A clean-slate accounting of the dollar

Tuesday, September 23rd, 2008

Mencius Moldbug attempts to offer up a clean-slate accounting of the dollar “with no assumptions about economics, finance, or accounting”:

Think of it as rather like analyzing a Soviet nickel company in 1991. Does the company even exist? Does it even produce nickel? Does it own any mineral rights of any sort? If we buy it, do we really own it? Etc.

He shares a short history of money:

Perhaps you think of the dollar as “money” or “currency,” and you are very confused by all this. “Money” and “currency” are nice words, but they have no precise accounting definition. They just refer to a good or security commonly held for the purpose of savings and/or exchange. Historically, we can identify four classes of currency:

(1) Direct goods, such as coins of a standardized weight of precious metal.
(2) Titles or warehouse receipts to (1).
(3) Obligations to pay (1) or (2), or redeemable currency.
(4) Mere equity, or fiat currency.

These are (excluding the common 4-to-1 transition) in order of historical evolution. Explaining the evolution is not of direct assistance in analyzing the dollar, but it helps us get our bearings — and it defines terms which will be useful later on.

Class 1 currency (standardized metal) evolves into class 2 currency (titles) because titles are more portable, secure and convenient. Digital gold is a modern class 2 currency.

Class 2 currency (titles) evolves into class 3 currency (redeemable notes), because the change is generally profitable for the currency issuer, and the marks are too dumb to know the difference. A title or warehouse receipt is a title because the issuer holds goods that match it; otherwise, he is a thief. A redeemable note is a mere debt, and does not default until redemption fails. And even then, the issuer is only bankrupt, not in jail.

Suppose I have 100 ounces of gold, and issue 100 titles against it, each title stating that the bearer owns one ounce of gold. This makes me a respectable issuer of class 2 currency.

Suppose I have 100 ounces of gold, and issue 200 redeemable notes against it, each note stating that I will issue the bearer one ounce of gold on demand. This makes me a scoundrel.

However, it also makes me wealthier than I was before, at least until more than 100 bearers show up to claim their gold at the same time. Will my notes trade at par? Ie: will people accept them as equivalent to the class 2 titles? Well, every time someone starts to get suspicious and tries to redeem one, it works. So I don’t see why they shouldn’t. We have just reinvented the wildcat bank — a staple of early American finance.

There is a cure for wildcat banking: those who accept class 3 notes should ensure that the issuer is solvent. A financial institution is solvent if and only if the sum of all the payments it is obligated to make equals or exceeds the total price of all the assets it holds. So our Scoundrel Bank above is not solvent, because it is obligated to pay 200 ounces and it only has 100 ounces.

One way to see a redeemable note is to see it as a very short-term loan from the noteholder to the bank, which is automatically renewed or “rolled over” when the noteholder does not redeem. If the term of the loan is an hour, a minute or even a second, the effect is redeemability. And note that when making a loan, what you want to know is whether the loan will be paid back. And collectively, what all loanholders want to know is that they all can be paid back. First come, first served, is not solvency.

Scoundrel Bank can redeem for some of its noteholders. But not all of them. Therefore, all unfortunate holders of its notes can agree on a fair — or “equitable” — bankruptcy restructuring: every holder of a Scoundrel ounce note should receive half an ounce of gold. As for the scoundrel himself, trees abound, and perhaps the noteholders can pitch in for a rope.

But there is a tricky intermediate case — call it Questionable Bank — between Respectable Warehouse and Scoundrel Bank. Respectable Warehouse issued 100 one-ounce titles. It has 100 ounces. Verifying the quality of the titles is as easy as verifying these facts. Scoundrel Bank issued 200 one-ounce notes. It does not have 200 ounces. Verifying its insolvency is just as easy.

Questionable Bank also issued 200 ounce notes. It also has only 100 ounces. But it also has 100 old pianos. Each piano, it asserts, is worth an ounce of gold. “Easily. Easily. No sweat, man. These are fine pianos. Here, play this one. Hear that sound? That’s a sweet tone. Check out the action on the keys. Totally smooth. You could move this piano for an ounce fifty, no problem.”)

