Inflation redux

Jim Manzi does yeoman’s work in pointing out that the demand-deficiency model upon which the fiscal and financial authorities are relying has failed before:

I decided to go back through the now-public Fed minutes from the 1970s methodically to try to see the decision process they went through with the information available to them at the time that they had to make decisions. It didn’t take long to hit pay dirt. In the August 1970 Fed meeting discussion notes, you see this statement that is eerily similar to the CBO’s current report:

“Moreover, the upturn would be starting from a point where there is substantial underutilization of resources, as evidenced by a 5 percent unemployment rate and an operating rate in manufacturing at well under 80 per cent of capacity. In these circumstances, there is virtually no risk that economic recovery over the year ahead would add to the inflationary problem through the stimulation of excessive or even robust demand in product or labor markets.

Inflation turned out to be a huge problem, of course, but hindsight is 20/20. People weren’t stupid in 1970. We don’t have some “new science” of economics available to us now that they didn’t then; presumably those who were pretty arrogant about how we can’t repeat the mistakes of earlier policy-makers because we’re so much smarter now are a little more humble after the past 12 months.

So, “no risk” of inflation in 1970. How did that one work out for you, again, Keynesians?

What feminism hath wrought indeed

Mary Kathryn Gallagher Lopez is a poster girl for what happens when you send a woman to do William F. Buckley’s job:

I appreciate the kids’ wanting Rihanna to take some responsibility for her situation. She’s an adult, after all, as is Brown. And if she gets beaten, she should get the heck away from the person responsible. And as a best-selling artist, she has the financial freedom to extricate herself from her trouble. But where’s the outrage over what Brown is accused of doing? There’s something off when so many people blame the victim, not the aggressor.

Or, perhaps, you know, they’re blaming the actual aggressor for the situation, you clueless twit! I pay far less attention to American celebrity nonsense than the NRO gang does, and even I know that it’s been in the news for weeks that the black girl singer probably hit the black guy singer first. It’s only the entire basis of the guy’s legal defense, after all. It was fairly obvious from the start anyhow, since the most logical reason that Brown would have bitten Rihanna’s fingers was that his hands weren’t free when she went after his face. If – if – she was going for his eyes, that also might explain what otherwise looks like an extreme reaction.

“Sources say Rihanna was the first one to strike — slapping and striking Brown “numerous times” while he was driving, after seeing the text message from another woman. Supposedly, this version of events is reflected in the official police report.”

While I never had the need to use more than a single backhand to deal with a violent woman even before I became a Christian, I have no problem whatsoever with a man beating the absolute hell out of a woman who attacked him first. In like manner, I also have no problem with a bigger man beating the absolute hell out of a little man who attacks him. It’s simply not that hard to refrain from physically attacking another individual, the vast majority of men and women throughout history have demonstrated that humans beings are perfectly capable of living their entire lives without initiating violence. And from the materialistic perspective, removing violence-initiators from the gene pool should be regarded as a positive action on behalf of human evolution in a positive direction, regardless of the sex of the evolutionary dead-ender.

It’s really not that difficult. Either women are children and should be treated accordingly, or they are adults and should be treated accordingly. There is no reasonable middle ground here. While one may elect not to retaliate for Christian reasons – and I can testify that I have seen God claiming the vengeance that is His in a vastly amusing manner – there is no legal, moral, or social rationale for granting women carte blanche to initiate violence. If you choose to attack an individual who is more physically capable than you and get the smack beaten out of you, you’re not a victim. You’re just stupid.

The root of bad economics

Even the Keynesians are abandoning the sinking ship of the Obama administration now. As well they should:

The common element to the Paulson and Geithner plans is the insistence that the bad assets on banks’ books are really worth much, much more than anyone is currently willing to pay for them. In fact, their true value is so high that if they were properly priced, banks wouldn’t be in trouble.

And so the plan is to use taxpayer funds to drive the prices of bad assets up to “fair” levels. Mr. Paulson proposed having the government buy the assets directly. Mr. Geithner instead proposes a complicated scheme in which the government lends money to private investors, who then use the money to buy the stuff. The idea, says Mr. Obama’s top economic adviser, is to use “the expertise of the market” to set the value of toxic assets.

But the Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. So this isn’t really about letting markets work. It’s just an indirect, disguised way to subsidize purchases of bad assets.

All bad economics are rooted in a single concept: objective value. This was most obvious in the Marxist form of assigning an input factor, but it’s also implicit in the Monetarist notion of government-backed paper currencies. Since there is no such thing as objective value – subjective value is the heart of Austrian theory, which states that all values are intrinsically dependent upon the moment and the acting man – any political action or economic theory based upon it is bound to fail.

In the case of the Paulson/Geithner plan, they are substituting “true value” for objective value, but it doesn’t matter what it’s called, the relevant point is that it diverges from what anyone is actually willing to pay for it at this moment in time.

Monday column

No bonuses, no bailouts
I am not a Democrat, nor am I a Republican. In fact, I have never voted for either a Democrat or a Republican in any of the past presidential elections for which I was eligible to vote. Ronald Reagan and Ron Paul are the only two Republicans for whom I would have been willing to vote; I was too young to vote for the former, and the Republican Party prevented me from having the opportunity to vote for the latter.

Needless to say, nominating John McCain looks just as foolish in retrospect as it did at the time. It seems he wasn’t quite as electable as his media champions repeatedly insisted he was….