What is "Advanced" Technology?

What is "Advanced" Technology?

07/10/2018Mark Thornton

During research for my book The Skyscraper Curse I started using the phrase "Advanced technology." It means a means of production that is currently beyond the capability of society or at least something that is "cutting edge." I would argue that is also useful in terms of the Austrian Business Cycle Theory (ABCT) because when artificially low interest rates impact an economy's structure of production, it typically induces the production and introduction of new "premature" technology that typically would only occur in the future, if at all.

We might be witnessing one such advanced technology on the campus of Auburn University--a robot bricklayer. The reason for this speculation is that low interest rates have increased the amount of construction and driven up costs so that new technology in the form of the robot bricklayer have been rush in to alleviate the high cost and lack of labor. Two masons and the robot can lay rough four times the number of bricks that two masons can lay.

 

SAM100, short for Semi-Automated Mason, will be the first of its kind in Alabama. It lays more than 3,000 bricks per day, using a conveyor belt and a robotic arm. Auburn University and Construction Robotics have partnered together to bring SAM to life on campus.

Construction Robotics, located in Victor, New York, created SAM to "leverage human jobs, not replace them." According to the MIT Technology Review, human masons can lay 300 to 500 bricks a day -- three times less than SAM. 

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What the ‘Dumpster Fire’ D.C. Metro Says About Federal Bureaucracy

07/10/2018James Bovard

The District of Columbia Council voted in June to impose a tax increase of almost 500 percent on Uber and Lyft users to help fix the Washington Metro transit system.  Anyone who summons a Lyft or Uber ride inside D.C. will now be hit with a 6 percent fee to bankroll a subway that a top Obama administration official aptly labeled an “ongoing dumpster fire” two years ago....

The skewering of Uber and Lyft riders was spurred by the D.C. government’s promise to ante up $178 million a year in “dedicated funding” for the subway system. Virginia and Maryland are also chipping in massively for this “solution” that threw the Washington Post editorial board, which retains boundless faith in the magic of government spending, into ecstasy. Metro managers had long claimed that dedicated funding would sway passengers from comparing the subway to Dante’s Inferno. But as soon as the funding deal was done, Metro stunned riders with plans for a vast array of new service disruptions, including shutting down subway lines south of Reagan National Airport for more than three months.

Much of the prolificacy and inefficiency in local transit systems is the result of federal mandates. As a Heritage Foundation analysis noted, “Federal subsidies decrease incentives…to control costs, optimize service routes, and set proper priorities for maintenance and updates.” Transportation scholar Randal O’Toole observed, “Innovative solutions are bypassed and high costs are guaranteed because of the requirement that transit agencies obtain the approval of their unions to be eligible for federal grants.” And the unions often don’t give a damn about the traveling public. Unions representing DC Metro workers blame riders for the system’s problems and denounced as “diabolical” a plan to contract out custodial jobs. But union campaign contributions make politicians happy, which trumps reducing costs.

If money could solve Metro’s problems, the heavily-subsidized system never would have commenced a death spiral.  But neither the feds nor local politicians have the courage to compel radical changes to curb the power of unions, end anti-work rules, and vastly reduce a bureaucracy that makes endless excuses for the system’s other failings. Nor is it likely that Metro employees will even learn the art of non-shiftless shovel leaning.

Read the full article at The American Conservative 
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Donald Trump's Supreme Court Nominee Helped Defend Obamacare

07/10/2018Tho Bishop

Donald Trump has made his second Supreme Court nomination: Judge Brett Kavanaugh of the US Court of Appeals for the District of Columbia.

Relative to the other names that were discussed, Kavanaugh’s selection could be seen as a win for the establishment.

For one, he will uphold the Court’s record of Justices with law degrees from either Harvard or Yale.

Two, he has a very swamp-friendly resume, including a long history of doing legal work for the Republican Party and a particular closeness with the Bush family. Having worked on matters including the Clinton Impeachment, the 2000 Florida Recount, and challenges to Obamacare, he has been described by Senator Dick Durbin as the “Forrest Gump of Republican politics.”

