Friday 30 May 2014

Piketty's Envy Problem

French rockstar economist Thomas Piketty has responded to his critics, mostly to the Financial Times who claimed his data is shoddy, cherrypicked and some of it “made up out of thin air.” Tyler Cowen reports:

There are 4,400 words here, mostly on the FT kerfluffle, and Neil Irwin summarizes it here: “The short version: He doesn’t give an inch.”

In this Guest Post by Peter Schiff, Schiff argues Piketty has an envy problem – and it’s this most fundamentally that explains his popularity.


Piketty's Envy Problem

There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves. However, the book's popularity is not at all surprising when you consider that its central premise: how radical wealth redistribution will create a better society, has always had its enthusiastic champions (many of whom instigated revolts and revolutions). What is surprising, however, is that the absurd ideas contained in the book could captivate so many supposedly intelligent people. 

Wednesday 28 May 2014

Google’s Rachel Carson

Rachel Carson Google doodle

I see the Google doodle this morning celebrating what would have been Rachel Carson’s 107th birthday this week, drawing this response from Iowahawk:

image

And this from Lyndsey Field:

image

Who was Rachel Carson?

She wrote the book that started the modern environmental movement.

Here’s some of what was written about here when her book, Silent Spring, turned 50 back in 2012.

  • “In Silent Spring, Carson crafted a passionate denunciation of modern technology that drives environmentalist ideology today. At its heart is this belief: Nature is beneficent, stable, and even a source of moral good; humanity is arrogant, heedless, and often the source of moral evil. Rachel Carson, more than any other person, is responsible for the politicized science that afflicts our public policy debates today.”
    Silent Spring's 50-Year History of Selective Data – Ronald Bailey, REASON
  • “It’s not polite to talk about brown and black people dying because rich white people in America feel better about themselves when the brown and black people don’t get to use DDT," says the University of Alabama's Andrew Morriss, co-editor of the new book Silent Spring at 50: The False Crises of Rachel Carson“The legacy of Carson's best-known book - widely considered the starting point of the modern environmentalist movement and the international ban on the malaria-fighting pesticide DDT  - has caused many more problems than it has solved.”
    Rachel Carson's Silent Spring at 50 Years – Joshua Swain, REASON
  • “Did cancer doom ever arrive? No. In Silent Spring Carson cites data showing that American farmers were then applying about 637 million pounds of pesticides to their crops. The most recent EPA estimate is that farmers used 1.1 billion pounds in 2007...What happened to cancer incidence rates? According CDC, age-adjusted incidence rates have been dropping for nearly two decades.”
    Silent Spring's 50-Year History Of Selective Data – CLIMATE DEPOT
  • “I don't want to talk about the particular topics she was hyping: they don't deserve it.
    Instead, I want to say that she was a pioneer of an ideologically driven pseudoscience pretending to be science. When she talked about the life of birds and their interactions with the environment, it sounded like a science – ecology. When she talked about pesticides, it sounded like a science, too – some kind of biochemistry. So by the choice of words, she could have pretended she was speaking as a scientist. A problem is that the claims she was making were actually never scientifically justified, at least not with good enough standards. They were ideological slogans. And she was one of the first people in the West who intensely insisted that the compatibility of a proposition with her ideology may replace the scientific rigor that was normally needed to establish scientific claims…
    “While pesticides are pretty important to feed the whole mankind today, they're not really an essential and omnipresent part of the civilization… What the newest fearmongering wants to ban – carbon dioxide emissions – is much more universal and crucial for the civilization…”
    Fifty years after Silent Spring – Lubos Motl, REFERENCE FRAME
  • How about praising a real hero.
    When it Comes to Human Flourishing, Forget Rachel Carson & Remember Bruce Ames – REASON
  • Disaster sells. But do the facts matter when we're scaring ourselves to death, or is it okay to lie in order to "wake people up" to calamity?
    Selling disaster: The four horsemen of modern apocalypse – NOT PC, 2006
    When politics masquerades as science – NOT PC, 2006

Tax Those House-Builders! Or Not?

So on the one hand you have a politician and sundry numpties saying that the cure for affordable housing is a large and confiscatory Capital Gains Tax on developers.

And on the other you have a Bill before Parliament admitting that taxation makes it difficult to supply cheap housing -- otherwise why would they have introduced a bill to exempt charities?

Can someone please resolve this contradiction?

[Hat tip Julian D.]

Sykes to Co-Lead the Menage of Convenience? [update 2]

UPDATE 1:

NBR is apparently reporting the leader is Laila Harre (right), formerly of New Labour, the Alliance, the CTU and the Greens – and one of the architects of Rodney Hide’s super-shitty Auckland mega-bureaucracy.

If this is true, it might suggest I’m just talking complete bollocks and the only thing DotCon wants out of this is getting Laila Harre and John Minto into parliament.

I guess we’ll have to wait and see …

"Prices Continue To Rise Between 3% And 33%"

As every wage-earner knows, wages struggle to keep up with monetary inflation.

As every wage-earner should know, the number-one source of monetary inflation is the monetary authorities.

And as wage-earners might know, the world’s chief monetary authority, for the time being at least, is the US Federal Reserve, aka, The Fed, who have the power to create and export inflation, but claim that, whatever pain wage-earners might be feeling – and even after injecting hundreds of billions in “liquidity” -- they haven’t been either producing or exporting inflation.

The folks at the Fed would however like you to know they feel your pain. And by "pain" they mean only getting a 13% raise last year, poor lambs.

They probably deserve a pay-rise ahead of all the other poor saps. It must be hard work shovelling out all that counterfeit capital. And they did increase their productivity last year.

[Hat tips and quips from Rudolf E. Havenstein and Daryl Montgomery]

Pigs Do Fly

Here is a picture of the world’s first flying pig, in 1909.

Tags: first-flying-pig John-Theodore-Cuthbert-Moore-Brabazon pig baskett plane
Pic of John Moore-Brabazon, from the Gloucester Transport History site.

