Professor Robert Paquette Takes On PC U

Professor Robert Paquette, an esteemed historian who courageously suffers Hamilton College's political correctness, has posted on the unsustainability of the United States  as evidenced at Hamilton.  Like most American colleges and universities, Hamilton advocates environmentalist ideologies that benefit American investment-and-commercial banks; it happens that senior officials of Goldman Sachs are on Hamilton's Board of Trustees, and it was the Goldman Sachs trustees who pushed Hamilton toward sustainabilty indoctrination. 

Paquette points out that universities seek grant money from the same investment banks that have benefited from Bush-and-Obama socialism.  Politically correct, green university students are eager to work on Wall Street, while most are eager to condemn Charles Koch.

Paquette and I were lucky enough to hear Charles Koch speak, and I was impressed.  At a time when academics were extolling Enron, Paul Krugman was collecting honoraria from Enron, Harvard Business School was selling case studies advancing Enron's philosophy, and Fortune was naming Enron the most creative firm, Koch rejected the advice of executives he had hired from Enron.  He suggested that he had found their ideas to have been absurd, yet these were the ideas the American business academy had considered the nation's most creative.  Koch is now the fourth-richest American, and Enron's former supporters now attack Koch because he does not adhere to their ideology, an ideology that was entirely consistent with the views of Jeffrey Skilling and Andrew Fastow.

Paquette makes the following point:

(T)hose who graduate (from Hamilton), precisely because of the deficiencies and one-sidedness of their education, will prove defenseless in articulating a thoughtful response to the caricatures of American and Western history that now pass as gospel as precincts of the cultural left capture ever more ground inside and outside the academy. 

Paquette emphasizes that American history is neglected--even among history majors. This is an understatement, for even if American history were required, it would be taught in an ideologically slanted, uninformed way.  Frederick Jackson Turner's nonsensical frontier thesis is presented as fact in Mickey Mouse history classes while ideologues in academic garb ignore T.S. Ashton's reasoned assessments of the industrial revolution.

Worse, American universities are purveyors of illiteracy.  At Hamilton, which is an elite college, the students have been adequately prepared at the primary and secondary levels.  In contrast, at public universities the students have been indoctrinated in public schools from their early years, but they have not been taught to read, write, or do basic mathematics.  Academics are uninterested in teaching their half-literate students how to read, write, or do basic math because it is much more fun to indoctrinate them than to educate them.  

Still worse, New York's public education system, and the American university system, are not just purveyors of ignorance, illiteracy and lack of historical knowledge.  They are purveyors, along with its inventor--The New York Times--of holocaust denial.My students have never heard of the differences between Hamilton and Jefferson, but they also have never heard of the Gulag Archipelago, and they have never heard of the twentieth century's socialist mass murders.   Their education has been silent with respect to the vicious bloodshed that the ideas of the academic left have caused, for they are taught that workers who voluntarily immigrated here are victims of the worst harm and discrimination in history.

Let us conclude with some certainty:  American universities are a load of crap. They are purveyors of illiteracy, ignorance, and holcaust denial.

 To see the history and origins of political correctness and its link to Wall Street, turn to the history of investment banking and George Peabody.  Peabody was one of the earliest American international investment bankers, but his success at first was as a Baltimore merchant. After some success selling State of Maryland bonds, Peabody sold railroad bonds. Since the best market was in London, he moved and spent his mature years there. 

On one of a handful of return trips to the United States from his home in London, when Peabody was already a famous philanthropist, he counseled another Baltimore merchant, Johns Hopkins, on how to establish a university.   Johns Hopkins University relied on the Peabody Library for decades.  Prior to his death, Peabody invited a partner, J.S. Morgan, to join his firm.  J.P. Morgan, J.S.'s son, was a student at a German university and, in effect, worked as an intern at Peabody's firm. Peabody supported J.P. Morgan during his early business career.  

