The benign metaphysics of Ms. Baum

While reading Ms. Baum's latest views, which strike me more as demagoguery than argument, it becomes quite clear that one of us will look the fool in the medium term. I think the key distinction in the articulation of the opposing views, rather than the substance of the arguments, is that I am aware of this possibility. One of the reasons I am so dogmatic about inserting "in my view" or "as I see things" in my writing is to remind both myself and all 3 of my readers that my views are just views. Views are much easier to change when new facts come to one's awareness or old facts are seen in a new light than an accepted metaphysics. As Aristotle noted, it is the mark of an educated mind to be able to entertain an idea without accepting it.

To which elements do I refer when I sense more demagoguery than argument? Take her description of Safehaven website, a site I've enjoyed for many years, as a place "where fantasy and reality mix" or the liberal peppering of "conspiracy theory" throughout the essay as examples. Methinks she reads the site with closed mind. Intriguingly, she holds up as as "far-out" a view which is as unfounded as hers, that of Robert McHugh. This isn't to dispute his view, but merely to suggest that ultimately, "why" the Fed chose to drop M3 reporting will be seen in light of their future actions. Mr. McHugh may be correct or Ms. Baum may prove correct, but neither is correct now, the experiment has yet to run its course.

I chuckled a bit reading her newest essay in light of my last post. While in my chosen world view, exposed in my last post, judgments about events can change as their effects become clearer, in my read of Ms. Baum's world, judgments quickly become unalterable truth. Notice how quickly she concludes; "So while the discontinuation of a series [M3] very few people pay attention to may have been a surprise, it was not nefarious. Nor was it a prelude to a massive, secretive money-printing operation on the part of the Fed, which is how the hard-core conspiracy theorists are playing it. " Perhaps that will prove to be true and perhaps not. I'll wait to see what happens in the first year of no M3 data before jumping to any conclusions.

As a general proposition, it seems to me that the more data presented to investors, the more likely can those investors draw reasoned conclusions about the corporation in question, be that corporation the Fed, GE or Enron. By the same token, the less data presented the less likely can investors draw reasoned conclusions. I wouldn't go so far as to argue that less data always means something is being hidden but rather that something might be being hidden. The Bank of Thailand spent the first half of 1997 delaying the release of current account data, a choice which later came to be seen, in the aftermath of the Asian Crisis, as nefarious. Who knows, maybe the Fed is earnest about their reasons for terminating the series. Of course, if the US finds it harder to finance its deficits and resorts to monetizing debt, the resultant inflation will likely lead people to view that policy choice as a poor one. The intent of the Fed won't matter in the post hoc analysis, only the effects.