Suddenly our noteholder, or at least the accountant he hires, is required to be a piano appraiser. Should you trade a Respectable title to one ounce, for a Questionable note paying one ounce? It depends on the quality of the pianos. Obviously, every piano is different. You can’t just play the one up front in Questionable’s office. You need to go into the back room and tinkle away.

Moreover, even if each piano could be sold on the piano market for an ounce or more, it is hard to know that all the pianos could be sold at once. Since price is set by supply and demand, the appearance of a large splodge of pianos, even fine pianos, on the market all at once, is liable to depress the piano price. And “at once,” let’s not forget, is the term of the Questionable notes.

In real life, of course, the good in question is typically not pianos but loans. Usually long-term loans. Pricing a piano is difficult, but it is nothing on pricing a loan. And the result of dropping a glut of loans on the market all at once is even more astonishing and disastrous.

Posted in Economics, Mencius Moldbug, Policy | No Comments »

The Fourth Quadrant

Monday, September 22nd, 2008

Nassim Nicholas Taleb (The Black Swan, Fooled by Randomness) maps decisions onto four quadrants — much like any MBA, really. In his case, the two criteria are whether the decision itself is simple (binary) or complex, and whether the probability distribution is known and thin-tailed (Mediocristan) or unknown and/or fat-tailed (Extremistan).

The Fourth Quadrant, naturally, is where all hell breaks loose:

In response, Taleb has developed a list of Phronetic Rules — What Is Wise To Do (Or Not Do) In The Fourth Quadrant:

1) Avoid Optimization, Learn to Love Redundancy. Psychologists tell us that getting rich does not bring happiness — if you spend it. But if you hide it under the mattress, you are less vulnerable to a black swan. Only fools (such as Banks) optimize, not realizing that a simple model error can blow through their capital (as it just did). In one day in August 2007, Goldman Sachs experienced 24 x the average daily transaction volume — would 29 times have blown up the system? The only weak point I know of financial markets is their ability to drive people & companies to “efficiency” (to please a stock analyst’s earnings target) against risks of extreme events.

Indeed some systems tend to optimize — therefore become more fragile. Electricity grids for example optimize to the point of not coping with unexpected surges — Albert-Lazlo Barabasi warned us of the possibility of a NYC blackout like the one we had in August 2003. Quite prophetic, the fellow. Yet energy supply kept getting more and more efficient since. Commodity prices can double on a short burst in demand (oil, copper, wheat) — we no longer have any slack. Almost everyone who talks about “flat earth” does not realize that it is overoptimized to the point of maximal vulnerability.

Biological systems — those that survived millions of years — include huge redundancies. Just consider why we like sexual encounters (so redundant to do it so often!). Historically populations tended to produced around 4-12 children to get to the historical average of ~2 survivors to adulthood.

Option-theoretic analysis: redundancy is like long an option. You certainly pay for it, but it may be necessary for survival.

2) Avoid prediction of remote payoffs — though not necessarily ordinary ones. Payoffs from remote parts of the distribution are more difficult to predict than closer parts.

A general principle is that, while in the first three quadrants you can use the best model you can find, this is dangerous in the fourth quadrant: no model should be better than just any model.

3) Beware the “atypicality” of remote events. There is a sucker’s method called “scenario analysis” and “stress testing” — usually based on the past (or some “make sense” theory). Yet I show in the appendix how past shortfalls that do not predict subsequent shortfalls. Likewise, “prediction markets” are for fools. They might work for a binary election, but not in the Fourth Quadrant. Recall the very definition of events is complicated: success might mean one million in the bank …or five billions!

4) Time. It takes much, much longer for a times series in the Fourth Quadrant to reveal its property. At the worst, we don’t know how long. Yet compensation for bank executives is done on a short term window, causing a mismatch between observation window and necessary window. They get rich in spite of negative returns. But we can have a pretty clear idea if the “Black Swan” can hit on the left (losses) or on the right (profits).

The point can be used in climatic analysis. Things that have worked for a long time are preferable — they are more likely to have reached their ergodic states.

5) Beware Moral Hazard. Is optimal to make series of bonuses betting on hidden risks in the Fourth Quadrant, then blow up and write a thank you letter. Fannie Mae and Freddie Mac’s Chairmen will in all likelihood keep their previous bonuses (as in all previous cases) and even get close to 15 million of severance pay each.

