PyotrVerkhovensky
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User ID: 2154
PyotrVerkhovensky
2mo ago
I'm late to this thread, but I did read Scott's post a few days ago. I don't love any of his examples or his framing. To me there are three categories to consider:
- Personally not watching/buying something either because the content doesn't align with my values or the company doesn't align with my values
- Organizing a group of like-minded people to not watch/buy something (boycott)
- Organizing a group of like-minded people to pressure a company to take an action (firing an employee, making a financial contribution to a cause, or disavowing/distance from statements previously made)
The first two categories are not cancel culture. They are just economics and personal/group preference. Companies may change their behavior in response to the economic reality, including terminating employees, but these are in response to employees directing the company in an unprofitable direction. The desired outcome, if accomplished at all, is achieved passively. All choices are made by the company in response to changing circumstances. Budweiser, Gillette, and Dixie Chicks all fall into this category.
The third category is cancel culture. It is a direct and active demand on the company to change it's behavior in some way. The company often has no direct economic rationale for taking the action. The action, if taken, is done to placate the mob. Gina Carano was well liked as Cara Dune, but Disney caved under pressure. My own company, who publicly espouses values disconnected from their core mission that are somewhat misaligned from my own, would happily sacrifice me to avoid an online mob, despite my opinions having zero to do with my company's profitability. Indeed, official policy states that an employee is liable to termination if they make controversial posts and are subsequently revealed to be an employee. This has an absolutely chilling effect on speech.
PyotrVerkhovensky
2mo ago
Sure, if you use a simple utility function (say, 1-e^{-x}), where x is millions of dollars, then the "sure bet" in choice 1 has utility 1-exp(-1)=.63 while the "gamble" ([.01, .89, .1]) under the real-world measure has utility (1-exp(-1))*.89+(1-exp(-5))*.1=.66. By adjusting the probabilities to (as an example) [.1, .89, .01] then the under this new measure the utility is (1-exp(-1))*.89+(1-exp(-5))*.01=.57, which is less than .63.
PyotrVerkhovensky
3mo ago
They can yes, and there may be cases (I can't think of one off the top of my head) where the actual probabilities are required. But if the objective is to be able to represent preferences via expectations of utility functions (and take advantage of all the benefits that such a representation can provide), then such a representation can be achieved under an equivalent measure instead. Its not too different conceptually from using "risk neutral" probabilities in asset pricing.
PyotrVerkhovensky
3mo ago
No, the Allais paradox is only a violation of the 4th axiom from the von Neummann-Morgenstern theorem. This axiom is necessary to show the existence of a representation of preferences by an expectation under the "real world" measure. My point is that the 4th axiom isn't necessary for such a representation. The measure under which expectations must be taken may need to change, but the use of expectations is still valid. Its not the utility function but the probabilities that are changed.
PyotrVerkhovensky
3mo ago
The Allais' case would be where E[u(X)]<E[u(Y)] even though X is preferred to Y. But as long as there is a non-zero probability that the outcome of X (let's call it x) is preferred to the outcome of Y (y), the probabilities can be re-weighted to put more emphasis on the state of the world in which x>y. A trivial example would be simply giving weight only to the probabilities for which x>y.
In practice, in a discrete probability space, the re-weighted probabilities can be represented as a non-negative least-squares problem. Let U be a matrix which holds the utility of each gamble in each state, multiplied by the real-world probability of each state. Let b be the actual utility of the gamble. Then minimize | | Ax-b | |. The altered probabilities xp/sum(xp) then form the measure v under which E_v[u(X)]>E_v[u(Y)].
PyotrVerkhovensky
3mo ago
There have been other non-political posts here that have gotten some engagement but this one may be too niche :). Thanks for letting me know about lesswrong, I have heard of it but have only visited a handful of times.
PyotrVerkhovensky
3mo ago
Not without doxxing myself, unfortunately...
PyotrVerkhovensky
3mo ago
You may well be correct, but the two things that remain unexplained are the extent of the panic after a mediocre debate (which you yourself show didn't impact polls long term) and the flavor of the reaction to his withdrawing from the race (which would have made more sense if he hadn't fought tooth and nail to stay in).
I'm not supposing that the elites coordinate that much, or that they have much control. Indeed, I think the world is spiraling out of their control (to the extent they ever had it). My theory only requires the actions from one or two individuals...and responses to those reactions that are quite predictable.
PyotrVerkhovensky
3mo ago
When I first saw memes hinting that Biden's debate flop was an intentional setup by the Democratic Machine, I thought it a humorous take but didn't treat it seriously. While the overall media reaction was excessive, the dismay seemed genuine. What benefit would there be to publicly humiliate their candidate? However, given the immediate and overwhelming support for Harris following his withdrawal, I've since updated my beliefs. I think now that Biden's flop was at least somewhat arranged.
If my theory is correct, sometime in early 2024 (Feb-April), Biden suffered a steep decline. It was too late to pivot for the primaries, and the Party hoped that he would be able to limp his way to re-election in the fall.
