Quotulatiousness

March 26, 2025

Rich country foreign aid – threat or menace?

Filed under: Africa, Bureaucracy, Economics, Government, USA — Tags: , , — Nicholas @ 03:00

John H. Cochrane on the benefits and harms that aid from rich countries has done to the poor recipient nations around the world:

At half the dinners I go to, someone says, well, yes, a lot of the USAID money was mis-spent, but what about the poor starving children in Africa? If you are in that situation, this is the article for you.

This article is about about the centerpiece of aid: “development” aid, designed to boost economic growth, not about the politicized “nonprofits” that USAID was supporting and their bloated staffs, funneling aid money to political advocacy and employment, promoting American self-loathing around the world, and so forth.

    Development spending accounts for almost three-quarters of all aid.

And the enterprise is a colossal failure.

    The capital of Malawi, one of the world’s poorest countries, runs on aid. A city built in the 1970s by the World Bank, Lilongwe’s straight streets are filled with charities, development agencies and government offices. Informal villages house cooks and cleaners for foreign officials; the entrance to each is marked with the flag of its national sponsor.

The money is small compared to advanced country GDP, but huge compared to poor country government resources […]

The results of such spending are no better in Malawi than in the US — even if it’s free to the recipient. Add the preference of aid advocates for “sustainable” or “appropriate” and “green” technology, including these days hostility to GMO foods, and social or environmental wrappers, “climate justice” and so on, indeed even the hostility to capitalism, “consumerism” and growth itself and it’s not a surprise this is a rathole. (Again, it’s cheap from our perspective. The problem is that it’s wholly ineffective. If money really could jump start growth, that would be great.)

One of the central conundrums of aid is that it can destroy local industry. Sending food, for example, seems like a no-brainer of mercy. And in a war, crop failure, or other catastrophe it is. But sending food on a regular basis bankrupts local farmers.

Central idea 1: Imagine just how happy the US might be if China decided in its mercy to tax Chinese citizens, buy crops at overvalued prices (which incidentally pleases Chinese farmers), and send bags of rice to the US for free, marked “gift of the CCP”, thereby bankrupting US rice farmers. Or if it decided to send us really cheap electric vehicles to help us speed towards net zero, thereby undermining our own state-supported EV business. Well, you know exactly how our government feels about this sort of thing! And this is exactly what aid does.

Now, a good free market economist welcomes subsidized imports, and a push to leave agriculture and move to export-oriented manufacturing or other higher value industries. But Malawi doesn’t have other higher value industries, and exporting anything to the advanced economies is getting harder and harder. Extending the old proverb, send a man a fish a day forever, and he forgets how to fish.

The article opened my eyes (some more) to the delicate intertwining of economics and politics. We really don’t live in a free market world in the US (note our executives rushing to change ideology and please the new team in Washington), and even less so in poor countries.

    Western aid officials often want to prevent local politicians, who control crucial industries, from profiting as a result of their projects, meaning they select obscure sectors for tax breaks, credit and subsidies. With few investors willing to stump up capital, and little interest from local politicians, the businesses duly flop.

Here is a conundrum for you. Without 10% off the top for the big guy, businesses will flounder.

February 28, 2025

Taking money from poor people in rich countries to give to rich people in poor countries

Filed under: Britain, Government, Media, Politics — Tags: , , , — Nicholas @ 03:00

Tim Worstall explains how government foreign aid is quite literally anti-democratic (which is why it’s rare for governments to allow the voters any input about the subject):

Obviously we need to start with the observation of Peter, Lord Bauer — foreign aid is nicking money off poor people in rich countries to give to rich people in poor countries. As the sort of people who rule us went to school with those who rule the poor countries — I did, with the President of the Philippines, Bongbong, for example. V different year but still — it’s people nicking our money to spend on making themselves look good to their peer group.

You know, elite virtue signalling.

Yes, of course 0.7% of GDP should be spent upon Official Development Aid. ODA is very important, dont’cha kno’? Every chav in Britain should have near 1% of everything they do collected up and sent off to Ol’ Bongie. Obviously. Couldn’t face an Old Boys dinner without that now, could I?

Now of course that’s not actually quite how it’s put even if that is what it actually is. But just the sometimes the truth slips out from those corridors of power.

    The former head of the Foreign Office has warned Rachel Reeves not to cut Britain’s international aid spending, amid signs the chancellor is willing to raid the development budget to help pay for higher defence spending.

    Simon McDonald, the former lead civil servant at the Foreign Office, said it would damage Britain’s global reputation if Reeves chose to reduce aid as she looks for savings across Whitehall in this year’s spending review.

Reputation? Among whom? Among those who attended Pembroke?

    He told the Guardian: “At times of financial need, development assistance is an easy target for trimming because international assistance is not generally voters’ priority”.

Remember folks, democracy is that we the people decide. We’ve even those out there insisting that all economic decisions must be made via democratic means — that true economic democracy which is to be the new socialism.

But when democracy — in the form of “We don’t give a shit about that” — bumps up against the elite desire to look good at the state banqueting table guess what? Democracy has to git to buggery and the elite get to spend our money their way all the same.

