The Media and Global Warming

If you look at the media, ok, uh, Russia invading Ukraine, job loss, a police officer was killed. The things that happened yesterday, 99% of them will be forgotten next week. The news cycle always changes. The reports will all gather around and the editor will ask, ‘What do you have?’ Someone will say, ‘I cured cancer.’ The editor will say, ‘Not good enough.’ Someone else will say, ‘I saw a baby get run over.’ The editor will say, ‘Still not good enough!’ Finally, someone will say, ‘The UN projects Ebola will kill 100 million people!’ Bam! That will scare people. Will it kill any US people? Maybe? What if those people from wherever come over to the US on an airplane? Then it will spread . It is really contagious. If one of these people spit on you, you’re going to get Ebola and die in four days because there is no cure. ‘Ok,’ says the editor. ‘Run with that. Don’t forget to include spit and that there is no cure.’

That is how every single story is massaged into the news headlines. You read the story and it says please continue on page 24, and lo and behold there is a huge ad. The goal is to get people to see ads. That’s why it seems to many people the world is falling apart. According to Matt Ridley and Steven Pinker, thanks to technologies, globalization, less war and improved lifespans, we’re living living in the best of times. We have driverless cars, Tesla, Facebook, Uber, web 2.0, Bay Area real estate, Snapchat, Tinder, Dropbox and other great technological marvels, thanks to the meritocracy and free markets. If the media reported on the good news, they wouldn’t be able to scare people to turn the page and look at that full-page ad. Blame the left for wanting the pull the roof down on civilization because there is too much wealth inequality or because companies are hiring based on IQ instead of big 5 personality traits and other pseudoscience crap. Like an immature child, if the left can’t have things their way, they would prefer that everyone suffer.

I don’t give a flying crap about ads or anyone who advertises in the newspaper. I have no ads on this website. I’m not trying to scare people.

What about climate change, asks the left. Well, what about climate change? Every year it seems like there is a new theory…well it wasn’t this old theory, now it’s methane gas. It wasn’t ‘this’ theory, it was this other theory. Oh, so OK, the climate is changing. Perhaps some of it is man made; perhaps all of it is man made. I dunno…it’s unlikely all of it is man made because every year since the dawn of time the earth’s climate has changed. The earth does different things. The climate changes. There was a mini ice age in the 1800′s. Climate change is very cyclical, with periods of warming and cooling:

And for the past 500 years:

The science on anthropogenic global warming is still unsettled. We don’t really know. Let’s assume the worst case scenario ,and the temperature is going to rise 1 degree a century, and there’s nothing we can do about it. Ok, in the 1970′, as the world population shot past 2.5 billion, everyone thought the world would run out of food. With 7 billion people, we’re not running out of food, and the biggest problem for many nations is obesity. So the world tends to adapt, innovate and change. The great thing about high IQ is that allows humans to adapt to changes and figure out technologies to help us, but it’s possible that there will be changes that occur so fast that we won’t be able to adapt. So I tend not to follow the herd of the latest worry. Let’s see what the real worries are. And this all can be scientifically modeled. The jury is still out on the depths of whatever the damage has been done. Every decade there has been damage, but there also have been good things. Pollution is much better now in America than any time in the past 150 years. If you want to change the world, change yourself. The world is not falling apart. The economy is not going to have a disaster. The world may seem like it’s falling apart, but the empirical evidence suggests otherwise.

The Daily View: Stocks, Individual Exceptionalism, Cultural Marxism, Birth Control

I would write more about the market, but not much going on. The S&P 500 is up 7% for 2014, but most of those gains are concentrated in a three-week period in May, with lots of churning before and after. It’s a weird, fickle market where sectors and stocks can be chopped to pieces in an instant, such as what has happened to emerging market and small caps. That’s why the ‘bigger is better’ theme has been such a good investment strategy since the market bottom of 2009, with huge gains in mega-cap, globalist stocks like Google, Apple, Amazon, 3M Company, Facebook, Jonson & Johnson and Disney. It’s so easy anyone can make money, but the the mistake a lot of investors make is taking on too much risk with high-volatility, speculative individual stocks when better returns with less risk can be attained by using in-the-money call options on large cap, low volatility stocks like the aforementioned companies or a large cap index fund such as the S&P 500. The idea behind the deep-in-the money call is you can capture 90-95% percent of the upside with only 10% of the capital of buying the stock outright. If the market tanks, which it did in 2011, you can deploy your large cash reserves and double down. It’s a very effective strategy.

