plantimals.org

For those who feel compelled to document progress in our times, here is a point to add. The music played when you are on hold for tech support has generally improved in recent years. It's not perfect by a long stretch but it is getting there.

For those too young to remember the bad old days, I have one word for you: trumpets. It was a cool jazz with trumpet doing the melody line, and then it would be followed by a spontaneous improvisation, which is fine the first time around.

But of course the nature of tech-support is that you are on hold for 10 minutes up to an hour, so of course the music must loop. The trumpet is fine once or twice but 10, 20, 30 times? It loses spontaneity. Then it gets on your nerves. Then it makes you crazy. Then you can't stand it anymore. Finally you hang up, rattled and disoriented, and open the web chat feature or fix the problem yourself.

And maybe that was the point after all. Every good tech support person knows that the number one best way to fix a problem is to delay as long as possible, thereby creating massive frustration on the part of the end-user, which in turn gets the creative juices flowing to the point that the user fixes his or her own problem.

Tech support did its job! You see, this was not a market failure. It was an efficient management strategy. There is nothing worse than a tech-support person who is always there for you, babying you at every step. This does as much good for a person's technical education as a GPS does for one's sense of direction. Too much, too fast, tech support can actually dumb us down.

Of course a greater challenge that tech support faces is how to keep people from calling in the first place. The trumpet-based hold music eventually gave way to extended electronic instructions to reboot your computer, and over a period of time the calls diminished, understandably.

At some point, it became more likely that serious people were the main callers and so it became important not to annoy people to the point of insanity.

The other day I experienced some tech-support hold music that was genuinely interesting and over a long period of time. The background had a long wave to it that suggested a kind of forward motion indicating that something progressive was taking place. On top of that was a mild percussive rhythm that had an inviting quality. Then as a separate motif, there was a regular pattern of a digital clapping sound, one that you can sort of mimic with your mouth, which gives you something to do while on hold.

Even today, however, some companies persist in playing music with a singer yammering on about love or some social theme. This is terrible because it effectively prevents multitasking, so while you are on hold, your whole life is on hold. Then every once-in-a-while a voice comes on to tell you to continue to hold because your call is important. The less of this the better, since it is obviously not true. And it raises credibility questions in the caller's mind.

Even the best possible singing, for example, a choir singing Machaut's amazing Messe Notre Dame, would be a disaster for holding on the phone. It just wouldn't convey that sense of urgency and progressive passage of time that is essential to quality hold music.

Actually, one can imagine worse. The Jonas Brothers come to mind.

Libertarian Papers, Vol. 1 (2009), Art. No. 32: "Gold, the Golden Rule, and Government: Civil Society and the End of the State," by D.G. White

Abstract: Properly speaking, money and law are natural outgrowths of human society, evolving over time via the voluntary cooperation that lies at the heart of the social enterprise. And as gold and the golden rule have for millennia formed the basis, respectively, of society's money and law, they accordingly constitute the "twin pillars of civilization," governing the social enterprise such that, in Mises's words, "the human species has multiplied far beyond the margin of subsistence." It stands to reason, then, that if money and law are corrupted, the social enterprise will be corrupted as well. And as this is precisely what the state has done, essentially toppling the twin pillars of civilization, it is necessary to understand what the state is, where it came from, and how it has systematically gone about corrupting money and law, and thus the social enterprise as a whole. For only then can money and law be returned to their rightful owners, and only then can the state be put in its proper place. Which is no place so far as the proper functioning of civil society is concerned.

Libertarian Papers, Vol. 1 (2009), Art. No. 33: "Reply to Matt Mortellaro on 'Block's Paradox': Causation, Responsibility, Libertarian Law, Entrapment, Threats and Blackmail," by Walter Block

Abstract: Matt Mortellaro's "Causation and Responsibility: A New Direction" is a brilliant Rothbardian analysis that makes numerous new and important points. It also critiques some of my own previous publications. In this piece I focus on Mortellaro's rejoinders to me, and set forth a defense of my own positions.