Here’s the most recent.


Pic by www.sunlive.co.nz

Harder Than Drowning in the Bath

The TAB has earned great coverage from their gimmick promoting the Soccer World Cup, offering a prize of $5 million if you can correctly predict all 64 World Cup games.

This is going several results better than the German octopus from the last Cup, and on the face of it looks “gettable,” says the Royal New Zealand Herald.

“It’s gettable, but it’s hard – that’s why it’s five million dollars.”

The experts at Crowd Goes Wild reckon you and I might have a shot, but.

“An expert is less likely to win it than someone who just has a shot at it.”
“It’s only 64 games and, as I say, there’s only 20 tricky ones I reckon”

So what are your odds?

Thomas Lumley at Stats Chat has calculated them for your. Your chance of winning, he says, would be 1 in 5,227,573,613,485,916,806,405,226,496.

At those odds, the value of an entry is approximately 1 ten-thousand-million-billionth of a cent (10-19 cents).

Just for a comparison, this is somewhat considerably more unlikely than the odds of being struck by lightning (576,000 to 1), drowning in the bath (685,000 to 1), or having a meteor fall on your house (182,138,880,000,000 to 1).

As Mr Lumley points out,

If you can predict a dozen of the games with perfect accuracy and get 70% right for the rest, you’d be much better off just betting.

And if you can’t, why not just try Lotto – the odds for which, on average, say you’d expect to win once in every 18453 years and 9 months.

Easy money.

ECONOMICS FOR REAL PEOPLE: The Finance Professional–Villain, or Saint?

image

Here’s a controversial topic for this week’s session at the Auckland Uni Economics Group:

There is probably no more demonised profession today than that of the finance professional. Hedge funds, private equity firms, and greedy Wall Street speculators, all singled out as real villains, the culprits that cause economic misery for millions of people.
    But is this criticism fair, or even accurate?
    In this week’s seminar Julian will address this question, by examining whether it is right to vilify the discipline of finance (finance being a subset of economics). Or can economic theory provide a defence of finance by showing that it is instead a productive and noble undertaking?
        Date: Thursday, 29 May
        Time: 6pm – 7pm
        Location: Case Room Two, Level Zero, Business School
All welcome!
We look forward to seeing you there.

PS: Check us out on the web at our Facebook group.

Tuesday 27 May 2014

Election Year. Time for Some Scapegoats

It must be election year.

It must be election year, because every political party has just started blowing an anti-immigration dog whistle.

It started with scare stories of “boat people,” “revealed” by a Sunday Star Slime as desperate for readers as David Cunliffe is for voters, and before we knew it the blame for the economic downturn, hospital waiting lists, souring race relations and the housing crisis were all being laid at the feet of those dirty migrants.

“Maori have a unique position in New Zealand and advancing their cultural and social needs must be put ahead of the needs of immigrants,” said Maori Party leader, Te Ururoa Flavell, responding to a poll showing Maori dislike Asian immigrants more than any other group of New Zealanders.

National's Immigration Minister Nikki Kaye just sent home to die a young Fijian man on dialysis, despite having a family here ready to donate a kidney and a community raising money for the transplant. “He was here unlawfully,” said an unregretful Kaye.

Mana’s John Minto suggests we yell 'Buggar off' (sic) to foreign investors and foreign workers. It’s about 'self-respect,' says the man once opposed to Racist Tours.

Labour’s Phil Goof has a member's bill to be debated in the coming weeks which would tighten the rules for foreigners buying farm land.

And now Labour leader David Cunliffe has taken his party’s hardest line yet against immigrants. The former Immigration Minister blames them for the house crisis, with the Greens’s Russel Norman quietly saying “me too.” Immigration levels are a 'bubble', Cunliffe told Radio NZ this morning, using words without any reference to their meaning.

How on earth can immigration be in a 'bubble'? A bubble is something that keeps inflating because it keeps inflating, attracting more and more buyers as prices climb due to new buyers. Bubbles are usually due to bad policy and cheap money – like the Tulip Bubble or the South Seas Bubble. Or the housing bubble.  This year’s immigration  is not a bubble, it’s a blip. It’s up because net immigration is higher now – higher mostly because fewer NZers are leaving for a now-limping Australia – which doesn’t make it unsustainably, uncomfortably or irrevocably high.

And it doesn’t make them to blame for our bad housing policies. Nor does it make them a source of our misery – migrants who, for the most part, are coming here not to bludge but to live, and produce and invest. Who might just help make us richer.

Migrants who, unlike Cunliffe, Kaye and their ilk, are not parasites, nor intending to be.

Here’s Christy Moore:

Change in UK politics? Well, not so much.

It’s said that UK politics has changed overnight with the rise to prominence of Nigel Farage’s UKIP Party.

Change? Well, not so much. Because the biggest winner on the night was still “None of the Above.”

Embedded image permalink

Just as it was, in overwhelming numbers, in previous UK elections.

And some of ours.

[Pic from David Pyle , via @ampp3d pic.twitter.com/nYbBkVDeMh]

How Central Banks Are Waging War on Your Savings

Guest post by Mark Thornton

Martin Wolf is the chief economics commentator at the influential Financial Times. Mr. Wolf has only deteriorated in my estimation over time. He has reached an all time low with his recent editorial (“Wipe out Rentiers with Cheap Money,” 5/6/14), where he argues that the cheap money policy used by central banks is here to stay, so get used to it.

What makes his conclusion so tainted is that he understands the consequences of this policy. He even invokes the famous remark of Keynes regarding the “euthanasia of the rentier” where he supported the ruination of people who earn interest on their savings.

He sees the problem as insufficient aggregate demand. Wolf considers the pre-2007 unsustainable credit boom a temporary fix, rather than the cause of the crisis brought about by central banks. His argument is that low interest rates and quantitative easing policy have been an insufficient policy response to the crisis. His preferred solution remains some type of massive public works program financed by government deficits. However, he believes that governments will refuse to borrow in order to build “productive assets.”