The Biden administration proposed in mid-May to have an extra-early June debate. It could be that the setup was already in play at this point, though I suspect it was a still a backup plan that would only kick in if something particularly incrementing happened before the debate.
On June 4th, the Wall Street Journal reported Biden's decline on his Europe trip. The Wall Street Journal only wades against the Narrative when it has airtight evidence lest it be accused of partisanship (a worry that the Washington Post and New York Times, alas, do not share). Indeed, the administration immediately accused the Journal of partisanship, and enlisted more friendly journalists to rebut the claim. Yet, the Party saw that the cat was out of the bag and that they likely couldn't sufficiently contain the evidence of decline through November.
On the day of the debate, I suspect that the Party withheld whatever stimulants they normally provided Biden during late speaking engagements. I suspect they also hinted to the CNN hosts that overtly negative coverage of Biden would be tolerable. The administration can drum up positive coverage at will as demonstrated by the above Journal article; it seems likely they can influence negative coverage as well. One or two senior officials would then tweet or otherwise message a stirring farewell. As is often the case, a compelling message from the top is quickly repeated and augmented by the lower echelons of the Party. There is no conspiracy in this: it is simply a way for Party members to signal their loyalty. The sooner they can repeat the message, the more likely their message is to go viral, so there is an incentive to relay it quickly.
But then, something happened that was not anticipated: Biden was not ready to go gently into that good night. He stuck around for weeks as the calls for him to step down mounted. What could, and, (from the Party's perspective) should have been a clean withdrawal followed by a Harris coronation, stretched into something that looked more and more like a soft coup (which, if my theory is correct, it certainly was). Finally, Biden under mounting pressure formally withdrew; though given the medium for that message, even that was done in a way that raised eyebrows.
The most brazen aspect of the whole charade was how the originally planned message was then promulgated with no substantial updates. My social media feeds from lesser Party officials became a chorus of "how brave and noble for him to put his country above his personal desires, and his term was one of the most successful of any president". An example quote, verbatim: "President Joe Biden has been the most effective president of the last century. He's...always put integrity first. So grateful of his leadership, and looking forward to working alongside Kamala Harris to win this November." For me, this messaging was 1984 levels of bizarre: we had just seen the Democratic Machine take down a sitting president who clearly wanted to remain in the race, yet when he acquiesced that same machine treated him as a hero. We were always at war with Eastasia. Yet I have seen no pushback from any center/mainstream outlet on this sudden and disingenuous pivot. And it was on observing this that I updated my opinion on the debate.
PyotrVerkhovensky
3mo ago
I am very conservative, probably even by this community's standards (though I like The Jews...I just wished they stopped voting against their interests). Some of my friend groups are very conservative. I have two friends in two separate friend groups who had immediate family members in the Capitol on Jan 6. And yet, I don't know anyone who even knows anyone who believes QAnon or RRN. If it is genuinely popular/believed, it is in niche conservative groups that my bubbles don't happen to overlap with. I lean towards genuine belief being quite rare, with a fair bit of QAnon talking points being repeated for the LOLs.
I do think that any belief or interest in these highly bizarre theories does reflect a broader rejection or negation of the mainstream narrative, which in turn evidences the domination of the mainstream narrative. We don't have true epistemological competition. We have the consensus. It is the water we swim in. It is the universal milieu. I tend to roll my eyes at mainstream hand-wringing over "misinformation" or "alternative facts" as if the disseminators or believers in these alternative narratives are so ensconced in these bubbles that they have no access to the enlightened narrative. This is just not true. Simply by existing I am aware of my expected place in ensuring the smooth path for progress along the arc of history. DEI is good, certain neo-reactionaries such as Musk notwithstanding. The future is female. Bring your whole self to work (but only if you are gay or black...not if you are a Christian).
Everything is liberal, and it cannot be escaped. In short, we have one narrative. Everything else is an anti-narrative. Anti-narratives can be true (I happen to think some weak forms of the anti-narrative are closer to the truth than the narrative), but they are all going to be compelling to those who reject the narrative. To some extent, the more extreme the anti-narrative, the bigger the "up yours" to the narrative.
PyotrVerkhovensky
4mo ago
I'll have to re-read Messiah, but I recall her being at least the equal of Irulun in the games of politics (not that that was saying much), and she commanded the respect of the people.
PyotrVerkhovensky
4mo ago
I agree that she was there to bludgeon the audience with "actually, Paul becoming the emperor is a VERY BAD THING". Destroying a character to translate a book to a movie is a risky move, but one that can work: for instance, both Jessica and Stilgar were made one-dimensional and I agree with those choices (more so with Jessica's than Stilgar's). Chani was not the right character to destroy. From a narrative perspective, it lacked the subtlety I expect from Villanueva. It didn't respect the source material, imposing Western 2024 norms on a feudal culture.
