adrock3215
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Posts posted by adrock3215
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The active / passive distinction is exemplified by pairs such as "The boy saw the girl" (active) vs. "The girl was seen by the boy" (passive).
That reminded me of the few opening lines from Frost's poem "Home Burial":
HE saw her from the bottom of the stairs
Before she saw him. She was starting down,
Looking back over her shoulder at some fear.
She took a doubtful step and then undid it
To raise herself and look again.
At first, she is the object being seen by him, but then the situation reverses and he is the object being seen by her. Not that it's entirely relevant, but I was just reminded of it by David's psot.
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In the first sentence the boat is the subject that shatters (undertakes an action) Joe's solitude.
Right, but the issue is that it is not the subject of the sentence. The boat is the thing that is acting upon Joe's solitude, but it is not the subject of the sentence.
The difference would be more clear if you had written in the first sentence: "Joe's quiet solitude was shattered by a motor boat." That would be the textbook example of passive voice, because the subject of the sentence is Joe's quiet solitude, and it has an action performed on it. In the active voice, since the motor boat is performing the action and Joe is being acted upon, the subject of the sentence should be the motor boat.
EDIT: Deleted. Sorry, source, I didn't read carefully enough before I replied!
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Your second sentence is better.
Stylistically, I don't like the passive voice, but that doesn't make it wrong in and of itself. It's not wrong to use it, and there are instances where it should be used. However, consistently using it does detract from the meaning and clarity of a writing. In order to avoid it, I think you are supposed to keep in mind that the grammatical subject of any sentence should be the actor of the sentence. When writing in the passive voice, this is not the case. The subject of the sentence is the object that the action is performed on, rather than the actor performing the action.
I think (someone correct me if I am wrong) that in your first sentence, the subject is "Joe's quiet solitude" but your actually talking about the motor boat, while in the second the subject is the "motor boat" and you are actually talking about the motor boat. Therefore, the meaning of the second sentence is more clear.
By the way, I think Rand uses the passive voice a lot, particulary when telling the history of someone like Gail Wynand or Francisco. That may be one of many reasons why she is frowned upon in English departments. I'll have to check on that though.
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Ron Paul has some interesting things to say about the financial mess and the government bail outs. I disagree with his foreign policy, but he is on target regarding the cause of the economic breakdown. And he is one of the few politicians who has come right out and said that the bail outs are immoral on the grounds that it is immoral to take money away from productive people and give it to the unproductive.
There's a video of him in the House yesterday located here. He does strike out against the morons in the House about the auto bailout.
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Or at least we speak different languages. "Symmetric," in my language, means that the two are mirror images of each other--so that the peaks on the one correspond to the troughs on the other...
Ahh, ok. Sorry; we are on the same page then.
With that in mind, and regardless of the definition of that word, does this graph show a correlation between the rate of growth in the money supply and the Federal Funds rate? Please answer yes or no, and provide the relevant reasoning. If yes, what exactly is the correlation, according to you.
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True dat, but may I point out that she was presenting Philosophy, and you can present a new philosophy via fiction, due to its nature.
The better and more precise point is that fiction is philosophy, due to its nature.
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I maintain that the eventual effect of permanent operations is just a permanent addition to the money supply, and that it is the temporary operations (i.e. repurchase agreements) that are used to manipulate the overnight lending rates.
The point is that monetary base is increased by injecting reserves into the banking system. When banks have excess reserves, they lend them out in the various credit markets, but primarily to other banks and financial institutions via the Fed Funds market.