Regarding the state of the economy, the entire middle class is getting demoted, and if you look at income relative to inflation, income has been going down four years in a row. Companies are firing middle management..look at the emails you get from friends, ‘I been laid off..what do I do?’ So what’s happening is companies are outsourcing their healthcare and worker’s compensation headaches to temp firms. We’re in an un-participatory wealth creation and economic boom. You have millions of people unable to to find work or working in low-paying jobs juxtaposed with stories of tech companies, most of which are less than five years old, being valued at hundreds of millions or even billions of dollars, making their founders and early employees obscenely and instantly wealthy – wealth that just a decade ago would have taken a lifetime to attain that now can be had in a year.

Bay Area real estate keeps making news highs:

Homes in 94705 are up 40% from the 2011 lows. So much for James Altucher insistence that real estate only gains 2% a year.

Uber will be worth $40 billion next year, guaranteed. TSLA will go to $350 a share. Facebook will go to $120. That’s the economy we live in, where the big and rich get bigger an richer.

From Matt Forney, he writes

flakes-posterAs the collective IQ of America slides every year, our discourse becomes increasingly juvenile and trivialized. The cultural Marxists of yesteryear at least had some intellectual chops: our modern overlords can’t discuss anything more complex then pop culture.

He’s right about the second part, but wrong about the first. Cultural Marxism is prevalent in popular culture, but I guess he didn’t see the Reddit AMA about the astronomer, which got over a thousand comments and three thousand votes because America is not dumbing down, as much as everyone says it is. The empirical evidence just doesn’t support a ‘dumbing down’ process. Taking into account the Flynn effect, more rigorous education and the internet, your average white, 20-30 year-old male would have an IQ of 115 fifty years ago. The beta male is also an archetype conservative, pragmatist and utilitarian because he puts logic, empiricism, and reason ahead of ideology and emotion.

Second, as evidenced by the backlash against the ‘check your privilege’ campaign, we’re seeing a repudiation of cultural Marxism by the smartest generation, in agreement with earlier posts about beta male conservatism and millennials being more conservative than popular belief dictates. Same on Reddit and 4chan – thousands of millennials were defending the action of the officers in the Michael Brown shooting and subsequent riots, and justly so. The smartist generation doesn’t take to pandering and vapid platitudes – and that’s exactly what those campaigns were. Obama’s plunging approval ratings and the rapid rise of internet libertarianism, pragmatism, utilitarianism, minarchism, neoconservatism, and neoliberalism doesn’t bode well for the already dwindling ranks of cultural Marxists, either.

The libs, in their war on success, exceptionalism and free markets, would rather have society regress than uphold the meritocracy. They want equality of outcomes instead of equal opportunity. They also seek economic failure and crisis so that the rich lose money, as a way to destroy the wealth of the top .1% when efforts to raise taxes and increase regulation fail. To them IQ is a meaningless number and individuals are exceptional at non-athletic tasks only through unfair environmental advantages, not because of superior genetics. Libs like Michael Lewis say the market is rigged and irrational, despite evidence to the contrary of hundreds or even thousands of people consistently beating the market while playing by the rules.

As an example of reason trumping ideology, a lot of republicans, including National Review, are now getting behind birth control because they realize that it’s a good way to control future entitlement spending and crime, as part of growing pubic and political support for eugenics. In 2000, John J. Donohue III and Steven D. Levitt. published a paper positing that abortions in the 70′s from Roe V. Wade could have been a major contributing factor to the reduction of crime in the 90′s and, now, decades later, policy makers are finally looking beyond the controversy and taking heed to the merits of the study and other similar findings.

The Great Ebola Outbreak of 2012 That No One’s Heard Of

Here is a perfect example of how correlation doesn’t equal causation: Cocoa prices surge on output fears over Ebola outbreak

LONDON – Cocoa soared to 3.5-year highs this week on fears the Ebola outbreak could reach Ghana and Ivory Cost, the two biggest producers of the commodity used to make chocolate.

