Belated Linkage

  • Thomas Sowell made a good point on use of the commerce clause:

The power to regulate indirect effects is not a slippery slope. It is the disastrous loss of freedom that lies at the bottom of a slippery slope.

People – with some justification – are so numb to ‘slippery-slope’ arguments that perhaps they can’t recognize when we’ve already slid down one. The people who think (or, as I maintain, pretend to think) that ‘regulate interstate commerce’ means ‘pass any law whatsoever about anything that may have an indirect effect on commerce that could in principle be interstate’ might not realize that my complaint isn’t that they’re taking us down a path to fascism, it’s that they’re already fascists.

  • Foseti, Statistical analysis is not science.  True enough.  It’s what you do with the statistical analysis that makes it science (or not).  The real significance of this point is that a lot of the people who end up relying heavily on statistics (such as in medicine, the subject of the article he linked to) don’t really know much about statistics or have the philosophical grounding to interpret them reasonably.  They basically do ‘studies’ for which they know they’ll have to put a pretty dress on the numbers at the end (for which, often, they’ll just hire some masters-degree type statistician assistant). This can at times give such fields a cargo-cult aspect to them; they’ve dressed their study up in statistics, so it must be science.  It’s a problem.
  • Nick Gillespie, like me, noticed that Steven Chu could get away with the exact same thing that Wall Street is considered to have caused a ‘crisis’ doing.
  • I appear to have flagged this Borepatch post due to finding it noteworthy that we both appear to share….fond memories of “Mirielle”, the girl from those “French In Action” videos.
  • Penelope Trunk on when to leave grad school off your resume.  Obviously doesn’t make sense in certain fields, but hard to deny there is some merit to the logic.  The real problem is that when I disparage and warn people away from grad school it’s hard to convince people I’m being sincere that it’s not worth it, rather than engaging in some sort of weirdly zero-sum self-serving prevent-defense a la ‘I got one and I don’t want others to get one’ (which wouldn’t accomplish anything for me anyway, but nevermind).
  • Barry Ritholtz is still being a retard about the Volcker Rule

You’d think after such a calamitous economic fall, there’d be a strong consensus on reinforcing the protections that keep us out of harm’s way.  But in some powerful corners [...]

Dude:  in order to be saying something intelligent, you’d need to make, allude to, reference, or at least suggest the existence of an actual argument that the Volcker Rule would be a ‘protection’ that would ‘keep us out of harm’s way’.  Instead it’s just assumed, because, why?, because it’s a regulation.  I don’t know why this grates on me so much though, because let’s face it, virtually all laws and regulations are supported using the same type of ‘logic’.

  • David Lowery from Camper van Beethoven is very interesting on the subject of music economics.  Via Dr. Frank.  This is a debate I try to follow mostly because I want to do the right thing and actually pay musicians I like, but I don’t quite know what the right thing is, and even if I did, this desire runs up against my ignorance/laziness.  For example I wanted to buy the new Brendan Benson album, almost got it on iTunes, then I thought ‘hmm maybe buying from his website direct would get him a higher %?’ (this is a total guess, hell if I know), so I went to his website, tried to buy it, but turns out you need PayPal (? can’t I just give him a credit card #?), I haven’t used my PayPal account in like 8 years, and when I had finally gotten my password hinted back to me etc., it turns out my account’s been frozen or some such, I have to re-confirm a bank account, give stool samples, etc., etc.  Long story short I still don’t have the Brendan Benson album.  But I bet it’s good.
  • Streetwise Professor on credit risk and CVA-linked capital rules.  Still digesting it, but I do share his concern at the end:

Moreover, I am downright frightened of basing derivatives capital requirements on CVA, or any market-price based measure.  It is individually rational for banks to price using CVA, but tying capital charges to this measure will almost certainly lead to procyclical capital charges that are highly correlated across major financial institutions.  That is a very bad-and very scary-idea.

Not only that but my hunch is that counterparty-risk / CVA remediation trades will be the Next Big Thing when it comes to ‘financial innovation’ and the creation of opaque, scary three-letter-acronym financial products.  Indeed, it has basically already happened – as has made the news, at least one bank is paying their employees with synthetic mezz CVA exposure…and you thought vanilla CDOs were complicated…

  • Yet more belated discussion of the Posner/Weyl ‘financial FDA’ stuff; John Cochrane is good. (Via Marginal Revolution).  Don Boudreaux is pithy.  I had felt kind of guilty for not actually reading the full Posner/Weyl paper that spawned this silly idea, but now I feel relief; from what I’m seeing of it in these responses, it appears to be even dumber than I’d guessed.
  • Robin Hanson on Death Of A Salesman, which people are suddenly talking about in the blogosphere for some reason that I’ll probably figure out from context in a day or two:

On capitalism, the play might hold critiques of failing to save for hard times, or of success based on who you know, good looks, and likability. But these are not intrinsic to, or even obviously correlated with, capitalism.  [...] This seems to me a common situation – things said to be critiques of capitalism are often just critiques of humanity. Humans vie selfishly and self-deludedly for status. Some succeed, while others fail. The struggle, and the failures, aren’t pretty. Yes capitalism inherits this ugliness, but then so does any other system with humans.

The reason for this puzzle is simple, and I’ve stated it several times before:  There is no such thing as “capitalism”.  An “ism”, as usually understood throughout the rest of the English language, would be a belief system and/or specific well-defined arrangement of some sort, but there is simply no such “ism”.involving “capital” (or something) to which one could meaningfully attach the label “capitalism”.  Instead, “capitalism” is simply the term applied to - basically – freedom (may I give Joe X in exchange for Joe giving me Y?  yes or no?  yes?  that’s “capitalism”!) by people who don’t like freedom for one reason or another.  An obvious byproduct of this basic fact is that unpleasant features of human society are  attributed to “capitalism” by the term’s/epithet’s users; this is easy to do and hard to rebut since, again, “capitalism” doesn’t exist as a coherent “ism”, just as an epithet.

3 Responses to Belated Linkage

  1. Steve Johnson says:

    If you want to make capitalism into an “ism” you can sum it up with “governments should enforce and respect private contracts”.

    Plenty of people will explicitly object to that idea.

    Viewing it just as “freedom” is incomplete.

    • Well leaving aside that I have no such desire to turn capitalism into an “ism” :-), I would say your definition is as good as any, except that it’s practically tautological.

      The notion that government should enforce and respect private contracts practically follows from the modern definition/conception of ‘governments’. To dispute this principle would be awfully strange, sort of like disputing that governments should stop/prosecute murders and not engage in murders themselves. In either case I guess I would say that any reasonable conception of ‘freedom’ implicitly includes the idea that government should do basic government-like things like enforce contracts. Hence, my definition…

      But, I think for curiosity’s sake it’s worth trying your definition and seeing if, as you predict, people actually object when presented with the explicit option…

  2. Borepatch says:

    I think that the “Capretz Method” was to find a smoking hot chick to star in the series. Kept me watching for 30+ episodes. ;-)

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