This is classic Keynesian logic: solve the problems of debt and monetary expansion by engaging in more debt and monetary expansion. With governments reluctant to expand spending further he concludes that we are stuck with the second-best solution of a cheap money policy consisting of ultra low interest rates and quantitative easing. Besides, he notes, the “cautious rentier no longer serves a useful purpose.”

Wolf is the unabashed mouthpiece for the ruling power elite. He clearly and correctly describes what this policy actually accomplishes — cheap monetary policy hurts most people in the economy, particularly workers and savers and redistributes wealth to the ruling elites. The losers from easy credit policy include the broad categories of insurance, pensions, and households (a long-known result recently confirmed in a study by the McKinsey Global Institute, referenced by Wolf himself).

The losers from cheap money policy are:

  • Insurance is far more important than most people think. Insurance protects us against the loss of life (life insurance), our health (medical insurance), our homes (home, flood, and fire insurance), and our vehicles (car insurance). There is also general liability insurance and various types of business insurance. Insurance companies even offer incentives to be better drivers, to maintain safer homes, and to live healthier lifestyles, and they strive to eliminate moral hazard. Insurance companies are hurt by cheap money policies because their interest return on investments are now lower than required to meet their payout obligations. This hurts the companies and their policyholders because it requires higher premiums and raises the possibility of bankrupting insurance companies.
  • Pensions and retirement savings accounts are also hurt by easy credit policies. These institutions arose to address the problems associated with increased longevity brought about by increased prosperity. By saving during your working career you provide income for your retirement. Cheap money policy and low interest rates discourage saving and also makes it more difficult for pensions to earn returns on their investments necessary to make future payouts to retirees. The same is true for individuals who have retirement savings accounts.
        In order to achieve higher returns, pension funds and people saving for retirement have been forced into more risky investments. Savings accounts, money market mutual funds, certificates of deposit, and short-term government bonds earn less than 1 percent, and after taxes and inflation they are losing purchasing power. Hence, central banks have been forcing these people to invest in the stock markets and junk bonds and the possibility of large loses in the future.
  • The class labeled “households” is basically everyone except the small number of people who benefit from cheap money policy. Households are harmed in a variety of ways, including the weak job market, declining real wages, and the negative impact on savings. It has also harmed them by encouraging households to take on extremely high amounts of debt, much of which comes with much higher interest rates.

The winners from cheap money policy are:

  • the government,
  • large corporations, and
  • large banks.

Low interest rates clearly benefit borrowers with lower interest rates and governments, banks, and corporations are the biggest borrowers. In general, artificially low interest rates benefit capital and hurt labour. Cheap money policy by central banks helps banks, like subsidized flour policies would help bakeries. Banks are also helped by most forms of government bailouts.

The easy money policy makes it easy for large corporations to borrow large amounts of credit at very low interest rates. It also forces stock prices up as alternative forms of savings, such as certificates of deposits, yield a real negative return. It has also made it very cheap for corporations to buy back their stock and to leverage their balance sheets.

The stock market bubble is the direct effect of the cheap money policy of the central bank.

Mr. Wolf and central bankers around the world have the idea that cheap money policies can increase stock prices and that this will lead to sustainable increases in investment, consumer spending, and increased aggregate demand. In reality, cheap money policies cause economic bubbles that are inherently unstable and subject to crash. It should be obvious that harming the workers and savers of society to benefit the wealthy ruling class is no way to get the economy back on track. Therefore, cheap money policy is a scam of gigantic global proportions.

Achieving economic recovery and growth requires first knowing what caused the problem in the first place. A lack of aggregate demand is the effect, not the cause. A lack of aggregate demand is the crisis, not the cause of it. The cause of the crisis is easy money policy and runaway government spending and debt. Continued easy money policy and government spending will only make the negative consequences of the crisis even worse.

The solution consists of:

  1. Central banks should have no monetary policy and they should not interfere with interest rates.
  2. Government budgets should be balanced and reduced over time.
  3. Government regulations, subsidies, and taxes should be eliminated.
  4. Land, labour, and capital should be transferred from the public sector to the private sector. And,
  5. Programs that burden future generations should be ended.

The horrible irony here is that when Keynes wrote approvingly of the euthanasia of the rentier class, he was speaking of a powerful class of monopoly capitalists and aristocrats. When Mr. Wolf speaks of the euthanasia of the rentier he is actually targeting “insurance, pensions, and households,” with a policy that has enormous financial benefits to the class of people that Keynes was targeting for extinction!

In 1789 Marie Antoinette said “let them eat cake.” In 2014, Mr. Martin Wolf tells us to eat “cheap money.”


Photo of Mark    ThorntonMark Thornton is a senior resident fellow at the Ludwig von Mises Institute in Auburn, Alabama, and is the book review editor for the Quarterly Journal of Austrian Economics. He is the author of The Economics of Prohibition, coauthor of Tariffs, Blockades, and Inflation: The Economics of the Civil War, and the editor of The Quotable Mises, The Bastiat Collection, and An Essay on Economic Theory.
This post first appeared at the Mises Daily

Monday 26 May 2014

#Piketty: Bad Theory, Bad Data

“Up until Giles's shock revelations, Capital in the Twenty-
First Century was the liberal-left's philosopher's stone:
the magical device capable of transforming base socialist
instinct (greed, envy, hatred, control-freakery, love of the
state, obsession with equality) into intellectual gold. This
week, it's just another worthless leftist screed in the dustbin of history.”

- James Delingpole, “Piketty -- Author of Das Kapital in the 21st Century -- Rumbled

Piketty said the discrepancies were simply
adjustments to raw data to smooth
them over time and across countries.”