Ghana and Ivory Coast account for 60 percent of global cocoa output, while West Africa produces 72 percent of the world’s cocoa. “If these two countries were to be seriously hit by Ebola then prices could soar—maybe double,”

Oh, really? Let’s take a closer look. It’s reasonable to assume that fears of Ebola disrupting the cocoa supply would cause prices to rise, but it never occurred to anyone that spikes in cocoa prices have occurred numerous times in history without Ebola outbreaks, and as shown below, that cocoa prices were already in a strong uptrend starting in 2013:

So maybe some psychic traders knew there would be a severe West African Ebola outbreak a year before it happened and began buying cocoa futures. But more likely there are numerous factors that cause commodity prices to rise and fall, and a correlation between rising prices and the Ebola outbreak doesn’t prove that Ebola caused prices to spike. Maybe cocoa surged because it was already in an existing uptrend and traders were buying the dip, regardless of Ebola. Cocoa surged 20% in early 2012 and there was no Ebola outbreak at the time, unless the outbreak was so bad that it killed off the media before they had a chance to report on it. That’s as stupid of a theory as attributing a spike in cocoa prices to Ebola when there are other factors.

Illusory Superiority and IQ

According to Derb’s own homepage, the prolific writer, autodidact, polymath, programmer and mathematician ‘only’ has an IQ of 135, which came as surprise to me. I’m sure if you asked others to guess Derb’s IQ they would shoot off numbers like 150 or 160, as would I. But perhaps his test had a low ceiling, but because he doesn’t tell us the type of IQ test he took, I guess we’ll never know. But, according to numerous studies, what we do know is that modern IQ tests have very high ceilings and that people with profound intelligence (160+) tend to exhibit vastly superior ability in adolescence than those who are merely very intelligent.

Perhaps there is a tendency among those in the HBD ‘community’ to downplay the ability of varying levels of intelligence such that a person of an IQ of 100 is only smart enough to be cognizant and 120 is the minimum to be educated when, in fact, about 25-40% of individuals with IQs between 90-110 do complete college and would be considered ‘educated’. Only 115-125 is needed to complete graduate school and even earn a PHD. Again, we’re not talking super-genius levels of intelligence. There is a cognitive bias called illusory superiority which means that individuals of above average intelligence may overestimate their own intelligence and the intelligence of their peers while also underestimating the intelligence of those on the left of the bell curve as well as underestimating the intelligence of those on the very far right. For example, Gary Ridgway, America’s most prolific serial killer, only has an IQ of 82 but, by fastidious attention to detail, was able to evade capture by the well-funded FBI for two decades. Although to someone with an IQ of 120, 80 may seem barely functional, it actually isn’t.

Now, let’s look to the very far right (>160) of the bell curve. A couple weeks ago on a debate on unz.org, I steadfastly maintained that celebrated physicist, Richard Feynman, only had an IQ between 125-140 instead of the >190 figure purported by others. No one agreed, and even Ron Unz, editor of unz.com who seldom interferes with the dalliances of regular commentators, had to intercede and rebut my point not just once, but twice because Richard Feynman is supposed to be among the smartest men who ever lived and to question this immutable fact is blasphemy and high treason. As mentioned in the Feynman’s IQ essay, the cognitive differences between individuals with an IQ between 120-140 (above average to genius) and those with an IQ > 160 are substantial, and this is documented in numerous studies. Richard Feynman was learning college level math in his early teens, but prodigies do the same and often go to college early, skipping high school altogether. Hell, even I was reading college level math books in 9th grade, and I’m not that smart. Read the biography of Feynman’s formative years and compare it to that of Terrance Tao, Edward Witten, Jacob Barnet and Jacob Lurie (all of whom have IQs above 160) and you’ll see a stark difference. Witten, for example, was able to acquire most Feynman’s repertoire of knowledge while studying history and economics, only to switch and obtain a PHD in physics. Those with the highest of IQs possess a superhuman ability to gain and synthesize knowledge and at such an early age that even Richard Feynman, as brilliant as he was, couldn’t match. That doesn’t detract from Feynman’s legacy – but we’re taking about IQ, which is not the same as mastery of a subject, whether it be math, chess or writing books.

The New Gilded Age; The Post-2008 Economy, Part 4

The news cycle over the past two weeks can be likened to watching paint dry or glaciers melt. 2013 was the year of congress, the sequester, debt ceiling and shutdowns; 2014 is dominated by sports (Donald Stirling, Ray Rice..stuff like that), police and race conflicts, Russia and the Middle East.

The good news is the slow news cycle bodes well for stocks because in the absence of economic catastrophe, stocks will do what they have normally done historically which is go up all the time.

