What Value?

Thanks to the scammers, the politicians, the elite deciders and do-gooders... for all the laughs

(Source: Getty Images)

Bill Bonner, reckoning today from Youghal, Ireland...

[We spoke] “for about half an hour. And I know my bulls**t meter was redlining. It was like, this dude is bulls**t – that was my impression.”

~ Elon Musk, on a live Twitter discussion, describing his conversation with Sam Bankman-Fried

Like a dead fish or a live Congressman, the US economy continues to deteriorate.  Rotting now is the housing market. Forbes:

Home Sales Plunge To Great Recession Levels As ‘Frozen’ Housing Market Adjusts To Elevated Mortgage Rates     

Existing home sales fell in November for a record 10th-consecutive month, according to data released Wednesday by the National Association of Realtors, as the housing market continues to be one of the worst-hit sectors of the uneasy U.S. economy.

That’s a whopping 35.4% decrease from November 2021, when 6.33 million homes were sold.     

Existing home sales are down on an annual basis at their greatest pace since May 2020, when the real estate market briefly went cold early in the pandemic before exploding, and otherwise the worst mark since November 2010, amid the Great Recession.

Interest rates have more than doubled in barely 12 months. No wonder houses are getting hard to sell.

But we’re not going to worry about it, not today. We’re getting in the spirit of Christmas, here at the Irish headquarters of Bonner Private Research…

A Time for Giving

We would like to express our gratitude to our leaders…the movers and shakers…the deciders…the elite…the Establishment and the Deep State…

…and their lackeys in the mainstream press…for making 2022 so entertaining.  Their lies, hypocrisy, incompetence and stupidity haven’t caused a nuclear war – yet. But they have given us an almost daily ration of laughs.

The year already had more than its share of jackassery…and then – what ho! – along comes SBF and FTX. And the more we learn about it, the more we need to pour a drink and dig further.    

To begin, we found out recently that Mr. Bankman-Fried had a lot of help from Mr. Bankman and Ms. Fried, his parents. Mr. Bankman teaches international tax law at Stanford. He ‘wrote the book’ on tax shelters, say colleagues. And it was apparently he who set up the business in…what else….a tax haven, the Bahamas. He was also instrumental in setting up Alameda Research and acting, effectively, as its legal counsel.   

Thanks, Dad!

As for Ms. Fried, she wrote of her two sons, that they  “have become take-no-prisoners utilitarians, joining their father in that hardy band.” She did not include herself in that hardy band, but she might have. She, too, is a world-improver, deeply involved with Stanford’s Center on Poverty and Inequality.

Uh oh. And there we have the problem. Whatever education and social distinction his parents gave to their children, they also gave them a foolish, on-its-face preposterous philosophy. This is what led, like a bad odor to an open drain, to the creed of “effective altruism,” the shroud behind which the scoundrels hid.

A Very Simplistic Idea

Utilitarianism is a very simple idea, developed in its modern form by Jeremy Bentham, whose body is now pickled at the University College, London. The idea is that you should always try to do whatever will give most people most happiness.  It is such a silly idea that it is amazing that anyone takes it seriously. It is a branch of ‘consequentialism.’ But the obvious problem is that we never know what the consequences will be.      

We don’t know what will give most people most happiness. WWI? The War on Poverty? McDonalds tells us that “happiness is in the bag.” Is that all there is to it…a Big Mac and cheese for everyone? Nor have we any way of knowing whether ‘happiness’ is a worthy goal for anyone. Nor do we have any way of measuring it…or of its opposite, unhappiness. If Donald Trump or Joe Biden were assassinated, for example, it might bring happiness to a great many…and unhappiness to a great many more. Should the unhappiness of the weeping masses be considered? After all, they’ll get over it, while the happiness of those celebrating will presumably last. Death is a permanent condition; mourning is temporary.

In short, the ‘utilitarians’ have no way of measuring the utility of what they are doing…or of knowing whether it is of any use at all. So, they take a shortcut – they try to make the world into something that they, personally, would find more charming.

Pope Urban II approved of removing the muslims from the Holy Land. Adolf Hitler thought removing Jews from Europe would have pleasant consequences.  The war in Vietnam found favor in Lyndon Johnson’s eyes. In the 20th century alone, the death toll from ‘consequential’ programs was over 100 million. And almost all world leaders today are convinced that future generations will thank them for eliminating fossil fuels.

