Posted by on November 1, 2017

Dear Readers:

I am moving back to the States this month, ending my long sojourn in Europe.  This is very much a bittersweet experience for me.  It also means that I am quite busy.  This combination accounts for my low output recently.

I will be moving to near Denver, a beautiful area called Evergreen.  Google it to see.  Come and visit.  I will have room.

Among other things, I am moving back to run for political office in 2018.  My target is to be the Libertarian Party candidate for the 2nd Congressional District, spreading the message and hopefully doing well enough to be a viable LP presidential candidate in 2020 and then finding myself on the debate stage with Donny and someone like Elizabeth Warren.

Everybody needs dreams.

During the transition, blog posts will be sporadic and short, like today’s selection of Things I Have Been Reading, Hearing or Watching (THIBRHeW).  I might also get a little sloppy with editing and proofreading!

Roger

 

Opioids

The opioid crisis has been in the news lately, in part because of Trump’s recent proposals on the subject.  As usual, these were a bombastic and self-congratulatory rehashing of policies that have already been tried and failed.  As a Reason article puts it, Trump’s ideas are a form of yoga: “lots of posturing while staying in one place.”

Here is a good podcast from Cato on the issue, entitled “How Prohibition Caused the Opioid Crisis.”  At the very least, this is excellent background from a practicing physician and Cato scholar, Jeffrey Singer.

Singer argues that, under government orders, opioid use and production has been going down for several years but deaths are going up, because users have been driven to a black market where quality and strength are unknown.  As further evidence, Singer points out that most deaths now come from illegal products, such as heroin, rather than from prescription drugs.

Singer makes an impassioned plea to “let doctors be doctors,” and adopt a strategy of harm reduction rather than prohibition.  Along the way he dismisses multiple myths, such as the idea that it is easy to become chemically dependent on opioids – something that Economic Man, the object of multiple surgeries as a result of aggression combined with incompetence on the ski slopes, knows is nonsense – or that long-term opioid use is necessarily debilitating.

Although I need to study this further, this strikes me as yet another area where we are legislating from extremes.  We see Michael Jackson being preyed upon by a pill-pushing charlatan and we assume that this is the prevalent scenario.  Our reaction to this then causes more collateral damage than the harm it was intended to address.  Wash, rinse, repeat.

On a related issue, there is some evidence that medical marijuana reduces opioid deaths by providing an alternative form of pain relief.  This is only surprising to imbeciles like our Attorney General.  In the parlance of microeconomics, medical marijuana and opioids are substitute goods.  In the “gateway drug” mind of a simpleton like Sessions, they are complementary goods.  Lower the cost of medical marijuana, including the risk of criminal prosecution, and the consumption of its opioid substitutes goes down, not up.  You see how that works, Jeff?  Or should I write more slowly?

As another example of how vices substitute rather than complement each other, we also have this recent piece from Marginal Revolution entitled “Prostitution Reduces Rape.”  The article concludes with:

In short, a wide variety of evidence from different authors, times and places, and experiments shows clearly and credibly that prostitution reduces rape. This finding is of great importance in considering how prostitution should be rationally regulated.

Bitcoin

One of my readers (and a former colleague) and I have been trying to get our tiny little heads around Bitcoin.  Our natural instinct is that this is a massive bubble that we wish it were easier to short.   However, just a Warren Buffett says that you should not invest in anything you don’t understand, it is also probably not a good idea to short it either.

Here is a good and seemingly pretty balanced article on the subject entitled “A Letter to Jamie Dimon.”  This is a response to Dimon’s broadly quoted comments about Bitcoin, saying that buyers are “stupid.”

In the comments section of the article, I raise some questions.  Hopefully, this will elicit an exchange that will be civil, informative and interesting for participants and spectators.

In the meanwhile, I was always taught that money serves three functions: it is a medium of exchange, a unit of account, and a store of value.  It strikes me that Bitcoin does none of these things well and has little prospect of evolving to do them better – among other things, the article points out that fewer mainstream merchants accept Bitcoin now than they did in 2014.  The article also points out that, at the end of the day, the only real use of Bitcoin is conducting illegal activities.  Which means that eventually governments will do their best to clamp down on it.  Hence my intuition that this is a huge bubble.

For the economics nerds out there, I have long pointed out that Bitcoin violates something called the “regression theorem.”  This is a theory, propagated by Ludwig von Mises, that the only way to resolve the circularity of a valuation of a currency is to “regress” to an original valuation as a commodity.  In other words, the value of gold as a currency grew out its original value as a material for things like jewelry.  I have raised this issue with several followers of Mises’ “Austrian School” and have never received a satisfactory answer, although I will leave the reader to decide if this is a comment on Bitcoin or on the Austrian School.  A recent article by Jeffrey Tucker on this subject does not, to my mind, make a compelling argument on this score.

