty small subset of the party's supporters.

That leaves the third option. Republicans get to keep taxes from going up and Democrats get to keep benefits from going down. So seemingly crack-pot ideas like "coin seigniorage" aren't so crack-pot after all.

Tuesday, July 26, 2011

Current Affairs

Of course, I mean current affairs in my life. Because everything is, after all, about me.

My life is terrible, and I don't know what to do about it. My life was terrible last July, also, when we were within a week of homelessness and I had to prepare for my qualifying exams. And the July before that was terrible, too, as I went on a long vacation with my wife's siblings' families and was moving to Virginia without a job or a place to live yet lined up. My summer of 2008 was terrible because I had 10 credit hours of class, which would be the equivalent of a 20-credit semester. When am I ever going to have a good summer again?

Yesterday we had rental negotiations fall through when we had to point out that the landlord's "policy" is, in fact, illegal. It turns out home teachers are supposed to coordinate moving committees, which fact my home teachee family commemorated by needing TWO moves in one weekend. Do you know who moves my family? I do.

I know this post is all over the place. Cram it. I don't need to hear that crap. My life is terrible and it's not going to get any better until at least September.

Monday, July 25, 2011

Constitutional Responsibilities

In Herbert Hoover's Memoirs, he writes he was in favor of ending Prohibition, but felt it was improper for a president bound by the Constitution to advocate changing the Constitution in any way. Congress and the states should decide without his input.

Luckily, our current president has no such hang-ups. Hardly a day passes now without him expressing his contempt for constitutional limitations on presidential power.

First last Friday he said to a town hall questioner, "I'm sympathetic to your view that this would be easier if I could do this entirely on my own." Then today he said, "The idea of doing things on my own is very tempting, I promise you, not just on immigration reform."

It turns out he thinks "protect and defend" means "wistfully opine on the shortcomings of."

Friday, July 22, 2011

Things I Did a Long Time Ago

My wife's been gone all day, so I finally raided her computer for pictures of events I was supposed to blog about.

Back in May, I received my master's degree. Actually, I received it in the mail last week, but in May I got to dress up and sit through a boring ceremony.

Then my mother stayed to watch our kids while my wife and I went out of town for our 10th anniversary. Most people go someplace nice for their 10th anniversaries. Well, most people aren't poor. We went camping, at a site in Shenandoah National Park my sister had paid for, and then at a state campground in West Virginia that was near three counties I'd never been to.

These four counties were a hole in my map that I've now filled in. And to make it more exciting, it was the first time I've ever hiked to a new county! We camped in northern Greenbrier County and hiked to Webster County and Nicholas County.

When we weren't hiking to new counties, we were sitting in the screen-thingy we borrowed from my sister, reading. We spend a lot of time sitting next to each other reading.

I'd like to tell you that we got this shot by training a squirrel to operate a camera. I'd like to, but I won't. The truth is, the squirrel was shiftless and wouldn't listen to directions, so we had to use the camera's timer function.

One day we went for a drive to get cell reception, and found ourselves 50 miles away in a sort of "big city" for that part of West Virginia. Down the street from the Wal-Mart, we found this evidence of modern America.

"The doctors say if yous has any more baby they's gonna take yo' foot."

We returned home to find everything the way it should be. Props to my sister for letting us borrow all her camping stuff, and for spotting us a campsite the first night.

Working for Money Is for Squares

I used to have no job, and I earned no money. Now I have two jobs, but I've still earned no money. That wasn't what I expected when I got hired by either place. Now I'm in the interview process for my third job, and I can't decide if I should take it or not. I'm supposed to be concentrating on school more now, not less. Being poor sucks. I don't recommend it.

Speaking of problems only poor people have, we live in a townhouse with attached neighbors on both sides. The neighbors to our right are the loud, smelly, trashy couple I've blogged about before. The neighbors to our left were quiet and sort of nice; the husband was very friendly, but the wife would hide for weeks at a time and ignore us when we happened to catch a sighting.

If you told me one of our neighbors would be evicted, I would have guessed it was the trashy couple. And I would have been wrong. And now that the quiet neighbors are gone, we got a notice that we have to move everything in our place away from the walls and be gone all day next Friday, because they have to exterminate bedbugs.

