Tuesday, July 25, 2017

Breaking Ranks

"You'll never be one of them."
--Captain George von Trapp (The Sound of Music)

Many people mock the inability of Republicans to stand together on a variety of issues. Look at the Democrats, they say. Dems have the ability to die to one's self, to take one for the team, to stand in solidarity.

Why is such unity deemed valuable? Because in a democratic political system numbers matter. If you can somehow get enough otherwise diverse factions to band together with you then you can gain control of the strong arm of government.

This is why liberty and democracy are fundamentally at odds. Those willing to compromise in order to join a majority faction are prone to give their freedom away.

This is also why collectivists are attracted to democracy. By definition, collectivists emphasize group over individual interests. They are more prone to compromise for the sake of the collective.

Preference for collectivism can be seen as distributed across a spectrum:

Highly collectivist preference <------------------>Low collectivist preference.

Preference for collectivism should be inversely related to preference for liberty.

It is safe to say that people with more collectivistic tendencies will be attracted toward the Democratic Party while people with less collectivistic tendencies will be drawn toward the Republican Party.

Because they are less collectivistic by nature, Republicans are more prone to break ranks and disagree on issues. This naturally puts them at a disadvantage in political systems grounded in first-past-the-post political processes.

Monday, July 24, 2017


I must've dreamed a thousand dreams
Been haunted by a million screams
But I can hear the marching feet
They're moving into the street

As the stakes associated with controlling the strong arm of democratic states continue to grow, Herbert proposed that factions will grow increasingly hostile toward each other. They will be hellbent on gaining government control and keeping control out of competing faction hands.

This hostility logically extends to voters on the losing side. They will become increasingly ungovernable (e.g., 'We Resist...') to the ruling majority. The real folly is that the ungovernable minority expects that the other side will somehow submit to their rule if/when the roles are reversed.

All part of the topsy-turvy ride down the path toward the Misesean chaos endpoint of socialism.

Sunday, July 23, 2017

Overdependence on Insurance

If you change your mind
I'm the first in line
Honey I'm still free
Take a chance on me

Ryan McMaken argues that a primary way to improve the healthcare system is to reduce dependence on health insurance products. Use of insurance as a principal means of distributing healthcare is largely a post WWII phenomenon--borne from government tax and regulatory interventions that rewarded corporations for offering health insurance to employees. Subsequently, the insurance model replaced cash markets where consumers purchased healthcare goods and services for a fee.

As insurance replaced fee-for-service markets, healthcare costs began their ascent. Why? In large part because health insurance invites moral hazard and subsidizes consumption, thereby reducing incentives to shop for value.

Cash markets, on the other hand, encourage entrepreneurship among producers who must constantly become more productive in order to win the business of value-conscious buyers. Thus, as McMaken notes, we observe ongoing patterns of innovation in industries that rely on cash-for-service transactions. Food, for example, a cash market good that is no less essential for life than healthcare, constantly gets better and cheaper and now comprises a lower percentage of household budgets than in the past.

McMaken proposes changes to tax codes and regulations to reduce dependence on the health insurance model. Tax-free health savings accounts and tax credits for health spending should be expanded. Group coverage options beyond employer-sponsored plans should be nurtured. Markets need to be opened to more providers willing to operate in fee-based markets.

He makes a nice point near the end of his article. If a society wanted to build a healthcare system where prices were permanently high and improvement was hindered, then one would be hard-pressed to design a system more conducive to those outcomes than the current one.

Saturday, July 22, 2017

Central Question Facing Statists

In violent times
You shouldn't have to sell your soul
In black and white
They really, really ought to know
--Tears for Fears

The central question that any statist, whether that statist leans toward the welfare or warfare end of the spectrum, is how do you justify the use of offensive force against others in order to enact your policies?

Statists have yet to reasonably answer this question.

Friday, July 21, 2017

Hypocrisy and Politics

"Listen, I'm a politician, which means I'm a cheat and a liar. And when I'm not kissing babies, I'm stealing their lollipops."
--Jeffrey Pelt (The Hunt for Red October)

Although these pages have long observed that hypocrisy and politics go hand in hand, I continue to shake my head at the blatant inconsistency of the Washington crowd. What was ok when your guy/party was in charge is outrageous when the other guy/party is in charge.

It does make one speculate about the extent to which political hypocrites are actually aware of their inconsistent behavior. Do they know and not care? Or do they not know what they are doing?

For those striving to for consistency regardless of situation, political hypocrites provide good examples of what not to do.

Thursday, July 20, 2017

Stealing Liberty

All for freedom and for pleasure
Nothing ever lasts forever
Everybody wants to rule the world
--Tears for Fears

One would think that the primary question that guide the actions of politicians--those who have sworn to uphold the Constitution--would be "What does the Constitution permit us to do?" Instead, the primary question is "What can we get away with?"

This is the question of thieves. Answers aim at stealing liberty.

Wednesday, July 19, 2017

No Worries

In every life we have some trouble
But when you worry you make it double
--Bobby McFerrin

All time highs once again for the SPX and COMP.

No worries for the bulls.

no positions

Tuesday, July 18, 2017

Repeal Appeal

Second time around
I'm still believing
The words that you said
--Naked Eyes

On the back of Rand Paul's continued strong, outspoken stance and formal thumbs down announcements by several other Republican senators including Mike Lee, the idea of repeal now and discuss replacement later is gaining momentum. President Trump tweeted the following last night:
Several posts in agreement with Trump, such as this one from VP Mike Pence, followed. Now, Senate Majority Leader Mitch McConnell is turning his hat around:
An up or down straight repeal vote of Obamacare seems increasingly likely.

This is what staying the course, prioritizing principle over compromise, and doing as promised can produce.

Monday, July 17, 2017

Hamilton and the Left

Peter Howard: We are citizens of an American nation! And our rights are being threatened by a tyrant three thousand miles away!
Benjamin Martin: Would you tell me please, Mr Howard, why should I trade one tyrant three thousand miles away for three thousand tyrants one mile away? An elected legislature can trample a man's rights as easily as a king can.
--The Patriot

Many people scratch their heads over the Left's affinity for Alexander Hamilton. Hamilton was, after all, one of the vocal framers of the Constitution. He also wrote skeptically, in the Federalist Papers and elsewhere, about a euphemism of leftist rule: democracy.

However, once the Constitution was ratified, Hamilton's actions revealed his true nature--much of which leftists would find naturally appealing. He favored a strong central government and thought the Constitution should be bypassed as necessary by the ruling class. In Hamilton's view, that ruling class should be aristocratic nature. He thought the the president should be granted lifetime tenure and that the powers of the executive branch should be disproportionately large.

As first the first treasury secretary, Hamilton initiated the nation's sovereign debt program and liked the idea of acquiring federal resources on the back of taxpayers. He was fond of central banking and got the First Bank of the United States, a predecessor to today's Federal Reserve, off the ground.

In many ways Hamilton's profile resembles Lincoln's--another authoritarian who leftists love to love.

Sunday, July 16, 2017

One Relationship Matters

Hey now, hey now
Don't dream it's over
Hey now, hey now
When the world comes in
--Crowded House

Only one relationship continues to matter when explaining the levitation of stocks. Asset buying by central banks is propping up markets round the the world.

The question remains: what causes this relationship to break?