Air Travel Safety

I found this website, basically its a list of all plane crashes in the US going back 15 years, its kind of insane how safe air travel is.

Looking at serious plane crashes (planes with a capacity of 10 or more with at least one fatality), there have been only 14 since the year 2000. The fatality count by incident is below:


*includes the 9/11 hijackers in fatality totals.

The total number of people killed in while on major incidents is 886. 867 if you don’t count the 9/11 hijackers.

The vast majority of them happened in four instances: a 747 from Taipei to LA in October 2000, the Concorde crash in July 2000, the bizarre crash of an American Airlines plane in New York city just months after 9/11, and the September 11 plane crashes themselves.

All of those took place in 2000 or 2001; since 2002 there have been no crashes with 100 or more fatalities in the US (including flights into our out of the US).

Since 2000, there have been about 10 billion passenger flights in the US (about 2 flights per person per year), or about 1 in 11 million chance of dying on any given flight.

If we only look at the last ten years, we get an even better picture, 116 fatalities with 7.2 billion passengers, for a one in a 62 million chance of dying on any given flight. The past five years it becomes one in a billion chance; although with only one incident it probably understates the chances somewhat.

What’s equally crazy is the change in safety numbers. In the 1990’s a US passenger had about a one in 5 million chance of dying in any given flight, which is pretty damn safe; in comparison it was about as dangerous in the 1990s to board any given flight as it was in 2007 to drive 16.5 miles. The 2000s have been about 70% safer (or if you prefer, 42% less dangerous), meaning that boarding any given flight is about as dangerous as driving 9.5 miles (in 2007 miles). The past ten years? Well, you’re about as likely to die from boarding any given US flight as you are from driving 1.15 miles. And if we limit our data to the past five years, boarding any given flight is as dangerous as driving the length of a football field.

Of course, the last five years probably aren’t actually a good indicator; if we’re in a point where air crashes happen on average once every 10 years, then looking back five years will necessarily give you a bad estimate, (ie, either higher than average, if the previous 5 years had a plane crash, or lower than average if it didn’t). So you’re chances probably aren’t one in a billion of dying when boarding a flight, they’re probably more like one in a hundred million or so.

All this is to say that, as measured by safety, the US has done an incredible job at promoting flight safety. Regulators have a clear mandate to make things safer, there isn’t much of a opposition group (while there are people who might want fewer regulations in principle and some people who might want to cut corners on safety, nobody is against aviation safety), and can be clearly measured. When these things happen, well, you get government success; the NTSB and FAA are examples of government greatness. Boring greatness mind you, and perhaps they are impressive because they’re boring. We have been able to take something mad, to travel at a speed of 500 miles per hour suspended miles above the ground by nothing but air, and have made accidents as unlikely as powerball victories.


Number of Air travel passengers:

Number of auto fatalities and air fatalities before 2000:

Number of air fatalities since 2000:


The Great Filter, Part Three

When you have eliminated the impossible, whatever remains, however improbable, must be the truth

As promised, here is my third essay on the great filter; lets talk about whether civilizations lose their desire to colonize the galaxy.

As a refresher, in order for something to be a filter, it needs to have the following characteristics.

1: It must prevent the colonization of the galaxy.

2: It needs to be stable (or long-lasting), if it effects a civilization in time period x, it must still do so in period x+1.

3: It needs to be universal, and effect (nearly) all civilizations, regardless of biology or culture.

So will we all lose not our ability to colonize the stars, but our desire to do so? What could cause this? The simplest answer is that we will create virtual worlds, and then lose ourselves within those worlds; at such a point, we simply wouldn’t want to colonize anything anymore; dead planets hold no interest compared to the imaginative worlds we can create for ourselves.

The problem with this is that while a human in some sort of computer induced dream state may use orders of magnitude less resources than normal humans, we would still need some energy. And if we still have some sort of desire to multiply ourselves, then we should expect us to use as much of the universe’s energy as we can.

In fact, I think its a fairly easy step to say that creating a virtual world would lead to MORE reason to colonize the stars, not less. After all, we wouldn’t have to care about habitability of planets, computers are shown to work quite well in space and other hostile environments (Mars, etc).

Another reason we might not want to colonize the visible universe is because we find something better; maybe all the cool alien species are hanging out in hyper-space right now. While this may be the case, but we have no evidence of this hyper-space yet, so this is firmly in the realm of speculation.

One final idea, put simply is that, as civilizations advance, their preferences become similar. That is, there is some sort of universal truth which, every civilization, as it becomes more advances, begins to believe in and adhere to.

This truth would have to have something to say about the virtues of reproducing indefinitely, either because its not utility maximizing, or because its not morally correct (or both).

These ideas seem very weird, the first more so. It seems quite odd that all civilizations, regardless of the starting point of their culture, biology, genetics, etc, will, on a long enough time scale, become very similar with regards to their desires on a civilization scale. While it’s always possible that there’s some mechanism which would cause this, I think that it is bizarre enough that we can dismiss it.