(Chuckle) What you showed is that the Fed's balance sheet contains a lot of securities held outright and not as many repurchase agreements, which is not at all surprising given that an outright purchase becomes a permanent addition to the balance sheet, while a repurchase agreement only stays there until it expires. So the current balance sheet includes all outright purchases ever made (minus any outright sales, which I think are rare), but only those repurchase agreements that have been made recently and have not yet expired. The figures we would need are the ones showing the total dollar value of outright purchases within a given period, vs. the total (not net) dollar value of repurchase agreements made in the same period.You made another mistake in this paragraph. It is not rare for the Fed to outright sell securities. They do that all the time. In fact, the Fed has actually sold 300 billion of Treasury securities since July. The expansion of the balance sheet is occuring right now via the new channels put in place during this financial crisis. Either way, when Greenspan was raising rates a few years back, Treasuries were being sold by the Fed. What will happen after this crisis passes is that the Fed will again sell Treasuries and raise interest rates in order to cool the coming inflation. That's why the smart money is shorting Treasuries right now.
Regardless, there is no such thing as a "permanent addition" to a balance sheet. All entries are susceptible to change. If you've taken accounting, you know that a balance sheet captures only a particular moment in time, not a period of time. It therefore reflects all of the current assets, liabilities, and capital of the firm (Fed in this case). If you think that balance sheets never change, you should take a look at the balance sheet of GM...that thing is total garbage. Balance sheets change every day if a company is publicly traded, because the value of the total equity worth of the company changes. For instance, since Assets=Liabilities+Equity, either Liabilities have to fall, or Assets have to rise when the stock value increases.
Now, you can look at the Fed's balance sheet at different points in time historically (week by week, every Wednesday), and see that Repo's are a very minor part of monetary policy implementation, and as such, have little to do with the manipulation of the Fed Funds rate.
Actually, the chart seems to make my point: the two graphs are not always symmetric, and in fact both appear to exhibit a distinct downward trend in the long term.Cap, I feel like we're on different planets here. The chart should not be symmetric. If money growth is correlated to the FFR, then a higher % growth rate in the monetary base should correspond to a lower FFR, and a lower % growth rate in the monetary base should correspond to a higher FFR. That is precisely what the graph shows. When the Fed has a low target FFR, the rate of growth in the MB has been high, and vice versa. That's why the peaks on one line correspond with the troughs on the other.
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As for what adrock said, I have a preference for non-fiction just because I invest more of my time in fiction anyway. And as nice as it is to have these poetic, esoteric discussions of man, one really needs to be able to speak in specifics and to ground ones beliefs in facts, which one needs the non-fiction for.
Individuals need both fiction and non-fiction, I do agree with you on that much. However, fiction is more important because it forces its reader to integrate knowledge completely. It forces you to reason from concretes to abstractions, and thus is indispensible to a well-rounded individual. Rand would not have had the same effect on me if she only wrote non-fiction. When I was new to Objectivism, the characters of Roark and Francisco were a rough guide to my action.
"Poetry is more philosophical and more serious than history. Poetry tends to express universals, and history particulars. The universal is the kind of speech or action which is consonant with a person of a given kind in accordance with probability or necessity..." - Aristotle from The Poetics (Sec 5.5)
Also,
"Fiction is not fact, but fiction is fact selected and understood, fiction is fact arranged and charged with purpose." - Thomas Wolfe from Look Homeward, Angel
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Why is non-fiction so popular in Objectivist circles? I like non-fiction, but it doesn't exactly make for great discussion. There are so many great works of fiction in the Western Canon (Shakespeare, Milton, Dante, Virgil, Lucretius, Camoes, Moliere, Ovid, Horace, Stendhal, Austen, Dickens, Dostoevsky, Proust, Ibsen, Wilde, Melville, Faulkner, etc, etc, etc) that will teach me far more about the human condition than non-fiction will.
To me, there's nothing more enjoyable than untangling the abstractions and meaning of a skilled work of fiction, most particulary from an Objectivist perspective.
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The natural state of man is to be dominated by powerful men and institutions, and then by his needs, I think (I could be wrong but I think I speak for a certain tradition of thought on the matter). This isn't a desirable thing, but that's no reason to try to deny it. Rights are a statement that domination must have limits, if we are all to realize our full potential. Without the force of government eliminating criminals who would harm you or steal your property, the "coercions" and the influence of "contrived goals" would encounter on a daily basis would only increase.
