Saturday, December 10, 2011

The STRIP Act and Republican Window Dressing

According to The Hill,
"More than two dozen House Republicans introduced legislation on Thursday that would prevent the Transportation Security Agency (TSA) from calling airport screeners "officer" unless they have gone through federal law enforcement training or are otherwise eligible for federal law enforcement benefits.

Rep. Marsha Blackburn (R-Tenn.), the lead sponsor of the Stop TSA's Reach in Policy (STRIP) Act, said that TSA has essentially allowed its airport screeners to play dress-up by giving them metal badges and police-like uniforms in recent years. But she said many airport screeners have no 'officer' qualifications, and should have this title removed."

Needless to say, the backlash against the TSA was and is prompted by its invasive passenger screening methods, i.e., grouping and body imaging via x-ray machines, not by the insistence that its employees be designated as officers and dressed in "police-like" uniforms. I find the distinction between being fondled or irradiated by officers and being treated as such by non-officers to be lacking. So while House Republicans masquerade as tough lawmakers reigning in the excesses of the TSA (see H.R. 3608, aka the "STRIP Act" for the details), the latter goes about its business unadulterated.

Monday, September 5, 2011

Assessing Universal Suffrage


In his series on the various basic theories of ethics, Professor Massimo Pigliucci, while writing on egalitarianism, wrote the following:
"The first obvious question about egalitarianism is: equality of what? For instance, in most modern democratic societies it is uncontroversial that citizens have an equal right to vote, or an equal right to justice. I doubt anyone would reasonably disagree with that sort of egalitarianism, except for despots, many men in a large part of the world (wherever women don’t have equal legal rights), and incurable aristocrats."
In response, I wrote the following:
"Universal justice is hardly objectionable. I find universal suffrage to be much less unassailable. For example, Daniel Okrent in "Last Call: The Rise and Fall of Prohibition" argues that women's suffrage was a decisive, cooperating cause of the 18th Amendment prohibiting the distribution of alcohol. If this is true, it, in my mind, should have been weighed against the benefits of women's suffrage at the time. I should add that William Lecky in 'Liberty and Democracy' made the following claim: "Universal suffrage, which to-day excludes free trade from the United States, would certainly have prohibited the spinning-jenny and the power-loom.'"
In response to my response, Pigliucci wrote the following:

"[Y]ou can't be serious abut universal suffrage. Or maybe you are, unfortunately. That [Lecky's quote] sounds like nonsense to me. And at any rate, I agree with Rawls that civil rights come before economic advantages, so there..."

This hardly qualifies as a cogent objection. But given that Pigliucci has objected, I may conclude that he rejects my appeal to consequences. Here's why I find this troubling.

Assume that a religious or political minority within a nation has been disenfranchised for however long. Now assume that considerable political transformations have led to the establishment of universal suffrage whereby adult members of this minority will now retain the right to vote and participate in the electoral process. Furthermore, this minority has sinister political intentions (the establishment of religious laws prohibiting all kinds of activities and voluntary transactions among consenting adults) and is sufficiently large to influence the staffing of the legislature and the executive and, thereby, influence the content of enacted laws.

Given the above developments, would Pigliucci remain an advocate of universal suffrage? It would seem so, given his flippant rejoinder. Thus, a right to vote, according to this devotion to universal suffrage, should not be accompanied by a right to a competent electorate. Pigliucci regards himself as an exponent of reason and of skepticism. Why then would he spare the irrational voter?

The right to vote is but one element within an amalgam of political phenomena that go curiously unexamined. Why do we champion such a right to begin with if we're willing to tolerate the irresponsible exercising thereof?

Sunday, August 21, 2011

Saturday, July 23, 2011

GAO Audit Unearths $16 Trillion in Loans by the Fed

From the newsroom of Senator Bernie's Sanders' website:
"The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. 'As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,' said Sanders. 'This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else.'"
According to the Unelected.com,
"The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all place

The GAO audit in its entirety can be viewed here.

Maddness.

Friday, July 22, 2011

Massimo Pigliucci on Libertarianism: A Response

Oddly enough, in a critique of Larry Summers, biologist and philosopher Massimo Pigliucci makes the following claim: "I simply do not buy the fundamentalist (yes, I’m using the term on purpose) libertarian idea that economics is all there is or that should count in pretty much all human transactions and social problems".

Simply put, Pigliucci errs if he labours under the impression that such an idea is a libertarian one. Libertarianism is a political philosophy, hence it contains a set of prescriptions concerning relations between human beings. Various kinds of libertarianism exist, but if one unifying proposition is a constituent of all of them its the notion that initiated physical force or the threat of initiated physical force should be minimized. Since the government is the most prolific initiator of physical force and threats of physical force, naturally it is the bete noire of libertarians.

Libertarians typically employ economics to attempt to demonstrate the alleged prudence of minimizing government coercion. They argue the discipline of economics proves that maximizing social welfare requires the circumscription of government power. Economics is but one method they use to attempt to prove the wisdom of their creed of "non-aggression". The pervasiveness of economic deliberation and reasoning among libertarians stems from the fact that it enables them to identify and understand the mal-effects of government intervention. Libertarians do not treat economics as the be all and end all of intellectual life. It would be inappropriate to employ economics at the expense of other approaches. But if an issue involves the use by humans of scarce means to achieve ends, then economics has got something to say about it.

Thursday, July 14, 2011

Whither Military Keynesianism?

From The Hill:
"A top defense and aerospace industry trade organization is pressing House Speaker John Boehner (R-Ohio) to resist deep Pentagon budget cuts as officials grapple with the nation’s troubled finances.

In a letter to Boehner, Aerospace Industries Association (AIA) President Marion Blakey argues substantial Defense budgets cuts would spawn new job losses and further damage the already injured economy.

Capitol Hill and defense industry sources tell The Hill that negotiators have discussed national security spending cuts as large as $700 billion over a decade; that is almost twice as much as the $400 billion in security cuts by 2023 that President Obama has called for.

'Deeply cutting defense during these tough economic times could make our nation’s fiscal and broader economic situation even worse,' Blakey wrote. 'Major cuts to defense would create further layoffs and great uncertainty for them and their families and undercut economic gains.'"