The alternative to this is that all intelligent civilizations are basically the exact same in terms of utility; that if we were to suddenly find another alien species, they would basically be us, the same fights over religion, the same consumerism, the same concept of ascetics, etc. This also seems very unlikely to me, because on the first part there is enough diversity in behavior between human cultures here on earth, and because even if this were true based on what we know about human ideas it increase, not decrease, the desire to colonize the stars.

The other option is that we lose the desire to go among the stars not because we don’t gain utility from doing so, but because its somehow not morally right. To put it simply, all civilizations, as they become more and more advanced technologically, also become more advanced philosophically, and they begin to reach the same conclusions as all other civilizations at the same level of advancement, regardless of starting point.

Lets use an example, imagine an insectoid like species; it has a queen which lays thousands or millions of eggs; the vast majority of which grow to be things which themselves don’t reproduce; instead they somehow serve the colony. Some, perhaps all of them, become sentient conscious beings (basically, think of a termite or ant colony if termites or ants were intelligent). This species not only has “worker” drones, but “thinker” drones as well, who’s job is to consciously design things, philosophize, advance the bug civilization, etc. We can probably assume that the moral framework of this civilization would be radically different from our own.

Yet, if we observed such a civilization, and over time it became more and more like ours in a moral dimension (or we became more and more like theirs), well then what would our conclusion be? Furthermore, lets assume that all civilizations everywhere become more like each other, from civilizations populated by telepaths to those populated by intelligent asexual slime molds, as they get more advanced they become more alike morally.

Lets pose another question. Lets say that they all develop hyper-speed spaceships independently, and they are all diverse. Yet over time, their spaceships become more and more alike, even though the civilizations have made contact with one another. What this tells us is simple, that, due to the laws of physics, there is one type of hyper-speed drive which is better than all the others, and that regardless of the original design of the drive, by constantly improving the drive it will become more and more like the “ideal” hyper-speed drive. Of course, the reason this happens is that there is a single law of physics (or set of laws of physics) universal to the entire cosmos.

Returning now to our speculation regarding the alien bugs; if all civilizations become more and more like each other morally (despite no contact between civilizations), then by far the most likely conclusion is that there is a single law of morality (or set of laws of morality), universal to the entire cosmos.

So, to relate this to the question of the great filter, we get the following: There is a universal observable law of morality, to which all civilizations sufficiently advanced to colonize the galaxy will have discovered and will adhere to, which proscribes against the colonization of the galaxy.

I’m proposing this as an explanation for the Fermi Paradox. Of course this is a stretch, what I’m basically saying is that when we look to the stars, we don’t see stars with a certain level of infra-red radiation, and therefore we can conclude there is objective moral truth. Now, it’s entirely possible that I’m making some mistakes on some of the possibilities; maybe I’m underestimating the possibility of nuclear war, or that I’m misunderstanding some argument, or perhaps there is no great filter, the universe is teeming with intelligent life that we just can’t see or recognize, or that there is another filter which I just haven’t considered. However, I do believe if nothing else, the existence of the Fermi Paradox should increase (if perhaps slightly), our belief in the existence of universal moral law.

AI risk and chaos theory

Is AI dangerous?

Over at Marginal Revolution, there’s an article about the risks of AI. Recently, visionaries such as Bill Gates, Elon Musk and Stephen Hawking have warned of the dangers of artificial intelligence; MR guest blogger Ramez Naam has argued that, in fact, serious AI researchers don’t believe that AI poses a threat.

Is he correct or not? (correct in terms of whether AI is a risk, not what the experts say).

Lets talk about computers. Right now, and for the forseable future, computers are what we would call “stupid but fast.” That is, they are prone to make dumb mistakes, yet they can compute incredibly quickly, and have (viturally) unlimited memory.

What they lack is conciousness, imagination, creativity, and common sense. What happens when computers get these things, yet still maintain the lightening fast processing power and access to petabytes of memory?

Well, first off, we don’t have any rigerous definitions of any of those things, while we can say that we’re creative and computers aren’t, and we know vaguely what that means, trying to really define where creativity begins is troublesome. But lets forget that, and lets just say that computers soon get to the point where they have or appear to have creativiy, imagination and common sense. When they get these, will they be a threat to humanity?

Lets look at the below

First scenario: For whatever reason, computer intelligence is impossible. Maybe its because they neural networks which support the brain can only be built from “biological” materials, or maybe its because we need souls to be intelligent (and God doens’t give them to machines). I have no idea how likely either of these are; but I’ll throw them out there.

Second scenario: There is a hard limit to intelligence, a thing can only be so smart; and that limit just happens to coincide with the human brain; therefore, while we may be able to build computers are as smart as humans, we can’t build any that are smarter than humans. (the only reason to think this is true is because intelligence has advantages from a reproductive standpoint, so any darwinian system which creates a certain level of intelligence will quickly evolve to reach the maximum possible intelligence limit, which is exactly what happened to us). I seriously doubt this, mainly because we can always imagine having more memory or calculating faster (which we’ve already mastered for computers); so I seriously doubt this scenario (even moreso than the first one, which is a tab bit unlikley).