This was the final impetus needed to get my wife to agree to move right away. We are looking at a couple places that will be available next weekend.

Wednesday, July 20, 2011

Your e-Harmony Profile Needs Updating

No one's a romantic anymore.

Romantic love is now as alien to us as knight-errantry, and young men are no more likely to court a woman than to wear a suit of armor, not only because it is not fitting, but because it would be offensive to women. As a student exclaimed to me, with approval of his fellows, "What do you expect me to do? Play a guitar under some girl's window?" Such a thing seemed as absurd to him as swallowing goldfish. -- Allan Bloom, The Closing of the American Mind, pp. 116-7

Bloom's contention is that romantic love is based on the recognition of the female sex as distinct from the male, and as desirable, and that modern feminism has sought to blur the distinction and to make the desiring an aspect of oppression. You have to treat your female friends like the rest of the dudes you hang out with or else you're a sexist misogynist.

"It's Never the Ones You Hope"

A general rule of thumb to remember when you hear about something hot happening: the people doing it are not hot.

I can virtually guarantee that these people who had sex in the Connersville, Indiana, city pool were two of the five grossest people there that day. Just like the braless lady at Wal-Mart is the lady who really needs a bra. Or like how the neighbor who doesn't close the blinds when she dresses is the one who needs to be hidden by blinds. It's always the way.

Title quote from Barry Zuckerkorn, attorney at law.

Tuesday, July 19, 2011

A Moderate President

What are the issues on which President Obama refuses to cave? The rent-seeking behaviors of his factional constituents.

Bankruptcy law exists for the purpose of restructuring bankrupt companies, but since that would have gutted auto unions, it was not allowed to apply to General Motors and Chrysler.

When the recession demanded action on job creation, the president demanded a health care law that most Americans oppose, one that is structured to raise government spending, raise health care costs, and not do a thing about the actual problems of the system. Why? Because the currently-vested interests of the health care system demanded it.

Government spending is on an unsustainable course, and businesses continue to not hire, but the president's debt plan is to leave entitlement programs uncut and raise taxes. This doesn't avert default. In fact, it virtually guarantees it. But it moves the default date beyond the next election.

A president who repeatedly had opportunities to make substantive changes, but who cynically protected the parasites draining the dying host. He brought change, of the very worst kind.

Technical Difficulties

Remember a few weeks ago when I blogged about my upcoming posts? Well, despite what you might believe, I remember, too. The problem is a technical one. My wife's computer has battery and heat-dissipation issues to rival my computer's, so getting the pictures off her computer is not as easy as it used to be. When I remember to take the cooling fan downstairs and blog from her computer, I'll finish some of the promised posts.

Monday, July 18, 2011

A Great Time to Teach Macroeconomics

From Tyler Cowen's blog:

With this [the American debt ceiling issue] and the euro crisis, in the next few weeks (days?) “the world” is going to have to step up to the plate in a big, big way. Stay tuned. If you’re not afraid, you haven’t been paying attention.

Carmageddon

Not being in The Southland (to use the vernacular) last weekend isn't stopping me from having an opinion on Carmageddon, and more specifically on people who have opinions on Carmageddon.

As for closing the 405, I assume it had to be done for the purposes of demolishing the Mulholland bridge. If so, it was done correctly: a lot of advance notice and dire predictions kept everyone off Sepulveda.

As for predicting the end of the world, there is an element of society which derives either income or worth from over-reacting. I try to ignore these people as much as possible, to the extent of even blocking the Facebook updates of certain hyper-dramatic high school classmates and fellow ward members.

As for thinking the lack of drama associated with Carmageddon means we should have one every month, as this reporter proposes, it shows a shocking lack of ability to reason. Look, Carmageddon was "successful" because people were frightened into staying home. So frightened, in fact, that the fearful results didn't materialize. Is this really a repeatable outcome? Or is it more likely that future Carmageddons will see an increase in traffic because people think it's a good time to drive around, while all the fools are stuck at home.

And speaking of being at home: if quality of life increases as voluntary mobility decreases, as this writer claims, then the highest quality of life would be delivered by incarcerating the entire Southland population. House arrest is the new nirvana.