6) Metrics. Conventional metrics based on type 1 randomness don’t work. Words like “standard deviation” are not stable and does not measure anything in the Fourth Quadrant. So does “linear regression” (the errors are in the fourth quadrant), “Sharpe ratio”, Markowitz optimal portfolio, ANOVA shmnamova, Least square, etc. Literally anything mechanistically pulled out of a statistical textbook.

My problem is that people can both accept the role of rare events, agree with me, and still use these metrics, which is leading me to test if this is a psychological disorder.

The technical appendix shows why these metrics fail: they are based on “variance”/”standard deviation” and terms invented years ago when we had no computers. One way I can prove that anything linked to standard deviation is a facade of knowledge: There is a measure called Kurtosis that indicates departure from “Normality”. It is very, very unstable and marred with huge sampling error: 70-90% of the Kurtosis in Oil, SP500, Silver, UK interest rates, Nikkei, US deposit rates, sugar, and the dollar/yet currency rate come from 1 day in the past 40 years, reminiscent of figure 3. This means that no sample will ever deliver the true variance. It also tells us anyone using “variance” or “standard deviation” (or worse making models that make us take decisions based on it) in the fourth quadrant is incompetent.

7) Where is the skewness? Clearly the Fourth Quadrant can present left or right skewness. If we suspect right-skewness, the true mean is more likely to be underestimated by measurement of past realizations, and the total potential is likewise poorly gauged. A biotech company (usually) faces positive uncertainty, a bank faces almost exclusively negative shocks. I call that in my new project “concave” or “convex” to model error.

8) Do not confuse absence of volatility with absence of risks. Recall how conventional metrics of using volatility as an indicator of stability has fooled Bernanke — as well as the banking system.

9) Beware presentations of risk numbers. Not only we have mathematical problems, but risk perception is subjected to framing issues that are acute in the Fourth Quadrant. Dan Goldstein and I are running a program of experiments in the psychology of uncertainty and finding that the perception of rare events is subjected to severe framing distortions: people are aggressive with risks that hit them “once every thirty years” but not if they are told that the risk happens with a “3% a year” occurrence. Furthermore it appears that risk representations are not neutral: they cause risk taking even when they are known to be unreliable.

I didn’t realize he also has a seminar DVD out, Nassim Nicholas Taleb: The Future Has Always Been Crazier Than We Thought.

Posted in Business, Economics, Nassim Nicholas Taleb | No Comments »

Jonathan Haidt on the moral roots of liberals and conservatives

Monday, September 22nd, 2008

I recently cited Jonathan Haidt’s piece on the differences between liberals and conservatives. I also recommend watching his TED Talk:

Haidt focuses on his various facets of “moral” psychology, when a big part of the difference, especially between libertarian conservatives and progressive liberals, comes from seeing fairness in equity versus equality.

Posted in Policy, Science | No Comments »

Intel’s secret weapon: Fresh air

Monday, September 22nd, 2008

I wouldn’t call it Intel's secret weapon, since they’re publicizing it, but fresh air seems to work just fine for cooling servers — something I’ve wondered about for a long time:

Fresh air could save millions in datacenter cooling costs, Intel has claimed, after a successful experiment in the New Mexico desert.

Replacing air conditioning by piping in outside air saved power costs with no appreciable increase in server failure rates, the company concluded in a research paper. Despite a lot of dust and major temperature changes–both long considered undesirable in datacenters–the equipment wasn’t affected, said Intel.

“Servers… were subjected to considerable variation in temperature and humidity, as well as poor air quality; however, there was no significant increase in server failures,” said the paper. “If subsequent investigation confirms these promising results, we anticipate using this approach in future, high-density datacenters.”

Intel estimated an annual cost reduction of approximately $143,000 (£79,000) for a small, 500kW datacenter, based on electricity costs of eight cents per kWh. In a larger 10MW datacenter, the estimated annual cost reduction was $2.87 million.

