Archive for May, 2010

The past is always changing

Friday, May 28th, 2010

Only the future is certain.  The past is always changing.

The Congo was the poster child for the dreadful evils of colonialism.  We were supposed to look at how cruelly the Belgians treat the poor natives, look at how many natives colonialism has murdered to maintain its savage rule.  In 1961, it got independence.  The whites fled rape and murder.  Two or three weeks after independence, the Congo became a savage hell hole, and has remained that way ever since, Zimbabwe in fast forward.  The whites fled the Congo faster than they have fled Zimbabwe, so the descent into savagery was faster.  Yet now, the outcome of decolonization has been forgotten, and the Congo is back to being the poster child of the evils of colonialism, and we repeat the same disaster over and over again:  Haiti foreshadowed the Congo, the Congo foreshadowed Zimbabwe and South Africa.

Until the Soviets collapsed, 99% of Academia enthusiastically agreed that the Soviet Union’s command economy was growing much faster than the US’s old fashioned semi market economy, and the remaining 1% agreed that it was growing at least as fast – or at least that is what they said when anyone was listening. Since the general consensus outside of Academia was that the Soviet Union was a festering economic basket case whose central plan existed only on paper, collapsing into disorderly pillage in actual practice, one wonders what happened to any academic inclined to say that the Soviet Union was a festering economic basket case, whose plans and statistics were utterly disconnected from the chaotic and destructive reality.

Before 1972, every historian of science agreed that Darwin’s big idea was natural selection, and those of them that addressed the issue of Lamarck and common descent agreed that Lamarck proposed common descent.

Natural selection, however tends to lead to disturbing thoughts and disturbing words, for example “Once the superiority of races with a prevailing aversion to incest had been established by their survival …” Superior races! Oh the horror, the horror. Natural selection suggests endangered species have it coming to them, that women are not naturally equal to men, that genocide is, if regrettable, nonetheless natural and in the long run frequently inevitable, and lots of similarly horrifying stuff like that, and I have left out the really shocking stuff to avoid offending the readers too much. So it was progressively de-emphasized to students in the textbooks. But if you de-emphasize natural selection, this leaves a mysterious gap. What was Darwin famous for?

So in 1972, history was corrected, Winston Smith style. Darwin got common descent to fill the gap left by the de-emphasis of natural selection, just as Winston Smith invented comrade Ogilvy to replace the vaporized unperson Comrade Withers, and common descent was taken away from Lamarck. The textbook “Biology today” page 638

… in the Origin of Species. The central claim of that book can be fairly simply stated. According to the Darwinian theory, any natural group of similar species-all the mammal species, for instance-owe their common mammalian characteristics to a common descent from a single ancestral mammalian species.

And as for Lamarck, he got the shaft. Page 641

Lamarck’s theory is not a hypothesis of common descent, which ascribes the common characteristics of a particular species to their common descent from a single species. … He claims that … although all mammals are descended from reptiles, they are not descended from the same reptiles

Somehow, after 1972, no one in Academia was able to mention that before 1972 everyone thought that Lamarckism is the doctrine “that all plants and animals are descended from a common primitive form of life.” (Century Cyclopedia)

Before 1972
After 1972

Just as one wonders what happened to academics before 1980 who were inclined to doubt the great success of central planning, one wonders what happens to academics after 1972 who remember that before 1972, the history of science was different.

We have always been at war with Eastasia

Someone in Academia received an order like that given to Comrade Winston Smith, and all of Academia fell into line, and remains in line to this day, a thousand megaphones attached to one microphone.

The reporting of Big Brother’s Order for the Day in The Times of December 3rd 1983 is extremely unsatisfactory and makes references to non-existent persons. Rewrite it in full and submit your draft to higher authority before filing.

… Withers, however, was already an unperson. He did not exist: he had never existed. …

… To-day he should commemorate Comrade Ogilvy. It was true that there was no such person as Comrade Ogilvy, but a few lines of print and a couple of faked photographs would soon bring him into existence.

Mission accomplished

Wednesday, May 26th, 2010
Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

But has everything goes to hell in a handbasket, it will all be blamed on free markets, despite what Brutally Honest calls “change some continue to believe in”.

The fundamental political strategy is that the more moochers, the more votes there will be for mooching.

I predict an Obama win

Saturday, May 22nd, 2010

With these tactics, Obama should be able to win in 2012 And 2016, and …
Of course, winning by such tactics may well result in a victory as useless as that which Patrice Lumumba won when the Congo became independent. Two or three weeks after independence, the government of the Congo had largely vanished from underneath Premier Patrice Lumumba, even though parliament continued to meet and vote him ever greater powers and additional titles for several months.

How to fix the financial crisis

Friday, May 21st, 2010

Proposed reforms, both left and right, are unlikely to have any effect on the continuing massive misappropriation from the financial system.  It is absurd that people are discussing obscure details of the credit swap market.

To fix the financial crisis, we have to revoke, or at least denounce and denigrate, Marie Curie’s Nobel prize.