The best investment strategy right now (and for many, many years to come) is to take advantage of the bigger is better market environment and go long large cap tech, such as Facebook, Google and or the S&P 500, while hedging it with a combination of emerging market short positions and or small cap shorts. Or you can short ALL markets excluding the US while going long the S&P 500. Since 2014, in the wake of the fear of recession in Europe and elsewhere, we’re seeing a huge flight to safety. Fund managers are taking money out of the smallest, weakest stuff and pouring into the safest and highest quality stocks, indexes and sectors such as the S&P 500, healthcare, biotechnology, and large cap technology such as Microsoft, Google and Apple. Again, this trend will continue of the big getting bigger and companies with huge growth and zero competition being rewarded with enormous but sustainable valuations. Such high-growth companies include Facebook, Snapchat, Uber, Tesla, Dropbox, Pinterest, Tinder, and Air B&B.

The left is hoping, to no avail, that Karl Marx’s prophecy will come true, and capitalism will self-destruct. No such luck as capitalism continues to thrive. The elite keep getting richer, and high-IQ people are still be showered in wealth and adoration for their contributions to society.

We’re a new gilded age like the roaring 20′s, but it won’t end in a crash, even as profits & earnings and wealth inequality keep making new highs. There’s too much money sloshing around in the global economy, too much fear by the masses, and the US is still the best neighborhood in an unsafe world, so institutions will keep buying our debt and stocks as there are no good alternatives. Compare that to the 20′s, late 80′s, and late 90′s when you had an opposite situation of rapidly rising interest rates, public euphoria, too many overpaid jobs, and high valuations.

I was taking to someone a couple days ago and he asked who would be the new superpower if America falters. I replied that if America fails, thanks to globalization, there will be no new superpower. We (the world) will all go down together because nations are so interdependent. It’s not like China will reign supreme, because it’s economically dependent on America to buy its exports. He also asked what would happen if America is unable to grow fast enough; would bondholders lose faith and dump American treasuries, resulting in inflation? I explained that Japan has much poorer economic growth than America but actually more deflation. If America has economic troubles, it will create a massive flight to safety and send yields much lower, not higher. That’ the power of reserve currency status and why the Goldilocks economy of slow, steady growth and tame inflation is the best economic environment.

Not only are we in a gilded age, but we’re in a smartist era and intellectual Renaissance. In the past eight years alone more significant discoveries have been made in high-energy physics than in the previous twenty years combined. The same for mathematics, finance, economics, and pretty much all intellectual subjects. Thanks to the world wide web, the Flynn Effect, and rigorous public education, millennials are smarter and better informed than any previous generation, which is why we’re seeing the rise of pragmatism (realpolitik), internet libertarianism, and utilitarianism – the fastest growing nascent political movements of recent history. As more evidence of the smartist era, a recent Reddit ‘Ask Me Anything’ (AMA) from an astronomer got over 1000 comments and even more up-votes, on par with famous athletes and celebrities. She’s not even a famous astronomer, but just some random university student. That’s just the tip of the iceberg of how prized intellectualism is in America today. AMA’s from physicists, wonks, tech entrepreneurs and other smart people have also gotten thousands of comments predominantly from a 20-30 year-old demographic. In the 60′s, people of that age may have had more street smarts – but in the post-2008 economic, wealth, and intellectualism boom – street smarts have ceded to book smarts in some sort of Revenge of the Nerds in overdrive because intellectual capital and cognitive capacity has become the new currency for upward mobility, so those who have more of it are superior people worthy of our admiration and attention.

Outside of athletic ability, welfare liberals are in constant denial about individual exceptionalism. They dismiss IQ as being unimportant or imprecise, or that the stock market is rigged and irrational in such manner that no one can beat it without insider trading or some other unfair advantage. According to liberal logic, someone may appear smarter not because they have more original cognitive capacity, but due to some unfair environmental advantage that only a big, wasteful social program can fix. In an effort to diminish the importance of IQ, libs in the useless field of social psychology want to believe everyone is irrational and that smart people are easily fooled. See, smart people aren’t so smart after all because they fall for the conjunction fallacy!

Some on the left say America is in decline or losing its influence. Not true, we’re pulling ahead of the rest of the world. Silicon Valley is not only the center of the technology universe, but America’s intellectual institutions are the envy of foreigners and are inundated with applications from the best and the brightest from all over the world. So while the left whines about America having too much inequality and not enough jobs, rich and smart foreigners – whether they are going to Caltech or MIT, working at Google, or buying up expensive real estate – can’t get enough of America.

Tomorrow I will drop a bombshell..stay tuned

We Need More Money in Politics and Less Voting

From Vox.com The class war in American politics is over. The rich won.

