Wednesday, October 22, 2014

Making Picketty's R > G work for the poor

Thomas Piketty's Capital in the 21st Century tells us that the rate of return for capital exceeds the rate of economic growth. Putting aside the many problems of the book, this, in itself, is not very controversial. It's an expected result when you have a shortage of capital compared to the labor prepared to use it. But it is a result that can be reversed by increasing the available capital pool.

Bitcoin and the rest of the alt-coin world are an opportunity to do this. A bitcoin might be $380 today but the smallest unit is the satoshi, a fraction equal to 1/100,000,000th of that. People will pay tens or hundreds of satoshis just to get you to look at an ad for a few seconds. With some applied effort at a public library, it's possible to get perhaps 40k satoshi in a day (not easy but possible) in this way so even if you're in a jobs wasteland with no employment prospects, this option is still available for you. Those satoshi are loanable funds over at BTCJam and other P2P lending sites but unlikely to trigger the first world welfare state's various poverty traps that keep the poor down. Returns are advertised at just under 20% for a doubling time of three and three quarters years.

In short, you have a road out of poverty that doesn't require any action on the part of the government other than the willingness not to investigate the blockchain so closely that we enter the unjust world of Javert. This is possible because it's so cheap to move bitcoins around that even the poor in the US can be part time capitalists. They have the money.

Is anyone telling them this?

Tuesday, October 21, 2014

Judas in University Administration

It started this morning (as it often does) with Instapundit's item on bogus sexual assault numbers which pointed to Mark Perry's analysis that the rate of sexual assault (1 in 5 during university) combined with the rate of reporting (12%) didn't work. It isn't even politics, but just poor math that means at least one of those two White House numbers are wrong.

This was shortly followed by a piece examining the left's creeping totalitarianism on due process. What caught my attention is the phrase that Harvard could withstand the loss of federal funds while they fought for due process. It occurs to me that the amount of federal funds at risk, the endowment of the university, the male population being betrayed by university administration is all public information. You could make a judas index to measure how much money your rights are worth betraying.

There could be an app for that. It would be pretty useful when it comes time to pick schools.

Monday, October 20, 2014

How Big is Bitcoin? Monday October 20, 2014

For this post all values are rounded.

As of today bitcoin has created
13,400,725 coins in circulation

At time of writing 1 bitcoin was $385 USD

This puts the total value of the coins at $5.2 billion USD and is roughly equivalent to what the federal reserve calls M0. For USD M0 is $3.9 trillion at present.

If Bitcoin were an economy, it would be the 162nd largest in the world slightly larger than Jersey and slightly smaller than Burundi.

Tuesday, October 7, 2014

Formal Proof Jackassery

Out on the 'net, A Formal Proof that Neil deGrasse Tyson is a Jackass

Would you believe that I came across this on a random page with the link running, in effect, as a classified ad? The Internet is a wondrous thing.

Sunday, September 28, 2014

In favor of a sustainable living wage

Right now we're living through a time of massive imbalance in the global labor market. The number of people who are available for work outsourced from around the globe has exploded and continues to grow larger. This is happening because poor economic policies are in retreat in the developing world and pro-globalization policy adoption remains high, continually feeding more and more people from India, China, and smaller developing nations into the global labor market as they walk down the path of converting their farmer/peasant heavy populations to first world levels. This massive imbalance has created a market signal reducing salaries below living wage levels at the bottom end of the labor market. Until that signal resolves in increased demand for labor, it leaves more people stuck in dead-end rural situations, urban workforces constantly in emergency mode, trying to scrape by, and lower standards of living for virtually everybody who is a worker all over the world.

There is a way to create a living wage consistent with free market principles. I call it the sustainable living wage. It's based on the idea that increasing the demand for labor and reducing the supply of labor both cause a natural rise in wages that need not be artificially mandated by legislation, and is not subject to evasion by paying people a lower wage "under the table". In a sustainable living wage environment, workers have better things to do than play black market games with skinflint employers. Down the road, somebody else is paying better.

