When considering the major failures of recent American governance – the 2008-09 financial crisis, the catastrophe that is U.S. policy in the Mideast – the one thing that any honest-minded person must conclude is: Nobody meant for things to turn out this way. It is impossible to make precise predictions about the effects of government policy; that is the nature of systems characterized by high levels of complexity. It’s one thing to predict that it’ll be colder during the winter, but another thing to predict down to the millimeter how much snow will fall on a particular acre in rural Maine on the third Wednesday in February, which is really what we expect from our public policy.
Classic cowboy movies, in contrast, are not complex at all: The good guys wear white hats, the bad guys wear black hats, all hats remain firmly affixed to all heads at all times, and that’s that. You can pretty much always predict how an old Western is going to turn out.
But that isn’t how the real world works.
On Tuesday, I had a conversation about Elizabeth Warren and Wall Street, pointing out that the popular version of that story – Senator Warren vs. Wall Street – is so oversimplified as to be not merely useless but misleading. The reality is that there are people working on Wall Street who dislike Senator Warren – investors and bankers, mainly – and people who adore her – notably Wall Street lawyers, who are reliable donors to her campaign and to those of other Democrats. My naïve interlocutor said: “Hopefully, it’s the lawyers that fight against Wall Street,” as though there were such a thing, as though there weren’t nice progressive lawyers in Manhattan who jokingly refer to their yachts as the SS Dodd-Frank.
Spend any time writing about this sort of thing and you’ll hear angry and panicked denunciations of derivatives-trading from people who pretty clearly do not know what a derivative is, just as you’ll hear paeans to Glass-Steagall sung by people who don’t understand the difference between a commercial bank and an investment bank, who don’t know how Goldman-Sachs makes its money or what it is that Standard & Poor’s does.
But they’re quite sure they know who is wearing the black hats.
Kevin Williamson, “Black Hats and White Hats”, National Review, 2015-04-15.
November 24, 2016
QotD: Black hats and white hats
November 23, 2016
QotD: The Progressive worldview
In order to understand this, we must first identify what the Progressive worldview is. Boiled down to its simplest, it’s this: “The government can do it better”. Do what? Anything. Individual Progressives might believe that there should be certain limits on what the government should do, but the overall guiding star of the movement is that everything will work better when the government is in charge. It’s nothing more than a Utopian vision: Things aren’t perfect now, but when WE are in charge of them, then we can make them perfect. The fact that perfection is impossible never enters their minds.*
[…]
* I’m taking their stated beliefs at face value, and many of the foot soldiers of the revolution, Lenin’s “useful idiots”, probably do in fact believe that they are working for a “better world”. Most of the leadership behind the Progressive movement is far too smart to believe any such thing. Utopia is just the flashy bling to dazzle the rubes. Their motivations are no different than any other humans. There’s an acronym that identify why people become traitors or spies — MICE — which stands for Money, Ideology, Coercion and Ego. I don’t think it vastly different here, although I’d substitute Power for Coercion in those that seek to be the ruling class.
Weirddave, “Fundamental Concepts – Why the Left Hates Families”, Ace of Spades H.Q., 2015-03-28.
November 19, 2016
November 17, 2016
Deregulation’s return
I rarely say nice things about Jimmy Carter’s term as president, but he should get more credit for the deregulation that happened under his administration — the lifting of restrictive and obsolete rules over things like railroads, long-distance trucking, and (most important to drinkers) enabling the rebirth of craft brewing — many of the economic benefits were later attributed to Reagan, but Carter did the heavy lifting on several important issues. It’s a hopeful sign that S.A. Miller says Congress and the Senate may be in a deregulatory mode after Trump’s inauguration:
Sen. Rand Paul said Wednesday that he expects a flurry of repeals of Present Obama’s regulations by the next Congress and President-elect Donald Trump.
“You’re gong to find that we are going to repeal a half dozen or more regulations in the first week of Congress, and I’m excited about it because I think the regulations have been killing our jobs and making us less competitive with the world,” the Kentucky Republican said on MSNBC’s Morning Joe program.
Mr. Trump, whose surprise win over Democrat Hillary Clinton sent shock waves across the Washington political establishment, pledged on the campaign trail to tackle over-regulation by the Obama administration.
The federal government has imposed more than 600 major regulations costing Americans roughly $740 billion since Mr. Obama took office in 2009.
Mr. Paul said he viewed many of the regulations under Mr. Obama to be unconstitutional because they were issued without Congress’ approval.
November 13, 2016
October 31, 2016
Is the “Gold Standard” of peer review actually just Fool’s Gold?
