The Demise of the Dollar

An important article by Robert Fisk in the The Independent.  (HT: Seldom Seen Slim)

Frugal bastards like me, who live according to the old virtues, play by the rules, are totally debt-free, save and invest, exercise 'due diligence' across the board — we are now going to get the shaft through no fault of our own.  What's a poor philosopher to do as his stash of cash threatens to transmogrify into a pile of trash?  Three simple suggestions:

1. Buy gold and other precious metals.  But gold is at an all-time high of $1038.65 a troy ounce, and you know what they say about buying high.  Gold is extremely volatile and has no intrinsic value.  Nor does it have any growth potential like stocks.  Because the world's gold supply increases very slowly, its exchange value is mainly driven by demand.  But the demand is perception-driven, so be careful.  Still, gold is and always has been the money of last resort, money for when the crap hits the fan, and thereafter.

2. Stockpile nonperishable goods, including those you don't use yourself.  What you don't need or want can be used later on for barter.  While prices are low and the dollar still has purchasing power, lay in a supply of clothes and footwear, tools, mountain bikes and musical instruments, wine and liquor, canned food and dry staples such as rice and beans, guns and ammunition, and so on.

3. Make repairs and improvements on your domicile.

I Must Not be a Serious Blogger

On the Typepad start-up page, there is the following come-on:

Are You a Serious Blogger? Prove it. Put ads on your blog to get paid for your hard work and give it a more professional look.

The underlying assumption is curious:  an activity is serious if it makes make money and because it makes money; the very same activity is unserious if it does not.  I expand on this theme in Work, Money, Living and Livelihood.  You will have guessed that I reject the assumption.

Not that I have anything against money or its (ordinate) pursuit.  Nor do I have anything against economic inequality. If your talent and hard work and good fortune have led you by legal means to a net worth  thousands of times greater than mine, then I salute you.  The notion that a legitimate function of government is wealth redistribution is a socialist abomination and of late an 'Obamination.'   I fail to see any good reason to accept John Rawl's Difference Principle, the thesis that socioeconomic inequalities are justified only if they make the worse off better off than they would have been without the inequalities.  There is no problem with economic inequality as such. 'Economic justice' is a junk phrase on a par with 'social justice.'

So my objection to the above assumption does not stem from any aversion to the lean green or its unequal distribution.  What I object to is a conceit found as much on the Left as on the Right, namely, that 'seriousness' and 'success' are spelled with dollar signs, that the only value is economic value.

Finally, the notion that ads give a blog a more professional look is absurd.  They are just so much distracting clutter.  And if they move,  it is even worse.  Ads are gimmicks to turn a buck; they make a site appear less professional and less serious.

The Fiscal Irresponsibility of Liberals in the United States of Ponzi

Paul Krugman as case in point, here:

There’s been some hysteria about the administration’s new estimate that the cumulative deficit will be $9 trillion over the next decade. Don’t get me wrong: this is bad. But it’s being treated as an inconceivable sum, far beyond anything that could possibly be handled. And it isn’t.

What you have to bear in mind is that the economy — and hence the federal tax base — is enormous, too.

Please note the typical leftist tactic of imputing mental instability to those who dissent from liberal-left ideas: you are 'hysterical' if you question the wisdom of running massive debt and thinking that we can spend our way out of it.  To take a second example, if you point out the very real threat of radical Islam, the leftist will call you an 'Islamaphobe' which of course implies that your concern is not rational but simply an irrational fear.  Examples can be multiplied.  Oppose the morality of homosexual practices and you are a 'homophobe.'  Obama treats criticism of his socialized medicine proposals as fear-mongering.  This shows what little respect liberals and leftists have for their fellow citizens.  It is a  sign of  profound disrespect for one's interlocutor when one treats his thoughts and utterances as mere symptoms of an underlying psychological malaise.  But that's the Left for you.  They are elitists.  They don't respect you, but they want to control you.

Note also Krugman's point about the size of the federal tax base.  The Feds have plenty of opportunity to fleece the taxpayer.  And that is what they will do.

