Sunday, April 19, 2009

Why Statists Always Do the Wrong Thing

"Statists" are those who believe that society, economy and culture flow from the actions of the state, who believe that without the state to manage and organize and regulate and ration, human existence would not be possible. Statism is the viewpoint of the parasite: No parasite could ever conceive that its activity is inessential to the body as a whole, much less deleterious. That idea is simply beyond its ken, like asking someone to imagine the world that will exist when he is no longer in it. Of course there is no such world! The world began the day of my birth and will come screeching to a halt the moment I die! Which will be never!

Because the parasitic viewpoint is so skewed and blinkered, statists are constitutionally incapable of generating the right response when things start to go haywire. (This may also be due to parasitism having caused the breakdown to begin with.) Surely now we must do more!, cry the statists. More of what we do so well: tax and spend, tinker and "experiment" (as the Obama administration is doing, in explicit imitation of FDR's New Deal), forbid and compel, stipulate and decree - then tax and spend some more.

As with all human behavior, the bottom line is self-interest. For instance, statists cannot comprehend the need for individual or national self-defense, and - for obvious reasons - feel very threatened by it. Is a man's own home his castle? Does a man have a right to secure the borders of his own territory? Is a man's own property inalienable? Does a man have a right to the fruit of his own labor? What is this word "own?" wonder the statists, sincerely. What's yours is ours, and what's ours is ours. It's all just lying around here to be taken. What's the problem? Why would you want to keep anybody else out? After all, that's how WE got in ...

The idea that wealth can only be created by human labor is something no statist has ever grasped. For this reason, when wealth seems to be in too short supply, the statist idea of how to increase it is typically parasitic: Take more from the rich! Then print more money! The facts that wealthy societies mean increasing numbers of increasingly wealthy people, and that too much money paradoxically impoverishes all with inflation, are as foreign to statists as the Man in the Moon.

Taxation is literally sacred to statism. Even statists who have no personal intention whatsoever of paying the actual amount of tax they owe feel a shudder of sacrilege coming on when others complain about the tax code. Gloria Steinem famously said that if men got pregnant, abortion would be a sacrament. Likewise the payment of taxes, those beautiful "voluntary contributions" that make statist life so deeply rewarding, is a "rite of Spring" for statists, their Christmas, Easter and Thanksgiving all rolled into one.

Some people are born statists, and others become statists or are recruited to statism. Those who were statists at birth must surely include Bill Clinton and Hillary Rodham. Both of them just knew from an early age that they were going to grow up to be parasites.

Civil Servants in some cases do worthwhile things, and certainly don't think of themselves as parasites; but of course their good deeds are done coercively at the expense of others. Statist beneficence can only be conducted with funds extracted from the labor of persons and businesses by means of various taxes, backed up by the threat of dispossession, imprisonment or worse.

There are two main types of statist: politicians (who are usually lawyers) and financiers (who are often lawyers).

When the financiers screw up the economy too badly, they run to the Treasury Department and become politicians. As soon as profitability has been restored, they run back to the "private sector" and begin dreaming up still more "exotic instruments." Pure capitalism, which exists mostly in theory, does naturally generate cyclical profitability crises; as the system decays under parasitic pressure, these cycles become more frequent, ragged, unpredictable, irrational and extreme.

Can a parasitized state-capitalist economy be saved? "Victory," of course, for the parasite, is Pyrrhic at best. Victory for the parasite means death for the host. If the parasite could be a host, i.e., could be a self-sufficient productive organism, then it would not be a parasite. Predator, parasite and prey: all forms co-exist at all levels, high and low, of life, always have and always will.

Thursday, April 9, 2009

And in Vodka, Even More Veritas

A 2002 thriller called Vodka by Boris Starling is a goldmine of lore about the great spirit and its spiritual homeland, Russia, as well as the intricate ins and outs of privatization in the early 90s. Too bad the novel has to drape all that good stuff on a framework of sick and far-fetched murders ... The passages about vodka (which Russians offer by asking "Will you take a hundred grams?," much as Scots, another world-class drinking people, ask "Will ye tak' a wee dram?") are so good they instill a longing for Happy Hour to arrive already ...