Interestingly, a decision he made regarding the Constitutionality of the Affordable Care Act is what troubles many on the right. Though he dissented to the question of whether the bill was Constitutional under the Commerce Clause, his minority opinion made it clear that it his objection was to the court’s jurisdiction and not the law itself. He viewed the individual mandate as a tax, logic used by Chief Justice John Roberts in upholding the law.

As Christopher Jacobs wrote for The Federalist:

In Kavanaugh’s view, the mandate could fit ‘comfortably’ within Congress’ constitutional powers,” Even as he ‘do[es] not take a position here on whether the statute as currently written is justifiable,’ Kavanaugh concludes that ‘the only potential Taxing Clause shortcoming in the current individual mandate provision appears to be relatively slight.

Attention now will turn to Kavanaugh’s views on Roe vs. Wade and whether his appointment will challenge that decision. On Fox News this morning, Judge Andrew Napolitano thought Kavanaugh’s explicitly pro-life track record as a Justice would make the nomination process more difficult, possibly pushing Trump to nominate someone different. We will now see how moderate Republicans, such as Senator Susanne Collins, react to the decision. 

Of course, the fact that the appointment of a single Supreme Court Justice warrants nationwide protests now erupting is simply a reminder of the inherent failures of a system which gives so much power to nine people in black robes.

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If Hillary Hates Populism, She Should Love the Electoral College

07/06/2018Ryan McMaken

Hillary Clinton was at it again the other day, complaining about how, if it weren't for that darned electoral college, she'd be president now. The Daily Mail reports on Clinton's remarks in her recent speech in the UK:

"Populists can stay in power by mobilizing a fervent base. Now, there are many other lessons like this," she said, adding that she had "my personal experience with winning three million more votes but still losing."

But there's nothing really novel about this. Clinton has been whining about the Electoral College since 2016.

The real news here, as Ed Morrissey at Hot Air notes, is that Clinton was condemning populism while at the same time condemning the electoral college. In other words, Clinton doesn't realize the electoral college is an anti-populist measure. In her speech

And why did the framers of the Constitution create it? To act as a buffer against populism, at least in form. The Electoral College reflects the popular vote on a state-by-state basis to prevent a handful of the most populous states from controlling the executive through the nationwide popular vote, which creates a buffer against the very impulse Hillary decries in this speech.

In other words, the purpose of the electoral college is to ensure that a successful presidential candidate appeals to a broader base of voters than would be the case under a simple majoritarian popular vote.

This makes it harder to win by doing what Clinton did during the campaign: focus on a thin sliver of rich Hollywood and business elites, coupled with urban ethnics.It's true that those two groups can offer a lot of votes and a lot of campaign dollars. But they also tend to be limited to very specific regions, states, and metro areas. The groups Clinton ignored: the suburban middle class and working class make up a much larger, more geographically diverse coalition. This can be seen in the fact that Trump won such diverse states as Alabama, Pennsylvania, and Wisconsin.

In 2016, the electoral college worked exactly as it's supposed to — it forces candidates to broaden their appeal. Or as a cynic like myself might say: it forces politicians to pander to a broader base.

Clinton complains that a fervent group of voters can take over the machinery of government. But that's harder to do with the electoral college than without it. So, Clinton is making a mockery of her own argument by one minute complaining about populism, and then complaining about the electoral college the next.

But it was the Clinton team that had the more populist strategy. For example, in the US the 4 largest states (California, Texas, New York, and Florida) constitute one-third of the US population. The top-ten largest states total 54 percent of the US population. Hillary thought she could just focus on the larger states and that would be enough. Her strategy was to ignore half the country, call them "deplorables," and just count on the resentments of people in some big cities to carry her to victory. It's hard to see how that's somehow less "populist" than what Trump did.

elecmap.png

For Hillary Clinton though, everything is personal, and the fact that the electoral college came between her and the presidency means it must be a bad thing.

The fact that it also guards against Clinton-style demagoguery, however, doesn't make the electoral college "anti-democratic" as is thought my many who so tiresomely chant "we're a republic not a democracy." 50 separate presidential elections (plus DC and the territories) is not somehow less democratic than holding one big national election. It's simply a democratic method designed to ensure more buy in from a larger range of voters, not less. Other similar tactics include "double majorities" as used in Switzerland. And for all these reasons, as I note here, the electoral college should be expanded:

Double-majority and multiple-majority systems mandate more widespread support for a candidate or measure than would be needed under an ordinary majority vote.