Donna Laframboise points out that it’s difficult to govern based on scientific evidence if that evidence isn’t true:
We’re continually assured that government policies are grounded in evidence, whether it’s an anti-bullying programme in Finland, an alcohol awareness initiative in Texas or climate change responses around the globe. Science itself, we’re told, is guiding our footsteps.
There’s just one problem: science is in deep trouble. Last year, Richard Horton, editor of the Lancet, referred to fears that ‘much of the scientific literature, perhaps half, may simply be untrue’ and that ‘science has taken a turn toward darkness.’
It’s a worrying thought. Government policies can’t be considered evidence-based if the evidence on which they depend hasn’t been independently verified, yet the vast majority of academic research is never put to this test. Instead, something called peer review takes place. When a research paper is submitted, journals invite a couple of people to evaluate it. Known as referees, these individuals recommend that the paper be published, modified, or rejected.
If it’s true that one gets what one pays for, let me point out that referees typically work for no payment. They lack both the time and the resources to perform anything other than a cursory overview. Nothing like an audit occurs. No one examines the raw data for accuracy or the computer code for errors. Peer review doesn’t guarantee that proper statistical analyses were employed, or that lab equipment was used properly. The peer review process itself is full of serious flaws, yet is treated as if it’s the handmaiden of objective truth.
And it shows. Referees at the most prestigious of journals have given the green light to research that was later found to be wholly fraudulent. Conversely, they’ve scoffed at work that went on to win Nobel prizes. Richard Smith, a former editor of the British Medical Journal, describes peer review as a roulette wheel, a lottery and a black box. He points out that an extensive body of research finds scant evidence that this vetting process accomplishes much at all. On the other hand, a mountain of scholarship has identified profound deficiencies.
October 18, 2016
QotD: “Smart Growth” regulations hurt the poor
In the 1970s, municipalities enacted new rules that were designed to protect farmland and to preserve green space surrounding rapidly growing cities by forbidding private development in those areas. By the late 1990s, this practice evolved into a land-use strategy called “smart growth.” (Here’s a video I did about smart growth.) While some of these initiatives may have preserved green space that can be seen, what is harder to see is the resulting supply restriction and higher cost of housing.
Again, the lower the supply of housing, other things equal, the higher real-estate prices will be. Those who now can’t afford to buy will often rent smaller apartments in less-desirable areas, which typically have less influence on the political process. Locally elected officials tend to be more responsive to the interests of current residents who own property, vote, and pay taxes, and less responsive to renters, who are more likely to be transients and nonvoters. That, in turn, makes it easier to implement policies that use regulation to discriminate against people living on low incomes.
Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.
October 17, 2016
Hillary Clinton tells us to expect a major US recession shortly after January 20, 2017
Fortunately, as Tim Worstall explains, politicians can rarely be believed — especially when it comes to economics:
Hillary Clinton Vows To Slam The Economy Into Recession Immediately Upon Election
This probably isn’t quite what Hillary Clinton intended to say but it is what she did say at a fundraiser on Friday night. That immediately upon election she would slam the US economy into a recession. For what she has said is that she’s not going to add a penny to the national debt. Which, in an economy running a $500 billion and change budget deficit means tax rises and or spending cuts of $500 billion and change immediately she takes the oath. And that’s a large enough and fierce enough change, before she does anything else, to bring back a recession.
[…]
Now, what she meant is something more like this. That she has some spending plans, which she does. And she is also proposing some tax rises. And that her tax rises will balance her spending plans and thus the mixture of plans will not increase the national debt. Which is possibly even true although I don’t believe a word of it myself. For her taxation plans are based upon static analyses when we really must use dynamic ones to measure tax changes. This is normally thought of as something that the right prefers. For if we measure the effects of tax cuts using the dynamic method then there will be some (please note, some, not enough for the cuts to pay for themselves) Laffer Effects meaning that the revenue loss is smaller than that under a static analysis. But this is also true about tax rises. Behaviour really does change when incentives change. Thus tax rises gain less revenue in real life than what a straight line or static analysis predicts.
That is, as I say, probably what she means. But that’s not actually what she said. She said she’ll not add a penny to the national debt. Which means that immediately on taking office she’s got to either raise taxes by $500 billion and change or reduce spending by that amount. Because the budget deficit is that $500 Big Ones and change at present and the deficit is the amount being added to the national debt each year. The problem with this being that that’s also some 3.5% or so of GDP and an immediate fiscal tightening of that amount would put the US economy back into recession.
