Monthly Archives: February 2015

Disingenuous Paul Krugman Wrong About Stimulus, Economy

The Krugster writes:

This is still true in much of economics, I believe. But in the areas that matter most given the state of the world, it’s not true at all. People who declared back in 2009 that Keynesianism was nonsense and that monetary expansion would inevitably cause runaway inflation are still saying exactly the same thing after six years of quiescent inflation and overwhelming evidence that austerity affects economies exactly the way Keynesians said it would.

Technically, he was right about the lack of inflation, but his prediction was hardly unique. I have been saying the same thing since 2011, for example. I and a few others bloggers were correct that TARP and record deficits would not cause high inflation. (Inflation as measured by treasury yields and CPI. Inflation can exist in other sources such as stock prices, gas, food, real estate, rent, insurance, textbooks, tuition, daycare and healthcare. This is called bifurcated inflation, which we have written about in the past.)

But the stimulus failed to create enough jobs or boost economic growth, in agreement with the many experts who predicted in 2009 that the stimulus would fail to meet the lofty expectations delineated by the stimulus’ biggest cheerleaders, Paul Krugman and Robert Reich. Krugman and the rest of the left is disingenuously taking credit for the post-2008 economic boom when, in fact fed policy, free markets, the consumer, the Bush Tax cuts, TARP, technology, and web 2.0 – not stimulus spending – are the reasons why the US economy has done so well.

The Krugster was wrong that the sequester would push the economy into a double dip recession. The exact opposite happened: stocks and GDP surged, much to the dismay of the left, who want to believe the growth of the economy is dependent on more entitlement spending.

From the WSJ: An Autopsy for the Keynesians

Keynesians told us that once interest rates got stuck at or near zero, economies would fall into a deflationary spiral. Deflation would lower demand, causing more deflation, and so on. It never happened. Zero interest rates and low inflation turn out to be quite a stable state, even in Japan. Yes, Japan is growing more slowly than one might wish, but with 3.5% unemployment and no deflationary spiral, it’s hard to blame slow growth on lack of “demand.”

Since 2008 we have the web 2.0 boom, Bay Area real estate boom, IQ being more important than ever, Silicon Valley being the center of the universe, Ivy League being inundated with applications, huge purchases of real estate by foreigners, stocks always going up, Apple being worth $700 billion, Snapchat worth $30 billion, Uber $100 billion, Facebook $300 billion, record high exports, and record high consumer spending and profits & earnings. Although the bond market alludes to deflation and stagnation, US economic activity, wealth creation and innovation is anything but. At 2-4% YOY, GDP growth has returned to the levels last seen during the late 90′s, and no one was complaining about slow growth back then. Treasury yields and inflation are low thanks to the Greater Moderation, QE, and huge demand for low yielding US debt due to the flight to safety – not because of economic weakness. The libs want to believe the economy is weak because they hate American exceptionalism and have no faith in the smart people who make the US economy the great success that it is – or – they want to spread lies about the economy being weak in order to push their destructive economic agendas as the ‘solution’ to fix this imagined weakness.

Stock Strategies & ‘Fundamental Drift’

There are dozens or even hundreds of variables the affect stock prices, but it can be reduced to just two: fundamentals and noise. For brevity, we’ll assume fundamentals are measured by inflation adjusted earnings and is a long-term driver of stock and index prices, a process that I call ‘fundamental drift’. The second noise; this is everything that isn’t earnings, such as foreign tensions, politics, investor sentiment, headline risk, buy & sell recommendations, etc. To understand this process, consider the S&P 500 has a constant PE ratio of 20. If inflation adjusted earnings rise 3%, the index (prices) must rise 3% for the PE ratio to be constant. This is the drift. It doesn’t always move in lockstep, but the relationship between earnings and prices is pretty strong:

The smart investors ignore the noise and focus on the fundamentals, profiting from this ‘drift’. Everyone else focuses on the noise, losing sleep over headline risks, conspiracies, and other distractions. The noise is the inherent choppiness or volatility of stocks.