Money has always been inseparable from politics. This blog argues the admixture of money with politics is a feature, not a bug, and a contributing factor for the enduring resiliency of our republic when many other governments have succumbed to corruption, incompetence, and revolutions. Let’s consider a thought experiment where candidates are prohibited from receiving any donations, but are instead issued a stipend by the government to spend however they want on their campaign. Thus one can expect that candidates and politicians would have a incentive to enact and promise policy that would get as many donations and votes as possible, regardless if it’s good policy or not. Promise everyone a handout and go after the ‘fat cats’ and you’ll get a lot votes. The introduction of unlimited contributions requires triangulation by the politician to get funding, as well as tacit loyalty by the politician to the donor to receive future donations when running for reelection.

Here are some ideas to improve the voting process and our government:

1. Let people sell their votes. This would require full electronic voting integration with the internet. Months before the election, registered voters have the option to put their vote for sale on a website. Through a dutch auction process, the votes for each state are auctioned off to politicians willing to pay for them. (In the presidential election, I imagine 100 Florida votes will be worth more than 100 California ones.) Then participants vote electronically and get a unique confirmation code afterwards linked to the candidate they voted for, which they have to enter on the website. Upon completion, they are credited the monetary proceeds. But if they defect and vote for another candidate, the code is invalid and they get nothing, although the unfaithful vote is still valid in the electoral counting. The politician would only have to pay for valid votes. This can work for state and national elections.

2. Make votes proportional to wealth, and in presidential elections, let the rich cast their votes in any state. So a republican billionaire living in California would have the option to cast 10,000 Republican votes for Florida.

3. Repeal all voting amendments, and restrict voting to only individuals who have an income, IQ and or net worth above a certain threshold. A literacy test is too inclusive since you only need an IQ above 80 or so to read.

4. Anther option is to set a minimum individual donation that is high enough to preclude most low-income people from donating, but the problem is this can be evaded if they pool their money together.

5. Let corporations and individuals, both foreign and domestic, donate as much money as they want directly to candidates.

6. Let corporations have representation in government beyond lobbying. A representative for Walmart, for example, would be able to vote along with senators and congressmen. Such positions would be auctioned off by the government to help raise revenue.

7. Require that all candidates pay for their campaigns out of pocket, a process similar to how Ross Perot ran his campaign. This would guarantee that only economic stakeholders (the wealthy) would be able to run.

Ultimately, we need more money in politics and less voting. Let economic stakeholders decide how the country is run instead of low information voters. Americans are good at consumer spending, but not economic or foreign policy. Leave that to the experts.

From Thomas Sowell ted cruz and point no return

Sowell, having outlived his expiration date, has become a concern troll. The will of the people isn’t always the correct one, and the founding fathers knew this, which is why they created a constitutional republic instead of a direct democracy and why early America had numerous barriers to voting. It’s better for the economy and the security of the nation to have moneyed elites in power than populists, because the former have much more to lose, so out of some combination of preservation of self-interest and selflessness, they will make the necessary but unpopular leadership decisions during crisis, as well promoting pro-growth policy at the behest of their donors and their on personal financial interests. Politicians have to be malleable and ‘flip flop’, because changing times call for changing policy. Do you want a president who says he’s anti-war to remain anti-war if in the unlikely event the country is invaded?

The rich won because they create more economic value than everyone else, and policy is designed to help the rich get richer. It’s not that politicians support rich people for the sake of supporting rich people; it just so happens that rich people, by virtue of being economic stakeholders, know more about what is good for the country than average people, so politicians take heed. That’s why we need more money in politics and less democracy and egalitarianism. The rich create the technologies that improve our standard of living, and they create jobs, so why don’t they deserve to have more influence in how they country is run? That is the fair, pragmatic approach to governance under a meritocracy.

But Obama received a lot of donations and his campaigns were very expensive, so isn’t that an argument for less money in politics? Not necessarily, if we also restrict voting. Furthermore, the beauty of our tripartite government is that power of the executive branch, especially under far-left presidents, tends to be severely compromised.

Ali Baba Stock Going Higher

Time for another prediction, which is that Ali Baba stock (BABA) is going to $130 within a year or so. In 2012 and 2013, I predicted correctly that Facebook stock would surge and Apple would flatline. Facebook indeed rallied 150% and Apple fell from $600 to as low as $300. I also predicted that the market would keep going up (also correct), that the fiscal cliff and sequester would be speedbumps instead of crisis (also correct), and that Snapchat would be worth over $10 billion (correct).

this 3% rally today is the start of a 30% one within the end of year

Like Facebook and Google, Ali Baba has many positives going for it such as:

1. Huge growth

The prospectus also says the company’s total sales revenue for the 2014 fiscal year that ended March 31 was 52.5 billion yuan ($8.56 billion), up 52% from the previous year. The company reported sales of 15.8 billion yuan for the second quarter of 2014, up 46%.

