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NYPD systematically conspiring to deprive people of their rights

I bet it's not just New York. Similar incentives are in place all over the country.

Forget Copenhagen

There is going to be a great deal of discussion in the coming weeks about the climate change negotiations to be held in Copenhagen later this month. Almost without notice, however, there could be technological changes brewing which have a much greater impact on carbon emissions than any treaty signed this year could ever hope to (hat tip: Megan McArdle):

Researchers in the Netherlands created what was described as soggy pork and are now investigating ways to improve the muscle tissue in the hope that people will one day want to eat it.

No one has yet tasted their produce, but it is believed the artificial meat could be on sale within five years.

Vegetarian groups welcomed the news, saying there was “no ethical objection” if meat was not a piece of a dead animal.

Personally, I'm not really particularly worried about global warming, but if one is, this could be tremendous news. Shifting to vegetable-based food has been estimated to be equivalent to reducing driving by 8000 miles. And this would have the added advantage of actually having a prayer of working to reduce emissions.

Politics tends to be a focal point of conversation (perhaps especially for libertarians), but it's worth keeping in mind that in the many cases, factors beyond the control of elected officials are even more important. And thank God for that.

Stock Market Efficiency, part 3


Here is what I believe is the only way the stock market can keep returning 10% a year despite everyone knowing it returns 10% a year: everyone doesn't actually "know" it returns 10% a year.

To clarify, I think everyone does "know" this fact much of the time; let's call these the times of Faith. People know it and believe it. But there are long stretches of time when they don't believe it; let's call these the times of Heresy.

During times of Faith, people look back at the average historical 10% returns and expect 10% returns in the future. The actual returns are probably zero or negative since the returns are already discounted.

During times of Heresy, people look back at recent history (the times of Faith) and see zero or negative returns and convince themselves that the stock market is last place to put your money. The actual returns are positive because no discounting takes place.

Average together the times of Faith and Heresy and you get a 10% yearly returns over the long term.

Does history agree with my theoretical conclusion? I believe so. There have been long stretches during which the average returns (not accounting for inflation or deflation) are zero: 1929-1954 and 1966-1982. At the end of those stretches of 25 and 16 years respectively, I imagine people were thoroughly disgusted and convinced that the stock market is a money pit. Those would've been the best times to invest.

Some implications:

  • A contrarian approach to investing is irrefutably necessary. Efficiency demands it. I put this in bold for emphasis. It is simply impossible to beat the stock market without being a contrarian.
  • Because the average return is 10% a year, the historical returns during the times of Heresy have to be much higher. The way to riches is to save up during times of Faith and invest only in times of Heresy. Easier said than done, I agree.
  • One doesn't need to know anything about economics or finance to succeed at investing; one only needs to accurately measure people's faith in the market.
  • I believe we are currently in a time of Faith. People haven't given up completely on the market. Few heretics are seen in the popular press. Give it a few more years.
  • The much ballyhooed "confidence" is a lagging, contrarian indicator.

Let's take that to its logical conclusion

Arnold Kling writes...

Reread the last sentence in the quote. When you read "that logic," what is meant is the law of supply and demand. It's a good thing that Congress doesn't vote on whether to accept the logic of gravity. response to a quote about Democrats' implied disbelief about the laws of supply and demand.

Let's take that to its logical conclusion: why are we (meaning our congresscritters) voting on any question about facts? Reality determines facts, and facts should be left to science, not voting. We can no more vote upon the truth of comparative advantage than we can vote on gravity.

Only in America

The local news had some advice on what to do if you're caught in a stampede while shopping Friday. I don't know whether to be proud or disgusted.

Stock Market Efficiency, part 2

Let me see if I can restate my question.

A) If it were known that historically, the market rises 10%, on average, in the first week of December, people would begin to buy stocks well in advance of December. This would push prices up. By the time the first week of December came around, there would be no 10% rise left in the market; that 10% rise has already happened.

B) Let's say that a PE ratio of 10 is a "good" value. Company A is priced at a PE ratio of 10 and is forecasted to grow earnings at 10% per year. Company B is priced at a PE ratio of 10 and is forecasted to grow earnings at 50% a year. Which company would you buy? Clearly company B. The "E" for company B is going to rise much faster than that of company A, and hence, the "P" should also rise faster. Well in advance of those higher earnings actually materializing, the "P" will rise to account for expected future earnings growth. This is why faster growing companies demand higher PEs.

