Monday, October 20, 2014

Software problems

Well my experiment with hard returns didn't work, the blogger.com software still runs everything together. Therefore I am forced to stop posting here until such time as I can figure out how to fix that. Such a format is way too obnoxious to readers.
(OK, let's try again. The blogger.com software seems to be dropping all hard returns and running everything together when I past from another document. Maybe if I put in those returns manually it will work, I hope.) Theory without empirical evidence is mere speculation. Empirical evidence without theory is simply a collection of facts. Theory supported by empirical evidence is science. How is this for an opportunity? You want to move to a new country but there is a ten to twenty year wait to get a visa. Or you can reach that country by taking an dangerous and unpleasant trip, across rivers and deserts, guided by unsavory characters who will probably demand extra money at the end of the trip, and who think part of their fee is the right to rape any women they are guiding. What is at the end of your journey? Why a country that many claim is not as good as where you are now. Yet millions make that trip. They wait years for visas, or make that dangerous trip, to enter the United States. If our country is so terrible, why do so many want to move here? I have friends who risked everything to reach the United States. Yet many of our so-called elites denigrate our country. They claim that we should copy Europe or other systems. Those elitists want a statist system, similar to what my friends fled. Even some who flee to this country want to make us into a copy of the tyrannies they left. Why? Almost certainly because they accept the nice theories and ignore the evidence. They never ask what makes this country so attractive that people risk their lives to get here. To the credit of my immigrant friends, I've never known even one who would not change his mind when I pointed out his inconsistency. Our native statists, on the other hand, seem immune to such reasoning. They reject the limited government our founders gave us, the standard of freedom that was widely accepted only a few decades ago. Why the difference? The immigrants have seen statism in action. The natives, on the other hand, have only a theoretical idea of what it is like. They pay attention to words, not results. Contrary information bounces off them like a ball off a wall. One notable exception was Eldridge Cleaver who metamorphosed from violent socialist to conservative Republican. He spent time in Cuba, saw what it was really like, then rejected the statist ideology. Of course he realized that the U.S. is not perfect, but he also found that the grass is not always greener on the other side of the fence. Not so most native-born statists. They reject freedom, preferring the restrictions of statism, even desiring to strengthen those restrictions. How can people, often smart people, be so blind to the evidence? I attribute it to three factors, three kinds of immunity to information: First, such people seldom see information contrary to their preconceived belief. They get their news only from sources that support the statist ideology. I have friends who refuse to even open a book or web site if they think it will present a viewpoint contrary to their belief system. In this the news media is complicit. Second, when presented with evidence of collectivism's problems, those people deny that it can be that bad. For example, they become justifiably angry about Hitler's atrocities, yet they refuse to believe the truth about Cuba under Castro or Venezuela under Chavez. The information ball bounces off their wall of preconceptions. Third, many fall for a “grass is greener” syndrome. They see the problems we have and assume that other systems will be better. I even had a friend claim that our slums were the world's worst. Anyone who has seen the slums in other countries knows better. Yes we have problems; nobody in his right mind would deny that. However that does not mean that other systems are better. Our salvation, if it comes at all, will come from people who look at results, not just nice-sounding theories. Next time, unless something intervenes, I plan to discuss the biggest pseudo-scientific system of all. (Based on Chapter 4 of my upcoming book, Twenty First Century Serfdom)