So not all drift is equal, and the best investors find ways to capture the most upside. The key is to focus on what is already working, not falling for value traps. Often, when a long-term underperforming asset class is falling fools will rush in to buy the dips. An example of this is buying the dips on emerging markets, commodities, and energy stocks – asset classes that have been losers since 2008, but people keep buying the dips anyway in the hope of capturing the bottom, to no avail. The inexperienced are enticed by the growth prospects of emerging markets, but fail to take into account the high inflation and other risks. Adjusted for inflation, the US economy has better growth than most emerging markets. Commodities & energy have too much volatility relative to returns, – a high risk/reward ratio. Smart, high-IQ investors, unlike the masses of idiots that fill the investing forums, choose maybe a couple dozen stocks and strategies that offer the the best risk adjusted return and ‘fundamental drift’ out of a pool of thousands of inferior strategies and stocks. To capture the most ‘fundamental drift’ they choose stocks like Apple, Google, Priceline, Visa, Mastercard, and Facebook – companies that have a long history of sustainable long-term growth, price stability, and few – if any- viable competitors. There are only a dozen or so stocks like this out of over 5,000 on the NYSE, and this whittling process is a similar strategy Warren Buffet uses to beat the market; he hones in on companies that meet the aforementioned criteria, ignoring the rest. So once you have your selection narrowed down, these high-IQ investors buy aggressive call options on the dips, reaping enormous returns when their stocks rebound (which they always do because of superior fundamental drift). It’s not uncommon to turn $1000 into $5,000-10,000 in a couple weeks doing this.

Smart traders don’t hate the fed – they use the fed to their advantage, going long equities during low rates environments such as the on we are in now (and will remain so for a very long time).

Despite all the whining about moral hazard, bubbles and debt, fed policy has been a resounding success at helping turn the boom-bust cycle into mostly a boom – with very brief recessions in-between. Going as far back as 75 years, I cannot recall a single instance of the stock market and economy crashing during a low interest rate environment like we are in now. Historically speaking, crashes are recessions tend to occur when interest rates are above 4%. This could be due to the flight to safety of investors getting skittish of stocks and putting their money into rich-yielding, short-term bonds. A risk-free 4-7% a year is better than many stocks, and there’s no volatility or risk.

Although the market is mostly efficient, there exist small pockets of inefficiencies that allow quantitative strategies to profit, sometimes substantially.

This year, Bridgewater’s performance has beaten most of its peers that invest across global markets based on economic themes. The firm’s Pure Alpha II fund rose 8.3 percent in January, compared with the 1.1 percent average return that macro funds posted, according to data compiled by Bloomberg, during a period when government debt rallied and oil slumped. The fund has gained an annualized 13 percent since inception in 1991.

Bridgewater’s 13% compounded performance is nearly double that of the S&P 500. Renaissance Technologies, run by math and physics PHDs, has historical returns in excess of 30%.

Later I’ll post a simple algo anyone can replicate to beat the market.

People Beat the Market Because of IQ, Not Conspiracies

Liberals like Nicholas Nassim Taleb, Robert Shiller, and Michael Lewis insist the market is rigged, a scam and a bubble, and therefore anyone who achieves long-term, risk-adjusted superior returns is either lucky, ignoring hidden risks, running a Madoff-like fraud, cheating (HFT, dark pools), or in cahoots with ‘evil’ bankers. In the same way the left denies how some people are born smarter than others and that these differences in intelligence are manifested in socioeconomic outcomes, the left denies that some people, by virtue of high-IQ and innate talent, are born to be better traders. The operative word is ‘born’. That means these traders are so successful because of an innate, congenital ability – not because of some ‘unfair’ environmental advantage, fraud or cheating. This drives the left crazy because it throws cold water all over their collectivist delusion – that only the state can make people perfect; people cannot be born perfect. And second, because the left hates it when people make money through individual merit that the state cannot take credit for. (Obama’s ‘You didn’t build that!’ speech comes to mind)