Now read something from an economist with his head screwed on properly, Nouriel Roubini, The United States of Ponzi:

A government that will issue trillions of dollars of new debt to pay for this severe recession and socialize private losses may risk becoming a Ponzi government if–in the medium term–it does not return to fiscal discipline and debt sustainability.

A country that has–for over 25 years–spent more than income and thus run an endless string of current account deficit–and has thus become the largest net foreign debtor in the world (with net foreign liabilities that are likely to be over $3 trillion by the end of this year)–is also a Ponzi country that may eventually default on its foreign debt if it does not, over time, tighten its belt and start running smaller current account deficits and actual trade surpluses.

Advertising and the Lure of the Lucre

I received an e-mail from a fellow who offered me $35 to run an ad on the alcohol, tobacco, and firearms page of this site for a alcoholism/drug addiction resource. I declined the offer for the same reason I don't display any money-making gimmicks such as 'tip jars.' The work I do on this site is a labor of love and an end in itself. To commercialize it would be to sully it. Of course, I have no objection to someone else turning a buck from his online work. If you need money, go ahead and try to earn some by any legitimate means and if this involves cluttering your site with advertising and such, it's a free country. But if you have enough of the lean green, then why not be content with what you have and turn your mind to the nonutilitarian?

"But what if he offered you $3,500?" Well, if I don't need $35, why would I need $3,500 or $35,000?

Work, Money, Living and Livelihood

Prevalent attitudes toward work and money are curious. People tend to value work in terms of money: an occupation has value if and only if it makes money, and the measure of its value is how much money it makes. If what you do makes money, then it has value regardless of what it is you do.  And if what you do does not make money, then it lacks value regardless of what it is.

A man stands on a street corner, Bible in hand, and preaches the gospel of Jesus Christ. Passersby regard him as of no account, as a loser, a bum, a fanatic. They give him a wide berth and would be embarrassed to be seen associating with him. But let the fellow clean himself up, get himself admitted to a divinity school, earn a degree and become an assistant pastor somewhere, and suddenly he has social status of sorts. For now his preaching is a livelihood, a means of attaining a comfortable living standard, and he is now a serious and productive member of society. He is now of account and is known to be such at the local bank. He amounts to something in the economic and social currency of the realm. As the Danish Socrates might have said, he has learned how to make a living from the fact that another man was crucified.  The allusion, of course, is to Kierkegaard.

A Further Thought on State-Run Lotteries: The Morality of Accepting a Payout

In Good Societies and Good Lives I argued against the morality of state-run lotteries. Now let's consider the morality of accepting a payout. Suppose you win big, in the millions. Chances are excellent that this will ruin you for the rest of your life, but that is not my present point. Suppose you can handle the windfall, the onslaught of long-lost cousins, the openly-displayed envious hatred of your 'friends,' the army of 'financial planners' and tax advisors who will beat a path to your door, etc. Aren't the winnings ill-gotten gains?

Continue reading “A Further Thought on State-Run Lotteries: The Morality of Accepting a Payout”

The Irrationality of Playing the Lottery

I have posted several times over the years on the irrationality of playing the lottery and on the immorality of state sponsorship and promotion (via deceptive advertising) of lotteries.  The following e-mail, however, raises an interesting question that gives me pause:

As I was reading this story of an impoverished young rancher who won $88 million net with a Powerball ticket, I was wondering whether you'd allow that a case could be made for the rationality of his gamble. The young man and his whole family were in desperate financial circumstances with no way to cover back taxes, livestock loans, etc. They faced foreclosures, eviction, etc. The young man bought one ticket. He was not a chronic heavy lotto-gambler. The one ticket did not make his situation worse. Arguably, the lottery gamble was his only hope of salvaging his situation. If you have only ONE way to save yourself, the odds don't really matter.

Actually, according to the account linked to above, the cowboy bought $15 worth of tickets.  So he bought more than one ticket.  But no matter.  Let us assume that this $15 was the only money he ever spent on the lottery.  And let's also assume that the cowpoke was at the end of his rope — pun intended — facing foreclosure and imminent residency on Skid Row.  We may also safely assume that the young man will never again play the lottery.  (For he seems resolved not to fritter away his winnings  on loose women and fast cars.) The question is whether it was rational for him in his precise circumstances to spend $15 on lottery tickets.
 
