Archive for April, 2011
How do people miss the point of Atlas Shrugged?
What’s with the Washington Post totally missing the smack-you-in-the-face obvious point of Atlas Shrugged, a novel routinely dismissed by its critics as stilted, didactic, and puerile?
I’m not trying to defend the book from these charges — it is, indeed, all of these things on one level or another. Nor am I defending Objectivism or Rand herself.
But the Post seems intent to allow its writers to pen screeds against the book and its author while missing the underlying point.
Last week, film critic Mark Jenkins gave us a review with this leap of logic:
The bullet-train theme is somewhat ironic. A roaring locomotive is a dynamic image of American industrial power, but even in 1957 — when the book was published — the future of railroading was in Europe and Asia. And the right-of-center types who revere Rand tend to dismiss public funding for high-speed rail.
And then today, Bush speechwriter Michael Gerson gives us this gem:
But Rand’s distinctive mix of expressive egotism, free love and free-market metallurgy does not hold up very well on the screen. The emotional center of the movie is the success of high-speed rail — oddly similar to a proposal in Barack Obama’s last State of the Union address. All of the characters are ideological puppets. Visionary, comely capitalists are assaulted by sniveling government planners, smirking lobbyists, nagging wives, rented scientists and cynical humanitarians.
Setting aside the general inanity of Gerson’s entire column, ably dismissed here by Jesse Walker, the question remains: What do you people not get about the point of this book?
Hint: it’s not about high-speed rail.
It’s about human achievement and a couple of characters making happen something the rest of the world has deemed impossible.
It’s not about the benefits of funding rail transit from the public purse. It is in no way “ironic,” nor is it “oddly similar” to any proposal from any elected official anywhere in the world.
The critics who assail Atlas Shrugged for its over-the-top didacticism, one-dimensional characters, and simplistic philosophy (charges I won’t defend it against) should be sure they understand the underlying point. You know, the one that they criticize Rand for making too obvious.
And it’s not a meditation on the utilitarian benefits of different means of passenger transport.
Is there a BitCoin bubble?
Tim Lee writes about the BitCoin bubble, where he argues that demand for BitCoin represents a bubble that will, like most bubbles, pop.
While I’m still skeptical that BitCoin will ever be a serious currency, I don’t think it’s likely that there’s a bubble, at least not yet. Currently, BitCoins are trading at around $1.15 each on the exchanges that convert BTC and USD. And since there are just under six million BitCoins currently in existence (the number of coins “mined” in BitCoin parlance), that means the BitCoin economy is somewhere in the $7 million range. By 2140, the last BitCoins will be mined and the total number of BitCoins in existence will level out at about 21 million. Based on the current exchange rate, that’s somewhere around a $25 million economy.
I don’t see how this represents a bubble. Given current American macroeconomic policy, you’ll be lucky if you can buy a haircut for $25 million in 2140. And $7 million in 2011 is still pretty insignificant; it’s less than the budget deficit of Las Vegas. If a bubble existed, we’d be talking about the world of BitCoin being valued in the billion or tens of billions of dollars.
Plus, unlike dot-com shares or houses or tulips, the supply of BitCoins is fixed (though I look forward to seeing Tim’s thoughts on this tomorrow). About 30% of the total BitCoins ever to be mined already exist, and we know pretty much what the trajectory looks like over the next 130 years. This is as stable a supply as can exist, which makes it easier for markets to equilibriate. And to the extent a bubble does develop, it will likely be more a reaction of holders of US dollars to the fear of future inflation.
Finally, even if BitCoin remains a tiny, niche currency — so what? The costs of converting USD and BTC are negligible. As long as some sites and people take BitCoins, the currency can thrive. Think of PayPal. Now, certainly, PayPal accounts are denominated in dollars and Euros and sterling and other real-world currency. But I can’t send PayPal money to just anyone. Restaurants and meatspace retailers generally don’t take it. Many if not most people won’t take it. I can’t pay my doctor or my mechanic with PayPal money. But because I can make many transactions with it — and freely convert my PayPal dollars with dollars in my bank account — it’s still useful to me. BitCoins can play the same role with the feature not bug of having no central bank inflating their value and being exchangeable with traditional currencies.
So in short, while I doubt we’ll still know the name BitCoin in a decade, I’m not convinced that there’s any irrational exuberance inflating the value of BitCoins to unsupportable levels.
The rightest guys in the room
Yesterday the New York Times ran a lengthy front-pager asking the question: “Why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?” Long answer: these cases are very complicated and costly to prosecute, and it’s not completely clear exactly what crime was committed, and both major political parties are in bed with Wall Street. Short answer: blame George Bush.