Decreased traffic only improves life for those driving around, experiencing the decreased traffic. This fool thinks we can all benefit from having most of us be locked up at home. If house arrest came with a loss of reporting privileges, I'd agree that his house arrest might be a good place to start.

Bicycle Dreams

I am not the bike commuter I once was, but I look forward to the day I will be again. And when that happens, I do not expect that I'll spend more on a bike than I would on a car.

But here are a few bikes I do wish I owned at least one of.

Trek Belleville

Novara Transfer

Breezer Uptown 8

Which isn't to say that my current bike is bad. It's actually really good. But these bikes are wonderful.

Saturday, July 16, 2011

Stupidity Surplus

In the multiply-titled Thursday Next in First Among Sequels by Jasper Fforde, the major public policy issue of the day is a stupidity surplus that threatens to build up and explode in a massively boneheaded boondoggle.

It turns out that this type of analysis is incredibly effective in looking at the current state of the American economy. From Peter Boettke's blog post yesterday, he gives his take on Tyler Cowen's Great Stagnation argument thus:

We realized the gains from trade (Smithian growth) and we realized the gains from innovation (Schumpeterian growth), and we fought off (in the West a[t] least) totalitarian government (Stupidity). As long as Smithian growth and Schumpeterian growth outpace Stupidity, tomorrow’s trough will still be higher than today’s peak. It will appear that we can afford more Stupidity than we can.... But IF and WHEN Stupidity is allowed to outpace the Smithian gains from trade and the Schumpeterian gains from innovation, then we will first stagnate and then enter a period of economic backwardness unless we curtail Stupidity, explore new trading opportunities, or discover new and better technologies.

So it seems Boettke thinks we live in a Nextian world, although the problem in the Nextian world is that government hasn't been using its stupidity, but rather socking it away, while the problem in the Boettkean world is the opposite. Either way, the Stupidity Surplus will kill us all.

Thursday, July 14, 2011

I Don't Like Where This Is Going

I don't want confirmation or denial from anyone who's already read Empire Falls, but I just want to go on record that I am upset about the implications I get from connecting these three passages.

Passage 1:

The competition for the love and admiration of men like Walt and Miles would be passed like a torch to some other girl, some kid, really, who'd look at Janine and Charlene and never even suspect that they'd been there and done that. (p. 70)

Passage 2:

Walt, apparently forgetting there was a friendly hand in his front trouser pocket, damn near leapt off his stool, twisting Janine's wrist in the process. "There she is," he cried, ignoring his fiancée's distress. "There's our little beauty." (p. 71)

Passage 3:

From this dream Tick concludes that she's learned something useful: whatever means you harm will look you over first. (p. 75)

Don't leave comments telling me I'm right or wrong. I just want this post to link back to when I get where I think this is going and I write an angry response.

"Will This Buy Me Any Bread?"

It was easier to believe in God, she said, or at least the possibility of God, on Martha's Vineyard than it was in Empire Falls. Miles knew what she meant, understood the bitter irony. Half the cars in the Vineyard chapel's lot were either Mercedes or Lexuses. No surprise that their owners believed that God was in His heaven. -- Richard Russo's Empire Falls, p. 48

This line left intentionally blank as a buffer between two block quotes.

In 1897 a young David O. McKay stood at a door with a tract in his hand. As a missionary in Stirling, Scotland, he had done this many times before. But on that day a very haggard woman opened the door and stood before him. She was poorly dressed and had sunken cheeks and unkempt hair.

She took the tract Elder McKay offered to her and spoke six words that he subsequently would never forget: “Will this buy me any bread?”

This encounter left a lasting impression on the young missionary. He later wrote: “From that moment I had a deeper realization that the Church of Christ should be and is interested in the temporal salvation of man. I walked away from the door feeling that that [woman], with … bitterness in [her heart] toward man and God, [was] in no position to receive the message of the gospel. [She was] in need of temporal help, and there was no organization, so far as I could learn, in Stirling that could give it to [her].”

-- H. David Burton's April 2011 General Conference address "The Sanctifying Work of Welfare"

Another line of text that's not really here.

So where is the hope and where is the faith and the love?

