Wednesday, July 18, 2018

Plastic Straw Myths That Lefties Are Apparently In Denial About (Or Evilly Choose to Ignore)

Wacko lefties just want to coerce other people. This is the bottom line. There is nothing in the way of sound logical argument for any of the central planning policy positions. It's time for the #PPS

Also, see: The Idiotic Thinking Behind the Elimination of Plastic Straws By Starbucks


Who Has Worse Trade Practices China or the US?

A Don Boudreau letter:
Mr. Josh Henderson
Mr. Henderson:
Thanks for your e-mail. You ask which government – the U.S. or the Chinese – I believe to be most responsible for today’s trade tensions.
My answer is both. Both governments obstruct with tariffs and subsidies their citizens’ freedom to trade peacefully with people outside of their countries. Without these obstructions, each resident of America would be free to peacefully accept or to reject offers made to him by individuals in China, and each resident of China would be free to peacefully accept or to reject offers made to her by individuals in America. Without these obstructions there would be no more trade tension between Americans and the Chinese than there is now between Minnesotans and Floridians.
Skeptics balk. They insist that Beijing’s obstructions of its citizens’ freedom to trade require that Uncle Sam similarly obstruct Americans’ freedom to trade.
These skeptics miss the crucial fact that the fundamental and chief tensions created in this case by Beijing are among only the people of China. Beijing’s tariffs and subsidies, in effect, seize the property of some Chinese citizens in order to transfer it to other Chinese citizens. But because these Beijing-engineered seizures take from no American anything to which an American has a property right, what ethical justification is there for Uncle Sam to create identical tensions in the U.S. by seizing the property of some Americans in order to transfer it to other Americans?
In what moral universe does A’s forcible transfer of B’s property to C justify X’s forcible transfer of Y’s property to Z? How is justice served if, in response to A’s wrongful creation of tensions between B and C, X creates like tensions between Y and Z?
Although Beijing certainly does enable some Chinese individuals to prey upon other Chinese individuals, this reality does not make right that which is wrong – namely, Uncle Sam enabling some Americans to prey upon other Americans.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030
The above originally appeared at Cafe Hayek.

The Problem With Forecasting Outcomes of Complex Human Events: The Goldman Sachs Failure

Bloomberg informs:
Goldman Sachs’ statistical model for the World Cup sounded impressive: The investment bank mined data about the teams and individual players, used artificial intelligence to predict the factors that might affect game scores and simulated 1 million possible evolutions of the tournament. The model was updated as the games unfolded, and it was wrong again and again. It certainly didn’t predict the final opposing France and Croatia on Sunday.

The failure to accurately predict the outcome of soccer games is a good opportunity to laugh at the hubris of elite bankers, who use similar complex models for investment decisions. Tom Pair, founder of the Upper Left Opportunities Fund, a hedge fund, tweeted recently:

Of course, past data don’t always predict the future; Goldman Sachs never tells clients to make decisions solely on the basis of its models’ findings. And in any case, the model only generated probabilities of winning a game and advancing, and no team was given more than an 18.5 percent chance of winning the World Cup. The moral of the story is probably that buzz-generating technologies such as big data and AI don’t necessarily make statistical forecasting more accurate...
Goldman Sachs’ economists fed oodles of data about teams and individual players into four different types of machine-learning models to figure out the statistics’ predictive power [in 2018]. Then they ran simulations to compute the most likely score of each game. The first results of adding player-level variables, such as an athlete’s average ranking on the team and measures of his defensive and offensive abilities, looked encouraging. Thanks to the use of more granular data, made possible by AI, this year’s model should have worked better than the 2014 one.

If anything, it worked worse.

Read Hayek, Goldman:


BREAKING: EU Penalizes Google a Record $5 Billion

This is a developing story. Return to this post for updates.


The European Union has fined  Alphabet Inc.’s Google with a record antitrust fine of €4.34 billion ($5.06 billion).


Via The Wall Street Journal:

The EU’s antitrust regulator has been looking into whether Google had abused the dominance of its Android operating system, which runs more than 80% of the world’s smartphones, to promote and entrench its own mobile apps and services—particularly the company’s search engine.


RW note: How outrageous. It is not as though EU consumers don't have options. It is just that Google brings to market the product package most EU consumers prefer.

This sends a disturbing chilling effect on great enterprise in the EU zone. 