Blakey conjures up an interesting argument: give my constituents more money or run the risk of blighting the economy. Now given all the ridicule with which to bespatter Ms. Blakey, who is an example par excellence of the category of human being who lobbies on behalf of the industry that he or she has previously been in charge of regulating, epitomizing the worst elements of the infamous Washington "revolving door", I nevertheless won't discount her last-ditch argument merely because she has a financial stake in the acceptance of her conclusion. To do so would be to commit the vested interest fallacy. Her economic allegations are more than enough cannon fodder.

The premise from which Blakey's proceeds should be a familiar one. It is a conclusion of military Keynesianism, a variant of Keynesianism which holds, among other things, that increasing military spending can contribute to economic growth and that increasing such spending is advisable during or in anticipation of recessions as part of a policy of increasing aggregate demand to hedge against recessions.

It should be no surprise that military Keynesianism commits the same errors as standard Keynesianism.

First off, it underappreciates the opportunity cost of government spending. As a reminder, opportunity cost, as I employ it, refers to the value of the next-most-preferred alternative use of a set of resources.

Suppose a $100 billion military budget is sufficient to protect the nation from foreign aggression. Fine. Military Keynesians, at least under certain conditions, would have the government expand this budget by an unspecified amount, say another $100 billion, on the grounds that doing so will increase economic growth. Well, since $100 billion is scarce (money is a scarce resource), $100 billion spent by the government means $100 billion denied to the private sector, where it could have been used for consumption and investment. This is known as the crowding-out effect.

Moreover, we have every reason to expect, in advance, that the opportunity cost of allowing the government to spend $100 billion is greater than the opportunity cost of allowing the private sector to spend $100 billion because of incentives. Within the private sector, the prospect of profits or losses incentivizes prudent consumption and investment habits. No such similar prospect exists within the "public sector", where the survival of a firm is not necessarily contingent upon performance in satisfying demand and where the assurance of revenue (e.g., taxation) erodes the incentive for wise decision-making.

Th crowding-out effect occurs as well if the spending is made possible by debt financing. Hence, if the government borrows money in order to expand the military and subsidize the defense industry, the borrowing represents in increase in the demand for credit which raises interest rates. Rising interest rates mean more expensive credit for private sector economic agents, thus crowding them out of the credit market.

The cyclical prescriptions of military Keynesianism are derived from the notions that recessions are caused by a lack of aggregate demand and that recessions are to be avoided. The former is misleading and the latter is false altogether. Recessions begin, in the words of economist Jesus Huerta de Soto, after "the pace of credit expansion unbacked by real saving stops accelerating". Central banks incite faux economic expansions by increasing the supply of credit in the absence of an increase in the supply of savings, i.e., monetary inflation. This causes interest rates to fall, which in turn causes the quantity of credit demanded by firms to rise. As firms acquire more credit, they begin to spend more money, principally to acquire additional factors of production, capital goods in particular, with which to produce more goods for customers. This process bids up both capital goods and consumer goods (price inflation, in other words), as the additional money introduced into the economy is spent and as factors are withdrawn from lower order stages of production (consumer goods) to higher order stages of production (capital goods).

As price inflation rises, monetary authorities typically reduce the supply of credit in order to halt it, which causes a rise in interest rates. This sparks the recession. Interest rates rise (even past pre-credit expansion levels due to increases by lenders as a hedge against price inflation and the increase in demand for credit by firms in anticipation of even higher future interest rates), credit becomes scarce, firms operating with higher order production stages get priced out of the credit market and become credit starved, leaving them with incomplete investment undertakings staffed with labour, land, and capital goods that must be "liquidated" or sold so as to cut losses and avoid insolvency. This process of liquidation is called a recession.

Recessions however are to be treated as visits to the dentist - painful but necessary - not as painful and unnecessary events. The liquidation process must occur because too many investment projects are incomplete and too costly to continue (due to rising interest rates). In addition, the high prices of goods, especially capital goods, is an effect of a dis-coordinating decision by the monetary authorities to expand the supply of credit without an equal expansion of savings, hence those prices must be allowed to fall so as to allow for the proper coordination of economic agents. Military Keynesianism, therefore, is powerless to correct the mal-adjustments produced by such credit expansion, for the solution is an economic contraction, not additional spending.

I draw attention to this issue because more than enough Republicans in Congress, despite their apparently shallow demands to cut spending, have demonstrated their unwillingness to cut the budget of the Defense Department. They claim to oppose Keynesianism, but will they show clemency towards this version of Keynesianism because of the military element? I won't hold my breath, as was once said.

Saturday, July 2, 2011

Nicholas Kristoff's Fantasy

In a piece in the New York Times, Nicholas Kristoff attempts to discredit Republicans by arguing that the epitome of what they supposedly desire - "a low tax, laissez-faire Eden" equipped with a limited government - can be found, of all places, in Pakistan. Let this be a reason to question Mr. Kristoff's expertise on foreign political economy.

Kristoff's "critique" is aimed at Republicans, and while I won't take this opportunity to defend them I will nevertheless venture to expose the errors in his argument. According to Kristoff, "[Pakistan] has among the lowest tax burdens of any major country: fewer than 2 percent of the people pay any taxes. Government is limited, so that burdensome regulations never kill jobs."

Its true that, according to the Heritage Foundation's
2011 Index of Economic Freedom, Pakistan's fiscal freedom is greater than the world average fiscal freedom, but Kristoff cannot conclude much from this premise. Hong Kong and Singapore far exceed Pakistan in terms of fiscal freedom and the standard of living in both nations is world class. Hence, it can hardly be argued, as Kristoff does, that "'starving the beast' of government, cutting taxes, regulations and social services...are steps toward Pakistan", i.e., sufficient, when combined, to plunge a nation into destitution and underdevelopment, since Hong Kong and Singapore, developed as they are, lead the world in the absence of those government controls and are neither like Pakistan nor in danger of becoming like Pakistan. The 2011 Index says it all. Furthermore, advocates of reducing government interference into the economy do not argue that tax cuts are a sufficient cause of economic development.

