Feb 19, 2020

Kevin Duffy on minimum wage laws

Wages, like any price, are determined by supply and demand. Not happy with what you're making? Develop skills where they're needed and difficult to develop (or even unpleasant). E.g., most younger people want cushy desk jobs so there is a shortage of trade skills. Really want to make a ton of money without getting a 4-year degree? Try underwater welding. Here's another skill that pays A LOT: simultaneous translation (very few people can do this).

Of course, you have to start somewhere and typically that begins with a low wage job. Heck, I remember working in an art gallery hanging paintings and sweeping the parking lot in high school. My brother flipped burgers at the local Burger King. Then we built a deck for our parents, developed some carpentry and design skills, and realized there was plenty of demand. Just like that, we were our own bosses, making decent money, and having all the work we could handle during the summers.

What happens when you impose a minimum wage? Does it give everyone below that wage a raise? Unless you can repeal the law of supply and demand, "no." You will instead make that employment agreement illegal, hurting the very people you purport to help, the relatively unskilled starting at the bottom and trying to gain skills so they can move up the economic ladder.

~ Kevin Duffy, Facebook response, February 18, 2020

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Kevin Duffy on full employment and low wage growth

Q: Why do we have full employment, but very low wage growth?

A: No one can honestly answer this because the economy is too complex. Beware those who try to explain this with soundbites (like politicians). They're either liars or lying to themselves.

Economic principles are a different matter. These don't change. Beware economic explanations (and prescriptions) that fly in the face of economic principles.

Just because we can't know everything about an economy, doesn't mean we shouldn't try to learn what we can and speculate about different causes. Ok, the official unemployment rate is low. Why? Is this a good indication of the overall happiness that people have with their jobs? If so, why is Bernie Sanders so popular? I suspect there is a large segment of the population that is not happy with their economic situation.

Statistics often give a false sense of knowledge. The so-called labor participation rate is low, which means many people are simply not counted. Should they be? Are these people happily retired at an early age, living on welfare, living in a friend's basement, or earning a lucrative living in the black market?

On the other side, there are clearly a lot of employers who aren't happy. They have positions to fill, but can't find skilled workers. Tighter immigration policies that impact high-skilled workers may be exacerbating this situation.  Our socialized education system is not helping.

Then there's this nasty thing call the boom-bust cycle. It happens when the central bank artificially lowers rates, causing asset bubbles and an unsustainable boom. Sound familiar? The official unemployment rates is ALWAYS low when this happens. That of course reverses with the bust.

It's complicated...

~ Kevin Duffy, answer to Facebook question, February 19, 2020

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Feb 18, 2020

Nick Gillespie on the big spending Trump administration

Last week, The New York Times published an eye-opening tally of how much more the federal government is spending on each of us since Donald Trump was elected president.  "Total federal spending has increased by $1,441 per person since 2016,"... to a grand total of $14,652 per person per year.  They came to their numbers by looking at actual federal outlays "for the 2016 fiscal year, adjusting for inflation and population changes" and comparing them to the budgeted amounts for the current fiscal year, which ends on September 30.

This revelation—which has generated a scant 45 comments as of this writing on five days after publication—should discomfit both Republicans and Democrats and conservatives and liberals/progressives. And it should absolutely enrage libertarians who believe in smaller government...

~ Nick Gillespie, "How Much More Should Trump be Spending on You?," Reason.com, February 16, 2020

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Feb 14, 2020

NY Fed's John Williams on the U.S. economy

[The U.S. economy is in a] very, very good place.

~ John Williams, New York Fed president, "New York Fed's Williams Sees Economy in 'Very, Very Good Place'," The New York Times, February 14, 2020

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Feb 13, 2020

Fred Hickey on Apple's recent earnings release

Apple handily bested estimates with better than expected iPhone sales but weaker services growth ($400 million less than expected).  On the conference call CEO Tim Cook was asked which services segments caused the shortfall.  He avoided answering the analyst's question.  It's important because Apple's services businesses are supposed to pick up the slack from the no growth (and highly competitive) smartphone market.

~ Fred Hickey, The High-Tech Strategist, February 4, 2020

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Doris Kearns-Goodwin on Abraham Lincoln's racial bigotry

Armies of scholars, meticulously investigating every aspect of [Lincoln's] life, have failed to find a single act of racial bigotry on his part.

