(1) The Alchemy of Finance. The author is George Soros (1987, 2003).
Nearly 30
years old, this book introduces Soros’ concept of reflexivity, which he uses as
a manner of understanding financials markets and beyond. As it pertains to markets, the basic idea is
that we are constantly in boom/bust sequences, and the trend is driven by a
prevailing bias amongst the players that creates a self-reinforcing process
between prices and trend/expectations – only to reach a final unsustainable
level that marks the ultimate inflection point.
As the prevailing trend persists, markets grow increasingly unstable
because the driving force is simply the bias of the moment. His theory, therefore, is driven by the
underlying assumption that there is nothing inherent to markets that leads them
towards an equilibrium with respect to fundamentals. To put it succinctly, he is not someone who
is a strong proponent of the efficiency of markets and of related wholesale
deregulation – mostly because he believes that some form of policy measure is
the only variable that might introduce some needed stability to markets.
Simultaneously,
he appreciates that the authorities typically are not as knowledgeable as the
players themselves, responding late to the changing dynamics in markets, and
usually addressing the last problem instead of anticipating the next one. Moreover, while he seems to be Keynesian in
his attitude about markets, there is something Austrian in the way that he appreciates
how low interest rates and leverage are integral to the boom/bust cycle, and
that the manner of response from government to the bust is problematic in that bad
debts are allowed to remain. He sees too
much regulation as a form of rigidity that hinders innovation, and seems to appreciate
the role of gold as a type of commodity standard to be considered, even way
back in the mid-1980s.
So, to
summarize, he believes that markets are the worst at allocating resources,
except for all the other options.
(2) I Know Best. The subtitle is How Moral Narcissism is Destroying Our Republic, If it Hasn’t Already
and the author is Roger Simon (2016).
Another book
that looks at the hypocrisy of liberals.
The term of art to describe it is “moral narcissism” – and it reflects
the phenomenon amongst progressives of declaring allegiance to a set of
politically correct ideals, thereby announcing themselves as “good”, even as
there is no follow-through or rational policy implemented that actually
supports the beliefs or leads to practical solutions. To re-formulate it in a way that I have
stated before, all that matters are good intentions. To wit:
-Senator
Sanders declaring the economic success and social justice of Scandinavian
countries, even as they are turning their back on socialism for capitalism
because their economies take a nose dive.
-Declaring
climate change settled science, even as it can only be proven with statistical
inference and computer modeling – not with actual experimental reproduction. And dare we point out that those computer
models are similar to the ones that constantly screw up predicting the weather
a day in advance, much less years. And
forget about all those hacked emails that point to collusion and fixing of
numbers to support the climate change argument.
-The
convenient overlook of correlation between increased gun ownership and lower
murder rates.
-The
priceless interview between Charlie Gibson and presidential candidate Barack
Obama in 2008, as Obama campaigned on a promise of higher capital gains tax
rates, where it was pointed out that lower rates had actually led to higher
revenues for the government to spend elsewhere – to which Obama said the
rationale was “fairness”. Each according
to his need…
-A very
valid point: “Any time you downplay
racism (which usually improves the situation), you are accused of racism. Every time you make an accusation of racism,
you exacerbate it further, often out of line with the level of crime.”
-Emphasizing
the dangers of domestic Islamophobia while simultaneously ignoring the greater
prevalence of anti-Semitic acts in the United States.
The moral of
the story is that there is a class of people in this country who believe that
they have moral authority on their side, regardless of the facts (or lack
thereof) that back them up. In other
words, “moral narcissism is the enemy of moral clarity”.
