...Archive for March 2023


I continue to write these days beneath the shelter of my “drafts blog“. A big benefit of that is almost nobody reads it, so I feel much freeër to write. A downside is, well, almost no one reads it.

I thought I’d excerpt some bits from posts I’ve written since the last “drafts” roundup.

There are not yet comments on the drafts blog, so please feel encouraged to offer comments here. (I do mean to add comments to the drafts blog! But I am now desperately allergic to surveillant or potentially surveillant tech platforms, so I will have to implement them myself. It won’t be instant.)

Without further ado, some excerpts!

From Banks should fail much more often (2023-03-26):

The most important reason to prefer small investent funds, however, is because large-scale funds are stupid. Large banks and investment funds are stupid in a very particular, very destructive way. They rely far, far too much on “hard information”. They are evidenced-based. Fucking idiots!

At a large bank, it will never cut it to go before the loan committee and say “Yes there’s no collateral, and limited credit history. But I’ve known Duane and his family for a long time. They are serious and connected to the community, and the business plan is promising.” But it is exactly this kind of loan that creates the greatest social returns. The true source of economic development is speculative but discriminating monetization of human aspirations and capabilities. You turn people with nothing but a work ethic and a great idea into proud pillars of the community by making available the resources they require to succeed. The more a borrower lacks — the less collateral they have to offer, the further they are from holding a sexy degree from Stanford — the more social upside there is in their success.

The very best loans are the ones that cannot be justified at all in terms of hard information, but are made anyway on the basis of very good soft information. Big banks are simply unable to lend on soft information, due to bureaucratic imperatives, and a need to manage legitimate ethical concerns. (Is this “soft information” just nepotism? Are we “discriminating” on the basis of some hypothetical je ne sais quoi of investment quality, or is it really just race?)

From Financial regulation is just debt covenants (2023-03-24):

Fundamentally, private debt covenants and public financial regulation are the same thing. They are means by which creditors of leveraged firms try to ensure shareholders can’t loot them by building tripwires that allow creditors to usurp control from shareholders when shareholder risktaking threatens creditor interests. They look different, they take different forms, because private creditors can regulate within debt contracts that they sign, while the public sector offers finance primarily via guarantees, and so must impose its regulation outside of the contracts that borrowing firms and their notional creditors devise.

From Banks are not private (2023-03-21):

[P]eople spend far too much energy worrying about the cost of bank failures, and far too little worrying about the cost of bank survival… [T]he most costly forms of state support take the form of subsidies that the state can pretend are not “taxpayer funded”, but that impose quiet costs on the public anyway. Do you remember when the Fed retroactively rewrote millions of lending contracts so that banks could charge more interest and recapitalize? Do you remember when the nation debt doubled in less than four years, precisely so that large banks would not have to be resolved? Yes, Virginia. Bank failures, actually, are much less expensive than the things we do to fill holes in bank balance sheets so we need never acknowledge their failures.

From Unlimited deposit insurance (2023-03-12):

Treasury/Fed/FDIC say no losses will be borne by the taxpayer because they will levy a “a special assessment on banks, as required by law” to recover FDIC’s losses. But who, pray, will pay for that “special assessment on banks”? It is not an assessment on the personal wealth of bank managers or shareholders… Sure, there will not formally be a new tax to cover these costs. But in substance, the tax-paying public will experience higher expenses or foregone income. This habit of declaring “no new taxes” in form, while tacitly imposing taxes in substance, deprives the public of any capacity to design the tax, to shape its incidence, and to hold accountable those who provoke the costs the tax must recover.

From Libertarians and hierarchy (2023-03-08):

Libertarians share exactly the same pathology as university professors and the smiling residents of Marin County: They flatter themselves that they stand in opposition to vicious social hierarchy, and find true-enough narratives by which to spin their allegiances into support for equal dignity. But their actual practices, the institutions they inhabit and animate and from which they earn their succor, belie all that… [U]nder actually existing capitalism, Matthew effects rule the day. Markets may be notionally “free”, but past winners (humans, not just firms) have tremendous advantage. Certain classes of people understand that market arrangements are likely to continue to deliver to them security and abundance, but will sadly deliver those goods less adequately to other groups whose ongoing misfortune, despite occasional bootstrap stories, we can pretty well predict.

Markets, under these circumstances, become a locus of hierarchy, rather than a challenge to it.