~ Doris Kearns-Goodwin, Team of Rivals: The Political Genius of Abraham Lincoln, p. 207

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Fred Hickey on Tesla's parabolic rise and $165 billion market cap

Tesla's insane stock price explosion is all about three things: money, momentum and mania.  It has absolutely nothing to do with fundamentals.  Even before this week's multi-hundred point upward explosion, Tesla's stock last week was "valued" by "investors" (speculators) at more than the stock values of the entire U.S. domestic auto industry (GM, Ford and Fiat-Chrysler) combined...

TSLA's stock is currently valued at $165 billion.  For comparison purposes, Ford Motor is valued at $36 billion, General Motors at $49 billion, and Fiat-Chrysler at $26 billion.  Germany's Volkswagen (which delivered almost 11 million cars in 2019 versus Tesla's 370,000) is at $92 billion - a valuation 44% less than the great money-losing Tesla.

~ Fred Hickey, The High-Tech Strategist, February 4, 2020

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Feb 12, 2020

Ronald Bailey on falling carbon emissions in the U.S.

Overall carbon dioxide emissions from the U.S. energy sector peaked at 5.9 gigatons in 2007 and have now dropped 19 percent to 4.8 gigatons in 2019.

~ Ronald Bailey, "Peak Carbon Emissions?," Reason.com, February 12, 2020

Jim Grant on liquidity

Liquidity is a psychological construct, perhaps as much as an arithmetic one.  Without a minimum quotient of speculative hope, even objectively liquid markets can malfunction.  It's confidence - in the future, in the dollar, in "the authorities," in the earning power of a business, in something or other - that makes the waters run...  In the dollar world, the fount of liquidity is the Federal Reserve...  Of course, the Fed merely proposes.  It's the "markets" - people changing their minds about price and value and buying and selling, lending and borrowing, accordingly - that dispose.

~ Jim Grant, "Gale-force liquidity," Grant's Interest Rate Observer, February 7, 2020


Peter Atwater on manic behavior: The Beatles, Beanie Babies and Tesla

Many will suggest that manias and panics routinely come and go, but history strongly cautions that they cluster. The Beanie Baby Bubble coincided with the peak of the dot.com bubble, and Beatlemania marked the mid-1960s market and mood peaks...

While Tesla may be followed by an even more extreme investor flash mob ahead, the recent clustering of manic behavior cautions not only that sentiment is topping, but that the current peak is extreme. Based on crowd behavior, 2020 could easily bookend the major 2011 low.

~ Peter Atwater, Financial Insyghts, "Tesla: A Flash Mob With Money," February 10, 2020

Wall Street Journal: "Rise in stocks reflects confidence in Hitler" (1933)

Headline: Berlin views Hitler calmly; rise in stocks reflects confidence he will not disrupt nation's affairs

~ Wall Street Journal, February 1, 1933

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Robert Murphy on the warlord objection to anarcho capitalism

When dealing with the warlord objection, we need to keep our comparisons fair.  It won’t do to compare society A, which is filled with evil, ignorant savages who live under anarchy, with society B, which is populated by enlightened, law-abiding citizens who live under limited government.  The anarchist doesn’t deny that life might be better in society B.  What the anarchist does claim is that, for any given population, the imposition of a coercive government will make things worse.  The absence of a State is a necessary, but not sufficient, condition to achieve the free society.

[...]

The standard objection that anarchy would lead to battling warlords is unfounded.  In those communities where such an outcome would occur, the addition of a State wouldn’t help.  Indeed, the precise opposite is true: The voluntary arrangements of a private property society would be far more conducive to peace and the rule of law, than the coercive setup of a parasitical monopoly government.

~ Robert Murphy, "But Wouldn't Warlords Take Over?," Mises.org, July 7, 2005

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Feb 11, 2020

Donald Trump on budget deficits

No member of Congress should be eligible for re-election if our country's budget is not balanced --- deficits not allowed!

~ Donald Trump, Twitter, July 31, 2012

(The federal budget deficit was $586 billion when Trump was inaugurated president in January, 2017.  Today it stands at $1.022 trillion.)

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Jordan Peterson on individual rights

I've been trying to identify 100 percent truths, let's say, that sit at the bottom of our societies.  And one of the things that I believe to be true is that the individual is properly sovereign.  I believe is as true as any idea that human beings have ever come up with.

~ Jordan Peterson, "The HIDDEN TRUTH About Politics," 9:00 mark, YouTube, February 10, 2020

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Feb 10, 2020

Jeffrey Tucker on the discovery process

But what kind of society do we need in order to maximize the potential of this form of spontaneous development of individuals and societies? A society hobbled by preset agendas emanating from fixed regulations and laws presume the opposite of a trial-and-error society. They indulge the illusion of knowledge, the myth of certainty, the fantasy that a static order with known solutions can be forced on everyone.

