Bachelor Party Cruise

We are off again, this time on a cruise down the coast of Mexico to celebrate my buddy's final days of freedom. Just kidding. She is an absolute sweetheart, one of the few worthy women out there, and we wish them all the best. But, as my brother says, "Dude, you go on vacation more than anyone else." True. Life is short and we try to live large.

Now, I know you are wondering: how can they leave the ladies behind while they go for a weekend on a boat to tropical paradise? Never fear. I got the guys together, worked my contacts in the travel industry, and we are surprising all the girls with a trip of their own!

Phone Cards

Economics or Pop Psychology?

AGAIN, I CAN'T REALLY DECIDE if this is economics or pop psychology? What does the "$1,000" figure matter in the first place? It's not like we can measure costs. One outcome is simply more costly (in a general sense, not just a purely monetary sense) than the other, based on their psychological speculations.

Big frickin' deal.

Source:
http://www.marginalrevolution.com/marginalrevolution/2005/09/why_you_buy_ins.html

Memo To Stefan Karlsson

The increase in the price of a home should be categorized as savings. The rise in prices leads to a rise in home equity and home equity is savings. Therefore, higher prices are a net positive for society and aren't being accounted for in measures of savings! Higher real estate prices: good for everyone!

I'm just kidding.

DIPLOMACY Not to be upstaged by the Karen Hughes "listening tour," we ran our own version of diplomatic relations over the last few days South of the Border. I think the campaign was an unmitigated success. When in foreign lands, I try to represent my nation in the best possible manner by giving them The Libertarian Jackass Treatment. This weekend, for instance, we rolled into a bar crowded with locals deep in the heart of Mexico, introduced ourselves to the bartender, then purchased a round of tequila shots for each willing participant. The result? By the end of the night we witnessed about 100 new friends all singing along in English with Jay-Z's hook, "Bring 'em out, bring 'em out." They loved it so much the DJ ran it back twice at our request.

Then we all went out dancing 'til dawn. It's quite possible we haven't had this much fun since Spain.

What were we doing in Mexico? Attending a fundraiser at a winery, actually. This included bullfights, paella, excellent vino (even a petite syrah), beautiful women and Cuban cigars. Since the young ladies were flashing their Christian Dior all over the place, it's important to note that the wealthy upper class in Mexico appears to be far wealthier than most Americans.

Shout outs to David and Santos for coordinating and joining in on this Adventure.

Sources:
http://www.jihadwatch.org/dhimmiwatch/archives/008252.php
"Bring 'em out, bring 'em out."

SITE FEED I was told I needed to dump my other template in order for Site Feed to work. Let me know if that solved the problem. I think this template is actually the first one we used at the birth of LJ. Hard to believe it's been over two years.

OUT THE COUNTRY, BLACKBERRY STILL CONNECTS I'll be out of the country quite a bit over the next couple of weeks. You know how we roll. We are leaving now for Mexico for several days.

"LIFE IS TOO SHORT to drink cheap champagne."

MEMO TO TYLER COWEN: there's a huge difference between academic institutions and central banks. Namely, central banks create liabilities in order to accumulate reserves.

http://www.marginalrevolution.com/marginalrevolution/2005/09/my_view_of_the_.html

HILARIOUS It's not the result of a speculative frenzy, but of fundamental economic factors like . . . low interest rates.

http://calculatedrisk.blogspot.com/2005/09/more-no-bubble-talk.html

What, do you suppose, fuels the speculative frenzy?

Economists -- they are all so clueless.

KIERKEGAARD Fear and Trembling:

If there were no eternal consciousness in a man, if at the foundation of all there lay only a wildly seething power which writhing with obscure passions produced everything that is great and everything that is insignificant, if a bottomless void never satiated lay hidden beneath all--what then would life be but despair? If such were the case, if there were no sacred bond which united mankind, if one generation arose after another like the leafage in the forest, if the one generation replaced the other like the song of birds in the forest, if the human race passed through the world as the ship goes through the sea, like the wind through the desert, a thoughtless and fruitless activity, if an eternal oblivion were always lurking hungrily for its prey and there was no power strong enough to wrest it from its maw--how empty then and comfortless life would be!

http://home.ddc.net/ygg/etext/fear.htm

IS THIS AN ATTACK ON AUSTRIAN ECONOMICS? From the Institutional Economics blog. Perhaps they're upset because there's no such thing as institutional economics? I'm trying to set up my own economics sect: nutritional economics. Get on the bandwagon early. Even Mises failed to understand the role of a nutritious breakfast on human action. Rothbard didn't bother to get up before noon, so, naturally, he failed to find an important factor shaping observable human phenomena. Nutrition matters!

