An Affair

My wife accused me of having a love affair with the stars. I understand why, as at 10pm for this past week I have laid outside staring at the stars for a few minutes. Soon the Lulin will pass and the nightly visits will end.

I do find the stars fascinating. It has been fun to learn more about the constellations and everything that you can see in the sky. The order that is displayed is amazing, as is the fact that the deeper you look into the sky the more stars you see.

Comet chasing

I got up at 3:00 am this morning to try and find a comet in the sky. This morning comet Lulin was it's brightest, just below Saturn in the south-western sky. I don't know for sure if I found the comet, but it was fun watching the stars and learning some new constellations.

Star gazing is one of the things that I think our society has unfortunately lost. With lights everywhere it can be frustrating to try, and we know so little of what is in the sky that it has little meaning. For me it is like staring out at the ocean. Both experiences bring a feeling of wonder at all that is before me and a curiosity of all that lies beyond my vision.

I remember fondly laying out at night watching meteor showers, gazing at the milky way, anticipating a lunar eclipse and times with my grandpa learning a few of the constellations. I would love a day, or I should say night, where everyone agrees to turn out their outdoor lights. A holiday to watch the stars. Instead of everyone going to watch fireworks we could enjoy laying out and searchings the sky for familiar and new constellations.

Dystopia for the young

Why is it that there are so many failed utopias in juvenile literature? I am perhaps being too generous in my description, they are really stories of controlled societies. Rarely do the authors put forth the communities as utopias. A Brave New World, Lois Lowry's The Giver and Gathering Blue are some examples that came to mind. I have it on hand but haven't read it yet, but City of Ember is a similar story.

Those more familiar with the academics of literature I am sure have a name to refer to this genre of story. I just wonder why so many of us are exposed to this material in school. Is it the juvenile resistance to rules and order? A veiled attempt to prepare us for the world of adults?

Reading some of these books as an adult I enjoy them as well written stories. I can see some of the failings in the principles that these communities were based on. Perhaps this is the purpose for sharing them to young adults studying literature. In the Messenger by Lois Lowry we find a village where freedom, kindness, and acceptance are the guiding principles. I think that Messenger does an excellent job of introducing the difficulties of such an ideal society.

Perhaps the enjoyment of these and similar stories lies in their focus on a small number elements of our complicated reality. We can consider and digest the ideas and how we feel about them more easily than dealing with the world around us. We can then take these thoughts and lessons to help guide us in our daily actions.

Austrian Theory Summary

I wanted to add one more post about the Austrian economist essays. I have come across a number of competing economic ideas that discuss more closely our current situation, but I want to mention the general summary of the Austrian theory put forward by Roger W. Garrison in his essay The Austrian Theory: A Summary.

The Austrian theory of the business cycle emerges straightforwardly from a simple comparison of savings induced growth, which is sustainable, with a credit-induced boom, which is not. An increase in saving by individuals and a credit expansion orchestrated by the central bank set into motion market processes whose initial allocational effects on the economy's capital structure are similar. But the ultimate consequences of the two processes stand in stark contrast: Saving gets us genuine growth; credit expansion gets us boom and bust.

We find ourselves in a reality where economic realities may frown upon savings. It still appeals to me as something that should be held as a guiding principle in private, public, and corporate life.

Reading challenge

Our local library is having an adult reading challenge over a two month time period. The challenge is to read at least eight books, with prizes at four and eight books read. Both my wife and I have been reading more than usual as of late anyway, so we thought it would be fun to record our reading as part of the challenge.

I have a confession to make however. As I have been checking out books to read I have come across interesting titles from the teen section that I haven't read before. I just finished Lois Lowry's The Giver and enjoyed the book quite a bit. Since the ending left me wanting a further conclusion, I plan to read the other two books loosely associated with The Giver. There are some really good stories that I have not read, and even though they may be shorter and targeted at younger readers, I plan to fill up my reading list with them.

If you have any good book recommendations I am always curious to hear them. My to-read list is always growing, but I love adding good books to it.

Wage Policy v. Monetary Policy

There is plenty more in Hayek's essay Can We Still Avoid Inflation? about the effect of wage policy on monetary and fiscal policy in an effort to keep unemployment low. Without posting here multiple long paragraphs I want to share a few key points.