After his death, at Peabody's request, the Peabody firm's name was changed to Morgan Grenfell.  J.P. Morgan did not graduate college, but his son, J.P. Morgan Jr., graduated from Harvard in 1886.   Morgan Sr. donated generously to the Harvard Medical School, whose transformation can be viewed as the most important historical step toward the modern university.  Abraham Flexner's 1912 report on medical schools, which extolled the Johns Hopkins Medical School, established the Johns Hopkins model (which Harvard followed) as the basis not only of medical education, but of modern American education and the modern American research university.  In effect, two Peabody pupils provided financing for the transformation of the religious American colleges of the nineteenth century into the modern university.  The money trail extends further, for the Carnegie fortune, which was the source of the Carnegie Foundation's funding for Flexner's report, was crystallized through J.P. Morgan's acquisition of Carnegie Steel, and his creation of the steel trust--U.S. Steel.  The university was linked to Progressivism and Wall Street from its beginning.   Today, buildings at Harvard include the Peabody Museum (there is also one at Yale), Morgan Hall (Harvard Business School), Mellon Hall (Harvard Business School), Rockefeller Hall, and Lehman Hall.  

  

WHAT's IN A NAME?

Howard S. Katz wrote this blog here.
8-18-08

In commenting upon the recent (July-August) decline in commodity prices, Bloomberg news service recently reported:

"Commodities, measured by the CRB, are down 20 percent….”

Bloomberg, 8-15-08

This would seem to be an unobjectionable statement, mathematical in its precision. There is, alas, one problem. What is the CRB?

The Commodity Research Bureau was an organization founded in the 1930s by a group of economic types to study the commodity markets. In the mid-1950s, they started to compile an index of the most prominent commodities to do for commodity traders what the Dow Jones Index had done for stock traders. This index was called the Commodity Research Bureau (CRB) Index, and for half a century it served its function well. It told commodity traders what commodities as a whole were doing.

But in 2004, with the founding generation gone, the CRB, now a successful and established organization, had passed into the hands of a new generation. A generation educated in the new way of gathering knowledge. The new generation sought knowledge by hiring a group of authority figures with long and impressive titles to rework the CRB.

I will save you a lot of complicated mathematics and say that the new index they came up with was half crude oil. Each commodity was given a special weighting, and when all the calculations were in, crude oil and its associated commodities (heating oil, unleaded gasoline and natural gas) had a weighting of close to 50%. Since there was a high probability that the other commodities in the index would cancel each other out, the new index pretty much moved up and down with crude oil. The authority figures with their impressive titles had taken away the CRB index and in its place put in its place one commodity. It would have been like taking away the Dow Jones Index and substituting a new index based on GM. GM may be an important stock, but it isn’t a proxy for the market.

Fortunately, the new Commodity Research Bureau knew that they could not just throw out the old CRB Index. That would risk another group picking it up and taking their business away from them. So they kept the CRB Index and changed its name to the Continuous Commodity Index. The new index they called the Reuters/Jeffries CRB Index (hoping that it would be abbreviated to CRB Index and thus confused with the old index).

Of course, if one wants an objective record of what commodities have been doing for the past half century, then one needs to track the same index over that period. It would not be valid to track the DJI from 1956 to 2004 and then switch to GM all the while calling the whole thing the DJI.

In short, the new Reuters/Jeffries CRB is a worthless piece of garbage, and any commodities trader with half a brain will give it no further thought. It was to head off this kind of thinking that the modern CRB gave the new index the name of the old one and changed the old one’s name.

Now perhaps you might say, “Well, these people originated the index. They named it in the first place. They have the right to change the name to anything they want.” The problem, however, is that a name stands for an object. If a young couple has a child, they have the right to call him “Bill.” But if they have a second child 20 years later, they do not have the right to call this second child Bill and rename the first. The character of the first child has become associated with the name “Bill.” People who know him will become confused, and his reputation may (undeservedly) suffer. This is the kind of confusion inherent in the idea that definitions are arbitrary.

Let me take another example. Ever since there has been a science of economics, economists have known what money is. Money was the economic good with which you could buy things. For example, if you want to buy a car and go to the dealer, the dealer will only accept one thing in exchange. If you bring a famous painting to exchange for the car, you will be refused. They will tell you, “Sell the painting for money, and come back and give us money for the car.”

But in the 1980s, Milton Friedman announced a new “money” (which he called M-2), which included short term loans (bank certificates of deposit). This has the same problem as the painting above. It cannot be used to buy things. If you take a bank CD to the car dealer, he will tell you politely to turn it in for money and come back. Soon M-2 had spawned a dozen brothers, up to M-13.