PyotrVerkhovensky
4mo ago
I am hopelessly behind in my movie watching, and have just recently finished Dune 2. I'm 5 months late to the party, but the movie's deep flaws spurred me to write this post, and hopefully provide some change of pace to the constant Biden drama.
Villanueva often uses strange settings (Arrival, Blade Runner) to tell a compelling and intimate story. I had high expectations for Dune in his hands: the narrative of Paul, Chani, and Jessica has an uncanny setting yet is a story with nuance and personality. Unfortunately, Villanueva has not delivered on either the setting or the interpersonal relationships.
As in the first Dune installment, the planet is not the omnipresent danger that it is in the books. Dune should be the harshest, most inhospitable environment imaginable, with even the prison planet paling in comparison. Those that survive are forced into extreme military discipline. There is no questioning authority unless the questioner was willing to fight to the death. The planet made the Fremen who they are: the galaxies most feared killers. Yet the movie never shows the planet as anything even a tenth as scary as the Sahara in Laurence of Arabia. None of the Fremen practice water discipline, with mouths wide open to the desert and several incidents of tears (only in extreme cases would water be given to the dead!).
The Fremen themselves are petulant and cliquish rather than clannish. Modern sensibilities are ludicrously transplanted, without modification, into a setting in which every minute brings a chance of death. Chani, inexplicably, is drawn to Paul as he internally embraces a sniveling beta-male persona. She talks of perfect gender equality among the Fremen, while any society that actually evolved in such extremities would be intensely patriarchal (as they are in the book). She says she will never leave him, as long as he remains who he is. A true Fremen (and a true woman!) would have never caveated or conditioned such a statement.
Paul, backed into a corner by the Harkonnen, finally transforms into the leader he is destined to be. Chani disapproves: she wanted a tame, domesticated partner. His transformation into a conqueror precipitates an extended hissy fit that ends with her abandoning Paul, the Fremen, and her duty. She takes on the persona of a girl-boss, and is as unhappy (and, seemingly, as barren) as any modern-day girl-boss.
In the book, Chani is loyal. She is a consistent mainstay for Paul, sharing in his miseries and exulting in his triumphs. She is no flake, and takes her duty and responsibility with great seriousness. She is perfectly at home in the society, with none of the bizarre anachronism of the movie.
Perhaps the best way to show the disconnect between the book and the movie, and in the character of Chani, is quoting a passage from each:
She spoke from the tent’s gloom, another shadow there: “It’s not yet full light, beloved.”
“Sihaya,” he said, speaking with half a laugh in his voice.
“You call me your desert spring,” she said, “but this day I’m thy goad. I am the Sayyadina who watches that the rites be obeyed.”
He began tightening his stillsuit. “You told me once the words of the Kitab al-Ibar,” he said. “You told me: ‘Woman is thy field; go then to thy field and till it.’”
“I am the mother of thy firstborn,” she agreed. He saw her in the grayness matching him movement for movement, securing her stillsuit for the open desert. “You should get all the rest you can,” she said.
He recognized her love for him speaking then and chided her gently: “The Sayyadina of the Watch does not caution or warn the candidate.”
She slid across to his side, touched his cheek with her palm. “Today, I am both the watcher and the woman.”
And the movie:
[Paul] What’s your secret name?
[Chani] Sihaya.
[Paul] Sihaya.
[Chani] Hmm.
[Paul] What does that mean?
[Chani] Means Desert Spring.
[Paul] “Desert Spring.” I love it.
[Chani] I hate it. It’s from some stupid prophecy. I prefer Chani.
[Paul] I prefer Chani, too, then. Do you think Stilgar would teach me?
[Chani] To ride?
[Paul] Yeah.
[Chani laughs] No. Only Fremen ride worms.
[Paul] Well, I thought I’d become one, didn’t I?
[Chani] By name, not by blood. Your blood comes from Dukes and Great Houses. We don’t have that here. Here, we’re equal, men and women alike. What we do, we do for the benefit of all.
[Paul] Well, I’d very much like to be equal to you.
[Chani] Paul Muad’Dib Usul… maybe you could be Fremen. Maybe I’ll show you the way.
Which version of Chani seems more real? More responsible? More happy? Villanueva (unintentionally) provides meta-commentary on modern feminism, and it isn't pretty.
PyotrVerkhovensky
5mo ago
Ready for some mild 36 year old culture war material? In 1988, BBC released their adaptation of C.S. Lewis' "The Lion, the Witch, and the Wardrobe". I watched this adaptation with my children this weekend, and having recently reread the Chronicles of Narnia series, I was surprised how little the script deviated from the book. Indeed, the essentially verbatim reproduction puts a spotlight on the few deviations.
In the book, the children meet Father Christmas who gives presents to ready them for the coming fight.
"And the dagger is to defend yourself at great need. For you also are not to be in the battle."
"Why, Sir," said Lucy. "I think—I don't know—but I think I could be brave enough."