Unfortunately, in the United States, it is possible to pass tax increases and other types of sweeping and costly legislation with nothing more than bare majorities from Congress which is itself largely a collection of millionaires with similar educations, backgrounds, and economic status. Even this low standard is not required in cases where the president rules via executive order with " a pen and ... a phone ."

In response to this centralization of political power, the electoral college should be expanded to function as a veto on legislation, executive orders, and Supreme Court rulings.

For example, if Congress seeks to pass a tax increase, their legislation should be null and void without also obtaining a majority of electoral college votes in a manner similar to that of presidential elections. Under such a scheme, the federal government would be forced to submit new legal changes to the voters for approval. The same could be applied to executive orders and treaties. It would be even better to require both a popular-vote majority in addition to the electoral-vote majority. And while we're at it, let's require that at least 25 states approve the measures as well.

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A Cup of Coffee in Venezuela Now Costs 1 Million Bolivars

Two years ago it was 450 bolivars.

Inflation over the past 3 months has been 482,000%, on an annual basis.

bolivar coffee.png Source: Bloomberg Cafe Con Leche Index

For more, see "How Socialism Ruined Venezuela" by Rafael Acevedo and Luis B. Cirocco:

So, what are the results of socialism in Venezuela? Well, we have experienced hyperinflation. We have people eating garbage, schools that do not teach, hospitals that do not heal, long and humiliating lines to buy flour, bread, and basic medicines. We endure the militarization of practically every aspect of life.

The cost of living has skyrocketed in recent years.

Let’s look at the cost of goods in services in terms of a salary earned by a full college professor. In the 1980s, our “full professor” needed to pay almost 15 minutes of his salary to buy one kilogram of beef. Today, in July 2017, our full professor needs to pay the equivalent of 18 hours to buy the same amount of beef. During the 1980s, our full professor needed to pay almost one year’s salary for a new sedan. Today, he must pay the equivalent of 25 years of his salary. In the 1980s, a full professor with his monthly salary could buy 17 basic baskets of essential goods. Today, he can buy just one-quarter of a basic
basket.

And what about the value of our money? Well, in March 2007, the largest denomination of paper money in Venezuela was the 100 bolivar bill. With it, you could buy 28 US dollars, 288 eggs, or 56 kilograms of rice. Today, you can buy .01 dollars, 0.2 eggs, and 0.08 kilograms of rice. In July 2017, you need five 100-bolivar bills to buy just one egg.

RELATED: "Hyperinflation Has Venezuelan Merchants Weighing Cash, and Now It's Breaking Their Scales" by Tho Bishop

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Apoplithorismosphobia translated into Polish

07/06/2018Mark Thornton

My paper "Apophorismosphobia" has been translated into Polish by the Mises Institute of Poland.

Here is the original.

 

 

 

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Trumping to Serfdom

07/05/2018Doug French

Ryan Murphy of SMU has confirmed what F.A. Hayek wrote decades ago. It turns out Washington D.C. has more psychopaths per capita than anyplace else in the country. Insert my shock face here.

The best chapter of the seminal “Road to Serfdom” is ‘Why the Worst get on Top,’ where Hayek wrote,

Advancement within a totalitarian group or party depends largely on a willingness to do immoral things. The principle that the end justifies the means, which in individualist ethics is regarded as the denial of all morals, in collectivist ethics becomes necessarily the supreme rule. There is literally nothing which the consistent collectivist must not be prepared to do if it serves ‘the good of the whole’, because that is to him the only criterion of what ought to be done.

The New York Times’ Maureen Dowd quotes the study,

“psychopaths are likely to be effective in the political sphere” and that “the occupations that were most disproportionately psychopathic were C.E.O., lawyer, media, salesperson, surgeon, journalist, police officer, clergyperson, chef, and civil servant.

Hayek wrote that psychopaths, er politicians, have to “weld together a closely coherent body of supporters”...appealing “to a common human weakness. It seems to be easier for people to agree on a negative programme – on the hatred of an enemy, on the envy of the better off – than on any positive task.”