When David Stockman Smacked John Kenneth Galbraith


Ivanka Trump Cheers Central Planning in the Jobs Training Sector

Ivanka "I will fix the workforce "Trump

Invaka Trump writes in an op-ed in today's Wall Street Journal:
With more companies expanding, hiring and raising wages, it is time to deliver better workforce training so that all Americans have the chance to move into better jobs and earn bigger paychecks. Already this administration has taken action to expand apprenticeships, increase access to STEM education for K-12 students, and help 11 million students and workers by working with Congress to pass an improved Perkins Career and Technical Education bill. On Thursday the president will sign an executive order to prioritize and expand workforce development so that we can create and fill American jobs with American workers.

First, this action establishes the National Council for the American Worker, composed of senior administration officials, who will develop a national strategy for training and retraining workers for high-demand industries. For decades the government has had more than 40 workforce-training programs in more than a dozen agencies, and too many have produced meager results. The new council will help make the government more efficient, innovative and, most importantly, focused on results.

Another critical task of the council will be to facilitate the use of data to connect American businesses, workers and educational institutions. All participants in the job market should know what jobs are available, where they are, what skills are required to fill them, and where the best training is available.

We will also launch a nationwide campaign to highlight the growing vocational crisis and promote careers in the skilled trades, technology and manufacturing.

Second, this executive order forms an advisory board comprising leaders from the private sector, educational institutions, philanthropic organizations and state governments. They will work with the administration to implement results-driven job-training programs in classrooms and workplaces across the country.

Finally, the administration is asking companies and trade groups throughout the country to sign our new Pledge to America’s Workers—a commitment to invest in the current and future workforce.
Ivanka is as economically ignorant as her father. Just why does she think free markets would fail in ?job training or the posting of jobs? This perspective is silly.

She is simply a junior to her father in thinking she can manage the private sector (with government help). This is not draining the swamp, it is creating another spot where opportunists who live off of government crony payouts can ply their activity.


Tuesday, July 17, 2018

The Spinning Washing Machine Production Question

Another Don Boudreaux letter to arch-protectionist correspondent Nolan McKinney:
Like you, I read in the Wall Street Journal that Trump’s tariffs on washing machines are prompting Samsung and LG to consider opening factories here in the U.S. Unlike you, I do not regard the jobs that will be created in those factories as a “benefit” of Trump’s tariffs. These jobs, in fact, are among the tariffs’ costs.
The reason begins with the fact that workers diverted by the tariffs into the production of washing machines in the U.S. are diverted away from producing goods and services that they would otherwise have produced. The reason concludes with the reality that without the tariffs we Americans would have been able to acquire the same number of washing machines by expending less labor and fewer resources. Therefore, any and all washing machines produced in America only because of those tariffs will be produced wastefully. The costs of producing them will be artificially and unnecessarily high.
To count as benefits the jobs that are created only in response to tariffs is akin to counting as benefits the extra work and expense that homeowners, seeking to protect their homes from being robbed, put forward in response to an increase in neighborhood burglaries.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

The above originally appeared at Cafe Hayek.

In Your Face Trump: Japan, EU Sign Major Trade Deal

From the international newswire of the German Press Agency:


House Speaker Paul Ryan Supports More Russian Sanctions

At a press conference today, House Speaker Paul Ryan said that he's "more than happy" to consider additional sanctions against Russia following last week's indictment of Russian agents for allegedly hacking into DNC computers.

"Those GRU officers, I've already seen the intelligence, they were the people that conducted this cyberattack on our elections. We already put in place sanctions," Ryan told reporters during a news conference. "If the foreign affairs committee or the financial services committee and the Senate Banking Committee think that there are other sanctions that we have not yet placed upon Russia, I'm more than happy to consider those."

Ryan's comments to further harras Russia by further limiting exchange, of course, come following President Trump's meeting with Russian leader Vladimir Putin in Helsinki, Finland, where Trump has been viciously attacked for acting civil to Putin.

Exchange results in nations moving in the direction of peace, on the other hand, sanctions, tariffs, etc. do the opposite.


Trump's Tariffs Likely to Result in Higher Prices for Alaskan Seafood

Another shrinking of America's standard of living because of Trump's tariffs.

“The U.S. is going to impose 10 percent tariff on imports from China, which could include Alaska seafood product that has gone to China for reprocessing and then is being imported into the U.S. for the domestic market,”  says Michael Kohan, the technical program director with the Alaska Seafood Marketing Institute.

