Quiggin does the zombie.

Firstly I'd like to thank you for the conciseness of your piece in the Sydney Morning Herald, unfortunately I might not be able to be as concise as the errors in that piece require a great deal of debunking. My appologies.

The idea that the financial markets always make better decisions than governments is wrong (and irrelevant) but it has nothing to do with "imputing wisdom to the rich and powerful" or the efficient market hypothesis. Government in most countries (including the USA) is made up of the rich and in all countries of the powerful. The financial markets on the other hand are to a great extent made up of the middle class and the people who handle their money. If anything you impute far more wisdom to the rich and powerful than the EMH. The efficient market hypothesis is states that it is impossible to beat the market because the market always correctly incorporates and reflects all relevant information. This is saying much more than that the market can beat the government, it's saying that the market beats everyone.

You might actually be thinking of the Austrian School theories that say that "financial [and other] markets always make better judgements than governments", but I doubt you've heard of the Austrian School as it's criticisms of the EMH were not made "in the wake of the crisis" many years before. In fact it is theorectically possible for governments to make decisions that, on occasion, are better than that of markets, it's just not possible for them to make them consistently enough to deliver a net benefit because the information provided by a price mechanism. Look up "economic calculation problem" on wikipedia, it will give you the outline. It may sound patronising to tell a professional economist that he needs to look up wikipedia for basic facts but I can't help that, you do.

It should be noted that you more correctly summerise the EMH further down in your article, which makes it seem like either you're being deliberately deceptive about what it says or you're simply not putting any thought at all what you're writting. If you're going to construct a strawman you should avoid actually stating it's full implications.

Your claim that economic rationalism was the "dominant ideology of the time" is absurd. Throughout the period you discuss the dominant ideology of all Western nations called for a powerful central bank, tarriffs, minimum wage laws, restrictions of nonabusive and consensual child labour, medical. legal and countless other types of professional licensing and so on and so on. The fact that this ideology was dominant is demonstrated by the facts that it dominated (i.e. it's ideas were implemented) and made it's domination seen natural. If you can find any evidence that for instance the idea that we didn't need a central bank was "dominant" at any point during the last 100 years I will recant this. Or if anyone can read aloud all the regulations applicable to financial markets is less than an hour. Please don't try this yourself, Basel II might make your tounge explode (251 pages of just the INTERNATIONAL regulations, thousands more of national and god knows how much state).

Of course the EMT was indeed used to support this "dominant ideology" in that it supported the idea that there wasn't a central-bank-created bubble and that indeed there couldn't be. But this idea is directly opposite to what "economic rationalism" says about bubbles in general and the bubbles you talk about in particular. The "reforms" after the dotcom fiasco were no doubt an overreaction, reforms made is such circumstances always are, but they were also an underreaction. The main cause of the dotcom bubble was the central bank, that is to say government intervention in the market, which has been the cause of all financial bubbles that don't involve tulips.

Of course if the EMH was right then there wouldn't have been a bubble nothing would be overpriced and therefore Julian Robertson would not have been right to bet they were. He was doing exactly the opposite of what EMH said he should. That he failed doesn't mean it's right (it's not as the subsequent collapse shows), but that you don't understand what it says about investing says you're wrong. Not just about what you say but the idea that you are well-informed enough to comment at all.

Of course you made the usual claim that "booms and busts ... can only be curbed by external regulation" despite the comprehensive failure of regulation to do anything of the kind. There are thousands of pages of regulations and god knows how many pages of decisions by bureaucrats about how they are to be interpreted, is there any evidence that they work? In fact there is good reason to believe that they will never will and I've laid out the arguments in my blog post "Systematic risk, markets and the State". Simply put government regulations don't control the booms and busts they are part of it. http://credible.blogspot.com/2009/11/systematic-risk-market-and-state.html Regulations alternatively cripple markets when they are not needed and spur them on at the worst possible time. The simplest way to reduce booms and busts is to simply eliminate the central bank, which is known to have caused this and all previous (non-tulip) booms and subsequent busts.