"That is not the point," he said. "But battles are ugly when women fight."
The BBC adaptation follows the book word for word until the last sentence (as best as I can remember: I couldn't find the script online):
"That is not the point. But you will be needed after the battle."
The original reading was a powerful statement, even in the time that Lewis wrote the book, and fully in keeping with his complementarian perspective. In the BBC adaptation, the interaction with Father Christmas ends unsatisfactorily, without any larger point than to provide the children with tools. The scene is robbed of the emotion and power of the original text.
Of course, the Disney adaptation is even worse, making is seem like Father Christmas is giving Susan permission to fight, and possibly intentionally subverting the original text:
Lucy: Thank you, sir, but I think I could be brave enough.
Father Christmas: I’m sure you could. But battles are ugly affairs. Susan. Trust in this bow and it will not easily miss.
Susan: What happened to "battles are ugly affairs"?
Neither the BBC or the Disney is "rewriting history"; every adaptation has to make compromises to fit the medium. However I would desire that any adaptation treat the source with respect and not neuter or subvert it. In many ways, C.S. Lewis was and remains a counter-cultural force. Watering down his work to be palatable to modern audiences is a direct contradiction to his intentionally medieval outlook.
PyotrVerkhovensky
6mo ago
Harrison Butker's commencement speech (transcript) is probably the most politically incorrect public exposition I've ever heard from a (relatively) public non-political figure. Butker is the Kansas City Chief's placekicker, and a devout Catholic. He hits nearly all the culture war hot topics: abortion, pride month, women's role in society, the Covid response, and Biden's leadership or lack thereof.
While the mainstream and new media are universal in their condemnation of this speech, the NFL up to this point is merely "distancing" itself from Butker's viewpoints. If Butker's career can survive intact, this seems to be further evidence in favor of the "vibe-shift". Indeed, he may have shifted the Overton window himself: he mentions his "teammate's girlfriend" (Taylor Swift); and simply by being on the same team as Travis Kelce, Butker's beliefs has the potential to be platformed to the millions of women who have started following the Chiefs.
Courage is contagious: the more people who stand up to the regime, the easier it becomes for others to do so. In my own small way, I signed a petition in support of Butker under my real name. While this seems a small risk to take, it isn't one I would have countenanced four years ago.
PyotrVerkhovensky
7mo ago
Scott's April Links led me to Walt Bismarck's "How the Alt Right won", a fascinating retrospective on a movement now nearly a decade old and six years removed from its slide into irrelevance following Charlottesville. Walt's surprising claim is that the Alt-Right won: identitarian politics, ranging from anti-immigration and desire for traditional gender roles from the "Alt light" to White nationalism, HBD, and skepticism of Israel from the harder "Alt right" are now quasi-mainstream among Republicans.
Walt is mostly incorrect. Certainly many Alt-Right talking points have been taken up by the Dissident Right, but the DR is an online phenomenon. Even now, the median Republican supports Israel, doesn't know what "HBD" stands for, and is only conceptually concerned about illegal immigration. Walt himself seems to have been both mildly blue-pilled and black-pilled following contact with the real world: a steady corporate job and girlfriend mellowed his edgier takes, while his realization that normie Republicans simply don't share the Spencer worldview and had no stomach for activism showed him the futility of full-on White Nationalism.
More compelling is Walt's personal journey and description of the heady year of 2015-2016 and the subsequent reality-check of 2017. While Walt paints with a broad brush, there is much truth in the wave of black-pilled Ron Paul supporters flocking to the hard right, entertaining and promulgating ideas for outside the normal discourse: I was one of them. He captures well the excitement and ethos of 2015-2016. He also captures well the ennui and bitterness following Charlottesville and Doug Jones' senate victory. With Covid throwing a massive wrench in the collective imagination, Walt's essays serves as a good reminder of the rollercoaster ride that was politics in the 2 years between 2015-2017.
Walt chooses to skip over much of 2018-2024. While 2017 was a very bad year (in addition to Charlottesville and Doug Jones, there was McCain sinking the repeal of Obamacare and his subsequent adoration by the left, which was for me personally a massive black pill), 2018-2020 was far better. Trump passed two major pieces of legislation which helped unleash an economy that had been sputtering under Obama. Doug Jones, rather than throwing a wrench, voted for each. 2018 was not the mid-term bloodbath that many feared. The politicized and baseless investigations into Trump made it clear to the median Republican that there was a deep state that was determined to undermine and overthrow Trump. By early 2020 I was cautiously optimistic about the direction of the country.
Then Covid happened. March 2020 to January 2021 was a dark time: the authoritarianism against law-abiding citizens, rioters burning down our cities suffering no prosecution, election laws changed to make "allowance" for Covid, relentless DEI. The intense isolation and frustration of feeling like the only sane person in a world gone mad. I believe this pent-up frustration was partially responsible for the events of January 6th. January 6th itself was a turning point. The harsh crackdown on the rioters when whole cities had burned six months earlier with no reprisal made it clear to the median Republican that there was a deep state that was determined to undermine and overthrow them. The culture war was now existential. And the Right started to put up a fight.