Oh, ok...so he is going to go along with the Hobbesian state of nature outlook. That's easy enough to disprove, since there have been anthropological studies showing that the state of nature was actually far more Lockean than Hobbesian. He is entirely consistent with his reasoning though. I assume he's a stinky "intellectual" liberal; incidentally, most stinky "intellectual" liberals are Hobbesians who deny the existence of free will and have a very pessimistic view of man's capabilities.
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I'll have to ask you too for your definition of credit expansion. I am interested in knowing:
- What you think is its essential defining characteristic;
- Whether it means an increase of the money supply; and/or
- Whether it means a lowering of some interest rate.
I think the process you described is how the Fed increases the money supply, which is distinct from how it manipulates interest rates.
This is an incorrect statement. These two actions are not distinct, they are intimately connected. Here's how: The Fed manipulates the interest rate through its control of the monetary base. There are three ways that the Fed implements its policy decisions:
- Open Market Operations
- Setting Reserve Requirements for the banking system
- Loaning directly to financial institutions through the Discount Window
Several more mechanisms are currently in effect during this financial crisis, but it is said that these are temporary and will be eliminated when the crisis passes. Therefore, they are not in any sense a primary way of conducting monetary policy. Moreover, the last two are not used often to implement policy. That leaves Open Market Operations. You can see on the NY Fed's website here the importance of these. I will bold the important parts. Let me quote from it:
Open Market Operations: The Bank implements monetary policy primarily by conducting temporary and permanent open market operations. By buying and selling government securities, the Bank affects the aggregate level of balances available in the banking system, and thus impacts the federal funds rate.This statement right here, taken directly from the Fed's website, already disproves the final statement of your post. Probing the site deeper, it tells us what the Fed Funds rate actually is: "The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight." Then, the site shows the two channels of Open Market Operations:
- "Temporary open market operations involve repurchase and reverse repurchase agreements that are designed to temporarily add or drain reserves available to the banking system."
- "Permanent open market operations involve the buying and selling of securities outright to permanently add or drain reserves available to the banking system."
I detailed this process in my post above, and showed that the overwhelming percentage of Open Market Ops are the so-called "permanent open market operations."
I hope this is clear. If not, I present the following graph comparing the growth in percentage terms of the Monetary Base (remember MB=R+C, as I defined above). As you will notice, the Monetary Base growth rate is high when the FFR is low, and vice versa. That's why one is at a peak when the other is at a trough. Conclusion: Growth in the Monetary Base and the FFR are intimately connected.
Now, I am going to answer your question about credit expansion while disagreeing with softwareNerd. He wrote: "To be precise, the Fed does not actually expand credit itself."
The Fed does create the initial expansion of credit. The key point is that fiat money IS credit. Whether or not the Fed is creating reserves or running the printing press, it is creating bills of credit, i.e. dollar bills, and it is liable for them in the future. It used to be that the Fed was liable for redemption of a bill in gold; now, the Fed will take your dollar bills and give you more dollar bills, because we are not on any hard money standard anymore. Regardless, the fact remains that the printed bills are a liability of the central bank. The central bank is liable for the dollar bills in the economy, and the reserves that financial institutions hold in accounts at the Fed--that is why both are subsumed as credit.
A credit expansion means an increase in the supply of credit in the economy. Since fiat notes are bills of credit, when they are printed, credit expansion is occuring. Since reserves are credit, when reserves are injected into the banking system, credit expansion is occuring. The Fed itself is the primary source of credit expansion. The secondary source is financial institutions, who transform the MB into M1 (MB+demand deposits) in accordance with the magnitude of the money multiplier, as I showed in the above post. In a gold-standard economy, the medium of exchange is not in and of itself a bill of credit, it is a tangible asset with intrinsic value. This is the primary difference. We can go on a discuss a free, gold-standard economy, but I really do think that you should look around on the NY Fed's website and really understand at least how monetary policy is decided upon and subsequently implemented in the context of our current fiat system.