Here is a distillation of Starling's vodka veritas; most of the passages in quotes are from the mouth of Lev, a Moscow mafioso who happens to be the director of a major vodka distillery:
The vodka in the glass lurched as he sat heavily into the chair opposite her, but the preservative balance innate to the hardened drinker ensured that not a drop was spilled.

Vodka is just about the only recession-proof industry; the worse the economy gets, the more vodka people drink. In many of Russia's cash-strapped regions, vodka was a stable currency, making it as profitable as diamonds or oil. ... [T]eachers in Murmansk were receiving their salaries in vodka ... The nation's consumption of vodka borders on the heroic, and the figures remain staggering no matter how many times you hear them: Russia accounts for four-fifths of the world's vodka; a million liters are downed in Moscow each day; the average Russian (including women and children) drinks a liter every two days.

"...[V]odka's our lifeblood, the defining symbol of Russian identity. It's our main entertainment, our main currency, our main scourge. Vodka affects every aspect of Russian life, good and bad: friendships, business, politics, crime, and the millions of Russians whose lives are lonely, embittered, and tough. If there's one thing that unites the president with the frozen drunk found dead on a Moscow street, it's vodka. Vodka's always been the great equalizer, from here in the Kremlin down to the hovels. ... No matter what's going on up above - monarchy, communism, capitalism - there's always vodka, and all life goes through it. Our history and our future depend above all on one thing: vodka, and our relationship with it."

"Vodka is all things to all men. It can be a folk medicine, a hallucinogen revealing the mysteries of the soul, a lubricant more commonly applied to sophisticated machinery than any conventional liquid - and of course it can simply be vodka too. Every aspect of the human condition finds its reflection in vodka, and its exaggeration too. Russians drink from grief and from joy, because we're tired and to get tired, out of habit and by chance. It warms us in the cold, cools us in the heat, protects us from the damp, consoles us in grief and cheers us when times are good. Without vodka, there'd be no hospitality, no weddings, no baptisms, no burials, no farewells. Without vodka, friendship would no longer be friendship, happiness would no longer be happiness. It's the elixir sipped sociably, spreading gregariousness and love; it's also the anaesthetic without which life would be unendurable. Vodka's the only drug that enables the dispossessed to endure the monstrously cruel tricks life's played on them. It's the only solace for desperate men and women for whom there's no other release."

"Isidor, the inventor of vodka": A cleric, Thessalian Greek, who was imprisoned by Vassily the Third and rationed to water and grain. Isidor distilled the two together to make an alcoholic spirit that he offered to the guards. When they were comatose, he escaped. ...

Okhotnichaya vodka [dark brown in color] was drunk by hunters returning from the hill. She sniffed at it and smelled aniseed; swirled it in the glass and sniffed again, finding ginger and pepper. When she drank it, she tasted the other ingredients - port, cloves, juniper, coffee, orange, lemon, tormentil, angelica.

Vodka owes its popularity in America largely to its suitability as a cocktail base, which in turn stems from what Americans perceive as its lack of aroma or taste. For Russians, drinking vodka with mixers is [the greatest of crimes].

Ultraa ... was distilled using the pure oxygen-rich waters of Lake Ladoga ... and its recipe was based on one that had been used in the czar's imperial palaces ... delicate, lightly sweet aroma, touches of needle in the smooth taste, very slight oiliness of texture.

"Why do I like vodka? That's like asking why it snows in Russia. Only a foreigner could ask such a ridiculous question. It's like asking for a definition of the Russian soul."

... Two vodkas to taste. Russkaya had been filtered through birch-tree charcoal and quartz sand, and tasted of cinnamon. Altai Siberian was sweet, rich and oily, smoothed with glycerine and lingering long on the palate, without a background burn worth mentioning.

How not to get drunk: "Smell the vodka first, take a sip and hold it in you mouth for a couple of moments. Then you swallow, and right after that you eat something. After every toast, a chaser; it's the beauty without which the beast is incomplete. Getting drunk is all well and good, but it's not the entirety of what vodka's about."

They broke for lunch ... discovering with unexpected pleasure the way vodka brought out certain flavors in sausage, dill cucumbers and pickled mushrooms ... "Vodka's a wonderful drink. It's good with food, before food or after food. ... There's no such thing as Russian cuisine, just things that happen to go well with vodka."