Into the fray stepped Rufo, Desantis, and Lindsay. They were able to identify core leftist ideology and repurposed previously leftist jargon (CRT, DEI) into pejorative labels. Desantis and Rufo put the weight of legislative action against the pervasive left-wing hegemony. Groups such as the National Conservatives, self-described Post-Liberals, and Christian Nationalists started coalescing and providing intellectual leadership for a new Right. X and Substack have allowed for the exchange of ideas that would have been impossible in 2020. Everyone, conservative or not, now sees that the emperor has no clothes. The deep state exists, and is sclerotic and incompetent. Several key victories, mostly through the Supreme Court, have served to shift the legal framework in favor of the Right. The Right isn't just fighting, it is often winning.
Walt is incorrect that the Alt-Right won. But he is correct that it had an important dissident voice that provided a valuable alternative to think-tank Conservatism. The newer leaders on the Right may be more "mature", more "institutional", and only retain a subset of the Alt-Right's objectives, but they owe a debt to the Alt-Right. They no longer need to apologize or throat-clear. They can speak plainly and authoritatively. The battle lines are clear, and the next stage of the fight can now commence.
PyotrVerkhovensky
7mo ago
You are reading too much into what I wrote. I am not Austrian. 100% reserves will not resolve business cycles, nor is that prescription practicable. I think even the New Keynesians have more interesting things to say on economics than Austrians. I happen to work for a large-ish bank that practices fractional reserve banking (as all retail banks do), and I can sleep at night.
I think Cochrane is the closest to being correct of the three that I laid out. I also think his proposal for 100% equity funded banks is both practicable and better aligns savers and borrowers, and will definitively end bank runs. I think all three are closer to being "correct" than the Austrians, whose main claim to fame is thoroughly debunking Marxist economics (admittedly not a high hurdle to clear).
I would love to hear more from you on the post-war Keynesian literature and how it is relevant to the rest of my post; that is the part that actually interests me.
PyotrVerkhovensky
7mo ago
The causes of inflation
Having recently finished Cochrane's Fiscal Theory of the Price Level, I was primarily struck by how contrived all modern macro-economic models are, whether Monetarist, New Keynesian, or Fiscal. New Keynesian models, for example, imply bizarre outcomes such as spiraling deflation when interest rates are at or near zero, yet rather than discarding the model economists instead warn of spiraling deflation at the zero bound. From a methodological standpoint, there appears to be a tradition of "fixing" a model by declaring a variable to be stochastic or subject to regime-change; yet without going back and re-deriving the model with these additional assumptions. Dynamic Stochastic General Equilibrium (DSGE) models jointly estimate macro-economic variables and policy parameters, despite policies being a choice; rendering predictions of potential policy impact on relevant economic variables futile.
Indeed, I posit that all three frameworks are missing a key element that drives inflation: the fact that the representative inter-temporal discount factor is non-constant, and that the discount factor is directly impacted by fiscal policy.
Background
First, some background. The representative agent (let's say me) prefers consumption now than consumption in the future. There are many philosophical reasons that this may be so, but the existence of debt appears to be ample empirical evidence for this assumption. The amount by which I prefer current consumption to future consumption is called the "discount factor", and can be modeled in a variety of ways. In discrete time, it is often symbolized using the Greek letter "beta" (not to be confused with the CAPM beta) and is typically somewhat less than 1 (perhaps in the .85-.99 range). Micro-economic models call the rate at which I prefer current consumption to future consumption the "elasticity of inter-temporal substitution", and typically model the impact of interest rates on this inter-temporal substitution effect. In equilibrium, the interest rate is directional proportional the negative log of the discount factor: r = a - log(beta), or if beta is modeled as exp(-delta), r = a + delta.
In a simple economic model with no government spending, no Federal Reserve, and no banks (frictionless financial markets) (and oh, to live in such a world!), the discount factor is directly related to the savings rate and amount of investment in "physical" (though intangible in the case of software and innovation) capital. Having a long term view implies a high savings rate. Savings are invested in capital. Capital is the primary driver of long-term economic growth, as it allows economies to produce more goods with greater efficiency. If the aggregate discount factor is at .95, then any capital investment with a (risk-adjusted) return greater than 5% would be financed, leading to more economic growth than if only capital investments with returns greater than 10% were financed.
Government spending, a central bank, and retail banks throw this simple model into flux. Unlike mutual funds, which act as a true intermediary by taking investors money and directly putting the money into portfolios of stocks and bonds, retail banks lend "safe" and thus cheap deposits. This cash has to go somewhere, and eventually makes its way back to a bank as a deposit...which is then lent out again. This cheap borrowing, and subsequent rise in the broad deposit base, artificially lowers the lending rate. Austrian economics correctly states that this leads to over-investment: investment is unbacked by corresponding saving, causing a bubble and mis-allocation of economic resources. A much more economically straightforward approach (and one also suggested by Cochrane) is for banks to be financed entirely by equity: investors can buy stocks in a bank, who then uses the money raised by an equity issuance to fund lending. This approach would let retail banks truly act as intermediaries, being rewarded for expertise in credit risk management and identification of wise investments, without introducing investment distortions.