The status quo with respect to medical care does not deserve to be preserved. It does bear the earmarks of financial lunacy. It does call for reform - for radical reform. The question is, what kind of radical reform? FULL ARTICLE

It has in common with the classics all those qualities of clear thinking, objective presentation and lucid exposition which distinguish the wise philosopher from the merely intellectual pamphleteer. FULL ARTICLE

Travel with me back to yesteryear, the early days of the Reagan administration, when taxes were being cut and spending increases were being curbed (actual spending cuts were few), and when journalists were losing their heads about the supposedly catastrophic state of the economy.

The prevailing ethos in those days in the White House was somewhat sensible. The idea was that the recession had to be permitted to run its course. The late-1970s inflation coupled with recession had wrought dollar depreciation plus high unemployment and high interest rates. These were part of the adjustment process. No one doubted it. FULL ARTICLE

European politicians want to achieve broadband access for all. They think that this is a panacea and could even drive Europe out of the current economic situation. In fact, the European Commission "considers it of the greatest importance that, within the European Union, key services such as e-communications are widely available to citizens and businesses, independently of their geographical location, and at an affordable price and specified quality."

Current regulation is failing to achieve this goal. So, politicians are looking for new ideas to push forward their vision for society. There is one proposal that has been in the making for some time, but which has only recently gained momentum due to the impulse of the UK government. It consists of including broadband service as part of the scope of the universal service obligations.FULL ARTICLE

People have a natural intuition about risk, and in many ways it's very good. It fails at times due to a variety of cognitive biases, but for normal risks that people regularly encounter, it works surprisingly well: often better than we give it credit for.

This struck me as I listened to yet another conference presenter complaining about security awareness training. He was talking about the difficulty of getting employees at his company to actually follow his security policies: encrypting data on memory sticks, not sharing passwords, not logging in from untrusted wireless networks. "We have to make people understand the risks," he said.

It seems to me that his co-workers understand the risks better than he does. They know what the real risks are at work, and that they all revolve around not getting the job done. Those risks are real and tangible, and employees feel them all the time. The risks of not following security procedures are much less real. Maybe the employee will get caught, but probably not. And even if he does get caught, the penalties aren't serious.

Given this accurate risk analysis, any rational employee will regularly circumvent security to get his or her job done. That's what the company rewards, and that's what the company actually wants.

"Fire someone who breaks security procedure, quickly and publicly," I suggested to the presenter. "That'll increase security awareness faster than any of your posters or lectures or newsletters." If the risks are real, people will get it.

You see the same sort of risk intuition on motorways. People are less careful about posted speed limits than they are about the actual speeds police issue tickets for. It's also true on the streets: people respond to real crime rates, not public officials proclaiming that a neighbourhood is safe.

The warning stickers on ladders might make you think the things are considerably riskier than they are, but people have a good intuition about ladders and ignore most of the warnings. (This isn't to say that some people don't do stupid things around ladders, but for the most part they're safe. The warnings are more about the risk of lawsuits to ladder manufacturers than risks to people who climb ladders.)

As a species, we are naturally tuned in to the risks inherent in our environment. Throughout our evolution, our survival depended on making reasonably accurate risk management decisions intuitively, and we're so good at it, we don't even realise we're doing it.

Parents know this. Children have surprisingly perceptive risk intuition. They know when parents are serious about a threat and when their threats are empty. And they respond to the real risks of parental punishment, not the inflated risks based on parental rhetoric. Again, awareness training lectures don't work; there have to be real consequences.

It gets even weirder. The University College London professor John Adams popularised the metaphor of a mental risk thermostat . We tend to seek some natural level of risk, and if something becomes less risky, we tend to make it more risky. Motorcycle riders who wear helmets drive faster than riders who don't.

Our risk thermostats aren't perfect (that newly helmeted motorcycle rider will still decrease his overall risk) and will tend to remain within the same domain (he might drive faster, but he won't increase his risk by taking up smoking), but in general, people demonstrate an innate and finely tuned ability to understand and respond to risks.

Of course, our risk intuition fails spectacularly and often, with regards to rare risks , unknown risks, voluntary risks, and so on. But when it comes to the common risks we face every day – the kinds of risks our evolutionary survival depended on – we're pretty good.

