Ben Bernanke

From what little I've gleaned so far, Dr. Bernanke strikes me as an inflation hawk. And for that, I'm glad. The Fed can either manage the money supply or manage interest rates. It cannot do both at the same time. Volcker was the first Fed chairman to take on the monetarist challenge. He flinched a bit, and the Greenspan Fed did too, but by 1990, the Fed was back into a position where it could get back to just managing interest rates.
Bernanke looks like he might have the guts to shift into monetarist policies if need be.

Why Are There So Many Leftists in Academe?

Although I usually grant people the presumption of subjective autonomy whenever I listen to what they have to say, I must admit to the temptation of offering an environmental explanation when I see a concentration of peculiar thinking in an identifiable group.
For example, certain paranoias are perfectly understandable in the context of ongoing racial and class conflict. When certain groups routinely find themselves on the short end of the stick, it is not surprising to find a number of otherwise intelligent people believing something outlandish. I'm thinking of the O.J. trial, for example.
When it comes to the liberal arts academy, I'm struck by the rarity of Republicans and general paucity of conservative thinking. Indeed, I've had it said to me by members of humanities departments that there is no such thing as conservative thinking.
Yet, I look around and I see before my eyes the wonders wrought by capitalism. And I also know of the horrors perpetrated not only in the name of, but as a very direct consequence of, communism. (I regard socialism and the liberal left as nothing more than watered-down communism, a series of partial communizing steps. The Interstate Highway system is a step toward communism, in other words. Anybody who thinks this is an insane comment has zero understanding of either history or economics.)
The fact is, many members of the liberal arts academy are quite simply and quite utterly hostile to capitalism, to corporations of any type, and to business in general. The fact that such institutions feed, clothe, house, medicate, and entertain us all--and well, compared with the alternatives' record--is, if not disregarded, then offered as yet more evidence of the stranglehold they have over our lives.
Why such blindness to the misery lurking in the projects of the alternatives? I know a certain part of it has to do with a reflexive hatred of one's own patria. Such people are quite literally anti-patriotic. They cannot subscribe to any affirmation of the environment in which they live. Yet, we cannot stop there. Why is this? It is certainly possible that we are dealing with a species of arrested adolescent rebellion. But how does that process get arrested in the first place? Why do we have apparently competent individuals walking around universities (of all places) with the economic equivalent of the Flat Earth Theory in their heads?
I think the answer is twofold. Teachers (and these are all teachers we are talking about), are typically not paid by outfits that need to make a profit. Teachers, to a great extent, are paid by the state. In other words, from the very beginning, teachers' first economic experience is that of socialism. Their experience of money is as an entitlement. Surely education is a right? Surely society has an obligation to educate its young? Surely, then, it is a salutary use of the State's monopoly on force to take money as taxes from individuals and pay it to teachers?
I do not disagree for the most part.
But note how public education, especially, has evolved since the days of John Dewey. We now have social mission creep in the schools, parents having been deemed suspect and generally incompetent in the raising of their charges. This trend really got going in the late 1960s, but accelerated 20 years later with the proliferation of day care centers and the consequent extension of the education establishment's interest.
At the same time, the increasing acceptability of psychiatry as a community resource has fostered an alliance between the schools and the mental health professions. In short, there is a much larger social service infrastructure in place now than there was 50 years ago. And it is sensible to suspect that any profession secretly wishes to expand its franchise. That's business, after all. The more social problems there are, the better paid will be the "caring professions". It's all supply and demand. But then so is the price of heroin.
OK, back to the psychology of teaching. Teaching is a profession. All professions are distinguished by the fact that the consumer of a professional's services cannot shop for those services, or at least do so very competently. Years of medical training separate me from physicians and that is why I must, in the end, trust the doctor to not take advantage of me economically. In return, the doctor is required to do me good. The question then is, what body determines what the good is? In this case, the AMA. Hmmm. Not so sure I like that. What about teaching? The NEA? I'm really skeptical there. The Education Schools? No.
In any event, the idea is that teachers know more than their customers, i.e., their students. And, just as we are expected to follow our doctor's orders, so we are expected as students to do our teacher's bidding when it comes to assignments. Fair enough.
However, I'm interested in the psychology here. Teachers live in a world in which they are able to command others. At the same time, as I noted above, they derive their livelihood in ways that do not respond to economic imperatives. Even private school teachers are somewhat insulated from the economic forces surrounding their employers.
College professors, above all, live in an exaggeration of the professional world I've been describing. For the first 15 or so years of their professional lives, they live as gypsies, fearing for their next year's salary. This job insecurity is painful and the "market" becomes a fearful place, a place from which one might very well be ejected coldly out of the entire profession.
Upon gaining tenure, however, all of that insecurity dissipates. Of course, by then the professor is knee-deep in bureaucratic demands, the utility of which would escape most rational people. But in the classroom, the professor, like all teachers, is accustomed to being right, to being obeyed. And if neither respect nor obedience accrues to the professor's efforts, the professor's psyche is nonetheless preserved by the notion that the years of study, research, and thinking (and we really mean a lot of hazing), justify his existence despite the obvious conclusions of the market.
Of course, the comparison between the intellectual architecture of the professor's brain and the sparsely appointed chambers in his students' brains is ridiculously incongruent.
Except for one thing. Those students, by and large, are headed for a world in which wit and native intelligence count. They may not be able to recall the characters of Henry James's The Ambassadors, or even get the point of the book, but they will be able, if they are lucky and savvy, to survive quite well in the jungle that is the world.
Finally, the conclusion that one must draw is that the professoriate, in the main, is infused by a resentment of its erstwhile charges' material success and cannot justify that success on any grounds whatsoever. Of course, the professoriate, in the main, does not understand the day to day details of what it takes to make it in the economy. Then, too, the economic environment in which the professoriate finds itself lends perfect credence to a culture of subsidy by some alien source, the nature of that source never to be questioned. That is why one so frequently hears great economic nonsense dripping from the universities, where it seems to be the notion that money is unlimited.
Well, maybe I'm not surprised. For the universities, especially these last 25 years, money has seemed quite unlimited, what with kids' and parents' willingness to take on any (subsidized) debt to pay for the whole scam. And who can blame them? The universities have not yet found any pricing resistance among their customers. I too feel socially generous when I'm flush.
Anyway...supply and demand.