MILITARY RECRUITERS are professional liars. Think about this before signing up:

Wars seem important at the time, but they usually aren't. Five years later, they are history. About sixty thousand GIs died in Vietnam. We lost. Nothing happened. It was a stupid war for nothing. Today the guys who lost faces and legs and internal organs back then are just freaks. Nobody gives a damn about them, and nobody will give a damn about you. A war is a politician's toy, but your wheelchair is forever. If you want adventure, try the fishing fleet in Alaska.

VOLTAIRE AND THE QUAKERS

Interesting conversation found here:

"We never go to war. This is not because we fear death. On the contrary, we bless the moment that unites us with the Being of Beings. It is because we are neither wolves, tigers nor mastiffs, but Christian men.

"Our God, who has commanded us to love our enemies and to suffer without complaining, would not permit us to cross the seas to slaughter our brothers, just because murderers clothed in scarlet, wearing caps two feet high, enlist citizens by making a noise with two little sticks beating on a stretched ass's skin.

"When after a victory, all London is lit up with illuminations, and the sky is ablaze with fireworks, and the noise of thanksgiving is heard from bells, organs and cannons, then we groan in silence about the murders which caused the public rejoicing."

International Phone Cards

TRIATHLON

I received a phone message early Friday morning: "J, can you come out across the desert and swim the first leg of a team triathlon relay, 7am? We need someone to come off the bench. Then we can go to Rehab later."

Of course, I made it out there, stretched on the Quintana Roo HydroFull (an absolutely perfect product, if you are in the market for a new wetsuit) and stood on the lake shore while several hundred other swimmers swam around the Lake, warming up. I don't do warm-up swims for open water events. It's not in my routine. I'll tell you what is in my routine, though: a Venti drip, double cup, from Starbucks, 50 ounces of water and a PowerBar one-hour prior to race-start.

Intead of warm-up, I just stood there on the beach watching, trying to determine which group of swimmers I would need to beat. That's what I do. I observe. I evaluate. I position myself near the elite group. I make comments to them like, "Wow, I sure am nervous -- this is my first time swimming outside of a pool. Is it difficult to navigate?"

Then I go about beating them in the first 200 yards.

First out of the water on the 1st leg (2nd leg: bike, 3rd leg: run), our relay team took first place overall. Probably one of the funnest moments in all of athletic competition is reaching shore first and running the 50 or so yards to the transition station, the entire route lined on on both sides with cheering, congratulatory spectators.

Sweet victory in the desert hell.
Phone Cards

REAL GOLD VS. REAL OIL Undervalued?

For more, here's Peter Schiff of Euro Pacific Capital on gold vs. government:

Also the week saw fresh releases of trade and current account deficit data. As an example of the power of diminished expectations, July's horrific $57.9 Billion trade deficit was greeted as good news, as it was less than the slightly more horrifying $60 billion that had been feared. The second quarter current account deficit, which came in at a higher than expected $195.7 billion, would have been a new all-time record, had it not been for the upward revision of the first quarter current account deficit to $198.7 billion. The $3 billion narrowing in the quarterly current account deficit (the first time since 2003) can hardly be seen as progress, as it resulted entirely from a $4.4 billion reduction in foreign aid. Widening trade and current account deficits will exert additional downward pressure on the dollar and upward pressure on consumer prices. Finally, President Bush's "Marshall Plan" for the Gulf Coast will only fuel inflation's fire, as the money needed to fund it will either be created by the Fed, or borrowed from abroad.

Perhaps the most important reason to be skeptical of government inflation numbers is that the government, like a fox campaigning to guard a hen house, has many reasons to be disingenuous. As the world’s largest debtor, the Federal Government is inflation’s primary beneficiary. More importantly, for America’s bubble economy to continue expanding, politicians must keep consumers borrowing and spending. By transferring wealth from creditors to debtors, inflation helps makes this possible. For debtors, inflation reduces the real burden of debt service, while simultaneously increasing the prices of their assets, particularly their houses. Unfortunately for creditors, the vast majority of American voters are debtors, and monetary policy is therefore conducted specifically to benefit the latter. Considering the fact that so many creditors are foreigners, and therefore ineligible to vote, this amounts to a political no-brainer.

However, this policy can only "succeed" as long as the Government can con America's creditors into believing that inflation is not a threat, even as it creates it with increased veracity. Recent evidence suggests that this propaganda campaign is beginning to wear thin. This week's pronounced weakness in the bond market, despite soft economic data and "benign core" inflation numbers, reveals that more investors are getting wise to the con, and looking to gold rather than the government as a reliable indicator of inflation.