To come up with something like this takes a Nobel Prize winner. Oh, excuse me. I forgot that there is no such thing as the Nobel Prize in economics. It was not one of the 6 prizes described in Alfred Nobel’s will. Indeed, it came along more than 70 years later. Somebody just announced that they were giving a prize in honor of Alfred Nobel. By calling their prize by this name, they were trying to give it the distinction and honor which the prize had acquired over the years. The world press fell for it hook, line and sinker.

The creation of M-2 is a serious problem because in trying to predict a rise in prices, one must take account of any rise in the money supply. If two people cannot agree on what money is, then they cannot predict when prices will rise. Prices only rise as a result of an increase in the economic good which is used to buy things.

Another of my favorite examples is the concept of capitalism. This concept was first used by Karl Marx, and he never defined what capitalism was. For the next century, Marx’s followers would call anything they did not like “capitalism.” For example, Hitler called himself a socialist (as in National Socialist – NAZI), but his leftist enemies called him a capitalist. Adam Smith never used the word. Neither did the classical economists (including Herbert Spencer). I have learned from bitter experience that whenever I hear the word, I am sure to be served up a pastry of confused gobbledegook.

The advantage of simply making up one’s own definition is that you can prove pretty much anything you want. But this is a big disadvantage in the honest search for truth. If you want your ideas to correspond to reality, then you must have accurate definitions of the concepts you use. And since any society has intuitive definitions for all its concepts, intuitive definitions which capture our minds and in terms of which we think, your explicit definitions have to correspond to these intuitive definitions. Otherwise you will confuse the two. Pretty soon you have won the argument and lost the search for truth. (The intellectual world is full of people who “cleverly” start out with formal definitions they know will lead to the conclusion they wish to reach. But these definitions do not correspond to the concept. For example, some sound money types, with whom I am in basic sympathy, defined inflation as an increase in the money supply. They did this so that they could “prove” that inflation is caused by an increase in the money supply. They have been hammering away at this point for over half a century and have still not convinced any of their opponents. If they define inflation as a general rise in prices, they will have a bit more success.)

For example, I define a witch as a woman who has magical powers used for evil. I don’t believe that witches exist. But when I define the concept, I have to put into words the (intuitive) idea of the people in my culture even if they do believe in witches. If I don’t do that much, then I will never be able to convince them that witches don’t exist.

The problem is that modern intellectuals support the arbitrary nature of definitions. It creeps into our culture, and it makes (most) people stupid. For example, do you remember being told early in the year 2000 that the DJI was going to 35,000? It was in all the papers. The New York Times and the Wall Street Journal cooperated in shoving that idea down our throat. Did you buy stocks just before the horrific bear market of 2000-2002? Well, you are allowed a few mistakes, but you are expected to learn from them.

When I first took philosophy courses at Harvard, I was told that all they could teach me was that they didn’t know anything. Hey, wait a minute. The reason I went there in the first place was that they told me they knew more than anyone else. If they couldn’t teach me anything, then what was I paying them money for? How about a class action suit to get my tuition money back?

One of the things I learned about Harvard was that of all the things I learned there, nothing worked. I couldn’t do anything with my “knowledge.” Fortunately, I studied on my own before going to college, and this gave me some ability to question my professors. After college, I continued to study on my own, and now I realize that they are nothing but a collection of frauds.

Unfortunately, this collection of frauds continues to corrupt our youth and dominate our society. They make everybody dumb. We are so dumb that we even buy Books for Dummies. In a previous generation, any book reader would have been offended by such a title, and a book with such a title would not have sold. Today’s book buyer meekly accepts it because he feels himself to be a dummy.

Unlike my college professors, readers of this blog are expected to admit and learn from their mistakes. If it doesn’t work, then it isn’t true.

If you do nothing more than read The Federalist Papers or some of the other works of the Founding Fathers, you realize that the intellectual level has collapsed over the past 2 centuries. We are now seeing the cultural and economic collapses which are the result of this. And if nothing is done to stop it, we will eventually follow the path of ancient Rome.

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Howard S. Katz can be visited at http://www.thegoldbug.net.