There is considerable reason to believe the investment decisions generated by private firms, which are under less pressure to produce short term returns than government, will outperfom those governments. Governments have no incentive to produce value, only to reward interest groups. The government has no shareholders to satisfy, only voters, who practice "rational ignorance" about their policies, and who even if they didn't, would have no reason to systematically advance policies that are for the general good. Private firms on the other hand have people with large interests in whether or not they're creating value and for whom ignorance is therefore not rational. While some of these shareholders may value short term gains, they know that sacrificing the long term interests of the company devalues the shares right now as long term investors will not want them, nor will short term investors who plan to sell to long term investors later on.

Of course this has nothing to do with "the case for comprehensive privatisation" since that case depends on the people benefitting from selling the assets, not the financial markets benefitting (at least that's not ostensibly why it's being sought). The idea that there are bubbles and that assets sometimes getting enormously overvalued is in fact damn good evidence for privatisation, comprehensive or otherwise, properly timed. As I said to my father, you were against selling Telstra shares, I was against buying them, who was right? Not only will privatisation during a bubble benefit financially benefit the government and therefore you no doubt believe the people, but it will extract money from the bubble preventing the enormous new bad investments that often occur during them. Everyone's a winner. Of course this depends on governments investing at the correct time, but if you're right that should be easy. It's startling that you don't even get the implications of your own theories right.

I am unable to tell who you thought would be convinced by your article. The things you support are already the opinions of the unthinking majority, so it can't be them. Anyone who does the least bit of research would see the flaws in your piece so obviously they're not it's target. I can only assume that you wish to give people with no economic knowledge an excuse to believe as they do.

How to excuse a murder (copy of letter sent to "The Monthly".

It's not often that journalistic bias in a piece that condemns it in it's subject is as obvious as in John Birmingham's hatchet job on Julian Assange. First there's the entirely irrelevant start that tries to blame him for an attack he had nothing to do with. Then there's the attempt to link greater efforts to not kill civilians with greater civilian deaths. I note that he wasn't quite brave enough to state claim causality, but without it what relevance does this bit have?

Finally after the ground has been fertilized there is the claim that wikileaks identified "hundreds - possibly thousands" of collaborators. I believe the actual number is three. http://www.abovetopsecret.com/forum/thread598661/pg1 That's the only number I could get from any source that actually checked the facts, unlike you Mr. Birmingham. If there had indeed been hundreds let alone thousands of collaborators identified then of course that would "damage national security" in the mind of David Lapan. Since he specifically said there was nothing in them that could damage national security even your own piece implies that there were not these hundreds you claim.

Then there are the absurd attacks on the journalistic ethics of wikileaks. They have not to my knowledge published a single false fact in the affair (except what false facts were in official government documents). They have been substantially less biased than the average news report on TV, which is admittedly not saying much. If mainstream media hadn't been caught parroting lies over both wars the claims that journalistic ethics were important might have some crediblility, but they did and it doesn't. As an example of the "long-established ethics and standards of the reporting profession" when was the last time a report about a proposed law didn't assume that it's authors were telling the truth about what the law was for? For instance a law about searching for knives is always presented as being intended as a way to crack down on criminals when we all know the police already have the power to search with probable cause. I see what you mean about a "compact with the state... authorities" though. Without such reporters might actually say what the laws were for.

Anyone who feels themselves wronged by anything that wikileaks says can of course reply, unless they're too stupid to operate a blog. The purpose of a story is not to give people time to excuse their bad behaviour. They did what they did, here's the evidence.

Finally we come to your pathetic and abominable excuse for the mass murders in the "Collateral Murder" video. You state that there is talk of weapons fire in the video yet nobody killed in the video fires a weapon or does anything that looks like they're about to. There is simply no action by any of those killed that would suggest an attempt to fire on anyone or the thought that they might have to. People who are about to fire on US forces take cover they don't stand around in the middle of the street. I have never been clearer about anything that I've seen in film than I am that these were not people about to engage in combat. Of course you can claim that I'm wise after the event, but that's just bullshit. Anyone can see they're not threatening. There is nothing that looks enough like a weapon to justify taking a life. The claim that weapons were later found merely makes it look like someone brought a throw-down, as is known to happen in Iraq. The video shows NO evidence of them and nobody has claimed it does. Not even you.