So whenever you see someone in a situation who you think doesn't understand the risks, stop first and make sure you understand the risks. You might be surprised.

This essay previously appeared in The Guardian.

In his book, Capital and Production, Richard von Strigl clearly shows that an advanced economy exists due to two social funds: the subsistence fund and the renewal fund. Neither of which is the product of printing presses.

For those wanting to show that redistribution (i.e. soaking the rich to benefit everyone else) is an impossibility, Bertrand de Jouvenel's book, The Ethics of Redistribution, contains an appendix with a sound refutation. Of course, times and places change. Regardless, to my knowledge, the bulge in the wealth distribution curve is always to the left.

Jonah Lehrer's article DON'T: The secret of self control in a recent issue of the New Yorker describes some fascinating research by on the importance of time preference by Stanford psychologist Walter Mischel.

Though he doesn't call it time preference, Mischel measured children's ability to choose between some candy now and more candy in a few minutes. Mischel found that children generally have very high time preferences, that there was considerable variability among children. (Friends of mine have estimated their own childrens' time preference at around 100% per two minutes).

Later in life, Mischel returned to the data to do follow-up studies on the adults he had studied decades before. He found that a relatively higher or lower time preference (within the study group) was consistent over the individual's life, and that low time preference correlated with greater success in all areas of life, including work, friends, family, substance abuse, and weight control.

This is consistent with the findings of political scientist Edward Banfield whose argued that time preference was the major factor in determining the ability of urban poor people to earn income and maintain employment.

The findings not surprising to Austrian economists, who have demonstrated that societies with a lower average social rate of time preference will accumulate more capital and experience a more rapid rise in their standard of living over time.

A 1934 story from the International Herald Tribune:

SPOKANE Discovery of a box of useless dynamite on the railway track two and a half miles southwest of this city led to special precautions being taken to guard the line over which President Roosevelt's train passed this morning [August 4] en route to Washington. Six deputy sheriffs guarded the section of the line near which the discovery was made. The President's train passed safely at 10 a.m. Officials are skeptical about the dynamite having any connection with a possible plot against the President.

Imagine if the same thing happened today.

Say you think Manhattan should be on the West Coast, so you move it. Daunting? Sort of.

But that's what it's been like to move a major part of Mises.org to a bigger, faster, more ginormous box, a process that has consumed us for a couple of weeks. The always-amazing David Veksler is getting married on Saturday (wedding site) so he has trained the young enterprise-software padwan Isaiah Houston, who has been an earnest and creative student.

As regards David, it's not a good way to start a new life to spend one's days before a wedding managing Mises.org from an iPhone. So David has had to depend heavily on Isaiah, and Isaiah has also had to get used to working with the old team of Brandon, BK Marcus, Doug French, and me, but he has been a great sport about it all.

The sticking point late last night was the blog--security is so tight these days that just managing server gives you the feeling of safe cracking--so we have done the DNS Two Step and moved back and forth, which accounts for why today some people will see what's new and some will only see what's old. In time, all things will come together for the good of all.

Here's to the future, of David and Sarah, of Mises.org, of young Isaiah and the readers of Mises.org!

Reading the July 2009 Government Accountability Office report sparks about as much excitement as reading last month's headlines, yet I can crack a smile at its earnest concern."GAO is adding the US Postal Service's (USPS) financial condition to the list of high-risk areas needing attention by Congress and the executive branch to achieve broad-based transformation." FULL ARTICLE

If we look beneath the surface of our public affairs, we can discern one fundamental fact, namely, a great redistribution of power between society and the State. This is the fact that interests the student of civilization. He has only a secondary or derived interest in matters like price fixing, wage fixing, inflation, political banking, "agricultural adjustment," and similar items of State policy that fill the pages of newspapers and the mouths of publicists and politicians. All these can be run up under one head. They have an immediate and temporary importance, and for this reason they monopolize public attention, but they all come to the same thing; which is, an increase of State power and a corresponding decrease of social power. FULL ARTICLE

Suppose that you want to destroy a city. Should you bomb it, or would it be sufficient just to impose rent control? It's a bracing question at first but the two are roughly equivalent. FULL ARTICLE

Good essay: "When Security Gets in the Way."

