Author Archive

“Spengler” is sometimes brilliant but sometimes he is way off the mark. His December 25 column strikes me as an instance of the latter.

The United States lived in Lever-Lever Land too long. Like Peter Pan, the country has refused to grow up. The object of the stimulus plans offered by the present and the next US administrations is to return to Lever-Lever Land, that is, to debt-financed consumption. It won’t work. Leverage is for the young, who borrow to build homes and start businesses. The financial crisis forces Americans to act their age, that is, to save rather than borrow and spend.
 
For a world economy geared to servicing the once-insatiable maw of American consumption, that is very bad news for 2009. Recovery cannot begin until Americans have restored their decimated wealth by saving - an effort that will take years - or until the youthful emerging markets start importing from the US, rather than exporting to it.
 
America’s leaders haven’t yet had the required moment of clarity. Its financial leaders still think the problem is a mere matter of confidence. These were the same people who swallowed their own sales pitch.

This analysis is too deterministic, as though an aging US population made economic decline certain. What about tax-rate reductions and other productivity-boosting incentives? Animal spirits aren’t a function of youth alone, but also of having a political and social environment that encourages entrepreneurial risk-taking. Also, what’s with the disdain for debt? If you’re borrowing at X% to make a >X% after-tax rate of return you are winning the game and should borrow as much as you can. And much of the high-yield corporate debt that Spengler frets about wouldn’t be needed if the terrible Sarbanes-Oxley law hadn’t destroyed the US IPO market.

Excessively tight credit, high tax rates, excessive regulation and political uncertainty all reduce investors’ ROR and thus chill productive activity. The solution is simple if not politically easy: repeal Sarbanes-Oxley, reduce tax rates, regulation and government spending. What drove productivity increases during recent booms was an economic environment, combining tolerable regulatory and tax conditions with a competitive market for start-up financing, that made technological and business experimentation a good bet. There may indeed have been a demographic component to it all, but to focus on demographics, debt and leverage is to miss the big picture. Incremental changes in the legal and regulatory environments since Summer 2002 have gradually choked entrepreneurial incentives, and perversely led to election of a new government that promises as a matter of policy to punish business success. (And even if the Obama administration and Democratic Congress govern pragmatically and prudently, the uncertainty they’ve created with their anti-business rhetoric is costly for businesses and individuals who must make investment decisions.) Spengler misses most of this. He also fails to ask why many countries with younger populations than ours are less productive than we are. In truth, productivity is a function not merely of youthful spirits but also of human capital (education, cultural values and societal institutions), physical capital (plant, equipment and infrastructure), investment capital and markets, and of taxes and governmental policies that encourage or discourage productive activity.

Best wishes to Chicagoboyz contributors and readers for 2009.

Traveling to Gaza in a stunt to aid Hamas, she complains because the Israeli navy damaged her boat. I would suggest that she got off lightly.

The activists, organized by the Free Gaza Group, said their 66-foot yacht called “SS Dignity” would defy an Israeli blockade of Gaza and ferry 16 activists and three tons of Cypriot-donated supplies. The supplies are intended to help treat the wounded from Israeli bombings against targets in Gaza, in retaliation for rocket fire aimed at civilians in southern Israeli towns.

She cared not at all when Hamas thugs were daily bombarding Israeli towns in an attempt to kill as many Jews as possible. Only when Israel defended itself was her sense of justice aroused.

Daily life near Gaza:

Moshe Turgeman spent a lot of time in Gaza before the intifada. Not only did he serve in the Israeli army there, but he used to get drinks and hang out in area frequently. “There are good people in Gaza ,” he tells me. Hearing this is rather remarkable because in August 2006, Moshe’s house took a direct hit from a Qassam rocket launched from Gaza . He managed to get his kids to safety but he was injured in the attack. I ask Moshe what life is like in Sderot today. “It’s not life,” he responds. His children are scared, he fears going outside and his disability has made it impossible to work. There were times, Moshe says, when he thought the warning siren was broken because it sounded non-stop for hours. “Forty-eight Qassams fell in a single day,” he says. “The scariest thing is that sometimes they fall without an alert—at any moment.” Moshe knows of what he speaks. One day he was ironing a shirt on the upper floor of his modest apartment. In an instant, a rocket fell meters from him and shrapnel nearly pierced his heart. He shows me the jagged hole in the window next to which he was standing during the attack. “It’s not life” he repeats.

The Commentary article from which the above quote is taken is worth reading in full.

A discussion about the financial crisis, Wall Street, management and accountability at Neptunus Lex. The initial post is merely the starting point for some insightful comments by readers. Worth reading in full.

There seems to be a trend toward diminished accountability for top members of our political and business elites. People who should resign don’t. Leaders who should fire those people don’t. The military still seems pretty good (perhaps it’s no accident that the discussion I linked is on a blog written and frequented by military people). Accountability standards in small business and many professions, where failure tends to be immediate and personal, still seem OK. But things appear to be on the decline in big institutions and government. I don’t know if that’s because government has grown so big and intrusive that it drags down standards everywhere, or because our society has deteriorated, or both. It’s a bad trend either way.