Naturally you refer to the graininess of the video to excuse the killers. But they knew of the quality of their equipment and choose to use it, badly, to determine whether someone lived or died. That was their moral decision and if they can't make moral decisions in combat they shouldn't be in it. If they gather and use information in a firefight in way that allows them to act like moral people then they were morally reprehensible for every getting in that chopper. This is not "naive" or "simplistic" or any of the other words horrible people use to describe people who are inconveniently decent. It's is simply the truth.

This didn't need to be leaked you claim, which is a lie and you know it. If the video showed only facts that were previously reported then why was it suppressed for years? I understand that someone who was embedded with the troops and sympathetic to them reported on it, but he didn't see the video did he? So he reported on reports by those involved, which is no substitute for the real facts. He explained "minute by minute" how the reporters came to be fired on. In that report did he mention that at the time NONE of the forces involved was being fired upon or believed that they would be fired upon between the firing and their reaching the site? Because that is obvious from the speed of their arrival and the fact that this non-threat was occupied the Apache's time. Did he leave that bit out or was that just you? I'm trying to pinpoint precisely who is making what excuses for murderers.

Murder, motive and militarism.

Stefan Molyneux's comments on the video of two journalists and several others being killed is correct, but misses something. Sure nobody with even a basic understanding of how the State works is surprised that they murdered people, or that they murdered people that weren't the people they were “supposed” to be murdering. What the video showed to me was that the purposes of the murders was not what even the more cynical observers assumed. The theory that US and allied forces are there to make the world safe for oil corporations is shown to be fundamentally wrong as is the theory that they are there to maintain control of the Iraqi government for whatever purpose. There is only one credible motivation for the actions of US forces as depicted in this video and it's far scarier than anything Molyneux attributed to the politicians.

First of all let's think about the sequence of actions.
1)Helicopter crews observe things that don't look a lot like armed men and report that they are armed.
2)Crew requests permission to fire on these men.
3)Their commander at base gives permission to fire. This third action is the critical point, logically what should have been the third action, if the goal of these actions was as what is commonly claimed either by their supporters or detractors? What should have come between 2. and 3.?
4)Murder, bloody murder.

Ok so to put this in context, the US military has been in Iraq at this point for ~4 years and had examined the reasons for violent action against it using both information from guerrilla conflict and others with similar ethnic groups. From this a basic rule was deduced that killing civilians or even active guerrillas resulted in recruitment of additional opponents for revenge. This was not a secret, it was very well known by this stage of the war. Indeed this principle was well known to military theorists for decades, although of course it is possible that they weren't listened to by those actually in command. By this time however these facts were well known to all commanders in theatre. Additional fighters obviously caused additional casualties and prevented the accomplishment of tactical and through them strategic goals of the coalition. This is true even if the coalition has no clear idea what it's goals are, except if they are a certain set of goals which I will mention later.

So we have personnel acting against the supposed interests of the people they work for. They do so despite their employers being able to easily access audio-visual records that clearly show this behavior and show no concern that they might be fired for being amazingly bad at their jobs. This confidence is well-placed since there is no mention in this controversy of anyone being fired, demoted, redeployed or inconvenienced in the slightest by said bad actions. Numerous other incidents similar to this have been uncovered and yet nobody is getting fired. Nobody is even being warned that they will be fired if this continues. I'm not talking here about morality, only about efficiency in accomplishing things that are claimed to be goals of those involved. This is an own goal, yet the players are still out there next week as center forward and the coach isn't even telling people not to do that, what gives? Is it possible that there are other goals more important than achieving “victory”? Indeed is it possible that “victory” is not a goal at all for the people actually firing the weapons?