September 29, 2016
Today’s utopian visionaries
Daniel Greenfield describes them very well:
The sort of people who set off class wars as a hobby have very particular classless societies in mind. The average left-wing revolutionary is not poor. He is a homicidal dilettante from the upper classes with a burning conviction of his own importance that he is unwilling to realize through disciplined labor. His revolution climaxes with a classless society in which he is at the very top.
Not near the top, not adjacent to the top, as he usually was before, but at the very top.
Utopia has a class system. At the top are the thinkers, the philosopher kings who develop plans based on how things ought to be and then turn them over to lesser men to actually implement. They are the priestly class of an ideological movement whose deity is politics and whose priests are politicians.
In a planned economy, they are the titans of industry and finance, they are the heads of banks and the men who move millions and billions around the board, and they are utterly unfit for the job. But they also make decisions in matters of war and science. And in all things. They measure political heresy in all things and all the activities of man are measured against their dogma and rewarded or punished.
This is the way it was in the Soviet Union or Communist China. But take a closer glance at the White House and see if you don’t spot the occasional similarity.
In the middle of Utopia’s class system is the middle class. This is not the middle class you are familiar with. There are no small business owners here. No one striving to make it up the ladder. Utopia’s middle class is the bureaucracy, the interlinked hive mind of government and non-profits.
At the top of Utopia’s class system are the philosopher-planners who issue the regulations. Or rather they offer objectives. The bureaucracy filters them through successive layers, transforming grandiose ideas into stultifying regulations and each successive layers expands them into further microcosms of unnecessary detail. This expansion of regulations also expands the bureaucracy. One feeds off the other.
September 20, 2016
QotD: Municipal parking regulations hurt the poor
Another land-use regulation that makes space more expensive is municipal requirements that establish a minimum number of parking spaces per housing unit.
According Donald Shoup’s analysis, parking requirements add significantly to the cost of housing, particularly in areas with high land values. For example, in Los Angeles, parking requirements can add $104,000 to the cost of each apartment. Parking requirements limit consumers’ choices and increase the cost of housing even for those who prefer not to pay for parking.
Developers typically build only the minimum amount of parking required by law, which indicates that those requirements are binding. That is, in a less-regulated environment, developers would devote less land to parking and more land to living space. A greater supply of living space will, other things equal, lower the cost of housing.
Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.
September 10, 2016
QotD: Organized government violence versus individual violence
By any measure, the pre-eminent form of aggressive pack violence is violence by governments, in either its explicit form as warfare and genocide or in more or less disguised peacetime versions. Take as one indicator the most pessimistic estimate of the 20th-century death toll from private aggression and set it against the low-end figures for deaths by government-sponsored violence (that is, count only war casualties, deliberate genocides, and extra-legal violence by organs of government; do not count the deaths incurred in the enforcement of even the most dubious and oppressive laws). Even with these assumptions biasing the ratio to the low side, the ratio is clearly 1000:1 or worse.
Readers skeptical of this ratio should reflect that government-directed genocides alone (excluding warfare entirely) are estimated to have accounted for more than 250,000,000 deaths between the massacre of the Armenians in 1915 and the “ethic cleansings” of Bosnia and Rwanda-Burundi in the late 1990s. Even the 9/11 atrocity and other acts of terrorism, grim as they have been, are mere droplets besides the oceans of blood spilled by state action.
In fact, the domination of total pack violence by government aggression reaches even further than that 1000:1 ratio would indicate. Pack violence by governments serves as a model and a legitimizing excuse not merely for government violence, but for private violence as well. The one thing all tyrants have in common is their belief that in their special cause, aggression is justified; private criminals learn and profit by that example. The contagion of mass violence is spread by the very institutions which ground their legitimacy in the mission of suppressing it — even as they perpetrate most of it.
And that is ultimately why the myth of man the killer ape is most dangerous. Because when we tremble in fear before the specter of individual violence, we excuse or encourage social violence; we feed the authoritarian myths and self-justifications that built the Nazi death camps and the Soviet gulags.
There is no near-term hope that we can edit either aggression or docility out of the human genome. And the individual small-scale violence of criminals and the insane is a mere distraction from the horrific and vast reality that is government-sanctioned murder and the government-sanctioned threat of murder.
To address the real problem in an effective way, we must therefore change our cultures so that either alpha males calling themselves “government” cease giving orders to perform aggression, or our bachelor males cease following those orders. Neither Hobbes’s counsel of obedience to the state nor Rousseau’s idolization of the primitive can address the central violence of the modern era — state-sponsored mass death.
To end that scourge, we must get beyond the myth of man the killer and learn to trust and empower the individual conscience once again; to recognize and affirm the individual predisposition to make peaceful choices in the non-sociopathic 97% of the population; and to recognize what Stanley Milgram showed us; that our signpost on the path away from mass violence reads “I shall not obey!”
