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I'm not surprised

The NY Times Square bombing suspect is a Tea Party protester. His motivation appears to be race-related; he's a pissed off white guy who wants to kill blacks and jews and women. Dylan Ratigan was right.


Revised: Wilde's Laws of Macroeconomics

I misspoke last week. I inadvertantly switched the first and second laws.

Wilde's First Law of Macroeconomics: Macroeconomics is complete and total horseshit.

Wilde's Second Law of Macroeconomics: Whenever there's a consensus by macroeconomists, the truth is the exact opposite.

In my estimation, the best macroeconomists are global fund managers with a track record. If I want to find out what's going on with the economics of a particular society, I listen to people who make their evaluations about currencies, interest rates, culture, government spending, etc and actually put their money where their mouths are, and on top of that, are successful. People who don't bet their own money can say whatever they want and not pay a cent for being dead wrong.

Jim Rogers and Marc Faber are far better macroeconomists than Paul Krugman.


May Day 2010: A Day of Remembrance

Welcome to this year's May Day commemoration. As is our tradition, today, we remember the all those who have died at the hands of communism. Their story is sometimes overlooked, usually brushed aside if acknowledged at all, and often denied outright. They deserve their day of remembrance.

To remind yourself of the size of the communist tragedy, read The Red Plague by R.J. Rummel, originally published during our 2005 May Day commemoration.

A few bloggers are contributing at their own blogs:

What if Lenin's Stroke Came Five Years Sooner? by Bryan Caplan at Econlog

Victims of Communism Day by Ilya Somin at The Volokh Conspiracy

The Conspiracy of Silence Around the Romance of Evil by Michael Strong at Let A Thousand Nations Bloom

Our contributions follow:

Down and Out in the Hermit Kingdom by Jonathan Wilde

"Joyful sounds mean nought to the traitor" by Jonathan Wilde


Down and Out in the Hermit Kingdom

Despite the fact that North Korea has some of the strictest rules in the world on visitation and journalism, Shane Smith of Vice Magazine was able to visit and secretly record video. Youtube has a series of short clips of his travels. Part 3 is below. Set aside an hour and watch all 14 videos. They can be found below the fold.

Though there's much in the video that's shocking, somehow the part that stands out to me is when Shane Smith began to sing karaoke and his tour guides looked at him as if he were crazy because they had no idea music like that existed.

How many people in North Korea have never heard rock 'n roll? How many are convinced that their state of affairs is normal--no, better than the rest of the world?

How many starve? Read more »


"Joyful sounds mean nought to the traitor"

From Solzhenitsyn's The Gulag Archipelago, in a chapter entitled "That Spring" comes the authors retelling of the fate of Red Army soldiers returning home.

Back when the Red Army had cut through East Prussia, I had seen downcast columns of returning war prisoners—the only people around who were grieving instead of celebrating. Even then their gloom had shocked me, though I didn't yet grasp the reason for it. I jumped down and went over to those voluntarily formed-up columns. (Why were they marching in columns? Why had they lined themselves up in ranks? After all, no one had compelled them to, and the war prisoners of all other nations went home as scattered individuals. But ours wanted to return as submissively as possible.) I was wearing a captain's shoulder boards, and they, plus the fact that I was moving forward, helped prevent my finding out why our POW's were so sad. But then fate turned me around and sent me in the wake of those prisoners along the same path they had taken. I had already marched with them from army counterintelligence headquarters to the headquarters at the front, and when we got there I had heard their first stories, which I didn't yet understand; and then Yuri Y. told me the whole thing. And here beneath the domes of the brick-red Butyrki castle, I felt that the story of these several million Russian prisoners had got me in its grip once and for all, like a pin through a specimen beetle. My own story of landing in prison seemed insignificant. I stopped regretting my torn-off shoulder boards. It was mere chance that had kept me from ending up exactly where these contemporaries of mine had ended. I came to understand that it was my duty to take upon my shoulders a share of their common burden—and to bear it to the last man, until it crushed us. I now felt as if I, too, had fallen prisoner at the Solovyev crossing, in the Kharkov encirclement, in the quarries of Kerch, and, hands behind my back, had carried my Soviet pride behind the barbed wire of the concentration camps; that I, too, had stood for hours in the freezing cold for a ladle of cold Kawa (an ersatz coffee) and had been left on the ground for dead, without even reaching the kettle; that in Oflag 68 (Suwalki) I had used my hands and the lid of a mess tin to dig a bell-shaped (upturned, that is) foxhole, so as not to have to spend the winter on the open field; and that a maddened prisoner had crawled up to me as I lay dying to gnaw on the still warm flesh beneath my arm; and with every new day of exacerbated, famished consciousness, lying in a barracks riddled with typhus, or at the barbed wire of the neighboring camp for English POW's, the clear thought had penetrated my dying brain: Soviet Russia has renounced her dying children. She had needed them, "proud sons of Russia," as long as they let the tanks roll over them and it was still possible to rouse them to attack. But to feed them once they were war prisoners? Extra mouths. And extra witnesses to humiliating defeats.