Think, the media, immigrants, the FBI, and now, gulp, Canadians.

Hayek continued,

The contrast between the ‘we’ and the ‘they’ is consequently always employed by those who seek the allegiance of huge masses. The enemy may be internal, like the ‘Jew’ in Germany or the ‘kulak’ in Russia, or he may be external. In any case, this technique has the great advantage of leaving the leader greater freedom of action than would almost any positive programme.

Trump’s surrounding characters are right out of central casting, starting with Rudy Giuliani, who, as Burt Blumert wrote, “Politically, Giuliani is like the horror film monster who refuses to stay dead.” Murray Rothbard said Giuliani was his least favorite politician.

As for Trump himself, when asked about comments made of Michael Milken’s sentencing, in a speech given in 1989 at the Libertarian Party convention, Rothbard said , “The other was Donald J. Trump, of all the nerve, saying ‘You can be happy on less money than that.’ What gall, what chutzpah!"

Chutzpah indeed. But, Rothbard hadn’t seen anything yet. Dowd, writes,

We knew Trump was a skinflint and a grifter. But the New York attorney general deeply documented just how cheesy he and his children are with a suit accusing the Trump charitable foundation of illegal behavior and self-dealing. It was just what Trump always accused the Clintons of doing.

Donald’s constant fibbing and contention that news is fake was anticipated by Hayek.

And the most efficient technique to this end is to use the old words but change their meaning. Few traits of totalitarian regimes are at the same time so confusing to the superficial observer and yet so characteristic of the whole intellectual climate as this complete perversion of language.

America’s road to serfdom continues on.

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Who’s Afraid of the Trump/Putin Summit?

07/03/2018Ron Paul

President Trump’s National Security Advisor John Bolton was in Moscow last week organizing what promises to be an historic summit meeting between his boss and Russian President Vladimir Putin. Bolton, who has for years demanded that the US inflict “pain” on Russia and on Putin specifically, was tasked by Trump to change his tune. He was forced to shed some of his neoconservative skin and get involved in peacemaking. Trump surely deserves some credit for that!

As could be expected given the current political climate in the US, the neoconservatives have joined up with the anti-Trump forces on the Left -- and US client states overseas -- to vigorously oppose any movement toward peace with Russia. The mainstream media is, as also to be expected, amplifying every objection to any step away from a confrontation with Russia.

Bolton had hardly left Moscow when the media began its attacks. US allies are “nervous” over the planned summit, reported Reuters. They did not quote any US ally claiming to be nervous, but they did speculate that both the UK and Ukraine would not be happy were the US and Russia to improve relations. But why is that? The current Ukrainian government is only in power because the Obama Administration launched a coup against its democratically-elected president to put US puppets in charge. They’re right to be nervous. And the British government is also right to be worried. They swore that Russia was behind the “poisoning” of the Skripals without providing any evidence to back up their claims. Hundreds of Russian diplomats were expelled from Western countries on their word alone. And over the past couple of months, each of their claims has fallen short.

At the extreme of the reaction to Bolton’s Russia trip was the US-funded think tank, the Atlantic Council, which is stuck in a 1950s time warp. Its resident Russia “expert,” Anders Åslund, Tweeted that long-time Russia hawk Bolton had been “captured by the Kremlin” and must now be considered a Russian agent for having helped set up a meeting between Trump and Putin. Do they really prefer nuclear war?

The “experts” are usually wrong when it comes to peacemaking. They rely on having “official enemies” for their very livelihood. In 1985, national security “expert” Zbigniew Brzezinski attacked the idea of a summit between President Reagan and Soviet leader Mikhail Gorbachev. It was “demeaning” and “tactically unwise,” he said as reported at the time by the Washington Times. Such a meeting would only “elevate” Gorbachev and make him “first among equals,” he said. Thankfully, Reagan did engage Gorbachev in several summits and the rest is history. Brzezinski was wrong and peacemakers were right.

President Trump should understand that any move toward better relations with Russia has been already pre-approved by the American people. His position on Russia was well known. He campaigned very clearly on the idea that the US should end the hostility toward Russia that characterized the Obama Administration and find a way to work together. Voters knew his position and they chose him over Hillary Clinton, who was also very clear on Russia: more confrontation and more aggression.