- What you think is its essential defining characteristic;
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The Humanities Move Off Campus
As the classical university unravels, students seek knowledge and know-how elsewhere.
I was looking for some thoughts on this article. I enjoyed it a lot, and thought that the author made some good points about the state of the modern university, so I wanted to share it. What are your thoughts?
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So an outright purchase of Treasury Bonds by the Fed is not going to have a direct effect on the demand for or supply of overnight credit and therefore on the overnight funds rate; all it does is increase the money supply. What does influence the supply of overnight credit is when the Fed supplies some overnight (or similar) credit itself, by the means of repurchase agreements.
This is incorrect, and it may be because of a bit of ambiguity in John's post.
The Fed has a trading desk in NY that communicates with the trading desks of the so-called "primary dealers" (keep in mind that the Open Market Ops of the Fed are only done with an approved list of 18 or so primary dealers...you can find the list on the NY Fed's website here). Let's say that the Fed wants to lower the Fed Funds rate through credit expansion. How would this transaction occur?
First, the Fed's trading desk would call the primary dealers and say that they want to buy (say) 10 billion of Treasury notes. The primary dealer and the central bank will negotiate a price for the bonds based on prevailing market prices. This is a requirement of the primary dealer's agreement with the Fed. Here are the specific requirements, taken from the NY Fed's website here:
As in the past, all primary dealers will be expected to (1) make reasonably good markets in their trading relationships with the Fed's trading desk; (2) participate meaningfully in Treasury auctions and; (3) provide the trading desk with market information and analysis that may be useful to the Federal Reserve in the formulation and implementation of monetary policy.Ok, so the Fed has called the primary dealer and stated that it wants to inject reserves into the banking system by purchasing 10 billion of Treasuries, and the primary dealer has to do business with the Fed by nature of its status as a primary dealer. So, after negotiating a price, the Fed will credit the reserve account of the primary dealer by the amount of the purchase. The Fed's balance sheet will change in the following manner:
Asset Side: Security Holdings +10 billion
Liability Side: Reserves +10 billion
The balance sheet of the primary dealer will change like so:
Asset Side: Securities -10 billion, Reserves +10 billion
Liability Side: No effect
In effect, the liabilities of the Fed have increased by the additional 10 billion of reserves that it created out of thin air, while its assets have increased by the 10 billion of additional securities that it now holds. It's balance sheet has simply expanded. Note that the Fed is the only entity in the world that can expand or contract its balance sheet at will. No private corporation would be able to do this, but the Fed can because it has the ability to create reserves (money) from nothing. The net effect of the entire purchase is a 10 billion increase in reserves in the banking system, and the corollary 10 billion increase in the Monetary Base (remember that MB=R+C, where R is 'reserves' and C is 'currency in circulation').
The transformation of the additional reserves into credit is an effect of the realization on the part of the primary dealer that it now has reserves in excess of its reserve requirements. Holding onto the reserves by keeping them in their account at the Fed will cost them the associated opportunity cost of not lending them out. Therefore, the primary dealer will choose to use its excess reserves either to make loans, or to purchase securities. Regardless of which is choosen, the effect on credit expansion is the same. The Monetary Base has increased because reserves have increased, and M1 increases in proportion to the magnitude of the so-called money multiplier. Another way to say this is that the supply of loanable funds has increased (i.e. a bunch of money was created from nothing), and therefore the overnight (Fed Funds) rates will decrease.
The primary source of credit expansion is NOT repurchase agreements (John McVey is wrong here, right now its actually through the Term Auction Credit Facility and through the mysterious 'other loans' entry). You can see the Fed's balance sheet here. You will need to scroll down to item 7 titled, "Consolidated Statement of Condition of All Federal Reserve Banks." Here is a picture of the asset column from last Wednesday (Dec 3) with the relevant item highlighted in red:
As you will note, Repos account for 6.54% of the Fed's assets (80,000/1,223,186) as of Dec. 3. The week of Nov. 26 they were zero.