When they gave a Nobel prize to Marie Curie for being female, that did not hurt anyone except more deserving potential Nobel prize winners.  But handing out phony Nobels on the basis of sex, race, and nationality necessitated handing out phony degrees on the basis of race and sex, and handing out phony degrees on the basis of race and sex necessarily led to a crisis where these phony degrees were being ignored by employers, so employers necessarily had to be forced to give out well paid phony jobs on the basis of race and sex.

But being given well paid phony jobs on the basis of race and sex failed to result in recipients living a middle class lifestyle, so lenders had to be forced to give out a middle class lifestyle on the basis of race and sex.

Which has led to our present financial crisis.  It all began with Marie Curie.  Each lie required a new and bigger lie.  We need to start by acknowledging that genders and races tend to have different abilities – that if you are looking for people that are the best at something, whether the fastest runners or the greatest mathematicians, they will almost all be of one particular race and gender, and some races will be completely absent, and if you are merely looking for people that are acceptably good at something, for example accountants, basketball players, or donut makers, they will be mostly of one particular race and gender.

We cannot end the crisis unless we admit who is defaulting on their mortgages, we cannot admit who is defaulting without admitting that they cannot perform their jobs either, we cannot admit they cannot perform their jobs without admitting that their degrees are phony, and we cannot admit their degrees are phony without admitting that many Nobel prizes, starting with Marie Curie, were phony.

Yale Harvard and Basel style Free Enterprise

Sunday, May 16th, 2010

After the collapse of socialism, the elite support free enterprise – they support it the way they support free speech.

If anyone is allowed to disagree with the orthodoxy taught at Yale and Harvard, or even doubt it, this endangers the free speech of people from Harvard and Yale, and similarly if any enterprise run by people from Harvard or Yale could go bust, this endangers the free enterprise of people from Harvard and Yale.

Basel II is tens of thousands of pages of regulations, no one knows how vast it is, because not all the regulations can be found in any one place, but it could all be replaced by two simple rules:  Politically correct victim groups shall always find it easy to borrow money, regardless of their ability or intention to pay it back, and politically well connected businesses shall always make money, regardless  of whether they are competently run or not.

The seeds of the crisis were the CRA and the ratings agencies.  I have discussed the CRA at length, but the CRA would have been resisted had it not been for other changes in the system that insulated the players against the consequences of making bad loans.  These changes, guaranteeing that badly run businesses would succeed, started with the bailout of the ratings agencies in the seventies, forty years ago.

Back then, the ratings agencies were in trouble, because they had made a lot of bad calls.  It seemed that whenever an institution was going under, the guys at the credit rating agencies were the last to know about it.  Back then, they sold their assessments of credit risk to subscribers. So no one wanted to subscribe.

So in the seventies, the regulators stepped in to make people use the credit rating services. In 1975 the SEC created the Nationally Recognized Statistical Rating Organization (NRSRO) designation. Credit rating agencies so designated received what was in effect a grant of governmental power. The SEC then relied on the NRSRO’s credit risk assessment in establishing capital requirements on SEC-regulated financial institutions – which meant that for SEC-regulated financial institutions to borrow and lend, they had to get rated.  A cascade of regulatory decisions followed over the years, each decision forcing more and more reliance on the risk assessments issued by these demonstrably incompetent institutions – and less and less reliance on other people’s risk assessment.  For more and more organizations, it became illegal for them to make their own judgments about risk.

By the 1990s, as Levine and Partnoy tell us, the NRSROs were not selling assessments of credit risks, but licenses to issue securities.  The rating agencies did not genuinely assess risk, nor did anyone really expect them to.  Nor could repeatedly demonstrated incompetence reduce demand for their services, so the ratings agencies had no incentive to provide correct credit ratings.  Since their income was entirely dependent on the state granting them power, they did, however, have an incentive to make politically correct credit ratings.  If you lend to the poor, the oppressed, etc, and you are run by good old boys from Yale and Harvard, and you make donations to the right politicians, the NRSROs have a very powerful incentive to give you a good credit rating.  And if you have a good credit rating, you can borrow as much as you like – and if you go bust, the government will bail you out.

Badly run companies that had been empowered to borrow as much as they pleased got in trouble – and were bailed out for the same reasons as they had been empowered to borrow as much as they pleased.

In addition to corruptly favorably rating the politically correct, the NRSROs corruptly favorably rated those who simply gave them money, which is perhaps what those who complain about “deregulation” have in mind.  The banks creating structured financial products would first pay the rating agencies for “guidance” on how to package the securities to get high ratings and then pay the rating agencies to rate the resultant products – a glaring conflict of interest, though one less apt to lead to bailouts when the proverbial hits the fan.

Now since all this dirty dealing has cost the taxpayer trillions, you may well ask what measures have been taken to punish the NRSROs for bad conduct, or give them incentives for better conduct in future, or indeed restrain them from continuing to do this stuff?

