30 thoughts on “Logical Conclusions

  1. From my chats with liberals, I get the sense that they are members of the cult of experts. A climate scientist knows more about the climate than you do, you climate denier, so the idea that your opinion should carry more weight than a climate scientist’s opinion is ridiculous. You have no right to have a wrong opinion on this.
    It’s argument from authority and we know its weaknesses.
    I am not sure why liberals have become members of the cult of experts. It wasn’t always this way, I can remember when the experts were assumed by the Left to be corrupt or close-minded. I think that it may have to do with the worshipful attitude many on the Left (and Right) have for the role of technical wizardry in improving society.
    I am not sure that they understand that the genius of Bill Gates, Steve Jobs, and Mark Zuckerberg is business, not super-science or engineering. Engineers from India and China aren’t better than American engineers, but it is cheaper to train engineers in India and China. They can work cheaper.
    Hayek argued that a complex system cannot be understood by experts. There was wisdom in crowds because every person in the crowd knew his or her business better than anyone else. It’s the opposite of the cult of experts where a nameless, but educated, person in a nameless office knows how what kind of vehicles your family needs and how many of them. Your daughter may want to be a nurse or a teacher. She is assumed to know less than the experts who have determined that it is in her best interests to be a software engineer or a telephone lineman.
    Sounds ridiculous when you put it that way, doesn’t it?

  2. “For one–Uncle Sam himself took up farming. Synthetic farmers behind Washington desks started telling farmers all over again what crops to plant–how much to grow–the amount to market–the price to charge. You know, farming looks mighty easy when your plow is a pencil, and you’re a thousand miles from the corn field.
    Dwight Eisenhower – Address at Bradley University, Peoria, Illinois. September 25, 1956

  3. Question the ability of un-elected bureaucrats and academics to micro-manage your life? You are an anti-intellectual!

  4. That is a great article.

    Woodrow Wilson installed this stuff permanently. The Frankfurt School. Socialism and central planning REQUIRE a central bank that produces never ending CPI inflation and asset bubbles. That is exactly what the Fed did.

    Now it quit working due to technology, NAFTA, and China opening up.

    So people want Trump and Bernie. We have all manor of social problems. The government is running out of money. They want the government to force up compensation by fiat.

    How do you prevent the bond market collapse? You can’t.

  5. Also, *W*o*r*d*p*r*e*s*s* is a tool of the ennn esss aye and the #F#E#D#

  6. Also, *W*o*r*d*p*r*e*s*s* is a tool of the ennn esss aye and the #F#E#D#

    Then kudos to both of them; they both did something worthwhile.

    And if the NSA is reading my blog, I bet they’re very very bored.

  7. While my other brilliant post is awaiting moderation…

    IMO, that article point out why having the GOP ride millennials and welfare queens so much about their lousy lives makes me very uncomfortable. The central planners have really mucked ti up. Now it’s just theft and graft over the 33% too low GDP.

  8. Y’know, TFS, I don’t worry too much about asset bubbles and governments and banks manipulating the fisc to ruination because it has always been like this. Gibbon said the Roman Empire was a device to pay the Roman Army. When the Roman Empire could no longer do this, the Roman Empire collapsed. The Romans didn’t have central banks or even set interest rates.
    Some economists will tell you that Medieval Europe suffered a shortage of coined money, and this created a chronic shortage of investment capital. Interest rates were outrageous in the Middle Ages because of the shortage of coined money (and shady banking practices).
    There is no hard-money paradise to return to. Britain between the Napoleanic Wars and WWI was an anomaly, likely never to be repeated.

  9. Mammuthus Primigenius: You are missing two points. The West will collapse without never ending credit growth regardless of the productivity of that debt AND the debt to GDP will never, ever improve.

    So we will run out of “money.”

    Also money does not equal investment capital. No way. In theory, politicians could invest printed money and make the standard of living go up but that isn’t happening, although Larry Summers wishes it could.

    Money has to have some kind of commodity break on it’s growth. Central banks have to back up banks in a simple, punitive way and not affect the economy. No government ever does this of course.

    What it comes down to is all the central banks have to have a harder policy or they are all going to be too easy. It’s like a geopolitical weapon.

  10. Let me put it this way. This stuff always gets resolved. The question is, who gets screwed?

    You can really see the Austrian’s case for no central banking if you study it enough.

  11. Mammuthus, the Cult of Experts is very useful when one doesn’t have the interest or ability to figure things out for one’s self. Just find an “expert” that you agree with, and all the heavy lifting/thinking has been done for you. Of course, you can’t defend the thinking without understanding the underlying principles behind it, so if someone calls you on it you’re only recourse is to call them names.

  12. Interest rates were outrageous in the Middle Ages because of the shortage of coined money (and shady banking practices).

    No, interest rates were outrageous in the Middle Ages because the demand for loans exceeded the supply.

    For much of the Middle Ages interest on loans was forbidden on religious grounds, which made non-Christians the only really successful bankers. In particular, the Jews became the dominant banking force since charging interest on loans was not forbidden to them. However, it was dangerous to be a successful banker in that era because those jealous of the success often decided it was easier to kill or imprison the banker than pay them if they were in power.