No, really. Look what he’s saying. Voters don’t care. But they must be forced to pay all the same. So much for that vaunted democracy.

February 17, 2025

A maple-flavoured DOGE? Maxime Bernier proposed this in 2020

Filed under: Bureaucracy, Cancon, Government, Media, Politics — Tags: , , , , , , — Nicholas @ 05:00

It’s both amusing and alarming seeing the kind of things the US government has been pouring money into, as the young auditors of Elon Musk’s DOGE dig into the accounts. Some folks on social media have been asking for a Canadian version of DOGE, but they’re nearly five years behind PPC leader Maxime Bernier:

Did you know that the Canadian government is spending $143,000 to help the African country of Senegal implement a “sectorial gender strategy” in its armed forces?

Or $46,793 to improve healthcare for intersex people in the Chinese province of Shandong?

What about $4.6 million to develop programs promoting a “positive masculinity” in Cuba?

There are hundreds of such crazy programs costing Canadian taxpayers billions of dollars every year to fund the Liberals’ woke ideology in other countries.

Many people on social media just found out that these programs exist last week, after they started looking for them on the website of the Government of Canada.

They were inspired by similar crazy programs that Elon Musk has unearthed with his DOGE team in Washington.

The DOGE – or Department of Government Efficiency – was created by President Trump and has already cut tens of billions of dollars in frivolous spending after only a few weeks.

I’m being asked if I support having the equivalent of a DOGE in Canada.

Not only do I support it, but I didn’t wait for Trump and Musk to do it to propose one. I did years ago!

In 2020, I stated that a PPC government would have a Minister of Government Downsizing to examine every federal program and cut or abolish everything that is inefficient, wasteful or not essential.

And speaking of DOGE, Coyote Blog shares some thoughts about some of the reasons Democrats are critical of the organization’s efforts:

… having thought about this longer, I think this is about more than just money. It is also about class. Just listen to how the cool kids in the media talk about Musk’s group of young weirdly-nicknamed geeks. This is fairly typical:

    He was speaking specifically about a Trump executive order that decrees that the Department for Government Efficiency can force federal agencies into firing four people for every new hire. “Who the hell voted for Mr. Musk?” Begala raged. “Who the hell voted for — excuse the phrase — a guy who calls himself Big Balls? A 19-year-old kid going in there and trying to fire cancer researchers and scientists and teachers and agricultural specialists. It’s, it’s appalling.”

This is moderately hilarious from a) a party who still has not told us which unelected people really were making decisions behind the curtain for a senile Joe Biden; and b) an individual (Begala) who wielded immense power and influence across all departments of the Clinton Administration. The department staffs in DC are 99.99% people who are both unelected and unconfirmed by Congress. The issue is not that they are unelected, the issue is that they are “the wrong sort”. I am reminded of the British aristocracy in the 19th century that would tolerate almost any sort of governmental incompetence or malfeasance as long as the people were “the right sort” — meaning of their class.

The mention of Victorian England reminds me of another way that class is likely involved here. In the English aristocracy the oldest son inherited the title and often all the land and income (which was entailed to the title). This left little for any additional sons, so an income had to be found somewhere for them in a profession that did not require them to sully themselves with “trade” (daughters were handled a different way, through the marriage market). Reading for the law was an acceptable profession for a son with brains, and the army or navy were outlets for many. But most families needed a way for their sons without too much brains or ability and not militarily inclined to make a living. A position in the Church was often the solution.

Modern American blue-blood parents are no different — they need a way to secure a living for their kids who won’t or can’t land a job in the modern elite career choices (law, consulting, investment banking, or a sexy startup). Unlike in Victorian times, the military or the Church are no longer preferred elite options. So what to do with your 22-year-old gender studies major? The parents need her to get an income and they need her to do it in a context that they can proudly report to their friends — Paul Begala does not want to tell his friends that his son’s job is maintaining distributor pricing lists (anyone who does not believe the latter criteria should have been at my Princeton or Harvard Business School 25th reunions).

The solution? Get them a job at a non-profit, the modern American version of going to the Church. As Arnold Kling noted once, non-profits tend to have much higher status than do for-profits. And without competition they don’t have to carry the same performance standards as for-profits. And they are incredibly susceptible to trading a position for your kid in exchange for a nice donation.

The employment rosters of non-profits and NGO’s are stuffed with the children of privilege. So much so that there are many non-profits that seem to do nothing EXCEPT employ and pay the travel expenses of 20-something kids from rich and/or influential families. I have been writing about the non-profit scam for years. As I wrote then:

    From my direct experience, I would go further. There is a tranche (I don’t know how large) of non-profits that are close to outright scams, providing most of their benefits to their managers and employees rather to anyone outside the organization. These benefits include 1) a salary with few performance expectations; 2) expense-paid parties and travel; 3) myriad virtue-signalling opportunities; 4) opportunities to build personal networks. This isn’t just criticizing theoretical institutions — people I know are in such jobs in these organizations.