Kate, from Small Dead Animals blog, 
from her post “Everything He Knows, He Learned
From Temperature Records

Thomas Piketty’s best-selling book Capital in the 21st Century has sailed forth arguing that capitalism holds a fatal flaw. Having been virtually sainted in the four short weeks since the book’s release, the SS Piketty appears to have hit a reef now that reviewers have had time to delve into his working.

Numerous reviewers have already pointed out problems with Piketty’s theory that mature capitalism inexorably produces a fatal wealth inequality only remedied by a global wealth tax – many of which you can read here at NOT PC -- problems to which when pointed out he and his opponents have simply responded “but look at the data.”

So the Financial Times’s senior economics editor Chris Giles did look at the data, comparing it to the sources Piketty claims for it. They gave it a really close look, trying to emulate his charts and tables from the data sources. Their conclusion, after trying, is that Piketty’s results are too often overcooked, cherrypicked, mistakenly transcribed, incorrectly fitted to each other, and (in the case for example of U.S. records for over a century) simply “made up out of thin air.”

What Giles and his colleagues found appears devastating.

They found that the data, as presented, contained (to say the least) substantial inaccuracies. More bluntly, if the correct figures from the sources he cites are used, and the calculations are performed correctly, the effects he claims to describe vanish entirely.
    You can click the FT link above to read the big-picture (ungated) story, and
this (gated) link to see the specific allegations about Piketty’s data errors.
    Giles explains what led him to start questioning Piketty’s historical figures on wealth and income concentration, which most other reviewers (including me!) had simply assumed were in the ballpark:

[W]hen writing an article on the distribution of wealth in the UK, I noticed a serious discrepancy between the contemporary concentration of wealth described in Capital in the 21st Century and that reported in the official UK statistics. Professor Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth. The Office for National Statistics latest Wealth and Assets Survey put the figure at only 44 per cent.

Whoa! Piketty’s figure for wealth concentration in the present–so we’re not quibbling over 1810 here–was off by 27 percentage points. Like Will Ferrell, that’s kind of a big deal.

It gets worse. This chart showing US data is an example:

Giles vs Piketty USA

Remember, the whole thrust of Piketty’s book is that there is inexorable income and destructive income inequality under capitalism, and his book has the data and theory to prove it. But, well, you see the blue line above, which is Piketty’s line purporting to show the “wealth share” of the “top 10% over the last two century’s? Turns out  that for 90 of those years, between 1870 and 1960, the data doesn’t even exist. (That’s the gap in the red lines, above.)

So how did he produce his continuous blue line?

According to Giles, Piketty literally just made that blue line up (presumably guided by the trends in the other countries, and in the US 1%, for which there were better data).

Giles describes several categories of issues that he found with Piketty’s data:

a) Fat fingers
Prof. Piketty helpfully provides sources for the data he uses in his work. Frequently, however, the source material is not the same as the numbers he publishes. …
b) Tweaks
On a number of occasions, Prof. Piketty modifies the figures in his sources. This might not be a problem if these changes were explained in the technical appendix. But, with a few exceptions, they are not, raising questions about the validity of these tweaks. …
c) Averaging
Prof. Piketty constructs time-series of wealth inequality relative for three European countries: France, Sweden and the UK. He then combines them to obtain a single European estimate. To do so, he uses a simple average. This decision (shown in the screen grab below) is questionable, as it gives every Swedish person roughly seven times the weight of every French or British person. …
d) Constructed data
Because the sources are sketchy, Prof. Piketty often constructs his own data. One example is the data for the top 10 per cent wealth share in the US between 1910 and 1950. None of the sources Prof. Piketty uses contain these numbers, hence he assumes the top 10 per cent wealth share is his estimate for the top 1 per cent share plus 36 percentage points. However, there is no explanation for this number, nor why it should stay constant over time.
There are more such examples. …
e) Picking the wrong year for comparison
There is no doubt that Prof Piketty’s source data is sketchy. It is difficult to find data that relates to the start of each decade as his graphs demand. So it is only natural that he might say 1908 is a reasonable data point for 1910 on the graph.
It becomes less reasonable when, for example, Prof. Piketty uses data from 1935 Sweden for his 1930 datapoint, when 1930 data exists in his original source material. …
f) Problems with definitions
There are different ways to compute wealth data ranging from estimates based on records at death to surveys of the living. These methods are not always comparable.
In the source notes to his spreadsheets, Prof. Piketty says that the wealth data for the countries included in his study are all obtained using the same method. …
But this does not seem to be true.
g) Cherry-picking data sources
There is little consistency in the way that Prof. Piketty combines different data sources.
Sometimes, as in the US, he appears to favour cross-sectional surveys of living households rather than estate tax records. For the UK, he tends to avoid cross sectional surveys of living people.
Prof Piketty’s choices are not always the best possible ones. A glaring example is his decision relative to the UK in 2010. The estate tax data Prof. Piketty favours comes with the following health warning.

“[The data] is not a suitable data source for estimating total wealth in the UK, or wealth inequality across the whole of the wealth population; the Wealth and Asset survey is more suitable for those purposes”.

These choices matter: in both the UK and US cases, his decision of which type of data to use has the effect of showing wealth inequality rising, rather than staying constant (US) or falling (UK).

This appears to be the key chart, says John Hinderaker at Powerline, “particularly the two graphs on the bottom. It is apparent that the superficial plausibility of Piketty’s account derives from his own ‘tweaks’ and misrepresentations, not from the underlying data”:

Piketty022

Unbelievably, there is still worse, leaving Piketty’s defenders to face

the awkward fact that Giles has arguably just shown that when you correct Piketty’s factual mistakes, then the trend in both the UK and the US is the exact opposite of what everyone took away from the book.

And while these countries represent two of the major sources for his argument, his data for the rest of Europe looks equally dodgy.

Nick Sorrentino at Against Crony Capitalism reckons that the fudging of data is actually unnecessary.

