Can We Trust The Inflation Statistics?

In response to my last post calling out the Federal Reserve for engineering grotesque income inequality in America, some commentators have said that the Federal Reserve shouldn’t be blamed since there hasn’t been any meaningful inflation.

Before I continue with this post, let me say that even when relying on the official statistics, there has been massive redistribution. The average inflation rate over the past 20 years has been 2.3% while the average growth rate has been 2.53%. I realize most people who go through an economics program are not trained to think this way, but let’s remember that absent money printing, prices would fall by approximately the growth rate. In other words, if the money supply had simply remained fixed over the last 20 years, prices would have declined by about 2.5% per year (all other things equal).

Now that doesn’t mean business would have been suffering. The whole reason for the decline in prices would have been technological improvements reducing the cost of production and increasing supply. If you sell more at a lower price it’s possible to be more profitable than selling less at a higher price.

Think of what has been happening to prices in the technology sector. Prices have been falling due to production outstripping the growth of the money supply, yet tech businesses are flourishing. The same thing would have applied to the entire economy.

So because prices should have fallen by 2.5% and instead they rose by 2.3% that implies they were inflated by an average of 4.8% each year. What this means is that upwards of 5% of income each year (though probably less on average) has been siphoned away from the middle and working classes to the wealthy. Compound this over 20 years (or longer) and you get a pretty massive number for the amount of wealth that has been redistributed.

So even using the official statistics, I can rest my case. However, my intent with this post is to question the accuracy of the official statistics.

The Fed Orchestrates the Largest Redistribution of Wealth from Poor to Rich, The Left Blames The Free Market

We are finally starting to get some commentary in the financial media about the enormous upward wealth redistribution being engineered by Ben Bernanke and the Federal Reserve. Yesterday on CNBC’s “Squawk Box“, hedge fund billionaire Stanley Druckenmiller said of QE: “This is fantastic for every rich person, … This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.”

For anyone who has been paying attention this statement shouldn’t come as a surprise. During this “recovery” the wealthiest 1% have captured 121% of the economic gains. How is it possible they received over 100% of the gains? Simple, everyone else has become poorer. But while income inequality is arguably the worst it’s ever been, it is really just part of an overall trend that has been going on for a couple decades.

Here’s a chart put together by Mish showing the growth rates in real household income.

Welcome Spooks!

Yesterday a left-wing redditor ventured into r/libertarian and stumbled upon my post, A New Libertarian Constitution. He (or she) was shocked to find that there are people who hold political views outside of the Hillary Clinton to Mitt Romney spectrum.

I was told that my post was “the most ridiculous piece of intellectual masturbation I’ve ever seen” and that, unlike myself, he actually “believes in the United States of America and the Republic for which it stands.”

Isn’t it cute when people think they own the government, rather than the other way around?

After a lovely little exchange in which I was reminded that treason is not allowed under the constitution (was that a death threat?), he concluded the conversation with this:

You are crazy. And you actively are trying to destroy the US government. I am forwarding this conversation to the NH State Police and the FBI.

So with that I would like to welcome my new followers! Of course we know the NSA already trolls the internet for “anti-government activity”, now I can add the FBI and State Police as well.

So welcome! Feel free to take a look around. And please do read! If anyone needs to discover the philosophy of liberty it is people like yourself.

The Indignity of Political Discourse

Politics is incredibly poisonous. People get it in their minds that the ideas promoted by their side are right and all others are so completely wrong that they aren’t worthy of serious consideration. There’s an us vs. them mentality that prevents people from objectively evaluating ideas and keeps them in an intellectual stuper.

Case and point here is Salon’s recent article, 11 questions to see if libertarians are hypocrites by R.J. Eskow. This very well may be worst article ever written. I say that because it’s blatantly apparent that Eskow acquired his knowledge of libertarianism from reading one or two blog posts at the Huffington Post or Daily Kos, yet he didn’t let this prevent him from offering up his opinion.

Personally, I would be horrifically embarrassed to publish something in a national outlet without at least first familiarizing myself with the subject, or even doing a Google search for that matter. But not Eskow, who produced gems like this:

Libertarians have a problem. Their political philosophy all but died out in the mid- to late-20th century, but was revived by billionaires and corporations that found them politically useful.

But the libertarian movement has seen a strong resurgence in recent years, and there’s a simple reason for that: money.

