Archive for April, 2007

To take away guns, you must take away freedom.

Sunday, April 29th, 2007

I want to make it clear that I am not one of those who think that an armed populace is a guarantee of freedom. Moreover, I believe that an unarmed people can free. But I do not believe that America can be made free of guns with out giving up any pretense of being a free country. A gun control advocate makes that point better then I ever could…

The disarmament process would begin after the initial three-month amnesty. Special squads of police would be formed and trained to carry out the work. Then, on a random basis to permit no advance warning, city blocks and stretches of suburban and rural areas would be cordoned off and searches carried out in every business, dwelling, and empty building. All firearms would be seized. The owners of weapons found in the searches would be prosecuted: $1,000 and one year in prison for each firearm.

Clearly, since such sweeps could not take place all across the country at the same time. But fairly quickly there would begin to be gun-swept, gun-free areas where there should be no firearms. If there were, those carrying them would be subject to quick confiscation and prosecution. On the streets it would be a question of stop-and-search of anyone, even grandma with her walker, with the same penalties for “carrying.”

The “gun lobby” would no doubt try to head off in the courts the new laws and the actions to implement them. They might succeed in doing so, although the new approach would undoubtedly prompt new, vigorous debate on the subject. In any case, some jurisdictions would undoubtedly take the opportunity of the chronic slowness of the courts to begin implementing the new approach.

You can read the rest here. The man is a member of the editorial boards of the The Blade and Pittsburgh Post-Gazette. (h/t Pierre Legrand)

Is it even possible for Europe to stabilize its population?

Sunday, April 22nd, 2007

Wolfgang Lutz, Vegard Skirbekk, and Maria Rita Testa have a paper out called The Low Fertility Trap Hypothesis: Forces that may lead to further postponement and fewer births in Europe. If you like to maintain the illusion that you are well informed about the serious issues facing the world, you ought to read their paper.

But I am afraid that relatively few people will read the paper. It is scholarly and some of the jargon can be a little intimidating. It is not something that most people are in the habit of reading. So to encourage the timid out there, I am going to give a little taste of what you can expect from the paper.

As most people know, there are a lot of countries that are not producing enough children to keep their population stable. Lutz & co. spell this problem out in the beginning of their paper….

Over the last three decades birth rates have been on the decline in virtually all countries of the world, and it is estimated that already more than half of the world’s population has below replacement level fertility (Wilson 2004). An increasing number of countries have birth rates that are not just somewhat below replacement fertility, but far below that level. Measured in terms of the Total Fertility Rate (TFR), currently 34 countries have fertility levels of 1.5 or less (PRB 2005).

From there the authors of the paper make the observation that demographers have historically gotten two things wrong when making projections. The first thing they got wrong is that they assumed average longevity could only increase to certain point. The second was that they assumed that fertility would drop to replacement rate and hold steady at that point.

Both of these points have been proven false. Average longevity in many countries has gone past what were assumed to be unbreakable barriers in average longevity. And fertility rates have dropped way below replacement in a lot of countries.

According to the authors of the paper, demographers have given up on the idea of a fixed limit to average longevity. Instead, they now assume that it will continue to go up at a gradual pace. But demographers still assume that the fall in fertility will reverse itself and move towards replacement rates. This causes the authors of the paper to ask…

For what reasons do these projections assume such an unusual reversal in the trend? Typically in trend analysis, one would need to come up with a very strong and convincing reason to justify such a deviation from the pervasive trend of the past 50 years of cohort experience. Even more surprisingly, not even the low fertility scenarios produced by these agencies assume a continuation of the trend of the past decades. Furthermore, none of these population projections provide the users with a clear theoretical reasoning for why, in the case of fertility, the declining trend is assumed to reverse, while in the case of mortality, it is assumed to continue. When looking at the assumed drivers of mortality decline, ranging from lifestyle factors to medical progress, there are indeed good reasons to assume that likely improvements in these fields will result in further mortality declines. But the same seems to be true for the generally assumed drivers of the fertility decline of the past decades, ranging from the decline of traditional family patterns to more female education, continuing secularization and increasing uncertainty about the future resulting from rapid social change and globalization. There is no reason to assume a reversal in the trends of many of these determinants of fertility decline in the near future. But why do projections assume a reversal in the trend of the outcome, i.e., fertility?