Alaska seafood processors often head and gut fish, then send them to China for secondary processing. China then exports them back to the U.S. or to other countries from there, according to KTOO in Alaska.

Pollock, salmon, and Pacific cod make up the bulk of Alaska fish sent to China for reprocessing, according to the institute, and they’re included on the new tariff list.

The proposed tariffs would go into effect in September.


Blue States Sue Trump Over New Cap on Tax Deductions

The Attorneys General in New York, Connecticut, Maryland and New Jersey this morning have filed a lawsuit against the Trump administration challenging the constitutionality of the new cap on federal deductions for state and local taxes in the 2017 tax overhaul, reports The Hill.

The states are asking the U.S. District Court for the Southern District of New York to invalidate the $10,000 cap on the federal tax deduction for state and local taxes, known as “SALT.”

The states argued that prior to the 2017 federal tax overhaul, Congress consistently allowed federal taxpayers who itemized their tax deductions to deduct, subject to certain incidental limitations, all of their state and local real and personal property taxes, and either state and local income taxes or sales taxes from their federal income tax returns, which often adds up to more than the $10,000 cap.

“The new cap effectively eviscerates the SALT deduction, overturning more than 150 years of precedent by drastically curtailing the deduction’s scope,” the states said in the complaint.

The states argue in the complaint the new cap is unconstitutional because it goes beyond settled limits on the federal government’s power to impose an income tax and deliberately harms certain states and their residents.

Heroic, I am always in favor of fewer taxes!


The Changing of the Bald-Headed Crony Chief at Goldman Sachs

 Lloyd Blankfein and David Solomon
Goldman Sachs plans to name company President David Solomon as its next CEO, reports Bloomberg. It is expected that Lloyd Blankfein will be staying on in the CEO role for an interim period.

Solomon recreationally produces electronic dance music records under the stage name DJ D-Sol.

Placing his bets on the establishment, Solomon donated $5,000 to Hillary Clinton and $5,000 to Jeb Bush during the 2016 presidential election.

Solomon is reportedly close to both Michael Milken and Sheldon Adelson. He worked at Drexel at one time under Milken and is Adelson's top investment banker. He does not appear to have any memberships in establishment globalist groups such as the Council on Foreign Relations, Bilderberg, etc.



It's official.

Goldman Sachs has just confirmed that its CEO Lloyd Blankfein is stepping down.

“It’s always been hard for me to imagine leaving. When times are tougher, you can’t leave. And, when times are better, you don’t want to leave,” Blankfein wrote in a note to colleagues obtained by EPJ. “Today, I don’t want to retire from Goldman Sachs, but by my own perhaps convoluted logic, it feels like the right time.” 

Blankfein will stay as CEO until the end of September and as chairman until the end of the year. He will then become "Senior Chairman."

The National History of Very Hot Temperatures and Why Do So Many Elderly Live in the Very Hot Cities of Phoenix and Tampa?

By Patrick J. Michaels

The heat and humidity are now on the rise again after a quite pleasant respite. But the last heatwave was exceedingly uncomfortable and prompted an examination of just how miserable Mid-Atlantic summers can be. My own weather equipment, in Marshall VA, showed the maximum heat index—a weighted combination of temperature and humidity that’s akin to heat stress—topped out at an astounding 125°F late in the afternoon of July 3.
This wasn’t a nationwide event, unlike the dust-bowl summers of 1934 and 1936. Instead, as shown on climatologist Roy Spencer’s blog, the unusual heat was rather circumscribed, with a fairly even distribution of above and below-normal temperatures across North America.
It’s worth having a look at the national history of very hot temperatures, shown below:
Figure 1. Despite warmer global average temperatures, there’s no trend in extremely hot days in the US record.
The heat of the 1930s has yet to be topped. In our region, none of the recent heat holds a melting candle to the summer of

Monday, July 16, 2018

Socialism, Like Dracula, Rises Again from the Grave

Richard Ebeling emails:

Dear Bob,

 I have a new article on the website of the American Institute for Economic Research (AIER) on, “Socialism, Like Dracula, Rises Again from the Grave.”

Socialism reminds me of the Dracula movies I used to watch as a kid. Appearing at first as charming and appealing, he soon shows himself to be a nightmarish bloodsucker draining the life force of all that who become his victims. Socialism offered a vision of a utopian post-scarcity existence of social equality and human harmony, if only “capitalism” was abolished and replaced with socialist central planning and government redesigning of society.

