Gigs Shrugged

I found this today:

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article taking from the federal government the power of borrowing. I now deny their power of making paper money or anything else a legal tender. I know that to pay all proper expenses within the year would in case of war be hard on us. But not so hard as ten wars instead of one. For wars would be reduced in that proportion besides that the State governments would be free to lend their credit in borrowing quotas.

The Writings of Thomas Jefferson Being His Autobiography, Correspondence, Reports, Messages, Addresses, and Other Writings, Official and Private By Thomas Jefferson

Every dollar in existence is backed by exactly 1 dollar of debt. It is impossible to increase the money supply without increasing aggregate debt. It’s also impossible to decrease debt without decreasing the money supply by the exact same amount.

That’s one reason the Fed is pumping out money like crazy, and congress is spending it. As the debt markets unravel, people are paying off debts, and other debts are being declared total losses and being written off and new debt isn’t being offered as much… all of this causes money supply contraction.

So why are they spending and creating so much money?

The optimistic answer is that they are doing it to prevent deflation. The cynical answer is that they are spending money because they can, giving it to political friends in massive pork spending contracts, and the Fed giving directly to politically friendly bankers, in the most massive wealth redistribution scheme this country has ever seen. Except it’s not the socialist kind of wealth redistribution, it’s the kind where a corrupt government transfers money from everyone to its political friends. The worst sort of crony corrupt capitalism. And yes, Obama is a party to it.

Whoever controls the volume of money in our country is absolute master of all industry and commerce…when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.

-James Garfield, 20th President

The passage below is reminder of how far Linden Lab has gone from their original dream of being “bigger than the web”.  Self-limiting decisions such as this “adult ghetto”, banning people for “unacceptable fantasies”, and in general, moving further and further from the concept of a common carrier, and turning into something more and more like AOL in 1995…  a sandboxed playground for kids and people who can’t figure out how to use anything better.

Linden Lab wrote, in December 2006:

We could never write a set of rules that would work for all people all the time, nor could we enforce them across a population that is growing so rapidly. Instead, we believe that the best way to foster communication and expression is to put power into the hands of the people by giving you better tools for local control. And that’s what we’ve been doing for several months now. [...]
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I’ve been a libertarian for a while.  Mostly small L, but the party guys don’t bother me too much, even if I do think they are a little extreme.  It used to be the case that libertarians would tend to defend the idea of “intellectual property rights”, after all, something with “property rights” in its name surely is something worthy of libertarian defense.

In recent years though, it seems there has been a shift.  Increasingly, libertarians are recognizing that “intellectual property” is largely government tinkering with the free market, similar to price controls or anti-gouging laws.  It’s not a clear cut case either way, however.  Creative output is the fruit of someone’s labor, after all.

I noticed this shift a while back, and it seems that others have too.  Today I got the Mises Daily email, and it included a book review for “Against Intellectual Property” by David K. Levine and Michele Boldrin.  Being good capitalists, mises.org themselves are offering the book for sale.  I have not yet read the book, but its existance in the bookstore of mises.org is a strong sign of the times:  “Intellectual Property” has lost yet another former ally.

Ever since I (re) joined the NRA, renewing my very old membership, I have been spammed mercilessly by the NRA.  I am getting email advertisements from LifeLock, from “Special Editon Books”, and for a while, persistent phone calls every couple days, even though I told them each time to put me on their Do Not Call list and to stop calling.

They have it appears at least 6 different mailing lists, and if you unsubscribe from one they just create a new one for the next “exciting offer” that they want to sell you and automatically opt you in.

Here’s some of the email spam I’ve gotten from the NRA:

• NRA Breaking News on 2nd Amendment Rights  (an ad for a book by Les Adams) (Special Edition Books)
• NRA brings you health insurance for less than a latte a day (NRA Endorsed Insurance)
• NRA & LifeLock- Exclusive Discount for NRA Members (NRA Special Offers)
• NRA & LifeLock Partner to Protect Your Identity
• NRA & LifeLock partner to protect your rights
• NRA Members ONLY! $600 Value! Get 4 Months FREE
• NRA’s Marksmanship Primer - Get yours for hunting season!
• Cool New NRA Gear!  (NRAStore)
• No Risk NRA  Wines - Only $6.99 & Free Shipping (NRA Special Offers)
• It’s $40 Below at the NRA Store!  (NRAStore)

This is in addition to paper junk mail in my mailbox.  I just wanted to support the 2nd amendment.  I didn’t sign up to be flooded with advertisements.

One can support minimum wages and still understand that they raise unemployment for those subject to them.  It’s far from settled whether there is a net benefit or not, but it’s pretty much universally accepted that they do raise unemployment.

The easy proof is to consider a minimum wage of $50/hour.  One consequence of this would be the near complete elimination of the entire retail employment sector.  Automatic electronic clerks would be installed at every store to take money.   The budget for technological improvements to self-service retail technology would be huge.

