Byung Kyu Park's Personal Website

I live a depressing life of a conservative, trapped in a liberal den: college—or, worse yet, UC Berkeley. I am occasionally delighted to find that some of the people closest to me share my conservative ideals and oppose collectivism in all its forms—including communism and the liberal fascism. But, more often, I am distressed that some people I care about are, well, liberals.

It is my hope that some of these people consider themselves liberals not willfully and consciously, but because they haven’t given the matter a good deal of thought—and because many people who had access to their malleable minds—i.e. teachers and professors—were liberals and didn’t have the sense not to corrupt the youth.

In this hope, I write here how I became a conservative. Perhaps some will see the validity of my point, and why, for the good of the greater whole, conservatism is a better philosophy than liberalism.

To be completely frank, I have not seriously considered my political identity until, well, until my junior or senior year in college. But I think a couple experiences in my youth laid the foundation for future decisions and thoughts. The first was a conversation with my youth pastor. It happened so long ago that all I remember now are, well, the conversation took place either when I was a sophomore or a junior in high school, and it took place when he was giving me a ride home from some church event. I don’t even remember why the topic came up, but he described the difference between Democrats and Republicans (and incidentally, why he’s a Republican): Democrats want to fix the society’s every problem with more government programs (and more taxes), and Republicans want to leave it to individuals (as well as their money). I don’t know if this made any sense to me back then, but this description—and it is a true description, I doubt even the hardcore liberal would dispute this characterization—was somehow impressed on my mind.

Then the other thing was the high school (well, it was AP) economics courses. I took both the microeconomics and macroeconomics. The one thing that laid the foundation for my conservative leaning was probably the effect of taxes covered in microeconomics course—how the tax, regardless of how it is levied, will be distributed according to elasticity of demand or supply curve, and how it will always result in dead weight, i.e. lost productivity. The macroeconomics course wasn’t so favorable to conservatives: it bashed Reagan’s supply-side economics and tax cuts as “Reaganomics” and offered very little criticism of Keynesians—not that I understand these topics fully now, given that I had no formal economics education since then.

Well, it looks like it will take rather long to finish this story, so I’ll just close for now with this thought: if you want to decide whether you are a conservative or a liberal, focus on this one issue: taxes. Are you willing to pay higher tax to benefit someone else—someone else that you do not know—or would you rather donate that same money to charity (or not at all)? If you choose the former, you may be a liberal. I would like to convince you that taxes are bad, even when the intentions are good, but, well, each to his own. If you choose the latter, you might be a conservative—please keep an open mind. Watch out for media and academic biases (these are fields that tilt heavily to the left, with notable exceptions like talk radio and some economists), trust your own logic above anything else, and verify all supposed facts with multiple sources.

I suppose it’s not a very good news for me, but Kindle 2′s price has been cut down once again, to $260. I think there’s an international version (wireless access outside U.S. included, I think) for $280 or something, too.

If anything, this is proof that capitalism works, when there are good capitalists (such as executives at Amazon) around, where there is enough competition (Sony’s new, cheaper readers provide real competition with wireless access, unlike iLiad’s readers, which are too expensive and lacks wireless), and where there is not enough regulation to choke the life out of the market.

Competition will drive price down. We don’t need some sort of “consumer protection agency” forcing companies to charge a fair price. Remove the barriers to entry, and the “exorbitant” profits themselves will be the driving force behind the downward pressure in price—increasing supply, attracted to the good profit, ensures that.

Capitalism works not because of virtues of any one man or organization. It works the same way scientific community works: under the usually held assumptions, there is a self-correcting mechanism in place. In science, it’s the principle of peer review—unless the entire community is rotten to the core, bad research will out itself because no one will be able to reproduce it. In capitalism, it’s the price and competition—any misallocation of resources will correct itself because that precise misallocation is an opportunity for profit (see: international trade) and that profit attracts more competitors, which forces everyone to offer lower price or lose business.

On the other hand, socialism works only when there are benevolent, wise government officials. Are you really willing to take that chance?

Apparently divorces and spousal infidelity is too expensive to continue in this economic climate.

On second thought, I’m not sure if this is actually a good thing. Divorces are like market corrections. If it needs to happen, then the more quickly it happens (and is over), the better. The Great Depression wasn’t great because of the magnitude of the market correction, but because of its length, and the current recession is bigger for the fact that the necessary market correction, which would’ve burst the housing bubble, was delayed and delayed until the Fed couldn’t hold it back any more.