Government spending is also a distortion. The government has to spend on something: either they hire private companies (a form of consumption or investment, depending on the nature of the spending) or directly create consumer or investment goods. Since this investment is also not tied to savings, distortion is introduced (Ricardian equivalence not-withstanding).
Finally, central banks control the interest rate either via the rate at which they allow retail banks to borrow or by directly creating money and purchasing government bonds on the open market. Purchasing government bonds increases the demand for bonds directly, giving the government more capacity to borrow and spend and facilitating more distortion.
Mainstream theories
Monetarists, New Keynesians, and Fiscal theories are aware of all the above, yet don't directly introduce these facts into their canonical models. Loosely speaking, Monetarists consider inflation to be driven in the long run by changes in the money supply: "Inflation is always and everywhere a monetary phenomenon" according to Friedman. Mathematically, MV = PY, where Y is economic output, P is the price level, M is the money supply, and V is the velocity of money (how frequently it changes hands). Under the assumption that V is a stationary process (conceptually, mean reverting) and that Y is long-run exogenous, the only impact on P comes from M. Unfortunately, M is not well defined, especially, as Cochrane correctly points out, in the presence of increasing financial innovation and removal of financial frictions. If I can purchase a television by an immediate transfer from my investment portfolio with no conversion to cash, then M is not only all cash and deposits, but also all bonds and stocks. Central bank open market operations, where money is created to purchase bonds, then has no impact on the money supply. Cash is created, but bonds are removed from the market, which is net-neutral for the money supply.
New Keynesians, in the tradition of the original Keynesians, consider inflation to be caused by excess demand. This is explicit in their canonical models, where the inflation rate is a function of the output gap and expected future inflation. New Keynesian theories struggle to explain the lack of inflation from 2009 to 2020, where fiscal and monetary policy were both accommodating, but in which inflation stayed stubbornly low.
Finally, Fiscal Theorists consider inflation to be the result of government deficits that are not backed by corresponding future surpluses. In this theory, government debt is valued by the present value of future primary surpluses (cash flows excluding interest expenditure). Government can either credibly promise to pay back new debt (in which case the current value of debt remains constant), or the price level will increase to deflate the current level of debt. This theory is relatively simple and has many advantages that Cochrane articulates in detail. My biggest issue with the theory is that the mechanism for inflation is opaque. The government can issue debt and promise future surpluses, leading to Ricardian equivalence. But if the government doesn't promise future surpluses, people are free to spend the money, driving up the price level. This theory does not, to my knowledge, tie consumer behavior back to the representative agent's utility function.
What about the discount factor?
And now I can finally get back to my own theory. Each of the three theories posited above assumes that the discount factor is constant. I believe that the discount factor is dynamic and that this dynamism directly leads to inflation. Fiscal policy can directly impact the discount factor, while monetary policies can stimulate inflation by decoupling interest rates from the discount factor.
An immediate shift to higher discount rates (lower discount factor) will cause immediate price level increases. As I now prefer current consumption even more over future consumption, I will spend more today and save less for tomorrow. Since higher discount rates lead to less economic growth, there is less room for supply side easing of inflationary pressure. Populations that have higher discount rates will also tend to vote in myopic governments who focus on short-term benefits while ignoring long-term structural and financial concerns.
Expansionary fiscal policy puts additional cash in consumers or investors hands. The presence and continued growth of additional cash will have an impact on savings rates: why should I bother to save if I will simply receive more government cash in the future? The discount rate will rise as a result. Cochrane does have a point: debt that is backed by future surpluses will not have the same impact on the discount rate, since eventually the gravy train will stop. However, Cochrane does not allow discount rates to change, robbing the model of a key mechanism for inducing inflation.
Expansionary monetary policy does not necessarily impact the discount rate. While in a frictionless society with no government, an interest rate decline can only happen when discount rates also decline, in an expansionary monetary episode lower interest rates can lead to higher “real” discount rates. The availability of cheap money relative to discount rates leads to increases in borrowing and current consumption which leads to demand-side inflation. This is a standard Keynesian argument, but I go one step further: long periods of low interest rates can lead to a lethargic population that assumes that money will always be free. How this manifests in a utility function is ambiguous: it could be that this actually lowers the discount rate in the long run (raises the discount factor). If this is the case, then a sudden interest and fiscal shock to the system can causes an even larger increase in the discount rate.