One clue to a particular goal is the calls to request firing clearance (or whatever they call it, I don't know the technical term). They consist of unsupported assertions that cannot be checked up on at the time followed by somebody giving permission if the facts reported fit a protocol that the asserter knows. Obviously if permission is wanted all the asserter has to do is concoct a story that fits the protocol for firing. How then is this useful? All it does is delay firing if permission is asked, which could be lethal if it is actually required. If the situation doesn't in fact fit the protocol it does not prevent firing since the assertion can't be checked. The punishment for lying about the situation is presumably no worse than for inappropriate firing if you didn't have to seek permission but simply obey the protocol. Indeed given that any real danger would result in firing without permission (hey would you ask if an RPG went past your head?) asking permission would tend to be positively correlated with bad shootings. So why do it? The answer is simple, CYA. The military needs to prove that it had procedures to avoid bad results and followed them, thus avoiding the criticism that it did nothing to prevent tragedy. The fact that what it did to prevent tragedy is ineffective or counterproductive is irrelevant since the goal is not to avoid tragedy but to look like one is trying to avoid it. Since few people are familiar enough with military procedures (particularly if these can be classified, as they are) to know how bad they are the military gets to say “We're trying our best, it's just really hard not to kill innocent people.”.

Now lets look at why the military isn't taking simple steps to avoid death or injury to it's members or damage to the strategic goals that are assumed important to the US government, from “liberating the Iraqi people” to “boosting oil company profits”. Remember two things, your boss is who can fire or promote you, your job is what you get fired for not doing or promoted for doing. If you can't be fired or not promoted for being a bad teacher but you can be fired for saying “nigger” you are not a teacher, you are a professional non-sayer of the word “nigger”, a pretty stupid job but hey there's a paycheck, someone will do it. If you can't be fired for not achieving victory but you can be fired for making it clear that military success is not in the long term interest of the voters you are not a soldier you're a professional obscurer of that particular truth.

Consider that for about 65 years the net effect of US military activities on the welfare of US citizens has been negative. If US entry into WWI is considered a cause of WWII then the period stretches back to 93 years at least. Yet the generals are still employed, the bases thrum with activity, people are refueling planes, repairing tanks, shooting journalists and otherwise “earning” a paycheck. If the perception of US military activities were to change to a realistic one they'd all get fired. Not immediately of course because the Military Industrial Complex (MIC) wants to protect their pork, but sooner or later other complexes (e.g. the Medical Industrial Complex) will promote a politician that proposes to take MICs pork and slough it in another trough. Said politician will get the votes of the disenchanted and the money of the competing thieves, an unbeatable combination. If you doubt that popularity plus loot can overcome powerful lobbyists I've got three words for you “State Tobacco Lawsuits”.

If a serious review of how the US military operates in Iraq and elsewhere and how this effects the strategic and political aims of the US government were to be undertaken and publicized most of the US military and almost all of it's high command would be fired. This need not occur because of any harm to the interests of the general US public, the harm to special interests is more than sufficient to have the generals canned if the government doesn't give a damn about it's constituents. Needless to say before any of the high command were fired they would certainly make sure anyone who caused the review to happen were taken down with them. Preferably in a manner that made it difficult or impossible for them to get another government job and severely limited their private employment opportunities too. So your job as a lieutenant, captain or other junior officer is to avoid serious examination of the performance of the US military in general and your unit in particular. Failing that allowing the performance revealed to become widely known and believed must be avoided. Whether this performance leads to attaining any goals of the government is irrelevant. While it is possible that non-performance in stated goals might lead to serious examination of the military and it's procedures this is extremely unlikely. This came close to happening after the Vietnam war, but nothing came of it, and nothing will come of it if both Iraq and Afghanistan are “lost”.