Kristoff's claim that the government of Pakistan is "limited" is as asinine. Again, according to the Index, Pakistan is designated as "mostly unfree" with a score of 55.1 out of 100 and a rank of 123th freest nation out of 179 nations. Read the report for yourself. For example, investment freedom in Pakistan is abysmal. According to the Index,
"Deterrents to investment include security threats, political instability, civil unrest, corruption, poor infrastructure, weak contract enforcement, inconsistent and arbitrary regulation, and a lack of coordination between the federal and regional governments. Payments, transfers, and capital transactions may be subject to approval, quantitative limits, and other restrictions. Foreign investors may acquire real property."
Financial freedom is as non-existent, as the Index states that,
"The government has a majority stake in the largest commercial bank and controls several specialized banks. Restrictions limiting the number of foreign bank branches have been removed, but the central bank must approve all new openings. Foreign investors are now allowed to hold up to 100 percent of the equity share of insurance companies."
Monetary freedom is severely obstructed. Again, according to the Index,
"The government controls pharmaceutical and fuel prices, subsidizes agriculture, and influences prices through state-owned enterprises and utilities, including electricity and water. Ten points were deducted from Pakistan’s monetary freedom score to account for measures that distort domestic prices."
Protection of property rights is atrocious and corruption is "pervasive" with the Index stating that "Pakistan’s judiciary, separate by law from the executive, remains hampered by poor security for judges and witnesses, sentencing delays, a huge backlog of cases, and corruption." According to the 2010 International Property Rights Index, Pakistan ranks 113 out of 129 (see page 117) nations examined in terms of the quality of protection for property rights, which puts it below nations like Iran and Serbia. According to the Corruption Perceptions Index of 2010, Pakistan ranks 143rd out of 178 nations examined, putting it behind countries like Zimbabwe, Syria, and Ukraine. If Pakistan was truly a capitalist paradise, then the above non-freedoms and non-respect for private property rights would not exist there.

Kristoff attempts to reassure us when he claims that,
"I spend a fair amount of time reporting in developing countries, from Congo to Colombia. They’re typically characterized by minimal taxes, high levels of inequality, free-wheeling businesses and high military expenditures. Any of that ring a bell?"
Again, Kristoff is implying that the alleged laissez-faire conditions in countries like Congo and Colombia are contributing factors to the poverty and neglect within this countries. Predictably, neither country is characterized by laissez-faire conditions, particularly Congo which ranks 168th on the Index of Economic Freedom. A variable or variables cannot be blamed for having produced a certain effect if said variable(s) do not exist to begin with; a thing must exist before it can cause an effect. Hence, one wonders from where Kristoff receives his information.

A "laissez-faire Eden" is a place where the exercise of property rights is not stifled by government interference, corruption, or violence. Why Kristoff labours under the impression that Pakistan is such is beyond me.

****

As a side note, I'm now settled in in my new residence in Alaska, so the long absences are a thing of the past for now.

Monday, May 16, 2011

Tax Breaks Are Not Subsidies

While discussing a proposal to discontinue tax breaks for oil companies, Senator Chuck Schumer thought it was imperative to make the following comment: "Let me get this straight, Republicans plan to dismantle Medicare while refusing to end this tax subsidies [sic] for big oil companies?"

I cannot reiterate this enough: tax breaks are not subsidies. A tax is "a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc." A subsidy is "a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization, or the like."

Consider this: taxes are a necessary condition for the existence of subsidies. Under current politico-economic conditions, if a government distributes subsidies, then it levies taxes. Hence, if a government does not levy taxes (100% tax breaks), then it cannot distribute subsidies. Subsidies are government expenditures. All government expenditures come from taxation. Therefore, all subsidies come from taxation.

Half the battle with government intervention is lost when political authorities manage to influence the lexicon. A tax is a seizure of property one has acquired via production and voluntary exchange. A subsidy is a piece of property seized and then granted to a party that did not acquire it via production and voluntary exchange. It's essential that we distinguish the two.

Saturday, April 30, 2011

A Note on My Posts

I'm currently located at Ft. Leonard Wood, Missouri for the moment, so I have no internet access other than my phone service. Hence, I can post essays (via my Evo) but I cannot edit the font or recall my list of labels. I'm moving to Alaska in one month where internet access will be available again. Until then, I'll write posts with my phone.

On the Criminalization of Inflation Reporting in Argentina

According to the Economist, INDEC, the statistics agency of the Argentinian government, "began doctoring its consumer-price index in 2007" costing "holders of the country's inflation-linked bonds at least $2.3 billion last year." Naturally, private statisticians and economists have offered their own estimates of price inflation. According to the Economist, "They reckon that inflation is now running at about 25%. That is far above the 10% reported by INDEC...but less than the 30% wage increases public employees have received in recent years."

Unsurprisingly, the Economist reports that "Guillermo Moreno, the thuggish commerce secretary, is moving to stamp out the unofficial, but widely trusted, price indices. To do so he has dusted off a decree, penalising misleading advertising, approved by a military dictatorship in 1983. In February he sent letters to 12 economists and consultants ordering them to reveal their methodology, on the grounds that erroneous figures could mislead consumers."

Ah yes, the repression of information distribution, a cynical, time honored tactic of governments far and wide. To begin with, we have every reason to believe that the figures produced by INDEC are erroneous, deliberately so. Given its loose monetary policy and the inevitable price inflation it yields, the Argentinian government has an incentive to disinform the public. At the very least, a government must command a modicum of respect from its citizens as this is a necessary condition for its continued existence. As price inflation rises as monetary authorities expand the supply of loanble funds, this respect decreases, and rightly so. Hence, the technocrats in Buenos Aires think they can maintain this necessary condition for their prolonged employment by fooling the public into thinking that price inflation isn't nearly as bad as they ought to think it is and harassing those who offer accurate estimations. It's a rather crude form of malfesance but certainly not beyond even the esteemed monetary authorities of the U.S. government who discontinued publishing M3, a monetary aggregate considered by many to have been the best measure of the money supply and, therefore, of inflationary activity.

By contrast, private institutions have an incentive to offer accurate information on the price level, as the financial integrity of their clients and their reputation as reliable distributors of data are contingent upon their performance. This is yet another example of a function assigned to the government that is better performed by the private sector.