  13. MM:

    I am not sure why liberals have become members of the cult of experts. It wasn’t always this way, I can remember when the experts were assumed by the Left to be corrupt or close-minded

    That happened right about the time that the Left took over academia and subsumed the “experts” into their ideology. When the “experts” reinforced their world view they became pillars of knowledge rather than quacks.

    I’ve never viewed “experts” as really expert about anything but the process in question, and even then only in the physical sciences. As we’ve seen with social science being able to replicate roughly a quarter of their biggest and most influential studies. And don’t get me started on computer modeling of systems! Understanding of correct computer modeling techniques is rare enough among those who do it for a living, much less in the soft sciences.

  14. My take about why liberals became members of the cult of experts is about the same as Nerdbert’s, and when you get right down to it, I’m guessing TFS will come down this way as well. After 1913, with the Federal Reserve and the income tax, suddenly the government had a lot more funding available for what progressives wanted.

    Sure, often those progressives were Republicans at the time, but the steady growth in adherence to the fallacy of “appeal to authority” simply derived from what those authorities were doing. They hated it when the authorities were military, but loved when they were in the social sciences and welfare.

  15. The Frankfurt guys and Woodrow Wilson thought that “smart people” pushing things around would make the world a better place. The other thing that happened was the direct election of Senators. 14th amendment. The 1000% useless mortgage interest deduction (total inequity for the poor. That’s all it accomplishes). A central bank either well run or for Big Finance’s convenience. ***Centralized power***. (To be clear they set up the Fed one way and promptly started running it another way)

    The 1907 banking panic was their excuse for much of this stuff.

    Also, the Left and Keynesians tell a ton of lies about the nature of the economy from post Civil War to 1907.

    So here we are.

  16. What is really happening is, people vote for the government to push things around and give them stuff, because the economy s messed up from people voting for the government to push things around and give them stuff. I’m dead serious.

  17. Usury was forbidden to Christians. Other loans — which we might consider a “small business loan,” where the lender expects to be repaid through future profits, were not distinguished from loans to a gambler (which was not expected to increase overall wealth). In many ways we still don’t distinguish between usury and investment at the consumer level. Borrowing $10k to buy a reliable used car to get you to work is different than borrowing $10k to buy a recreational boat or a trip to Vegas.

  18. Yes, MP, those usury edicts were pretty severe for most of the Middle Ages and they banned much of the “profit” on money handling, even to the point of making it illegal to make money while changing one currency to another. The laws were very strict, far more strict than today’s Islamic banking codes. In various forms this strangled commerce due to a lack of capital mobility (why lend money you might not ever get back?) until the mid-16th century when loans began to be made between Christians again.

    To get a feel for things, consider that in Roman times when lending at interest was common the rate of interest averaged 5-12%, although there were exceptions. But after the conversion to Christianity and the imposition of usury laws forbidding the charging of interest as a mortal sin, rates jumped to the 20-30% range as the sources of capital dried up to mainly the Jewish members of the community. Only after the Reformation in the 16th and 17th centuries freed lending from the Catholic Church’s control did rates drop back down to the 9-10% range, and it dropped further as the use of borrowed money was found to be an economic stimulus. The social acceptability of borrowing took far longer to be liberalized, and imprisonment for debt was common until the 19th century, and bankruptcy liberalization was one of the main advantages the early US held over Europe (although that was driven by the fact that the wealth of most Americans was in illiquid assets like land).

    But as with most things, I think TFS will tell you we’ve overdone the credit expansion, especially recently. I tend to agree, but we can leave that for detailed discussions later rather than totally threadjacking this one.

  19. The point is, the only way to have intelligent credit growth and allocation is to have market based interest rates. All it does it lower GDP, rob the future, and increase inequality. So people effectively vote for more of it course.

  20. Having a bunch of propeller heads GUESS an interest rate and force it on society IS central planing just like Joe’s article, for the record.

  21. Nerdbert-
    In Medieval times people believed that the amount of wealth in the world was fixed. Usury — loaning money at interest — was seen by religious authorities as a means of transferring money from the poor to the rich. It was thievery. You gave a desperate man a shilling and demanded two shillings, paid later, in return. The extra shilling for repayment he got by starving his family or by stealing, not by creating wealth. In the pre-Reformation world, charity, not usury, was supposed to provide for the indigent.
    What investors, aka banks, needed was joint stock companies that separated the man from his investments. Those weren’t developed until the seventeenth century (as you note).
    But the development of joint stock companies required political innovations. The rule of law, rather than the rule of men, was needed, and a currency whose value was independent of the whims of kings.
    And so here we are. Money divorced from merit, family, and nation. It’s all commerce.

  22. If you want to get a picture of moneylending in the Middle Ages, just read Ivanhoe. And fall in love with Rebecca.

  23. I just heard Michael Walsh on Hugh Hewitt. he wrote a book on Critical Theory and the Frankfurt school. This is what is going on. Leftist Keynesianism is growing government, hollowing out the economy and ruing people’s character; but it’s subtle like an invisible gas. Then the Democrat party comes in with the 24/7 Overt Everywhere All The Time Critical Theory Scream System Sledgehammer. Criticize everything. If you run out find something new.

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