President Trump would be wise to ignore the neocon talking heads and think tank “experts” paid by defense contractors. He should ignore the “never Trumpers” who have yet to make a coherent policy argument opposing the president. The extent of their opposition to Trump seems to be “he’s mean and rude.” Let us hope that a Trump/Putin meeting begins a move toward real reconciliation and away from the threat of nuclear war.

Reprinted with permission. 

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The Spirit of '76: Radicalism and Revolution

07/03/2018Ryan McMaken

In the final chapters of his masterful history of the American Revolution, Conceived in Liberty, Murray Rothbard takes to examining the political and social repercussions of the American Revolution's success. He notes the revolution accelerated the elimination of old feudal laws, the disestablishment of churches, and the confiscation of lands from the old Tory ruling classes. Confiscated lands were sold by state governments to "patriots." In other words, the "land redistribution" programs we so often hear about taking place during other revolutions, were not alien to the American one.

The war changed race relations in many areas as well. In 1776, Congress authorized the enlistment of blacks in military units, and some especially anti-British masters began to offer freedom to slaves that enlisted. Meanwhile, the "American navy — Continental, state, and privateer — welcomes Negro sailors from the very beginning of the conflict." Among the colonies, only South Carolina and Georgia refused to participate in this new option for blacks in the war. Indeed, so strong was the devotion to slavery among South Carolina and Georgia officials, Rothbard concluded, "they preferred defeat in the war to allowing that sort of subversive license." Not surprisingly, these new legal and social realities accelerated the abolition of slavery in many states, although total abolition crashed upon the rocks of the slave economy in the Deep South. 

There is no denying, then, that the American Revolution was very much a revolution, as Rothbard wrote in Chapter 80

Especially since the early 1950s, America has been concerned with opposing revolutions throughout the world; in the process, it has generated a historiography that denies its own revolutionary past. This neoconservative view of the American Revolution, echoing the reactionary writer in the pay of the Austrian and English governments of the early nineteenth century, Friedrich von Gentz, tries to isolate the American Revolution from all the revolutions in the western world that preceded it and followed it. The American Revolution, this view holds, was unique; it alone of all modern revolutions was not really revolutionary; instead, it was moderate, conservative, dedicated only to preserving existing institutions from British aggrandizement. Furthermore, like all else in America, it was marvelously harmonious and consensual. Unlike the wicked French and other revolutions in Europe, the American Revolution, then, did not upset or change anything. It was therefore not really a revolution at all; certainly, it was not radical.

This view, Rothbard writes "displays an extreme naiveté on the nature of revolution." The American revolution was radical, indeed, and 

It was inextricably linked both to the radical revolutions that went before and to the ones, particularly the French, that succeeded it. From the researches of Caroline Robbins and Bernard Bailyn, we have come to see the indispensable linkage of radical ideology in a straight line from the English republican revolutionaries of the seventeenth century through the commonwealth men of the late seventeenth and eighteenth centuries, to the French and to the American revolutionaries.

In spite of all of this, the mainstream continues to devalue the Revolution and its revolutionary nature. On the left, pundits claim that the war was a reactionary attempt to preserve slavery, or that it was fought to advance the views of authoritarian retrograde religious zealots. The truly revolutionary nature of the conflict — because it was radically laissez-faire — is ignored altogether. On the right, we are told to conveniently ignore all the revolutionary aspects of the war beyond the a vague opposition to taxes. Sedition and secession in 1776? That was OK. The same thing today? That's not OK. "Follow the law!" seems to be a frequent mantra of modern "patriots."   

We are fortunate, though, that this new radicalism was not guided by ideologies such as socialism, nationalism, or any sort of totalitarianism. It was instead — as we see in the thinking of the Anti-Federalists — guided by radical decentralist views, by radical suspicion of the state, by radical opposition to commercial controls, and by a radical opposition to a national military establishment. 

Although now greatly reduced, bastardized, and diluted, these revolutionary views, to a limited extent, continue to allow for a relatively robust amount of freedom in private and commercial life. How much of that freedom will be preserved a generation from now remains to be seen. 