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Saturday, April 23, 2011

Essays, Articles, Blog Posts, Podcasts, and Videos

~According to the New York Times, "For the last three years, Gallup has called 1,000 randomly selected American adults each day and asked them about indicators of their quality of life. Responses are converted to the Gallup-Healthways Well-Being Index. Here are the 2010 results, sorted by Congressional districts."

~Ben O'Neill eviscerates the intellectual edifice upon which dictator Evo Morales attempts to
"[grant] the Earth a series of specific rights that include rights to life, water and clear air; the right to repair livelihoods affected by human activities, and the right to be free from pollution." O'Neill also has an older essay on the problems of "positive rights" as well.

~Morgan Alexander Brown shames Terry Eagleton in his review of Terry's latest Marxist apologetics.

~Wendy McElroy discusses restrictions upon the freedom to cross the border into the U.S.

~ExxonMobil, via the Minerals Management Service and the Department of the Interior, provides an illustration of the extent to which offshore drilling for oil and natural gas is prohibited by the federal government.

~According to Taking Points Memo (TPM), "In a McClatchy-Marist poll released this week, 70% of registered voters who identify with the Tea Party opposed making cuts to either Medicare or Medicaid -- the government-run health programs for the elderly and the poor -- to help reduce the nation's deficit. Meanwhile, only 28% of tea partiers said they'd be willing to cut spending on those two programs.
"

Tuesday, April 19, 2011

Assessing the "Pro-life" Argument from Human Similarity

A common argument among "pro-life" conservatives against abortion rights involves a deduction of the claim that a fetus deserves freedom from fatal coercion, i.e., freedom from being killed, from prior claims asserting that a fetus is a human being and that a human being deserves freedom from fatal coercion. When asked to demonstrate that a fetus is a human being, many conservatives appeal to a claim that identifies the human characteristics of a fetus and a corollary claim asserting that these human characteristics make it a human being. Below is a formalized version of the argument:

1.) A fetus is a human being
2.) A human being is something that deserves freedom from fatal coercion
3.) Therefore, a fetus is something that deserves freedom from fatal coercion

4.) To prove that a fetus is a human being, pro-lifers often emphasize facts about the development of the fetus, particularly the formation of those physiological characteristics present within human beings who have been born already. It is said of the fetus that as it develops, its humanity is expressed ever more vividly. Different sets of characteristics are provided by different pro-lifers and pro-life organizations, but the very brief list offered by ChristianAction.org below is typical:

-The heart starts beating between 18 and 25 days.
-Electrical brainwaves have been recorded at 43 days on an EEG.
-The brain and all body systems are present by 8 weeks and functioning a month later.
-At 8 weeks, the baby will wake and sleep, make a fist, suck his thumb, and get hiccups.
-At the end of 9 weeks, the baby has his own unique finger prints.
-At 11-12 weeks, the baby is sensitive to heat, touch, light and noise. All body systems are working. He weighs about 28g and is 6-7.5 cm long.
-(Often an emphasis on the human DNA of the fetus is offered as well, though ChristianAction.org omitted this detail)

5.) The subsequent premise asserts that anything possessing the characteristics shown within the former premise is a human being
3.) Therefore, a fetus is a human being

One of the propositions I dispute within the above argument is premise #5. I have yet in my participation within the abortion debate to see a demonstration of premise #5. How does the formation of certain human characteristics qualify a fetus as a human being?

But nevertheless, we have a conflict of "interests". If the mother aborts, the fetus dies. If the mother is prohibited by the state from aborting, she is disenfranchised. To whom should legal protection be greater?

It seems to me that women ought to possess the legal right to abort. Consider the following.

On one side, we have the mother. She is a physiologically independent, human entity and she is capable of being rational, i.e., she can make inferences. On the other side, we have the fetus. It is physiologically dependent wholly upon its mother and it most certainly is not capable of rationality. Because of her ability to conduct herself rationally, the mother is capable of being a productive member of society, participating in the division of labour and making positive-sum exchanges with others. By contrast, it will be years, perhaps decades until the fetus develops into a productive, contributing member of society precisely because it is not equipped with a rational cognition. Shall we sacrifice the rational and productive (or those who are currently capable of being so) to the non-rational and the non-productive? I would rather not.

What I would like however from pro-lifers is:

1.) A proof of premise #5
2.) An elaboration on what is it about human beings that make them worthy of freedom from fatal coercion (or a proof of premise #2, in other words)

On the Significance of the Common Good

It seems to me that people who profess to believe in capitalism who are quick to dismiss the importance of the common good do so at their own expense. If we define the common good as wealth per capita, then it appears to me that while the ultimate moral justification for a social system may not be the fact that it maximizes the common good, maximizing the common good is nevertheless a function of an ideal social system. It would be troubling, wouldn't it, if one declared a social system as moral, only to watch it plunge an adopting society into agony and pauperism. The maximization of the common good should be understood as a necessary concomitant of an ideal social system; it is an indicator that the ideal social system has perhaps been achieved.

Monday, April 18, 2011

Friday, April 15, 2011

About 46% of Usual Mississippi Republican Primary Voters Support a Ban on Interracial Marriage

Oh Mississippi. According to a poll conduct by Public Policy Polling, 46% of "400 usual Mississippi Republican primary voters" randomly chosen believe that interracial marriage should be illegal. Thus, if we apply the method of statistical generalization,

-n percent of s randomly selected F are G
-Therefore, about n percent of all F are G, where

n = percent
s = sample size
F = a property defining the general population
G = the property surveyed then:

-46 percent (400 x .46 = 184) of 400 randomly selected usual Mississippi Republican primary voters are people who believe that interracial marriage should be illegal
-Therefore, about 46 percent of all usual Mississippi Republican primary voters are people who believe that interracial marriage should be illegal

Now, the soundness of statistical generalizations is dependent completely upon the randomness of the sampling. According to my book on statistical reasoning,
"A randomly selected sample is chosen by a method guaranteeing that each of the F's has an equal chance of being chosen. If a large sample sample of F's is randomly selected, it is likely (although not certain) that the proportion of G's in the sample approximates the proportion of G's among all F's."
I do this because I'm confident that this poll will have its methodology challenged, given the potential political ramifications of its findings and the statistical inferences that can be derived from it. According to Dustin Ingalls, the Assistant to the Director of Public Policy Polling, "We poll random samples of registered voters, which means they're distributed proportionately across the state." Hence, the random sampling question is settled, given that it is a necessary condition of a respectable statistical generalization. What we can conclude without the assistance of statistical reasoning however is the fact that there are many in Mississippi who should hang their heads in shame.