The spending that DOGE is going after at USAID and other departments likely threatens the income of a number of under-qualified elite kids. So I will update my meme:

February 11, 2025

The End of Empire? Colonialism in Crisis – W2W 003

Filed under: Britain, Economics, France, History, Russia, USA — Tags: , , , , , , — Nicholas @ 04:00

TimeGhost History
Published 9 Feb 2025

In 1946, the old colonial empires of Britain and France struggle to maintain control as nationalist movements rise and their economies crumble. Meanwhile, two new superpowers — the U.S. and the USSR — seek to reshape the world in their image, using decolonization as both an ideal and a tool for influence. As the colonial order fractures, global power shifts, and the battle for dominance begins.
(more…)

February 9, 2025

A “certain niche Canadian’s” prophetic look at Western demography

Filed under: Books, Government, Politics, USA — Tags: , , , , , — Nicholas @ 03:00

Mark Steyn reminds us that it’s twenty years since he published America Alone: The End of the World as We Know It, which has become more and more accurate every year:

~As some readers may be aware, next year marks the twentieth anniversary of a certain “niche Canadian”‘s boffo international bestseller on demography. So the other day I was musing on whether it was too soon to mark the occasion — only to find I’d been beaten to the punch by the Nigerian media bigfoot Azu Ishiekwene:

    It’s nearly 20 years since Mark Steyn wrote a non-fiction book, America Alone: The End of the World as We Know It.

    Steyn, a Canadian newspaper columnist, could not have known that the kicker of this book title, which extolled America as the last bastion of civilisation as we know it, would become the metaphor for a wrecking ball.

    Steyn thought demographic shifts, cultural decline, and Islam would ruin Western civilisation. The only redeeming grace was American exceptionalism. Nineteen years after his book, America Alone is remembered not for the threats Steyn feared or the grace of American exceptionalism but for an erratic president almost alone in his insanity.

    The joke is on Steyn.

Oh, well. It was good while it lasted — which wasn’t as long as it should have, thanks to the dirty stinkin’ rotten corrupt American “justice” system (see below).

~But I thank Mr Ishiekwene for reminding me of the twin theses of my book: on the one hand, “demographic shifts, cultural decline, and Islam” and, on the other, “American exceptionalism”. The first half is undeniable: At one point last year, there were no Anglo-Celtic heads of government anywhere in the British Isles except for Northern Ireland. Nobody even talks about “demographic shifts”, with even “conservative” politicians preferring to focus on “British values” or “French values” or “[Your Country Here] values”, even as those “values”, not least freedom of speech, are remorselessly surrendered. The UK’s “Deputy Prime Minister”, Angela Rayner, is proposing as the state’s reaction to the Southport stabbings, about which the most intemperate Tweeters were less inaccurate than the state propaganda, to restrict free expression even further. Islam? In Britain, Germany, France, the Netherlands, we would rather our children be stabbed and gang-raped than do anything about it, especially if it risks being damned as “Islamophobic”. The delightful Ms Rayner, who once boasted about flashing her soi-disant “ginger growler” across the Commons to Boris Johnson at Question Time, will be keeping it under wraps in the years ahead.

~As for the second part of my book’s arguments — “American exceptionalism” — well, it’s been a rough twenty years. But, to cast Azu Mr Ishiekwene’s contempt for an “an erratic president almost alone in his insanity” in a more generous light, the last three weeks have been a useful reminder that America is still different — or, at any rate, retains the capacity to be different. In his first days in office Trump 47 yanked the US from the World “Health” Organisation and the Paris “climate” accord and the UN “Human Rights” Council. If I have been insufficient in my praise for this energy, it is only because I held out hopes that a man “alone in his insanity” might have simply nuked the WHO. But, such disappointments aside, in Britain (and in the EU it has yet to leave in any meaningful sense), no such decisive acts in the here-and-now can even be contemplated.

And just because I’ve been including a fair bit of USAID-related stuff this week, he comments on Elon Musk’s epic sidequests investigations into US government waste and corruption:

~That’s the good news — and it’s very heartening. The bad news is that almost everything the national government (it is no longer really “federal”) of the United States touches is a racket.

The United States Agency for International Development is so-called in order that gullible rubes who listen to NPR think that it’s something to do with helping starving children in Africa. The cynical rubes who follow Conservative Inc think it’s something to do with helping African dictators’ Swiss bank accounts and endlessly regurgitate the old line about “international aid” taking money from poor people in rich countries to give to rich people in poor countries. But this is the cynicism of the terminally naïve and does a great injustice to the average blood-drenched Somali warlord. As Elon Musk has pointed out, ninety per cent of USAid funds are disbursed in the Washington, DC area. Opponents of that line say, ah, yes, but that’s misleading because some of it then gets passed on outside the Beltway eventually to reach some emaciated Congolese laddie.

Well, I would doubt it. There is no legitimate reason for Bill Kristol and Mona Charen to be receiving any funds from an agency for “international development” — and they surely know it. The least we should expect from them is that they come by their Never Trumpery honestly.