Intel used a normal air filter that took larger particles out of the air but not fine dust. While the 32 servers and racks became coated in dust, and humidity was monitored but not controlled, the failure rate was 4.46 percent, compared with a 3.83 percent failure rate in Intel’s main datacenter over the same period.

The experiment was run for 10 months, between October 2007 and August 2008. Server units with over 900 blades, used for production design, were split into two compartments. One of the compartments was air cooled, with temperatures ranging from 18 to 32°C. The other compartment was cooled using air conditioning, and used as a control.

Frankly, I think more homes could use fresh air for cooling.

Posted in Technology | No Comments »

College Panel Calls for Less Focus on SATs

Monday, September 22nd, 2008

Unsurprisingly, a college panel calls for less focus on SATs — and more focus on, well, I think you can guess:

Mr. Fitzsimmons’s group, which was convened by the National Association for College Admission Counseling, also expresses concerns “that test scores appear to calcify differences based on class, race/ethnicity and parental educational attainment.” The report calls on admissions officials to be aware of such differences and to ensure that differences not related to a student’s ability to succeed academically be “mitigated in the admission process.”

“Society likes to think that the SAT measures people’s ability or merit,” Mr. Fitzsimmons said. “But no one in college admissions who visits the range of secondary schools we visit, and goes to the communities we visit — where you see the contrast between opportunities and fancy suburbs and some of the high schools that aren’t so fancy — can come away thinking that standardized tests can be a measure of someone’s true worth or ability.”

What’s amusing is that they attack the SAT, because students spend so much time “gaming” it, and recommend using the so-called achievement tests, which aren’t gamed as much, as a substitute — ignoring the fact that any alternative will start getting gamed as soon as it replaces the SAT.

Posted in Education | No Comments »

Physics Proves It: Everyone Should Shoot Granny-Style

Saturday, September 20th, 2008

Physics Proves It: Everyone Should Shoot Granny-Style — or, rather, they should probably shoot free throws underhand:

Using lots of trigonometry, Brancazio calculated the optimal angle of the arc from the free throw line. If tossed at 32 degrees or less, the ball will most likely hit the back of the rim. “That doesn’t mean it won’t go in, but it will certainly bounce off the metal and reduce the chance of success,” Brancazio says. At angles greater than that, the ball has a chance of making a nice swish. The optimum angle for the shot, he finds, is 45 degrees—plus half the angle from the top of the player’s hand to the rim. “The shorter you are, the steeper that angle has to get to give you the best chance of making the shot,” he says. Of course, lobbing a ball very high so that it comes down nearly straight into the basket would be the most efficient technique, but a shot like that “is almost impossible to aim,” Brancazio says. Instead, he says, his formula makes it possible for a player to shoot with the largest possible margin for error.

Posted in Science | No Comments »

The Tell-All Campus Tour

Saturday, September 20th, 2008

In The Tell-All Campus Tour, Jonathan Dee explains how Jordan Goldman got his Web 2.0 company, Unigo, off the ground:

With no money, no contacts and no business education whatsoever, Goldman began where any 21st-century self-starter would: “I Google-searched ‘business plan,’ and I found one and just plugged my own words into it. Then it wound up that Wesleyan has an alumni database, and so I looked for people who worked in finance and who graduated 10 or more years before I did. I e-mailed about 500 people, and I just said: ‘Look, I have this idea. What do I do now? What comes next?’ It was a fairly untraditional fund-raising process.”

Actually, with the exception of the bit about Google, it was as traditional as can be, but given that he was 23, Goldman can be excused for thinking that he discovered the Old Boy Network. About 50 Wesleyan alums answered his e-mail messages, and one of those replies — from Frank Sica, a former president of Soros Private Funds Management — was the stuff of drama.

“He said, ‘I live in Bronxville,’ ” Goldman recounted. “ ‘At 7:30 I order my eggs at this diner. I’m done by 8. Come up to the diner and tell me about your idea, and I’ll give you until I’m done with my eggs.’ ” Armed with only his idea and the ability to talk a blue streak about it, Goldman set his alarm and took a train to that diner. No one who has ever met Goldman would have any trouble guessing that by the time Sica was finished with his eggs that day, he was on his way to becoming the young man’s lead investor.