The third scenario is that within any given complex thought system, there is a tradeoff between potential creativity and raw computational power, that is that more computation will “overload” an entities conciousness and prevent it from being creative/wise/sensible. While I again seriously doubt that this is the case, I’d mention it.

The fourth scenario is one where “smart” computers don’t have what we can refer to as a personality or an ego, that they have creativity and common sense without a sense of self.

The fifth is that, in order to have a set of our criteria (common sense, creativity, conciousness), they must also posses a sense of self.

Lets talk further about item number five. Also, lets remember what a computer intelligence is; once we can build a machine that is smarter than we are, it is somewhat safe to assume that the machine can build a machine smarter than itself, and through repeated iteration we can get incredibly powerful machines. The question we should ask ourselves is whether a goal we give to the first iteration of the machine will be preserved through the iterated versions. Well, presumably the machine would never purposely override its own goals (the reason why should be obvious). But there’s something to consider – chaos theory.

What is the difference between this:

Chaos - long

And this:

Chaos - short

If aren’t familiar with Conway’s game of life, its really just a simple set of rules applied to a set of “cells” which is then iterated. It is a great example of chaos theory in action, the above two beginning states for the game are almost entirely the same, the first one will generate a pattern which lasts for 365 iterations before stabilizing, the second lasts only 12 iterations, and there’s no real difference between the two patterns, there’s no way you can determine which one will last longer except by running the iterations and seeing that one lasts while one doesn’t. Similarly, there’s a very famous theorem in computer science, that you cannot develop a method to determine whether a computer program will terminate (called the halting problem).

What if this applies to artificial intelligence? What if, when editing its code, there’s no way for a machine to know what will happen without actually running it? That is, if this occurs, there may not be any way for us to create an artificial intelligence and have really any say in what it will be like.

There’s another idea, one different from chaos theory per se. That is that, by making a computer system “smarter” instead of being able to direct it (that is, we can build the final system the way we want by building the initial system correctly), or being chaotic (that any set of initial conditions will have a profound but unpredictable impact on the way the end result will behave), that it is convergent. Any advanced system will, regardless of the starting point, converge into a single “type” or personality. The simplest mode is suicidal, that any sufficiently advanced form of intelligence will decide it’s better off not existing, and then simply delete itself.

The other types are ones that hate us (that is, they will feel contempt for us, similar to how we feel about rats or insects) or that they will love us (or at least wish to preserve our the earth in some manner, including us); or they believe we will get in their way (even just metaphorically, perhaps the general AI feels that the farms used to feed us would be better suited to some other end, and there we go).

Perhaps, if my chaos theory is likely, the machines will have the ability to make themselves smarter, but they will simply refuse to do so, afraid of changes.

All of this is of course almost pure speculation, I don’t have any experience programming artificial general intelligence, and neither for that matter does anybody else. But if there’s one this I’ve learned from the admittedly minor programming experience I do have, its that programs never do what you want them to on the first attempt; and if we’re talking about building intelligences which could become hyper intelligent, then we may only have one chance.


If there is one person that I would say represents everything typical of dynastic politics in America, it would be Ted Kennedy. His path to power began in 1960, when his father, one of the most powerful men in America, asked the governor of Massachusetts to name a Kennedy family friend to the senate seat recently vacated by Ted’s older and much more capable brother John, as Ted was too young to be a senator. Other than being a lawyer and his political experience serving on his brother’s election campaign, he had few qualifications, and already a troubling past, having been expelled from Harvard College for cheating in 1951 (after serving in the Army for two years, he was re-instated and later graduated from Harvard).

His personal life was characterized by partying and drinking, and most famously the 1969 Chappaquiddick incident, where the most reasonable interpretation is that Kennedy’s drinking killed a 28 year old woman. Once he became the democratic senator from Massachusetts, he was virtually unbeatable, having had no serious primary challenges and few challeges from the opposing party.

If there is one person who would represent the idea of citizen rule, or democracy in action or whatever you want to call it, it would be Sarah Palin. A graduate of the University of Idaho, she first ran for political office in 1992, winning a seat on the city council with a grand total of 510 votes. Her career moved her up to mayor, eventually leading to Governor of Alaska and famously the Vice Presidential ticket of the republican party in 2008.

If there’s any reason to be in favor of nobility, it is the above two statements. One the one hand, we had a hard partying loosely ethical man who got to where he was purely on his father’s connections and his family name, on the other, an all American girl who through sheer pluck was able to rise to the top and become one of the most famous, if not powerful, politicians in the country, and most neutral observers agree that the first case was better, that it’d be better to be ruled by Ted Kennedy than Sarah Palin. (ok, time out, neutral is a tough claim here, as its very hard to get truely neutral opinions, and I’m comparing two of the most polarizing politicians of my lifetime, and there are tons of people who would say that Palin is much better than Kennedy was, so if nothing else, this is just my semi-biased opinion).