He didn’t have to fudge the data however, Piketty is fundamentally wrong about how capital snowballs and why the wealthiest have increased their share of wealth in the USA since about 1970. In a nutshell it is because of the financialization of the economy enabled by a truly fiat currency… Easy money benefits the bankers and the politically connected first, the 1%.

But Piketty has failed to even notice this valid point, leaving him, as Bob Murphy argues, wrong in data and wrong in theory.

The book contains foundational theoretical problems, a misreading of the empirical literature that blows up his whole case, sloppy and absurd factual errors concerning tax rates and minimum wage hikes, and shocking quotations that reveal he has no desire to actually raise government revenue with his massive soak-the-super-rich schemes, but instead merely wants to prevent the formation of fortunes in the first place.

Because even on its face, Piketty’s theoryas stated doesn’t hold water.

You have to be ignorant as the day is long not to know that capitalism has made us wealthy beyond all possible expectation, even going back thirty years never mind three hundred. We now have a vast number of people who do not work because we produce at such a prodigious rate that it just doesn’t require more than about a quarter of the working population to produce enough for us to maintain a 1950s and better lifestyle for those who choose not to bother actually earning an income. In our society who hasn’t got a phone, a car, a colour TV, enough to eat, clothes to wear and a place to live. There are always people on the fringe who circumstances have dealt a bad card, but really we are beyond any issue of deprivation that had existed for the entire course of human history up until say around that same 1950s mark.
    So Piketty lied. The people who line up behind the book will care about that as much as they did about Climategate. It is about power and wealth, with the facts of the case as close to a non-issue as it is possible to be. The only interesting question about wealth distribution to these people is that they would like more of our wealth distributed to themselves.

As Steve Horvitz observes, “Piketty has a potential problem here and we need to see what his response is.  His first round reply in the Financial Times was a whole bunch of nothing.” And it’s not enough to respond on his behalf, as many have already done, saying “but look, he’s so honest he’s put all his data on line. Because as Tyler Cowen points out, the question is not whether or not Monsieuer Piketty is a nice guy (he may be, but it’s irrelevant), nor whether he’s more honest than Michael “Hide the Decline”Mann (which wouldn’t be hard): the real question at stake is whether or not he’s right. Because if he is, or can be made to appear that way, then politicians the world over are ready and willing to swing a global wealth tax your way.

So this matters.

scientific method phd comics

LINKS REFERRED TO:

[Hat tip for cartoon to Steven Kates]

“Teach a man to fish…”

[Hat tip Laissez Faire Capitalism]

Sunday 25 May 2014

Quote for a Sunday: A Thanksgiving Sermon

By Robert Green Ingersoll...

I thank the artists who chiseled forms in stone and wrought with light and shade the face of man. I thank the philosophers, the thinkers, who taught us how to use our minds in the great search for truth. I thank the astronomers who explored the heavens, told us the secrets of the stars, the glories of the constellations—the geologists who found the story of the world in fossil forms, in memoranda kept in ancient rocks, in lines written by waves, by frost and fire—the anatomists who sought in muscle, nerve and bone for all the mysteries of life—the chemists who unraveled Nature's imwork that they might learn her art—the physicians who have laid the hand of science on the brow of pain, the hand whose magic touch restores—the surgeons who have defeated Nature's self and forced her to preserve the lives of those she labored to destroy.

I thank the discoverers of chloroform and ether, the two angels who give to their beloved sleep, and wrap the throbbing brain in the soft robes of dreams. I thank the great inventors—those who gave us movable type and the press, by means of which great thoughts and all discovered facts are made immortal—the inventors of engines, of the great ships, of the railways, the cables and telegraphs. I thank the great mechanics, the workers in iron and steel, in wood and stone. I thank the inventors and makers of the numberless things of use and luxury.

I thank the industrious men, the loving mothers, the useful women. They are the benefactors of our race.

The inventor of pins did a thousand times more good than all the popes and cardinals, the bishops and priests—than all the clergymen and parsons, exhorters and theologians that ever lived.

The inventor of matches did more for the comfort and convenience of mankind than all the founders of religions and the makers of all creeds—than all malicious monks and selfish saints.

I thank the honest men and women who have expressed their sincere thoughts, who have been true to themselves and have preserved the veracity of their souls.

I thank the thinkers of Greece and Rome, Zeno and Epicurus, Cicero and Lucretius. I thank Bruno, the bravest, and Spinoza, the subtlest of men.

I thank Voltaire, whose thought lighted a flame in the brain of man, unlocked the doors of superstition's cells and gave liberty to many millions of his fellow-men. Voltaire—a name that sheds light. Voltaire—a star that superstition's darkness cannot quench.

I thank the great poets—the dramatists. I thank Homer and Aeschylus, and I thank Shakespeare above them all. I thank Burns for the heart-throbs he changed into songs, for his lyrics of flame. I thank Shelley for his Skylark, Keats for his Grecian Urn and Byron for his Prisoner of Chillon. I thank the great novelists. I thank the great sculptors. I thank the unknown man who moulded and chiseled the Venus de Milo. I thank the great painters. I thank Rembrandt and Corot. I thank all who have adorned, enriched and ennobled life—all who have created the great, the noble, the heroic and artistic ideals.

I thank the statesmen who have preserved the rights of man. I thank Paine whose genius sowed the seeds of independence in the hearts of '76. I thank Jefferson whose mighty words for liberty have made the circuit of the globe. I thank the founders, the defenders, the saviors of the Republic. I thank Ericsson, the greatest mechanic of his century, for the monitor. I thank Lincoln for the Proclamation. I thank Grant for his victories and the vast host that fought for the right,—for the freedom of man. I thank them all—the living and the dead.

I thank the great scientists—those who have reached the foundation, the bed-rock—who have built upon facts—the great scientists, in whose presence theologians look silly and feel malicious.