Sources:
http://bigpicture.typepad.com/comments/2005/09/real_gold_versu.html
http://www.europac.net/
Calling Cards

DON'T DRINK AND DRIVE Take a limo when you venture out. That's the motto.

TOO MANY REAL ESTATE AGENTS

Too many mortgage bankers, too many loan officers, too many investment bankers. This is another reminder of why a "bubble" is not about price appreciation, it's about the massive misallocation of real resources. Bill Gross:

Take a gander at the remarkable Chart II displayed below. It shows that real estate, not manufacturing, has been the economic impetus in recent years in terms of net growth. Once price momentum slows or ceases for home prices, job growth will slow or disappear in the sector as well. How many more mortgage brokers or real estate agents do we really need or can we legitimately support? At least one more than our total of portfolio managers and investment bankers you might say, and to that I’d say "touché," but it only reinforces my point! Once the cautionary momentum begins, job and wage growth will not support a continuing housing boom, leading to further caution and an economic slowdown at the minimum.

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2005/IO+September+2005.htm
Calling Cards

TOM PALMER: "We can learn a great deal about how non-state legal systems work, not by dreaming up fantasies of competing defense agencies, but simply by studying closely the world around us."

Excellent. This pulled from a 15-page PDF "Do We Need Government?" Check it out.

"WE DON'T REMEMBER DAYS, we remember moments."

SHE PASSED BY, IN A BLACK MERCEDES Damn she's fine, the way her body's movin'. The new DJ Quik album hits stores today. Best living rapper/producer.

The West Coast is the best coast.

http://www.dj-quik.com/

I DON'T KNOW WHAT ARNOLD KLING IS TALKING ABOUT The market isn't telling consumers to drive less. The "market" isn't "telling" the consumer anything. Further, why are Washington, D.C. "libertarians" and "free market" econ profs always crying about the state of economic education in politics? Do they not understand the nature of the state? That it is an organization based on exploitation, not cooperation?

Why should a politician ever care about understanding economic science (except insofar as it enables more manipulation, as is the role played by modern economic science just nicely as it is)?

http://econlog.econlib.org/archives/2005/09/economists_unde.html

MAYBE THE REAL PROBLEM HERE is the "equilibrium" construct? The comment:

Let's be serious. $5.87 seems to be above the market equilibrium, even in these times. But I wouldn't prosecute them. Not at all. I'd just tell people not to go there! Find another station! If you're running on empty, just buy a gallon and drive on.

You see, it's the simple "idea" of the equilibrium market price which stirs up the problem, isn't it? The "economists" aren't worried about "gouging," they are concerned the actual price (that is, the current market price) is above some imaginary, mystical equilibrium price.

Should we be waging intellectual war against the equilibrium price concept?

THE CHAOS OF UNCOORDINATED FACTS?

Here indeed was the great defect of the Greek mind: it was not disciplined; it lacked limiting and steadying traditions; it moved freely in an uncharted field and ran too readily to theories and conclusions. So Greek philosophy leaped on to heights unreached again, while Greek science limped behind. Our modern danger is precisly the opposite; inductive data fall upon us from all sides like the lava of Vesuvius; we suffocate with uncoordinated facts; our minds are overwhelmed with science breeding and multiplying into specialistic chaos for want of synthetic thought and a unifying philosophy. We are all mere fragments of what a man might be. -- Will Durant, The Story of Philosophy

ECONOMISTS HAVE SUCH TOUGH JOBS They have to sit around and wonder if the Fed should play a role in defusing asset bubbles.

LIBERTARIANISM OR CONSTITUTIONAL FETISHISM? Can you see the dangers of mixing yourself up in arguments about the legality of gun possession?

But, don't worry: you're free because you can have the NRA bring a lawsuit on your behalf.

Nonsense.

http://hnn.us/blogs/entries/15048.html

In a similar way, libertarians get too caught up in arguments on the War Between the States and the Constitution:

Here Woods lapses back into constitutional fetishism, of a particularly silly form. Why should any libertarian care one whit whether secession was a legal right? The vital, unaddressed question is whether the southern states had a moral right to secede. With respect to evaluating the American Revolution, do we ask whether it was legally justified or whether it was morally justified? If the secession of the slave states was truly immoral, than of what possible import was the legal right? On the other hand, if they indeed had a moral right to leave the Union, so what if doing so was illegal? Only a legal positivist would let the legality determine the morality of the act.

Whether the MORAL right of secession is conditional or unconditional is a question about which libertarian political theorists disagree. I have made the case for an unconditional right of secession in my own book on the Civil War.[9] But Woods dares not go down that path. Because if the states have a moral right to secede from the Union, regardless of motives or grievances, than counties have an unconditional moral right to secede from states, and individuals from counties. This not only sanctions the Confederacy's 1861 firing on a federal fort in Charleston Bay but also John Brown's 1859 raid on a government arsenal at Harpers Ferry, which was merely an attempt to apply the right of secession to the plantation.

