Now, blog writers do craft catchy leads for impact. I could have written, “I gave away a pile of old clothes, books and junk, which collectively comprised 51% of the individual objects I owned.” Yawn. But overdramatic phrasing aside, this action greatly improved quality of life.

But possessions merely chipped a bit from a Sisyphean boulder of excess.  The real application for this “fewer, nicer” philosophy is time and attention.  I long resisted hard decisions, because I have so many interests, in no particular hierarchy.

I finally chose a crucible:  do fun things that have more direct impact on the rest of the world.  The top of that list includes both the whimsical (playing in my band) and the serious (developing, using and publishing investment tactics to clients in 8 countries).

Near the bottom of the list is this blog, which deals in subjects that interest me, but about which I have little leverage for direct action or impact.  So with great reluctance, I conclude it must be the first thing to go.

I write compulsively (figuratively, not clinically).  To prevent posting in moments of caffeine-infused weakness, this site has been converted from Wordpress to static HTML, where it remains readable but not easily editable. Just a safeguard.

And so, to my ~5 readers, I bid adieu.  There will be more blogs someday, I suspect.

It’s easy to see how an evolutionarily stable subset of humanity could arise that compulsively takes insane risks to gain leadership positions.

Various primates, including humans, tend toward social hierarchy, with a greater or lesser tendency for there to exist a single male leader that may greatly, sometimes wildly out-reproduce the rest.  For example, the current state of genome evidence suggests that 8% of all Asians are descended from a single male less than 2,000 years ago, presumed to be Genghis Khan.

Evolutionarily, that kind of payoff is worth some risk. A lot of risk, in fact. Even an action with an 90% chance of sudden death (”hey guys, watch this!”) is “worthwhile” if the increase in reproductive success is sufficiently vast.  If the expected return is positive, evolution will make that risk-taking tendency increasingly common in a population, until the odds renormalize.

As a result, it is easy to see how something we today call a pathology — compulsive risk-seeking behavior, as occurs among gamblers, short-term traders, Kennedies, and would-be teapot dictators — is evolutionarily possible.

• Economic sanctions (Cuba, Iran, Iraq, etc.)
• Counterinsurgency (Algeria, Vietnam, Afghanistan, etc.)
• ESL education (actually slows language acquisition)
• War on Drugs (raises price, attracting more supply)
• Agricultural subsidies (negative ROI, other market distortions)
• Government housing (as opposed to successes like special zoning)

I’ll add more as I think of them — there are plenty — but it’s interesting to ask why these things would persist indefinitely, when they always fail.  A big reason may be the lack of transparency that results from a lack of careful, consistent, widely published measurements.

USA Today, 5/26/10:
Private pay shrinks to historic lows as gov’t pay rises
(private salaries fall to 41% of personal income;  public assistance reaches 18%, up 50% in 10 years)

Bloomberg, 5/24/10:
FHA volume signals ‘very sick system’
(95% of all new home mortgages are government-sponsored.)

WSJ, 4/19/10:
Rising personal consumption attributed to homeowner strategic defaults
(Chief economist of Economy.com [Moody's] attributes rising personal expenditures to the fact that 5 million households now live in homes they are not paying for.)

WSJ, 5/7/10:
U-6 unemployment still over 17%, near postwar high

Marketwatch, 5/12/10:
Tax receipts still falling
(Federal gov’t runs loss even during tax month — 4/09 and 4/10 are the only two months it’s ever happened.)

Treasury Dept:
Public debt 88.9% of GDP, rising at ~10% of GDP per year
(Fastest increase in peacetime US history, similar rate to World War II)

The dots form this picture:  epic public borrowing substitutes for normal economic activity, with no end in sight. We are witnessing a titanic battle between deflationary economic conditions and inflationary federal policy. Anything could happen. Hope it doesn’t.

Most econ commentators now admit this is a possibility, but Nostradoofus foretells that it is a near certainty, and sooner than we think.  Single digit years at most.