He offered some Pertsovka, nut-brown with red tinges. It contained infusions of cubeb berries and pepper pods, red and black. Touches of aniseed and vanilla played on the nose ... surprisingly sweet on the lips ... the aftershock from the pepper suddenly ignited the gums and tongue. ... "Pertsovka highlights the seasoning and nuttiness of rice. Vodka does that, you know, brings out the flavors in food. If you have herring and sour cream, the vodka melts the cream's richness and slices through the herring's oiliness. Or take caviar. Vodka promotes beluga's creamy, nutty relish, together with a hint of sweetness that recalls almonds and marzipan. The lightly fishy, brie-and-roquefort taste of oscietra becomes even smoother with vodka. And vodka softens the sea-salt flavor of sevruga, which can be a little harsh."

When she looked back toward St. Basil's, she saw the domes as vodka bottles. Vodka, not religion, was the true opium of the masses. ... When she looked again she saw the onion domes - Russia's other perfect symbol. Onions have multiple layers, and the more you peel away, the more you weep.

There was no quicker or surer method [of rising to a big occasion] than vodka, the cold rushing river that swept her away from the dangerous rapids of trouble and stress and into the calmer pools of happiness and contentment. A quick dab of the elixir, and gone was her gauche and tense self ... Vodka was a liquid makeover from the inside out.

"Two-thirds full only. Only philistines fill to the top, because they don't mind spilling vodka down their shirtfronts. And this is good vodka - Kubanskaya, made by Cossacks in the Kuban lowlands, a little bitter."

"There are two types of vodka: good and very good. There can't be not enough food; there can only be not enough vodka. There can be no bad jokes; there can only be not enough vodka. There can be no ugly women; there can only be not enough vodka. There can't be too much vodka; there can only be not enough vodka. The first glass is drunk to everyone's health; the second for pleasure; the third for insolence; and the last for madness. So - to your health!"

The cold simplicity of vodka was an invitation to toss a glassful down the throat and wait, eyes watering, for the lovely blast in the stomach as the liquor explodes. Vodka lacks the subtlety of whiskey and the bourgeois splendor of brandy, but in its craggy purity it stands on a peak of its own.

[Brendan Behan likewise observed that "There is no such thing as a large whiskey."]

"When it comes to mixing vodka with food, you can take the high road - caviar, smoked murlofish, veal Apraksin - or you can take the low road: herring as bony as you can find, or pink Ukrainian fatback. Both paths are equally worthy of respect. Whichever one you choose, you'll find tomatoes, mushrooms, peppers, cabbage and sauerkraut. All are honest, upstanding chasers, as beautiful as any Grecian urn and as virtuous as a pre-Nabokovian teenager. Do you know why vodka goes so well with food? Because so many foods are suitable base materials for vodka. You can use anything with a starch content that can be converted to sugar: barley, rye, maize, wheat, beet, onion, carrot, apple, pumpkin, bread ... even chocolate."

[Not to mention grapes, a la Ciroc.]

"You don't need medicine in Moscow. Vodka's the cure for all known ills. Stomachache? A glass of salted vodka. Flu? Peppered vodka and a hot bath. Fever? Rub vodka all over your body."

"A Russian's like a sponge, you see. You don't know his true shape until he's soaked."

"I'm trying out a new process of triple rectification. The first distillation takes the purity up to eighty percent, the second and third to the high nineties. Try some ... Exactly! It emphasizes purity at the expense of character. Peter the Great loved triple-distilled vodka. Maybe we need to dilute it with some anise, perhaps some other congeners too, because as it is it tastes like Absolut. Typical Swedes - take the danger out of driving and the character out of vodka."

"Have you ever heard the saying Ne pesh, ne mesh - if you don't drink, you're not one of us? In this case, it's slightly different. Ne beresh, ne mesh - if you don't take bribes, you're not one of us."

