Monday, June 18, 2018

Cooperation vs Coercion

Arthur: What is this punishment for? Answer me!
Ganis: He defied our master, Marius. Most of the food we grow is sent out by sea to be sold. He asked that we keep a little more for ourselves, that's all. My ass has been snappin' at the grass I'm so hungry!
--King Arthur

The two general choices for organizing economically are capitalism and socialism. In capitalism, property is privately held. Producers decide what to produce based on customer preferences. Society alleviates scarcity thru voluntary cooperation and exchange.

In socialism, property is held in state hands. Central planners decide what gets produced and who gets it. Society attempts to alleviate scarcity thru edict and violent coercion.


However, Mises long ago argued that, in reality, society does not choose between two economic systems for the long haul. This is because attempts to alleviate scarcity thru socialism inevitably fail. When peaceful exchange is crowded out in favor of forceful command, society inevitably disintegrates into chaos.

Sunday, June 17, 2018

Coney Island

The heat is on
On the street
Inside your head
On every beat
--Glenn Frey

On the southern most tip of Brooklyn a small peninsula juts west. For early explorers it was an intuitive place to set up camp as it sat at the opening of New York harbor. The Dutch called it Conyne Eylandt, meaning Rabbit Island. Subsequent English morphed it to Coney Island.

Its position on the water and sandy beaches made Coney Island a natural target for entrepreneurial development. By the mid-late 1800s, Coney was populated with hotels, amusement parks, and other resort structures.

Like magnets, Coney's beaches have attracted people on hot summer days. Circa 1924:


Circa 2016:


Years pass, but the need to beat the heat at Coney hasn't.

Saturday, June 16, 2018

Stocks and Jobs

Things are going great
And they're only getting better
--Timbuk 3

Stephanie Pomboy posts the relationship between the headline unemployment number and the SPX since 1990. At best, job numbers are coincident, perhaps even slightly lagging, indicators of stock market performance.


Stated differently, it seems unwise to regard recent record low unemployment numbers to be a harbinger of higher stock prices--particularly with stock indexes already near all time highs.

position in SPX

Friday, June 15, 2018

Insidious Tax

At night
When you turn off all the lights
There's no place that you can hide
Oh no
The rhythm is gonna get you
--Miami Sound Machine

In this era of purportedly 'tame' inflation, the purchasing power of the dollar has declined about 20% in the past decade. Imagine what happens when inflation heats up...


Because we usually don't notice it until long after we've been fleeced, inflation functions as an insidious tax.

Thursday, June 14, 2018

Flag Day

Gabriel Martin picks up tattered US flag off the ground.
Tired soldier: It's a lost cause.
Gabriel Martin folds up flag and puts it in his satchel.
--The Patriot

On this day in 1777, the Continental Congress adopted a national flag for the newly declared United States of America. The resolution stated that the US flag be "thirteen alternate stripes red and white" and that "the Union be thirteen stars. white in a blue field, representing a new Constellation."


The flag's design was subsequently modified as new states were added to the Union. In 1818, Congress enacted a law that locked in the 13 stripe portion of the design and permitted only the number of stars to change on the blue backdrop.

The first Flag Day was observed in 1877 on the 100th anniversary of congressional adoption. Afterwards, several states continued to celebrate Flag Day until it was declared a national day of observance in 1949.

Wednesday, June 13, 2018

Affiliation Bias

Director Nicholas Spikings: You were in the Olympics. You know about being a team player?
Agent Nina Chance: Sharpshooting isn't a team sport.
Director Nicholas Spikings: This is.
--Murder at 1600

Collectivists are, by definition, prone to elevate the wishes of the group over their own. This makes collectivists particularly vulnerable to biases that accompany group affiliation. These include:

In-group favoritism. Affinity for people who belong to the same group. Special treatment is given to in-group members that is not afforded to outsiders.

Out-group derogation. Those in out-groups are seen as threating and inferior. Outsiders become targets of discrimination and ridicule.