But I wouldn’t be surprised to learn that that 90-10 ratio is pretty standard. The US armed forces account for forty per cent of the planet’s total military spending. Does ninety per cent of that also get disbursed in the District of Columbia? On Thoroughly Modern Milley’s ribbon budget? It’s as good an explanation as any for the failure to win anything since VJ Day. The rube right’s antipathy to foreigners shouldn’t blind us to the fact that the overwhelming majority of the corruption is domestic — and it’s a very bipartisan sewer.

So I wish Trump, Musk et al the best of luck. But, notwithstanding that every rinky-dink District Court judge seems to be labouring under the misapprehension that he’s head of the executive branch of government, Trump has spent the last three weeks doing things. There is no sign that that is even possible in the rest of the west, where the Dutch model seems to prevail: Geert Wilders wins the election, but then gets neutered.

So, in a sense, Azu Ishiekwene is right. There is a yawning chasm between Trump and the poseur attitude-flaunting rest of the west. And yet Mr Ishiekwene is wrong on this: an erratic president is not almost alone in his insanity. In case you haven’t noticed, Panama won’t be renewing its Chinese deal on the Belt & Road Initiative, and El Salvador is happy to gaol anybody Trump sends them. It turns out that the quickest way to solve any international dispute is to threaten the recalcitrant with twenty-five per cent tariffs starting at midnight. If the forty-seventh president doesn’t seem interested in “winning hearts and minds”, it’s because he’s found something more effective.

February 6, 2025

The fascinating (domestic and) transnational role of USAID

Filed under: Government, Politics, USA — Tags: , , , , , , — Nicholas @ 05:00

One of the most interesting moves of the Trump administration so far has been the lightning strike to shut down the United States Agency for International Development (USAID):

On closing it down Musk said: “USAID is a criminal organisation. Time for it to die.”

On Friday last week, Elon Musk and DOGE wanted access to agency systems of the giant USAID. When senior officials refused, by Saturday they were put on leave.

    “Spent the weekend feeding USAID into the wood chipper,” Musk boasted on X.

    “It became apparent that it’s not an apple with a worm it in,” Musk said in a live session on X Spaces early Monday. “What we have is just a ball of worms. You’ve got to basically get rid of the whole thing. It’s beyond repair.” — AP News

Elon Musk and DOGE closed the doors, and sent the head honchos packing. One officeworker said staff rushed to take down things like Pride Flags and incriminating books (whatever that means), and now they have lost access to their computers, and the site is down.

As Donald Trump and Elon Musk cut back rogue government agencies, USAID looks more and more like a giant money laundering racket. It has (or had) 10,000 employees and a budget of $50 billion dollars. It’s presented as a humanitarian aid group, but the AID in US-AID means the US Agency for International Development which turns out to mean anything and everything. The humanitarian projects include giving $53 million dollars to the starving EcoHealth Alliance which used that to pay for bioweapon research in Wuhan, China, helping to create Covid-19. USAID also funded the production of heroin in Afghanistan. The WhiteHouse revealed that USAID also funded DEI projects in Serbia, and DEI musicals in Ireland. They spent US Taxpayer money on transgender operas in Colombia and a trans comic book in Peru.

As Mike Benz describes it, USAID was the Ultimate Nerve Center Of A Rogue Foreign Policy Establishment

Mike Benz, former State Department Cyber expert, has studied USAID closely and says:

    USAID grantee NGOs literally take their USAID money then turn around and lobby all key members of Congress to give more and more US taxpayer money to USAID each year in the budget. USAID buys an army of lobbyists with your tax dollars to give it more of your money.

He also wonders why USAID gave $27 million to the US fiscal sponsor of the group controlling Soros-funded prosecutors and telling them which American citizens and politicians to prosecute?

Indeed, somehow USAID is also one of the “BBC Media Actions” top ten donors? Go figure? It’s just the US of A helping out third world countries like the UK, right?

    As Mike Benz said: the “BBC was in direct cahoots with USAID leadership on Internet censorship efforts to crush BBC’s online populist news competitors since 2017. I went over 9 hours of receipts on this in a 3-part private livestream lecture for my X subscribers”.

The BBC part of The Blob takes Blob money to lobby to cripple the media outside The Blob’s control. The words “Self Serving” come to mind.

Ron Paul agrees — USAID is a key component of US Regime change, meddling in foreign affairs. The news from Ukraine is essentially being controlled by USAID. Ukrainian media is Blob media.

Jo Nova posted a follow-up the next day:

Hands up who is still reeling with the news that USAID had 50 thousand million dollars of political and media influence? The annual budget of $50 billion dollars in the hands of unaccountable activist NGOs buys a lot of “journalists”, editors and teenage protestors. Suddenly a lot of global patterns make more sense.

Today we found out that news outlets like Politico, and the New York Times were being given millions of dollars from the US government.

Benny Johnson says:

    This is the biggest scandal in news media history: No employee at Politico got paid yesterday. First time ever the company missed a pay period. This is a crisis. Now we learn Politico — a “news company” — which spent the last 10 years trying to destroy the MAGA Movement was being massively funded by USAID.