What's that you say to me?

"Does love light up your Christmas tree?"

-- U2's "If God Would Send His Angels"

Wednesday, July 13, 2011

The Coin of the Realm

Ron Paul asked Ben Bernanke today if gold is money, and the Ben Bernank said, "No." He said it's a precious metal.

Given Helicopter Ben's definition of money, dollar bills aren't money, either. They're pieces of fabric.

What makes something money is when it's a commonly accepted medium of exchange (often abbreviated CAMOE, which makes it sound much cooler/dirtier than it really is). Several factors can make something attractive as a medium of exchange, with an important one being its track-record as a store of value. If current trends continue, a massive devaluing of the dollar would be coming (maybe this August, maybe in 2013). Jurisdictions foreseeing this are preparing today. The Bearded One would have you believe that the definition of money is solely based on government's legal restriction, but there's a long history of money arising spontaneously where it is legally prohibited. In the future, we might see it happen again.

"Another Day Older and Deeper in Debt"

Today in class we were talking about the loanable funds market and government deficits. I brought in a book chapter by Steven Landsburg from 1993 where he heavily pooh-poohs the idea that government deficits have real consequences, and I asked, "How does this relate to what we've seen in Greece, Ireland, and Iceland, and what we're currently seeing in Italy and the United States?"

Crickets chirped.

"Are you aware of what has happened in Greece? Or what is being discussed right now [19 miles away] at the White House?"

Somewhere in the distance, a dog coughed.

In the students' collective defense, it's not like I can expect them to be conversant with macroeconomic events when they come to a macroec--ah, crap.

So what is going on? The nation has a statutory limit to how much money the federal government can borrow. (The fact that we need a limit should tell you everything you need to know about the incentives of politicians.) At the current pace, the Federales are expected to reach the limit on August 2nd. If this happens, then government spending is reduced to a pay-as-you-go pace, with debt servicing taking priority.

The president says it will be a national default. That's not likely. What's certain, though, is that many, many "non-essential" government services will be stopped.

Congressional leaders want any agreement to raise the debt limit to be tied to a reduction in the deficit. The draconian proposal Republicans support is to return federal spending to the levels last seen in the dark ages of 2007. Gasp! Shudder!

The president wants to "increase revenue," despite the fact that he is on record as recently as 2009 saying raising taxes in a recession is a bad idea. Now, however, he wants to raise trillions in taxes, and not exclude low- and middle-income Americans.

I wrote last week about the holes in the argument that deficit reduction is not related to unemployment. But given how difficult it is to hold the president's attention on economic matters, maybe Speaker Boehner should tell him that reducing the deficit will bring about some of the president's higher priorities, such as:

Here's the thing about the president, though: he knows when to double down. He was the last guy to blink on his worthless health care law, and when he says he will withhold seniors' Social Security checks if he doesn't get his way, he's not bluffing. For 50 years politicians have been kicking spending down the road, figuring it will be someone else's job to pay for it. This is the last possible kick. We either adopt the Republican plan of beginning to deal with it now, or we adopt the president's plan of bankrupting the country sometime after the next election. Moody's sits waiting.

Title from Tennessee Ernie Ford's "Sixteen Tons."

Taking Attendance

The class I'm teaching is a whatever-they-call-a-shortened-term ("accelerated semester"?) class, which means it's a lot like a prison sentence: we're going to see a lot of each other for a while, and then try our best to forget it all as soon as it's over.

With only 17 class meetings, each day is like a week of a regular semester. So the one student who only came to two of the first five classes was effectively gone for a month. (That didn't stop him from giving some long, rambling speech that he appeared to be reading from his computer screen.) And the girl who just added the class today was basically joining at Spring Break.

I have a tendency to ask rhetorical questions. I don't want answers; I want to direct their thinking onto a question before we move to the answer of the question. My students being modern young Americans, they have not met a silence they can't fill with 15 minutes of noise, and rhetorical questions make these soliloquies seem invited.

I've got to change my teaching style, but the semester is nearly half over, anyway.

Monday, July 11, 2011

Mail Bag: Clapping Mormons Edition

Erin: I had imitation Cafe Rio at your house once. It was good, but not applauding-in-church good. I don't know if that was the fault of Cafe Rio or you.

