Guilt-free Ideas

I've started a new blog, Guilt-free Ideas, for recording some of my studies of Objectivism.

Unemployment outlook with generous assumptions

Mish predicting unemployment:

Yet, in spite of all those generous assumptions, no double dip recession, no second recession, high rates of job growth and falling participation rates all the way through 2020, and unemployment peaking at 11.6% not 13%, the best I can do is suggest the unemployment rate will be over 10% all the way through 2015 and never dip below 8% all the way out through the end of 2020.

With a rosy outlook like that, who needs a worst case scenario? Such as Prechter's prediction that we will double from here to a U3 of 20% in a major global depression.

Electronics Project #1

Since recently completing all 101 projects in the Snap Electronics Jr. kit, Elias has been learning real hobby electronics and loving it. It's almost an obsession, but healthy I think. We have fun and learn a lot together. What makes it natural for him is he is able to retain just about every fact ever explained to him, and he is very excited to learn how physical things work and above all to create his own contraptions. It surely helps that I'm interested in electronics too (cause like all geeks I want to eventually build super-cool robots), though I actually know very little about it.



We've been reading that Forest M. Mims, III book Getting Started in Electronics that Radio Shack has been selling for at least 20 years -- that's how old my copy is. We're up to Silicon Controlled Rectifiers. And to test out our little circuits we use a bread boarding box that I've been storing for 20 years, apparently just for this purpose. Last week, Elias got the hang of creating what he calls a "touch detector" circuit, which involves a transistor, a resistor, an LED, and some wires. I don't even know how (are people positively charged relative to residential ground?), but just by touching one wire attached to the gate of the transistor, the LED lights up. He was building this all by himself on the bread board for a few days.



I recommended that we get out my soldering iron, another relic, and actually burn his touch detector circuit into permanent form. We had a broken circuit board from an old phone handset that was just the right size for 2 AAA batteries to lay on it. Of course I did all the soldering, but only after I had him draw a schematic of what we had laid out on the bread board. He labeled the 10K Ohm resistor, the round and flat sides of the LED with little marks, and the 2N2222 transistor, which has E, C, and B by its legs. The three "fingers" on each of the two free ends of wires are, I think, a reflection of his love earlier this year for drawing diagrams of neurons, after seeing them in my college biology text. Here's the last version he made on the breadboard, touching the red and green wires lights the LED.



And this is the permanent version. Bending the white wire slightly so that it touches a leg of the transistor lights the LED. We found that once we went to battery power, the mysterious trick of just touching the transistor gate with your finger no longer worked.



What next? We are trying to build a circuit from the Mims book that is supposed to pulse a light or buzzer at about 1Hz. One capacitor, two transistors, and three resistors. He laid most of it out on the bread board looking at the schematic, then I stepped in to finish it. You'd think I could nail such a baby circuit, but we were working on it tonight and it just buzzes solidly. So I know the first thing Elias is going to ask me tomorrow morning is to work on it with him. Fun!

Book: Goddess of the Market

Last week, Jon Stewart interviewed Jennifer Burns, author of a new biography of Ayn Rand, Goddess of the Market: Ayn Rand and the American Right. Burns was reasonable, but made a few incorrect statements: Ayn Rand a "conservative"? [15:50] whose life mission was to defend the right? Actually, AR stressed that she was not a conservative, e.g. she couldn't stand Reagan, and The Fountainhead was not about political philosophy at all, but about the psychology and ethics of spiritual independence. Still, not a hint of the childish insulting tone from either Burns or Stewart that I was expecting (such as Colbert displayed about AR earlier this year). In fact, both of them seem genuinely impressed with AR. So thumbs up to Stewart for intellectual honesty here.



Today, Burns has an article on www.foreignpolicy.com, Howard Roark in New Delhi. This is an interesting description of the popularity of AR in India. But this time Burns labels AR with "libertarianism." Actually, AR stressed that she was not a libertarian, calling libertarianism "a mockery of philosophy and ideology" which often plagiarizes her without credit.

So, Burns seems to be generally intellectually honest from what I've seen so far, and may intend to be objective about AR's political thought -- but she doesn't or can't distinguish between the Objectivist political philosophy and two movements that are profoundly incompatible with Objectivism, as has been described many times by many people, including AR.

Movie: The White Rose

Last night I watched the subtitled movie "Sophie Scholl: The Last Days" about the young and courageous members of the secret resistance group in 1942-3 Germany, The White Rose. The group members, mostly students at the university of Munich, distributed thousands of leaflets denouncing the Nazi programme of war and murder. A few days after they were caught, the leaders (including Sophie Scholl, who was 21) were guillotined; many others were imprisoned. As a movie I don't recommend it, it is very depressing, one is better off to just read about The White Rose on the Internet (the Wikipedia article seems to give a decent overview). But the story depicts, negatively, the grand power of intellectual activism: besides brute force, irrationality has no defense against voices of reason. It may be a fictitious line, but in the movie Hans defiantly tells the judge that he and Hitler must be afraid of -- and thus morally inferior to -- the members of The White Rose, otherwise there wouldn't even be a trial.

From The White Rose leaflet #3:

[W]hy do you allow these men who are in power to rob you step by step, openly and in secret, of one domain of your rights after another, until one day nothing, nothing at all will be left but a mechanised state system presided over by criminals and drunks? Is your spirit already so crushed by abuse that you forget it is your right - or rather, your moral duty - to eliminate this system?

Next leg down: Are we there yet?

Daneric:

So the primary count is officially Minuette (iii) down of Minute [i] of Minor 1 of Intermediate (1) of Primary [3] of Cycle wave c of Supercycle wave (a) of Grand Supercycle wave IV.

Translation: last week we may have seen the highest stocks are going to be for years, with SPX hitting 1088.

UPDATE: The short-term call is already wrong, SPX has since hit 1099, but whether or not this rally ends, sooner than later, with a top in this neighborhood that will reign for years, remains to be seen.

Hazlitt on Profits

Henry Hazlitt:

The indignation shown by many people today at the mention of the very word profits indicates how little understanding there is of the vital function that profits play in our economy. ...

The function of profits ... is to put constant and unremitting pressure on the head of every competitive business to introduce further economies and efficiencies, no matter to what stage these may already have been brought. In good times he does this to increase his profits further, in normal times he does it to keep ahead of his competitors, in bad times he may have to do it to survive at all. For profits may not only go to zero, they may quickly turn into losses; and a man will put forth greater efforts to save himself from ruin than he will merely to improve his position.

Contrary to a popular impression, profits are achieved not by raising prices, but by introducing economies and efficiencies that cut costs of production.