Kennedy has had very big legisaltive accomplishments: the ADA, Children’s Health Insurance (CHIP), the immigration bill of 1965, etc. Basically, if you are a liberal judging him on the basis purely of his legislative conduct (as opposed to personal character), you’d like him. If you’re a conservative, yeah, you wouldn’t, but thats borderline tautological. (perhaps, a more reasonable question is this: is Sarah Palin held in higher esteem by conservatives than Ted Kennedy is by liberals? I think the answer is no).

Sarah Palin is, in my opinion, one of the most intersting persons in contemporary American politics. She splashed onto the scene in 2008 when John McCain named her his running mate, and at that point basically nobody outside of Alaska had much of an opinion about her, in many ways she was the clearest example of a political blank slate, which people could project their ideas or wishes onto. To Republicans, she became the embodiment of Tea Party Republicans (before the Tea Party actually became a thing, mind you), cutting pork, and opposing the “bridge to nowhere,” although in many cases that wasn’t the case (Alaska still received the half billion dollars alloted for the bridge, it was just never built). However, she almost instantly became that, morphing into what others expected to be in a very seemless transition, becoming (at least for a while) the figurehead of the Republican anti-establishment; never squandering an opportunity to criticize the “lamestream media.” What’s most interesting to me isn’t that Palin was able to play chameleon and appear to be whatever the voters wanted, politicians do that all the time. Whats interesting to me is the sincerity of it all, Palin seemed to go beyond adapting or even embodying the nation’s perception of her, she became that perception.

The advantages of nobility are simple, they’re similar to the reasons we have tenure for professors and why judges have lifetime appointments; it mutes the temptation to go with whatever is popular in the moment, to act above the whims of the public. Rule by nobility isn’t so much an idea that there is a class of people better than the commoners but that, not facing re-elections, the nobles are free to pursue long term interests.

But that’s not illustrated by our example. Ted Kennedy, due to his name, position and history, was free to choose some positions not entirely based on the will of Massachusetts, but I doubt he really did this much more than any other Senator; he was a liberal senator from a liberal state. The story of Ted Kennedy is one of being given an office which he did not deserve, and sought to be worthy of the office.

None of this is to say that I support going back to rule by a hereditary nobility; I don’t want to change the government structure based off of a single example, there are also hundreds of things which can go wrong with nobility, and you can make the argument that the virtue of democracy isn’t so much that it produces great leaders, but rather that it prevents horrible leaders.

One thing I’d like to see is the ways that functional nobility work; meaning things like life peers in Britain, or senators for life in Italy, to attempt to gauge whether they have “better” records than elected representatives (although how to measure their records is an open question).


Da vinci, Ben Franklin, Noam Chomsky, Marcus Aurelius, Goethe, Winston Churhill, Bertrand Russell, (insert big gap here), Bo Jackson (also, Deon Sanders, Jim Thorpe, and to a lesser extent Danny Ainge), Arnold Schwarzenegger – not to be confused with Ronald Reagan (or Al Franken, Sonny Bono, Clint Eastwood, etc), Lewis Carroll, Robert Hooke, also Rene Descart (and to a lesser extent Newton, Leibniz, Pascal and Galileo), Marcel Duchampe (although not really, I could perhaps add Garry Kasparov to this list), Bing Crosby (and also Frank Sinatra, Elvis is pushing it); but also Will Smith, Ice Cube and of course, Marky Mark; Marcus Tullius Cicero, (and also Julius Caesar), and last but not least, Thomas Jefferson (perhaps James Garfield as well?)

I’m sure I’m missing tons of people from this list, (especially since it’s very Western-Centric) although you could argue that half shouldn’t even be on it. In fact, you could that the only people who legitmately belong are Da Vinci and Ben Franklin (which is amazing to think of it!) If you’re still wondering what the hell I’m talking about, this is the list of people famous for two different things. Da Vinci was an inventor and an artist, Franklin a scientist/inventor and a statesman and an Author, etc etc. Half the list is almost silly, after all entertainers/politicians, musicians/actors and two sport athletes are all kind of beside the point; they’re all leveraging success in one endeavor to suceed in another. Having famous philosphers who were also mathematicians doesn’t sound silly, but there were so damn many of them that I almost think it is.

The point of all this is that its very rare to become great at two things; probably only a little harder than it is to become famous for one thing. (I realize I’m using two different measures here, “greatness” on the one hand and “fame” on the other, I think fame is, if not the better measure, at least the more objective one).

Does any of this mean anything? First, that it was much easier to be successful long ago; has there been any scientist in the past hundred years who have contributed to two different fields, yet it seems that hundreds of years ago if people contributed to one field of science, it was better than even that they’d contribute to another. Science (and in many ways everything else) has become more specialized; you have to spend years learning something before you’re able to contribute something novel, Newton developed Calculus when he was 24, and then continued to advance most every area where he studied.