So why are smart people so much better than everyone else at ‘reading’ the economy and stock market? Because the skills that IQ tests measure (making connections between pieces of information, pattern recognition) have direct applications in stock trading – namely smart people have a superior ability to separate signal from the noise, choosing the best strategies from a huge pool of crappy ones and leaving the rest for everyone else. Then these losers with poor trading strategies cry foul, whining about imagined conspiracies such as fed manipulation and the market being a fraud. Liberals create conspiracies to explain away being failures at life, attributing the real-life manifestations of their mental deficiencies to non-existent external factors. Believing in market/economic conspiracies is no more risible than believing that more education spending will narrow an achievement gap that is really an IQ gap. It’s as stupid as believing that ‘shadow governments’ are keeping down the poor – not low IQs.

I sometimes get into debates with conspiracy nuts, well-intentioned but misinformed people who believe the fed’s QE program is the only reason for stocks going up. This is countered by the fact that despite the fed tapering almost 2 years ago and finally ending QE a year ago, stocks have actually risen 30%, which shouldn’t have happened if QE were entirely the cause of this rally. The left wants it both ways – they want to call QE a failure, but also predict it will cause hyperinflation. QE was a success by boosting confidence and asset prices, and that is good enough for me. Libs who wanted more job creation: too bad. Stocks are surging because the fundamentals of the US economy as measured by exports, consumer spending, profits & earnings keep being better than ever. Large cap tech companies like Apple, Microsoft, Google and Facebook are flooded with cash. The banks are sitting on the QE money due to individuals and businesses not borrowing, so QE isn’t even inflating the economy anyway. Treasury yields are still rock bottom despite the unending doom and gloom predictions of high inflation, and the dollar is rallying to multi-year highs. Yes, to some extent QE contributed to the bull market, but it’s hardly the only cause.

Tomorrow’s post: The strategies smart people use to beat the market and everyone else

When Will The Tech Valuations Crash? How About Never

The left has been predicting doom and gloom since 2009, to no avail. In 2010, during the first wave of the European debt problem, the left predicted that Greece would pull the rest of the world into a recession; with the market indexes at record highs, that prediction was obviously wrong. Economically, with an economy no bigger than Rhode Island, Greece is a drop in the bucket. There won’t be crisis or anything like that, just the usual leftist drivel about stocks being overvalued and overbought. If investors were worried about debt, bond yields would be surging – and they obviously aren’t. While the left is preoccupied with stagnation, wealth inequality and the debt being too high, Silicon Valley is booming. My home keeps going up everyday in my neighborhood, too.

Video bloggers like pewdiepie and Jenna Marbles are making millions of dollars in an economy that left insists is dead because not enough people can find jobs or the jobs aren’t paying enough. Meanwhile, coders – some without college degrees – are making six figures a year; others are becoming multi-millionaires starting their own apps. VC firms are making billions as valuations for companies like Snapchat and Uber rise to no end. Apple, Google, Microsoft and Facebook have a combined market cap of $1.5 trillion, but the PE ratio of the S&P 500 is still just 17, versus over 40 at the height of the 2000 tech bubble. The white-hot Bay Area real estate market, with prices up 50-100% since 2012, shows no sign cooling. So you can’t look at all this prosperity and say with a strait face that America is in decline, because it obviously isn’t. If you’re not smart enough to succeed in America’s post-2008 hyper-meritocracy, tough luck. But for those who are smart enough to thrive and for those who can see beyond the doom and gloom, America’s best days are ahead.

The post-2008 tech boom will continue in perpetuity, culminating in the transition to a type-1 civilization, transhumanism, and the creation of a Matrix that will resemble the one in the movie. The Kingdom of Heaven is the Kingdom of Wealth & Technology, extending to a horizon as vast and wide as the mind can conjure, ruled by a post-mortal technocracy. Biological determinism isn’t just a staple of science fiction – it’s reality. The future is today – albeit with more inequality, more technological progress, and higher valuations. In a form of manifesdestiny 2.0, tech valuations are destined to keep rising because of the economic value created by the cognitive elite, and through rising asset prices (expensive real estate, stocks) the cognitive elite are enriched for the economic value that they create. America is becoming richistan, successistan and IQ-istan, and the left is left powerless reverse this, their cries for crisis still unanswered as the American economic hegemony consumes the world, becoming the world.

