From the “Preface to the English Edition” of “The Theory of Money and Credit” by Ludwig von Mises: “All proposals that aim to do away with the consequences of perverse economic and financial policy, merely by reforming the monetary and banking system, are fundamentally misconceived. Money is nothing but a medium of exchange and it completely fulfills its function when the exchange of goods and services is carried on more easily with its help than would be possible by means of barter. Attempts to carry out economic reforms from the monetary side can never amount to anything but an artificial stimulation of economic activity by an expansion of the circulation, and this, as must constantly be emphasized, must necessarily lead to crisis and depression. Recurring economic crises are nothing but the consequence of attempts, despite all the teachings of experience and all the warnings of the economists, to stimulate economic activity by means of additional credit.

Mathematicians of the day.

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From Fight Aging!: DRACO Illustrates the Poor Funding Situation for Radical Departures from the Existing Status Quo

DRACO, double-stranded RNA activated caspase oligomerizer, is a broadly applicable antiviral technology that has been under development at a slow pace for quite some time now. You might recall some publicity back in 2011, for example, but that marked the results of years of earlier work. DRACO attacks infected cells, not the viruses themselves, following the principle of finding a common vulnerability to target rather than trying to tailor therapies to every different variety of attacker. Despite technology demonstrations to show effectiveness against a broad range of very different types of virus, and the fact that this technology can in principle be applied to near any type of virus, there is next to no ongoing funding for DRACO. It stands as an example of the fact that you can build a better mousetrap and still have the world ignore you. In this case DRACO is languishing despite grave concerns regarding spreading viral resistance to existing drugs, and billions devoted to constructing new drugs that are just more of the same.

I noticed a recent paper, one of the few for DRACO of late, in which the authors provide evidence to show that DRACO is a worthwhile avenue for antiviral therapies in pigs, targeting diseases for which there are no presently adequate therapies. Another of the draws here is that DRACO isn’t just an approach for near all viruses but also an approach that should work for near all mammals as well.

The entire article can be read here.

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Boston Pulls 2024 Olympic Bid, Taxpayers Win by Ryan McMaken

McMaken reminds us that the hapless taxpayers are always the losers when their wealth is stolen to fund sporting events.

Hosting the Olympic Games isn’t as popular as it used to be. This week, Boston cancelled its bid to host the 2024 summer Olympics. The city was forced to cancel the effort in response to opposition to what The Nation called the “debt, displacement, and militarization of public space” that the Olympics brings to every host city. Basically, the taxpayers and citizens of Boston weren’t in the mood to foot the bill for an enormous party for the richest and most powerful plutocrats of Boston and the United States.

The Ruins of Past Olympic Games

Meanwhile, the taxpayers in much of the developed world have gotten wise to the high costs and few benefits of hosting the Olympics. Many have seen these photos from the UK’s Guardian which show the state of the Athens 2004 Olympic venues in 2014. The billions of taxpayer dollars spent on facilities have all evaporated, and all that’s left is rusting stadiums and mud-filled Olympic-sized swimming pools.

The Greeks were told back then that hosting the Olympics would be their ticket to a new era of first-world prestige and economic success. Needless to say, such a rosy future failed to materialize. Even less time has passed since the 2008 Olympics in Beijing, but as these photos show, Beijing’s abandoned venues will have plenty in common with those of Athens in a few years.

And while Brazil looks forward to its own 2016 bid, the Brazilians already are getting a preview of what will become of all those Olympic venues. The World Cup stadiums, built just last year, are already massive white elephants, as Business Insider recently showed. One massive stadium functions as a parking lot for buses. Several more simply decay in the humid Brazilian air.

After Boston was forced to finally pull out, The Nation correctly diagnosed the nixed bid as a “victory for activists and a loss for the city’s most entrenched business interests.”

Cronyist deals like the Olympics help remind us that there’s a big difference between support for free enterprise, and support for “big business.” Economic development corporations and business associations such as chambers of commerce are usually more than happy to squeeze a few more bucks out of the taxpayers if the money will go toward whatever the “business community” thinks should be subsidized at any given time. But, the entrepreneurs, employers, and taxpayers who lack lobbyists and pocketed politicians mean little to the business “leaders” who set policy.

Unfortunately for them, many educated people have begun to see through the scam. Glitzy shopping centers, stadiums, and global mega-events no doubt do wonders for the resumes of the rich and powerful. But those who pay for such things do less well.

The entire article can be read here.

An abandoned training pool for athletes at the Olympic Village.

An abandoned training pool for athletes at the Olympic Village.