Speaking of Bubbles

In my most recent rant about Tesla, I omitted a useful link.  This is a running tally by a Seeking Alpha contributor of all the material forecasts and commitments made by Tesla or Musk since 2011 which have not been met.  The number is about 60 and counting.  My informal count of forecasts or commitments that the company has outperformed is nada.

The standard applied by the SEC is contained in the famous Rule 10(b)5 which enjoins a company from:

…mak[ing]any untrue statement of a material fact or to omit[ting] to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. ….

Companies can be wrong in a forecast without violating this rule so long as the prediction was honestly held and unbiased.  The probability of an unbiased prediction falling on only one side of a symmetrical distribution 60 straight times is 0.00000000000000000864%.  As a point of comparison, the probability of Hillary Clinton having parlayed $1,000 into $100,000 in cattle futures without actually having been on the receiving end of bribes was a robust 0.000000000000323%.

Another Seeking Alpha contributor has recently been posting multiple videos from Tesla owners about reliability problems.  Examples are here and here.  The amazing thing is that, despite these problems, owners often remain committed to the brand.  One owner said that he looks at them as the endearing foibles of a beloved.  I kid you not.

I recently tweeted that real Tesla-ites know that there is no sainthood without martyrdom.  Like so many things in our current times, religion and other forms of tribalism are better explanatory models than rationality.

Fragile Generation

Here’s an interesting podcast featuring Lenore Skenazy, the author of Free Range Kids.  The argument of the book and the podcast is that “helicopter parenting” has led directly to safe spaces, microagressions and trigger warnings.  I have also suggested to Tyler Cowen that it is a factor in the rise of risk aversion he documents in The Complacent Class.

The shocking thing, of course, is that all of this is happening in an environment where children and adults have never been safer and the probability of ending up on a milk carton is vanishingly small.

The podcast is a strong recommendation.  In particular, Nick Gillespie, the interviewer, is at his witty and irreverent best.

Kevin Williamson on White Working Class Populism

I assume that many of you have seen and read Kevin Williamson’s piece from the National Review entitled “The White-Minstrel Show.”  This has been ricocheting around the blogosphere since its publication.  When I grow up, I want to write like Kevin Williamson.

This article has many levels, but in part I interpret it as the Reader’s Digest version of Hillbilly Elegy.  In turn, the best one-line summary of both this article and Elegy is from Jean-Paul Sartre:

“Nous sommes nos choix.”  (“We are our choices.”)

 

Roger Barris

Weybridge, United Kingdom (but not for much longer)

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Comments

  1. Fred in Paris
    November 1, 2017

    Leave a Reply

    Hi Roger,

    If I understand well, you are leaving the investment fund industry for politics..?
    Will you miss Europe?

    Anyway, I wish you the best for your new life, and I hope we can catch up one of those days…!

    All the best Amigo!

    Fred

    • Roger
      November 2, 2017

      Leave a Reply

      Yes, I will miss Europe, but I can always come back for vacations. Thanks for the best wishes. Same to you, Fred.

  2. Mary Lou
    November 1, 2017

    Leave a Reply

    I will gladly pay for a front seat when you debate Elizabeth Warren. I can hardly wait.

  3. Matt
    November 2, 2017

    Leave a Reply

    Big move. All the best Roger for your political career. I hope though the US voter is ready to elect a person that has spent long time outside of the US.

    Already have set up a web/facebook page? Will spread the word once done!

    • Roger
      November 2, 2017

      Leave a Reply

      Thanks, Matt. Given that I intend to run as a Libertarian, my spending time outside of America is probably the least of my worries.

      No web/Facebook page yet. But will let you know!

      Roger

  4. Jerry Morton
    November 2, 2017

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    Hi Roger, You would have my and Elaine’s vote. We know you will do well in whatever you do. Good Luck and welcome home.

    • Roger
      November 2, 2017

      Leave a Reply

      Great! Thanks for the vote of confidence and the welcome. When I am back in the States, I should be able to travel around and see people more. Hope to catch you both. Roger

  5. Anonymous
    November 7, 2017

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    I wish you all the very best, Roger. And I hope/am sure you will do very well. I truly do.

    I also hope you will import/export the cultural continental european excellence the rest of the world so badly needs: nowhere, anywhere, will there be anything like the bravery of Charlie Hebdo, here in Paris, who are at it again, in spite of the massacre 3 years ago, risking their lives, again, for no money (something that seems incomprehensible to anglo-saxons) in the middle of 1 of the 2 most civilised modern nations in the world: France and Germany. To a standing ovation in french parliament.

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