~ Jeffrey Tucker, "Shakira’s Musical Disquisition on Uncertainty, Creativity, and Entrepreneurship," American Institute For Economic Research, February 4, 2020

Feb 9, 2020

Kevin Duffy on exploitation

Quora: How do libertarians address the issue of exploitation?

Duffy: Libertarians differ from most when addressing the issue of exploitation in two fundamental ways. First, they view exchange at the individual level vs. the abstract level. E.g., the “U.S.” doesn’t trade with “China.” Apple engages in various exchanges with Chinese employees, suppliers, consumers and shareholders. Second, they focus on the nature of the exchange. Is it coerced or voluntary? If coerced, exploitation exists; one party benefits at the expense of the other. If voluntary, both parties enter into the exchange because they expect to benefit. The operative word, of course, is “expect.” There are no guarantees and people often look back at decisions with regret. All part of the learning process. The future is uncertain and always will be.

Through the libertarian lens, what are some examples of exploitation? At the individual level, the answer is clear: rape, murder, robbery, fraud.

Greedy capitalists

What about at the abstract level? Do "greedy capitalists" exploit "helpless workers?" As long as no one is putting a gun to anyone’s head, no. If an employer and employee agree to an exchange, both parties expect to benefit. The employer prefers the labor services of the employee over the wage he’s willing to pay. The employee prefers the money he receives above the time spent doing the work. Win-win. If either party feels they are no longer benefiting, they are free to walk away (unless there is a contract that commits both to a certain amount of time).

Trade deficit with China

Is China exploiting the U.S. because they run a large trade surplus? Again, no. Since the exchanges involved are all voluntary, they must be mutually beneficial. Apple sells iPhones to Chinese consumers. Apple receives money (they have a money surplus and goods deficit) while the buyer receives an iPhone (they have a money deficit and goods surplus). Walmart buys products from Chinese suppliers. Even though they run a money deficit, they do so willingly… because they benefit. Walmart's Chinese suppliers run money deficits with their employees. Again, both parties benefit. Trade surpluses and deficits are an accounting fiction. Do you worry about running a chronic trade deficit with your local grocery store?

Sweatshops

Does a multinational firm setting up a factory in a poor country exploit its workers? If entered into freely and peacefully, the exchange only takes place if both parties benefit. E.g., if Nike builds a sneaker factory in Bangladesh, they must make the wages and work environment enticing enough to attract workers from their current jobs. They have to give them a better deal. They have to improve their lives. Some call this “unfair.” Libertarians call it heroic.

Taxation

How does a libertarian judge taxation? Is this a voluntary, mutually beneficial exchange or is it coercive and exploitative? The question answers itself.

~ Kevin Duffy, Quora answer, February 9, 2020

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Feb 8, 2020

Athletes and Coaches

Baseball:
Basketball:
Boxing:
Football:
Golf:
Tennis:
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Jane Lancaster on W.T. Sherman's lessons from the Second Seminole War

Sherman gradually developed his own ideas about war. He thought that the War Department should fill Florida with troops, declare martial law, and fight to exterminate the enemy. According to Sherman, this was the most economical plan.

~ Jane F. Lancaster, "William Tecumseh Sherman's Introduction to War, 1840-1842: Lesson for Action," Florida Historical Quarterly, 72: 1 (July 1993), pp. 65-66

(as cited by Joseph Stromberg, "Sherman in the Swamp," LewRockwell.com, February 21, 2003)

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Tom DiLorenzo on Whig Party hatred towards John Tyler

John Tyler also became the first president to be subjected to Articles of Impeachment, which were filled with rather hilarious political bluster.  He was accused of “arbitrary and despotic abuse of the veto power”; “open hostility to the Legislative department of the Government,” as though that was a bad thing; and “vacillation, weakness, and folly,” among other absurdities.  The Articles of Impeachment were ultimately rejected.

You know John Tyler was a good man, and that Ivan Eland [author of Recarving Rushmore] is probably spot on in ranking him as America’s best president (he reduced the size of the army by one-third, among other things) since he elicited the hatred of such a cabal of political gangsters, rent seekers, idiots and tyrants led by Lincoln’s “beau ideal of a statesman” Henry Clay.

~ Tom DiLorenzo,  "The President Who Was Expelled from His Own Party," LewRockwell.com, February 8, 2020

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John Tyler on vetoing Henry Clay's bank bill

The power of Congress to create a national bank to operate over the Union has been a question of dispute from the origin of the Government.... [M]y own opinion has been uniformly proclaimed to be against the exercise of any such power by this Government.