2021 was a time of fiscal excess, supply shortages, and post-pandemic YOLOing. Discount rates shot through the roof, as evidenced by both heightened consumption and declines in workforce participation, hitting both the demand and supply side of the economy, funded by accommodating fiscal policy. It is a testament to the American people that we seem to a large extent to have come back to our senses. Despite continued deficits, inflation has come down as the discount rate has dropped to near previous levels. However, it is clear how easy it would be to devolve into a South American-style economy, characterized by short-termism and fiscal irresponsibility at both the individual and government levels.
Why is this culture war material?
To what degree are low discount rates driven by culture? Americans were originally positively selected for long-termism. By definition, they had an unusually high capacity for adventure, exploration, hard work, and desire to create a better world for their descendants. Most of the immigrants to the United States since have had similar positive selection. Even the Irish and African populations, who may have been negatively selected on certain attributes (by the potato famine and by defeat/capture by rival tribes respectively), there isn't anything to suggest that their discount rate was negatively selected for. When America was a melting pot, they were assimilated into a culture that favored long-termism.
When considering modern immigrants in light of discount rates, I come to a surprising conclusion. Whatever issues illegal immigrants have (and I have many concerns!), they may well be positively selected on discount rate. They risk danger and uncertainty for a better and brighter long-term future. On the other hand, while seemingly the most successful immigrants, Indians could very well be negatively selected on discount rate. Rather than stay in India and help transform it into a fully developed nation, they come to the United States to enjoy immediate success. Indians (Brahmins) have administrative and managerial talents that often far outpace the mean American and they enjoy great success navigating the PMC (the growth of which could also be a consequence of higher discount rates). Yet in my experience, these high-capacity Brahmins do not actually drive innovation or change. If I'm correct about this, the current surfeit of Indian executive talent could contribute to American economic stagnation.
"Christian Nationalism" is a label given by its detractors, so I agree it certainly sounds more theocratic than it actually is. I should have more carefully defined it in my original post. Here are specific parts I find compelling:
- They believe: They recognize the totality of Scripture and supremacy of God and fully embracing its implications. One of these implications being an understanding of a just or flourishing society that is at complete odds with the Western perspective. See https://en.wikipedia.org/wiki/Theonomy.
- They fight: They meet the apostasy of our society head on. They recognize that politics is endogenous to the human state, and as Christians we cannot escape it. Christianity cannot be "above" politics, we are already in it whether we want to be or not. The question is not "if", but "how".
- They build: They are starting to build a parallel society, with new educational and civic institutions, while not fully withdrawing from broader society (contra Rod Dreher). They truly are in the world but not of the world.
As I hinted in my original post, I'm starting to personally recognize that God has already defined what a flourishing society would look like, and it is not (purely) libertarian. While I don't favor a state Church, I would be in favor of including a statement that all orthodox Christians believe into our Constitution, such as the Nicene creed. If "Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.", then we should enshrine morality and religion in the Constitution.
On the other hand, I recognize there are downsides as well:
- The elevation of the Church to a position of political authority tends to corrupt the Church. There is a reason to render to Caesar's what is Caesar's; and to God's what is God's. A state church benefits the state far more than it benefits the church.
- On the question of the salvific implications of a national religion, it requires the sovereign to truly believe that they are subject to the divine; otherwise they will manipulate the genuine faith of their subjects to horrible ends. Historically, the evidence is that rulers tend towards skepticism and machiavellianism rather than caretakers and redeemers of their people.
- On a practical note, it would be difficult to implement in our increasingly post-Christian society.
Edit: clarity, formatting, spelling
I posted on this forum because I did want to hear a non-Christian perspective on Christian Nationalism (good, bad, and ugly), so I appreciate your response. I hope that non-Christians can find the topic interesting, in the same way that I find discussions on GamerGate interesting despite not being a gamer.
EDIT: To respond to your larger question about the appropriateness of religion in a rat-adjacent forum, I believe rationalism is an incredibly useful tool for uncovering knowledge. I believe rationalism is downstream of Truth: in the beginning was the Logos (the Word), the Word was with God, and the Word was God. If I'm understanding you correctly, you conclude that there is no God because it doesn't follow from rational principles; without God I don't think there is such a thing as rational principles. Or, to put it crudely:
Jesus is Lord -> 2+2=4 -> everything else that follows.
Starting with 2+2=4 can get you quite far, but it won't uncover all knowledge and it would be futile to ask it to prove or disprove revelation.
PyotrVerkhovensky
8mo ago
A good summary can be found here: https://g3min.org/a-review-of-mere-christendom-by-doug-wilson/. For a critical perspective, see Heidi Przybyla's interview on MSNBC.
PyotrVerkhovensky
8mo ago
Every sin, no matter how "small", condemns us. However, at a societal level there is a clear distinction between a population that occasionally looks on someone with lust, and a population that murders and rapes babies.