A living wage based on forcing, by law, employers to raise wages beyond the market clearing price will, over time, always lead to substituting capital for labor and other methods of getting around the law such as falsely reporting working time and hiring "under the table". It also promotes acceptance of inflation in the employing class as that erodes the economic penalty of minimum wages. Inflation is probably the worst economic blow that an otherwise normal government can strike against the poor while calculating that it won't get called out for it.

A sustainable living wage, in order to be sustainable, must not create these perverse labor substitution incentives for employers which is what too often happens with traditional efforts to raise a minimum wage to a living wage. In the real world either the rise is so small as to be ineffective at its stated goals or it prompts employers to take a look at substituting capital for labor. When this substitution effect happens, a minimum wage practically acts as an indirect legal subsidy for machinery manufacturers, throwing more work their way and tossing lower end workers out of a job. These indirect subsidies are social injustice writ large.

The other side of the coin is reducing the supply of labor. This is about increasing the supply of people who make some or all their money as capitalists. It also implies moving from a small number of very wealthy investors to a large number of relatively well off people as the capital source for businesses. It means taking some money and succeeding in actively investing it for a profit to the point where it can substitute for some of your labor income, allowing you to shift from full time membership in the laboring class to being a part time capitalist, part time worker and eventually full time capitalist.

Necessarily, this also means reducing labor force participation in a good way. Economic prognosticators are going to need a better metric to not only capture whether labor force participation is changing but why it is changing. The person that reduces their hours from full to part time because they're making up the difference and more in loan interest they're lending out to others right now looks the same as the person that has their hours reduced by their employer because they want to avoid costly benefit obligations. That's a very small chunk of the labor force right now in the upper middle class. It will grow in the future.

Friday, September 26, 2014

Flipping the party

Republicans are used to unfair hit pieces that blow mistakes up into evidence of conscious evil. New York's Mayor de Blasio is likely less accustomed. Apparently he's part of a line of lefty animal killers:

Yet another defenseless creature was slaughtered by a left-wing politician, the New York Post revealed on Thursday. Adorable groundhog Staten Island Chuck was “chucked” to his death during an appearance with New York City Mayor Bill de Blasio, a raging liberal, back in February. Officials sought to cover up the creature’s demise, so as not to fuel public outrage over the disturbing trend of liberal politicians murdering cute animals. They even lied about the true identity of the victim.
 We're still in the field of good clean fun mocking the phenomenon. The number of low information voters fooled into taking this seriously as evidence in a left-wing war on animals is likely to be very low. We are, however edging towards it not being a joke and having the right join the left in the type of unfair assaults that have been predominantly running from the left to the right for as long as I've been alive. It'll be a shame when it happens but not much of a surprise.

Saturday, September 20, 2014

Militia Software - I

It seems pretty likely that a number of foreign governments are running cell phone interceptor towers in DC. Were our government on the ball, I would expect these towers to be taken down quickly and consequences issued either in diplomatic expulsions, EMP shenanigans, or some other nasty deterrent that would ensure the safety of our government's communications from prying foreign governments. This apparently has not happened, with the towers being discovered by a private company touting an expensive anti-interception phone technology who reported it to the FCC and let the rest of us know via press release.

An individual firm or even the spy chasers have a limited number of people to run around and seek out these interceptor towers. But making a phone app that identifies local towers and alarms on the appearance of new ones shouldn't be that hard or expensive. Widely release that app and you have a way to pick up the spies no matter where they are. Applications like Llama provide a functional model for finding signal and AntennaSearch provides a database to filter out existing towers.

This is a militia activity that is in response to a real threat actually being deployed against the US. You don't have to run around in camo or make any large sacrifice, just run an app occasionally on the smartphone you already own. It will make it hazardous for foreign enemies to deploy the technology against us. It will also catch domestic enemies deploying the technology in violation of the law. Legitimate use by law enforcement will have paperwork filed and the reports of this software will file will hit that paperwork and not raise alarms.