Obviously, employment is decreased as millions of positions are eliminated.  Funding into technology to replace those positions, however, is massively increased.  Engineers enjoy full employment, as do technicians to service these machines.  These increases in high tech employment would not come close to offsetting the massive lower end job losses though.  There would also be massive frictional losses as companies struggle to retool quickly.  In the long run, there may even be a net gain to society, as new technologies to replace human workers are developed.

But one incontrovertible fact remains, the higher minimum wage caused higher unemployment.  Not everyone can be an engineer or a highly skilled worker.  Minimum wages have the strong potential to hurt the very people they are designed to help, eliminating their jobs, replacing them with machines.  Something to consider the next time you pump your own gas (and pay yourself at the pump), use an ATM, or a self-service checkout at the grocery store.

It seems a lot of arguments these days are using the logic, “If it saves one person, then it’s worth it”, where “it” is … pretty much anything.  It doesn’t matter how expensive, draconian, or detrimental “it” is, if it saves just one life then it’s all worth it!

More formally this could be expressed as:

1. X provides benefit Y
2. The value of Y can’t be measured
3. Therefore X is justified no matter what the cost

To make this concrete:

1. Embedded RFID chips can detect kidnapped children in public places
2. The value of a kidnapped child’s life is unmeasurable
3. Therefore mandatory embedding of RFID chips in every child is justified

Or a more mundane example:

1. Corporate charity sponsorship foster consumer goodwill
2. Consumer goodwill is a largely unmeasurable benefit
3. Therefore large charity budgets are justified

And very closely related:

1. Doing Y has a minuscule chance of killing someone
2. The cost of someone dying is unmeasurable
3. Therefore no one should do Y

I don’t believe this logical fallacy has been formally described before.  If it doesn’t have a name, I suggest calling it “Appeal to unmeasurable value”.

The ad farming policy of Linden Lab is aimed at “network advertising”, that is, pervasive, commercial advertising on the mainland, perpetuated by a small group of “ad barons” that owned hundreds of small parcels.

Somehow the original intent of this policy has been twisted.  Juliett Beaumont reports that her signs protesting the openspace price increase were removed, with the following notice from Harry Linden:

Harry Linden: Hi Juliett, If you are planning to advertise/protest with objects on your land on the mainland please make sure any of the objects comply with the recent mainland advertising policy as stated here: Blog Link

Juliett reports that her signs were removed by Harry, not even returned to lost and found, but deleted.  What I want to know is just exactly how is what amounts to political speech in violation of the ad farming policy?  Is this now a policy that is to be used whenever Linden Lab wants to silence dissent?

Everyone is talking about recapitalizing the banks as if that will be the one magic bullet that will “save the stock market”.

It won’t. Things are going to get worse before they get better. The Fed is out of wiggle room with interest rates, right now they are effectively on the floor.

The next step will be to change the fractional-reserve rate.

The current rate is 10%. As you can see from this chart, $100 deposited magically turns into over $900 that the banks can loan out in short order. You will also note that it’s pretty nonlinear.

Reducing the reserve rate to 7.5% will effectively create massive amounts of new money, exactly what the fed wants to do.

This is a drastic measure. I’m sure it will be spun as “necessary”, and there’ll be lots of FUD promising more stock market losses if it isn’t done.

This will be one more step on the road to massive inflation. This is money out of your pocket, and into the government. This fundamentally will change the rules.

But it’s not just a tax on you, inflation is a flat tax on everyone that deals in USD. This includes petrodollar interests overseas. At some point, they might not be intimidated by our military threats any more, and will stop using USD. Because of this, no matter who gets elected will continue to threaten overseas oil interests with military intervention. If any of them drop the use of USD for oil, we will see a quick military response.

Zara Linden unilaterally approves SL gambling scheme?

This came up on my playlist, I think it’s appropriate:

Don't need no fast buck lame duck profits for fun
Quick trick plans, take the money and run
We need long term, slow burn, getting it done
And some straight talking, hard working son of a gun.
Whatcha doin tonight, I got faith in our generation
Lets stick together and futurize our attitudes
I ain't lookin' to fight, but I know with determination
We can challenge the schemers who cheat all the rules

I just tried out this system. I paid 500 L$ and got 500 Z$. I played a few hands of blackjack on a fairly well written machine, betting 100 Z$ per hand. I got my balance up to 600 Z$ and decided to quit while I was ahead.

I went to the cash out game, it’s a matching game like concentration.
You pay 1 L$ to play, and you get a free Z$ for trying. You have 2 minutes to complete a 4×4 game of concentration. You’d have to be really really slow or bad at it to lose. If you lose the match game, you don’t lose and Z$. So you can play as many times as you need to until you cash out successfully. There is nothing at-risk in the game of skill.

(Image Credit: Jeff Kubina)