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Bohm-Bawerk Against Keynesianism

Despite the fact that Eugen von Bohm-Bawerk died in 1914, his criticism of those who deny the vital role of savings in capital formation, penned in his magnum opus The Positive Theory of Capital, sounds like a direct shot at Keynesianism. However, this is an example of Hazlitt’s criticism of Keynes made in The Failure of the ‘New Economics’, that Keynes’ errors were resurrections of economic fallacies that had been exploded long ago.

Possibly I have wasted too many words in proving a truth
so obvious that no thinking man unskilled in science would
ever doubt it. Every child knows that a piece of capital, say
a hammer, must be produced if it is to come into existence.
And to every simple man it is obvious that no stock of capital
can be made, or can increase, if men regularly consume their
whole available income; if, in other words, they do not save.
It was reserved for the sharp and subtle wits of learned
theorists to suggest the first doubt about it. This, however,
it would have been difficult to do if, instead of dogmatising
on the formation of capital, they had attempted to give a
complete and faithful representation of the process by which
capital is formed. Here lies the entire, but almost the only,
difficulty of these and many other economical doctrines; and
this suggests, I might add, the reason why so many abstract
deductions are discredited and fail of result. It is not the
deductive method that deserves the distrust, but the persons
who misapply it. Vulgar errors in thought, indeed, are quite
exceptional among capable thinkers; and here the fault lies
mostly in this, that the economists in question could not put a
sufficiently clear and life-like picture before their minds of the
circumstances and processes which they introduced into their
deductive arguments as assumptions, or, at least, did not keep
it persistently enough before them through all stages of the
deduction. Hence, losing touch with life, they began to make
deductions, not from truth of facts, but from words of formulas,
and so fell without knowing it into the emptiest dialectic. It
is because so many economists, as it seems to me, have made
this mistake, that I risk being tedious rather than being suspected
of sophistry.‘ – The Positive Theory of Capital, Book 2, Chapter 5.

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From Parabolic Arc: Virgin Galactic Executive Summary of Submission on SpaceShipTwo Accident

On October 31, 2014, at approximately 10:07 PDT, Scaled Composites’ SpaceShipTwo flight test vehicle, SS2-001 (N339SS) experienced a serious in-flight anomaly during a rocket-powered test flight approximately 13 seconds after release that resulted in the destruction of the vehicle and the death of the copilot. The pilot survived after successfully parachuting to the ground. No other persons were injured in the air or on the ground.

Probable Cause and Contributing Causes

The Probable Cause of this accident was the copilot’s unlocking of SpaceShipTwo’s feather locks at 0.92 Mach, approximately 14 seconds prior to the flight manual minimum speed of 1.4 Mach.

Although normal checklist procedures maintained the feather locks in the locked position until after obtaining a minimum speed of 1.4 Mach, the mishap copilot prematurely unlocked the system at approximately 0.92 Mach. This premature unlocking was indisputably confirmed by telemetric, in-cockpit video and audio data. At this speed, lift from the horizontal tails well exceeded the feather actuator’s ability to prevent a rapid aerodynamic extension of the feather system. These forces caused the feather to rapidly extend without any further pilot action or mechanical malfunction.

A thorough review of the mishap flight data conclusively determined that there were no misleading indications on the pilot displays and that all flight data were accurately displayed to the aircrew.

Extension of the feather while in boosted flight under these conditions imparted over 9g’s of pitch up acceleration forces on the spaceship. These forces exceeded SpaceShipTwo’s designed structural load capability and resulted in its in-flight breakup.

The Contributing Causes of the accident were:

Feather Lock system design. The Feather Lock system design did not have an automatic mechanical inhibit to prevent premature movement of the feather system.

Crew Resource Management. Scaled Composites’ aircrew procedures did not require a challenge/response protocol prior to moving the feather lock handle.

The entire article can be read here.

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Why Unemployment Cannot Be Accurately Measured

Governments measure unemployment mainly by three methods: surveys, noting those receiving unemployment payments, and noting the number of employed people via tax filings. From this data, there are various ways of estimating the number of unemployed people in a given area. I use the word estimate as it is not possible to actually count the number of people who are unemployed.

First, let us examine the limitations of the three methods mentioned above. Surveys are obviously plagued by sampling errors (which are unavoidable) and sampling bias (demographic bias and selection bias [who actually answers surveys]). However, it cannot be stated a priori if these biases have a positive or negative effect on reported unemployment numbers.

Counting the number of people receiving unemployment payments poses two problems. Some people do not file for such payments for a variety of reasons. Also, since such payments are not perpetual, those who are still not employed when their payments end are not counted as unemployed.