In-group influence. In-group members will be prone to shift their personal views toward those of the group.

In-group extremity. Extreme behavior that individuals would never condone by themselves is endorsed when they are members of a group.

Group uniqueness and superiority. Belief that the in-group possesses characteristics that are unique and superior to those of other groups.

The higher a person rates on the collectivist scale, the greater the tendency that this person will display these affiliation biases.

Tuesday, June 12, 2018

Our Largest Threat

Wasted
Sacrificed for the new nirvana
Night time sends the sun away
--Icicle Works

What is the largest threat facing the United States? It isn't external. Not China, North Korea, Russia, Iran, nor ISIS.

It is internal, grounded in our proclivity to live beyond our means. As this congressman observes, the largest threat facing the US is our national debt.

A country that can't keep its fiscal house in order is destined for the scrap heap of history.

Monday, June 11, 2018

Meeting North Korea

"There is a saying in Korea. Saying something a hundred times is not as good as living it once."
--Kang (Olympus Has Fallen)

The finest achievements of Barack Obama's presidency were the reopening of friendly talks with Iran and Cuba. Naturally, he caught (and still catches) grief from his detractors for doing so.

Now it is Donald Trump's turn. Trump has been working on a historic meeting with the president of North Korea--something that any proponent of peace and prosperity should support. Unfortunately, but all too predictably, many of those who cheered President Obama's diplomatic efforts are condemning Trump's.

As Ron Paul observes, just as trading is always better than sanctioning, so is talking always better than threatening.

Any effort that gets adversaries together at a table for conversation should be encouraged.

Sunday, June 10, 2018

Temporary Housing

Kumiko: My home is here.
Daniel LaRusso: Home is where you hang your hat. 
--Karate Kid II

Today, Paul (2 Corinthians 4:13-5:1) reminds us that although growing old or being gravely ill seems to signify the end, it is not. As long as we persevere in seeking God and pursuing truth, we should "not lose heart" when our health declines.

This is because "even though our outer self is wasting away, our inner self is being renewed day by day. For this slight momentary affliction is preparing us for an eternal weight of glory beyond all measure."

Rather than worrying about our physical deterioration too much, Paul suggests that "we look not at what can be seen but at what cannot be seen, for what can be seen is temporary, but what cannot be seen is eternal."

We should rest assured "that if the earthly tent we live in is destroyed, we have a building from God, a house not made with hands, eternal in heaven."

Human bodies are but temporary dwellings for people's spirits. God challenges each of us to strengthen our spirits in the face of declining physical capability. If we do so, then our spirits will ultimately vacate our temporary housing and travel to permanent digs.

And, unlike our earthly dwellings, God's house is built to last.

Saturday, June 9, 2018

Discretionary Morality

Casey Ryback: I support women's lib. Don't you?
Jordan Tate: When it works in my favor.
--Under Seige

Interesting study by Uhlmann et al. (2009) demonstrating discretionary application of moral principles by politically motivated individuals. Their basic premise was that people will be more likely to employ moral principles when those principles are consistent with the preferred political narrative.

For example, the researchers hypothesized that progressives would be more prone to support the consequentialist outcome of the trolley problem when the victim to be sacrificed was white instead of black. Similarly, the researchers hypothesized that conservatives would be more prone to endorse the consequentialist outcome of collateral damage during wartime (e.g., accidental killing of innocent civilians) when the victims were Iraqis rather than Americans.

Five studies using 'what if' scenarios presented to college student and community respondents confirmed the hypotheses. The authors conclude that people appear to selectively draw from a 'moral toolbox' when those morals conveniently support a political argument.

These results are consistent with theoretical concepts of confirmation bias, selective reasoning, and cognitive dissonance.

Reference

Uhlmann, E.L., Pizarro, D.A., Tannenbaum, D. & Ditto, P.H. (2009). The motivated use of moral principles. Judgment and Decision Making, 4(6): 476-491.