The authors go on to argue that we ought to look at what is causing fertility to drop instead of assuming that fertility trends will reverse for no discernible reason. As a spur to further research, the authors offer up the hypothesis that low fertility is trap from which it is very hard to get out of.

This is where the paper gets interesting. The evidence that they present for their hypothesis is compelling and well argued. From a logical standpoint, it is hard to find flaws in their hypothesis. Their hypothesis’ only real problem is that empirical data is not exhaustive enough to support authoritative arguments.

Yet, I think that anyone who takes the time to read their paper will come away with a sick feeling in their stomach. Based on my own personal observations, it is hard for me to imagine that there is any data out there that would overturn their hypothesis.

But this is where my teaser ends. I don’t think I can give a summation of the paper’s arguments for why a fertility trap is likely without making those arguments appear weaker then they are.

The true force of their argument needs to be experienced first hand. You should go read the paper.

Ever wonder how they make guns in Pakistan?

Saturday, April 21st, 2007

I found this very interesting video off of a link on the Survival Blog. The guy who made the video apparently managed to get into Pakistan’s tribal areas. It is titled The Gun Bazaar of Pakistan.

What seems to have impressed the narrator the most was the small machine shops that turned out homemade guns. He keeps describing these people as making guns with their bare hands. This annoys me to no end.

From what I can see, he is obviously visiting small scale machine shops. Yet our narrator seems to think that it is amazing that they can build guns there.

It is just not that hard to build guns.

My primary thought while I was watching this video is that rural American’s would be making guns the same way if the Federal government ever tried to restrict the supply of guns. I have a couple of neighbors who could do it, and there are millions of rural men through American who have the skills to build their own guns if they needed to.

One final gripe; the narrator implies that kids are building guns, but as best as I can tell, the kids in the video are loading ammunition. Something my neighbors do all the time.

Annoying narrator aside, the video is well worth watching. – The Gun Bazaar of Pakistan

The truly scary thing about the Virginia Tech massacre…

Wednesday, April 18th, 2007

The shooting had barely stopped and wounded were still being carried out, but the pro gun control and the anti gun control camps must have felt that there was no time to lose. I could hardly read about the massacre without seeing constant references to the gun control debate.

Was this really necessary?

Psychologically, I think it was. Many people cannot face the horror of life straight on, so they must invent gods to help them face their troubles. Thus, in the form of a debate over gun control, modern man once again turns to Mars or Pax for aid in understanding this horrifying life.

Like any mythology, the gun control debate has some elements of realism, but at its heart it is absurd.

Switzerland is a mountainous country where every man is armed with an automatic weapon that he keeps in his home. Afghanistan is a mountainous country where every man is armed with an automatic weapon. But the crime rates of the two countries do not compare.

Similarly, Great Britain is an island nation with stringent gun control laws. Japan is also an island nation with stringent gun controls. But the crime rates in Japan are closer to those of Switzerland; where as Great Britain has more crime than the U.S.

When it comes right down to it, guns explain very little about how safe we will be from the evil of man. We don’t want to hear that, because we want a simple solution that will guarantee that we will be safe from the horror that was expressed at Virginia Tech.

But there is no cure that will guarantee that the Virginia Tech massacre will never happen again. The massacre reminds us that we are all vulnerable to this type of hell ourselves. Worse, it reminds us that we always will be, no matter how desperately we chase after ephemeral guarantees of security like guns or gun control legislation.

That is the truly scary thing about the Virginia Tech massacre.

A 300 trillion dollar complex system is currently in beta….

Wednesday, April 18th, 2007

Ordinary mortals are naturally inclined to be afraid of derivatives. Especially those ordinary mortals who know that the nominal value of all derivatives is around 300 trillion dollars.

But more sophisticated people would like to tell you that there is nothing to worry about. They would tell you that derivatives actually make the market safer.

Steve Randy Waldman has an excellent point by point rebuttal to those sophisticated types.

But I would like to add an observation of my own. Being an ignorant hillbilly I don’t know anything about high finance, but it does seem to me that financial innovation has historically led to disaster. Financial systems, like any other complex system, need to be beta tested to work out the bugs. The only way to do that is to let them experience disasters.

