Saturday, August 20, 2011
The Dunning–Kruger effect is a cognitive bias in which unskilled people make poor decisions and reach erroneous conclusions, but their incompetence denies them the metacognitive ability to recognize their mistakes. [links omitted]Hanselman writes about a problem all of us face: objectively judging our ability and performance. I think many people tend towards one type of error or the other. However, I think it's also possible for one person to make both types of error, although I would guess that this would normally depend on the area of expertise on which such an individual is attempting to gauge himself.
"Let me translate: The only argument with any chance of success in today's Supreme Court starts by admitting that Congress has authority to control every single economic, 'activity' known to mankind -- farming, building, manufacturing, transporting, storing, insuring, selling, buying, leasing, practicing medicine, operating a hospital, you name it -- but then denies any authority to invade the sacred right of 'inactivity.'" -- Thomas Bowden, in "How Important Is the Obamacare Litigation?" at The Daily Caller
"Four decades on, a comparative review shows Nixon's decision [to abandon the gold standard] to have been a catastrophic error, and indicates the need for fundamental monetary reform." -- John Allison and John Chapman, in "It's Time for Pro-Growth Monetary Reform," at The American Magazine
"As a former gold standard advocate, I concede that I was wrong on the issue." -- Wendy Milling, in "Forget Gold, Let's Denationalize Money" at RealClear Markets
"At what point does the chance co-location of two houses (and all the property lines and restrictions that go with it) develop into a warm fuzzy friendship?" -- Micheal Hurd, in "Be a First-Class Neighbor" at DrHurd.com
"Funny how nobody has an issue with computer trading when stocks rise, only when they sell off." -- Jonathan Hoenig, in "High-Frequency Trading Fears Do Not Compute" at SmartMoney
"In contrast to 1971, and the four decades since as a fiat currency tied to Washington's waning fiscal credibility, a dollar today buys 98% less gold, 96% less oil, 85% less in terms of a basket of consumer goods, and 39% less even against major foreign currencies. The fiat paper dollar also has lost 83% in terms of toilet paper." -- Richard Salsman, in "Gold, Reagan and the Reds: From Degraded Dollar to Downgraded Debt" at Forbes
"In effect, macroeconomics was a two-step public relations strategy for those seeking to finance the entitlement state. Step 1 was to define the goal as aggregate spending increase (which, of course, you always refer to as "economic growth"). Step 2 was to have the central bank engineer a long-term expansion of the money supply." -- Mikiel de Bary, in "Macroeconomics and the Entitlement State" at American Thinker
My Two Cents
Even among today's handful of thought-provoking pieces pertinent to the fortieth anniversary of the abandonment of the gold standard, Wendy Milling's column provides the most interesting look at the problems caused by fiat money and, more important, how to reestablish sound money. Anyone who considers himself an advocate of the gold standard should read her piece carefully.
Balzac on Coffee
A Q&A by Leonard Peikoff on whether one can morally sanction the use of caffeine indirectly reminds me of an amusing essay by Honore de Balzac on "The Pleasures and Pains of Coffee."