So why should I, or anyone else, trust for economic advice the losers who have been wrong about everything for nearly the past three decades, save for a few instances of luck like in 2008?

The Rational Something

Vox Day, who looks like Bill Hicks, who looks like Alex Jones, who looks like Christopher Hitches, who looks like Brad Delong, is the author of The Irrational Atheist. I don’t really know what I am (atheist, deist, agnostic, etc), nor do I wish to go by a simple label, but I believe in rationality in whatever form that it may be or wherever it may lie, hence The Rational Something.

I estimate there are hundred million adult practicing Christians in the US, of which 5% of them have a high-IQ as determined by an IQ test. Of these, many of them would probably describe themselves as resolute in their faith, but I argue that smart Christians have beliefs and mannerisms, either intentional or unintentional, that could be considered ‘un-Christian like’; however, this conflict between faith and action is understandable and to be expected in smart people. Smart people may have difficulty unequivocally embracing the teachings of Christianity because (to the smart person) it’s irrational, flies in the face of reality, isn’t backed by empirical evidence; but, most importantly, offers no favoritism to high-IQ people. They accept enough of it to carry out the motions, but not embrace it spiritually to its fullest extent.

Smart people tend lose patience more easily than slow people and tire of having to explain things slowly and repeatedly, while the Bible, on the other hand, preaches selflessness, patience and altruism. I’m sure when someone suddenly slows down in the fast line when there is no obvious traffic, the smart person thinks, ‘What an idiot! Can’t he drive? But wait – I’m going to heaven with him! And love thy neighbor! Darn! Can’t God create a purgatory for dull people?’

Ross Douthat, whose intellect is matched by few in the world of punditry, is also a man of contradictions, contributing to his intrigue, versus the bland, less intelligent and always predictable Krugman. A shapeshifter, it’s hard to pinpoint what Douthat is, or really what he stands for. On one hand, he labels himself a Christian Conservative, but he attended Harvard – a secular university – instead of a Christian university. In his book Privilege: Harvard and the Education of the Ruling Class he recounts engaging in what can be described as un-Christian like behavior. Douthat seems like the kind of guy who will take whatever position makes him seem like the smartest, most empirically minded guy in the room, even if it contradicts an earlier position or doesn’t fall within the party lines, a tendency that Andrew Sullivan, a Catholic who writes a lot about his faith, also shares. Attending Harvard allowed him to showcase his great intelligent, and it paid off career-wise. I cannot begrudge him for that – and, in fact, attending Harvard was the rational thing to do. Intellectually, he was dealt a royal flush and he’s playing it accordingly. Being chained to a narrow, parochial view of the word makes it hard to evolve when times change and keep up with those who aren’t constrained in such a manner. He’s a Rational Something.

Fox Day, a genius in terms of IQ and perennial critic of the ‘four horsemen of neo-atheism’, holds views about IQ that seem to align with those of the more atheist-leaning HBD/rationalist community; in fact, just talking about IQ sets him apart from the rank-and-file Christian. Although Mr. Day’s view on the matter is fairly nuanced, even going so far as to say that accomplishments are more important than a score, the obvious statement that someone with an IQ of 150 is better at understanding complex things than someone with an IQ of 50 – that alone is enough to elicit much dissent and bemusement from the welfare left.