The PPP poll is especially detrimental to Republicans, many of whom identify as conservatives because, according to a Gallup poll, "Mississippi is home to the largest percentage of conservatives among U.S. states, with a slim majority identifying their political views as conservative."

Wednesday, April 13, 2011

Essays, Articles, Blog Posts, Podcasts, and Videos

~According to Carrie Lukas, there is no wage gap between men and women.

~Bryan Caplan talks about 40 important truths he has learned over his 40 years of existence, endorses Jason Brennan's new book The Ethics of Voting, and tells people to have more children.

~Terry Eagleton takes time out to write a defense of Karl Marx. There's always one, at least one.

Saturday, April 9, 2011

Essays, Articles, Blog Posts, Podcasts, and Videos

~George Reisman elaborates on why we should eliminate Social Security and Medicare and how.

~Robert Murphy reports on the sorry state of private money, as does Lew Rockwell.

~Thomas Woods takes Fed-supporter Joseph N. DiStefano to task on pre-Fed banking history.

~Can the frequency and severity of insurgent attacks be forecasted via statistical analyses? Neil Johnson of the University of Miami in Coral Gables, Florida thinks so (to a certain extent).

~If this is true, then libertarians that do so need to stop fawning over Gandhi.

~Thorstein Polleit explains very systematically why economic recovery is hampered by low interests rates encouraged by the government.

An Interview with Bernie Madoff

The Financial Times has just published an interview with Bernie Madoff conducted by David Gelles and Gillian Tett. Its detailed and in depth.

Monday, April 4, 2011

The Military Industrial Complex in Five Minutes



(via Robert Wenzel)

Walter Williams: Up From the Projects

"Hitler Banned Unions" and Other Last Ditch Arguments

It appears that some protesters lobbying against Wisconsin Governor Scott Walker's state budget plan have resorted to some questionable argumentative tactics. If you'll recall, in February Scott Walker had the effrontery to propose a state budget plan that, among other things, circumscribed the collective bargaining rights of public sector unions in his state by abolishing all such rights but the right to negotiate over wages. Since then, the Capitol building and the surrounding grounds have been a theater of acrimony, with anti-Walker discontents embroiled in a battle with Tea Party types. Naturally, both groups have been accompanied by their fair share of, shall we say, "decorative illustrations" expressing their contempt for the other side and it seems that a particular theme has emerged among a few of the anti-Walker posters, one that emphasizes the claim that Adolf Hitler banned unions. Here is an example:

Now, let's address the truth-value of this proposition first. Unfortunately, I'm not familiar with the history of Nazism and trade unions. However, according to Brooke Baynes,
"In 1933, the Nazis disbanded the Weimar unions and replaced them with the new and improved union, the German Labor Front (Deutsche Arbeitsfront, DAF), which was comprised of 2 primary entities, the National Socialist Factory Organization and the National Socialist Trade and Industry Organization. The labor contracts that were Weimar contracts were now DAF-honored contracts. The Nazi’s funded the DAF’s coffers with the Weimar unions’ stockpile of wealth (the existing unions were part of that inflation problem)."
Assuming Baynes is correct, Hitler substituted new unions for old unions. I'm not one to shill for Hitler, but it appears that, if Baynes is correct, then the inscription upon the gentleman's poster above is misleading. I'm not sold on Baynes history credentials, thus I'm open to criticism of her claim about Hitler and unions.

However, the truth-value of the Hitler-union proposition in question is irrelevant in this case, for those who underscore the notion that "Hitler banned unions" are making an argument, albeit an implicit one, not just offering a declarative statement. The argument crudely suggests that Scott Walker is like Hitler because both undermined unions within their jurisdiction:

-Hitler undermined unions
-Scott Walker undermined unions
-Therefore, Scott Walker is Hitler (or rather, a Hitler equivalent or neo-Hitler)

The problem with this argument is its form, which is thus:
-
A is C
-
B is C
-Therefore,
B is A (or A is B)

The rules governing deductive reasoning simply do not permit this kind of inference. In any deductive syllogism, the middle term, the only term absent from the conclusion, must be distributed at least once. Here, the middle term
C is distributed in neither premise. A Venn diagram very easily demonstrates how this conclusion does not follow from the premises.

Now, to avoid this formal fallacy, protesters maintaining the same line against Walker might adjust their argument to the following, less formal version:

-Hitler undermined unions
-Scott Walker undermined unions
-Therefore, Scott Walker shares character properties with Hitler or is similar to Hitler

Now its true that both men chose to frustrate the pursuits of unions, but
what the gentleman above and his like-minded demonstrators imply, falsely I might add, is the allegation that this fact is relevant. The argument is an example of an ad hominem that imposes guilt by association; it very sleazily attempts to graft the wickedness of Hitler unto Walker by emphasizing the fact that both men subverted unions (albeit in very different ways). The error of course in this argument is that it treats Hitler's subversion of unions as an essential feature of his character when it certainly was not. When historians offer their own moral estimates of Hitler, they tend to emphasize the fact that he personally ordered the invasions of Eastern and Western Europe, including Norway, North Africa, and put some 6 million plus Jews, gypsies, pacifists, communists, socialists, and homosexuals to death in now notorious places of confinement. These decisions are underscored by historians because they were his most consequential and his irrevocably abysmal reputation is the result of universally negative assessments of these decisions.

By contrast, historians pay considerably less attention to Hitler's opinion of impressionist art or the affection he displayed towards his dog because these decisions, while making for odd trivia, were completely inconsequential. Its the most consequential decisions of an individual that should be afforded the most weight among the decisions he makes when a normative assessment of him is conducted. Furthermore, if those most consequential decisions are malevolent ones, then the overall normative evaluation should be negative due precisely to the fact that these are the most consequential decisions that have been assessed as immoral.