Counting tax filings misses those who are employed in the underground economy. More on this shortly.

An additional problem is due to the various “adjustments” made to the raw data. These include the notorious birth-death models and seasonal adjustments.

Even if we were to assume that survey biases are neutral and that they accurately capture those who have exhausted their unemployment payments, there is no way to measure the impact of the underground economy.

Let me describe the workings of a barber shop I patronized years ago. Mr. X was a licensed barber [1] who was the owner of the shop. He had 3 chairs. X was the only licensed barber and the only one on the payroll. The other two chairs were leased out to anyone who had the skill to attract customers (usually X would seek at least one young guy who kept up with whatever outrageous style was in vogue). X collected a % of the earnings of the other two barbers. In X’s shop only cash was accepted, only X was officially employed and filed taxes [2], so the other two barbers could collect unemployment checks as there was no record of employment. When the two barbers exhausted their eligibility to receive unemployment payments, they still did not go on X’s payroll.

Additionally, during the week, a bookie would come around to hand out betting sheets and settle accounts. I am quite sure that he was not filing income tax forms.

Here is another anecdote. Mr. Y. is a licensed and bonded general contractor. He has a few permanent employees who are formally on his payroll. When he has a job that requires more manpower, he has an informal list of men that he can go to. None of these men ever go on the payroll, they are paid in cash.

The point is that the underground economy is a significant source of employment for many people. The effect on employment can never be accurately measured. Does this mean that government unemployment statistics are too low? Maybe. However, it must be noted that the effect of missing those who fall off of the unemployment rolls plus the various “adjustments” tend to underestimate the number of people who are unemployed. The net effect cannot be known. Thus there is no way to ever accurately measure the number of people unemployed.

[1] The idea that governments require licenses to cut hair is symptomatic of the absurdities of the regulatory state. In college, there were always guys who would cut hair in the dorms or in student apartments. None of them were licensed and all payments were made in cash, beer, or pizza.

[2] This is why cash only businesses can be fairly lucrative. By avoiding conspicuous consumption goods, matching your perceived lifestyle with a reported income, and making most purchases in cash (groceries, utilities, etc.) such a business owner can enjoy substantial tax free income with no fear of being caught.

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From FEE: Who Is Building the Private, Peer-to-Peer Marketplace? An Interview with Sam Patterson

Sam Patterson ( is an author and technology enthusiast from Virginia. He has written about decentralized technologies such as bitcoin and OpenBazaar. Sam recently cofounded a company called OB1 to help build the decentralized marketplace OpenBazaar.

The Freeman: Your project, OpenBazaar, has been awarded $1 million in seed funding so far. Congratulations. What is it, and what does it do?

Patterson: OpenBazaar is an open source project to create a decentralized marketplace online where anyone in the world can buy or sell any goods or services with anyone else in the world, for free, using bitcoin. A few of the core project members (including myself) recently started a company called OB1, which received the funding in order to hire full-time developers and make OpenBazaar a reality.

Online commerce today is mostly centralized; companies own websites where users visit to buy and sell things. Those companies charge fees, monitor their users’ data, and censor their transactions based on their own rules and on behalf of the government.

OpenBazaar is different. Instead of relying on a centralized third party, trades occur directly between buyers and sellers. Users install peer-to-peer software on their computers, similar to bitcoin or BitTorrent, and this connects them to other users running the same software. They transact in bitcoin. Since there’s no middleman, there are no fees, no collection of data, and no censorship of trade.

The rest of the article can be read here.

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From Fight Aging!: Transthyretin Amyloidosis is More Prevalent than Thought

Evidence suggests that transthyretin (TTR) amyloidosis, also known as senile systemic amyloidosis, is the condition that kills the oldest people, those who have survived every other aspect of aging to reach ages of 110 and greater. Here, I’ll note a review paper in which the authors point out that TTR amyloidosis in aging is very likely much more prevalent than this: not a condition only seen in the oldest old, but rather also the cause of a small but sizable fraction of some varieties of heart failure across the entire elderly population. It has been misdiagnosed due to lack of adequate testing for the condition, and thus the development of treatments has not been prioritized highly enough.

Numerous types of amyloid appear in tissues with aging, each consisting of a specific misfolded protein that precipitates to form form clumps and fibrils. In the case of transthyretin amyloid, these deposits clog blood vessels and lead to hypertrophy of the heart, ending with something that looks a lot like congestive heart failure.

The obvious path to dealing with amyloids and their contribution to aging and age-related disease is to periodically remove them.

The rest of the article can be read here.

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