In a nutshell, Christianity says that everyone who believes, regardless of IQ, ability, talents, wealth…whatever, is equal in the eyes of God and worthy of redemption. There are variations, such as more conservative sects, but the Bible makes no allowances OR PREFERENTIAL TREATMENT for IQ, merit, or innate ability – everyone is equal and will be saved, provided they accept Jesus as their lord and savior. And that is it. That means an eminent physicist with an IQ of 160 is no better than a ‘reformed’ sex offender. And that is patently absurd to anyone who holds any modicum of rationality. In real life, for example, you see smart people getting further ahead, creating things; you see the relationship between IQ and intellectual ability; you make the mental connection that without smart people, society would not be where it is now – modern conveniences would not exist. Some people are better than others. You buy guns – to keep those reformed sex offenders away from your wife and children. You get sick and immediately seek help, despite entering heaven sooner if you die. Why is there a St. Jude hospital; why not let the kids die and go to heaven? Of course, you want to spend time with your loved-ones on earth, but mathematically speaking, if an eternity of bliss awaits you and your family in heaven (assuming you don’t go crazy from having to be with the same people forever), what difference does it make if you get there 20 or so years sooner?

Creating Optimal Socioeconomic Environments for the Cognitively Exceptional

Although this blog has a republican/libertarian bent, the government should play a ‘nurture’ role for those with demonstrable cognitive superiority, as determined by an IQ test, by creating optimal economic environments to allow these exceptional individuals to live to their fullest cognitive potential, as Steve Hsu and Charles Murray agree:

How assiduously does our federal government work to see that this precious raw material is properly developed? In 2006, the Department of Education spent about $84 billion. The only program to improve the education of the gifted got $9.6 million, one-hundredth of 1% of expenditures. In the 2007 budget, President Bush zeroed it out.

The debt binge is sustainable, but the problem is too much money is wasted on ineffectual social programs and entitlement spending for the Left Side of the Bell Curve (throwing good at the bad) when it would be much more efficacious (a higher ROI) to allocate more resources to the Right Side. We should cut entitlement spending to the Left Side and or make welfare contingent on some form of mandated birth control or abstinence as part of a eugenics program, but that is obviously a long shot. It’s probably easier to implement positive eugenics than negative eugenics, as far as policy goes because of the historical baggage associated with the the later.

Anyway, the idea is to appropriate the successful supply-side principles of Reaganomics (low taxes, low regulation, free trade, monetarism), but with a social safety net exclusively for high-IQ individuals to spur these individuals to live to their full cognitive potential, in the hope of hastening technological progress and the transition to a type 1 civilization, and improving society and living standards overall.

Combine these groups, and the top 10% of the intelligence distribution has a huge influence on whether our economy is vital or stagnant, our culture healthy or sick, our institutions secure or endangered. Of the simple truths about intelligence and its relationship to education, this is the most important and least acknowledged: Our future depends crucially on how we educate the next generation of people gifted with unusually high intelligence.

Smart people are the reason why humans still don’t live in caves.

The plan consists of three parts, in order of most feasible to least:

Part 1: More high-tech immigration, as Paul Graham makes the case in his short essay: Let the Other 95% of Great Programmers In.

I discuss this further here:

Paul Graham on Immigration, Part 2
Immigration and the Liberal War on Success
The Free Market Case For More Immigration

In a free market and meritocracy, we shouldn’t limit our labor options. This stunts innovation and competitiveness. High-IQ immigrants help the economy by creating companies that then hire Americans:

The left would rather keep all the overpaid jobs to themselves rather than have more immigrants who create jobs and economic value.

Part 2. Special academies for high-IQ children

Stuyvesant high-school is one such example of an elite public school for the gifted, but our proposal would apply to all grade levels and such academies would be established all over the country. The only admittance criteria is having an IQ in the top 5% (>120) and would feature an immersive, comprehensive curriculum to foster tomorrow’s business, technology, creative and political leaders, challenging gifted students in ways that traditional schools fail to do. The academies would offer unconventional programs such as coding classes, how to set-up a tech business, robot labs, debate teams, classes on how to trade stocks, intro to macroeconomics, classes on futurism & AI, physics beyond Newton’s laws, astronomy, a course on how to invest in real estate (Not a joke. A home is likely the biggest, most important purchase a person will make. Best to do it right.), college-level science labs, etc. Accelerated programs would allow students to enter college early.