The company has seen strong profitability. Its net profit for the 2014 fiscal year rose 170% year on year to 23.4 billion yuan. For the second quarter of this year, net profit was 12.4 billion yuan, growth of 184%.

http://www.marketwatch.com/story/alibaba-investors-have-reason-to-worry-say-analysts-2014-09-23?page=2>

The left wishes Ali Babba were just another dotcom bubble like pets.com. The libs also used the botched Facebook IPO to bolster their confirmation bias, completely ignoring the strong fundamentals pf the company. Sure enough, as the stock has doubled from its IPO price, no one cares about the botched IPO but the libs on the blogs. Libs are so desperate for crisis and failure that they have to turn molehills into mountains or invent problems out of thin air.

2. No viable competition

These huge IPOs such as Google and Facebook have been great performers. Facebook is up 150% and Google up 1000%.

We’re in a risk-averse market. Small caps, emerging markets, retail, and mid cap stocks have lagging badly as huge funds and other investors seek safety in what has been an enormous 3-year rally. What is happening is funds fear the market’s positive streak will end and the smallest, most speculative stuff will fall the most, so they are parking their cash in the biggest and safest stocks like JNJ, MSFT, BAC, C, MO, WMT, GOOG, PG, FB, and AAPL that will fare better in a selloff. At a $220 billion dollar valuation, strong fundamentals and risk-averse, alpha-seeking funds, BABA will join the flight to quality trend and possibly surge as much as 30% by end of year and maybe even 100% by next year for a market cap almost as big as Apple.

The Pursuit of Equality

A dense article by Steve about the pursuit of truth, philosophy, ‘equality’ of man, conservatism, and god. At the end he writes:

Today, the extremism of our culture’s demands for attestations of faith in equality and transparency is a mask for the movement back toward censorship and esotericism. We live in a society in which the fundamental truths—such as, that talents are distributed unequally by genetics—are increasingly considered unfit for public discussion, and careers as eminent as that of as James D. Watson, codiscoverer of the structure of DNA, are destroyed for letting slip a lack of fidelity to the reigning taboos.

The left is uncomfortable with biological determinism because it goes against their nature/environment-centric worldview, that all ills in society can be ameliorated with tax payer dollars and regulation, when in fact biology renders many problems intractable to social fixes and good intention. The liberals may be losing ground, and because they can’t win on intellectual merit, they resort to censorship to defend their cherished worldviews.

Another theme is equality, whether by decree, god or natural law. Let’s be honest: as far as post-2008 America is concerned, big brains equals more money and more clout. People are technically born equal, but biology, for better or worse, supersedes some sacred document. Every individual is allowed ‘life, liberty, and the pursuit of happiness’, it’s just that people with better genes get more mileage for their efforts, resulting in wealth inequality. And then the left comes along and says, ‘Yes, we’re all born equal, but we must all die equal, so if you have too much money we want you to spread your wealth.’ There is no such thing as ‘equality in the eyes of God or a creator’ because theism is an unfalsifiable, wishy-washy concept and hence we cannot draw inferences from it in a logically consistent matter. Look at the contradiction of the left’s logic: They want to believe everyone is an equal blank slate from birth, but as soon as some individuals become exceptional, they seek to redistribute their wealth and or deny such exceptionalim exists. Seems almost arbitrary, like the machinations of a madman. There is only equality under law, that under a fair society these laws be applied to everyone equally. “In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets,..” – Anatole France

Continuing on the topic of equality, for any finite resource, it’s more efficacious to give priority to those with better ability. That’s the idea behind supply side economics in that you create economic environments of low taxes and low regulation where the best and the brightest can thrive. The left prefers malinvestment – more resources going to the least productive parasitic class. That’s why the 2008 bank bailouts were such a success versus the failed Obama stimulus; the former helped the owners of capital – the productive class- while the later was intended to help the masses. Within five months of the bailout, stocks surged and are still rising to this day six years later.

Neoconservatives were possibly wrong about Iraq, but their economic policy is pretty good, or at least compared to the alternatives on the left. If you own a home or stocks, for example, you are thankful for the bailout even if you don’t like it or oppose the other aspects of neoconservative economic policy. Pick your poison: doing too much and staving off crisis or doing too little and having things get worse. That’s why consequentialism and Minarchism is a superior system to pure libertarianism. We have free markets where individuals can create profits within the rule of law and government intervention in crisis.