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Crook County's finest....
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"Dollars" are not property in the sense that this computer is, or my house is. They're a mechanism by which the government provides people with the service of buying and selling; they have zero intrinsic value, and thus the government isn't really taking anything tangible when they relieve you of them.
Dollars are not a mechanism by which the government provides people with the service of "buying and selling." Dollar bills are money. The function of money is three-fold:
1. Store of value
2. Medium of exchange
3. Unit of account
There is nothing about these 3 functions that necessitates government control.
Now, in so much as him saying the dollars has zero intrinsic value, he is right. The only value placed on the dollar is due to its marginal utility as a medium of exchange. Its status as a medium of exchange is declared by fiat, so people accept it on the premise that the government will continue accepting it. If we knew that the government is going to collapse tomorrow, then the dollar bill would be entirely worthless, and people would wiping their asses with them and scrambling to get resources with intrinsic (actual) value, i.e. gold, silver, real estate, an Armani suit, a bushel of wheat, whatever. Something tangible. He's right that the dollar is not tangible, but it still is my property in the sense that I have traded tangible goods to receive it. If we agree with his reasoning, then a borrower can simply decide to renege on a contract to pay back a debtor, because the contract is intangible and has no "intrinsic value." Factually speaking, this is exactly what the government would be doing if they "relieved you" of your dollars--they would be defaulting on a loan that I gave them, i.e. my tangible goods in exchange for their banknote.
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Normal banks all have accounts with the Central Bank in its capacity as a clearinghouse, called Exchange Settlement accounts (in Australia anyway, maybe named differently elsewhere),
Great post John! By the way, for Cap and others, these accounts are called Reserve Accounts in United States Fed jargon, and the overnight rate between banks is called the Fed Funds Rate.
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Hey, this is really quite good. I searched Youtube, and there are many other recordings of the same work. I like it!
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Currently I am reading various sections of the Old Testament.
I will be reading the following books next:
Toilers of the Sea by Hugo
Intruders in the Dust by Faulkner
How to Read and Why by Bloom
Einstein by Neffe
Robinson Crusoe by DeFoe
Look Homeward, Angel by Wolfe
Thoreau: A Life of the Mind by Richardson
The Last Days of Socrates by Plato
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I agree largely with what you are saying here, but there is technically an exceedingly broad principle that governs our use of force.
Your point is well-taken. I said "there isn't a set principle that a cop can always resort to", but I suppose that this is technically untrue, because officers do consult a principle, it's just wide enough to give them latitutude (I guess this is characteristic of a principles--it needs to be contextually applied).
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I understand it is not always that easy, but I hope that illustrates the general principle.
The issue is that it is not that easy, and therefore there isn't a set principle that a cop can always resort to. Every single decision a cop makes must be made contextually, and the cop should be free to make contextual decisions. There are so many factors that should be taken into account in the decision, that to bind the cop to some sort of standardized thinking procedure would be to condemn him to death.
Here are a few factors, for instance, that may go into a cops decision at any given moment: crime being committed, time of day, location, fellow officers, his previous experiences, lighting and visibility, his life, reputation of neighborhood, community he is in, clothing of suspect, appearance/race of suspect, amount of bystanders, amount of readily available backup, time it will take until backup arrives, his family at home, his career, the victim's life, the suspect's life, car the suspect is driving and whether or not it has tinted windows and chrome rims, weapons he has, weapons suspect has, etc.
Like RationalBiker said: Any time you give an order and it is not obeyed, it can turn into a life-or-death situation in the blink of an eye. Cops need to be prepared and able to assess the situation rationally and quickly, and make a decision under pressure.
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If a cop swings at me for insulting him
Right, but the question is "Why are you insulting him?" Let's forget about his reaction and talk about your action. Is it because you just have this stereotype that all policemen are evil, and so you felt like hurling a few insults at him? If so, the whole problem could be corrected if you simply stopped yelling insults at him and just gave him a smile.