It serves the self-interest of the environmental polluters, for example, to promote a political philosophy which argues that regulation is bad and the market will correct itself.

A lot of them don’t like democracy very much. In their world, democracy is a poor substitute for the iron-fisted rule of wealth, administered by those who hold the most of it.

Science Should Hurt

A New Libertarian Constitution

Back in the 1990s Roderick Long undertook what I consider to be a very worthwhile project to create a constitution that would appeal to both anarchists and minarchists. In my discussions with people, I’ve found that almost no one has heard of it. So it is my intent with this post to resurrect the idea and hopefully start a productive conversation between both camps.

Why A Constitution?

Let me state upfront that I decidedly come down on the anarchist side of the debate. Given that, it may be surprising that I am pushing a constitution. To many, the term “libertarian constitution” is an oxymoron. But let us consider that it is usually said that there are two types of constitutions — written and unwritten. The United States is usually presented as an example of a country with a written constitution. The United Kingdom as an example of one with an unwritten constitution. What most anarchists have in mind with anarcho-capitalism is something along the lines of an unwritten constitution. That is, there is still a legal system, laws, courts, enforcement mechanisms etc, all of the elements that are typically defined by a constitution, but they are instead the byproducts of custom, competition, and incentives. There is no reason, however, why we couldn’t have all of those elements behaving in the same way, yet codified into a formal written constitution that addresses the concerns of minarchists. That is more or less going to be the proposal that follows.

Before we continue, let’s consider why having a constitutionally defined system of governance may be more preferable (at least in the present) to pure anarchy:

The Marketplace of Ideas

A Glimpse Of The Future: Quantum Computers, Teleportation, And Superluminal Communication

If you haven’t been paying attention, enormous progress has been made towards quantum computing and quantum teleportation in recent years. Just recently, researchers in Zurich have demonstrated teleportation inside a solid-state circuit which they estimate can transfer 10,000 quantum bits per second, which is somewhat of a land speed record. Meanwhile, researchers in Tokyo used a hybrid technique to teleport photons with a 79 to 82 percent accuracy, another major advance over previous experiments.

But don’t count on being beamed up to the Enterprise just yet. The type of teleportation we’re talking about isn’t likely to rearrange molecules into the form of a human being, rather it communicates information (such as position, momentum, spin, and polarization) about subatomic particles across time and space. So while we’re likely going to have to wait a while to have our own transporter rooms, a type of quantum teleportation may be the key to unlocking the power of quantum computers. And as we’ll see, there is an outside chance that a similar type of technology could be used to create a mind-boggling type of communication system that is usually only found in science fiction.

Quantum Computing

Let’s start by getting a handle on quantum computing. Today’s computers encode information into bits — binary digits, either “0” or “1”. These bits are usually stored on your computer’s hard disk by changing the polarity of magnetization on a tiny section of a magnetic disk, or stored in RAM or flash memory represented by two different levels of charge in a capacitor. Strings of bits can be combined to produce data that is readable by humans. For example, 01000001 represents the letter A in the extended ASCII table. Any calculations that need to be performed with the bits are done one at a time.

The Free Gift Of Knowledge

Can A Humanitarian War Ever Be Justified?

There is a thought experiment in ethics that runs something like this:

A brilliant transplant surgeon has five patients, each in need of a different organ, each of whom will die without that organ. Unfortunately, there are no organs available to perform any of these five transplant operations. A healthy young traveler, just passing through the city the doctor works in, comes in for a routine checkup. In the course of doing the checkup, the doctor discovers that his organs are compatible with all five of his dying patients. Would it be morally permissible for the doctor to murder the traveler and use his organs to save the other five patients?

With the exception of a handful of hardcore utilitarians, nearly everyone who responds to this question believes it would not be morally permissible for the doctor to murder the traveler. What if, however, we increased the number of people who would be saved to ten? My guess is that most people would still say it is not morally permissible to kill in this instance. What if we increased the number to, say, a thousand or a million?

As the number increases the moral dilemma becomes more apparent. It is extremely difficult to say how many people would need to be saved in order to justify killing an innocent person. In fact, I’m not sure I would be comfortable deeming killing morally permissible under any circumstances. Whatever the number is, however, I’m sure most people would say it has to be very high to justify killing. We could turn this into a maxim by stating that there is a strong presumption against killing people. To override this presumption one would need to conclusively demonstrate overwhelming benefits.