Quick Roundup 375

Friday, October 31, 2008

Brian Simpson on Gold

Over at Capitalism Magazine, there's a column by Brian Simpson on the origins of the financial crisis and the need for a gold standard:

The first thing that [Alan] Greenspan and most other commentators on the crisis must do to understand why the crisis occurred is to learn that the free market did not cause the crisis because the U.S. is not even close to being a free-market economy. Massive government interventions in the market in the form of myriad regulations and financial irresponsibility on the part of the government are really to blame. This makes the "solution" being imposed doubly absurd: more government controls, borrowing, and spending to solve the problems created by government controls, borrowing, and spending.
The best thing about this column is that Simpson does not just stop at refuting Alan Greenspan's ludicrous claim that capitalism caused the crisis. He swats Greenspan aside like a gnat and directly goes on the offensive!

This isn't just intellectual activism. It's leading by example.

Lincoln Quote

Amit Ghate quotes Abraham Lincoln on fighting the good fight uphill:
I have not allowed myself to forget that the abolition of the Slave-trade by Great Britain, was agitated a hundred years before it was a final success; that the measure had its open fire-eating opponents; its stealthy "don't care" opponents; its dollar and cent opponents; its inferior race opponents; its negro equality opponents; and its religion and good order opponents; that all these opponents got offices, and the adversaries none. But I have also remembered that though they blazed, like tallow-candles for a century, at last they flickered in the socket, died out, and were remembered no more, even by the smell. [bold added]
The fight against slavery is an inspiring and informative precedent indeed.

Barney Frank, Octopus

Galileo, on the heels of an excellent post about Alan Greenspan's pragmatism, notes that Barney Frank, as a new part-owner of our banks, wants to dictate executive compensation:
The real price of the $250 billion partial nationalization of America's leading financial firms will be much larger than just this dollar amount. We are only seeing the first signs of it now. Barney Frank and his minions are just fashioning the bibs to their bellies. Their feasting on America's leading banks and investment banks -- starting with Goldman Sachs, Morgan Stanley, JP Morgan, and Citibank -- has just begun.
Allow me to make an easy prediction: Our new, self-appointed "captains" of industry will very quickly live up to all the tired old stereotypes about businessmen the left has foisted on America for ages. Hell, Frank is already being chintzy with pay to workers whose initiative is vital to the work of the companies he's trying to run!

Every stereotype has an element of truth to it somewhere. In this case, the element of truth comes from the fact that the stereotype exists in the minds of people engaging in psychological projection.

Bass Ackwards!

Rational Jenn has a couple of very amusing posts up. One starts out with, "The other day, Ryan asked me how to spell 'ass.' Okay, let me back up."

The other is also funny, but got extra points because it contained the word "hobbit", reminding me of my hobbit-like wife, whom I really miss right now.

Two Roundups

Adam Cooke hosts the 68th Objectivist Roundup (scroll down), and C. August an Alan Greenspan roundup.

-- CAV


z said...

I have an analogy for those sympathetic to Capitalism, but cannot get past some of the really careless CEO's on Wall Street like the ones featured on 60 minutes and who have been blamed as the exclusive cause of the crisis.

I liken the situation to what would happen if we were somehow able to disable our ability to feel pain. If we were able, for example to stub our toe without the "ouch". This would lead to a short-term benefit, no more funny bone bumps, no more pain when you put your hand on something hot, or when you are looking for something in a low cabinet and bash the back of your head on the counter. The long-term effect, however, would be that you would become careless because you no longer had an incentive to avoid doing things that caused this pain. You might swing your arms in small spaces, you wouldn't look where you're going, you'd leave your dumbells all over the place and wouldn't mind kicking them. You won't notice that your bones are turning to mush.

The same with the Federal Reserve (and, really, all government regulation). In order to avoid the pain of credit contractions when bank reserves are too low, the government creates a situation where the banks can still loan money, even when they should be tightening their standards. The effect is elevated risk-taking, incompetence, crisis.

Gus Van Horn said...

That's an excellent analogy regarding the folly of government bailouts.

WRT short-sighted officials, some are acting as they do thanks to the government, and some (the groups have overlap) also, as pragmatists, willfully close their eyes to unpleasant sights -- like bright lights on the road some distance ahead.

Jay said...

Gus, where are the objectivists on Obama on this statement:

"John McCain and Sarah Palin they call this socialistic. You know I don’t know when, when they decided they wanted to make a virtue out of selfishness."

Mo said...

my primitive understanding is that the gold standard may not be appropriate given that's more hectic during a depression

Gus Van Horn said...


Speaking for myself, I just heard about that today.

If BO keeps saying things like this -- and doesn't impose censorship -- then we will have a field day when his policies bring back the '70's or the '30's.


I suggest re-reading the Simpson piece to make your "understanding" less "primitive".

More to the point: Simply implying that it's just common sense that we should not have a gold standard does not constitute an argument against having a gold standard.


Harold said...


What is your opinion of Warren Buffet? He has become even more relevant with the election situation and may have a place in the Obama government.

I was at the hair place and on TV Obama was telling Wolf Blitzer that he has spoken with Buffet and that increasing a certain tax (capital gains or something along those lines) would not have a negative effect on the economy. I'm paraphrasing here, but this is the same Warren Buffet that supports the estate or "death" tax.


Gus Van Horn said...

I don't know that much about Warren Buffet, but have heard that he has supported some pretty bad economic legislation before. (At least one article by Don Luskin accuses him of dishonesty when making a similar type of claim in the past.)

Buffet, as a successful and politically active businessman who does not understand the economic system that made his success possible, is hardly unique. Armand Hammer, for example, had rather close ties to the Soviet Union.

Harold said...

Philosophy: Who Needs It?

The men who are not interested in philosophy need it most urgently: they are most helplessly in its power.

--Ayn Rand

She was so right about this, and it's becoming more and more clear to me each day. I used to visit a personal finance website, getrichslowly. It had a lot of good info on there, but there was a strong altruist (and in more than a few posters, mystical) current that ran through the discourse.

You would think that the bankers or regular people interested in growing their money in an effective and controlled way would be on board with this stuff, but it's just not true.

So glad I found this website.

Gus Van Horn said...

Thanks for the high compliment, Harold. I am flattered.

There are many reasons for the strange discrepancy you observe, but I suspect that they break down, broadly, into ignorance of the nature and importance of philosophical principles, which is not necessarily a moral flaw, and the fact that, when push comes to shove, some people really do place first other concerns than their own life here on earth . That latter is a moral flaw.

They would probably describe themselves as wanting happiness -- but only up to a point. Too bad that principles aren't optional.