We are being sent a mixed message: on the one hand, we are continually forced to use arbitrary security procedures. On the other hand, even the professionals ignore many of them. How is the ordinary person to know which ones matter and which don't? The confusion has unexpected negative side-effects. I once discovered a computer system that was missing essential security patches. When I queried the computer's user, I discovered that the continual warning against clicking on links or agreeing to requests from pop-up windows had been too effective. This user was so frightened of unwittingly agreeing to install all those nasty things from "out there" that all requests were denied, even the ones for essential security patches. On reflection, this is sensible behavior: It is very difficult to distinguish the legitimate from the illegitimate. Even experts slip up, as the confessions reported occasionally in various computer digests I attest.

"In all the general assemblies Marin always demands that the older boys like him shall have more work than the younger ones. There is always a big discussion on this; sometimes it is settled one way, sometimes another. "I can work all day from sun-up to dark," boasts Marin, "and it won't hurt me now. But when I was little, I sprained my wrist from working too hard and it will always be a bad wrist. And our younger ones now are working beyond their strength; I see them with heads and backs aching in the hot sun. Then they come back and drink lots of cold Volga water and get sick with malaria. There should be two standards of work, for the older ones and the younger ones."

But the younger boys always argue against Marin, for they will not admit that he can do any more work than they can."

In Children of Revolution (1925), journalist Anna Louise Strong used her experience observing the John Reed Children's Colony, located on the Volga, to describe the dawning of the Soviet utopia. This quick and easy read details the wonders of socialism through Strong's radical and warped view of Stalin's USSR.

Strong uses the voice of Morosof, the musical shoemaker, to enlighten the reader: "'But I do not see the use of property; I think it is better not to own it. The October Revolution taught us to organize the commune. Even peasants begin now to do this; how much more can homeless children, who have no homes or property to begin with?'"

Freed from the ills of property, the children of John Reed quickly flourished -- or so goes the tale told by Strong.

To read Strong's words, it appears that capitalism is the evil that rots the world. But, wait.

"And now a great piece of luck came to the colony. Two days' journey away the Quakers from America were giving out food to children's homes. And the Quakers had heard of this group of boys which was starting to build a big farm colony of children, and promised to give them food. So Yeremeef went on the boat for a day's journey north, and then took the train for a day's journey west, till he came to the town where the Quakers gave out supplies of food. He brought back with him a whole car-load. Very wonderful food that they had not seen for years. Sugar and cocoa, and lard! There were also a hundred blankets, for starting a big colony. And soap--the first they had seen for many years! For ever since the Hungry Year they had been too poor to buy soap, and had scrubbed their dishes with sand, or ashes from the fire."

At every turn, American dollars and goods saved the colony.

Read the Children of Revolution and wonder: As we slip toward full-blown socialism, where will we turn for food and the equivalent of "good American shoes?" Who will act as our benefactor during the soon-to-come "Hunger Year."

The New York Times has an editorial on regulating chemical plants:

That law sunsets this fall, and the moment is right to move forward. For the first time in years, there is a real advocate for chemical plant security in the White House. As a senator, President Obama co-sponsored a strong bill, and he raised the issue repeatedly in last year's campaign. Both chambers of Congress are controlled by Democrats who have been far more supportive than Republicans of tough safety rules.

A good bill is moving through the House. It would require the highest-risk chemical plants to switch to less dangerous chemicals only in limited circumstances, but Republicans have still been fighting it. In the House Homeland Security Committee, the Republicans recently succeeded in adding several weakening amendments, including one that could block implementation of safer-chemical rules if they cost jobs. Saving jobs is important, but not if it means putting large numbers of Americans at risk of a deadly attack.

The Obama administration needs to come out forcefully for a clean bill that contains strong safety rules without the Republican loopholes. Janet Napolitano, the secretary of homeland security, said last week that she considers chemical plants a major vulnerability and promised that the administration will be speaking out on the subject in the days ahead.