All the strengthened regulation is regulation to make people continue to treat NRSRO ratings as true, even though it has become horrifyingly apparent that the ratings are generally false.  All the strengthened regulation is more of what caused this mess in the first place.  Any real reform would necessarily start by abolishing the legal privilege of NRSROs, would have to start by rolling back regulations to what they were in 1974.  Instead, compulsion and bailouts are being applied to make NRSRO ratings true, or to enable people to continue pretend that they are true.  Their power has been increased, their misconduct unpunished, and their incentives have become even worse.

The left as astroturf

Thursday, May 13th, 2010

Whenever one sees supposedly insurrectionary leftism, one usually detects a government official sponsoring it, as for example in the recent suppression of US flags on Cinco de Mayo.

Observe the recent firebombings in the Greek riots, where the “rioters” murdered three people.

Here are a couple of videos of the “rioters” firebombing police.

The “rioters” charge the police, and bang on their shields with light sticks, making no attempt to jab through the gaps at the actual bodies of the cops, nor using sticks heavy enough to even shake the shields.    No axe handles or baseball bats.

Hey guys, if you want to bang on armored cops, I have a sledgehammer that would make a pretty good mace. It goes through concrete mighty fast.

They then fall back, and hurl firebombs – but they do not hurl firebombs at the police, but at the ground in front of the police.  One cop gets one of his boots splashed with burning petrol.  He rolls around, and a couple of other cops put him out.  In the second video, same scene shot from a different angle, we observe that the cops make not the slightest attempt to arrest the firebombers for attempted murder, and the rest of the mob for assault and as accessories to attempted murder.  It is all theater.  When they see that one of the firebombs has actually hit, the theater pauses.

When right wing militia listens politely to an FBI provocateur at a meeting proposing that they bomb someone, they all go to jail for plotting crimes.  The “rioters” firebomb a cop, and everyone acts like it is an unfortunate accident – which of course is exactly what it is.

The “rioters” in the Greek riots are government employees put on the streets by government sponsored unions that are themselves as much part of the government as the police were – and predictably, in a supposed riot supposedly between police and government employees, the only people actually murdered were neither police nor government employees.

Official statistics smell of official truth

Tuesday, May 11th, 2010

Mandel points out that there is something mighty funny about official US economic statistics.

China catching up

Sunday, May 9th, 2010

Chinese wages

The NYT reports

Liang Huoqiao, a 22-year-old plastics worker, joined a small group of men and women studying a 40-foot-wide list of companies seeking workers.

“You can walk into any factory and get a job,” he said.

He expected his pay to double in the next five years and added that he already had set his priorities.

“For sure, I want to buy a car,” he said. “Car first, then maybe marriage later.”

US government endorses Mexican violence

Sunday, May 9th, 2010

At live oaks high school, government policy is that Red, White and Blue is verboten on Cinco de Mayo.

Compare and contrast with Saint Patrick’s day:

Compare with Mexican intolerance

Numerous blogs have objected: x, x, x, x, x, x, x, x, x, x, x, x.

By enforcing what the thugs want, the government endorses and supports that thuggery. The government will empower any group that supports bigger government, for example Mexicans as a voter block, and disempower any group that objects to bigger government. So, predictably, Mexican thugs were empowered by the school administration, the administration being part of the government.

Wishing for a chinese crash

Friday, May 7th, 2010

Lots and lots of people are predicting China will crash, though The Money Illusion doubts it. Supposedly, debt fueled construction, decreed by central planners, Soviet style, is sixty percent of GDP – except that there is absolutely no evidence that this remarkable statistic is true.  It is not an official government statistic.  Where does it come from?   If it was sixty percent of GDP, most of the population would be working in construction, which obviously they are not.

People want to believe that China will crash.

Who wants to believe that China will crash?

The people who believe that China will crash also believe that China is a command economy, which obviously it no longer is, except in the sense that Europe is a command economy, and America has recently become a command economy.  They also believe in Soviet growth statistics – that the Soviet Union grew just great, at least at first.

Further, those who believe that China will crash, also believe it has already crashed: that China’s prosperity is based on forcing
peasants into grinding poverty in sweatshops on two dollars a day, that China has no middle class (hence the supposed absurdity of the present building boom in china creating vast amounts of middle class housing, offices, and shops), and that Cuba’s quite astonishing health statistics are true.

Their beliefs about China are incoherent, internally inconsistent, and mutually contradictory, showing that they don’t really believe what they believe.  I suspect that what they really believe is that basing a society on self interest is morally wrong, and therefore must surely be punished by the heavens. Obviously the right way to run a society is to put people like themselves, who know what is good for society, in charge and then make everyone else do what is good for society, and any society that allows greed to run riot is obviously doomed.  Therefore, they subconsciously think, China is obviously doomed, due all the rampant greed that is not properly restrained by good government.

I just don’t hear any one who confidently and sincerely believes that self interest is the proper basis for a society, predicting doom for China.

No doubt China will have a recession, sooner or later.  No doubt some speculators will lose their shirts, sooner or later, for in a free economy, speculators take risks, unlike America where the elite gets bailed out by taxpayers when they bungle, but China is growing mightily, and will continue to grow mightily, with the usual minor interruptions from time to time.