The scientists never persecuted, never imprisoned their fellow-men. They forged no chains, built no dungeons, erected no scaffolds—tore no flesh with red hot pincers—dislocated no joints on racks—crushed no bones in iron boots—extinguished no eyes—tore out no tongues and lighted no fagots. They did not pretend to be inspired—did not claim to be prophets or saints or to have been born again. They were only intelligent and honest men. They did not appeal to force or fear. They did not regard men as slaves to be ruled by torture, by lash and chain, nor as children to be cheated with illusions, rocked in the cradle of an idiot creed and soothed by a lullaby of lies.

They did not wound—they healed. They did not kill—they lengthened life. They did not enslave—they broke the chains and made men free. They sowed the seeds of knowledge, and many millions have reaped, are reaping, and will reap the harvest of joy.

I thank Humboldt and Helmholtz and Haeckel and Büchner. I thank Lamarck and Darwin—Darwin who revolutionized the thought of the intellectual world. I thank Huxley and Spencer. I thank the scientists one and all.

I thank the heroes, the destroyers of prejudice and fear—the dethroners of savage gods—the extinguishers of hate's eternal fire—the heroes, the breakers of chains—the founders of free states—the makers of just laws—the heroes who fought and fell on countless fields—the heroes whose dungeons became shrines—the heroes whose blood made scaffolds sacred—the heroes, the apostles of reason, the disciples of truth, the soldiers of freedom—the heroes who held high the holy torch and filled the world with light.

With all my heart I thank them all.

- by Robert Green Ingersoll, an excerpt from 'A Thanksgiving Sermon,' 1891

[Hat tip Hilton Holder]

Friday 23 May 2014

Friday Morning Ramble: Edition #762

Here’s some of what caught my eye around this week’s traps…

According to local trade unionists, wages rates are higher in Australia because Aussie unionists have better legal protection. And yet, the International Trade Union Confederation reckons protection is better here than in Oz.
Worker rights – OFFSETTING BEHAVIOUR

Not going to “reform” the RMA until after election? But it’s not like National were offering real RMA reform anyway. Just more blancmange.
Resource Management Act Reform – Amy Adams, BEEHIVE
Property rights urgently needed to allow mineral riches to be safely exploited – NOT PC, 2009
It's Time to Drive a Stake Through the Heart of the RMA – Peter Cresswell, FREE RADICAL, 2004

No wonder Labour would be happy to support the Nats’s tepid reforms.
Labour offers bipartisan support to National for a separate RMA reform bill to improve housing affordability – INTEREST.CO.NZ

“Good old Radio New Zealand doesn't usually incite me to violence, but the other morning I felt like throwing things at my wireless when I heard you being not very sorry over the Lombard Finance collapse.”
An open letter to Bill Jeffries – Maria Slade, STUFF

“Every week we rent, we keep earning interest on our growing savings. Every week we rent we don't pay interest on a $300k loan and save on rates, high insurance premiums and maintenance costs.
”Maybe one day the desire to invest in something solid, knock down walls and have cats, dogs, and chickens will become stronger than the need for flexibility. Hopefully the market will have settled down by then and our savings big enough to afford the house we want. In the meantime, I'll keep discussing it at barbecues.”
To buy a house, or not to buy – Cecile Meier, THE PRESS

“We have already seen how this experiment works in Auckland, New Zealand. There, a very tight urban growth boundary (the “Metropolitan Urban Limit” or MUL) has been in place for well over a decade, strangling urban land supply. Auckland now has one of the densest populations in the Anglosphere (see next chart), some of the most expensive housing in the OECD, and severe congestion problems.”
Melbourne secures land ponzi for our children / Auckland's mythical urban sprawl 'problem' – Leith Van Onselen, MACROBUSINESS

“We can't do much about distance. But we can get bigger.”
Fixed costs in small countries, again – OFFSETTING BEHAVIOUR

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“If you click on the link you’ll be able to see details, for example Australia’s highest value export is coal and ours is dairy products…. Of those, sugar was the highest value export for five.”
This map shows which export makes your country the most money – GLOBAL POST

“That the Thai military achieved complete surprise with this coup d'état is incredible in itself. Many people suspected that it was coming, but all the protest venues were caught flat footed. UDD, PDRC, Isara, Dhamma, KPT -- all were caught off guard. Well played by the Army, so far.
”PDRC has wanted a coup for a long time. Coup d'état was a bad way to go, yet there were no good choices remaining.
And hey, United States, my country! How did we miss this? The US Department of State had just said that we do not expect a coup d'état. What the heck are we paying the NSA and CIA for?!”
- Michael Yon at FACEBOOK

“I want to vote UKIP in the European Parliamentary elections today.  There have been and are a lot of reasons to commend UKIP, but despite a plaintiff claim by Nigel Farage on Conservative Home, I am strongly inclined not to put a cross beside UKIP - because UKIP is no longer the libertarian-inclined party I warmed to, and was a member of for a year. … What's the problem?  Well it's all about Romanians.”
I would vote UKIP, but it is not libertarian – LIBERTY SCOTT UK

“Selective enforcement of the law is a dangerous thing.”
Prison For D’Souza, Beach Time For Corzine – THE FEDERALIST

“The site of an American-enabled kinetic-action-lead-from-behind-super-duper NATO triumph that somehow led to U.S. Amb. Chris Stevens being croaked by really irate YouTube consumers, is now packed with more domestic terrorists than your neighborhood Tea Party HQ. ‘One U.S. military contractor working on counter-terrorism in Africa summed up the situation in Libya today as simply, ‘Scumbag Woodstock.’ The country has attracted that star-studded roster of notorious terrorists and fanatics seeking to wage war on the West.’”
Forget Benghazi! "Libya is Now 'Scumbag Woodstock'"! – REASON

The left’s shift on this issue, as on many issues, was purely tactical.The left’s leading lights were racists who jumped into civil rights. They were sexists who became feminists. They were advocates for the working class who despised the idea of working for a living.
”The culture war does not emerge from the left’s deeply held beliefs. Its leaders could care less about the things that they pretend to care about. It emerges instead from the need to maintain a constant state of domestic conflict.”
The Left Isn’t Pro-Gay — It’s Pro-Power – Daniel Greenfield, FRONTPAGE