TO have absolute equality would mean no capitalism and no incentive for individuals to be exceptional; civilization would founder.

We’re still in the smartist era. It’s not a typo. The suffix ‘-ist’ alludes to a follower of an ideology or belief versus ‘-est’ which is a matter of degree.

In the hyper-competitive post-2008 economy, the Beta male is winning, or at least the tide is turning. Through stocks, real estate, technology, Wall St. and private equity, Betas seem to be making most of the money these days, while jocks with ‘good people skills’ are putting those skills to use in the low-paying service sector, because after high school no one cares how popular you were. Pop culture reflects the changing values of society. Every month it seems some tech company is being sold or valued at hundreds of millions or billions of dollars, and the high-IQ founders and investors are held in high esteem like yesteryear’s Henry Fords and Andrew Carnegies. But it’s not just instant-rich tech entrepreneurs that are on the top American society’s post-2008 hierarchy of importance; theoretical physicists, economists, programmers, policy wonks, the high-functioning autistic savant, quants and mathematicians – regardless of personal wealth – also occupy a lofty position. In more ways than one, The Bell Curve is not just a science book, but a prophetic glimpse into our more unequal future.

America Is Still Exceptional

Charles Murray, unwavering defender of inconvenient truths in the face of political correctness and beloved by millions of millennials and smart people all over America, has become an institution unto himself. His most recent book, The Curmudgeon’s Guide to Getting Ahead, has become ‘required reading’ and the ‘bible’ for the smartest generation, which is whom the book is intended for. On smart sites such as as Reddit, 4chan and Daily Elite, Charles Murray has attained a legendary almost cult-like status as a exponent of empiricism and IQ, like that of Richard Feynman and Carl Sagan. And like Steven Pinker, his writings and videos have inspired millions of young, intelligent people to consider biological explanations for social problems, to think more empirically, and to embrace the meritocracy.

In a recent video, he questions America’s exceptionalism:

Unfortunately, this is one of the few times Charles Murray is wrong, because as hard as it may be to believe with all the negativity in the headlines, premature pronouncements of America’s demise and that the majority of Americans still think we’re in a recession, America is still exceptional, and will remain exceptional for the foreseeable future.

Many people, including liberals, subscribe to the ‘America is doomed’ worldview. Some conservatives believe America is doomed because of too much debt. Some liberals think we’re doomed because of too much wealth inequality. Both are wrong. Wealth inequality doesn’t pose a threat to the economy and thanks to historically low treasury yields and a rising dollar, the debt binge is still sustainable. Although the national debt is very high, Japan, an economy that is worse-off than America, has an even higher debt to GDP ratio and their economy hasn’t imploded due to hyperinflation. In fact, despite all this debt, their biggest concern has been deflation. That’s the power of reserve currency status, on of many things that makes America exceptional.

Debt becomes an issue when you don’t have reserve currency status and your economy is small and volatile – some notable examples being Greece, Portugal, Spain, Turkey, and South Africa.

America has the best consumers in the world, the most attentive central bank, the best performing stock market, the best policy makers that are there in times of crisis but otherwise don’t rock the boat and let the free market run on its own, low regulation that attracts business formation, biggest and most profitable multinationals, the most research institutions and volume of academic output, and is home of the biggest, fastest-growing, profitable and most innovative tech companies in the world such as Microsoft, Google, Tesla, Apple, and Facebook. The most viral web 2.0 startups, such as Uber, Snapchat, Air B&B, Dropbox and Tinder, are worth a combined $100 billion and all originated in America, but more specifically the Silicon Valley. Rich foreigners, tech billionaires, and private equity can’t get enough Silicon Valley real estate and are bidding up even the quaintest of dwellings into seven figures in all cash bidding wars.

For example, over the past five years, the S&P 500 has crushed its global peers. Nothing even comes close:

As Europe teeters on a triple-dip recession, America is still growing steadily:

As part of the ‘flight to quality/safety’, the US dollar is surging:

This wouldn’t be happening if market participants and institutions didn’t have such strong faith in our currency and the economy of America. After the wildly successful bank bailouts, remember those predictions of hyperinflation and dollar collapse? So much for that.

Thank the always reliable US consumer, especially the wealthy consumer, for being a tailwind on the economy:

The wealthiest 10% percent of America accounts for half of consumer spending. As always, the media’s reports of the death of the consumer still premature.

