Aristotle on Rhetoric

Definition of rhetoric as "the faculty of observing in any given case the available means of persuasion." Of the modes of persuasion some belong strictly to the art of rhetoric and some do not. The rhetorician finds the latter kind (viz. witnesses, contracts, and the like) ready to his hand. The former kind he must provide himself; and it has three divisions -- (1) the speaker's power of evincing a personal character which will make his speech credible (ethos ); (2) his power of stirring the emotions of his hearers (pathos ); (3) his power of proving a truth, or an apparent truth, by means of persuasive arguments (logos ). Hence rhetoric may be regarded as an offshoot of dialectic, and also of ethical (or political) studies. The persuasive arguments are (a) the example, corresponding to induction in dialectic; (b) the enthymeme, corresponding to the syllogism; (c) the apparent enthymeme, corresponding to the apparent syllogism. The enthymeme is a rhetorical syllogism, and the example a rhetorical induction. Rhetoric has regard to classes of men, not to individual men; its subjects, and the premisses from which it argues, are in the main such as present alternative possibilities in the sphere of human action; and it must adapt itself to an audience of untrained thinkers who cannot follow a long train of reasoning. The premisses from which enthymemes are formed are "probabilities" and "signs"; and signs are either fallible or infallible.... The lines of argument, or topics, which enthymemes follow may be distinguished as common (or, general) and special (i.e. special to a single study, such as natural science or ethics). The special lines should be used discreetly, if the rhetorician is not to find himself deserting his own field for another.

Does Altruism produce Efficient Outcomes? Marshall vs. Kaldor

The first conclusion of this article is that the Kaldor and Marshall criteria for efficiency are not equivalent. The argument showing that they are equivalent depends on the assumption that a transfer from one person to another benefits the latter by the same amount by which it injures the former. This assumption is not true if the utility of the one party depends on that of the other, so in such cases the two definitions of efficiency lead to different conclusions.[22] In particular, the level of transfer chosen by an altruist is efficient by the Kaldor criterion but inefficiently low by the Marshall criterion.

The second conclusion is that the Marshall criterion is the appropriate one for individuals making decisions that will affect future transfers, under circumstances where they do not know if they will themselves be the donors or the donees. It is also the appropriate one for individuals deciding on transfers among other individuals, towards all of whom they are equally altruistic.[23] It is not appropriate for predicting the outcome of bargaining among individuals all of whom know what role they will play in any transfers.

The final conclusion is that the arguments suggest a justification, from the standpoint of Marshall (but not Kaldor) efficiency, for the special tax treatment of gifts. In doing so, it also suggests a criterion for determining which transfers should or should not be tax exempt.

The Art of Rhetoric

Soc. You were saying, in fact, that the rhetorician will have, greater powers of persuasion than the physician even in a matter of health?

Gor. Yes, with the multitude-that is.

Soc. You mean to say, with the ignorant; for with those who know he cannot be supposed to have greater powers of persuasion.

Gor. Very true.

Soc. But if he is to have more power of persuasion than the physician, he will have greater power than he who knows?

Gor. Certainly.

Soc. Although he is not a physician:-is he?

Gor: No.

Soc. Then, when the rhetorician is more persuasive than the physician, the ignorant is more persuasive with the ignorant than he who has knowledge?-is not that the inference?

Gor. In the case supposed:-Yes.

Soc. And the same holds of the relation of rhetoric to all the other arts; the rhetorician need not know the truth about things; he has only to discover some way of persuading the ignorant that he has more knowledge than those who know?

Gor. Yes, Socrates, and is not this a great comfort?-not to have learned the other arts, but the art of rhetoric only, and yet to be in no way inferior to the professors of them?

***

Soc. In my opinion then, Gorgias, the whole of which rhetoric is a part is not an art at all, but the habit of a bold and ready wit, which knows how to manage mankind: this habit I sum up under the word "flattery";

FIRE (Financial, Insurance, and Real Estate

Dow Overvalued??? What Happend To "Reversion to Mean"

Dow and Home Prices Adjusted for Inflation: 1924 - 2007

EARLY STAGE HOUSING DEPRESSION

HOUSEHOLD LEVERAGE - UNCHARTED TERRITORY

DIVERGENCE BETWEEN DOMESTIC DEMAND AND REAL GDP

This is what John Mauldin has to say about the bond market which I agree with. There is a lot smart-money short long-bonds based on their technical break of the 20-year channel. Deflation will be the threat more than inflation over the next few years.

CONSTRUCTIVE BOND MARKET OUTLOOK

"A continuing contraction in both the growth of total reserves and the transactions-based monetary aggregates, as well a downturn in the velocity of money, suggest that monetary conditions remain restrictive. These monetary considerations, combined with greater slack in the labor markets, will serve to put additional downward pressure on the inflation rate. Even though a weak dollar and increases in commodity prices suggest that inflation will rise, this is not likely to be the case. Demand will be too weak to allow cost increases to be passed along to consumers. Thus, weakness in domestic demand suggests that profit margins will be compressed in this environment.

In the latest twelve months, the core real personal consumption expenditures deflator rose at a 1.8% annual rate, down from a peak of 2.5% reached in February of this year. Over the next six months, this measure of inflation should ease toward 1.5%. This is good news for bond investors. Moreover, the highly leveraged condition of the U.S. economy, as well as the huge volume of mortgage resets scheduled for the first half of 2008, suggest that exiting the growth recession will not occur quickly or easily. Indeed, no growth, or an outright recession, is a distinct possibility. In this environment, the entire Treasury yield curve should shift downward. The greatest returns will accrue to those investors positioned in the long-end of the Treasury bond market."

Home is where the rot starts

But the good news may be about to come to an end. The housing downturn has entered a second, more dangerous, phase: one in which the construction rout deepens, price declines accelerate and the wealth effect of falling prices begins to change consumers' behaviour. The pain will be intensified by a sharp credit crunch, the scale of which is only just becoming clear. And, in the short term, it will be exacerbated by a spike in oil prices—up by 25% since August—that is extreme, even by the standards of recent years. The result is likely to be America's first consumer-led downturn in close to two decades.

The most recent research implies that changes in Americans' housing wealth affects their spending more than similar changes in their financial wealth, although the effect takes longer to emerge. A $100 fall in financial wealth is traditionally associated with a $3-5 decline in spending. An equivalent fall in housing wealth, it seems, eventually reduces spending by between $4 and $9.
Given that America's stock of residential housing is worth some $21 trillion (or almost one-third of all household assets), a 10% drop in house prices would make a discernible dent in consumption growth.

Higher fuel costs are the equivalent of a tax on consumers, reducing the amount of money they can spend on other things. Jan Hatzius, of Goldman Sachs, reckons that a rise in petrol prices of one cent reduces consumers' overall disposable income by about $1.2 billion, and tends to drag consumer spending down by $600m.

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