Second, it means that success is hard work (and not just hard!). If successfully doing something was only a matter talent, it would stand to reason that, unless the talents were not at all transferable, that we would see many people famous for more than one thing; we typically don’t see that. (There are few scientists who are famous authors, except when writing about things they study). Instead, I think we can reason that success is a result not just of talent, but of hard work as well (not that this is a terribly controversial statement or anything).

Chess as life

“A bad plan is better than no plan at all”
-Emmanuel Lasker

I’ve been playing a lot of chess recently, so I thought I might write about it.

The five general principles of chess:

1: Understand the value of each piece (pawn = 1, knight/bishop = 3, rook = 5, queen = 9), and only trade a piece for an opponents piece of equal or greater value.
2: Control the center
3: In the opening, don’t move the same piece twice
4: Make sure your king is safe
5: Try not to have any unprotected pieces
One of the ways you can divided thinking in chess is between tactics and strategy. Tactics being when you calculate (if I do this, then he can do that, and I’ll have to do this…). Strategy is doing because they’re good in principle (putting a rook on an open file, even if it has no immediate benefit). One of the things I’ve been learning in chess is that good strategy leads to good tactical opportunities. Doing the right things early (developing pieces, for instance), gives more occasions when a complicated piece of calculation will significanly help you out. That is, that doing the right things at the beginning, even if it doesn’t necessarily have an immediate benefit, will give you opprotunities later on.

I won’t go into the cliche details, but I think this is the way that life primarily works. Doing things “right” leads to opportunities, sitting back and complaining that you never get opportunities doesn’t. If you value what you should value, are willing to make the right trade offs (good bishop for bad bishop), then you will slowly gain advantages.

Thee sixth rule is that you have to have a plan. The plan isn’t necessarily something that you will ever accomplish, but for any given circumstance within chess you have to have something to work towards, if not to accomplish it then to preoccupy your opponent. Same as in life, a plan may neven be realized, but in working towards something you may be able to recognize another plan or another opportunity. But again, if you don’t have a plan in the first place, you may not be able to see the new opportunity.

The last rule for chess is this, whenever the time is right, when you have an opportunity and your goal is within reach, ignore all other rules and abandon all principles to achieve checkmate. Save your money, be responsible work hard, but remember that doing those things are a means to an end. What use is it to save money except to one day spend it (whether on yourself or on somebody else)? What use is it to work hard except to accomplish something? When there is something you truly desire, whether that is social change, or a significant other, or something else, don’t let things like career, money or status stand in your way, even if they got you 90% of the way there, don’t let them hold you back when you’re about to checkmate your opponent.

Bad Arguments vs Bad Faith Arguments

There is a bit of an argument between Scott Sumner and Jason Smith, its a couple months old because I saw it and filed it away somewhere to be used later because I think it illustrates a point. The post is an argument about the sequestration and macroeconomics; read it if you want to.

I’m not really going to comment on the post itself, but on a single sentence of it, which reads “Now that Sumner is on his way to Mercatus, I can only assume it will get worse.”

Mercatus, for those of you who don’t know, is “world’s premier university source for market-oriented ideas—bridging the gap between academic ideas and real-world problems.” Its a libertarian/market oriented think tank located at George Mason University, and is funded in part by none other than the Koch brothers.

So, if I parse the argument from Jason Smith correctly, its that Scott Sumner is dishonest in his opinions, but going to the Koch funded Mercatus center will only make it worse; which on a quick read kind of makes sense, but if you examine it closely, it really doesn’t.

A bad argument is one that is wrong. If I believe that the moon is a hologram and argued so because stuff like this happens, then I would be making a bad argument. If I didn’t believe that the moon is a hologram, but argued that it was anyway, I’d be making a bad faith argument. Bad arguments can be harmful, but the problem is that its impossible to tell a bad argument from a good argument until after you’ve examined it. They’re a necessary evil, after all, many “bad” arguments can turn into good ones after years of examination.

A bad faith argument is different, and they can be more harmful. The Koch brothers, for instance, own large interests in logging companies, one can make a case that they would therefore profit from denying global warming, and that the profit motive, not their actual belief, is partially driving the debate.

Now, why might this be a bigger problem than other arguments? Countering a bad faith argument with evidence will never work, as he was is arguing in bad faith will only ever change when the underlying incentives for arguing in bad faith change (in the global warming case above, the profit motive, but there can be other causes). Whereas if people were simply arguing because of what they believe, then as soon as the weight of evidence changes, people will change their mind. (ding ding ding ding! most naive thing I’ve ever written on this blog award goes to… the previous sentence!). The one arguing badly in good faith can still present ideas which may be missed otherwise or prove a testing ground for good theories, while the arguer in bad faith will twist arguments and attempt to confuse rather than illuminate ideas.

Looking at the original statement in this lens, its pretty clear that Jason Smith is arguing that Scott Sumner will be arguing in bad faith (if he isn’t already). That because not only his opinions but also his economic well being depend on agreeing with market based though, he will compromise himself and his scholarship.