Information Immunity

Theory without empirical evidence is mere speculation. Empirical evidence without theory is simply a collection of facts. Theory supported by empirical evidence is science. How is this for an opportunity? You want to move to a new country but there is a ten to twenty year wait to get a visa. Or you can reach that country by taking an dangerous and unpleasant trip, across rivers and deserts, guided by unsavory characters who will probably demand extra money at the end of the trip, and who think part of their fee is the right to rape any women they are guiding. What is at the end of your journey? Why a country that many claim is not as good as where you are now. Yet millions make that trip. They wait years for visas, or make that dangerous trip, to enter the United States. If our country is so terrible, why do so many want to move here? I have friends who risked everything to reach the United States. Yet many of our so-called elites denigrate our country. They claim that we should copy Europe or other systems. Those elitists want a statist system, similar to what my friends fled. Even some who flee to this country want to make us into a copy of the tyrannies they left. Why? Almost certainly because they accept the nice theories and ignore the evidence. They never ask what makes this country so attractive that people risk their lives to get here. To the credit of my immigrant friends, I've never known even one who would not change his mind when I pointed out his inconsistency. Our native statists, on the other hand, seem immune to such reasoning. They reject the limited government our founders gave us, the standard of freedom that was widely accepted only a few decades ago. Why the difference? The immigrants have seen statism in action. The natives, on the other hand, have only a theoretical idea of what it is like. They pay attention to words, not results. Contrary information bounces off them like a ball off a wall. One notable exception was Eldridge Cleaver who metamorphosed from violent socialist to conservative Republican. He spent time in Cuba, saw what it was really like, then rejected the statist ideology. Of course he realized that the U.S. is not perfect, but he also found that the grass is not always greener on the other side of the fence. Not so most native-born statists. They reject freedom, preferring the restrictions of statism, even desiring to strengthen those restrictions. How can people, often smart people, be so blind to the evidence? I attribute it to three factors, three kinds of immunity to information: First, such people seldom see information contrary to their preconceived belief. They get their news only from sources that support the statist ideology. I have friends who refuse to even open a book or web site if they think it will present a viewpoint contrary to their belief system. In this the news media is complicit. Second, when presented with evidence of collectivism's problems, those people deny that it can be that bad. For example, they become justifiably angry about Hitler's atrocities, yet they refuse to believe the truth about Cuba under Castro or Venezuela under Chavez. The information ball bounces off their wall of preconceptions. Third, many fall for a “grass is greener” syndrome. They see the problems we have and assume that other systems will be better. I even had a friend claim that our slums were the world's worst. Anyone who has seen the slums in other countries knows better. Yes we have problems; nobody in his right mind would deny that. However that does not mean that other systems are better. Our salvation, if it comes at all, will come from voters who look at results, not just nice-sounding theories. Next time, unless something intervenes, I plan to discuss the biggest pseudo-scientific system of all. (Based on Chapter 4 of my upcoming book, Twenty First Century Serfdom)

Monday, October 13, 2014

I'm Back, And Book Review Three Felonies a Day

Good news for my loyal readers, both of them. I'm back to posting on my blog. I've been away for other reasons (missionary in Mexico, doing other work etc.) but will try to post once or twice a week for the foreseeable future. I may even post excerpts from a book I'm working on. I'll start with a review of a book that I encountered while doing research for my book which I expect to publish within a few months. Book Review, Silverglate, Harvey A. Three Felonies a Day, How the Feds Target the Innocent, Encounter Books, 2009. “Silvergate believes that we are in danger of becoming a society in which prosecutors alone become judges, juries and executioners because the threat of high sentences makes it too costly for even innocent people to resist the prosecutorial pressure. That is why nearly all criminal defendants [in federal court] today plead guilty to 'reduced' charges rather than risk a trial with draconian sentences in the event of a conviction.” (From the Foreword by Alan M. Dershowitz) This is a frightening book, giving examples of how federal prosecutors pressure witnesses to testify against friends, bosses, even family members. It describes how they “climb the ladder,” starting with low level employees and getting each to agree to testify against those higher on the organizational chart. The problem is that truth in testimony becomes less important than digging up dirt on the ultimate targets. The book presents evidence that prosecutors encouraged perjury, even telling people what to say in their testimony. Companies such as AIG and Arthur Anderson, along with their executives, fell victim to this type of prosecution. Another major tactic is to use vague laws to prosecute people for what most of us would agree is legal. For example, Walter L. Lachman and Maurice H. Subilia, Jr. were charged with selling materials that would help India develop nuclear weapons. The case hinged on the definition of materials “specially designed” for such weapons. The jury convicted, but then lawyers discovered an appellate case that decreed that the materials were not specially designed for nuclear uses. In addition, Commerce Department officials had given seminars where they taught that such materials did not meet the “specially designed” criterion. Judge Douglas P. Woodlock declared a not guilty verdict. The government appealed and that same appellate court that had ruled that the materials were not so designed turned around and said that they were specially designed for nuclear weapons. That court also ruled that, in spite of the same court giving diametrically opposed rulings on the wording, the wording was not unconstitutionally vague. This book is well worth reading – if you can stomach it. I find it sickening that our government would twist our justice system in the manners described. And such legal blackmail can threaten almost any citizen who has a job, especially a job with a large company. Though the major targets are people in fields such as accounting, they could go after anyone who might provide testimony about other company employees.

Monday, September 12, 2011

Book Review, The Housing Boom and Bust

Book Review, The Housing Boom and Bust, by Thomas Sowell. Basic Books, 2009. 148pp plus references and index.

This book is an attempt to clear up the misinformation about the causes of our current economic problems. I believe that attempt will be successful if people will actually read the book and consider the information it contains. Unfortunately too many people have spent too much time blaming whoever they don't like for that problem. That only keeps the public ignorant of the real causes thus allowing the probability of a repeat.