[There are policies and laws] which in effect release unions of all responsibility for the unemployment their wage policies may cause and place all responsibility for the preservation of full employment on the monetary and fiscal authorities...

Since it cannot be denied that at least for a period of years the monetary authorities have the power by sufficient inflation to secure a high level of employment, they will be forced by public opinion to use that instrument...

[Inflationary developments] will continue to operate as long as we allow on the one hand the unions to drive up money wages to whatever level they can get employers to consent to-and these employers consent to money wages with a present buying power which they can accept only because they know the monetary authorities will partly undo the harm by lowering the purchasing power of money and thereby also the real equivalent of the agreed money wages.

I see all of this as a vicious cycle that can only be broken by breaking a large number of people. Either workers must be willing to periodically take wide spread cuts in pay, companies must risk labor conflicts by not agreeing to unreasonable wage policies, or monetary officials (i.e. our government) must dispel the myth that unemployment can be held low indefinitely and risk the wrath of their constituents.

I often try to apply personal financial principles to macroeconomics and the economy as a whole, and I am beginning to realize how quickly this can fall apart. The simple desire to provide well for your family and ensure a good wage can lead to a chain of decisions that leaves the entire economy in need of a painful correction due to misappropriated capital.

Inflation for the union

Given the number of posts I have already written and the amount of material I would still like to mention from Friedrich A. Hayek's essay Can We Still Avoid Inflation?, it may be best to read the essay for yourself. I preface the following excerpt with a warning that I have a hard time understanding the benefit of labor unions. I know of many stories of how poorly labor used to be treated and the battles fought to influence management, but I see labor unions as another body to concentrate and misuse power by a few individuals in the name of a group. Now that my biases are on the table, I want to share a taste of what Hayek has to say about inflation and the influence of labor union policies.

Before I proceed with this main point, however, I must still say a few words about the alleged indispensability of inflation as a condition of rapid growth. We shall see that modern developments of labor union policies in the highly industrialized countries may there indeed have created a position in which both growth and a reasonably high and stable level of employment may, so long as those policies continue, make inflation the only effective means of overcoming the obstacles created by them.

This certainly describes the situation we find ourselves in today. Perhaps we will still yet see widespread bargaining agreements were labor unions agree to decreases in pay and benefits, but it will not come without much wailing and gnashing of teeth. It is also unlikely to find management that is ready to stand up for the future of the company and not give unfulfillable promises to labor to appease the current groans for more.

I hope my feelings on the matter are plain enough. The continuation of the paragraph from Hayek adds more fuel to the fire.

But this does not mean that inflation is, in normal conditions, and especially in less developed countries, required or even favorable for growth. None of the great industrial powers of the modern world has reached its position in periods of depreciating money. British prices in 1914 were, so far as meaningful comparisons can be made over such long periods, just about where they had been two hundred years before, and American prices in 1939 were also at about the same level as at the earliest point of time for which we have data, 1749. Though it is largely true that world history is a history of inflation, the few success stories we find are on the whole the stories of countries and periods which have preserved a stable currency; and in the past a deterioration of the value of money has usually gone hand in hand with economic decay.

I do not have the data to back this up, but it appeals strongly to the sense of logic that I have developed throughout my life and my experiences.

The Joy of Achievement

I came across Franklin Delano Roosevelt's first inaugural address a few weeks back. That is his famous "the only thing we have to fear is fear itself" speech. I was impressed with much that he had to say. Last week the great Planet Money podcast at npr.org had a bit to share from an essay published in 1933 by H. L. Mencken. I highly recommend the blogpost, which can be summarized with the following excerpt.

It seems to me that the depression will be well worth its cost if it brings Americans back to their senses.

In Roosevelt's first inaugural address he shared something that agreed with the essay mentioned above and I believe is a good lesson for myself.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy, the moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days, my friends, will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves, to our fellow men.

I came across the same sentiments in the scriptures as I read this past week. The message has come from so many directions that it is hard to ignore. Happiness does not lie in possessions but rather in achievements and service to others. This is not the first time I have heard this, but the truth of the statement was a welcome reminder.