“In a recent debate on the welfare state, I was asked whether I thought it was important to help others. That, I said, was not the right question. In a free society, people help others all the time — parents help children, neighbours help neighbours, private charities help orphans.
”The question you need to ask when you’re thinking about the welfare state is not, “Should I help others?” It’s, “Do some people have a right to be supported by others…”
How to end the welfare state with one simple question – Don Watkins, VOICES FOR REASON

Yaron Brook and Doug Casey Debate The Need For Government…

“Why urban yuppies have it all wrong.”
Sprawl Is Good for You – Robert Bruegmann, POLITICO

“Ira Einhorn was on stage hosting the first Earth Day event at the Fairmount Park in Philadelphia on April 22, 1970. Seven years later, police raided his closet and found the “composted” body of his ex-girlfriend inside a trunk.
Earth Day Founder Was Into Composting…People – DOLLARS & CROSSES

“The author, a self-admitted leftist, concedes that today’s environmental movement is no longer concerned with global warming…er…climate change, but rather de-industrialization at any cost…”
Environmentalism’s Zero-Sum Game – Derron Matthews, DOLLARS & CROSSES

Patrick Moore, founder of Greenpeace, on where greens went badly wrong.
‘Environmentalism has become a religion’ – SPIKED

Ed Cline reviews another book (right) exploding the global-warming-is-all-man's-fault nonsense. Looks to be full of evidence that people need to read.
Roosters of the Apocalypse – Ed Cline, RULE OF REASON

"In recent decades, we have seen advances in agriculture that have been more environmentally friendly and sustainable than ever before. But they have resulted from science-based research and technological ingenuity by farmers, plant breeders and agribusiness companies, not from social elites opposed to modern insecticides, herbicides, genetic engineering and "industrial agriculture."
Organic Farming Is Not Sustainable – Henry Miller, WALL STREET JOURNAL

“Hillary Clinton’s latest speech revealed some of her thoughts about reviving the economy. It suggested that she does not understand how jobs are created.
”She said she was trying to ‘encourage more companies to come off the sidelines and, frankly, for some to use some of that cash that is sitting there waiting to deploy.’
”This echoes the naïve idea embraced by the Obama administration that economies are fuelled by ever more borrowing and spending. But this is not how jobs are created.”
Hillary Clinton Shows Ignorance of How Economy Works and Ben Bernanke Cashes In – Hunter Lewis, AGAINST CRONY CAPITALISM

“’A property market slump remains a tail risk, but the tail is getting fatter…’  A reasonable assessment with the exception that this is not a tail risk. It’s a reality.”
China property bust risks growing – MACROBUSINESS

“A living standards measure shows Australians have gone backward over the last two years…”
Why consumers are so pissed off – MACROBUSINESS

“There is apparently a new economic danger out there. It is called “very low inflation” and the eurozone is evidently at great risk of succumbing to this menace..”
Keynesian madness: central banks waging war on price stability, savers – DETLEV SCHLICTER

“He even invokes the famous remark of Keynes regarding the “euthanasia of the rentier” where he supported the ruination of people who earn interest on their savings.”
How Central Banks Are Waging War on Your Savings – Mark Thornton, MISES DAILY

“The government forces us to use their paper as if it were money, and they have several different mechanisms for doing it.”
Legal Tender Forces Gold Out – Keith Weiner, FORBES

“Sometimes, though, the source of the economic fallacy surprises, as it did when reading a brief John Redwood commentary on Britain’s latest Budget from its Chancellor of the Exchequer, George Osborne.”
The Infernal Resilience of Economic Fallacies – THE ORGANIC TORY

781955734“I’ve just published a short book, Advanced Introduction to the Austrian School of Economics, which is designed to give people with some knowledge of economics an explanation of what ideas distinguish the Austrian school from mainstream economic thought. The paperback is relatively affordable ($22.36 if ordered on-line). The book is much slimmer in person (144 pages) than it appears in the graphic ….”
New Book: The Austrian School of Economics – Randall Holcombe, THE BEACON

“It is not too early to ask how the present US business cycle expansion, already more than five years old, will end. The history of the last great US monetary experiment in “quantitative easing” (QE) from 1934-7 suggests that the end could be violent.”
Echoes of 1937 in the Current Economic Cycle – Brendan Brown, MISES DAILY

Through inflation (expanding the money supply), as I will show, the state and its cronies "drink our milkshake" every day. Only, it does so surreptitiously, with nary a sucking sound to be heard.
How Inflation Picks Your Pocket – Dan Sanchez, MISES DAILY

“History is repeating itself as farce.”
On Top of Piketty: The new Marxism has nothing to offer us but chains – Tim Cavanaugh, NATIONAL REVIEW

“[Piketty] points out that wealth captures politics and this is a problem; but I think he’s got cause and effect reversed. If you look at the historical examples it’s not the case that wealthy people bought political power, its that politicians want economic power.”
Thomas Piketty and the great inequality debate: The Ayn Rand response – Yaron Brook, CITY A.M.