So what's the best way to avoid rational discussion of the US military's effects either happening or penetrating public consciousness? Well ironically being in a war helps. So does increasing the size of that war so as to turn as many voters and campaign contributors as possible into members of the MIC. Failure is not only an option for the military, it's the best option. When the military is actually in a war any complaints about it's performance or the cost are deemed “unpatriotic”. It's only in peace, where the activities of the military hardly matter, that it can be questioned. Once they stop performing brave self-sacrificing activities they lose the strange moral shield that self-sacrifice endows. So in the end what the military wants is to lose for a long time but not so badly that their paymasters lose patience with them and give up. Then they want to salvage something that their paymasters ( not their bosses) call victory. This avoiding a backlash for the paymasters that could cause them to come down on the military's masters. As long as those who control the government can be fooled into thinking that the military will serve the government's purposes and that the government's purposes are basically theirs the military will be allowed to do what it wants. That the corporations fall for this over and over again is partly due to the profits for being part of the MIC but mostly because they are run by people already invested in the strategy who would be fired if it's general failure became apparent. Ending the war in Iraq won't happen because people realise that it's unjust but because it's in their interests to oppose it. Telling the corporate elite that you believe they benefit from it won't help that.

The democratic restaurant

Imagine you go to a restaurant and see on the menu two choices
each for apertizers, main course and desert. You order the salad
for starter, then the steak and finally the fruit cocktail, a
nice white would go well with that you think. The waiter tells
you that you can only have either the salad, lasagne and fruit
salad or the garlic bread, steak and ice cream. Only 2 choices
on the menu. You pick the first option figuring you can swap
your main course with someone.

Unfortunately you don't actually get to pick which menu option
you get, you just get to vote for it. If you win then everyone
has to eat what you're eating, if you lose then you have to eat
what the majority ordered. You try to explain that you're lactose
intolerant but the waiter is too busy tallying votes. He doesn't
seem too concerned that half the diners don't bother. After the
vote goes against you, you decide to leave. Security stops you
and insists that you pay for a meal you did not order and have
not eaten. They won't let you leave until you do.

Looking at people's bills you notice that some are larger
than others, although everyone ate the same type and amount of food.
You eat up and leave vowing never to eat there again. The
security guards tell you not to eat at any other restaurant, else
they'll break your legs and that if you eat at home, you still
have to pay for the food here.

This is democractic dining, with as much freedom as voting for the
government allows. Bon appettit.

Vogter2100 and moral stupidity.

AngieAntiTheist has a video http://www.youtube.com/watch?v=zURPZ6r_fUg in which she describes how she brings up her kid to be moral without religion. It's well thought out and clear both in terms of how she intends to raise a moral child and why.

Then the idiot Vogter chimes in with a response that calls the question stupid. He claims that morality is in our DNA and therefore we don't need to find out anything about it to be moral. As usual he accompanies his claims with insults to anyone who believes differently from him, in this case against their intelligence. Socrates, Plato, Aristotle, Nietzsche, Rand, Russel, Molyneux they were all wasting their time according to him. All we have to do is let the instincts flow. Now I don't deny that we have a certain amount of morality encoded in our DNA but that this is sufficient to look after us without thinking. If that's the case Vogter, then how the hell did we get religion? Religion is against practically all the moral instincts that scientists have found to be inherited in our DNA, so how could it arise if simply allowing them full sway works? The fact is that the moral instincts like compassion don't answer often critical questions about morality well and sometimes they don't answer them at all.

For instance should we sterilise retarded people so that future generations aren't forced to take care of their subnormal offspring? Compassion tells us that burdening the poor of the future with the support of these people is bad. It also tells us that taking away the joy of raising a child from someone is also bad. Compassion tells us to help those in sweatshops in the third world, it does not tell us whether we do this better by boycotting sweatshops or by buying as much as possible from them so demand for and therefore the price of sweatshop labour goes up. Should we be compassionate for a whale killed to feed thousands of people or for the hundred of cows that would be slaughtered to feed them if it's spared? Is it better to spend one's time collecting money for Haitian earthquake victims or telling people why so many died in the first place? Because it looks like compassion would recommend the former, but without the later Haiti will continue it's present abysmal system and disasters will continue to kill Haitians in obscene numbers. As usual Vogter doesn't consider any non-obvious facts and even obvious facts that don't fit his viewpoint he ignores. In fact looking at any of Vogter's videos shows me why morality is never easy and what happens to you if you fail at it.