It is Hitler's genocidal racism and militarism that provoke such adverse appraisals of him, and rightly so - not his union-busting. Hitler's subversion of unions contributed negligibly to the wickedness of his character; it may have been a burden upon some, but overall it was of little consequence. If Scott Walker was similarly antagonistic towards civil society, then a comparison between Hitler and him would be appropriate. Alas, the association between Adolf Hitler and Scott Walker is an asinine one. These protesters are attempting to bespatter Walker with the moral filth of Hitler by limelighting the fact that Walker made a decision that:

1.) resembles a historically inconsequential decision made by Hitler, not one for which Hitler is remembered or reviled and

2.) resembles such in only a most shallow way

Not only was Hitler's union subversion historically insignificant, it is only superficially similar to Walker's union subversion. According to Brooke Baynes, Hitler abolished the Weimar unions, including private sector unions, and replaced them with unions with whom the Nazis could be politically allied. He thereby nullified the right to unionize within the private sector as labourers saw fit. Conversely, Gov. Walker has not abolished the right to unionize; instead he has expunged the right of public sector unions to negotiate with the government firms they are employed with over anything other than wages.

It is imperative to acknowledge this distinction. Hitler's union subversion was an example of introductory coercion; he disbanded institutions that were either voluntary or could have been modified as voluntary organizations. In contrast, Walker's union subversion was a response to and hedge against introductory coercion. The government firms for which Wisconsin's public unions work are, on the whole, inefficient enterprises thriving on the tax dollars coercively removed from the private sector. They are benefiting from the introductory coercion employed by the state government against private sector employers and employees. By reducing the ability of public sector unions to benefit from the introductory coercion of the state government, Walker is mitigating said coercion, not resorting to it - very much unlike Hitler.

I'll conclude by arguing that the ridiculousness of this argument is most vividly revealed when all of Hitler's decisions are taken into account. According to his Wikipedia entry, "Hitler oversaw one of the largest infrastructure-improvement campaigns in German history, with the construction of dozens of dams, autobahns, railroads, and other civil works." If this is the case, then would it be appropriate for opponents of government construction projects to file into capitol buildings with placards reading "Hitler commissioned highways" or "Hitler ordered the construction of railroads"? The anti-Walker protesters, with whom government construction projects are undoubtedly popular, would resent such an underhanded insinuation, yet this is what they resort to (some of them) when they imply that Gov. Walker is meaningfully comparable to Hitler. Well, how about some common courtesy?

Friday, April 1, 2011

Simple Unemployment Math

We are constantly reminded by Obama's detractors, and rightly so, of the national unemployment rate, yet I wonder as to whether most people understand what the unemployment rate is. Undoubtedly, some believe it reveals what percentage of the total population of Americans are jobless. Others think it describes how many people who are capable of working are jobless. The unemployment rate is a description of neither.

The number U of people who are unemployed are people who are not working and are active searching for a job. The labour force L is the sum of the number E of people who are employed and the number U who are unemployed. The unemployment rate u is the ratio of those who are unemployed U to the labour force L, where U is the numerator and L is the denominator. Hence:

u = U/L, L = E + U, u = U/(E + U)

Naturally, the employment rate e is the ratio of those who are employed E to the labour force L, again where E is the numerator and L is the denominator. Since the employment and unemployment rates are fractions, they add to 1. Hence:

e = E/L, 1 = e + u, e = E/(E + U)

Many people confuse the labour force with what's known as the working-age population. The working-age population N is, essentially, everyone capable of working between the ages of 15 and 65. It is the broadest quantity thus far, being the sum of those who are employed E, unemployed U, and excluded X from the labour force. Hence:

N = (E + U) + X, N = L + X

Finally, the participation rate p is the ratio of the labour force L to the working-age population N. Hence:

p = L/N = 1 - X/N

Sunday, March 27, 2011

Essays, Articles, Blog Posts, Podcasts, and Videos

~Isaac Chotiner reviews Stephan Collini's critique of cultural relativism and unfounded offense taking.

~Robert Murphy
explains why unemployment is as high as it is.

~Robert Higgs
explains why the West is awesome.

~Does Obama's Libya campaign harmonize with the Weinberger/Powell Doctrine? According to Christopher Preble, no.

~Richard Salsman argues that Obama is "our latest neocon president."

~Michael Tanner assesses the notion that we are not broke.

Tuesday, March 22, 2011

An Oddity of Price Gouging Laws

The latest issue of the Cato Institute's exceptional magazine Regulation includes a delightful critique of price gouging laws by Michael Giberson in which he examines the economics of such laws and critically assesses ethical arguments in favor of them. Giberson's economic argument against price gouging laws should be familiar to lay readers of economics. Price gouging laws are laws that impose controls on the price of a specific good. Typically, these laws impose a kind of price ceiling P, where suppliers of a good are prohibited from charging prices beyond P. Thus, if is the price charged by suppliers of a particular good, then price gouging laws forbid suppliers from setting S above P. In other words, S cannot exceed P. Thus, price gouging laws keep prices lower than what they would be within a free market environment. Of course, the problem with such price controls is that they cause shortages. Take gasoline. Natural disasters cause gas prices to rise by reducing the supply of gas. Price gouging laws prevent gas prices from rising however. As gas prices fall due to the laws, the quantity of gas supplied by gas retailers falls and the quantity of gas demanded by consumers rises, in accordance with the laws of supply and demand (some suppliers may even temporarily halt transactions). As the quantity demanded exceeds the quantity supplied, a shortage ensues and the availability of gas falls significantly.