Sometimes we try to lie but our tongue will not allow us to. These people were labeled traitors, but a remarkable slip of the tongue occurred—on the part of the judges, prosecutors, and interrogators. And the convicted prisoners, the entire nation, and the newspapers repeated and reinforced this mistake, involuntarily letting the truth out of the bag. They intended to declare them "traitors to the Motherland." But they were universally referred to, in speech and in writing, even in the court documents, as "traitors of the Motherland."

You said it! They were not traitors to her. They were her traitors. It was not they, the unfortunates, who had betrayed the Motherland, but their calculating Motherland who had betrayed them, and not just once but thrice.

The first time she betrayed them was on the battlefield, through ineptitude—when the government, so beloved by the Mother- land, did everything it could to lose the war: destroyed the lines of fortifications; set up the whole air force for annihilation; dis- mantled the tanks and artillery; removed the effective generals; and forbade the armies to resist.

[Now, after twenty-seven years, the first honest work on this subject has appeared—P. G. Grigorenko, "A Letter to the Magazine Problems of the History of the Communist Party of the Soviet Union," samizdat, 1968—and such works are going to multiply from here on out. Not all the witnesses died. And soon no one will call Stalin's government anything but a government of insanity and treason.]

And the war prisoners were the men whose bodies took the blow and stopped the Wehrmacht.

The second time they were heartlessly betrayed by the Motherland was when she abandoned them to die in captivity.

And the third time they were unscrupulously betrayed was when, with motherly love, she coaxed them to return home, with such phrases as "The Motherland has forgiven you! The Motherland calls you!" and snared them the moment they reached the frontiers.

[One of the biggest war criminals, Colonel General Golikov, former chief of the Red Army's intelligence administration, was put in charge of coaxing the repatriates home and swallowing them up.]

It would appear that during the one thousand one hundred years of Russia's existence as a state there have been, ah, how many foul and terrible deeds! But among them was there ever so multimillioned foul a deed as this: to betray one's own soldiers and proclaim them traitors?

How easily we left them out of our own accounting! He was a traitor? For shame! Write him off! And our Father wrote them off, even before we did: he threw the flower of Moscow's in- telligentsia into the Vyazma meat grinder with Berdan single- loading rifles, vintage 1866, and only one for every five men at that. What Lev Tolstoi is going to describe that Borodino for us? And with one stupid slither of his greasy, stubby finger, the Great Strategist sent 120,000 of our young men, almost as many as all the Russian forces at Borodino, across the Strait of Kerch in December, 1941—senselessly, and exclusively for the sake of a sensational New Year's communiqué—and he turned them all over to the Germans without a fight.

And yet, for some reason, it was not he who was the traitor, but they.

...

How many wars Russia has been involved in! (It would have been better if there had been fewer.) And were there many traitors in all those wars? Had anyone observed that treason had become deeply rooted in the hearts of Russian soldiers? Then, under the most just social system in the world, came the most just war of all—and out of nowhere millions of traitors appeared, from among the simplest, lowliest elements of the population. How is this to be understood and explained?

Capitalist England fought at our side against Hitler; Marx had eloquently described the poverty and suffering of the work- ing class in that same England. Why was it that in this war only one traitor could be found among them, the businessman "Lord Haw Haw"—but in our country millions?

It is frightening to open one's trap about this, but might the heart of the matter not be in the political system?