It seems some $27 million dollars went to Politico during the Biden years — and that’s just the subscriptions (not the USAID). Truly, Politico charges as much as $10,000 for a single “Politico Pro” subscription — and so the taxpayers fork out big bucks to pay for politicians “work expenses”, and the money ends up covering the salaries of journalists who are working hard to deceive the hapless taxpayers.

As ZeroHedge reminds us, Politico went in hard in the 2020 election to cover for the Hunter Biden laptop from hell.

They also point out that the Blob has many other ways to keep newspapers toeing the line…

    It’s not just the subscriptions: there are huge “ad contracts”, dinner parties DC throws itself under the guise of “media conferences”, sponsorships, etc all paid for by taxpayers. Once done with Politico look at its spawn Axios, founded by Politico veterans

Niccolo Soldo included some commentary on the USAID shutdown in his weekend post a few days back:

Today I learned that all NGOs working in foreign countries that are funded by the USGov are having their funding suspended for 90 days. This is already sending shock waves around the world, as not only are State Department officials losing their shit, but local NGO employees are wondering how they can continue operating in the meantime:

People are quickly learning just how much of a footprint the USA has in their countries and how significant an influence they have on politics in their homelands. All of their Trojan horses are being exposed at the same time, meaning that it will take some time for most people to digest the sheer scale and size of US meddling abroad.

Mainstream media is already beginning to push back against this funding suspension, using their typical tricks to try and paint this order as potentially “risking the safety of millions“:

    Marocco strode into the offices of USAid this week flanked by members of Elon Musk’s “department of government efficiency”, a special group Trump created, with clipboards in hand. Several hours later, almost 60 senior officials from the office had been put on paid leave. Veteran aid officials with decades of experience at the agency were escorted from the building by security, according to current and former USAid officials, and their email accounts were frozen.

    “They wanted to decapitate the organisation,” said a current USAid employee. “And they did it by pushing aside the leadership and decades of experience.”

    The purge followed confusion within USAid over the stop-work orders drafted by Marocco and signed by Marco Rubio, the new secretary of state, leading some to believe that limited actions could continue if funds had already been committed.

The Guardian UK has decided to focus its attacks on Mr. Marocco.

    “We have identified several actions within USAid that appear to be designed to circumvent the president’s executive orders and the mandate from the American people,” wrote Jason Gray, USAid’s acting administrator, saying the relevant staff would be put on administrative leave.

    Some employees have openly rebelled. In an email to all staff seen by the Guardian, Nicholas Gottlieb, USAid’s director of employee and labor relations, said that appointees at USAid and “Doge” had “instructed me to violate the due process of our employees by issuing immediate termination notices”.

    Calling the requests “illegal”, Gottlieb said he “will not be a party to a violation of [due process]”. Hours later, he was put on administrative leave.

    In a separate email to the sidelined USAid senior staff, Gottlieb wrote that the “materials show no evidence that you engaged in misconduct”.

Fight! Fight! Fight!

    The chaotic rollout of the ban has led to whiplash for critical programs around the world, from emergency Aids relief (which has been granted a waiver), to clean-water and sanitation programs, to the Famine Early Warning Systems Network, which the Washington Post reported on Friday had gone offline.

    Yet there are few details of a vast review program, which is supposed to evaluate thousands of foreign aid grants as well as an expected torrent of waiver requests. And a number of the senior USAid staff put on administrative leave were lawyers who had helped prepare requests for exemptions from the foreign aid freeze, sources said.

Demoralization:

    Previous cables indicated that the people involved would include Marocco or the new director of policy planning, Michael Anton, another political appointee. The state department declined to answer questions from the Guardian about who is evaluating the reviews and how many staff had been detailed to the process.

    “We’re all trying to figure out, is there a review process? Who’s part of that review?” said the former senior USAid official. “Is it Pete Marocco and his two best friends?”

    At USAid, other directives have been enacted that have both defunded and demoralised staff. Photographs of aid programs around the world have been literally stripped off the walls after a “directive has been issued to remove all artwork and photographs from the offices and common spaces across all buildings”.

    Musk’s “efficiency department” has crowed about slashing $45m in scholarships for students from authoritarian Burma.

    The $40bn a year that the US spends on foreign aid is less than 1% of its budget. But the US spends $4 out of every $10 spent globally on humanitarian aid, according to the state department, and the sudden cutoff has led to thousands of layoffs among US contractors and local partners around the world.

And of course:

    A former USAid official said the decisions could put millions of people around the world at risk.

    “If there’s a tropical cyclone that hits Cox’s Bazar tomorrow, then how are you going to save all those people, and then how are you going to rebuild if there’s a stop-work order?” said a former senior USAid official, referring to the city in Bangladesh where more than 1 million Rohingya refugees are living. “You could have people sitting there for 90 days and sitting and waiting for what? That’s what worries more.”

Critics who say that this order effectively reduces US influence abroad are absolutely correct … but what if this is part of a widely-assumed fundamental change in how the USA conducts its foreign policy?