To tell you the truth, your entire way of thinking is argumentative and shows that you already have your mind made up. There are not too many instances of individuals going about minding their own business when suddenly a cop jumps out of a bush, whacks the guy in the jaw, and runs away. While these types of things do happen, they are negligible in number.
I know exactly what kind of people have problems with cops. It is spoiled know-it-alls from the suburbs who got their skateboard taken by a cop because they continued to skate on private property after being asked to leave 3 times.
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You have to select an ultimate purpose, and then evaluate each secondary goal in terms of how it works towards the ultimate goal.
I think it is inaccurate to state that "you have to select an ultimate purpose." There is no selectivity involved. Life is the final and ultimate goal for every rational being by default (law of identity). The issue at hand is whether or not one recognizes it as such. The only ultimate goal is life. If you want, you could state that your ultimate goal is getting an A in your college class, and you could evaluate your secondary goals in terms of how they work towards getting an A, but neither one (nor both together) makes getting an A in your college class your "ultimate goal". There is not a buffet of "ultimate goals" sitting around that you can walk by and pick and choose your own "ultimate goal". That's called Existentialism. An individual must evaluate secondary goals in terms of how they work toward furthering his life, if he wants to stay alive.
But let's say that he's in a concentration camp and is going to be gassed tomorrow, and therefore he plans on killing himself before the Nazi's can. We could say that he "values" suicide, but when we introduce the term "value" we are implicitly introducing the concept "life", since there can not be one without the other. Therefore, in so much as he is valuing his suicide, he is doing so in the context of comparing it to his ultimate goal, i.e. life. That's why Rand wrote (paraphrasing) that stepping in front of a gun pointed at your spouse is like saying: I can't live without this person, so I am willing to die. Despite the fact that the individual may die, his action is still evaluated in the context of furthering his life.
For the original poster's example, and going to what you said: 3 cannot be an ultimate goal because it is not his ultimate goal. Only 1 is his ultimate goal, so it's a matter of recognizing that fact and acting accordingly.
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My thought was that perhaps a new "greater goal" could arise after being presented with the choice to live.
It would help you to read Aristotle's Nicomachean Ethics. Here is the relevant section:
http://www.sacred-texts.com/cla/ari/nico/nico007.htm
Here is the relevant quote:
So the argument has by a different course reached the same point; but we must try to state this even more clearly. Since there are evidently more than one end, and we choose some of these (e.g. wealth, flutes, and in general instruments) for the sake of something else, clearly not all ends are final ends; but the chief good is evidently something final. Therefore, if there is only one final end, this will be what we are seeking, and if there are more than one, the most final of these will be what we are seeking. Now we call that which is in itself worthy of pursuit more final than that which is worthy of pursuit for the sake of something else, and that which is never desirable for the sake of something else more final than the things that are desirable both in themselves and for the sake of that other thing, and therefore we call final without qualification that which is always desirable in itself and never for the sake of something else.The rest of Chapter 7 is relevant as well.
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Person A chooses murder of person B as his primary goal in life ---> life is his primary value (murder can't be commited if he's dead) until murder of person B is accomplished (then his life has no value) ---> Person A commits suicide
The central choice of Objectivist ethics is the choice to live. As far as I know, Objectivism will not tell you why you should choose to live. In fact, nothing will tell you that objectively, because (as Aristotle wrote) life is the ultimate end in itself. In other words, you don't choose to live in order to achieve a greater goal. You choose your goals so that you may live. Objectivism tells you: once you have choosen to live, here are the values and virtues you should pursue.
There is no objective justification of pursuing the murder of someone on the basis of "I don't like him because he smells bad." It is an irrational fantasy, and it is not a morally proper goal. In your scenario, if your guy has choosen 1 and 2, then he is morally forbidden to choose 3, and so 4 will never happen.
The Coming Auto Bailout
in Economic News
Posted
Surprised nobody posted this before me. It looks like it collapsed in the Senate: