The Daily View 8/28/2024: Bitcoin, Kamala’s Tax, IQ

Item #1: Bitcoin keeps falling, now below $59k. I keep being right that Bitcoin is inferior to tech stocks. It’s like “I can choose to invest in a tech company with billions of profits and is economically indispensable, or digital coins that are used for crime.”

Bitcoin is doomed to underperform due to too much supply overhang: Celsius creditors, miners, Mt Gox creditors, hedge funds, Silk Road, etc. These coins from various hacks, bankruptcies, and frauds never go away, they just get dumped later like we’re seeing now. In early 2024, when Bitcoin went to $70k, the assumption was these coins would remain locked. Bitcoin had done well on the implicit assumption that this supply would remain sequestered.

But now a huge amount of supply has suddenly been introduced into the market, which only means much more downside, likely to $15k until the oversupply equalizes. It’s not that Bitcoin is falling only due to the oversupply, but also people selling in anticipation of the oversupply, so a secondary effect. This is why scarcity in the context of cryptocurrencies is a joke.

Item #2: No, intelligence is not like height.

This article uses a lot of words to say little. Of course IQ is not like height. Who ever said it was? Height is a single variable; IQ is more like a multivariate equation in which the output is the IQ score. That is why IQ tests have multiple subtests from which the score is derived.

Regarding Steve Sailer and IQ again, Stancil still came out ahead despite losing in the debate, in terms of more followers, even by peope who disagree with him. Just like in start-ups, there is always a pivot. A common arc I have observed is starting out as an avowed, dew-eyed leftist, and then ‘coming around’ to seeing that the left has gone ‘too far’ on some issues or that the left is sabotaging its goals, so you keep most or all of your left-wing followers, but also get a ton of center-right ones who see you as an ally or are sympathetic.

Item #3 The Rise of the Dale Gribble Voter.

I agree that despite their numbers, they lack much representation in institutions. They are virtually nonexistent in academia or judicially. Quality tends to beat quantity in so far as policy is concerned, but they have an impact at the polls in swing states. It shows how there are strengths and weaknesses or tradeoffs between what he calls ‘elite human capital’ and everyone else. It’s why no single side has a total grip of power, but that it’s a constant tug of war between competing interests. The ‘Rogan people’ can affect sentiment such as on Twitter, but everyone is still forced to have to play by ‘woke rules’ at work or attend woke universities.

This passage stood out:

Unfortunately, Gribbles are more upset about the approval of life-saving vaccines than any other aspect of the pandemic response, showing that podcasts and a community of paranoid individuals all doing their own research is not an acceptable replacement for medical experts.

But the ‘expert position’ is also anti-HBD and rejects willpower as a solution to obesity, despite also being pro-vaccine. By comparison, the author is pro-HBD, pro-vaccine, and believes that obesity can be fixed with willpower. Which goes to show how no one is ever consistent about expertise or the role of experts in society. It’s not so much that people are pro-expert or anti-expert, but rather want their preexisting biases confirmed. Or maybe experts are right about some things and wrong about others.

Item #4: Interesting cultural commentary by Tyler Cowen: Why do the servers always want to take our cutlery and plates and glasses away?

This is why tipping is overrated: you pay more money for worse service and less food (shrinkflation). They want you in and out as fast as possible. No one cares if you are a loyal customer or tip well. If you get bad service, tip nothing. Post-Covid, restaurants put more emphasis on takeout, but possibly at the cost of service.

Item #5 Why Does Ozempic Cure All Diseases?

The high failure rate of dieting is one of the most well-reproduced findings of human physiology despite how willpower is often touted as the answer. Ozempic (and related drugs) is the closest thing to a wonder drug for the 21st century. You can see the transformations…people who used to be obese seeing the fat melt off, when nothing else seemed to work. This is what people have been hoping for decades: A mostly-safe and effective non-surgical weight loss treatment.

Item #6: Why Kamala Harris’s approach to capital gains is generating so much controversy

This is the key passage and is why I am not concerned:

But these plans — which include the taxation of unrealized capital gains on holdings not yet sold — would face an uphill fight on Capitol Hill even if Harris wins big.

There is little to no possibility this can pass, and even if it did, it would be struck down as unconstitutional. It would also be exceedingly impractical to implement. As shown by the strength of the stock market despite Kamala’s surge, ‘smart money’ is not concerned either.

This is related to the wealth tax, which has been floated for years and has always been DOA. The secondary effects of a wealth tax or taxing unrealized capital gains would also be worse than just printing more money, so the latter is favored in terms of raising revenue even if it may lead to inflation and higher deficits.

Policy makers, on either side, tend to be risk averse and favor incrementalist solutions. Increasing the debt gradually is preferable to sweeping legislation.