Stephen: Yes, I think you have your ratio about right. I don't think they were in the employ of Mr. Cafe Rio (who my wife claims should be called Brother Cafe Rio), but I think Brother Cafe Rio probably thought to himself, "It really is as easy to take Mormons' money as my Herbalife upline said it is!"

Alanna: I don't know if Craig was clapping or not; I was looking at my shoes in mortification. As for loosening things up, I am on record as supporting that. But maybe we should start with clapping for sermons and salvation, not for a new place to spend money.

Aren't They the Same Thing These Days?

In this blog post, Alex Tabarrok writes, "This is the attitude of a serf not an American." But I have found that any time I recommend ending a government program, nearly always my conversational partner asks a question beginning, "But who will...". We cannot imagine a world where private needs are met by private means. We are all serfs.

Sunday, July 10, 2011

Necessary and Proper

Here's an article about a family having their gold coins seized because the government thinks they were stolen so long ago that the statute of limitations has expired. In that article, we read this:

However, his license to deal scrap gold, which sometimes took him to the Mint, was revoked.
That's right: you need a license to deal scrap gold. Just like you need a license to braid hair. Because uncertified braiders can take money from their competitors result in DEATH!

Two months my daughter got her hair cut by an unlicensed beautician and BARELY ESCAPED WITH HER LIFE!!!!! I can only imagine what would happen if she tried to buy scrap gold from an unlicensed dealer. Oh, Government, save me from the thought!

The Things That Really Matter

Man in Priesthood Opening Exercises: "I'm visiting from San Diego. I'm here in town to open a restaurant. It's Cafe Rio."

The Brethren of My Ward: spontaneous applause in the chapel

Seriously?!

I was going to entitle this post "Why I Hate Mormons." A man comes to town and announces that he's allowing you to continue the materialism you developed in Provo, and you reward him with a round of applause. I realize I was just a young child when Official Declaration 2 was announced, but I believe not even that was applauded. But allow me to continue to signal my awesome Latin American mission or my high levels of disposable income, and I will break whatever protocol you need. Just take my money, please!

Friday, July 08, 2011

Pre-Committing to Blogging

To shame myself into blogging regularly again, I'm posting a list of future post topics.

  • Camping trip to West Virginia
  • Tee ball
  • New video camera
  • Economics conference in Richmond
  • New job(s)
  • County trip to Ohio
  • Great American Ball Park
  • Troy municipal pool
  • Hoosier Hill
  • County trip to Pennsylvania
  • Twelve Mile Island
  • Summer teaching
  • Casey Anthony
  • My left knee
  • Moving

Regime Uncertainty

Some folks wonder why we're spending legislative effort on the deficit instead of unemployment. But the debt limit talks involve two of the three things that would jump-start employment.

  1. Not raising taxes (which one side of the deficit talks is insisting has to be part of the deal).
  2. Lowering government's need to take future profits (meaning debt reduction to make current tax rates a more-believable long-term commitment).
  3. Repealing Obamacare (which committed government to an unsustainable spending path and altered the employer/employee relationship in still-not-understood ways).

How many of these things is the president seriously entertaining? Does he even have an employment plan? He'd probably say yes, but when I responded, "QE-3 doesn't count," he'd say, "Oh, um, well, in that case...."

Friday, July 01, 2011

Am I Coming Across Too Busy? Because I Can Be Busily Idle

I thought Eric Holder was a busy guy. I mean, what other excuse does he have for not having read a law he challenged in court? But it turns out that, when he wants to be, he can have quite a lot of free time.

For instance, when the Justice Department wants to have an afternoon pretending that actors are experts about issues faced by their characters, he's available to swing by. And he also has enough time to get involved in whether there should be another season of "The Wire."

It bothers me that most reactions to this story regard whether or not there should be another season. Why is no one talking about whether or not the Attorney General of the United States should be issuing opinions about the scheduling of a TV show which does a wonderful job pointing out the failings of the Attorney General of the United States and his army of bureaucrats in a failed "War on Drugs."

Title a paraphrasing of one of my favorite lines from the movie Singles.