Seen on the social media network formerly known as Twitter:

February 1, 2025

DOGE’s first week

Filed under: Bureaucracy, Government, USA — Tags: , , , , — Nicholas @ 04:00

J.D. Tuccille on the odd position DOGE finds itself in, as many Americans seem conflicted about cutting back the federal government:

The new Department of Government Efficiency (DOGE) is off to a quick start, if we consider the advisory board’s claimed savings in federal spending and the voluntary buyout of workers that could reduce the ranks of federal employees with a minimum of drama. But while the public agrees that corruption, inefficiency, and red tape are serious problems for the government, DOGE itself enjoys mixed popularity and majorities believe the government spends too little on big-ticket items, leaving little room for savings. The American people themselves are a big obstacle to paring the federal government to size.

DOGE Off to a Good Start

“DOGE is saving the Federal Government approx. $1 billion/day, mostly from stopping the hiring of people into unnecessary positions, deletion of DEI and stopping improper payments to foreign organizations, all consistent with the President’s Executive Orders,” the DOGE X feed boasted this week. “A good start, though this number needs to increase to > $3 billion/day.”

The Trump administration also sent a letter to the majority of the federal government’s roughly three million workers, offering a “deferred resignation” plan. Those who accept the deal could stop working for the government as of February 6 and still be paid through September of this year. The administration expects up to 10 percent of workers to take the offer. The voluntary nature of the plan blunts inevitable complaints from unions about “purging the federal government of dedicated career civil servants”.

We will have to see what the results will be in the coming months and years. But if that works out, it’s a pretty good launch for an administration and its advisory board that are less than two weeks old. Unfortunately, Americans aren’t sure where they stand on all this.

The Public Frets About Corruption, Inefficiency, and Red Tape …

According to AP-NORC polling, majorities believe that corruption (70 percent), inefficiency (65 percent), and red tape such as regulations and bureaucracy (59 percent) are “major problems within the federal government.” These findings square with the results of other surveys revealing that “nearly 2/3 of Americans fear that our government is run by corrupt officials” (Babbie Centre at Chapman University, Spring 2024), that 56 percent of Americans say government is “almost always wasteful and inefficient” (Pew Research, June 2024), and that “55% of Americans say the government is doing too much” (Gallup, November 2024). That’s exactly what the Trump administration created DOGE to combat, so it should be a good sign for the project.

But Americans are torn over DOGE. Asked by AP-NORC to share their opinions of “an advisory body on government efficiency led by Elon Musk and Vivek Ramaswamy” (before Ramaswamy left to run for office), only 29 percent support the venture while 39 percent oppose it. That seems to reflect its leadership. Fifty-two percent of those polled have an unfavorable opinion of tech titan Musk, while 36 percent view him favorably.

Why the hate? Musk’s problem may be that he’s a high-profile rich guy with things to say at a time when that type of person isn’t especially popular. Sixty percent of respondents believe it would be a bad thing “if the president relies on billionaires for advice about government policy”. That disapproval crosses over into opinions about DOGE, even if people say they support its goals.

January 5, 2025

“Everything humans build starts with human and social capital. This includes everything economic.”

Filed under: Economics, Education, History, Technology — Tags: , , , , , — Nicholas @ 05:00

Lorenzo Warby explains why he has always disagreed with the “standard model” of economic growth, as it fails to include the biggest cultural variables that matter enormously for economic development:

“Hyderabad bazaar” by ruffin_ready is licensed under CC BY 2.0 .

The seminal theory of economic growth is the Solow Growth Model (technically, the Solow-Swan model). The model can be easily expressed mathematically.

I have never liked the model, nor its later variations.1 The intuition behind my dislike was that societies — and indeed different ethnic groups within societies — obviously varied enormously in their capacity to use, to “put together”, the factors of production. They also vary enormously in their capacity to generate factors of production: specifically capital, the produced means of production. The model implies that there will be a general convergence between economies that has not happened.

Updating the model by including human capital was a gesture in that direction but did not fix the problem with the model, which is much more basic. The update attempted to grapple with the failure of investment to flow to poorer countries and, by implication, the long-term, systematic failures of foreign aid. The failures of foreign [aid] also supported my intuition.

The most recent (2024) Nobel memorial was for work that also directly supports my intuition — how much institutions matter for economic growth. The long-term economic growth literature — identifying culture as very much mattering for economic growth — also supports my intuition.

Skills and knowledge (human capital) are basic

To explain why the entire approach — basically, fiddling with some version of the Cobb-Douglas production function — is fundamentally mistaken, we need to go back to the origins of human economic growth. I mean, right back — all the way to foragers.

What are the original forms of capital? Well, there are tools, which are the original form of physical capital. But without the skills to make and use the tools, they either do not exist, or they are useless.

So, we start with skills and knowledge, with human capital. It takes almost 20 years to train a young human forager to be a subsistence adult — that is, to forage as much nutrition as they consume. The need to stuff the human brain with skills and knowledge — and the need to grow a brain that can be so stuffed — is why we have the most biologically expensive children in the biosphere. The need to impart skills to biologically expensive children is fundamental to the dynamics of all human societies.