There are an infinite number of examples within economic history of price ceilings yielding shortages.
Giberson makes the economic argument but also cites a 2008 paper by University of San Diego philosophy professor Matt Zwolinski on the ethics of price gouging. While deliberating on a South Carolina investigation conducted by the attorney general's office on alleged price gouging that occurred after the havoc caused by Hurricanes Gustav and Ike, Giberson writes that
"The South Carolina report on price gouging also indicated that some retail stations went to extraordinary lengths to secure supplies during the emergency even though they were uncertain as to whether they would recover their costs. Zwolinski argued that while such efforts may be laudable, merchants are not under an ethical obligation to do so. In fact, merchants face no ethical obligation to remain open during emergencies, even though closing may contribute to hardships among some potential consumers. And if merchants may ethically close, Zwolinski pointed out, it can hardly be unethical for merchants to remain open but offer goods at a higher-than-usual price. By remaining open even with high prices, the merchant is providing potentially helpful opportunities for consumers in need."
The pertinence of Zwolinski's point cannot be overstated. Price gouging laws do not reprimand or punish business owners whose goods are subject to such laws if the owners choose to halt operations completely. During or after natural catastrophes, when price gouging laws are usually activated, firms subject to such laws can shut down with impunity if they determine that further operations will be unprofitable due to the laws. If the firms to cease business activity are gas retailers, then shutting down ensures that gas exchanges will not occur, i.e., that no positive-sum transactions will take place. Neither the gas retailers nor the gas consumers are capable of making gains under these circumstances.

Now surely it is worse for the welfare of the community for gas retailers to abort distribution then it is for gas retailers to charge higher-than-usual prices for their gas, since an end to economic activity means the absence of the possibility for positive-sum exchanges. If retailers are allowed to charge disaster prices, then consumers are still able to acquire the gas that they need. If retailers shut down, gas is denied to all consumers. The oddity of price gouging laws here is that they penalize gas retailers for charging higher prices, but exempt them from penalties if they close up shop, the latter decision being one that negative affects consumers even more than charging higher prices. If policymakers propose price gouging laws on the premise that charging disaster prices qualifies as exploitation, then perhaps consistency would require them to impose laws forbidding firms subject to price gouging laws from aborting transactions because doing so is, according to the logic of the exploitation argument, even more egregiously exploitative than charging disaster prices. If not, then policymakers will have to narrow down their definition of exploitation.

Friday, March 18, 2011

Essays, Articles, Blog Posts, Podcasts, and Videos

~The latest issue of the Cato Institute's Regulation publication has just been released for free in pdf form. If you want empirical arguments against various kinds of government intervention, then Regulation is a must read.

~Mark Brandly beautifully explains what ought to be done to reduce gas prices.

~Damon W. Root assesses the claim the the Robert's Court possesses a "pro-business" bias.

~Bryan Appleyard reviews Edward L. Glaeser's defense of dirty, filthy, crowded, industrialized cities.

~The Cato Institute examines the economic freedom of the various states of India in this formal report.

Thursday, March 17, 2011

Une Femme Fatale?

The notion that the French are enamored with socialism is as common as it is false. France has, since the end of the Second World War, been a semi-capitalist nation (page 21 of 64), i.e., a market economy with an actively intervening central government. The French face a melange of government controls upon economic activity with which to cope, no doubt, but they live, for all intents and purposes, in a free society (no exceptions please - exceptions are like excuses and we all know what excuses are like).

The typical narrative on French socialism has been popularized by an overemphasis on particular aspects of French intellectual and political history. Yes, perhaps the serious enthusiasm for a socialist or communist type of collectivism in Europe began with Rousseau and the French Revolution. Yes, there was the 1848 Revolution. Yes, there was the Paris Commune of 1871. And yes, similar, in intellectual and aesthetic depth, to the appeal an anonymous rear end has to my vizsla, a romanticized genre of socialism has seduced and continues to seduce an array of French intellectuals. The threat posed by socialists is a real one, but this and the above events hardly qualify France as a socialist state.

Unfortunately, the remaining liberty of the French people may be jeopardized by a new threat in the form of the National Front, France's premier nationalist political organization founded by holocaust de-emphasizer and xenophobe Jean Marie Le Pen. Le Pen's daughter, Marine Le Pen, was appointed as head henchwoman of the party in January. Lacking her father's tactless, anti-Semitic disposition, Marine Le Pen is looking to enhance the growing popularity of her father's political legacy and, according to recent polling data, it seems that the Front is well on its way to becoming a significant presence in France's political environment. Now conservatives and libertarians make careers out of expressing disgust and disapproval with European and especially French social democrats. That's hardly objectionable. But foul as social democracy may seem, its doubtful that diet fascism is a sound alternative, particularly given the nefarious history of the Front. Here's a brief, translated list, thanks to Daily Kos, of some objectives sought by the Front straight from their website:

Our platform for the Department:
  • Combat the unfair dismantlement of social subsidies
  • Improve security in schools
  • Lower local taxes
  • Provide financial help to small businesses and fight outsourcing
  • Restore local services, especially for the elderly and the handicapped
  • Repair local roads and infrastructure
  • Stop subsidies to political organizations
  • Fight waste and corruption
  • Restore moral values

Our platform for the Country:

  • Create hiring priorities for French citizens
  • Restore law, order and security
  • Restore fairness before taxes
  • Defend republican values, traditions and our way of life
  • Stop illegal immigration and expel illegal immigrants
  • Increase financial support to poor family & single parents
  • Guarantee affordable housing to everyone
  • Restore the right to health care and the reimbursement of quality care
  • Leave retirement pensions as is

The Wikipedia description of the Front is more revealing, claiming that the Front endorses the following:

  • A return to traditional values: to include making access to abortion more difficult or illegal; giving an income to mothers who do not go out to work; promoting local traditional culture
  • Greater independence from the European Union and other international organizations
  • The establishment of tariffs or other protestionist measures against cheap imports
  • Firm sentences for all crimes and reinstatement of the death penalty for "the most heinous crimes"
  • The end of non-European immigration and the establishment of the jus sanguinis

If one opposes the French social democrats and socialists on the grounds that they champion government intervention in the economy, then one ought to treat the National Front with the same scorn. Choosing between French nationalism and French socialism is analogous to choosing between havoc and calamity. They are united in their opposition to free trade, to liberalization, and in their support for the welfare state. Unfortunately, as economic troubles persist it seems that the approval of the Front will expand, especially given the efforts of Madam Le Pen to curtail the party's crass racial bigotry.

As usual, the UMP is the only tolerable alternative. They are perhaps the only real political hindrance to the rise of either the socialists or the nationalists. All one can do is hope that French voters come to their senses. France remains a relatively free country, but this freedom requires the presence of a cautious, ever vigilant electorate.