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The Fed Helped Goldman Sachs, Morgan Stanley Cheat "Stress Test"

07/02/2018Tho Bishop

Last week the Fed released the results of its regular "stress tests" given the large banks. It outright failed the US branch of Deutsche Bank which, as Thorsten Polleit recently noted, has problems so severe they could risk the whole Eurozone.

While the rest of America's 35 largest banks were cleared by the Fed, two banks had their ability to increase stock buybacks restricted as a result of them: Goldman Sachs and Morgan Stanley. As the Wall Street Journal reported today, this outcome was the result of phone calls between the Fed and two of the most powerful banks on Wall Street. By agreeing to feeze their shareholder payouts, the banks were able to avoid their own failing grades.

As Liz Hoffman and Lalita Clozel explain: 

The arrangement—allowing the banks to keep their capital payouts level while dodging a public rebuke by the Fed—is the first of its kind in the eight years of the Fed’s annual tests and will steer billions of dollars to shareholders of both banks. Other banks in the past have been able to keep their capital payouts steady after failing the quantitative portion of the stress test. Put another way, Goldman and Morgan Stanley got the same outcome without the black eye of a formal failing grade.

It also will boost a profitability measure that helps determine how much Goldman Chief Executive Lloyd Blankfein and Morgan Stanley CEO James Gorman are paid.

While it is true that this is yet another example of Donald Trump being far kinder to Wall Street as a president than what his campaign rhetoric indicated, it worth pointing out that entire design of stress tests always had as much to do about benefiting Wall Street than it did economic stability. After all, the tests are done using the Fed's own secret measurements, keeping useful data away from consumers to make their own informed opinions. Instead, the primary goal is for the central bank to project strength in the financial sector, which benefits banks by keeping depositors content. 

Unfortunately these stress tests have little real world value, as demonstrated by the fact that the ECB cleared 3 out of Greece's 4 major banks shortly before they became insolvent. As Paul-Martin Foss wrote at the time:

 

If we now know that the ECB’s stress tests of Greek banks were absolutely worthless, why then should we trust the Federal Reserve’s stress tests any more?

We can only conclude that the stress tests have two purposes: 1.) to reassure the public that the banking system is safe and sound so that depositors will continue to deposit their money; and 2.) to punish any banks who fall afoul of the Fed for any reason by giving them a negative assessment after a stress test, thus tarnishing their reputation in the public eye. The former is probably more important than the latter, as the overall health of the banking system depends on the existence of deposits. Without money deposited in banks, banks cannot lend and make money. Thus, ensuring that depositors don’t flee the system is one of the primary aims of central banks and banking regulators.

Bank stress tests then are really nothing more than a dog and pony show, especially if the stress test models aren’t being made public so that their relevance (or lack thereof) can be ascertained. Rather than serving as any sort of benchmark or indicator of the health and strength of the banking system, they are yet another tool that the Federal Reserve uses to “manage expectations” – to manipulate people into believing that banks are safer and sounder than they actually are. The citizenry will faithfully continue to deposit their money into bank accounts, not once doing due diligence to see just how sound their banks actually are. And the whole rotten system will continue to lurch from crisis to crisis until its final collapse.

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Another 'State of Democracy' Report Ignores Real Cause of Plummeting Trust

07/02/2018James Bovard


Americans’ faith in democracy and politicians has plummeted in large part due to perennial violations of their rights by one federal alphabet agency after another, from the FBI, to the TSA, to the DEA, to the DHS, and to the IRS. Candidate Donald Trump periodically signaled that he would curb federal abuses but, as president, he has instead spurred new crackdowns on drug users, property owners, immigrants, trade, and other targets. 

The report, like many similar trumpet calls, urges increased civics education in public schools. But civics classes are an illusory solution because government has no incentive to educate people about the perils of political power. Besides, as a 1996 Washington Post survey concluded, “The more people know, the less confidence they had in government.” 

Americans are indeed losing faith in democracy but more cheerleading from the political ruling class will not reverse the trend. As long as presidents are permitted to routinely behave like dictators, citizens would be foolish to trust ballots to provide all the protection their rights and liberties need or deserve.  Americans should scoff at any democratic faith-building exercises that omit government under the law and the Constitution.

Read the full article at The Hill
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