Our banking system as it now stands is the product of a lot of disasters. Our central bank and the theories that guide its operations are the product of disasters. The way that we let our currency float against other currencies is the product of disaster. The way that we run our stock market is shaped by past disasters. And I could go on and on…

Why should the derivatives market be different?

Derivatives have never been tested by a genuine financial crisis the way that our stock market and banking system have. Why should we assume (as the optimists are assuming) that the derivatives will be able to sail through such a crisis when no other financial system has managed to pull that feat off?

Discussing the Washington Post Experiment with Joshua Bell

Monday, April 16th, 2007

This post is a response to a comment on the Ethereal Voice. But since some of you do not follow The Ethereal Voice, I am going to have to give some background.

As one of its wired quirks, The Ethereal Voice selects an essay that can be found on the web to highlight each week. This week, The Ethereal Voice chose to select a Washington Post article for this week’s Essay of the Week.

The focus of this article/essay was an experiment that the Washington Post did with the famous violinist Joshua Bell. They wanted to see how many people would stop and listen to the man widely considered the best violinist in world during rush hour at a subway station. Now anyone who knows anything about human nature already knows the answer to that question. But for those few of you who cannot already guess, hardly anyone stopped and listened.

Now both the Washington Post and the Ethereal Voice interpreted the results of the experiment as being something that reflected poorly on people in general. But a commentator who goes by the name Michelle on the Ethereal Voice disagreed. She gave us a link to a blog post by the Saw Lady.

The Saw Lady is a busker, and she argues that it was Joshua Bell’s fault that nobody stopped and listened. The core of her argument is this…

The thing is Joshua Bell is a great violinist but he doesn’t know how to busk. There are violinists who are not even close to being as good as he is (such as Jim Grasec or Lorenzo LaRock), yet they get crowds to stop and listen to them. It’s because when you play on the street you can’t approach it as if you are playing on a stage. Busking is an art form of its own. You need to be as good a musician as to audition for any stage gig (the competition over permits is fierce) but in addition to that you have to relate to the audience and be a real people’s person. You can’t hide behind your instrument and just play, with an invisible wall between you and the audience, the way a stage performance is conducted. In busking you use the passers by as if they were paint and your music is the paint brush – your goal is to create a collective work of art with the people, in the space, in the moment with you and the music.

Now as far as the Saw Lady goes, I am sure she is correct. I am sure Joshua Bell made a lousy busker. And as one of her commentators correctly points out, the Washington Post made it even harder for him by choosing rush hour, when almost no one wants to stop.

But I think that to look at the experiment from the angle that the Saw Lady is looking at the experiment it is wrong. She might feel proud that her set of skills can not be easily duplicated by someone who gets paid far more than her. But the real experiment was not about how to be a good busker, it was about how we perceive beautiful and meaningful things.

Joshua Bell did not play the catchiest tunes he knew. Rather, he played the most meaningful tunes that he knew. Even the Saw Lady admits that Joshua Bell is very good. In that context, then, who would you rather be like if you had a choice: John Picarello, supervisor in the post office who recognized the beauty and stopped to listen, or the hundreds of people who hurried by and noticed nothing?

I don’t think that Joshua Bell really wants to be a good busker. And I know I could care less about what makes a good busker. But I do desire to develop the skills to recognize beautiful and meaningful things.

The Washington Post experiment is a lot like life. We are all very busy. We all have little time for all that we need to do. In life, only the people that have the skills which the Saw Lady describes can catch our attention. But is this a good thing?

As the Washington Post experiment shows, by only being open to people who are skilled at playing to the crowd or the things that are eye catching, we miss some of the most beautiful and meaningful things in life. This is true whether we are flipping through a rack of books or we are walking down a busy street corner.

To see meaningful things, we must see past the obvious; we must be willing to make time. We must be able to appreciate beauty even when we are not being played to. As the Washington Post article shows, that is a skill that few of us have.

But I, for one, would rather have that skill than have the skill to be a good busker (not that the two skills need to be mutually exclusive).

My Favorite Modern Art

Saturday, April 14th, 2007

I think of atomic explosions as art. Few things capture the sprit of the modern age as well as setting off the bomb.

In the resulting explosions I see all the power and knowledge and beauty of the modern age combined with all horror and nihilistic furry that have accompanied it. An exploding atomic bomb is the hell that is in man expressed in a technological form. It is perversely beautiful even in its ultimate futility.