Now Goldman goes to work every day on Park Avenue, in an office with an interior window through which he can keep tabs on his 25 employees, nearly all of them even younger than he. This month his Web site, called Unigo.com — a free, gigantic, student-generated guide to North American colleges for prospective applicants and their families — went live for the benefit of tens of thousands of trepidatious high-school students as they try to figure out where and how to go to college. Not coincidentally, it also aims to siphon away a few million dollars from the slow-adapting publishers of those elephantine college guidebooks that have been a staple of the high-school experience for decades.

Posted in Business, Education, Technology | No Comments »

Entrepreneurs hope to save world 1 baby at a time

Saturday, September 20th, 2008

Entrepreneurs hope to save the world one baby at a time — which sounds like a fine idea:

Chen and her colleagues are finalists in the American Express Members Project contest to fund socially important programs. Their project, Embrace, is an innovative low-cost, low-tech incubator they invented that can help save premature babies in developing countries. The top five finalists will share $2.5 million, with the winner receiving $1.5 million. That would be enough for Embrace to become a self-sustaining enterprise.

Embrace was the result of an innovative entrepreneurship class at Stanford University — Design for Extreme Affordability. Business school and engineering students are given a task to devise an “extremely affordable” solution to a significant societal problem. Chen’s team was challenged to create an incubator that cost less than 1% of a traditional incubator, around $20,000.

“We did research in Nepal and India,” Chen said.

They discovered that the most important issue in the survival of low-birthweight premature babies was maintaining a constant body temperature.

“We realized that the majority of deaths were in places that had no access to electricity. They needed something extremely affordable, easy enough for a mother to operate with no training, that could be used in a home or clinic setting, since most births in these areas are in (the) home.”

They came up with a device that looks like a very small sleeping bag, in which the mother inserts a pouch containing a type of wax that, when heated in boiling water for only 15 minutes, can maintain a constant 37 degree Celsius temperature for about four hours. A mother or caretaker in even the most remote village could use it properly and safely. They named it “Embrace” because it also enables a mother to hold her infant close to her body, unlike the mechanical incubators in Western hospitals.

Something so simple. So easy. So smart. That solves such an important problem. Most importantly, it would cost less than $25 — and can be used over and over again. You can learn more about Embrace at www.embraceglobal.org.

Sadly, this ignores the Malthusian conditions in “developing” countries, which haven’t grown their economies as quickly as they’ve grown their populations. Saving a premature baby, in such conditions, means adding one more mouth to feed, in a place where there may not be enough food to go around. In the short term, saving a baby is so obviously good, but, in the long term, it means more misery. At the very least, it probably means that that family cannot afford to raise the next, healthier child to come along.

Sometimes it really does look like the road to Hell is paved with good intentions.

Posted in Business, Economics, Policy, Technology | No Comments »

QuantLib

Saturday, September 20th, 2008

QuantLib is a free/open-source library for quantitative finance:

Finance is an area where well-written open-source projects could make a tremendous difference.

That’s how you know the developers are approaching the problem from an academic point of view.

Posted in Business, Technology | No Comments »

Government Bailouts: A U.S. Tradition Dating to Hamilton

Saturday, September 20th, 2008

Michael Phillips notes that government bailouts are a U.S. tradition dating back to Alexander Hamilton and cites Alex J. Pollock of the American Enterprise Institute:

“If you would like an empirical law of government behavior, it is that in a panic or threatened financial collapse, governments intervene — every government, every party, every country, every time.”

Posted in Economics, Policy | No Comments »

The Seed of Apple’s Innovation

Thursday, September 18th, 2008

I enjoyed this old (2004) piece on The Seed of Apple's Innovation, in which Jobs explains what happened to Apple while he was away:

You need a very product-oriented culture, even in a technology company. Lots of companies have tons of great engineers and smart people. But ultimately, there needs to be some gravitational force that pulls it all together. Otherwise, you can get great pieces of technology all floating around the universe. But it doesn’t add up to much. That’s what was missing at Apple for a while. There were bits and pieces of interesting things floating around, but not that gravitational pull.