Will they? Who knows? That is why consequentialism is a fraud. It’s also why the common sense of the common people is so often at odds with elite programs. The deciders think they know what is best for everybody. And they’re ready to impose it on them.  

Long Term Kapital

The common folk simply follow the rules. One of the Ten Commandments, for example, is ‘thou shalt not kill.’ We can think of a lot of people without whom the world might be a better place. But we’re not about to kill anyone to find out. Rules don’t guide you to any specific place…but they keep you from blowing yourself up along the way.

The utilitarians, however, eschew rules. It’s results they’re after. And the ‘effective altruists’ of the SBF persuasion take the nonsense a few steps further.  

First, they think they should earn as much money as possible, so they can give away as much as possible. Have any of them seriously thought about this? Earning money means you are adding to the wealth of the world. If you are earning a lot, it means the difference between the goods and services you provide…and the cost of providing them…is high. That is, you are ‘adding value.’

Logically, the way to add more value is to invest wisely and earn more. 

Instead, SBF and the EA (effective altruism) crowd think they should give their money to people who don’t add anything to the world’s wealth. This reduces the world’s wealth, but it makes the givers feel better about themselves.

It also covers up a lot of sin. If you think you are earning money for a good cause – to give it away! – you may feel a little, well, like Robin Hood. Why not rob the crypto fantasists of America in order to give to unwed mothers of Pakistan? Wouldn’t that be for the greatest good of the greatest number?

No matter.  

The other nuance of the EA enthusiasts was to take the very long view. Will MacAskill, a Scottish philosopher and one of the 'guiding lights' of the effective altruism 'movement', became a kind of guru to the young dreamers in the Bahamas. He argued that EA needed to focus on ‘longtermism:’  

“Humanity might last for a very long time… Barring catastrophe, the vast majority of people who will ever live have not been born yet… [W]hat we do today can affect the lives of future people in the long run.”

What, then, shall we do that will help our great, great grandchildren? Whatever the answer to that question might be, it is not ‘scam them with cryptos.’

Regards,

Bill Bonner

Joel’s Note: Speaking of whiny do-gooders, unintended consequences and the plight of the US housing market, here’s a neat little dovetail…

An uber-progressive county in (where else?) San Francisco just became the nation’s first to pass a law banning criminal background checks on housing applicants. Considered “discriminatory,” the law also prevents landlords from advertising that people with criminal records “need not apply.”

The county, you’ve already guessed… Alameda!

The law says nothing about the implicit advertisement the county just made to the nation’s criminals: Got a rotten record? Welcome to Alameda!

Supposedly, the move is part of the county’s “war against homelessness”… a problem caused almost entirely by exactly these kinds of progressive policies. Despite being the wealthiest metropolitan area in the United States, San Francisco’s homelessness problem is also, by almost every measure, the worst in the nation. So too for crime, drug use and a range of other social hazards.

As journalist and documentarian Christopher Rufo pointed out in his work on the issue:

Despite good intentions, the city’s policies amount to a regime of extreme permissiveness: The San Francisco Board of Supervisors insists on a policy of free housing for the homeless and, at the same time, the city’s [now former] district attorney, Chesa Boudin, has decriminalized public camping, drug consumption, prostitution, and other “quality-of-life crimes.”  

But wait… if it’s not the fault of “people experiencing homelessness,” who is to blame? To whom does it fall to pay the costs? Continued Rufo:

The city now spends more than $1 billion per year on homelessness—including shelters, permanent housing, law enforcement, and medical programs—but the number of those living on the streets has risen 32% in the past decade.

Now, do you think prohibiting landlords from discriminating based on criminal history will make them:

A) More likely to lease their property or
B) Less likely to lease their property?

What might such an anti-owner law do to the supply of available units for rent in a county already experiencing record homelessness?

Who in their right mind would observe the trajectory of crime, drug use and homelessness in a place like San Francisco and fairly determine that the solution was more progressive/permissive policy?

Not to worry, though… the new law is not due to take effect until the county’s Covid eviction moratorium expires, which will likely be… never.

Alameda today… Anytown tomorrow.