Part 3. The High-IQ Basic Income

A third possibility is a high-IQ basic income. It would be like a government Mensa that pays its members, and anyone from rich to poor is eligible for payments provided they meet the IQ requirements. Depending on the requirements, only around 5% of the country would be eligible, so it would cost much less than a universal basic income (UBI). The advantage is that the money would have a higher ROI than a normal UBI because high-IQ people tend to be more productive and creative and therefore would put the money to use in ways that could boost the economy and improve society such as by starting businesses, coding, tinkering, producing art, and writing – that otherwise may not be possible if these smart people are too busy trying to make ends meet than thinking and creating.

Liberalism and the Perfectibility of Man

Christianity could be inherently liberal – the idea of the perfectibility, malleability, and salvation of man through deeds and other extrinsic virtues, versus salvation through intrinsic factors such as IQ. Jean-Jacques Rousseau’s writings inspired the French Revolution and is the genesis of modern liberalism. From Wikipedia: Discourse on the Origin and Basis of Inequality Among Men

Rousseau’s man is a “savage” man. He is a loner and self-sufficient. Any battle or skirmish was only to protect himself. The natural man was in prime condition, fast, and strong, capable of caring for himself. He killed only for his own self-preservation. When the natural man established property as his own, this was the “beginning of evil” according to Rousseau, though he acknowledges the sanctity of the institution of property and that government should be created to protect it. The natural man should have “pulled up the stakes” to prevent this evil from spreading. This property established divisions in the natural world. The first was the master-slave relationship. Property also led to the creation of families. The natural man was no longer alone. The subsequent divisions almost all stem from this division of land.

Rousseau believed that civilization is a ‘trick’ perpetuated by the elite to suppress the weak, and that the default state of man is savagery, also known as the ‘noble savage’. This explains why left has no faith in humanity and wants society to regress unless man is perfected to their exacting, egalitarian standards, and it’s this leftist drive for ‘perfectionism’ and ‘equality’ that has the intentional consequence of causing society to regress to a more ‘noble’ and savage state. It also explains why the left allies with Islam, because they both share a desire for Western civilization to fail and for society to regress both technologically and economically to a more primitive, but egalitarian equilibrium. It is this enmity against the rich, individual cognitive exceptionalism, and technology that unifies the welfare left.

The belief in perfectibility of man motivates liberals to support useless social programs that run headlong into the limitations imposed by biology. Similarly, this ties into the delusion that practice can make can make an imperfect man perfect (the 10,000 hour rule). It would seem antithetical to rationality to believe this superstition. Holding the number of hours of practice constant, smarter people get much better returns for the hours they devote to intellectual endeavors such as math, stock option trading and chess. In regard to music, some people have an ‘ear’ for it and others don’t (perfect pitch, for example). Professional sports are another example where having an obvious biological advantage (being taller in basketball) could reduce the number of hours of practice needed for mastery, and short people are vastly underrepresented in the NBA.

Most proponents of HBD, such as this blog, believe that by virtue of genes and IQ some people are born ‘better’ than others. The role of nurture should be create optimal socioeconomic conditions that allow these exceptional individuals to live to their full cognitive potential. Biology always has the final word and, in the Randian way, people with cognitive superiority should be able to gratify their desires within certain ethical bounds without having to accede to an ambiguous moral higher power. And the state should also not be curtailed in this manner, in that the un-scientific assumption that ‘all life is precious/equal in the eyes of God’ should not bear influence on policy; policy should, in accordance to Kantianism and Hume, be rational, or in the economic sense, maximizing economic value and the advancement of the human canon of knowledge as it pertains to technology.

What Should Neo Reaction Believe In?

IMHO, neo reaction – unlike a political party – is less about engendering action, but more about the acknowledgement and description of reality, as conveyed through articles, blogs, videos, and books. It’s like a think tank, providing resources that politicians, thinkers and business leaders can draw inspiration and information from, without actually getting involved in the nitty-gritty process of politics.

Upon looking at Mike Anissimov’s picture, which bears an uncanny resemblance to a young Pat Buchanan, it occurred to me that neo reaction is mostly a re-branding a paleoconservatism, but with some futurism spliced in.