So, to restate my question, if it is known that the stock market returns 10% a year, why don't prices rise in advance to account for this expected return, thus negating the expected 10% return?

Patri says I am just restating the equity premium puzzle. Am I? The equity premium puzzle asks, "Why do stocks return a higher rate than risk-free instruments?" whereas I believe I am asking a different question, "Why doesn't the stock market discount its future expected returns?"

Or if the stock market does discount its future expected returns, then, "Isn't it true that people shouldn't expect 10% returns?"

In Defense of Libertarian Imperialism

(Cross-posted from

Many libertarians, after Rothbard, start from the (correct) assumption that one's government is one's first and most direct enemy, to the conclusion that one should always side with the enemies of one's current oppressor. Rothbardians have thus prolificly denounced the US and supported its enemies in its hot and cold wars with National Socialist Germany, International Socialist Russia, Communist China, North Korea, North Vietnam, National Islamist Iran or Iraq, etc.

Of course, applying the same "logic", the respective citizens of those countries whose government are in conflict with USG should in turn support the US government in its fight against their own — if only their own government wouldn't murder them immediately at the mere utterance of such a support. And to take this line of reasoning to its conclusion, a Pole in 1939 should have supported Hitler and Stalin as opponents to his current oppressive government.

A "logic" that reaches different conclusions for different people is actually not a logic. It's polylogism, a fallacy of double standards, a rhetorical device to back whichever absurdity one fancies. Moreover, underlying this fallacy, we see another typical case where people who should know better fall into an accounting fallacy: just because a current oppressor is identified (current account negative) current non-oppressors (current account zero) are considered a better alternative as part of an unrelated future choice between oppressors.

"There are two kinds of pacifists: those who try to disarm the aggressors, and those who try to disarm the victim." At the margin, you may only have the choice between two oppressors. Making this economic (moral) choice about the future based on a historical accounting of one's past personal relationship with them is completely stupid and baseless. The enemy of your current oppressor may oppress you far more than said current oppressor if he wins, not to speak of his current victims, as Hitler and Stalin may have amply demonstrated to the hypothetical Pole who would have believed the rothbardian argument.

Some oppressors are objectively better than others. And one should support the better oppressors against the worse oppressors, whichever of them is currently oppressing one. For all its warts, the corrupt US-backed South Vietnamese regime was better than the wanton mass-murdering Russia-backed North Vietnam, and should have been supported in its war of defense against the communist aggressor. The wanton mass-murdering Russia-backed North Vietnam itself was better than the outright genocidal China-backed khmer rouge, and should have been supported in its war of aggression against that regime. The latter regimes were no less imperialist than the previous for being backed by Russia or China rather than the US or France; but they were much less libertarian.

Similarly, for all the crimes committed by their men, the British and French Colonial Powers should have been supported in their conquests of barbarian and totalitarian powers that previously existed in Africa, India, Vietnam, etc. In all those countries, colonial oppression may have been a bad thing, pre-colonial oppression was worse, and so was post-colonial oppression. The regimes that were toppled by colonial imperialists were never peaceful to their own people, and had no "right" to remain in place. The offenses they committed against their later victors may have been large (as in the case of systematic muslim raping enslavers around the mediterranean sea) or comparatively trifling (as in the case of various disputes with european merchants or missionaries); they were often reason enough to wage war, and even when not, the new conqueror had no less right to rule than the previous one; only more so for his more liberal laws.

But apparently, to the racists who call themselves anti-colonialists, the color of the skin of the ruler matters more than whether he's an honest, competent administrator or a corrupt wanton mass-murderer. And so the racists and leftists from the Western Establishment, after conquering the University, the main-stream media and the public administrations, have managed to push for local brown-faced mass-murderers to replace rather honest white administrators everywhere that a colonial power once existed, tamed after its initial bloody installation. Worse, they have successfully disarmed and embargoed those who were resisting communism in Russia, China, Vietnam and paralyzed the attempts of western reactionaries to help the victims.

Let it not be said that those of us who call for the use of force against barbarians are pro-war. The war was started long ago, and the enemies of life, property and liberty have never granted any truce even less peace, to those they seek to oppress. Those who deny property rights and claim totalitarian power over our lives are at war with us, whether their agenda is open or remains concealed behind pleas for greater "social justice" and claims of "saving the planet". They have successfully subverted many weak societies and their entryism in all venues of power is now bearing fruit even in the formerly strongest societies. Expect no mercy from these enemies. And grant them none.