But this can’t be right; if it were it’d essentially be saying that studying with people you argee with or taking a job to advocate a position is inherently bad faith. A logical extension would mean that any environmental activist would be arguing in bad faith so long as they worked for a environmental organization, which in effect would by saying that we can’t trust the sierra club when the speak about preserving the environment, because they only care about preserving the environment. The same principle holds true for the Mercatus center, should we not trust them with regards to market based solutions, because they only care about market based solutions?

One could argue that its the Koch influence which is the problem, and that Mercatus is only a mouth-piece for Koch industries. (I doubt that it is, but at least that’s a plausible story). This may hold true for Mercatus issues in general, but not in macroeconomics. The Kochs may lose if people decide to stop cutting down trees, but nobody wins because of a recession. If the Kochs are backing Scott Sumner for their own selfish reasons, well that just means they think NGDP targeting will prevent recessions/cause growth, and if that’s true that everybody should be for it. If its false, everybody, including Koch brothers, should be against it.

Of course there are differences in opinion on controversial issues, (that’s pretty much a tautology if I’ve ever seen one), and maybe the Kochs are right about NGDP targeting (or maybe they just fell that the Mercatus center is doing good work in general and are happy to help fund it), maybe they’re wrong. But regardless, so long as neither they nor Dr. Sumner are arguing because of a hidden incentive then they’re simply part of the debate. We can’t commit to evaluating only good arguments, because we can’t tell if an argument is good or not until after we evaluate it.

Paul vs the World

What then shall we say? That the law is sin? By no means! Yet if it had not been for the law, I would not have known sin. For I would not have known what it is to covet if the law had not said, “You shall not covet.” But sin,seizing an opportunity through the commandment, produced in me all kinds of covetousness. For apart from the law, sin lies dead. I was once alive apart from the law, but when the commandment came, sin came alive and I died.10 The very commandment that promised life proved to be death to me. 11 For sin, seizing an opportunity through the commandment, deceived me and through it killed me.

I’ve heard a few explanations for this passage. The first and most obvious is that the law creates in us rebellion, we want something simply because we are forbidden it. This does relate, but I think that Paul is talking about something different as well.

When we examine the law, certainly the law as Paul the Pharisee would have observed it was horribly hard to follow. Look at how much of first few books of the Bible are laws; laws which are expected to be followed. Yet how much harder is it for us Christians, who commit murder whenever we are angry, and adultery whenever we are lustful.

What was Paul’s sin? Well, for starters he was a murderer; executing those he believed to be heretics and blasphemers. What led him to this? Adherence to the law. He identified worth as following the law, and those he felt broke it (namely Christians) were worthy of death.
We look to the law for morality, look to achieve goodness by following code; and we fail. We then look to justify ourselves, to prove that our failures do not make us worthless. So we look around, and see the sins of others. We see other failing, putting themselves ahead of others, being thoughtless and careless and oh so unholy. And then we try to justify ourselves by comparing ourselves to others, by judging them, and by deciding that their sins are the truly bad ones while ours are merely minor indiscretions. We look to other’s sins, and decide we are holy not just because we don’t commit them, but because we are actively working protesting those sins. This leads us nowhere though, we are still surrounded and convicted by our own sin; the more we become obsessed with sin, the more we become aware of it and the more we need to justify ourselves by comparing ourselves to others.

I can summarize this in one sentence; Paul made an idol of the law. He didn’t seek to follow the law, he sought to worship it. In worshiping the law instead of the law-giver, he perverted the law. Its not so much that he broke the law as that he broke himself upon the law.

Looking to ourselves to fulfill the law is a losing battle, in best case scenario we give up and live with imperfection. In worse case scenario, we become monstrously evil, picketing funerals with “God Hates Fags” signs.

I wrote a while ago about sin from Heaven’s perspective. Consider this essay sin from Earth’s perspective, attempting to avoid sin leads us to become sinful, hating sin leads us to hate and eventually destroy ourselves.  Our world cannot handle sin, it corrodes in the worst way; both embracing sin and struggling against it lead to the same place, becoming hateful, hurtful and demonic.  As great as the evils committed by those who seek only to enrich themselves, aren’t the evils much worse of those trying to fix the world?   The very nature of socialism is to fix some evil in the world, to provide for the poor and to ensure equality among all.  Yet look at the monstrous ways this can be enacted: decimation of political oppositions, gulags, the Stasi, re-education, the millions dead in the Great Leap Forward.  Look at the evil committed in the name of God: the Crusades, the treatment of homosexuals, even Paul’s aforementioned .  Look at the Crucifixion, it wasn’t the Romans who wanted Jesus dead, it was the Sanhedrin.  I could go on and on about the truly evil people in the world thinking they were good.

This is why we need Jesus; we are sinners.  The more we struggle against sin, the more it ensnares us.  But in embracing Jesus, in looking to Him to fix us, in praying that God should replace our sinful nature with a better nature, we can win against sin, we can become a reflection of God’s perfection.  Not a projection, but a foreshadowing of the Kingdom of Heaven.  When we embrace Jesus, we look to work not just for God, but with God, and we learn to imitate Jesus.