Human capital — skills and knowledge — is not an “add on”. It is basic.

So are social connections (social capital)

Foragers do not live as atomistic individuals. They live in families and (fluid) foraging bands. Families and foraging bands are vehicles for our highly cooperative subsistence and reproduction strategies.

That we are the tool-making and tool-using species lacking tearing teeth and claws with the most biologically expensive offspring is why we have highly cooperative subsistence and reproduction strategies. It is also why we are so much the normative species — enabling robust cooperation based on convergent expectations — and why we have prestige and propriety as forms of status.

Both these forms of status represent currencies of cooperation. Prestige grants people status for doing things which are risky, clever, hard, entertaining. It is status by conspicuous competence. It provides a way to reward people for engaging in activities which generate wider social benefits — what economists call positive externalities. It also encourages people to want to associate with you.2

The other form of status — propriety — grants status to those who uphold the norms of the group. In particular, it wields stigma against those deemed to have violated those norms. It provides a way to punish people for engaging in activities which generate wider social costs — what economists call negative externalities. It helps solve the free-rider problem regarding the effort to enforce norms.

Reversing (i.e. perverting) status patterns so that people get prestige from victimhood — extending to various forms of failures of competence or even wildly anti-social behaviour — while stigmatising people who conspicuously successful (as oppressors or exploiters) is deeply destructive of human flourishing.3 We can see this pattern currently operating in “progressive” US states, and especially cities, but murderous versions of it operated in various Communist states. These things affect economic activity, but cannot be discerned by a Cobb-Douglas production function.

It is not true that scientists have never discovered Homo economicus. Unfortunately, Homo economicus is not a member of genus Homo. It is Pan troglodytes (chimpanzees) playing strategy games in a lab. It is precisely because we Homo sapiens are more normative, allowing us to encapsulate the social conquest of the Earth, that there are billions of us and only a few thousand of them.

We — as a highly social, indeed ultra-social, species — engage in both individual and social calculations. Different cultures notoriously generate different patterns for, and balances between, such calculations.

    1. The model has some utility for short-term calculations of growth.

    2. As with any social benefit, the knock-on dynamics of prestige can be complex, but status from conspicuous competence is at the heart of it.

    3. The November 2014 Shirtgate controversy — where a rocket scientist who had led the technically incredibly difficult task of landing a probe on a comet was publicly humiliated over the shirt he wore (a gift from a female friend it turned out) — represented conspicuous achievement (prestige) being trumped by feminist stigmatisation (propriety).

December 6, 2024

QotD: Herbert Hoover in the Harding and Coolidge years

Filed under: Bureaucracy, Government, Quotations, USA — Tags: , , , , , , , , — Nicholas @ 01:00

[Herbert] Hoover wants to be president. It fits his self-image as a benevolent engineer-king destined to save the populace from the vagaries of politics. The people want Hoover to be president; he’s a super-double-war-hero during a time when most other leaders have embarrassed themselves. Even politicians are up for Hoover being president; Woodrow Wilson has just died, leaving both Democrats and Republicans leaderless. The situation seems perfect.

Hoover bungles it. He plays hard-to-get by pretending he doesn’t want the Presidency, but potential supporters interpret this as him just literally not wanting the Presidency. He refuses to identify as either a Democrat or Republican, intending to make a gesture of above-the-fray non-partisanship, but this prevents either party from rallying around him. Also, he might be the worst public speaker in the history of politics.

Warren D. Harding, a nondescript Senator from Ohio, wins the Republican nomination and the Presidency. Hoover follows his usual strategy of playing hard-to-get by proclaiming he doesn’t want any Cabinet positions. This time it works, but not well: Harding offers him Secretary of Commerce, widely considered a powerless “dud” position. Hoover accepts.

Harding is famous for promising “return to normalcy”, in particular a winding down of the massive expansion of government that marked WWI and the Wilson Administration. Hoover had a better idea – use the newly-muscular government to centralize and rationalize American In his first few years in Commerce – hitherto a meaningless portfolio for people who wanted to say vaguely pro-prosperity things and then go off and play golf – Hoover instituted/invented housing standards, traffic safety standards, industrial standards, zoning standards, standardized electrical sockets, standardized screws, standardized bricks, standardized boards, and standardized hundreds of other things. He founded the FAA to standardize air traffic, and the FCC to standardize communications. In order to learn how his standards were affecting the economy, he founded the NBER to standardize government statistics.

But that isn’t enough! He mediates a conflict between states over water rights to the Colorado River, even though that would normally be a Department of the Interior job. He solves railroad strikes, over the protests of the Department of Labor. “Much to the annoyance of the State Department, Hoover fielded his own foreign service.” He proposes to transfer 16 agencies from other Cabinet departments to the Department of Commerce, and when other Secretaries shot him down, he does all their jobs anyway. The press dub him “Secretary of Commerce and Undersecretary Of Everything Else”.