From Dilution of faction requires voting system reform (2023-03-08):

David French argues we can “dilute the disruptive power of faction by allowing factions to bloom.” …[James] Madison counseled that factions should be small and many. But our single-winner, first-past-the-post voting system exerts a social gravity that pulls us into two, gigantic factions of similar size… If we want multiple factions, we understand how to design voting systems that encourage and support that, rather than the voting system we have, which punishes any divergence from two major parties… If you think democracy would work better with a more pluralistic ecosystem of factions…please specifically advocate voting system reform!

From Economists are such scoundrels (2023-03-06):

But when you learned about [Arrow’s Impossibility Theorem], I bet you didn’t learn that its original object was the impossibility of authoritative technocracy. Social actions cannot in general be ranked under the ordinal utility constraint economists impose upon themselves. Instead, you learned that it was about the impossibility of a good voting system… In other words, after struggling for decades to come up with a basis to make authoritative claims beyond politics, the economics profession realized by about 1950 that, at least on the terms they had prescribed for themselves, it was impossible. They had no criterion, and could have no criterion, by which they could elevate their conclusions as “scientific” and above the fray. What was to be done? Well, we know what they did.

They took the weapon they invented, this theorem that damned their own authority, and they pointed it at the rest of us. They stopped talking about the impossibility of ranking social actions, but loudly proclaimed their theorem foreclosed the possibility of coherent democratic choice.

From What is fascism? (2023-03-25):

The use of fascism as an epithet, as a kind of rhetorical “cooties” that discredits whomever can be somehow associated with it, prevents us from thinking clearly about a phenomenon whose roots go too deep to simply shun away.

Fascism…represents an approach to solving the key problem of modern nation-states: How do we build and sustain a capacity for effective social coordination over scales so large that people’s interests and identities are likely to be diverse and conflictual? …Fascism can be understood as a means of rendering permanent the clarity, conformity, and collective decisiveness that publics usually tolerate only when they perceive exceptional threat.

As they say, read the whole thing!

If you have nothing better to do. If you read this stuff at all, please understand that I am desperately grateful to you. Thank you always for your company.

Drafts (meta)

For the past week or so, I’ve been running an experimental “drafts” blog.

The first post there is a long-winded take on why, but to boil it down, I want to blog like the early days. When some thought crossed my mind, I just wrote it down as best I could and hit publish.

Over the years, because interfluidity had a readership for a while, which engenders caution, and because the blogosphere evolved from a conversation to a cacaphony of competitive resumés, I stopped giving myself license to do that, and largely stopped writing.

So, I’ve undertaken to call my new posts “drafts”, then just write shit and hit publish again. I’ve really enjoyed it.

Here are those “drafts” so far, in reverse chronological order:

I’m not sure where I’m going with all this, and would welcome your feedback. Should I revise and promote some “drafts” to posts here, or just acknowledge that the whole drafts thing is a conceit, and let it become the chattier successor to this site?

You can subscribe to the drafts blog by RSS. You can’t yet subscribe by e-mail. I think I’ll continue to do round-up posts like this one, so if you are subscribed by mail here, you’ll indirectly get mailed digests. Eventually I mean to implement subscriptions by e-mail directly on the drafts blog, but that too will take the form of a roundup, not more frequent than weekly. Knowing each post gets spammed out as e-mail has been a discouragement, on the margin, from just fucking writing.

Eventually I hope to make a “unified” RSS feed that points to anything I write anywhere, but for now, please consider subscribing by RSS to both feeds.

On this main blog I laboriously track any changes I make (after a “grace period”, maybe an hour or two after posting) in “update histories” you’ll find after most posts. I’m not doing that in the drafts blog. I’m tweaking at will. But the drafts blog is a static site published via git, everything published will have been a commit. You can keep me honest by rolling back history here.

Whoever reads this, please know I am incredibly grateful that you do. I welcome any feedback on all of this in the comments.

As a reminder, interfluidity still hosts chat-about-anything drop-in “office hours” via Zoom, Friday afternoons, lately at 12:30pm PST / 3:30pm EST / 8:30pm UTC. If you are interested, please say so in a comment and provide a real address (it won’t be published) in the e-mail field of the form. I’ll send you an invitation. Or you can send me an e-mail directly, or message me on Mastodon.