What a hell on earth socialism-in-practice became once actually imposed and implemented with lost civil liberties, government-determined economic wellbeing independent of the needs, wishes or desires of the “the masses” under collectivist command and control, and a chamber of horrors of terror, torture and murder or enslavement in forced labor camps. The Communist Party members were the Red Draculas who lived privileged and favored lives, living off the work of those they coerced into being the human material of their central plans.

But rather than pass away with the demise of the Soviet Union and the economic changes in countries like China, socialism seems to be rising from the grave once again under the label of “democratic socialism.” What a farce and fraudulent deception in the use of words, since “democracy” carries in the minds of many the notion of freedom and justice. But socialist “democracy” is merely the society-wide extension of political and economic control over all of society, through the comprehensive politicization of every facet of human life, with a clique of ideological and power-lusting enthusiasts determined to remake the world into their own image.

Once more friends of freedom are called upon to intellectually drive a new stake through the heart of the socialist Vampires who wish to control the minds and souls of their fellow men, while living off the productive life-blood of those who they command to work and pay.



The full column is here:

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There is also one in memo pad size:


THIS NEEDS TO CHANGE: U.S. Startups Are at 40-Year Lows

In today's Wall Street Journal, Rep. Jeb Hensarling (R-TX) calls for support for The Economic Growth, Regulatory Relief and Consumer Protection Act, also known as S. 2155.

There's far too much micro-regulation in the Act for me but it does move in the direction of less harassment of business, that is, more in the direction of liberty---we just need to go much farther.

But the Act should be supported for going in the right direction (though lack of Democratic support in the Senate will more than likely kill the bill.)

Here's Hensarling:

How Baseball Resembles the Market System and Why Rod Carew-Style Hitters Will Return

By George Will

It is a prudential axiom: If it isn’t broken, don’t fix it. This reflects the awareness that things can always be made worse, and it reflects the law of unintended consequences, which is that they often are larger than and contrary to intended ones. As baseball reaches the all-star break amid lamentations about several semi-broken aspects of it, it is time to amend the axiom: Don’t fix it, even if it is broken.

The itch to fix complex systems often underestimates the ability of markets, broadly understood, to respond and adapt to incentives. So, even if you are an unsatisfactory American — i.e., uninterested in baseball — read on, because the debate about some of the game’s current defects contains lessons about lesser things than baseball, meaning everything else.

Today’s all-or-nothing baseball is too one-dimensional. There are too many strikeouts — for the first time in history, more than hits, a lot more. And the number is increasing for the 13th consecutive season. Also, too many of the hits are home runs. It was imprecise for Crash Davis (Kevin Costner’s character in “Bull Durham”) to say that strikeouts are “fascist,” but he was right that they are “boring,” at least in excessive quantities. So are home runs (and caviar, and everything else except martinis). In about one-third of today’s at-bats, the ball is not put in play (home run balls are put in the seats). Sports Illustrated’s Tom Verducci notes that by the end of June there were “more strikeouts in half a season than there were in the entire 1980 season.” And “on average, you have to wait [3 minutes and 45 seconds] between balls put in play — 41 seconds longer between movement than 20 years ago.” Steals (hence pitchouts), sacrifice bunts, hit-and-run plays — interesting things for fans — are becoming rarer.

This is not the main reason attendance is down.

Read the rest here.

Former Macau Gangster ‘Broken Tooth' Raises US$750 Million in Cryptocurrency Offering Through His Company World Hung Mun Investment

"Broken Tooth” Wan Kuok-koi
Thank you, People's Bank of China?

Former Macau triad gangster “Broken Tooth” Wan Kuok-koi has partnered with a mysterious Beijing firm to back chess and poker tournaments in mainland China, as his company said it raised US$750 million in less than five minutes in an initial coin offering for his “HB” cryptocurrency, reports the South China Morning News.

Wan launched the ICO at a star-studded event in Cambodia, attended by high-ranking government and military officials, businessmen and celebrities from mainland China and Hong Kong.

In total, Wan’s company, World Hung Mun Investment, said it had sold 450 million HB tokens at three events, in Cambodia, Thailand and the Philippines, with a final stop scheduled in Malaysia on Wednesday.