On the other hand, China has now become the biggest manufacturer in the world, but America is still 2x of Japan and 4x Germany:

America clearly ranks #1 in scientific research output:

Paypal announced they will integrate bitcoin payments. It’s hard to accept that America is in decline or no longer exceptional when you have all this good news and examples of exceptionalism.

Will Technology Make All Jobs Obsolete?

From Jim Goad of Taki Magazine: Workers of the World, Goodbye

From the first paragraph:

There was something pathetically nostalgic at the specter earlier this month of fast-food workers demanding compensation to the tune of $15 an hour for performing jobs that require almost no skills beyond not being in a coma. It recalled a halcyon age very long ago when management depended on menial labor, when a general strike of unskilled workers could bring bosses to their knees.

A quibble about the misuse of words. A ‘specter’ is a phantom or an illusion of something, while the fast food workers demanding a raise are real. Also, ‘halcyon’ means peaceful, while labor strikes generally tend to be tumultuous. The phrase: “It recalled a halcyon age…” is also awkward. Who is ‘it’? The fast wood workers? The nostalgia?

The problem is some words and phrases have become so overused that the original meaning is forgotten, a blind leading the blind vicious circle of writers misusing words because others did so earlier. Or the writer, without even thinking, just assumes the word means what they contextually intended it to mean, a common mistake. Other times, words that sound similar are confused.

Sarah Palin’s infamous ‘cackle of rads’ is an example. Cackle plausibly sounds correct, but she meant gaggle.

A word is like a Lego brick or a piece to a puzzle. If it doesn’t snugly fit, you cannot use it.

An interesting, thought-provoking article, although I disagree about the post-labor society, because the Luddite fallacy has a good track record of being a fallacy. You get rid of one type of job and another pops up. As the labor market becomes more polarized, there will probably be strong growth of jobs in the low-paying service sector, such as healthcare and retail, because these jobs require anticipating human behavior which may be hard to fully automate. For example, the self-checkout machines simply coexist with regular cashiers instead of replacing them. And then you need additional employees to regulate the machines as some customers will inevitably be confused.

The hollowing out of the middle is evident. Many people of ‘average’ IQ and credentials that just a couple decades ago had good-paying middle class jobs are now only able to find low-paying service sector work.

Another example is major brands like Walmart and Target, when combined, hire thousands of workers to monitor their Facebook pages for spam and to answer customer questions. This is a low-skill job that just five years ago didn’t exist. Facebook hires thousands of people to screen content for terms of service violations such as porn and spam. Again, another new job. Apple’s ‘Genius Bars’ employ of thousands of people. Ten years ago Apple was just another tech company and now indirectly employs probably a million people though its ecosystem. There are even people making a living standing in line on behalf of customers who don’t wish to wait for the latest i-gizmo.

They, the welfare left, would rather have the economy regress than risk creative destruction and the loss of useless/overpaid jobs.The good news is they are losing their war on success and the meritocracy. The S&P 500 is up 65% since OWS.

Biological determinism means that not everyone can participate in the post-2008 wealth creation boom. Millions will be left out, living on the margins of society. The question is, ‘What should policy makers do?’ Since LBJ’s failed war on poverty, inflation adjusted entitlement spending has surged:

Eugenics is inevitable as the only viable long-term solution to the growing entitlement spending problem. Environmental/nurture based solutions have fallen short. As we said earlier, there are new jobs being created, but the labor force participation rate is at multi-decade lows, which means a lot of people are living off taxpayers instead of contributing. Mitt Romney was right. The number of people on foodstamps – already at 40 million – keeps growing.

A second passage that stood out:

You know the type—they reflexively use “capitalism” and “corporations” as pejoratives. They seem to have been energized and ennobled by the economic crash of 2007, blaming it on a “crisis of capitalism” rather than more likely suspects such as fiat currency, global finance, unsustainable government debt, off-shoring, and unchecked immigration.

He’s right about the first part. The liberals did take advantage of the brief, over-blown financial problem to embolden their ingrained, preexisting loathing of free markets and were aggrieved when, just five months after the super-effective bank bailouts, stocks began surging and haven’t looked back – the left’s hopes and dreams for the global economy to be reset to a more egalitarian state and the demise of the American economic and geopolitical hegemony stymied yet again.

But he’s wrong about the cause. Fiat currency, debt, off-shoring, and immigration didn’t cause the financial problem. The culprit according to most experts was risky mortgages given to unqualified borrowers. Another explanation is that the market was simply undergoing a correction and the financial problem was a trigger.

Tomorrow I promise to write that Charles Murray article