He picked up a three-and-a-half-ounce glass. "Handwashed in spring water - no scented detergent, please. The glass is stemless, and fits neatly into your palm. This warms the liquid, which is good; room temperature is best for testing. Long-stemmed glasses are better for pleasure, when the vodka is freezing and the afterburn icy. ... The easy way to detect faults is to cut one measure of room-temperature vodka with two measures of pure, bottled spring water in a wineglass, swirl it to release the vapors, and then inhale."
"It smells of toffee ... a faint layer of caramel too."
"They both mean the same thing: diacetyl, burned sugars from incomplete fermentation. You're right, that batch is not good. We'll have to throw it away. Perfumes are a dead giveaway. Amyl alcohol smells of nail polish remover, DMTs of boiled cabbage or drains. Acrolein is sharp, acrid and pungent. The scent of green apples means acetal. Methyl thiazole, you can't mistake that one, it smells like cats. What else? Oh yes, ionone, that's heavy and sweet. All are bad news. Now, how about this?"
"Too heavy, too greasy."
"We've overdone the fusel oil. It's a combination of butyl and iso-amyl alcohol. We use it in tiny quantities to make the vodka smoother. Last one." It was vodka infused with horseradish.
"Flawless - flawless."

There was nothing quite like the first proper vodka of the day ... It was a ritual. It was passion, it was sensual pleasure, it was paramour.

They drank Sibirskaya, distilled from winter wheat and repeatedly filtered through birch-tree charcoal. The wafts of aniseed on the nose were repeated on the palate, this time with liquorice tones attached: a delicate and light aroma giving way to a large, fragrant taste, quite sweet and almost creamily smooth until the extra alcohol began to bite through a long finish.

"There's an old conundrum that goes like this: 'If they raised the price of vodka to the price of a suit, which would you buy?' 'Why, vodka, of course. What would I need with such an expensive suit?'"

"This is pear-drop vodka. The process is very simple, really; we spread a handful of pear-drop candies across a sieve, place the sieve in the vat and let the alcohol pass over it. Ester impurities are sweet and fruity - we've kept a small amount in, to complement the pear drops. Some distillers prefer maceration, but I've always believed in circulation: six times a day for a week, and then the vodka's pumped into barrels to let the flavors fuse and settle for a couple of months. Of course, you get evaporation and a corresponding loss of strength ..." Any aroma of pear drops was submerged under a slightly meaty smell, not unlike stock cubes. This was due to the unspent yeasts burned during the distillation.

He offered her some Smirnoff Black, just about the best vodka in Russia. [!!!] It's made from the highest quality neutral grain spirit, distilled in a copper-pot still to preserve the grain's natural mellowness and flavors before being filtered through Siberian silver-birch charcoal ... tones of light rye overlaid with creamy charcoal and the slightest hint of acetone, tanginess ending with a brief sharp burn.

The real healing effects of vodka, the Russians say, begin only after the second bottle. Vodka in excess, brain in recess.

She was warmed from inside, a great molten core of vodka. Her thoughts seemed to flow down endless rivers of distilled spirit. Vodka was her friend. No one else really understood her, but vodka did, vodka made everything better - until it made everything worse.

Sunday, April 5, 2009

The Morally Hazardous Economy

Aw, I only just read David Leonhardt's article in the March 11 New York Times, so the newspaper is no longer taking comments, but I gotta say ...

First Leonhardt praises the distinguished authors of a book (Looting, published in 1993) which "argued that several financial crises in the 1980s, like the Texas real estate bust, had been the result of private investors taking advantage of the government."

Then Leonhardt notes, "This form of moral hazard — when profits are privatized and losses are socialized — certainly played a role in creating the current mess."

("Moral hazard" is an economist's term for "risky behavior" caused by such things as the existence of taxpayer guarantees of losses. For instance, the FDIC uses taxpayer money to insure individual bank accounts up to $100,000 [now $250,000] - just as the Fed is now using yet-to-be printed trillions in taxpayer money to buy - again - toxic "assets" that shouldn't have been bought in the first place.)

Finally, Leonhardt repeats his prescription to cure this lamentable tendency of Wall Street to "take advantage" of the poor old well-intentioned government: "If we don’t get rid of the incentive to loot, the only question is what form the next round of looting will take." And his prescription?


Non sequitur, to put it mildly. Statism turns the "incentive to loot" into the only operant motive for economic behavior and
the entire economy into a moral hazard. Nationalization will make Ponzi schemes look like good old-fashioned bootstrap capitalism.

The American taxpayer, that stolid, solid, plodding workhorse of the world. Oh, we are Fortune's fool! The world seems to be betting that we'll keep on being played for one, too ... which is the saddest part.