The New Progressives?

Here is an interesting article by Joel Kotkin in today's Washington Post. It is precisely the pragmatism of the people he cites that I admire.

Bohemian Dollars

The dollar is a Bohemian. It's true. The United States adopted a currency based on the Spanish milled dollar, popularly known as "Pieces of Eight".
OK, so the Spanish currency was called a "dollar". Where does this word come from? It's actually derived from the German "Thaler", which itself comes from "Thal" meaning "valley". The word is etymologically related to our "dale".
It turns out that there were rich silver mines in what is now the Czech Republic, in the Sudetenland, to be precise. This was the German-speaking rim of Bohemia that Hitler coveted so much in 1938 and that Chamberlain sold out on. Anyway, the location of these mines was known as "Joachimsthal", and the products of these mines as "Joachimsthalers", or "thalers" for short.
By the way, did you ever try to cut a pie into five equal slices? It's hard to estimate accurately. How about four? That's easier. You just slice twice along a diameter, which is easier to see. If you want eight pieces, you slice two more times. That's why the Spanish dollar was "milled" into eight pieces that could be broken off. Each piece was a "bit", worth 12.5 pennies. Two bits therefore is a quarter. This is also why until quite recently, financial instruments were quoted in eighths and sixteenths or other powers of two. Wall Street originally based its quotation system on the Spanish milled dollars still circulating when the Exchange was founded.

Some Random Notes

I'm told that money can't buy happiness. Well, maybe not, but poverty isn't much fun either. Also, I've noticed that my happiness has increased with my income.
I am suspicious of anyone who tells me that money can't buy happiness, that it isn't everything, etc. Of course it isn't everything, and of course there are poor people who are happy. But I'm still suspicious of people who tell me this--I think they want my money. Or at least they don't want me to have it.
I'm fascinated by people who think having money is somehow illegitimate or that any gain is somehow wrong. We've only just begun to parse the psychology of mass envy.
Why is this important? Well, on the international stage, the United States is the current Empire just as Britain was in 1875. And as such, we attract all kinds of opposition, 98% of which is based on opinions and reasoning that would normally be the subject of clinical attention. The World, in other words, goes nuts when it comes to the subject of America. (E.g., blaming us for the tsunami last December.) Resentment of power is an ancient and abiding emotion and is always legitimized beyond the point at which other strong emotions would be regarded as illness.
Yes, one is easily tempted to regard most of humanity as utterly crazy--dysfunctional, violent, consumed by resentment and hatred, subject to the most outlandish conspiracy theories, etc.
And the solution? I'm sorry, but it's a boring one. It consists of having everyone shutting up, sitting down, and getting to work. Also, it consists of seeing the world soberly, without the frisson of imagining dark powers lurking here and there.

First Observation

We live in interesting times, which, according to what is probably an urban legend of sorts, is the result of an old Chinese curse. Perhaps we have been cursed by China, perhaps not. I regard myself as blessed so long as I'm not being chased down the street by machine gun-toting irregulars.
Anyway, since September 11, 2001, we Americans have been engaged in dealing with the world in ways we never imagined before.
Well, not quite. Ever since the 1979 Iranian Revolution, I and many others have thought that the kind of terrorism emanating from the Middle East and Muslim world was going to become an ever-larger item on the Western agenda. Along with the overt complaints about Israel and Western policies, the fact that for most, if not all of its history, Europe and the formerly Christian West have been for Islam a kind of unsolved problem (the Battle of Tours being regarded as a temporary setback), means that there is a significant slice of humanity that regards the West as somehow illegitimate.
But the West's own narcissism has blinded it to the challenge it faces. And the Western Left's critique has been anything but constructive. Rather than extending and rectifying the rough edges of Western culture, the Left has too often turned against its own benefactor (where did freedom of speech come from? Where did academic freedom come from? Etc.)
Now, since much of the current material well-being of the entire species was spawned in the West, the challenge the West currently faces (even if many if not most in the West cannot seem to understand that they are in fact being challenged), is critical for the whole world. Of course, I'm assuming that material well-being is a good (see my following economic postings, TBA).
This is not to say that there is a zero-sum and only a zero-sum solution to the current conflict, but it is to say that mere recognition of the conflict is necessary. And it is necessary, too, to acknowledge that mere self-criticism in the style of the Western Left is only to surrender (which would in fact be a zero-sum solution).
More on this anon....

Ab Initio--The Spleen Board

This blog was urged upon me by a buddy of mine who thinks others might wish to share my spleen as it emerges in my observations of the various genera of human folly. Topics of particular interest include politics (a most fertile field of folly), economics (a counter-intuitive obstacle course of ideas, which upon explanation make complete sense to anyone who cares to sit still for five minutes and parse them), and social and cultural observations.
It has been my position that possessing opposable thumbs confers a certain duty to use them to advantage. From what I have seen of the past 10,000 years, this duty has only occasionally been performed. The aim here is to redirect some of the wasted energy used in running the human hamster wheel to increasing the well-being of the species. And so now, this blog is open for business.