The Good News of 2020

 

Tamny: Stable Currency is the Goal

Tamny's point is an obvious one - money is useful only to the degree it facilitates an exchange between two parties. To that end, money should consistency measure and communicate value (like any other unit of measure). You don't want a unit of monetary measure that's constantly changing, and anchoring it to gold is only one of many ways to ensure a stable currency.  

It's Truly Scandalous That Some View Judy Shelton As Controversial
By John Tamny

The rial is no longer Iran’s currency. It was recently replaced by the toman. Why was it replaced? The answer is really simple. Since 1971 the rial has been devalued over 3,500 times. Translated for those who need translation, the rial long ago ceased to function as a currency.

In order for currencies to be broadly circulated, they must be trusted. That’s the case because no one exchanges money when they transact. In truth, they exchange products for other products. Money is just an agreement about value that facilitates the transaction.

The rial ceased to function as a currency precisely because no reasonably sensible provider of goods and services would accept that which was constantly being devalued. In other words, no sane person will hand over real goods and services for money that is exchanging for fewer and fewer goods and services by the day, week, and year.

All of the above is a reminder that when monetary authorities devalue what we call “money,” they’re robbing workers of the fruits of their work. It’s as simple as that. If money is consistently shrinking as a measure exchangeable for goods and services, so is the value of our work. It’s being taken from us. Politicians can shrink our buying power through direct taxation, or they can do so through the tax that is devaluation. Both are cruel levies placed on our work.

That currency devaluation is as old as money is explains better than anything else why Judy Shelton - whose nomination to the Federal Reserve Board was stalled Tuesday by a Senate committee vote - has been such an insightful and muscular voice in favor of credible money for decades. To know Shelton is to know how thoroughly decent she is, and how gracious she is. To know her is to want to be like her. She’s also a very compassionate person. One of the most animating factors of her work over the decades is that she rightly sees currency devaluation as incredibly unjust.

Shelton has long focused on monetary policy because she’s long been horrified by the despicable act of devaluation. In its extreme form, it’s what’s happened in Iran. The Iranians who were paid for their toil in rial saw their life’s work taken from them. Shelton views this as tragic.

Looked at through a dollar lens, U.S. monetary authorities haven’t wrecked the dollar in the way that Iranian authorities have. Evidence supporting the previous assertion is that the dollar is still accepted as “money” around the world. Its global acceptance is a consequence of it having for the most part held its value over the decades.

In Shelton’s case, the “for the most part” when it comes to the dollar’s constancy as a measure of value is what concerns her. Per Adam Smith, the “sole use of money is to circulate consumable goods.” Money should be a stable and forever measure of value. Historically it was. Gold was the market commodity used to anchor money not with the view of limiting the supply of money, but because gold has long been the commodity least affected in price by surges in its supply or demand. Gold has long been the constant, which explains why it’s defined currencies around the world for hundreds, and realistically thousands of years.

Gold-defined money existed as assurance for workers that their immense effort on the job would not be taken from them by stealth. Simple as that.

So while the dollar’s exchange value has never been a Fed function to begin with, and wouldn’t be even if Shelton were Fed Chairman, Shelton has a positive view of gold-defined money precisely because she wants to end the currency devaluations that so cruelly rob innocent workers of the fruits of their work. Translated for those who need it, Shelton’s allegiance isn’t to gold as much as it’s to workers whom she hates to see being shortchanged.

That’s why, assuming a commodity or dollar-issuing method comes along that reveals itself as more price stable than gold, Shelton would logically support that which imbued the dollar with even greater stability. Shelton respects hard work, and stable money as a measure of value is what ensures that effort in the workplace won’t happen in vain.

What’s sad is that Shelton’s views are seen by some as “controversial.” Somehow her tireless support of money that holds its value so that workers get to retain the value of their work has economists in particular up in arms. Notable here is that the Fed is the largest employer of economists in the world. Many inside the central bank view the notion of stable money as improper, or yes, “controversial.” That they don’t share Shelton’s vision of money, one that has been around for millennia, is a happy reminder of what a great addition Shelton will be at the Fed. Her presence will force the economists in its employ out of their comfort zones, and perhaps cause them to reconsider why they reflexively disagree with Shelton about money.

In the process, they might pause to consider what Shelton already knows intimately: there are no companies and no jobs without investment first. And when investors put money to work, they are buying future dollar income streams and future returns in dollars. It’s a reminder that devaluation doesn’t just eviscerate the value of our toil. Indeed, it’s also a tax on the very investment without which work opportunities would be rather limited.