One of our most ancient proverbs justifies the war prisoner: "The captive will cry out, but the dead man never." During the reign of Tsar Aleksei Mikhailovich, nobility was granted for durance in captivity! And in all subsequent wars it was considered society's duty to exchange prisoners, to comfort one's own and to give them sustenance and aid. Every escape from captivity was glorified as the height of heroism. Throughout World War I, money was collected in Russia to aid our prisoners of war, and our nurses were permitted to go to Germany to help our prisoners, and our newspapers reminded their readers daily that our pris- oners of war, our compatriots, were languishing in evil captivity.

All the Western peoples behaved the same in our war: parcels, letters, all kinds of assistance flowed freely through the neutral countries. The Western POW's did not have to lower themselves to accept ladlefuls from German soup kettles. They talked back to the German guards. Western governments gave their captured soldiers their seniority rights, their regular promotions, even their pay.

The only soldier in the world who cannot surrender is the soldier of the world's one and only Red Army. That's what it says in our military statutes. (The Germans would shout at us from their trenches: "Ivan plen nicht!"—"Ivan no prisoner!") Who can picture all that means? There is war; there is death—but there is no surrender! What a discovery! What it means is: Go and die; we will go on living. And if you lose your legs, yet manage to return from captivity on crutches, we will convict you. (The Leningrader Ivanov, commander of a machine-gun platoon in the Finnish War, was subsequently thus imprisoned in Ustvymlag, for example. )

Our soldiers alone, renounced by their Motherland and degraded to nothing in the eyes of enemies and allies, had to push their way to the swine swill being doled out in the backyards of the Third Reich. Our soldiers alone had the doors shut tight to keep them from returning to their homes, although their young souls tried hard not to believe this. There was something called Article 58-lb—and, in wartime, it provided only for execution by shooting! For not wanting to die from a German bullet, the prisoner had to die from a Soviet bullet for having been a prisoner of war! Some get theirs from the enemy; we get it from our own!

Is there any greater indictment of a slave state than its placing its soldiers on the battlefield, and after they manage to find a way home tattered and torn, charging them with treason, and executing them?

Return to May Day 2010: A Day of Remembrance


May Day

Make sure to visit us tomorrow for our annual May Day commemoration. Econlog, The Volokh Conspiracy, and A Thousand Nations will also be participating.

Please send links to all your friends.


Wilde's first law of macroeconomics

Whenever there's a consensus by macroeconomists, the truth is the exact opposite.

Example: Greece needs to be bailed out to stop the contagion from spreading.

Truth: Bailing out Greece will spread the contagion far and wide. Letting Greece default will minimize the contagion.


Council of Elders

I'm not sure how I missed this when it first came out, apparently nearly three months ago. It's a panel discussion at an investing conference in Russia featuring some of my favorite minds. I can't figure out how to embed it so you'll have to visit the site.

I've mentioned before how I respect Marc Faber's views on pretty much anything; he's the moderator. Also making an appearance is Nassim Taleb who wrote the most provocative book on finance of the last decade.

Capping it off is Hugh Hendry, another personal favorite. He's unabashedly cocky, but also eloquent, witty, and extremely intelligent. The other guys are pretty blah. If you're like me and have some interest in investing and markets, this video, albeit an hour long, is like crack.

Hendry, like most contrarians, comes off as crazy much of the time, but he makes some great points:

* Everyone seems to be expecting inflation down the road and making their bets--buying gold, shorting treasuries, etc. Heck, I've even thought about buying some TBT along with gold. If everyone is making bets on inflation, it's probably not a good time to make bets on inflation.

As I see modern economies in the age of fiat currencies, deflation is not something to bet on over the long term. Any deflation will be met with absurdly low interest rates, bailouts, dollar bills from helicopters. Hendry's comment implies that, perhaps, the wiser move would be to wait for another downturn in the general stock market, at which point everyone will give up on the inflation scenario and start screaming "deflation!" and that will be the time to make large inflation bets.

I (think I) know the endgame: a bubble in commodities/gold and hyperinflation. I just have to wait till most people believe this is a crazy scenario before betting on it.

* Most people believe the Chinese economy will take over the world in a couple of decades. I believe it--it's an ancient civilization waking up from a slumber of insularity and communism that's embracing market reforms. But Hendry is the only one skeptical on China and he's asking a fundamental question: What does Chinese capitalism really look like?