“There was no single, dramatic event that set this off ... A whole series of very questionable decisions by many people, in many places, over a period of years, built up the pressures that led to a sudden collapse of the housing market and of financial institutions that began to fall like dominoes as a result of investing in securities based on housing prices.” (Preface to the book)

Before we can understand the bust we must understand why we had the boom and inflated prices which set the stage for that bust. Sowell points out that the boom (and subsequent bust) were essentially local phenomena, but that new means of financing housing set the stage for the problem to explode to national and even international scope. The boom in housing prices was limited to a few areas, especially coastal California. Those places have strict laws about how land can be used. Restrictions in the name of things like livability, green space, etc. drove up the price of land and of the buildings placed on that land. That drove prices up for everyone, but the poor were especially hard hit. Blacks and Hispanics suffered more than Whites (though Whites suffered more than Orientals). The result was a statistical imbalance that led to accusations of discrimination. Meanwhile cities like Houston and Dallas lacked such restrictions and therefore did not participate in the boom. They were also less affected by the subsequent bust.

These legally-driven price increases created pressure for government to do something, a government solution to a government-created problem. Of course the solution was to attack not the root of the problem but its symptoms. If Blacks were turned down for mortgages more often than Whites, government would force lenders to reduce standards. Credit requirements were lowered, interest only loans approved, balloon mortgages issued. That did allow more minorities to obtain mortgages though the numbers who subsequently defaulted make one wonder how helpful those mortgages really were.

In addition, once the flood gates are opened you can't control where the water goes. The lower standards facilitated speculators “flipping” houses as well as the purchase of million dollar homes with “liar loans.” In addition, with inflating prices, many people started to treat their homes as ATMs, taking out second and even third mortgages. The bubble was growing.

Freddie Mac and Fannie Mae (the organizations I call the FM twins) compounded that problem by encouraging risky mortgages. There were plenty of warnings but congress, especially Barney Frank and Christopher Dodd, made sure that those institutions were not hampered in their encouragement of marginal loans. They made soundness and security secondary to what they called affordable housing goals. The Office of Federal Housing Enterprise Oversight (OFHEO, the agency charged with overseeing the FM twins) found accounting irregularities in the books. Then Barney Frank took action. He excoriated ODHEO and demanded a leadership change there.

The private sector also contributed to the growing bubble as new securities based on those risky loans hit the market. Rating agencies had no experience with such securities and ignored the risky nature of the loans behind the securities. That set the stage for those securities to spread throughout the country and even abroad and eventually create a world-wide problem.

Political pressure to provide mortgages to minorities, bad accounting at the FM twins, risky securities and other factors inflated the bubble. Price increases attracted more people to buy and to take out second mortgages. Risky loans attracted more and more people who wanted houses but lacked the financial acumen to judge the risks to themselves. As the bubble continued to inflate, it was inevitable that it would burst.

Eventually, borrowers started getting behind on payments. Foreclosures led to price collapse. The price increase had fed on itself before, now the declining prices fed on themselves. Even many who could afford their payments found their homes “under water,” they owed more than the value of the property. Some of those gave in to the temptation to just let the bank have the house. Banks, not being in the business of renting or managing houses, sold them for what they could get. Prices dropped again and the bust was on.

All those defaults cost banks, the FM twins, and buyers of the securities. That made money for mortgages less available, driving prices down farther and harming other parts of the economy. Because the securities and lenders were widely dispersed, the entire country and much of the rest of the world was affected. Money to purchase other goods was in short supply and people lost their jobs. That further depressed the economy. Mostly (but not totally of course) because of the housing crisis we still face economic problems.

Sowell's last chapter starts with the quote, “Bad ages to live through are good ages to learn from.” He indicates that we should learn from this crisis and stop government meddling in the economy. In particular we should never pressure lenders to make risky mortgages for any reason. I'm not optimistic on that score.

This is a useful book. My only criticism, and it's a big one, is that it follows the modern abomination of not footnoting references. In fact it is worse than most in that regard. The references in the back are tied only to chapter and not to page number. That makes it difficult for the reader to follow up on those references.

Thursday, August 11, 2011

Politics and Religion, Part 3 (Romney)

Let's get specific now. I've discussed some general issues of politics and religion, but let's talk about a particular candidate. Mitt Romney appears to be leading the Republican race for the presidential nomination. From what I know of him, he appears to have the makings of a good president. However his religion has already become an issue in some circles, so let's discuss that.