I happen to be thinking about such art today because I came across this collection of atomic explosions. It is one of the best collections of atomic explosions on the web.

Sometimes big changes happen with relatively little fuss….

Saturday, April 14th, 2007

The balance of power is slowly shifting even though most people don’t notice it. It use to be that the British ruled the seas and India was their crown jewel. Now, the British navy is being cut to the point of irrelevance. And India?

They are building nuclear powered subs. This from’s Norman Polmar…

India will soon launch its first nuclear-propelled submarine, which will make it the sixth nation to have constructed such a craft. Beginning with the USS Nautilus, completed in 1955, nuclear submarines have been constructed by the United States, Soviet Union/Russia, Britain, France, and China.

The Insanity of the Chinese

Friday, April 13th, 2007

China’s behavior has just been insane over the last couple of months. There is simply no other word for their actions. They are engaging in activities that are so bizarre that I can barely believe that the people running China’s economic policy have enough intelligence to cause their hearts to beat. From Brad Setser’s Blog….

There is just no way to get around the fact that China bought a ton of foreign exchange in the first quarter. Its reserves went up $135b in the quarter – topping its previous record quarter ($85 or so in q4 04). Only about $5b of the increase came from valuation gains v. $20b or so in late 2004, so China actually bought a lot more fx in the market now than then — $130b v $75b (by my estimates). $130b in a quarter works out to $520b for a year.

He goes on to say….

Roughly $100b of China’s $130b in reserve growth probably flowed into dollar assets. That roughly what it would take to keep the dollar share of China’s reserves constant.

If it keeps going at that rate, China will have increased its reserves by 400 billion dollars this year. To put that in perspective, that is only slightly smaller than the entire cost of the Iraq war to date. And that money was spread out over years; China is on track to increase its reserves by about that much in one year alone.

As Brad Setser says…

I never expected China would be on track to add $500b to its reserves in a year, or the world a trillion. Never. Back in 2004, I though the world’s central banks wouldn’t sustain a $600-700b pace of increase. The numbers are so large that in some sense they are hard to believe. But I have double and tripled checked the numbers. They are in the data. The COFER data (especially if you add in SAMA’s non-reserve foreign assets). The IMF WEO data. The national data when the big central banks are added up. This is real.

The really sick thing about this is that even the Chinese admit that their dollar reserves are already too large. They must be really scared of a devaluation dollar. But this is simply bizarre. They are growing their reserves far faster than their economy is growing. Mathematically, there is no way that they can keep this up. By piling on their reserves at this rate, they are only increasing their future losses.

The numbers and how crazy they are is dealt with very ably by Brad Setser and Macro Man. But I want to add a point of my own to the mix.

First let me point out that Setser has shown that the current account imbalance in the US has been increasingly funded by foreign government entities. If things continue at their current rate, foreign government entities will provided almost a trillion dollars in financing to the US (with the Chinese providing almost half that figure all by themselves).

Now if you follow economic commentary to any degree, you will find that the more devoted an economist or other economic commentator is to free markets, the more likely they are to argue that we should not be worried about the current account balance. In spite of being pretty close to being a free market purist myself, I have long felt that such arguments were irrational.

How can one claim that the free market is the best way of setting prices and then turn around and say that the fact that foreign governments are on track to paying out almost a trillion dollars to manipulate the US currency is no big deal?

Why I am Special…..

Friday, April 13th, 2007

When the high price of gas starts to bother me, I try to keep things in perspective. After all, I am truly a privileged person. People are being forced to go with out electricity so that I can have gas.

You see, oil is something everyone wants, but not everybody can have. So some people are going to have to do without. Thus, the free market raises prices until some people just can not afford to buy oil based products anymore. By forcing those people to drop out of the market, the free market ensures there will be enough for me (as long as I can afford to pay anyway).

The people that get forced to stop buying oil based products first are poor people in third world countries. Take Senegal for example….

The power cuts are largely due to problems purchasing increasingly expensive fuel to run oil-fired generating plants. Residents deprived of fans and refrigerators during the hottest part of the year, when daily temperatures rise above 90 degrees, were shocked by an unannounced price increase on their latest electricity bills.

H/T the oil drum.