We know what European capitalism looks like: slow growth social democracy. We know what Anglosphere capitalism looks like: fast growth liberal democracy with a vice for debt. We know what Japanese capitalism looks like: a system reliant on individualism trapped in a culture of conformity.

People expected Japan to take over the world in the 1980s, and as Hendry points out, people expected Argentina to take over the world at the turn of the prior century. Both nations are today way down on the list of dominant economies whereas the US has survived numerous wars, a Civil War, a Great Depression, great societal transformations, and more, and always been near the top.

So what does this authoritarian brand of Chinese capitalism really look like? We don't know yet, and according to Hendry, we shouldn't make large bets on it, especially when everyone else is.


All Praise And Blame Be To God

You know what really grinds my gears? Thanking God for miraculously saving someone from harm. Under what conceivable theology does God deserve thanks for miraculously saving someone from harm, but not also blame for failing to act miraculously and preventing the harm from ever occurring in the first place?

A friend (currently a med student) updated his status on Facebook with:

Was just nearly killed on I20 by a police officer not paying attention, but I was miraculously saved from any harm. Thank you God for saving me!

Note: for saving me and my dear wife

I responded, trying to remain polite yet antitheistically contrarian:

I'd blame God (and the police officer) for putting you in that situation to begin with. Glad you are safe, though :D

At this point, I would expect the theistically inclined to respond with some sort of apologia about the free will of the police officer, as if the police officer and God cannot both be held jointly liable: The officer for choosing to be negligent, and God, for choosing to miraculously create the circumstances leading up to this outcome, and/or failure to miraculously intervene and prevent one or more of these contingent circumstances from happening.

My friend responded with more detail and a possible justification:

3 people were injured, including a pregnant woman.

I try to be optimistic, because it could have been so much worse had several things not conspired in our favor.

I'm not sure if optimism is offered as serious justification, but I just don't see how it's relevant here, other than as a confused post-hoc rationalization. Being thankful that things turned out fortuitously is great, but its not a thanks that God deserves, unless God also deserves blame from the three injured people, as well as blame from all those who were needlessly scared by an event that God could have easily prevented, just as easily as God miraculously saved those involved from even greater harm.

My latest response:

Optimism is great, but I see no reason to thank God for saving you unless you are also willing to blame God for creating all of the factors that led to this incident, in which case the net thanks/blame God deserves is unclear. The fact that 3 people were injured, including a pregnant woman, leads me to believe that God deserves net blame, not thanks, if we are attributing the outcome of events to divine intervention. The world would have been better off had this event never happened.


Storing Gold Overseas

The USG is set on a path on which it will inevitably have to destroy the currency. The only question is, How quickly? I believe it will happen faster than most expect. And I expect capital controls to be enacted soon.

With the goal of preserving wealth, I want to store some gold overseas. The intrepid Arthur B. has given me some advice, but I thought it wise to open up the question to this blog's wise readers.

My target country is Singapore because its government is one of the few in the world that is not destroying its own currency, has relatively smart economic policies, and respects business. But I'm open to other suggestions. I've read elsewhere that it's not that difficult to open a bank account in Singapore as a US citizen and rent a safe deposit box.

Apparently, it's legal to transport gold out of the US. So one strategy might be to buy gold here in the US and take it to Singapore. I've heard that there might be a limit--$10,000--but am not totally sure. The problem with this approach is that some TSA idiot will surely freak out, start asking questions, and possibly put me on a terrorist watch list. I don't want to raise a single eyebrow.

I've also been told that the properties of gold allow you to walk through the metal detector gate carrying it. That would allow gold coins in your pocket to sneak through undetected. But that limits the practical amount of gold sneaked through to about $10,000, I think.

Another option is to buy gold in Singapore and then deposit it there. How can I do this? Can I withdraw, say, $50,000 from an ATM and buy gold and put it in safe deposit boxes (over several days with multiple trips)? Will a flag be sent to the USG because I'll be using a US bank account? Will anyone take a credit card (my credit limit is not as high as the amount of gold I want to buy unfortunately)?

Can I wire the funds to a Singapore bank, and will that raise any flags with the USG?

Apparently, US citizens with a passport do not need to obtain a visa to visit Singapore.