Consequently, THE POLITICALLY INCORRECT GUIDE TO AMERICAN HISTORY enmeshes itself again in a futile debate over the Constitution's one-and-only proper interpretation, which as emphasized above, is a quest for a chimera.

LET'S BE CLEAR on the real estate bubble: the escalation in home prices is but one symptom of a bubble in real estate, not the bubble itself.

IS "PUBLIC CHOICE" ECON REALLY ECONOMICS? Give me a break.

http://www.marginalrevolution.com/marginalrevolution/2005/09/the_public_choi.html

THE REAL PROBLEM WITH KANYE WEST He think he's the greatest rapper of all-time. His name shouldn't even be in the conversation.

FOR HAIR I recommend: Soy Salvation from Healthy Sexy Hair.

http://www.sexyhairconcepts.com/

SHOUT OUT Almost forgot. Shout out to the women working the Virgin Atlantic Airways flight from London to Los Angeles last Saturday.

PLAYERS ONLY "Shout out" to my little baby sister, who turned 21 last week! We took her out, popped a few bottles, made sure the white stretch was parked right out front and showed her how the real gentlemen run it in Hollywood.

Also, "shout out" to "Super Freshman." Although I hit him up on the BlackBerry at the last minute, he still managed to roll with us. You should have ventured to Jerry's with us. I was buying.

MARCUS AURELIUS:

When a man finds his sole good in that which the appointed hour brings him; when he cares not if his actions be many or few, so they accord with strict reason; when it matters nought to him whether his glimpse of this world be long or fleeting -- not death itself can be a thing of terror to him.

...

Death: a release from impressions of sense, from twitching of appetite, from excursions of thought, and service to the flesh.

IS THE CHINESE RMB OVERVALUED? As suggested by a Bush administration official, if capital controls were removed, "we are likely to see the remnibi fall." In a real general sense, of course it's overvalued. I think the peg to the dollar creates a situation where demand for the yuan is greater than it otherwise would be.

HUGO CHAVEZ

Hugo Chavez wants the Venezuelan State to have more influence on the banks. The real story here is that, according to a related FT article:

Venezuelan banks, among the most profitable in Latin America, are heavily exposed to government debt. Public debt can account for as much as 60 percent of a bank's assets. The government is also the largest single depositor among many banks.

Two months ago, legislators passed a controversial central bank law that allows the government to withdraw and spend part of the country's $30 billion in international reserves.

How private are these banks in the first place? Then again, without the political-banking partnership, how could Venezuela enjoy the benefits of a fiat currency and fractional reserve banking?
Alcohol tests

VIENNA AND CHICAGO, friends or foes?

http://mahalanobis.twoday.net/stories/950534/

SHOULD LOOTERS BE SHOT DEAD? "Shooting the New Orleans looters is, under present circumstances, an appropriate response to the collapse of civic order, and a first step towards the restoration of that order."

http://volokh.com/archives/archive_2005_08_28-2005_09_03.shtml#1125597101

Is violence the key to social order? Shooting looters is neither appropriate nor justified (you're going to have great difficulty proving to me that deadly force is necessary against a thief as it is).

I HATE TO GO TO THIS LEVEL (well, not really) but Bush is a moron:

http://www.mercurynews.com/mld/mercurynews/12548023.htm

In Mobile, Bush cited the experience of Sen. Trent Lott, R-Miss., to make the point that the region will rebound.

"Out of the rubble of Trent Lott's house - he's lost his entire house - there's going to be a fantastic house," Bush said. "And I'm looking forward to sitting on the porch."

Trent Lott's house?

EMPIRICAL EVIDENCE OF GIFFEN GOODS? A friend from Beverly Hills called to suggest that, as the looters are choosing the goods (after all, they can't steal everything), the goods which they would loot last (or not at all) are the Giffen goods. That is, as the price falls to zero, demand for these goods also falls?

I'M SURPRISED WE HAVEN'T seen any of the "Blockheads" ask questions like, "Is looting acceptable if limited to public property?"

ARNOLD KLING: "I'm in favor of gas price ceilings." Apparently Dr. Kling thinks a central planner can allocate resources "better" than the market.

http://econlog.econlib.org/archives/2005/09/im_in_favor_of.html

I HOPE MORE AMERICANS BEGIN TO ASK: what are we doing in Iraq when thousands of Americans are suffering at home?

GOVERNMENT AND CHAOS Is a gang roaming the streets with AK-47s better or worse than the previous "government" which once occupied the territory?