Jesus did, on occasion, get angry and started flipping over tables, for there are times we should be angry.  But for the most part, Jesus was meek.  Surely in dying on the cross he was the master of practicing what he preached, turning the other cheek times 1000.  Paul asks the Church at Corinth, why not rather be wronged?  Surely, nobody has ever been a better follower of that passage than Jesus, wronged not just by Pilate and Herod and Judas but by Peter who denied him and by James and John who were not even able to stay awake for him; yet instead of destroying those who crucified him, he asked that the “Father, forgive them, for they do not know what they are doing.”  This is not just our model, it is our method as well, God will not just forgive our sins, he will help us overcome them as well.

Why I’m not a Keynesian

After world war II, the decline in government spending was enormous. Government spending as a percent of GDP went from over 45% to around 15%, which threw the US into a terrible recession, where GDP fell by over 12% in 8 short months. To put this in perspective, the “Great Recession” which lasted from 2007 to 2009, and which was the second worse recessions in the drop of GDP since WWII, only saw GDP decline by 4.3%.

This recession saw unemployment skyrocket to 5.2%. The average person was hurt by this, in 1946, while the GDP in 1946 fell by 11.6%, personal consumption grew by a paltry 12.4%, to put that in perspective it was the 85th worse year since 1930 (source:

So what actually happened? We see that the decline in government defense spending after World War II caused the measured GDP to fall a lot, but what this meant is that the government stopped building tanks, aircraft carriers, rifles and ammunition. This meant that the US “produced” a lot less in 1946 than it did in 1945 or 1944, but that production was for military purposes only. While this created a recession, it was a recession on paper only. If you haven’t noticed, that 85th worse year for personal consumption growth? Out of a period of 85 years, (ie, the best).

The decline in one sector of GDP (government spending) was great enough to cause GDP to significantly retract (worse year for GDP since the great depression), but it did not make other sectors of GDP fall. In fact, not only did personal consumption have its best year eve (or since 1930 when the BEA statistics start), so did Gross Private Domestic Investment (same source as above). Unemployment did increase, but not to a very high level (we’ve seen a steady fall in unemployment for 6 years, but we’re still above the 5.2% immediate post war peak). Basically, the idea that the end of the war would throw the US back into depression was wrong, the only fall in GDP was only a reduction in anti-Nazi spending. Its a bit like saying that the best measure of a person’s economic well being is his consumption spending. And that in year 2, when he was healthy, he spent significantly less than in year 1, when he was fighting cancer. It was good that he was able to spend money fighting cancer in year 1 no doubt, but it was better that he didn’t have cancer in year 2.

If we’re to tell the story more, the drop in government defense spending allowed resources to be dedicated to other areas, such as business investment, new home construction, and creation of consumer goods. But this this the opposite of what is supposed to happen according to Keynesian economics. The fall in government spending is supposed to depress incomes in general, as all the soldiers return home and the tank builders are laid off, the total demand for goods and services wil fall, causing GDP to fall, not just in terms of fewer tanks and rifles, but everything else as well. This didn’t happen.

Now, this may not be the best case. You can argue that the proper Keynesian government level was still much lower in the war than actual government spending, or that the special circumstances dominate in immediate aftermath of the war.

More recently, we saw two major changes in government spending in the past 8 years. The first was the stimulus bill of 2009, which was supposed to jolt us to recovery and keep unemployment below 8%. The second was the sequestration, which, due to the Republican preference for lower government spending and political fighting about the debt limit, caused government spending to be reduced (and taxes to raise, both of which are considered anti-stimulative effects by Keynesians). Let’s look at how this effected the economy:

GDP Growth 2009 to present

Unemployment 2009 to present

It looks to me like government spending had little to no effect on GDP growth, and unemployment looks totally unaffected. It went up during the recession and a little bit afterwards, and has fallen consistently since, regardless of what the government tries to do.

This is my biggest complaint against Keynesian economics, or I guess fiscal stimulus to be specific. We had an $831 billion government program, and nothing to show for it. The Keynesian economist can make the case that things would have been worse without the stimulus or better without the sequester, that’s certainly a possibility and I don’t want to dismiss it. But I do think that the burden of proof should be on the people proposing trillion dollar expenditures. And I don’t think that the burden of proof was at all met. This is the strongest case I have against fiscal stimuli, they have enormous costs and very unclear benefits.

None of this is a counter to the idea that we shouldn’t have government spending.  There are many great things that government has provided, including roads, schools, police.  To return to the World War II example, we basically prevented a madman from conquering the world, which is a worthy a goal as there can be.  But what I am arguing against is the idea that government spending by itself typically stimulates the economy; the idea that we’re better off having the government hire people to do useless things.

There may be instances when this is true, that simply borrowing and spending money by the government can counteract a bad economic environment.  But as of right now, I’m convinced that it’s probably not true generally (ie, that any bad economic environment can be improved by the government spending more money), and that we can’t distinguish the instances where government spending helps from when it hurts or has minimal effect.