PyotrVerkhovensky
8mo ago
Christian Nationalism
Within my own circles this is rather a hot topic, but I've yet to see it discussed in this forum. Christian evangelicalism has had its own version of the culture war; to whit, how involved and in what manner should Christians (both individually and the Church) be engaged in society and politics. There are factions of "Big Eva" who seem to be moving more Left (see the recent "He gets us" commercial in the Super Bowl). There are those who think that the "third-way"ism of Tim Keller (taking a high road that transcends politics and culture war) is still relevant in these days (from my perspective, with echos of Martin Niemoller). And there are those who are actively seeking a more aggressive and explicitly Christian approach to governance and policy. For those interested, a useful taxonomy provided by the Gospel Coalition describes to a reasonable first approximation the different approaches that Christians have to our current moment.
I have had my own journey in the direction of Christian Nationalism (though I wouldn't...yet...apply that label to myself). While in college I was a pro-life Ron Paul libertarian, over the years I've become less individualistic as I've grown in my faith. I used to think of religion as a private exercise. I know recognize the centrality of community. I even have begun to entertain the idea that there may be salvific consequences for those who are under the authority of a Christian leader. If the unbelieving spouse can be sanctified by his or her believing counterpart, and an entire house can be baptized when the head of the house believes, could there not be salvation extended to a nation whose head of state is an orthodox Christian and whose government practices the precepts of the Word? (If you are interested in more of my ramblings on this topic, https://pyotrverkhovensky.substack.com/p/what-is-christianitys-role-in-culture and https://pyotrverkhovensky.substack.com/p/on-theocracy-and-redemption)
Christianity in America has enjoyed centuries of being a dominant culture. Many Christians, having grown up in a culture that was at least outwardly compatible with Christianity, have slipped into casual acceptance of cultural norms. They are in the world, and of the world. In many cases self-proclaimed Christians are functionally agnostic, with no significant lifestyle differences from Atheists. Do we really believe Christ is Lord or do we not? Do we not believe in divine judgement and divine mercy? Is Church a weekly therapeutic exercise or is it a place where we meet the transcendent and drink of the body and the blood? Christian Nationalism, at its core, recognizes the reality and consequence of a world in which Christ is Lord. There is no "third way", there is only God's way. (For a somewhat related essay on the reality of God, see https://pyotrverkhovensky.substack.com/p/christianity-and-culture-continued).
There is a common assumption among Christians that all sin is equally damning. Man can never follow the Law, and Jesus even makes it clear that the Law didn't go far enough (the Law allows divorce, and does not explicitly proscribe lust). At the individual level, this assumption is correct. Outside the atonement found in Jesus, we all stand condemned. Yet at the societal level, there are varying levels of alignment with God's will. Every single person in Nazi Germany was a sinner. Every single person in 1941 USA was a sinner. Yet it would be an unusual Christian who would argue that 1941 USA was not more aligned with God's will than Nazi Germany. Not all societies are created equal, and there are varying degrees of misalignment. If I look at a woman in lust, I am clearly sinning and am condemned; but at least my desires are in alignment with God's ideal. It is only the object of my desires that is inappropriate, as being attracted to my wife is not only not a sin, but is a key part of a relationship that is a representation of Christ's love for the Church. Same-sex attraction is more disordered as both the object and the desire itself are misaligned. Transgenderism is completely disordered: the object, desire, and self are all misaligned. Societies that venerate increasingly disordered behavior will inevitably sink into corruption and decay. Christian Nationalism, perhaps alone among contemporary strands of Christian thought, fully acknowledges these implications.
PyotrVerkhovensky
9mo ago
My perspective, as a Christian:
- There is knowledge/truth that cannot be discovered via purely rationalistic/logical means (as hinted at by Godel)
- There is truth that is inherently unfalsifiable
- Science/rationality is an incredibly useful tool, and is a subset of the tools/revelation that God has provided us to understand his world
- Like all tools, this tool can (and due to our fallenness will inevitably) become unaligned with God's will/plan
- Unless another tool is yet to be discovered (and I doubt such a tool will be), there is no way for humanity to ascertain unfalsifiable truth/knowledge without revelation (either general or specific).
I've been re-reading the Chronicles of Narnia for the first time since I was a kid. I'm not a huge fan of Lewis' children's books, but there are certain moments that stand out. Two that resonate with me:
From the Dawn Treader:
"In our world," said Eustace, "a star is a huge ball of flaming gas."
"Even in your world, my son, that is not what a star is but only what it is made of."
From the Silver Chair:
"Hangeth from what, my lord?" asked the Witch; and then, while they were all still thinking how to answer her, she added, with another of her soft, silver laughs: "You see? When you try to think out clearly what this sun must be, you cannot tell me. You can only tell me it is like the lamp. Your sun is a dream; and there is nothing in that dream that was not copied from the lamp. The lamp is the real thing; the sun is but a tale, a children's story."
"Yes, I see now," said Jill in a heavy, hopeless tone. "It must be so." And while she said this, it seemed to her to be very good sense.
Reduce the franchise to one vote per household who have at least two children between 0 and 18. The benefits:
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