It is looking increasingly likely that Congress will extend the current inadequate law for another year to take more time to come up with an alternative. That would be regrettable. There is no excuse for continuing to expose the nation to attacks that could lead to mass casualties.

The problem is a classic security externality, which I wrote about in 2007:

But to society, the cost of an actual attack can be much, much greater. If a terrorist blows up a particularly toxic plant in the middle of a densely populated area, deaths could be in the tens of thousands and damage could be in the hundreds of millions. Indirect economic damage could be in the billions. The owner of the chlorine plant would pay none of these potential costs.

Sure, the owner could be sued. But he's not at risk for more than the value of his company, and -- in any case -- he'd probably be smarter to take the chance. Expensive lawyers can work wonders, courts can be fickle, and the government could step in and bail him out (as it did with airlines after Sept. 11). And a smart company can often protect itself by spinning off the risky asset in a subsidiary company, or selling it off completely. The overall result is that our nation's chemical plants are secured to a much smaller degree than the risk warrants.

Research that proves what we already knew:

Abstract. Web users are shown an invalid certificate warning when their browser cannot validate the identity of the websites they are visiting. While these warnings often appear in benign situations, they can also signal a man-in-the-middle attack. We conducted a survey of over 400 Internet users to examine their reactions to and understanding of current SSL warnings. We then designed two new warnings using warnings science principles and lessons learned from the survey. We evaluated warnings used in three popular web browsers and our two warnings in a 100-participant, between-subjects laboratory study. Our warnings performed significantly better than existing warnings, but far too many participants exhibited dangerous behavior in all warning conditions. Our results suggest that, while warnings can be improved, a better approach may be to minimize the use of SSL warnings altogether by blocking users from making unsafe connections and eliminating warnings in benign
situations.

"Commercial real estate is also dependent on finance, but it's far less of a driver for the banks," Susan Wachter opined in a recent edition of the Opelika-Auburn News. And while Ms. Wachter, a professor of real estate and finance at the University of Pennsylvania's Wharton School, is right to be bearish on the prospects for commercial real estate, she is far too sanguine about the effects dud commercial real estate loans will have on the nation's banks.

The Federal Reserve estimates that the commercial property market totals $6.5 trillion, with loans against these properties totaling $3.3 trillion, or roughly a third of the U.S. residential mortgage market. So on the surface, the commercial real estate loan market, appears to be less a threat to bank balance sheets than residential mortgages. However, 60 percent of the nation's commercial real estate loans are held by small community and regional banks. These banks may only hold 28 percent of the banking industry's total assets, but they make up over 98 percent of the nation's 8,200 banks and savings institutions.

Professor Wachter, comfortably tucked away in her Ivory Tower in the shadow of the east coast money center banks, may not be all that concerned about a rash of garden office and strip-shopping center loans hitting the ditch. However, for the vast majority of small banks who didn't play the sub-prime mortgage game, but are hip deep in commercial construction loans, the plunging of commercial real estate values may spell the end of their existence.

Fifteen years ago less than two percent of U.S. banks and thrifts had exposure to commercial real estate that exceeded five times their Tier I capital, according to a report by Oxford Analytica. But the recent real estate boom seduced most banks into property lending and by late 2008 that ratio had jumped to 12 percent.

With commercial property values down nearly 35 percent from the peak in October 2007 and the downturn just getting started, banks will be feeling the pain for months and years to come. Real estate consultant Foresight Analytics estimates that commercial property losses could reach $250 billion, causing another 700 banks to fail.

The downturn in property values is not due to overbuilding according to professor Wachter, but is entirely due to the financial crisis. That can't be true with vacancies up and rental rates down, exacerbated by a rash of retailer bankruptcies like Circuit City, Levitz Furniture and Sharper Image. Commercial developers saw the increase in housing as a signal to build more commercial properties to provide services to those new households.

It was the Federal Reserve's low interest rate policies that provided false signals to the market, leaving homebuilders with homes they couldn't sell and now commercial properties that aren't needed. All might be well with the government assisted big Wall Street banks like Goldman Sachs, but the bottom is a long ways off for commercial real estate, threatening the solvency and stability of scores of regional and community banks.