The reason is simple self-interest.  Peripheral EU states joined the euro to borrow more cheaply.  If they can no longer do so, and if the price of membership is now fiscal agony, then the euro has nothing to offer them but deflation and 20% unemployment.

Greece’s leadership has a long tradition of acting in its own short-term interest:  profligacy, excessive borrowing, etc.  We have no reason to expect a change in that culture, so at this point, what is in Greece’s short-term interest? Default on the euro debt and leave the currency union.  Hence that is the most likely result.

Once that door is open, other heavily indebted hangers-on are likely to leave, e.g. Portugal.

I’m looking forward to a brief window of inexpensive vacations in Santorini.

The real problem is that Keynes places unrealistic demands on a capitalist democracy.  When you encourage currency debasement, mass redistribution, interest rate distortion, et al — even briefly — you open a populist door that is very hard to close. Giveaways are the politician’s crack, almost impossible to put down once taken up.

The possible exception to this is monetary stimulus, if the central bank is sufficiently independent.

Munger spent a great deal of his opening monologue singing the praises of Lee Kwan Yew, who, as Singapore’s rather ironfisted “prime minister” from 1965 to 1990, led this tiny, resource-starved, ethnically divided, malaria-infected island nation to become one of the wealthiest, most prosperous, best educated, most stable, most peaceful and least corrupt places on earth.

Munger later commented that, while he personally liked the California climate and would not consider leaving the US, he could certainly understand the logic of emigrating to Singapore.

Anyone who has followed 86-year-old Munger over the years knows him to be a conservative Republican, steadfast patriot, supporter of the Iraq invasion, and (until recently) perennial optimist about America;  but also rational and willing to change his views. When this man says “Basically, It’s Over” for America, and that he understands the logic of leaving the US for Singapore, one should sit up and take notice.

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Compliance costs are regressive, falling disproportionately on small businesses that lack a full-time accounting and compliance staff.  Since small businesses are the biggest source of US employment, it is logical to conclude that increasing regulatory complexity measurably increases total unemployment (expanded thoughts here, here and here).

Weeks after healthcare reform passed, reporters are still trying to figure out the ramifications of the 2400-page law.  Here’s an ominous one from CNN:

Health care law’s hidden tax change to launch 1099 avalanche (ht Eric)

Some choice quotes from the article:

…in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services…

While this sounds almost exactly like existing law, the subtle addition of “corporation” and “goods” makes it vastly broader:

…under the new rules, if a freelance designer buys a new iMac from the Apple Store, they’ll have to send Apple a 1099.

So apparently every business will soon be generating 1099s for the office landlord.  The web hosting provider.  The local restaurant where sales meetings are held.  The airline.  The travel agent.

This is just the latest straw on the camel’s swayed back.  With each new sheaf of regulatory paper, the small businessperson increasingly asks himself two questions:  ”Could I offshore this?” and “Should I leave the country?”

Of course, not everything will be offshored, and not everyone will leave.  But these are not questions America’s entrepreneurs should even be asking.

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The shutdown is typical of just-in-time manufacturing systems;  break the supply chain, and final assembly runs out of parts within hours or days.  Obviously some critical component (probably lightweight and high value, such as electronic control systems) was being shipped from Germany by air.

Transnational interdependencies are bad news for the economic cost of natural disasters, but perhaps good news for geopolitical stability:  transnational just-in-time manufacturing decreases the likelihood of war by increasing its cost to all parties.

War then becomes unlikely unless at least one participant has no economic interdependencies.  For example, the US could invade Iraq in part because so few in the West had economic interests there.

How do you end conflict in the Middle East?  Install dozens of large, domestically owned, export-driven, just-in-time manufacturing plants in Iran, Iraq and Syria.  This would appear to deliver more stability than sanctions, bombing or occupation, because vested interests on all sides would then fight to preserve them.