Extraordinary Idiocy

"We must just pray that when your head is finished turning that your face is to the front again."
--Sir Thomas More (A Man for All Seasons)

So much foolhardy commentary is posted on social media that it is easy to build an immunity to it after a while. Every now and then, though, one stumbles across posts of such extraordinary idiocy that they are difficult to ignore.

"There is, in fact, in the writings and teaching of those who nowadays call themselves “economists,” no longer any comprehension of the operation of the economic system as such." - Ludwig von Mises https://t.co/F1GH9dRFwv

— Mises Institute (@mises) January 31, 2020

The post above comes from a professor of economics at the University of Utah. He did his undergrad at Oxford and his doctoral works at the University of Chicago.

How someone like this gets past his comprehensive exams much less defends his dissertation and gets hired by an R1 university is beyond my comprehension.

Corrupt Motives Doctrine

"Sometimes, in order to see the light, you have to risk the dark."
--Dr Iris Handyman (Minority Report)

The Democrat's impeachment argument has withered into a 'corrupt motives' slant (not this first time corrupt motives doctrine has been tried against the president). President Trump broke no laws, they say, but his motives justify him being removed from office.

Aside from the problem of getting inside the president's head to identify his true motives for any action, motivation cannot be grounds for legitimate conviction. In this case, if the argument is that the president was wrong because he acted in his own self-interest (e.g., for his re-election), then all pelicans are guilty of 'wrongdoing', as is the public at large. All of us act in our own self interest.

Moreover, president surely equate their re-election with the 'national interest.'

The corrupt motives doctrine circulating among so-called 'impeachment managers' demonstrates once more the brazen political hypocrisy in Washington.

Safety Trading

I say
We can go where we want to
To a place they will never find
And we can act like we come
From out of this world
And leave the real one far behind
--Men Without Hats

Although domestic equity markets haven't surrendered much in the face of coronavirus and other current crises, govies are acting like the safety trade is on.

Ten yr yields have broken their multi-month uptrend in a hurry. They're now eyeing the repo madness lows of last Sept at ~ 1.45%.

Fascism and Political Expedience

"What we need right now is a clear message to the people of this country. This message must be read in every newspaper, heard on every radio, seen on every television. I want everyone to remember why they need us!"
--Sutler (V for Vendetta)

Interesting proposition here that politicians will generally prefer fascism (i.e., government control but not necessarily ownership over means of productive capacity) over socialism (i.e., outright government ownership of productive capacity). The idea is that by not owning assets outright, politicians can lay off blame for problems on the so called private sector.

Of course, it can be argued, as Hayek did, that there is little difference between socialism and fascism in reality. In fact, fascism is really a flavor of socialism. Ownership is about who has decision rights to dispose of property. If government controls production, then government effectively owns it.

Nevertheless, the proposition helps explain why we tend to see socialism expressed in fascist forms more than in communist forms. Fascism can be a politically expedient choice.

Info Tech Growth

"Here's the deal. Gary and Wyatt...they created me on their...computer."
--Lisa (Weird Science)

Growth rates of various information technologies shown below. One takeaway is just how quickly some of these technologies moved up the curve toward maturity. It took radios and TVs decades. Smartphones reached an 80%+ usage rate in just a few years.

The other takeaway is that take-up rates of all these technologies are leveling out. On the upswing, info tech was a tremendous contributor to productivity improvement which, in turn, kept price inflation at bay.

Now that these technologies are maturing, their positive effect on productivity is declining and their brake on inflation goes away.

Life's Priorities

"Not sure you've got your priorities straight, Brantley."
--Fred Melrose (The Secret of My Success)

On heels of last week's March for Life, this post offers good perspective.

Priorities:

An eagle egg:

— Illegal to destroy
— Punishable by $250,000 fine
— Destruction can carry a 2 year prison sentence

A human life:
— Legal to abort
— Taxpayers forced to fund abortion providers
— Abortion actually encouraged by 1/2 of lawmakers

🤔

— Charlie Kirk (@charliekirk11) January 24, 2020

Life--human life--is God's greatest gift.

Electricity Production

You got me running
Going out of my mind
You got me thinking
That I'm wasting my time
--Electric Light Orchestra

Interesting study of US electricity production. From the time lapse graphic you can see how things have evolved away from coal.

Evolved is the correct word, however. Contrary to a popular media narrative, alternative energy is not taking over the grid. Share gains of Alt E over the past few years are very small. In fact, most of coal's decline has been replaced by another fossil fuel--gas.

Note also the highly fragmented state of renewable energy, and the dependence of various types of renewable sources (e.g., wind, hydro, solar) on geography.

Perpetual Racket

"Now, tomorrow you collect $400 from Del Rio. And if I tell you to break a guy's nose or thumb as a 'late payment notice,' you do it!"
--Gazzo (Rocky)

Why is Social Security (and any other entitlement program for that matter) a ponzi-like racket? The poster below explains it well.

How it works:
1. Government robs generation A.
2. Generation A gets old.
3. To pay for generation A's welfare/social security, they rob Generation B.
4. Generation B gets old.
5. To pay for generation B's welfare/social secuirty, they rob Generation C. https://t.co/g6YCB2WxuD

— Eric July (@EricDJuly) January 24, 2020

Another name for this is generational theft with the government serving as strong-armed agent for the robbing generation. Once implemented, it's hard to stop because the older 'paid in' generation feels that they are naturally entitled to what's theirs by 'social contract.'

A new generation may complain up front, but once it antes in, it's hooked. First you get robbed, then you rob.

Perpetual racket.

Time to Shine

There used to be a graying tower
Alone on the sea
You became the light 
On the dark side of me
--Seal

Stocks continue to outpace commodities. Ratio of $SPX:$CRB hitting new highs on a daily basis.

Ratio of US Stocks to Commodities continues to hit new all-time highs. $SPX $CRB pic.twitter.com/uqKs9432UI

— Charlie Bilello (@charliebilello) January 23, 2020

From the graph, the two previous periods where commodities outperformed weren't economically similar. The early-mid 70s were times of classic 'stagflation' while the mid 2000s saw commodities and stocks both run for a while--commodities just ran hotter. Oil peaked at ~$150/barrel in 2008.

What will it look like when it's once again commodities' time to shine?

Shop and Drop

"Do you have a bra to match that...something in leather, rubber, or barbed wire?"
--Lisa (Weird Science)

Interesting data on the evolving face of retail. Over the past 20 years, e-commerce has grown from less than 1% to over 10% of total retail sales (actually less than I would have thought).

Rise of e-commerce and fall of bricks-and-mortar retailers@StatistaCharts pic.twitter.com/qp4CR9Y3SV

— Liz Ann Sonders (@LizAnnSonders) January 16, 2020

Assuming the second panel reflects brick and mortar retail only, store closures have been outpacing openings--and the gap widened from 2018 to 2019.