The problem with paleoconservatism is that it makes too many unrealistic demands (ending the fed, isolationism, ending free trade) that fly in the face of an unmovable reality. Second, not all of the principles and demands of paloconservatism may be in the best interest of promoting ‘enlightenment’ and the optimization of the human and economic condition. Paloeconservatism seems like an ideology that wants society to regress or become stagnant. I would prefer an ideology that creates optimal conditions for the best and the brightest to advance society and, through the free market, rewards these individuals for their contributions. How about a more adroit, dynamic ideology that borrows from the dark enlightenment biological realism, anti-democracy, and anti-egalitarianism, with an added emphasis on pragmatism, incrementalism and realism? How about being pro-fed, pro-eugenics and pro-tech immigration, while keeping the aforementioned elements of neo reaction?

For example, a typical paleoconservative that visits Zero Hedge or Market Ticker would say our economy is doomed because of debt. But isn’t the pursuit of the truth, even if you don’t agree with it, preferable to denial? About the debt, America has reserve currency /safe haven status. That helps lessen the burden considerably. Look at companies like Apple making tens of billions of dollars a quarter; there are real fundamentals at work besides fed intervention. Demographics also pretty good, economically speaking. There are problems, but I don’t see evidence of economic collapse anytime soon. Cultural collapse is more likely, but this won’t necessarily lead to economic collapse. Maybe intervention, the anathema of paloconservatism, isn’t so bad if it costs nothing and indirectly creates trillions of dollars of economic value. TARP may have lead to moral hazard, but stocks are surging, the economy is doing pretty well, and Silicon Valley – the epicenter of innovation – is booming. In spite of the controversy, TARP benefited the best and the brightest. And that’s what I think good policy is about; it’s not about pleasing the ‘populace’, but about doing what is in the best interest for society, technology and the economy.

This ‘democracy’ or egalitarianism that Asnismov decries doesn’t really exist anymore (assuming it ever did), or at least not in America. Perhaps we’re closer to the ‘dark enlightenment’ than many realize, save for the monarchy. Although the left does espouse the virtues of egalitarianism, their power is quite limited as is evident by post-2008 socioeconomic trends of rising wealth inequality, a do-nothing congress that seems tone deaf to people’s problems but is otherwise ready to step in during crisis, the highest incarceration rate of any country in the world, and the rise of biological determinism – all stultifying what little democracy America has. Although the left could be winning the culture wars, they are losing the human bio diversity and economic wars, which I think are more important. With the post-2013 backlash against SWJs, the left could be losing the culture wars – or at least the score is even. The left still has control over the universities, the legal system, and some of the media, but they cannot control the burgeoning world of social media, nor can they regulate Silicon Valley out of existence.

The issue of the underclass voting for benefits at the expense of the productive class can be ameliorated with a eugenics program and comprehensive entitlement reform, which doesn’t require a monarchy but a modification of existing republican platforms. Making the leap to eugenics, however, is a long way off and seems as fanciful as a monarchy.

I hope Silicon Valley one day does secede from the Union, in addition to its present metaphysical detachment from the rest of society. We’re only scratching the surface of our understanding of transhumanism, and the indefinite extension of individual consciousness though the intertwinement of mind and hardware is the final frontier to unlocking the limitless potential of human intelligence as we transition to a post-mortality era. We should bring all resources to making this happen, leave no stone unturned. I guess that’s my kind of ‘monarchy’ or pipedream.

So much for that 10,000 hour rule

The 10,000 hour ‘rule’ has been so thoroughly discredited that to discuss it further is beating a dead horse, but I can’t resist.