Full disclosure: I am of the same religion as Romney. I am inclined to support him for president, though my mind is not fully made up on that score. I like his demonstrated ability, both in business and as governor of Massachusetts. I believe he would bring some much needed improvement to the way our federal government manages its power and finances. I also believe he would appoint judges who are more in tune with the constitution than many now on the bench. He has even, both at the Salt Lake City Olympics and as governor, shown the ability to get big egos with disparate agendas to work together. However I have doubts about his commitment to limited government. There are other candidates worth a look, notably Herman Cain who is another successful businessman of great ability and commitment to the country.

Be that as it may, let's look at Romney's (and my) religion and how it might affect, or not affect, his performance as president.

First, is he committed to that religion? That is a difficult question since it is impossible to see inside the mind of anyone. However his actions would indicate that he is. Mitt Romney has spent uncounted hours doing unpaid work for his church, first as a missionary in France, then in various positions up to and including stake president. That last is equivalent of running a diocese in other churches – except he had to do it while holding down a full-time job elsewhere. Also, there is not even a hint of scandal in his background, no indication at all that he does not live the teachings of his church.

That said, is there anything in his church's teaching that should concern us? For example, would he try to impose his religion on the country? The answer is “no,” loud and clear. In fact one of the central beliefs of “Mormonism” is that it is against God's will to force anyone into any religion. “We claim the privilege of worshiping Almighty God according to the dictates of our own conscience, and allow all men the same privilege, let them worship how, where, or what they may.” (LDS Article of Faith 11) Se also the LDS Doctrine and Covenants, 134:7, “We believe that rulers, states, and governments have a right, and are bound to enact laws for the protection of all citizens in the free exercise of their religious belief; but we do not believe that they have a right in justice to deprive citizens of this privilege, or proscribe them in their opinions, so long as a regard and reverence are shown to the laws and such religious opinions do not justify sedition nor conspiracy.”

There is clearly no indication that Romney (or any other committed member of his church) would use government to force religion on anyone.

There is, however, one LDS (Mormon) teaching that bears strongly on how I hope Romney would govern. The church teaches that the Constitution is inspired.* (See Doctrine and Covenants 101:77-80, and 109:54). We have every reason to hope that Romney, if elected, will follow that constitution.

Finally, there is a charge by some that the LDS are not Christian. That accusation lacks foundation in fact. While it has some differences with mainstream Christianity, the Church is centered on Jesus Christ as the savior of mankind and the only way we can reach any form of salvation. Even a modest perusal of LDS scripture shows the centrality of Jesus' atoning sacrifice. Even if Christian belief were a requirement for office, Romney meets that requirement.

In short, Romney's religion is no reason vote against him, and provides some reason to vote for him. It is of course not the only factor to consider, but it should not be an impediment.



*Note however that “inspired” does not mean perfect. For example the Constitution initially allowed slavery, something repugnant to not only all right-thinking persons but to LDS scripture and belief. In fact the most severe persecution the Church faced was in Missouri, largely because most of its members did not like slavery.

Tuesday, August 9, 2011

Politics and Religion, Part 2

“no religious test shall ever be required as a qualification to any office or public trust under the United States.”

Here we have another misunderstood part of the constitution. Some would have this apply to voters. They seem to believe it should prohibit voters from considering religion when deciding for whom to vote. They claim that, for example, a Muslim's religion should not be considered in deciding for whom to vote. A little thought puts the lie to that contention. If we look at that statement in context we see that the whole paragraph says,

“The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial Officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious Test shall ever be required as a Qualification to any Office or public Trust under the United States.”

That statement is in the context of restriction on government, not on the people. It requires support of the constitution manifested by oath or affirmation. It places demands on government officials but none on citizens. If a citizen wants to support or oppose a candidate because of his religion, he has that right. Indeed it would only make sense that we refuse to vote for someone if we suspect that his religion would prohibit full support of the constitution.

I say this knowing that two members of my own church are running for president, and that some religious groups oppose them on that basis. That opposition is misguided on many levels, but does it violate the constitution? No it does not. Those opponents have a right to vote based on whatever criteria they deem important. If they think baldness disqualifies a candidate they have that right. If they think presidents should hold certain beliefs, they have that right also. Likewise they have a right to vote for or against someone based on religious belief.

We all tend to trust people similar to us more than those who are different. That leads to erroneous belief, but again we have that right.

I would hope that people would cast their votes based on appropriate criteria and after carefully considering which candidates meet those criteria. I do not believe that, in most cases, religious belief would be part of those appropriate criteria. (A religion that teaches contrary to our constitution would be the exception.) However voters have a right to decide which criteria they want to use, so we cannot prohibit consideration of any aspect they deem important.