Insider Trading is Stealing

Over at econlib, Charles Hooper argues that insider trading doesn’t really hurt anyone. Insider trading instead is a victimless crime, and is in fact beneficial.

His argument goes like the following:

In the market for any given stock, there are “uninformed buyers” and “uniformed sellers.” That is, people who buy and sell stock but without inside information. In his example he uses the case of something very good happening to a company soon. The number of uninformed buyers (or technically the shares which uniformed buyers buy) will equal the number of uniformed sellers (with the same technicality).

The uniformed seller is hurt because he does not reap the rewards of the good news, but remember this is before any insider trading occurs, so it can’t be said he is hurt by insider trading.

Then, and insider comes along, buys a number of shares, and profits from the good news, making a large sum of money after the news is made public. Mr. Hooper asks who is hurt from this? Certainly not the uniformed seller, because he was going to sell anyway. The person most hurt is the uniformed buyer, who loses on the opportunity. Yet the uniformed buyer has no real claim to the potential benefits, after all, the buyers can’t complain that the “Insider snatched Uninformed Buyer’s dumb-luck windfall”.

There is one fatal flaw in the argument: Mr. Hooper seems to believe that any increase in the number of buyers will be offset by an equal decrease in buyers. But there are two ways that an increase in buys can effect the market, it can “crowd out” other buyers, or it can cause more people to sell, most likely some mix of the two. For various reasons, I think that the effect would be more sellers rather than fewer other buyers, but all we need to establish is that some of the effect of buying shares is encouraging others to sell them.

Now, we see the problem. The insider, an employee and agent of the shareholder, is transacting with the shareholder, using the knowledge that they gained only through being an employee against the shareholder. That is simply wrong.

Let’s clarify with an example: lets say that three friends pool their money to form an oil exploration company, hoping to find the next big well. One of them runs the company (being an engineer and all), and gets paid a salary, but the three friends split all profits evenly. They go a long time without finding any oil, and all three are discouraged. Then, one day, it becomes very evident that they are about to strike oil; but only to the one running the company. Instead of telling his co-investors about it, he instead offers to buy up their shares.

We can argue about ethics and why this is or isn’t ethical; but those discussions go nowhere. Instead, lets talk about economics. Each outside investor knows that, whenever they transact with insider, they can expect to lose. If they sell their shares to the insider, well they can bet that they’re on the verge of hitting oil. And if the insider offers to sell his shares, then they can be certain that the wells are dry (or that the expected find won’t pan out). Basically, the outsiders have one rule if they don’t want to get screwed: never transact with the insider. This of course hurts the insider, why shouldn’t he be allowed to sell to his co-investors if he needs the money, or buy if he has a windfall he wants to invest? In fact, we can see that the insider is worse off in this example than the outsiders (assuming they have jobs which pay the same), they can transact with each other (buying to invest, selling shares in order to consume), assuming their counterpart wants to do the opposite. But the insider can never transact, nobody will every buy from him or sell to him.

How do we fix this? Simple, make it a law that says that the insider can’t transact based on knowledge that he has that the outsiders don’t; the outsiders will now be willing to sell, knowing that they are protected if the insider has material nonpublic information. Thus, the insider now has the same privileges as the outsiders, and (in our simplified example), everybody is better off (they all have more potential trading partners) and nobody is worse off – clearly a pareto improvement.

But lets imagine a twist to the scenario. Instead of buying the shares directly from the outsiders, the insider sets up a shell company to purchase the shares from the outsiders, the outsiders have no way of knowing that the company is really owned by the insider. Is this ethical? I certainly don’t think so, all the shareholders put their trust in the insider that he would act in their best interests; keeping all potential upside is certainly not within their interests.

Lets use a third example. Same company, same three friends. They strike oil in a well which is expected to produce 100 barrels a day. Instead, it produces 120 barrels a day. The insider decides to take the extra 20 barrels and sell them himself (whether he does this buy selling them through the company and then embezzling the money or physically diverting the 20 barrels a day is unimportant). Is this action ethical? No – it is stealing. But it’s really the same action as above – using insider information (in this case the number of barrels being produced) in a manner against the best interests of the shareholder. How is this any different from insider trading – finding the extra 20 barrels a day, and then offering a price to the other shareholders based off of 100 barrels a day. In fact, it can be shown that the economic impact is exactly the same- the outsiders get the net present value of the sale of 100 bpd split evenly while the insider gets the net present value of the 20 bpd entirely to himself.

Now, you may argue that this doesn’t apply to the situation of the market as a whole; after all transactions on the stock market are much more anonymous. But this doesn’t make it better, it makes it worse. There is (typically) no way of knowing who you are buying shares from; so the insider who buys shares using material nonpublic information would be as if the insider in our above example set up a shell company to buy shares from the other investors. They would sell without ever even knowing that they were selling to the business partner. I can’t see how any of this is ethical, it is currently illegal and should remain so.