Andy Weir’s debut novel, The Martian, was an overnight success, surpassing seasoned authors who have decades of writing experience. Sure he did some writing in the past on his personal blog, but his career is a programmer, and it seems unlikely he put in 10,000 hours (roughly 10 years) of deliberate writing practice *. But you see this over and over – of high-IQ people becoming immensely successful with relative ease at high-IQ endeavors, such as writing and stock trading, even if these pursuits are hobbies, while those of lesser intellect who pursue these ‘hobbies’ as full time careers struggle and struggle to no avail. Just more evidence it’s IQ, not hard work, that is the ultimate determinant of individual success or failure at intellectual endeavors. Kinda reminds me of reading Salon articles; while I don’t agree with most of what’s written there, the writing itself is of a high enough caliber to suggest innate talent – talent that manifests itself as early as preschool and is what separates the rarefied creative class from the bulk of society.

Here are other examples of authors who apparently defied the 10,000 hours rule.

I would also add to the list Alex Garland’s debut at age 25 The Beach, an instant success that was later made into a crappy movie staring Leonardo Dicaprio. And then there is David Foster Wallace’s debut at age 26 Broom of the System, an inscrutable 500+ page tome that makes The Beach a child’s scribbling by comparison, although Wallace probably spent thousands of hours writing up until Broom.

* In the arts, which has a large subjective component, fame/success and quality are not always mutually inclusive. It’s possible that 10,000 hours applies more to proficiency as a writer than commercial success.

Things that I am sick of people complaining about

1. The market being manipulated/bubble. There was hardly a peep by the left about conspiracies when the markets crashed in 2007-09, but now the liberals on Zerohedge and Market Ticker are going on about shadow banking, dark pools, and other plots to make investors rich. Nevermind fundamentals such as blowout profits and earnings, blowout consumer spending, record-high exports, or that the America is in a technological renaissance – no it’s all a conspiracy. The left also insists that market manipulation makes it impossible for anyone to beat the market, yet smart people do so all the time with consistency that is characteristic of skill rather than just dumb luck.

2. Speculators. With oil and gas prices plunging 50% in 2014 there is much less whining about this, but there was not a peep from the left about speculators in 2008 when oil fell from $140 to $40. Apparently, according to the left, speculators can only make prices go up. To the left, when prices plunge it’s due to economic forces; when they rise, it’s because of greedy speculators. Perfect!

3. Police. ‘Hand up don’t shoot!’ and ‘I can’t breathe!’ have become rallying cries of the cognitively feeble. If you have the temerity to challenge the police, there is a a decent likelihood you will get your ass kicked.

4. Fox news. Again, not a peep from the left when MSNBC and the New York Times tried to fan the flames of crisis in 2008 to get Obama elected. Fox News was right about Obamacare cancellations (and Obama lying about being able to keep your plan), about Obama’s weakness on terror, about Obama being deferential towards Muslims, about Obama’s animus against the police who are trying to make the streets safe, about Obamacare being bad for job creation, about neo Keynesian economics failing, about the Tea Party being a major political force, and about Obama being an incompetent president, overall.

5. The debt being too high. Like it or not, the debt binge is sustainable. The question is: should policy makers keep wasting money on entitlement spending, or should we divert this spending to things that could help the economy and have a higher ROI, such as: the proposed high-IQ basic income, funding the future Facebooks and Teslas, more spending for high-IQ/gifted education, defense, and tax cuts? Why we are wasting so much taxpayer money on the least productive/useful members of society is the question we need to be asking ourselves, not getting mad about deficit spending.

6. Wealth inequality. News flash: people who contribute more to the economy earn more, too. And there is no empirical evidence that rising wealth inequality is hurting the economy. Maybe society – and the left – needs to comes to terms with the fact that biological determinism means not everyone is smart enough to participate in the recovery, or at least not all at once. Some will be left behind, and there is not much anyone can or should do about it.

7. Crusades. All this talk about crusades is irrelevant. Islamic terror is the issue now; it’s Muslims doing terror, not Christians. In the past decade, the number of incidents of Christian terror is negligible, versus thousands of victims and hundreds of incidents of Islamic terror.

8. College tuition costs/college being a bubble. The left blames the colleges, not the students who choose to take on too much debt to major in useless subjects. College has a good ROI for those who major in STEM and or graduate from a prestigious school.