PJTV has a “generational theft calculator” that calculates how much your share of the burden will be for a government program, since the politicians don’t do a good job of telling you how much you will personally be paying—what comes out (as hand-out) must get taxed, right?

I had been struggling with Adam Smith’s Wealth of Nations for a couple weeks. It had been a fascinating read, but the book was much longer than I had suspected: the Kindle book counts 15939 “locations”, and since 7 “locations” are approximately the same amount of text on a single page of a pocket paperback, it’s nearly 2277 pages of a pocket paperback (as a textbook, it might be 500 pages or so, I think). So, I’m only 17% of the way through (i.e. position corresponding to location 2700 or so), but it’s O.K. because it was so long to begin with anyway, right?

… Not!

I also bought the newest edition of Graham’s Intelligent Investor. That was 3 days ago. I am now almost halfway through the book, or, at location 4811.

Clearly the problem wasn’t either with the length of the text or how interesting the material is (from purely intellectual level, I think they are of about the same interesting value, as can be attested from the approximately the same number of notes I made reading). So, how was it that I could read through almost twice as much of the latter book in much less than half the time?

I think it comes down to motivation, and more specifically, profit motive. Adam Smith’s book, while it offers a valuable insight into capitalism and market economy (which is why I started reading it in the first place), it is not, in the practical sense, applicable to today’s economy, e.g. the stock market. On the other hand, the information in Graham’s book is the information I need right now in order to make prudent investments in the stock market, as I have been moving my liquid assets into stocks for a week or two and will be buying even more dollar value of stocks in the next few days. I think this profit motive is what made so big a difference in my, ah hem, performance.

I wonder if something similar could be instituted for my, er, day job, if I would be a more productive researcher.

On BankDeals:

With all the talk of Ally Bank being pressured by the ABA to cut deposit rates, I was hoping that Ally Bank would hold steady on its rates for a while. Unfortunately, that’s not the case. Ally Bank made some sizable rate cuts today. The savings account rate fell from 2.25% to 2.05% APY, the 12-month CD rate fell from 2.80% to 2.49% APY and the 9-month no-penalty CD rate fell from 2.50% to 2.30% APY. The largest rate cut was on the regular 9-month CD. That rate fell from 2.60% to 1.90% APY. Now there’s no reason to choose this classic 9-month CD when the no-penalty version has a higher rate.

And if an anonymous commenter who couldn’t provide specifics is to be believed, the pressure to cut interest rates on savings account and CDs is coming from Mr. Bernanke, the wise regulator who couldn’t see the housing bubble that everyone with half a brain was screaming was coming for years.

Do you need any more evidence that regulations are bad? Some regulations might be necessary, but they are necessary evil—it’s like bandages and scabs on your wound. You need those things at the moment to stop the bleeding, but if you always have bandages on your arm and have scabs here and there, well, something’s wrong with you, buddy. If we actually need regulation anywhere, then regulation is at best a treatment for symptoms and will only get more and more expensive with time. The problem has to be dealt with at the fundamental level.

An example people keep bringing up is the environmental issues. Sure, factories dumping wastes into the local air and water are terrible. Sure, regulation could help with these issues. But it doesn’t fix the underlying problem—that there are people who stand to benefit by being a little less careful with their surroundings and they have no incentive to be careful. But if you look more deeply into the issues, the government created these underlying problems. All that a government is empowered to do and is necessary to do is protect the sanctity of property (and by extension, lawful contracts). When it failed to do that, for whatever reasons, it created the problems that it is now somehow entrusted (by statists and leftists, anyway) to solve it. Talk about leaving the fox with the chicken!

Well. In any case, it looks like if Obama and his minions have their way, the middle class families with a little bit of income to save (but not willing to risk it in stock or even bonds) will be left with no option other than to watch their savings diminished by inflation, which is only bound to grow with the reckless spending that Obama administration has shown to be far too willing and able to do. As it is, even at the historical inflation rate of 1%, the current rate of about 2% at Ally Bank is barely enough to keep your money’s value at the exact some worth. If every bank was offering rates like 0.2% (that offered by many banks and even credit unions), you would be better off buying gold and burying it in the ground, rather than keeping the money in a bank and in circulation.

What would regulators do then? Outlaw buying of gold? Punish those trying to sell gold? Apparently your imagination is the limit.