~ John Tyler, 10th president, August 16, 1841

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John Tyler (1841-1845)
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Tom DiLorenzo on president John Tyler's place in history

In his book Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, Ivan Eland ranked John Tyler as the best American president of all time.  (The Marxist Left that dominates the American academic history profession usually ranks him near the bottom).  Eland’s ranking is so at odds with the hard-Left history profession because their criteria give higher scores to presidents who spend and tax the most, consolidate the most power in Washington, D.C., oppress civil liberties the most, centrally plan the economy the most, and are the most belligerent in foreign wars.  Hence, Lincoln, FDR, and Wilson have long been at the top of their ratings (although Wilson is recently out of favor after the historians finally acknowledged that he re-segregated the U.S. military).

~ Tom DiLorenzo, "The President Who Was Expelled from His Own Party," LewRockwell.com, February 8, 2020

Feb 7, 2020

Kevin Peraino on Lincoln's foreign policy

Q: I know this is almost an impossible task, but if you had to describe it, what’s the Lincoln Doctrine?

A: Lincoln said it himself: “One war at a time.” And I think that’s the bumper sticker for Lincoln. He just didn’t want to do anything during the Civil War that was going to make his job at home more difficult.

That’s how he led the country, and set the stage for American power in the decades since.

~ Kevin Peraino, historian, "How Abraham Lincoln's foreign policy helped win the Civil War," Vox, February 18, 2019

Abraham Lincoln, the 16th president of the United States and arguably one of its best presidents on foreign policy.

Boris Johnson makes the case for global free trade

This country is leaving its chrysalis.  We are reemerging after decades of hibernation as a campaigner for global free trade.  And frankly it is not a moment too soon.  Because the argument for this fundamental liberty is now not being made.  We in the global community are in danger of forgetting the insights of those great Scottish thinkers: the invisible hand of Adam Smith, and of course David Ricardo's more subtle, but indispensable, principle of comparative advantage, which teaches that if countries learn to specialize and exchange, then overall wealth will increase and productivity will increase, leading [Richard] Cobden to conclude that,
free trade is God's diplomacy, the only certain way of uniting people in the bonds of peace, since the more freely goods borders, the less likely it is that troops will ever cross borders.
And since these notions were born here in this country, it has been free trade that has done more than any other single economic idea to raise billions out of poverty and incredibly fast.

~ Boris Johnson, U.K. prime minister, "Boris Johnson threatens to collapse Brexit trade talks if EU insist we stick by their rules," 3:00 mark, YouTube, February 3, 2020

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Feb 6, 2020

Joe Dugan on Babe Ruth

To understand him, you had to understand this: he wasn't human.

~ Joe Dugan, teammate

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Babe Ruth on the game of baseball

I won't be happy until we have every boy in America between the ages of six and sixteen wearing a glove and swinging a bat.

~ Babe Ruth

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Tris Speaker on Babe Ruth's future (1921)

Ruth made a grave mistake when he gave up pitching.  Working once a week, he might have lasted a long time and become a great star.

~ Tris Speaker, 1921

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Babe Ruth on earning more than the president

I know, but I had a better year than Hoover.

~ Babe Ruth

(Reported reply when a reporter objected that the salary Ruth was demanding - $80,000 - was more than that of President Herbert Hoover's.)

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Babe Ruth on superstition

I have just one superstition. Whenever I hit a home run, I make certain I touch all four bases.

~ Babe Ruth

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Babe Ruth on swinging for the fences

If I'd tried for them dinky singles I could've batted around six hundred.

~ Babe Ruth

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Babe Ruth on failure

Never let the fear of striking out get in your way.

~ Babe Ruth

(Ruth was born on this day, 1895.)

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Tom Glass and Kevin Duffy discuss climate change computer models

Glass: As one trained in the sciences and one who worked in IT as a career, I know the difference between science and a computer model.

Before a computer model can be relied upon to take drastic action, denying people liberty and destroying their prosperity, good sense would demand that we check the model to see if it predicts reality well. (That is called science. You know, checking your hypothesis embodied in the computer model against reality to see if it matches observed results.)

To date, I am unaware of any climate computer model that has accurately predicted climate. Until we get one that does, I will oppose the destruction of our liberty and prosperity that ALWAYS seems to be the proposed "solution" to the hypothetical problem.

Duffy: Well said, Tom, but I'll go even further. Let's imagine some day the computer models prove accurate and that there's a serious problem. Are you ready to destroy liberty and prosperity to solve it? Or might that complex adaptive system called the free market have a better chance?

Glass: I agree!

~ Tom Glass and Kevin Duffy, Facebook exchange, February 5, 2020

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