Eric S. Raymond, “The Myth of Man the Killer”, Armed and Dangerous, 2003-07-15.
September 6, 2016
QotD: Minimum lot size regulations hurt the poor
Other things equal, the larger the lot, the more you’ll pay for it. Regulations that specify minimum lot sizes — that say you can’t build on land smaller than that minimum — increase prices. Regulations that forbid building more units on a given-size lot have the same effect: they restrict supply and make housing more expensive.
People who already live there may only want to preserve their lifestyle. But whether they intend to or not (and many certainly do so intend) the effect of these regulations is to exclude lower-income families. Where do they go? Where they aren’t excluded — usually poorer neighborhoods. But that increases the demand for housing in poorer neighborhoods, where prices will tend to be higher than they would have been.
And it’s not just middle-class families that do this. Very wealthy residents of exclusive neighborhoods and districts also have an incentive to support limits on construction in order to maintain their preferred lifestyle and to keep out the upper-middle-class hoi polloi. Again, the latter then go elsewhere, very often to lower-income neighborhoods — Williamsburg in Brooklyn is a recent example — where they buy more-affordable housing and drive up prices. Those who complain about well-off people moving into poor neighborhoods — a phenomenon known as “gentrification” — may very well have minimum-lot-size and maximum-density regulations to thank.
When government has the authority to restrict building and development, established residents of all income levels will use that power to protect their wealth.
Sandy Ikeda, “Shut Out: How Land-Use Regulations Hurt the Poor”, The Freeman, 2015-02-05.
September 2, 2016
QotD: H.L. Mencken’s beliefs
I believe that religion, generally speaking, has been a curse to mankind — that its modest and greatly overestimated services on the ethical side have been more than overcome by the damage it has done to clear and honest thinking.
I believe that no discovery of fact, however trivial, can be wholly useless to the race, and that no trumpeting of falsehood, however virtuous in intent, can be anything but vicious.
I believe that all government is evil, in that all government must necessarily make war upon liberty and the democratic form is as bad as any of the other forms.
I believe that the evidence for immortality is no better than the evidence of witches, and deserves no more respect.
I believe in the complete freedom of thought and speech — alike for the humblest man and the mightiest, and in the utmost freedom of conduct that is consistent with living in organized society.
I believe in the capacity of man to conquer his world, and to find out what it is made of, and how it is run.I believe in the reality of progress.
I — But the whole thing, after all, may be put very simply. I believe that it is better to tell the truth than to lie. I believe that it is better to be free than to be a slave. And I believe that it is better to know than be ignorant.
H.L. Mencken, “What I Believe”, The Forum 84, 1930-09.
September 1, 2016
Don’t blame the market for the EpiPen price hike – blame the FDA
Scott Alexander explains why “the market” has very little to do with the outrageous price hike for EpiPens:
EpiPens, useful medical devices which reverse potentially fatal allergic reactions, have recently quadrupled in price, putting pressure on allergy sufferers and those who care for them. Vox writes that this “tells us a lot about what’s wrong with American health care” – namely that we don’t regulate it enough:
The story of Mylan’s giant EpiPen price increase is, more fundamentally, a story about America’s unique drug pricing policies. We are the only developed nation that lets drugmakers set their own prices, maximizing profits the same way sellers of chairs, mugs, shoes, or any other manufactured goods would.
Let me ask Vox a question: when was the last time that America’s chair industry hiked the price of chairs 400% and suddenly nobody in the country could afford to sit down? When was the last time that the mug industry decided to charge $300 per cup, and everyone had to drink coffee straight from the pot or face bankruptcy? When was the last time greedy shoe executives forced most Americans to go barefoot? And why do you think that is?
The problem with the pharmaceutical industry isn’t that they’re unregulated just like chairs and mugs. The problem with the pharmaceutical industry is that they’re part of a highly-regulated cronyist system that works completely differently from chairs and mugs.
If a chair company decided to charge $300 for their chairs, somebody else would set up a woodshop, sell their chairs for $250, and make a killing – and so on until chairs cost normal-chair-prices again. When Mylan decided to sell EpiPens for $300, in any normal system somebody would have made their own EpiPens and sold them for less. It wouldn’t have been hard. Its active ingredient, epinephrine, is off-patent, was being synthesized as early as 1906, and costs about ten cents per EpiPen-load.