But SCMP notes:
[D]oubts remain over the currency, the provenance of the Chinese company, and the chess and poker tournaments, the first of which was slated to take place in Hainan in October, that Wan would be providing prize money for in the form of HB tokens. 
Earlier this month a company called Zhonggongxin Cosmos (Beijing) Internet Technology Limited said it had signed an agreement with Wan’s investment company to work together on a chess and poker game contest in Hainan...
Guo [Jia, a member of staff at Zhonggongxin Cosmos] said there was no law against using cryptocurrency as prize in China, and the company would host the competition according to the law.
However, a lottery industry veteran said using cryptocurrencies as payment in chess and poker games in China was an unregulated grey area.
“When chess and poker games are paid with tokens such as cryptocurrencies that can be converted to fiat currencies, it becomes a disguised form of gambling in China,” Su Guojing, founder of the China Lottery Industry Salon, said. “There’s a legal loophole on this issue.”
For Li Yongfeng, founder of Shubei, a social network and information portal for investors in cryptocurrencies, there were concerns surrounding the technology Wan’s company was using to support HB.
He said there was only a vague reference to HB’s technology in its investment document, and no source code was disclosed, which made it impossible for people to track and verify the currency.
“People would not be able to know how many tokens are issued without details of its technology, ” Li said.


Jordan Peterson's Take On the EU and More

I don't agree with everything Peterson says here, he might even contradict himself a bit about the U.S., but overall it is a very interesting take.


Sunday, July 15, 2018

Ain't No Way Norway Is a Model for Democratic Socialism

By Daniel J. Mitchell

Earlier this year, I explained why Nordic nations are not socialist. Or, to be more precise, I wrote that if they are socialist, then so is the United States.
My slam dunk evidence was this chart from the Fraser Institute’s Economic Freedom of the World, which shows there is almost no difference in overall economic liberty when comparing the United States with Finland, Norway, Sweden, and Denmark.
This doesn’t mean, incidentally, that

Thanks Fed, $1 Million Is The New Entry Point For American Luxury-Home Buyers in 51 Markets

Fifty-one of the 91 luxury markets now have an entry point of at least $1 million, according to


A Plea to Economics Journalists

The world's greatest Keynesian economic textbook salesman, Greg Mankiw, makes a reasonable request:
I was recently reading an article by Greg Ip (one of best economics journalists around, by the way), and he used the following expression:
"the trade balance improved"
A quick google search finds this expression (and the related "the trade balance deteriorated") used many thousands of times by various writers. 

I would like to ask everyone to please stop saying things like this. Write instead:

"the trade balance moved toward surplus"
I know that is wordier, but saying "the trade balance improved" lends credibility to the view that trade surpluses are always good and trade deficits are always bad. That is not true, of course, and I doubt Mr. Ip intended that interpretation. But in light of all the craziness going on lately with regard to trade policy, it is best not to inadvertently give aid and comfort to the crazies.


What If Jeff Bezos Spent $50 Billion to Build and Operate Steel Factories?

Here’s another Don Boudreaux letter to Cal Clayton (a new e-mail correspondent of his):
Mr. Clayton:
I disagree with your assertion that Beijing’s policies result in “overcapacity in global steel making” and that this asserted “overcapacity” hurts us Americans.
Suppose that Jeff Bezos, just for kicks and not expecting to turn a profit on the expenditure, spends $50 billion of his own funds to build and operate steel factories. Global steel-making capacity would thereby rise, and steel (and other metal) prices would fall (thus ensuring, by the way, that all steel that is produced finds willing buyers). Would you call this capacity “excessive”? And would you suppose that Americans are harmed by Bezos’s steel factories?
I wouldn’t, and nor should you. Bezos’s use of his money to build these factories is his business. His doing so, in this example, bestows a gift on the rest of humanity – namely, a greater abundance of steel, all produced with resources that would otherwise have been used to produce goods and services for his own private consumption. In short, by building these factories that he runs unprofitably, Bezos transfers real wealth from himself to the rest of us.
Of course, Beijing isn’t Bezos. When Chinese government officials spend money to expand steel-making capacity in that country they spend, not their own money, but that of the Chinese people. This fact means that steel-making capacity in China is excessive from the perspective of the Chinese people. It is they – and only them – who have any cause to complain. The rest of us have zero cause to complain because this action by Beijing bestows on us net benefits. From our perspective in this example, Beijing is no different from Bezos in the previous example: in neither case, from ourperspective, is the world’s steel-making capacity excessive.
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

The above originally appeared at Cafe Hayek.