Sunday, July 17, 2011

Prediction on Further Quantitative Easing

Last week, Fed Chairman Ben Bernanke admitted in front of Congress that a third round of Quantitative Easing (AKA further devaluing of the dollar) is among the Fed's plans for the future.

This really doesn't surprise anyone who has a clue about the truth of the current propped up economy that is bound to bust sooner rather than later, even though Bernanke backpedaled from that stance the next day.

So, we now know what most of us have know for a while: QE3 is in the works. The only question is when it will be implemented (how it will be implemented is immaterial).

I will now make my first major economic prediction as writer of PoK and it ties in to the ongoing farce of a "debate" on the debt ceiling:

1. A deal will be made, on or before the August 2nd deadline.

2. In that deal, there will be miniscule baseline budget cuts across the board. - What this means is that there won't be real spending cuts, just not as much spending as there would be otherwise. And since it will be across the board, there will hardly be an impact in specific agencies that are ailing the American economy, like Medicare.

3. The deal will also include minimal to negligible tax increases, or as they're now calling it "closing tax loopholes."

So what do all these steps mean? It means we will have continued outlandish spending without any revenue to cover for it because of a lack of large tax increases. This means we will spend more without any money coming in to pay for it.

So, it leads us to the question: How will we cover this continued spending since there is no increase in revenue? The answer? You got it. Quantitative Easing. Quantitative easing, or QE3, will take place as an attempt to boost aggregate demand and cover this increase in federal debt.

The debt deal will take place just in time for the August 9th Federal Open Market Committee (FOMC) meeting. In that meeting they will discuss how they will cover the increased spending with further easing but it won't yet be implemented. Publicly, Bernanke will probably announce that the Fed is awaiting further economic data to see how the economy reacts to the debt deal, or something like that, before taking any action.

Then, by the time the September 20th FOMC meeting takes place, the Fed will have seen enough negative economic data and will then announce QE3.

So, there you have it: my prediction on how the Fed will implement QE3. Am I betting any money on this? Probably not. Please remember I'm only an undergrad. However, this prediction is based on a few things: past Fed behavior, the current and near term state of the American economy, and Washington politics. I believe this bet isn't bad. And if I do get it right, maybe they'll have to have me on CNBC instead of that joke Jared Bernstein.

Saturday, July 9, 2011

American Values Network Epitomizes Ignorance

In a new commercial aimed at calling attention to Ayn Rand's beliefs, especially about God and religion, and how they can be a dangerous influence on conservatives, the American Values Network (AVN) has done a fantastic job in epitomizing the very ignorance many "social conservatives" fall prey to. Instead of summarizing the video and dissecting it point by point, I provide it here and my criticism follows:

First off, I will begin, as I am studying English, by pointing out the obvious intentional fallacy taking place here. Although I am a big fan of Atlas Shrugged and the philosophy that helped made it what it is (one of the greatest novels ever written), there is no escaping the fact that delving into, or putting too much emphasis on, the intention of an author's work is an outright fallacy. More specifically, it is an intentional fallacy. When criticizing a novel specifically, one cannot place primary importance on the author's intent. Ultimately, whatever is written, and how it is written, in a novel is to judged and criticized on its own merits and not subjugated to the underlying intentions. Therefore, in this commercial, to attempt to demagogue a novel not based on its content (plot, character development, etc.) but rather on what its author said in an interview afterward, is fallacious and ultimately irrelevant. Therefore if you want to demonize a book, especially one of such quality as Atlas Shrugged, its best you do so based on its content, and even that would be a foolish task. So, that's the first point underlining AVN's outright ignorance.

Secondly, the most obvious ignorance taking place here is the message that AVN is trying to convey, which is basically that if you agree with someone on one particular aspect, what they believe in every other aspect, if incorrect, invalidates your agreement as their other views nullify any previous perceived correct stance. In this case particularly, what people like Congressman Paul Ryan mean when they say Ayn Rand should be listened to, they generally mean on matters of economics. Rand was an outright free marketeer, no if's, and's or but's about it. So when Ryan and other Republicans praise Rand's philosophy, they are specifically praising her philosophy that emphasizes the individualism that should be the foundation of society; ethically, morally, politically and economically. Last time I checked, there was nothing anti-religion or anti-Christian about individualism. Individualism is the underlying principle to be found in Atlas Shrugged. As a matter of fact, generally understood, religion is all about the individual. When it comes to Christianity, the belief is that when one dies, he or she alone will be judged for his or her actions. Therefore, emphasis on individual actions is of utmost importance.

What any of this has to do with Rand's belief of religion is irrelevant. As a matter of fact, it should be noted that not one of those cited by AVN ever praised Rand's philosophy on God or religion. To AVN, it appears that if you agree with Rand on ethics and economics, you are somehow endorsing her theological, or lack thereof, beliefs. This is, of course, absurd. It's perfectly reasonable for someone to agree with another on one subject but totally disagree with them on another.

If AVN wants to somehow claim that Rand's premises of atheism, or anti-theism, invalidates any preceding conclusions, then they better rethink their policy. After all, the first word in their organization is "American." Let's think about this. The term American refers to the United States of America. The USA was founded upon certain principles that were written in certain documents. Foremost of these documents was the Declaration of Independence. This document was written primarily by Thomas Jefferson. Let's see what Jefferson had to say about religion, Christianity in particular:

"The whole history of these books [the Gospels] is so defective and doubtful that it seems vain to attempt minute enquiry into it: and such tricks have been played with their text, and with the texts of other books relating to them, that we have a right, from that cause, to entertain much doubt what parts of them are genuine. In the New Testament there is internal evidence that parts of it have proceeded from an extraordinary man; and that other parts are of the fabric of very inferior minds. It is as easy to separate those parts, as to pick out diamonds from dunghills."

Not entirely positive, is it? As a matter of fact, Jefferson, himself a Desist, said many disparaging things about religion and Christianity. Seems to invalidate AVN's very usage of the word "American." Does this mean that anyone who claims to be influenced by Jefferson's philosophy is wrong or "anti-Christian?" Obviously, not. But you won't see AVN making this point.

This is, of course, very silly. But this kind of stuff especially infuriates me. If the AVN wants to drive a wedge between libertarians and "social conservatives" then go for it. If only the GOP would wake up and notify these social authoritarians (not conservatives) that limited government means complete limited government. Nowhere in the powers delegated to the federal or state governments is the power to dictate values or religious beliefs. AVN tries to disparage Rand's goal of forming "a morality not based on faith." Is faith now a prerequisite to be an American now? Of course not.

The obvious point that AVN tries to make there is that one has to be religious in order to be moral. This plainly incorrect. Belief in God or adherence to any religion is NOT a prerequisite for being moral. Morals are based on reason. Everything that is moral is rational. I could be an atheist but that doesn't mean that there is nothing stopping me from being immoral. I still have my human capacity for reason and as long as I utilize that, as Rand promotes, then I will live morally. This philosophy is the very foundation of movements that have helped form this country's principles and modern philosophy: the Enlightenment, the Reformation, etc.

Don't be mistaken; I don't agree with Rand on everything. Her reasoning for not believing in God is erroneous itself. God's existence can easily be proven within reason. Also, Rand's belief on American foreign policy was anti-individualist, ironically enough. (That's another thing: Rand was a big supporter of Israel and of America being interventionist in Muslim countries, yet I suspect, as most at AVN probably agree with Rand in that aspect, they won't bother questioning their own premises there as they agree with this "nutcase" Rand)

I could go even more into the inherent contradiction included in social authoritarianism and their general participation in Republican politics. I will save that for another time...