Judy Shelton is pro-worker and also pro-work opportunity. Yet her decades-long support for workers and work opportunities is viewed by some as controversial. That’s truly scandalous. Though yesterday's vote revealed an uphill battle for the nominee, there’s still a chance for Shelton to be confirmed. Republicans need to make it happen.

Census Bureau - Median Income by Race

Saw this data recently regarding US median income by race (adjusted for inflation).

Observations:

• Real median income pre-COVID was highest ever for Asian, Whites, Hispanics, and Black Americans
• Median incomes for all races changed trajectory (positive) in 2019. Interesting coincidence given passage of the tax-cut in 2018. 

Stossel - Expertise has its limits

Great historical context here regarding the gap between what expert models predicted and what actually happened.  Also interesting background regarding the massive failure of models predicting mad cow, swine flu, and avian flu.

 

Socialism

Protests Turn to Riots

It's been too long since my last post, and it is sad the returning topic must be this one.

Four observations prior to the video below:

1. The violence portrayed in the video below is shocking and clearly widespread. Why isn't it on every major news source in the country? Avoiding telling the truth about this violence is far beyond 'Fake News' and bias and into something far worse.
2. Outside of direct and immediate threat of bodily harm and in self-defense, when are any of these violent acts acceptable?  If they are not acceptable, what will it take for societal by-standers to say so?  I don't see much of that on social media these days as everyone falls over themselves to renounce Systemic Oppression. Whether you believe the USA has systemic oppression or not is irrelevant to your stance against mob violence, I would hope. 
3. Irony alert - we just finished a period where government used its power to forcibly close businesses and suspend rights of assembly and worship in the name of public safety.  Where's that concern for public safety now?  We heard nothing except the need to social distance for months, at the very least shouldn't we be condemning the rioters for putting themselves and others at risk of the COVID-19? Of course that sounds ridiculous, because everything about this is ridiculous. Rioting and violence are not on the same level as failing to maintain #socialdistance, yet so far government seems more motivated to use its powers to limit freedom (even if well intended) than to protect citizens from mobs. 
4. Is the skin color of criminals relevant to how we prosecute them for the crimes they commit?  I don't care what color you are, I judge you by the ideas you have and the actions you take. 

Undoing the Dis-Education of Millennials

Undoing the Dis-Education of Millennials
By Adam J. MacLeod | November 9, 2017, 9:06 EST

I teach in a law school. For several years now my students have been mostly Millennials. Contrary to stereotype, I have found that the vast majority of them want to learn. But true to stereotype, I increasingly find that most of them cannot think, don’t know very much, and are enslaved to their appetites and feelings. Their minds are held hostage in a prison fashioned by elite culture and their undergraduate professors.

They cannot learn until their minds are freed from that prison. This year in my Foundations of Law course for first-year law students, I found my students especially impervious to the ancient wisdom of foundational texts, such as Plato’s Crito and the Code of Hammurabi. Many of them were quick to dismiss unfamiliar ideas as “classist” and “racist,” and thus unable to engage with those ideas on the merits. So, a couple of weeks into the semester, I decided to lay down some ground rules. I gave them these rules just before beginning our annual unit on legal reasoning.

Here is the speech I gave them.

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Before I can teach you how to reason, I must first teach you how to rid yourself of unreason. For many of you have not yet been educated. You have been dis-educated. To put it bluntly, you have been indoctrinated. Before you learn how to think you must first learn how to stop unthinking.

Reasoning requires you to understand truth claims, even truth claims that you think are false or bad or just icky. Most of you have been taught to label things with various “isms” which prevent you from understanding claims you find uncomfortable or difficult.

Reasoning requires correct judgment. Judgment involves making distinctions, discriminating. Most of you have been taught how to avoid critical, evaluative judgments by appealing to simplistic terms such as “diversity” and “equality.”

Reasoning requires you to understand the difference between true and false. And reasoning requires coherence and logic. Most of you have been taught to embrace incoherence and illogic. You have learned to associate truth with your subjective feelings, which are neither true nor false but only yours, and which are constantly changeful.

We will have to pull out all of the weeds in your mind as we come across them. Unfortunately, your mind is full of weeds, and this will be a very painful experience. But it is strictly necessary if anything useful, good, and fruitful is to be planted in your head.

There is no formula for this. Each of you has different weeds, and so we will need to take this on the case-by-case basis. But there are a few weeds that infect nearly all of your brains. So I am going to pull them out now.

First, except when describing an ideology, you are not to use a word that ends in “ism.” Communism, socialism, Nazism, and capitalism are established concepts in history and the social sciences, and those terms can often be used fruitfully to gain knowledge and promote understanding. “Classism,” “sexism,” “materialism,” “cisgenderism,” and (yes) even racism are generally not used as meaningful or productive terms, at least as you have been taught to use them. Most of the time, they do not promote understanding.