Thursday, March 10, 2011

Essays, Articles, Blog Posts, Podcasts, and Videos

~Ron Rosenbaum considers the morality of using nuclear weapons and our nuclear fail-safe system.

~Tyler Cowen lists the alleged errors of "left-wing"and "right-wing economists".

~According to Ronald Bailey, "Ten of the last 11 recessions were preceded by oil prices hikes." Is there a causal link?

~Shikla Dalmia argues that Obama's clean energy project is economically imprudent.

Sunday, March 6, 2011

The Enviable Brilliance of the Swiss

How else shall one describe a people who have maintained the integrity of their civil society for so long? It appears its become necessary to qualify Daniel Hannan's generally accurate proposition that "America must not follow Europe".

Just recently, 56.3 percent of Swiss participants in a national referendum, appealing to their most cherished values of security and limited government, voted against an initiative "banning army-issue firearms from the home and setting up a central arms register in a bid to curb gun violence." There was a considerable campaign in favor of the initiative, staffed by "a broad coalition of NGOs, trade unions, churches, pacifists and centre-left parties." Fortunately, the Swiss as a whole can be counted on to make sound decisions regarding matters of civil liberties.

Perhaps the high rate of civilian gun ownership helps to explain why crime is extraordinarily low in Switzerland. I'd wager that the risk involved in engaging in violent criminal activity in Switzerland must be relatively high since the high rate of civilian gun ownership means the risk of begin deterred, apprehended, or shot during the commission of a criminal act is correspondingly high.

In addition to upholding gun rights, 51.7 percent of participants from the canton of Bern voted within a canton referendum in favor of replacing the old nuclear reactor at a location called Mühleberg with a brand new one. The Swiss affinity for nuclear power has waned considerably in the past but a renewed desire for nuclear power as a significant source of electricity, fueled in part by clean energy concerns, has compelled the Swiss to oppose further moratoriums on the production of nuclear power.

Naturally, recent Swiss wisdom does not end here. My mother can recall, when she traveled to East Germany in the late 70s, how unsettled she was when she discovered the extent to which socialism left Eastern Europe bespattered in filth and poverty. By contrast, when she headed south towards Zurich she remarked that it was probably the most immaculate place she had ever been, easily overcoming New York, Paris, or any other part of Europe she had been to. This tradition of cleanliness is continued by Swiss citizens such as Thomas Niederer, founder and president of the Swiss Association of Environmental Trash Divers (SAET). Niederer has recently announced that he will embark upon an endeavor to cleanse Switzerland's lakes and bodies of water of their human contaminants. Niederer expresses his intolerance towards a fouled landscape when he insists that “I can’t turn a blind eye to the rubbish, the waste produced by society, that one encounters underwater. I can’t simply swim past it.”

Though it may be true that a perfect society alludes us so far, its arguable that Switzerland bests every other nation in terms of its proximity to this ideal. It enjoys an extraordinary level of government non-intervention, as indicated by the 2011 Index of Economic Freedom andFreedom Houses' 2010 Country Report. Its citizens have refused to vote in favor of transforming Switzerland into a member of the EU, perhaps a wise decision given the dubiousness of the EU's commitment to liberalization. It has a stellar record on governmental respect for private property rights, as indicated by the 2010 International Property Rights Index (page 69 of 79).

In fact, Switzerland is so free that it has been aggravating its European neighbors for years. Despite unlettered bullying from Washington and the OECD, the Swiss engage in a delightful kind of tax competition, where they attract firms and financial capital from around the world by imposing minimal taxation. The tax policy works like a charm and now Swiss locales like Rolle can brag about coping with the problem of too much economic growth. We feel their pain.

Similarly, the 26 cantons within Switzerland are free to engage in tax competition as well. According to Paul Green,
"the canton of Obwalden formerly had one of the higher tax rates, but to compete brought it down to a flat 10% – though cantons Zug and Schwyz are better known for their low taxes. In the south, cantons Vaud, Geneva and the Italian-speaking Ticino are currently lowest. Also, it is perfectly possible for any reasonably wealthy person to cut a special deal with a canton for a much lower rate. In fact, the wealthier the better – the lack of social envy and its politics is unusual and noteworthy.

There are also occasional amnesties to provide for tax which is not paid. The evaded amounts are actually lower percentage-wise than the much more oppressive surrounding countries. This can only be due to lower rates, more local accountability and less violent collection methods leading to less resentment and motivation for resistance. Tax evasion, if found out, might land an offender in a somewhat uncomfortable civil action, but it is not a crime."

The logic of tax competitiveness is not different to comprehend. If two governments A and Bmaintain the same tax rate X and one government, government A, decides to tax liberalize the market within its jurisdiction by reducing its tax rate to (X - R), then, ceteris paribus, economic agents and their financial capital within the jurisdiction of government B will most likely either remain within jurisdiction B (unlikely) or will move to the jurisdiction of government A because as tax liberalization occurs, it increases the freedom of economic agents to generate profits and keep those profits. The Swiss understand. The EU doesn't.

The Swiss tradition of respect for civil liberties comes in part as a result of its political configuration. Political power is severely decentralized. The country is a confederation of 26 regional constituents called cantons. Similar to our now abandoned 10th Amendment, Article 3 of Title 1 of the Swiss Constitution states that "the Cantons are sovereign insofar as their sovereignty is not limited by the Federal Constitution; they shall exercise all rights which are not transferred to the Confederation." This is significant because the administrative privileges given to the federal government mostly concern foreign policy. Domestically, local governments are in charge. Political jurisdictions are small, the assignment of tasks to local authorities is maximized, popular referenda are a staple of Swiss political life, and power within the federal government is deliberately spread out. This decentralization of political power ensures that the federal government is less capable of becoming repressive.

Add to this the fact that four languages are spoken in Switzerland - German, French, Italian, and Romansh - and the people nevertheless manage to co-exist peacefully. Oh, and the Swiss government doesn't subsidize foreign dictators or finance nation-building fiascos. So next time when we exalt ourselves as citizens of the greatest country on Earth, perhaps instead we should second guess ourselves in light of the existence of our Alpine ally.