Why don’t they? They keep trying, and the FDA keeps refusing to approve them for human use. For example, in 2009, a group called Teva Pharmaceuticals announced a plan to sell their own EpiPens in the US. The makers of the original EpiPen sued them, saying that they had patented the idea epinephrine-injecting devices. Teva successfully fended off the challenge and brought its product to the FDA, which rejected it because of “certain major deficiencies”. As far as I know, nobody has ever publicly said what the problem was – we can only hope they at least told Teva.
[…]
Imagine that the government creates the Furniture and Desk Association, an agency which declares that only IKEA is allowed to sell chairs. IKEA responds by charging $300 per chair. Other companies try to sell stools or sofas, but get bogged down for years in litigation over whether these technically count as “chairs”. When a few of them win their court cases, the FDA shoots them down anyway for vague reasons it refuses to share, or because they haven’t done studies showing that their chairs will not break, or because the studies that showed their chairs will not break didn’t include a high enough number of morbidly obese people so we can’t be sure they won’t break. Finally, Target spends tens of millions of dollars on lawyers and gets the okay to compete with IKEA, but people can only get Target chairs if they have a note signed by a professional interior designer saying that their room needs a “comfort-producing seating implement” and which absolutely definitely does not mention “chairs” anywhere, because otherwise a child who was used to sitting on IKEA chairs might sit down on a Target chair the wrong way, get confused, fall off, and break her head.
(You’re going to say this is an unfair comparison because drugs are potentially dangerous and chairs aren’t – but 50 people die each year from falling off chairs in Britain alone and as far as I know nobody has ever died from an EpiPen malfunction.)
Imagine that this whole system is going on at the same time that IKEA spends millions of dollars lobbying senators about chair-related issues, and that these same senators vote down a bill preventing IKEA from paying off other companies to stay out of the chair industry. Also, suppose that a bunch of people are dying each year of exhaustion from having to stand up all the time because chairs are too expensive unless you’ve got really good furniture insurance, which is totally a thing and which everybody is legally required to have.
And now imagine that a news site responds with an article saying the government doesn’t regulate chairs enough.
August 29, 2016
QotD: Conflating the Hobbesian and Rousseauvian views of mankind
[…] there is a second, possibly more important source of the man-as-killer myth in the philosophy of the Enlightenment — Thomas Hobbes’s depiction of the state of nature as a “warre of all against all”, and the reactionary naturism of Rousseau and the post-Enlightenment Romantics. Today these originally opposing worldviews have become fused into a view of nature and humanity that combines the worst (and least factual) of both.
Hobbes, writing a rationalization of the system of absolute monarchy under the Stuart kings of England, constructed an argument that in a state of nature without government the conflicting desires of human beings would pit every man against his neighbor in a bloodbath without end. Hobbes referred to and assumed “wild violence” as the normal state of humans in what anthropologists now call “pre-state” societies; that very term, in fact, reflects the Hobbesian myth,
The obvious flaw in Hobbes’s argument is that he mistook a sufficient condition for suppressing the “warre” (the existence of a strong central state) for a necessary one. He underestimated the innate sociability of human beings. The anthropological and historical record affords numerous examples of “pre-state” societies (even quite large multiethnic/multilingual populations) which, while violent against outsiders, successfully maintained internal peace.
If Hobbes underestimated the sociability of man, Rousseau and his followers overestimated it; or, at least, they overestimated the sociability of primitive man. By contrasting the nobility and tranquility they claimed to see in rural nature and the Noble Savage with the all-too-evident filth, poverty and crowding in the booming cities of the Industrial Revolution, they secularized the Fall of Man. As their spiritual descendants today still do, they overlooked the fact that the urban poor had unanimously voted with their feet to escape an even nastier rural poverty.
The Rousseauian myth of technological Man as an ugly scab on the face of pristine Nature has become so pervasive in Western culture as to largely drive out the older opposing image of “Nature, red in tooth and claw” from the popular mind. Perhaps this was inevitable as humans achieved more and more control over their environment; protection from famine, plague, foul weather, predators, and other inconveniences of nature encouraged the fond delusion that only human nastiness makes the world a hard place.
[…]
In reality, Nature is a violent arena of intra- and inter-species competition in which murder for gain is an everyday event and ecological fluctuations commonly lead to mass death. Human societies, outside of wartime, are almost miraculously stable and nonviolent by contrast. But the unconscious prejudice of even educated Westerners today is likely to be that the opposite is true. The Hobbesian view of the “warre of all against all” has survived only as a description of human behavior, not of the wider state of nature. Pop ecology has replaced pop theology; the new myth is of man the killer ape.
Eric S. Raymond, “The Myth of Man the Killer”, Armed and Dangerous, 2003-07-15.