People always ask me why did Apple really fail for those years, and it’s easy to blame it on certain people or personalities. Certainly, there was some of that. But there’s a far more insightful way to think about it. Apple had a monopoly on the graphical user interface for almost 10 years. That’s a long time. And how are monopolies lost? Think about it. Some very good product people invent some very good products, and the company achieves a monopoly.

But after that, the product people aren’t the ones that drive the company forward anymore. It’s the marketing guys or the ones who expand the business into Latin America or whatever. Because what’s the point of focusing on making the product even better when the only company you can take business from is yourself?

So a different group of people start to move up. And who usually ends up running the show? The sales guy. John Akers at IBM is the consummate example. Then one day, the monopoly expires for whatever reason. But by then the best product people have left, or they’re no longer listened to. And so the company goes through this tumultuous time, and it either survives or it doesn’t.

Jobs is an unusual CEO:

Look, I was very lucky to have grown up with this industry. I did everything in the early days — documentation, sales, supply chain, sweeping the floors, buying chips, you name it. I put computers together with my own two hands. And as the industry grew up, I kept on doing it.

Not everyone knows it, but three months after I came back to Apple, my chief operating guy quit. I couldn’t find anyone internally or elsewhere that knew as much as he did, or as I did. So I did that job for nine months before I found someone I saw eye-to-eye with, and that was Tim Cook. And he has been here ever since.

Of course, I didn’t tell anyone because I already had two jobs [CEO of Apple and of movie maker Pixar Animation Studios] and didn’t want people to worry about whether I could handle three [jobs]. But after Tim came on board, we basically reinvented the logistics of the PC business. We’ve been doing better than Dell [in terms of some metrics such as inventory] for five years now!

Posted in Business, Technology | No Comments »

Colonel House and Philip Dru

Thursday, September 18th, 2008

Mencius Moldbug recently cited Walter Millis‘s Road To War: America 1914-1917, which offhandedly refers to one Colonel House, a figure I don’t think I could make up:

Edward Mandell House (July 26, 1858–March 28, 1938) was an American diplomat, politician, and presidential advisor. Commonly known by the purely honorific title of Colonel House, although he had no military experience, he had enormous personal influence with U.S. President Woodrow Wilson as his foreign policy advisor until Wilson removed him in 1919.

This is the especially good part:

In 1912, House published anonymously a novel called Philip Dru: Administrator, in which the title character, Dru, leads the democratic western U.S. in a civil war against the plutocratic East, becoming the dictator of America. Dru as dictator imposes a series of reforms which resemble the Bull Moose platform of 1912 and then vanishes.

So, Wilson’s foreign policy advisor was a colonel with no military experience, who wrote a novel about a progressive dictator saving America. Hmm…

Posted in Mencius Moldbug, Policy | No Comments »

The Flag of Humanity

Wednesday, September 17th, 2008

When you claim that yours is the The Flag of Humanity, well, that’s not necessarily good news for everyone else:

If you heard a Hitler say: “the swastika is the flag not only of Germany, but of the world,” you would doubtless be a little concerned. You might think, gee, this Mr. Hitler doesn’t mind sounding like he wants to conquer the entire friggin’ planet.

But when you hear that the Stars and Stripes “is the flag not only of America, but of humanity,” you have a slightly different reaction. And not because you’re a gun-totin’, God-lovin’, truck-drivin’ red-state American. Quite the contrary, in fact.

That’s Mencius Moldbug talking, and he goes on to cite Woodrow Wilson, from July 4, 1914, describing the policy that now bears his name:

My dream is that as the years go on and the world knows more and more of America it will also drink at these fountains of youth and renewal; that it also will turn to America for those moral inspirations which lie at the basis of all freedom; that the world will never fear America unless it feels that it is engaged in some enterprise which is inconsistent with the rights of humanity; and that America will come into the full light of the day when all shall know that she puts human rights above all other rights and that her flag is the flag not only of America but of humanity.

What other great people has devoted itself to this exalted ideal? To what other nation in the world can all eyes look for an instant sympathy that thrills the whole body politic when men anywhere are fighting for their rights?

Mencius adds his thoughts:

Note the particularly charming phrase “unless it feels that it is engaged in…” What Wilson really means is that [no government] will ever fear America unless [America] feels that [that government] is engaged in some enterprise which violates the rights of humanity.