The essential proficiency in political science is to distinguish friends from foes. You may be a fool and not know the difference; the enemies of liberty are quintessential political beasts and sense this difference very well. You're a fool if you believe yourself at peace with socialists, islamists and other totalitarians. You're a fool no less if you realize there is conflict but think you can bargain, negotiate or compromise your way into peace with them. Any appeasement talk with totalitarians can fool but yourself and your allies, never the enemy. Their very nature, the way and the reason they live, their deepest aspiration, their ultimate value, is to prey on producers; there is no more peace to be had with them than with the plague. If you're waiting for men in black to knock at your door before you realize these men are at war with you, you're a pretty useless ally in this war; you're just another of these "useful idiots" as Lenin called them.

Free Market defense agencies would certainly have to fight attempts by the totalitarians to seize power; meanwhile totalitarians would certainly do systematic entryism in whichever defense agencies they can to turn them into their tool. And so this eternal war will certainly continue in the Anarchy dreamed by anarcho-capitalists just as it exists now, though freedom to choose one's defender may make it easier to win that war over and over again. In any case, fighting back at the totalitarians will happen in the Free Societies of Tomorrow, and is thus certainly no crime. It thus isn't a crime now even in the Semi-Free Societies of Today, and wasn't a crime in the Semi-Free Societies of Yesterday, though those who may have waged this war may themselves not have been innocent of other lesser crimes.

However, inasmuch as there are many tyrants to be kicked out in the world today there is no more an Imperial force to kick them out and replace them with something better. Inasmuch as there are a whole lot of totalitarian activists to be crushed, there is no Imperial force to crush them and spread civilization in place of the poisons these activists spread in people's minds. "Conservatives" and "Neo-conservatives" have bitten bait, hook and line into the "progressive" ideology of Democracy, and will sacrifice all liberties on the altar of this God That Failed. They cannot replace tyranny with anything but another tyranny in foreign countries, and even at home they are part of the problem rather than the solution. Meanwhile, "progressives" and outright "socialists" continue with little impediment on their war on liberty, and there is no one to stop them, only minor hurdles that slow them down. National armies and police forces, having monopolized the defense of property rights in the last semi-free countries able to fight, are now securily controlled by enemies of liberty. The war has been waged, and it has been won by the Enemy.

But this war was waged first with ideas. The reconquest will also happen first with ideas. Before guns may speak on our side again and at long last give the totalitarians a taste of their own medecine, we have a long way to go. Happily, modern technology makes it easier than ever for ideas to spread; and so, we must wage the war with ideas, with faith that it is precisely what makes our ideas good that will make them prevail in the end.

Stock Market Efficiency

I've been thinking a lot about stock market efficiency lately. When I say "efficiency" I mean the ability of the stock market to factor in information relevant to the price of stocks very quickly. One related aphorism is, "Buy the rumor, sell the news." In other words, well before any announcement is made by a company, the stock price will have increased based on the diffusion of that coming information through society. This leads to some interesting questions. Consider a hypothetical conversation that I'm sure has taken place innumerable times in American history.

Alice: I have some money saved up. What should I invest in?
Bob: Stock market. Index fund.
Alice: Why?
Bob: Because the stock market has historically returned 10% per year for over a hundred years.

Clearly, there's something wrong with Bob's statement. There's nothing factually wrong with his statement; the stock market has indeed return around 10% per year. Rather, what's wrong is Bob's implication: that the stock market will keep returning 10% a year into the future.

If the stock market is truly efficient, those expected returns should be factored into prices already. There should be a premium in prices that takes into account the expected 10% returns. Am I correct?

Global Warning is Likely to Starve 5 Billion People Worldwide Over 200 Years, No Matter the Temperature Change

This would be a tragedy greater than the direct effects of all of the tyrants in world history combined. Agree or disagree?

Regards, Don

TSA search rules changed

Remember the incident in which airport security questioned someone for carrying a lot of cash and he recorded the conversation on his iPhone? Looks like the TSA has changed its rules as a result.

The new rules, issuedin September and October, tell officers "screening may not be conducted to detect evidence of crimes unrelated to transportation security" and that large amounts of cash don't qualify as suspicious for purposes of safety.


That second directive tells screeners that "traveling with large amounts of currency is not illegal," and that to the extent bulk quantities of cash warrant searching, it is only to further security objectives, the ACLU said.

Steve Bierfeldt is a hero.