In fact, “isms” prevent you from learning. You have been taught to slap an “ism” on things that you do not understand, or that make you feel uncomfortable, or that make you uncomfortable because you do not understand them. But slapping a label on the box without first opening the box and examining its contents is a form of cheating. Worse, it prevents you from discovering the treasures hidden inside the box. For example, when we discussed the Code of Hammurabi, some of you wanted to slap labels on what you read which enabled you to convince yourself that you had nothing to learn from ancient Babylonians. But when we peeled off the labels and looked carefully inside the box, we discovered several surprising truths. In fact, we discovered that Hammurabi still has a lot to teach us today.

One of the falsehoods that has been stuffed into your brain and pounded into place is that moral knowledge progresses inevitably, such that later generations are morally and intellectually superior to earlier generations, and that the older the source the more morally suspect that source is. There is a term for that. It is called chronological snobbery. Or, to use a term that you might understand more easily, “ageism.”

Second, you have been taught to resort to two moral values above all others, diversity and equality. These are important values if properly understood. But the way most of you have been taught to understand them makes you irrational, unreasoning. For you have been taught that we must have as much diversity as possible and that equality means that everyone must be made equal. But equal simply means the same. To say that 2+2 equals 4 is to say that 2+2 is numerically the same as four. And diversity simply means difference. So when you say that we should have diversity and equality you are saying we should have difference and sameness. That is incoherent, by itself. Two things cannot be different and the same at the same time in the same way.

Furthermore, diversity and equality are not the most important values. In fact, neither diversity nor equality is valuable at all in its own right. Some diversity is bad. For example, if slavery is inherently wrong, as I suspect we all think it is, then a diversity of views about the morality of slavery is worse than complete agreement that slavery is wrong.

Similarly, equality is not to be desired for its own sake. Nobody is equal in all respects. We are all different, which is to say that we are all not the same, which is to say that we are unequal in many ways. And that is generally a good thing. But it is not always a good thing (see the previous remarks about diversity).

Related to this: You do you not know what the word “fair” means. It does not just mean equality. Nor does it mean something you do not like. For now, you will have to take my word for this. But we will examine fairness from time to time throughout this semester.

Third, you should not bother to tell us how you feel about a topic. Tell us what you think about it. If you can’t think yet, that’s O.K.. Tell us what Aristotle thinks, or Hammurabi thinks, or H.L.A. Hart thinks. Borrow opinions from those whose opinions are worth considering. As Aristotle teaches us in the reading for today, men and women who are enslaved to the passions, who never rise above their animal natures by practicing the virtues, do not have worthwhile opinions. Only the person who exercises practical reason and attains practical wisdom knows how first to live his life, then to order his household, and finally, when he is sufficiently wise and mature, to venture opinions on how to bring order to the political community.

One of my goals for you this semester is that each of you will encounter at least one idea that you find disagreeable and that you will achieve genuine disagreement with that idea. I need to explain what I mean by that because many of you have never been taught how to disagree.

Disagreement is not expressing one’s disapproval of something or expressing that something makes you feel bad or icky. To really disagree with someone’s idea or opinion, you must first understand that idea or opinion. When Socrates tells you that a good life is better than a life in exile you can neither agree nor disagree with that claim without first understanding what he means by “good life” and why he thinks running away from Athens would be unjust. Similarly, if someone expresses a view about abortion, and you do not first take the time to understand what the view is and why the person thinks the view is true, then you cannot disagree with the view, much less reason with that person. You might take offense. You might feel bad that someone holds that view. But you are not reasoning unless you are engaging the merits of the argument, just as Socrates engaged with Crito’s argument that he should flee from Athens.

So, here are three ground rules for the rest of the semester.

1. The only “ism” I ever want to come out your mouth is a syllogism. If I catch you using an “ism” or its analogous “ist” — racist, classist, etc. — then you will not be permitted to continue speaking until you have first identified which “ism” you are guilty of at that very moment. You are not allowed to fault others for being biased or privileged until you have first identified and examined your own biases and privileges.

2. If I catch you this semester using the words “fair,” “diversity,” or “equality,” or a variation on those terms, and you do not stop immediately to explain what you mean, you will lose your privilege to express any further opinions in class until you first demonstrate that you understand three things about the view that you are criticizing.

3. If you ever begin a statement with the words “I feel,” before continuing you must cluck like a chicken or make some other suitable animal sound.

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To their credit, the students received the speech well. And so far this semester, only two students have been required to cluck like chickens.



Adam J. MacLeod is an associate professor of law at Jones School of Law at Faulkner University in Montgomery, Alabama.