In other words, [the US government] will judge the world. In other words, [the US government] will govern the world. In other words, [the US government] will rule the world. In other words, [the US government] will dominate the world.

The belief that judging is distinct from ruling, that one can “provide global governance” without “grasping world domination,” is not a Wilsonian invention. It is a fundamental part of the American political tradition — the separation of powers. In this case, the separation of executive and judicial authority. One can be an honest broker, without being an imperial overlord.

Rationally — if the term applies — this depends on the concept of “natural law,” ie, a theory of right and wrong which is self-evident to everyone honest. Since [the US government] is always honest, being democratic, it and and any other honest, enterprising government will always agree on whether the latter is “violating the rights of humanity.” And if they don’t, it is. Ergo, [the US government] is always right.

Thus, it is clear that when Serbia wishes to recover a seceded province, it is violating the rights of humanity, whereas when Georgia does the same it is defending them. The former fears America, and rightly so. The latter is helping it support democracy.

So [the US government], the universal democratic nation, may, indeed must, assert its jurisdiction over all. Which it just happens to have the military and financial power to enforce. And is this in the interest of America or Americans? Heaven forfend!
[...]
Lest the odor of cynicism become overpowering, let’s pause for a minute, and admit that there is evil in the world. More specifically, there are evil people. And it is a glorious thing, and good for all and sundry, to wrap a rope around their necks and pull the chair away.

The trouble is that if we truly despise evil, we hope to minimize the amount of it in the world. Wilsonism is not inherently evil. A Petri dish is not inherently bacteria-infested. There is such a thing as a sterile Petri dish. But the combination of world domination and profound self-righteousness is a bath of nutrients as nourishing as evil has ever found. And bacteria are not in short supply.

Why would evil not go abroad in the mask of good? Satan has no fear of masks. Wilson, a deeply mystical man, thought of democracy as a sort of antibiotic which ensured that his Petri dish would always remain pristine. It has not, in my opinion, worked out that way.

But the combination of world domination and profound self-righteousness is a bath of nutrients as nourishing as evil has ever found.

Posted in Mencius Moldbug, Policy | No Comments »

Tesla Motors’ Second Electric Car Will Be Made in Silicon Valley

Wednesday, September 17th, 2008

Tesla’s Model S sedan will be made in Silicon Valley, because California offered $15 million in incentives:

That includes waiving rent for the first 10 years of the 40-year lease on the San Jose property and waiving state sales tax on $100 million worth of equipment. New Mexico was reportedly offering Tesla around $7 million worth of incentives.

Posted in Business, Policy | No Comments »

Animal-rights activists suspected in attacks on UC Santa Cruz researchers

Wednesday, September 17th, 2008

Animal-rights activists suspected in attacks on UC Santa Cruz researchers:

The first bomb went off about 5:40 a.m. Saturday, destroying a car outside the home of a UC Santa Cruz researcher. Authorities have not named the researcher.

Three minutes later and less than a mile away, a second device exploded on the front porch of researcher David Feldheim’s home while he and his family were asleep. As the house filled with smoke, the scientist, his wife and their children, ages 2 and 4, escaped out a window and down an emergency ladder. Feldheim injured his feet during his escape.

Both devices were incendiary, police said, but it was unclear how they were triggered. Also unknown is how many people were involved in carrying out the attacks.
[...]
“Acts of violence and intimidation such as these are unacceptable, and they continue a troubling pattern seen at UCLA and other UC campuses that should be repugnant to us all,” UC President Mark G. Yudof said Monday. “These acts threaten not only our academic researchers and their families, but the safety and security of neighbors in our communities as well.”

City officials joined in harshly condemning the bombings and urged members of the public who might have evidence in the case to contact authorities. They announced a $30,000 reward, including $2,500 donated by the Humane Society of the United States.

“The threats and attacks are shocking and abhorrent,” Santa Cruz Mayor Ryan Coonerty said. “We as a community are unambiguous in our condemnation of these actions. Let me be clear, this is not protest. This is terrorism.”

Posted in Science, War | No Comments »

« Older Entries
Newer Entries »