Bubble or Growth?

by Jerry O’Driscoll

In an interview with The Wall Street Journal, German Chancellor Merkel called for an end to risky growth policies built on asset bubbles.  “In recent years we’ve had the Asian crisis, the new economy crisis, and now this great international financial and economic crisis — we can’t slide into a crisis every five to seven years.”  As she notes, however, the central banks of the major economies have implemented “unorthdox” policies to increase borrowing and lending in the current crisis.  Those policies risk yet another asset bubble.

Monetary Policy At War With Itself

by Mario Rizzo  

It is well-known that John Maynard Keynes favored permanently low interest rates in order to foster adequate and stable investment demand. Let us first focus on stability and then we’ll see a connection to adequacy.

 What happens when counter-cyclical policy (aka Lerner’s “functional finance”) is practiced?  

The Wall Street Journal ran an excellent small article by Richard Barley, focused mainly on the UK, that makes interesting general points. Investors must try to figure out when the current policies of quantitative easing will be reversed. Those who are long (or plan to be long) in the securities which central banks have bought are quite interested in timing. 

Writing Propaganda

by Gene Callahan

The kind of writing that craftily describes political situations, not in order to get at the truth of what is going on, but in order to bolster some party platform, always upsets me. The kind of moves made are similar no matter what party is writing the propaganda, so analyzing a sample from one side of an issue — like the one found here — is useful for tuning one’s “propaganda radar” to detect BS coming from the other side(s) as well.

Mr. Avni’s editorial is purportedly about the situation in Honduras, but it’s true purpose is to paint President Obama as being an enemy of the US. Let’s take a look at the kind of underhanded writing techniques that can be used when all one cares about is scoring points for one’s own side:

“Obama threw his lot in with deposed Honduran President Manuel Zelaya…”

Well, Obama “threw his lot in with” the idea that democratically elected leaders shouldn’t be deposed by military coups. How much he likes Zelaya himself may have nothing to do with that lot throwing.

Exhaustion of the Welfare State’s “Reserve Fund”

by Mario Rizzo  

“An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself.”  Ludwig von Mises, Human Action: A Treatise on Economics, 3^rd edition, p. 858 (1966).  

During the bad old days of the Bush Administration I wrote a post, “The Disorderly Bankruptcy of the Welfare State.”  I stand by it all. 

Can Biology Dispense with Purpose?

by Gene Callahan

Mario called into doubt the usefulness of purposive explanations in biology in this thread. I started to write up the following as a comment, but it grew long enough, and, I hope, of enough general interest, that I found it appropriate to elevate it to “post level.”

I think the evidence is very strong that biologists just have not been able to do without thinking of the “purposes” of biological features, despite the scientistic prejudice against regarding any such consideration as scientific.

Why the Catholic Position on Homosexual Marriage Is Not Mere Bigotry (But Still Is Mistaken)

by Gene Callahan

“Summum autem bonum si ignoratur, vivendi rationem ignorari necesse est.”* — Cicero

My friend Roger Koppl, in a recent discussion on this blog, contended that the only reason anyone might object to legalizing gay marriage is “bigotry.” Now, it is always a good bit o’ fun to insult one’s political opponents like this, but it may not always be helpful. So, I wish to take a moment here to demonstrate that at least the Catholic position contra gay marriage is not based on mere bigotry.

Healthcare Game

by Chidem Kurdas

Funny thing about the Obama healthcare plan. It resembles a Rube Goldberg machine, as did the 1990s Clinton version. The present proposal “relies on a combination of subsidies and regulation to achieve universal coverage, and introduces a public plan to compete with insurers and hold down costs,” according to Paul Krugman in the NYT.

Why not simply extend Medicare to everybody? Oh, I forgot, Medicare Part A is projected to run out of money by 2017. And the only reason the other parts don’t face potential insolvency is that they’re financed from general tax revenue. Given the government’s track record with medical entitlements, the claim that a new  public plan will hold down costs is laughable.

Medicare costs more than half a trillion dollars a year now; within a decade it will require almost $1 trillion a year. If you want to skirt the cost issue, it’s best not to mention Medicare. This is the kind thing Charlotte Twight identified as a way proponents of larger government quash opposition. Concoct an elaborate new program of subsidies and regulations, mask the cost, focus on the new entitlement, and you’ll get more people behind the program.

Why Mathematical Reasoning Cannot Be a Simple Matter of Definitions and Formal Rules

by Gene Callahan

The point I wish to make here has been made before, notably, by Lewis Carroll in his essay “What the Tortoise Said to Achilles“, as well as by Wittgenstein, in his work on what it means to “follow a rule,” and by Gödel in his famous paper on undecideability. But, as I recently encountered a very, very bright young philosopher who seemed unaware of the import of such arguments, it is, perhaps, a point worth making once again.

The contention at hand is that, contrary to those who hold that mathematical knowledge offers us an example of objective truths that are of a non-physical nature, mathematical truth is “simply” a matter of positing some arbitrary set of definitions and rules for drawing conclusions from them.

What Should Be The State’s Role In Marriage?

by Mario Rizzo 

I suggest that it should be the same as in contract law. In other words, the State should not define the terms of the relationship. It should allow the parties to do that for themselves and then simply enforce it. The current one-size-fits-all civil marriage should be abolished except as a default option for those who do not want to build their own contract.  

Man: The Political Animal?

by Gene Callahan

I recently saw a prominent anarchist saying, in effect: “Look, we can all go wrong — after all, one of the greatest thinkers in history called man ‘the political animal.’”

This statement, I think, exhibits a common misunderstanding of what Aristotle meant here. Man is a political animal, the Philosopher held, because he is the one animal that tries to order his social arrangements according to his sense of, and rational arguments about, the justice of those arrangements. Thus the anarchist, in debating the justice of the State, is illustrating, and not disputing, Aristotle’s point.

It is, in fact, Hobbes’s position that the anarchist should dispute — if man is not naturally a political animal, then justice is just a creation imposed on the natural human exogenously, and there really is no arguing against the justice of the Leviathan — there simply is no justice in the absence of whatever it defines as just!’