Now one question to ask is whether the rationality of a decision can be judged ex post facto.  I would say not.  A rational agent agent is one who chooses means that he has good reason to believe are conducive to the ends he has in view.  A rational decision is one made calmly and deliberately and with 'due diligence' on the basis of the best information the agent has available to him within the limited time he has at his disposal for acquiring information.  A rational decision cannot be rendered irrational by a bad outcome, and an irrational decision cannot be rendered rational by a good outcome.
 
So I am inclined to say that our cowboy made an irrational decison when he decide to spend $15 on a chance to win millions.  The fact that, against all odds, he won is irrelevant to the rationality of his decision. The decision was irrational because the chances of winning anything significant were astronomically small, whereas the value of  $15 to someone who is down to his last $15 is substantial. 
 
But I can understand how intuitions might differ.  Suppose we alter the example by supposing that the man will die and knows that he will die if he does not win today's lottery.  Suppose he has exactly $15 to spend and he spends it on lottery tickets.  He now has nothing to lose by spending the money.  It is perhaps arguable that, in these precise circumstances, it is prudentially if not theoretically rational for the cowpoke to blow his last $15 on lotto tickets.
 
Just what is rationality anyway?
 

Good Societies and Good Lives: On State-Run Lotteries

Good societies are those that make it easy to live good lives. A society that erects numerous obstacles to good living, however, cannot count as a good society. By this criterion, present day American society cannot be considered good. It has too many institutionalized features that impede human flourishing. Here I discuss just one such feature, state lotteries.

On Tipping

Here, in no particular order, are my maxims concerning the practice of tipping.

1. He who is too cheap to leave a tip in a restaurant should cook for himself. That being said, there is no legal obligation to tip, nor should there be. Is there a moral obligation? Perhaps. Rather than argue that there is I will just state that tipping is the morally decent thing to do, ceteris paribus. And it doesn't matter whether you will be returning to the restaurant. No doubt a good part of the motivation for tipping is prudential: if one plans on coming back then it is prudent to establish good relations with the people one is likely to encounter again. But given a social arrangement in which waiters and waitresses depend on tips to earn a decent wage, one ought always tip for good service.

Continue reading “On Tipping”

Taxation and Liberty

On 17 April I wrote:

Taxation, then, is a liberty issue before it is a 'green eyeshade' issue: the more the government takes, the less concrete liberty you have. Without money you can't get your kids out of a shitty public school system that liberals have destroyed with their tolerate-anything mentality; without money you cannot live in a decent and secure neighborhood.

But I just now found something over at Jim Ryan's Philosoblog that gives me reason to think that I blundered.  Ryan writes:

As Isaiah Berlin said, echoing the Bishop Butler, "Everything is what it is: liberty is liberty, not equality or fairness or justice…." Unjustly high taxation is unfairness, injustice, and theft. It is not a violation of liberty rights. The price for ignoring this fact is that we let the verbal trap stand and you lose the basis for dismissing out of hand the leftist's argument for redistribution of wealth. There is plenty of reason to indict unjustly high taxation. There is no need to resort to verbal trickery. Leave the verbal trickery to the leftist, isolate it, and expose it.

Although Ryan was not responding to me when he wrote this, he could say to me, Your talk of 'concrete liberty' being lessened by high taxation smacks of the very sort of thinking that you presumably oppose in leftists.  Liberty is liberty.  There is no such thing as concrete liberty.  As opposed to what? Abstract liberty?  You would agree that justice is justice and that there is no such thing as social justice or economic justice.  Similarly with liberty.  It is what it is and not some other thing.  The argument against high taxation is not that it violates or lessens your liberty.  It doesn't. The problem with it is that it is unjust.  High taxes don't violate yout liberty; at most they impede the exercise of your liberty, which is something different.

I need to think further about this.

The Lottery Player

The lottery player, unable to think clearly about money, both overvalues and undervalues it.

He overvalues it inasmuch as he thinks that a big win would be a wonderful thing even though it would probably not be, and won't occur in any case for the vast majority of players. There are plenty of examples, some reported here, of people who have been destroyed by a sudden huge windfall. For instance,

Continue reading “The Lottery Player”