SurvivorsGraduates are sent for advanced training…

In the list of feeds near the top of the right sidebar, I’ve added a link to a Google feed that displays links from other blogs to this blog. This feed seems like an improvement over trackback links on individual posts, which are a spam magnet. (And I removed the link to the feed from the Chicago Boyz Forum, which is currently inactive.)

Please note also that each post on this blog displays, at the top of the list of comments, a link to a comments feed for that particular post. There used to be a link in the blog’s upper-right sidebar to a feed that displayed all comments from the blog, but I removed it because I thought it encouraged trolling. I don’t know if this was the right thing to do.

Is the current array of feeds optimal or could it be improved? I welcome suggestions.

All best wishes to my Christian friends for a peaceful and rewarding Holiday. Joyeux Navidad!
 
 

UPDATE: This is a nice column about Channukah (via Ron).

UPDATE 2: Yes, the spelling. I have no idea what is correct. Until recently I would have said it doesn’t matter, but now we have search engines, so maybe it does.

If you get invited for a ride on someone’s boat, and you use the toilet, which is of a type that you have never used before and has a pump handle that you have to turn to the left, and then pump, and then turn to the right and pump again, or something like that, do not, whatever you do, pump the handle even more vigorously if it does not immediately appear to be clearing the bowl.

Ronald Cass’s column about Bernard Madoff is insightful:

The sense of common heritage, of community, also makes it less seemly to ask hard questions. Pressing a fellow parishioner or club member for hard information is like demanding receipts from your aunt — it just doesn’t feel right. Hucksters know that, they play on it, and they count on our trust to make their confidence games work.
 
The level of affinity and of trust may be especially high among Jews. The Holocaust and generations of anti-Semitic laws and practices around the world made reliance on other Jews, and care for them, a survival instinct. As a result, Jews are often an easy target both for fund-raising appeals and fraud. But affinity plays a role in many groups, making members more trusting of appeals within the group.

“Affinity groups” (to use modern marketing-speak) may be particularly vulnerable to fraud because trust works both ways. Group members tend to be more trusting of other group members than of outsiders, and this caution toward outsiders protects the group. But it also means that group members tend to let down their guard against other group members. This is OK most of the time because the extra caution about outsiders keeps predators at bay, and business people who gain admittance to the group are more likely to be trustworthy than outsiders are. However, a sociopath who penetrates the group’s defenses may wreak havoc — the single-point-of-failure problem.

Read the rest of this entry »

It’s up. Thanks to Mike Doughty and David Fischer for providing seed photos, and to Dan from Madison, from whom I ripped off the term, “subdivision wildlife.”

If you want to submit photos or written accounts of your urban/suburban wildlife encounters, please email them to submit at subdivisionwildlife dotcom, or to jonathan at chicagoboyz dotnet (or simply click the “support” email link in the upper-right column of this page).

SubdivisionWildlife.com

This turns out to be a popular topic, so I’m setting up a blog devoted to “beast in the garden” issues. I’m particularly interested in photos. So if you have any original photos of suburban (or urban) wildlife that you wouldn’t mind sharing, please forward them to me at jonathan at chicagoboyz dotnet, or the support email address in the top right corner of this blog.

Thanks!

Yes, I know, the real headline is: Obama: Don’t stock up on guns . This means that the fact that people are buying guns has caught Obama’s attention and matters enough to him for him to express disapproval. Reasonable people might infer that he will support legislative and regulatory efforts to restrict gun ownership if it becomes politically expedient to do so.

Let’s not forget.

If you want information, the Naval Historical Center archive that we linked in last year’s post is as good a place to start as any.

Maybe it’s normal for cultures to lose their memories, or at least to roll them forward to more-recent events. By that logic, perhaps September 11, 2001 should serve as the current generation’s version of December 7, 1941. Does it? I don’t think so. I think we’re losing the memories, old and new, as we lose cultural self-awareness. We’re losing cultural self-awareness because we are losing cultural self-confidence. We are losing cultural self-confidence in large part because we allowed our educational system to be taken over by people who see cultural self-confidence as a crime.

From the Naval Historical Center:

By late November 1941, with peace negotiations clearly approaching an end, informed U.S. officials (and they were well-informed, they believed, through an ability to read Japan’s diplomatic codes) fully expected a Japanese attack into the Indies, Malaya and probably the Philippines. Completely unanticipated was the prospect that Japan would attack east, as well.

Change the details and this story becomes generic. The most important events tend to be unanticipated, and not for anyone’s lack of trying to anticipate them. We should remember this truth even if we fail to remember specific events, though I suspect that the forgetting of events begets the forgetting of principles.

Interesting times ahead.

UPDATE: Via David Foster, this excellent post from Neptunus Lex.

Reuters: Saudi offer for Moscow mosque, Orthodox call for church in Arabia

(via Jim Miller)