This fits the story into what Will Wilkinson helpfully calls the “progressive master narrative.” In the case of financial service prosecutions, the story runs something like this:
During the Bush administration, regulators were asleep at their jobs, because nobody believed in regulation. The Bush team slashed regulatory enforcement budgets [false] and allowed Wall Street firms to commit egregious criminal fraud because these firms are solid GOP donors [false]. They refused to prosecute obvious crimes or go for long sentences on miscreants [false]. Because the wrong people (i.e., Republicans) were in charge, they allowed these guys to get away with the financial equivalent of murder.
Despite some false premises, blindness to conflicting evidence, and leaps in logic, this isn’t an entirely indefensible worldview. You can argue — and conservatives tend to be as guilty of this as progressives — that having the right people running things matters most, and that the right guys will make the right decisions that lead to the right outcomes. Of course, at most this means that the right thing happens only about 50% of the time, but set that aside for the moment.
Where this train of thought falls apart is when Obama (to progressives, the right guy) is elected and begins to run things. So since progressives now have the right guy in charge, why aren’t the sociopaths and idiots who ran Wall Street into the ground facing charges?
The Times offers one hypothesis: because Bush-era regulators didn’t collect much evidence, it’s hard for the Obama DOJ to build a case. There’s little analysis to back this up. But it still fits nicely into the progressive master narrative. Later in the story, they suggest that the FBI didn’t invest significant enough resources into financial crimes because those resources were needed in other investigations. Again, this fits the progressive master narrative that government is under-resourced.
But my question to progressives is: If the right guys can’t or won’t bring criminal prosecutions after the meltdown of an entire sector of the US economy, despite having wide-ranging rules on the books like the “honest services fraud” law which would allow a decent federal prosecutor to indict a ham sandwich, under what set of circumstances do you think the right guys can identify a crisis (i.e., crime) before it occurs and stop it from occuring?
That the wrong guys didn’t collect evidence isn’t much of an answer. After all, that evidence didn’t exist before the crisis. Evidence is what is built up in the commission of a crime. If you can’t prosecute once all the facts are known, it’s impossible to say you could have seen it coming. You can’t see the future but not the past without an accident involving a contraceptive and a time machine.
A corollary to the master progressive narrative is that, had the right guys been in charge, they would have prevented this meltdown, this series of crimes, from occurring, because good regulators would have seen what was happening and stopped it.
But if prosecutors working for the right guys can’t prosecute a crime after it occurs, by what mechanism could regulators working for the right guys have stopped that crime?
The honest answer here is to admit that the Obama administration isn’t the “right guys.” And then the progressive solution falls apart entirely. Obama is the most progressive president since Johnson, and probably the most progressive president we’ll see for a generation. He’s the paragon of electable progressivism. If this administration isn’t “right” enough, no administration will ever be. And the progressive solution is thus assuming a can opener.
To be sure, by all accounts Angelo Mozilo of Countrywide and a number of the other executives at the helm of this Titanic were bozos who were really bad at their jobs and really good at scamming the system. And they largely reported to boards of directors who seemed to think that they had no real obligation to oversee the companies they were overseeing.
But it’s not obvious that a prosecutable crime occurred. And it’s even less obvious that anyone could have foreseen these crimes occurring before they did.
The challenge to progressives is to articulate a system of regulatory oversight and government regulation more generally that doesn’t depend on the right guys being in office — especially if the right guys as defined by progressives means officials to the left of Obama. And since the right guys seem unable or unwilling to prosecute crimes (statutory, common law, or imagined) after the fact, what makes it likely they would be able or willing to stop them before the fact?
Libertarian half of Tea Party is winning
The WSJ editorial board today calls the federal budget deal “The Tea Party’s First Victory.” They argue that the GOP made the right call to compromise on defunding Planned Parenthood to better position themselves to win the larger spending fight on entitlements.
What I found interesting is the lesson the WSJ editors suggest Republicans take from this:
Now the battle moves to the debt ceiling increase and Paul Ryan’s new 2012 budget later this year, and there are lessons from this fight to keep in mind. One is to focus on spending and budget issues, not extraneous policy fights. Republicans have the advantage when they are talking about the overall level of spending and ways to control it. They lose that edge when the debate veers off into a battle over social issues.
As I’ve argued previously, the Tea Party is split roughly 50-50 between libertarians and social conservatives. Spending and budget issues unite the Tea Party. Social issues divide them. In House Republican’s first big test, leadership seems to have gotten the message.
But isn’t this a sign of how far the GOP has come in a libertarian direction? Could you imagine such a compromise even a few years ago under George W. Bush’s Republican Party? Surely, there is much, much more Republicans could do. But for now, a good sign that the libertarian half of the Tea Party is winning.