“How would you translate your new book’s title into English?  Andreas Marquant: I would like to say The State Causes the Poverty It Later Claims to Solve. This is the title of my article on mises.org last December. An even better title could be The Austrian Answer to Thomas Piketty.”
How Fractional Reserves and Inflation Cause Economic Inequality – Andreas Marquart, MISES DAILY

“Rand is often caricatured as an advocate of the rich and an enemy of the poor… ‘This, of course, is simply wrong. It’s not ‘the rich’ who go on strike, but the producers. The good and evil divide for Rand is not between rich and poor, but between producers and takers. There is no remotely plausible reading of Atlas Shrugged where the “1%” are unambiguously heroes and where everyone else is a ‘moocher.’ ’”
The Rich, the Poor, and Ayn Rand – VOICES FOR REASON

“In other words, there are two ways to explain why the mean wealth of the x% has grown faster than the mean wealth of the whole population. According to Piketty, it means that the richer you are in the first place, the faster your capital grows over time (hence, the dynastic wealth world he foresees). But it might also be the opposite: this phenomenon is exactly what we should expect to see in a world of high wealth turnover, a world where fortune rewards skills, hard work and risk taking. Quite symptomatically, Piketty and its numerous followers have completely dismissed that possibility.”
The x% puzzle - Guillaume Nicoulaud, ORDRE SPONTANÉ

“But what if people don’t spend down their savings? That seems to be Piketty’s assumption, at least for the very rich: they build more and more wealth which they don’t spend, and that wealth generates capital income, which they also don’t spend, and so on. If that happens, then the capital-output ratio does keep rising.
”But this also means that Piketty’s rich-get-ever-richer projection can happen only if the rich don’t live like rich people…”
A question on Piketty - Andrew Biggs, AEI

“Yesterday, I had the pleasure of being interviewed for half an hour by John O'Donnell on www.PowerTradingRadio.com. The interview was wide ranging, covering economic inequality, the 99% and the 1%, and the fact that the wealth of the 1% is the source both of the supply of the products that the 99% buys and the demand for the labour that the 99% sells, and thus operates in the self-interest of everyone.”
Interview with John O'Donnell on PowerTradingRadio.com – GEORGE REISMAN’S BLOG
Capitalism with Dr. George Reisman – TRADING ACADEMY

“Economist Bob Murphy joined me last week to take apart Thomas Piketty’s celebrated book Capital in the Twenty-First Century. It isn’t just Austrian economists who find fault with the book, it turns out; quite a few economists have noted that Piketty makes basic, even embarrassing mistakes in treating basic concepts. I realize it must sound as if I am making this up or being unreasonable, but listen for yourself.”
Thomas Piketty Refuted – TOM WOODS

“I wish that the divorce rate were higher. I know some people who’ve been married for decades, and they’ll likely never divorce. Yet life in that marriage is miserable due to ongoing dishonesty, …”
A Controversial Thought on DivorceDiana Hsieh, NOODLE FOOD

“You’ve probably seen the recent glut of sensational headlines in the media proclaiming that non-celiac gluten sensitivity is some kind of widespread collective delusion—simply a figment of the imagination of anyone who claims to experience it…”
Is Gluten Sensitivity Real? – Chris Kresser, HEALTH FOR THE 21ST CENTURY

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“A child's education baseline should be fun and trial-and-error exploration, not imposed standards and fear…”
Expert says growing number of children are risking their mental health because they are so terrified of getting bad results – MAIL
Montaigne on educating for independence – STEPHEN HICKS

“It works so well that it is, as The New York Times' John Markoff put it, "boring." The implications, however, are breathtaking.”
The Trick That Makes Google's Self-Driving Cars Work – THE ATLANTIC

“From Citizen Kane to The Great Gatsby to American Beauty, the critics’ favourites are savaged using the incisive blade of objective standards. As the literati mission is laid bare, the innocent are now forever spared the hypocrisy of professing a love for the dull and the insipid, a love that that they never felt.”
The Search for Romanticism in Hollywood – Vinay Kolhartkar, THE STORY DEPARTMENT

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image“It seems inevitable … that [Terry Teachout] would turn to Ellington, the most important jazz composer of the 20th century and a person of intense aspirations and rich achievement; someone whose life scarcely took second place to the music he wrote and the musicians he led.”
Take the ‘E’ Train: A definitive life of the great American composer. – WEEKLY STANDARD

“As a solitary, bookish schoolboy, Jonathon Green was tickled by outrageous words. He scoured the library for them.”
Slang shows us how language is always changing – FT

“In its third generation the Microsoft Surface Pro remains what it was: As beautifully engineered as it is ill-conceived. It’s still the laptop you can’t use on your lap and the tablet you can’t fully use with just your finger.”
Introducing the Surface Pro 3 – VODKA PUNDIT

“Great article on free speech and importance of debate with opponents. About abortion but true for all issues.”
The Pro-Choice Lobby Should Celebrate Not Censor Debate – SPIKED

Stealing tunes? When hasn’t Led Zeppelin stolen tunes.
Led Zeppelin and plagiarism – Stephen Stratford, QUOTE UNQUOTE

“A Florida pastor has been jailed for trying to sell fake paintings by the British artist. But why does the art world give Hirst's talentless artworks any financial value at all?”
Faking a fortune: why Damien Hirst's paintings are poor imitations of art – Jonathan Jones, GUARDIAN

“Sumtimes people tweet and there spelling isn’t quite what it should bee. Sumtimes it’s meaks things better. Hear are sum of those tweets.”
The 25 Worst (Best) Spelling Mistakes on Twitter – THE POKE

On the eve of being dismantled, in the midst of a snowstorm, a Frank Lloyd Wright house of rare quality is captured in its original location for the last time…”

“Foster + Partners is part of a consortium set up by the ESA to explore the possibilities of 3D printing to construct lunar habitations. Addressing the challenges of transporting materials to the moon, the study is investigating the use of lunar soil, known as regolith, as building matter…”
Foster + Partners works with European Space Agency to 3D print structures on the moon - ARCHINECT

[Hat tips Geek Press, Home Paddock, Hugh Pavletich, Architettura Matassoni, Scott Powell, Jim Matzger, Harry Binswanger, Michael Neibel, Mark Tammett, Friends of Kebyar, James Stannard, Lawrence Reed, Film Producer, Yaron Brook, ROMANTICISM WATCH, Justin Templer, Jeff Perren Novelist, Paul Litterick, Nelson Brackin, Stephen Hicks, Claire Finn, Old Holborn, Fergus Hodgson]

Thanks for reading,
Have a great weekend!
PC