Hoover’s greatest political test comes when the market crashes in the Panic of 1921. The federal government has previously ignored these financial panics. Pre-Wilson, it was small and limited to its constitutional duties – plus nobody knows how to solve a financial panic anyway. Hoover jumps into action, calling a conference of top economists and moving forward large spending projects. More important, he is one of the first government officials to realize that financial panics have a psychological aspect, so he immediately puts out lots of press releases saying that economists agree everything is fine and the panic is definitely over. He takes the opportunity to write letters saying that Herbert Hoover has solved the financial panic and is a great guy, then sign President Harding’s name to them. Whether or not Hoover deserves credit, the panic is short and mild, and his reputation grows.

While everyone else obsesses over his recession-busting, Hoover’s own pet project is saving the Soviet Union. Several years of civil war, communism, and crop failure have produced mass famine. Most of the world refuses to help, angry that the USSR is refusing to pay Czarist Russia’s debts and also pretty peeved over the whole Communism thing. Hoover finds $20 million to spend on food aid for Russia, over everyone else’s objection […]

So passed the early 1920s. Warren Harding died of a stroke, and was succeeded by Vice-President “Silent Cal” Coolidge, a man famous for having no opinions and never talking. Coolidge won re-election easily in 1924. Hoover continued shepherding the economy (average incomes will rise 30% over his eight years in Commerce), but also works on promoting Hooverism, his political philosophy. It has grown from just “benevolent engineers oversee everything” to something kind of like a precursor modern neoliberalism:

    Hoover’s plan amounted to a complete refit of America’s single gigantic plant, and a radical shift in Washington’s economic priorities. Newsmen were fascinated by is talk of a “third alternative” between “the unrestrained capitalism of Adam Smith” and the new strain of socialism rooting in Europe. Laissez-faire was finished, Hoover declared, pointing to antitrust laws and the growth of public utilities as evidence. Socialism, on the other hand, was a dead end, providing no stimulus to individual initiative, the engine of progress. The new Commerce Department was seeking what one reporter summarized as a balance between fairly intelligent business and intelligently fair government. If that were achieved, said Hoover, “we should have given a priceless gift to the twentieth century.”

Scott Alexander, “Book Review: Hoover”, Slate Star Codex, 2020-03-17.

October 13, 2024

Occupation of Germany, Plunder and Enslavement?

Filed under: Britain, Economics, France, Germany, History, Military, USA, WW2 — Tags: , , , , , , , , — Nicholas @ 04:00

World War Two
Published 12 Oct 2024

The Allies’ occupation of Germany was marked by competing visions for its future, ranging from France’s focus on security to the Soviet push for reparations. This episode dives into the complex negotiations that determined Germany’s borders, industrial disarmament, and economic management, all of which would shape Europe’s post-war order and fuel the East-West divide.
(more…)

August 9, 2024

QotD: Celebrity fund-raising for foreign aid

Filed under: Africa, Economics, Government, Media, Quotations, USA — Tags: , , , — Nicholas @ 01:00

Unlike private capital, foreign “aid” enters a country not because conditions there favor economic growth but because that country is poor — because that country lacks institutions and policies necessary for growth. And the more miserable its citizens’ lives, the more foreign “aid” its government receives.

Can you imagine a more perverse incentive? The poorer and more wretched are a nation’s people, the more likely celebrities such as Bono will convince Westerners and their governments to take pity on that country and to send large sums of money to its government. And because that country’s citizens are poor largely because their government is corrupt and tyrannical, the money paid in “aid” to that government will do nothing to help that country develop economically.

The cycle truly is vicious. Aid money naively paid by Westerners to alleviate Third-World poverty is stolen or misspent by the thugs who control the governments there. Nothing is done to foster the rule of law and private property rights that alone are the foundation for widespread prosperity. The people remain mired in ghastly poverty, their awful plight further attracting the attention and sympathy of Western celebrities, who use their star attraction and media savvy to shame politicians in the developed world into doling out yet more money to the thugs wielding power in the (pathetically misnamed) “developing world”.

If I could figure out a way to measure the long-term consequences of this new round of debt relief — a way that is so clear and objective that even the most biased party could not quibble with it — I would offer to bet a substantial sum of money that years from now this debt relief will be found to have done absolutely no good for the average citizens of the developing world.

It’s a bet I would surely — and sadly — win.

Don Boudreaux, “Faulty Band-Aid”, Pittsburgh Tribune-Review, 2005-06-18.

June 13, 2024

Debunking the “miraculous” Marshall Plan

Filed under: Economics, Europe, Germany, History, USA, WW2 — Tags: , , , , , , , , — Nicholas @ 03:00

If you’ve read anything about the state of Europe in the aftermath of the Second World War, you’ll undoubtedly have heard of the way the Marshall Plan did wonders to get (western) Germany and the other battle-devastated nations back on their feet economically. At FEE, Christian Monson suggest that you’ve been provided with a very rosy scenario that doesn’t actually accord with the facts:

Konrad Adenauer in conversation with Ludwig Erhard.
KAS-ACDP/Peter Bouserath, CC-BY-SA 3.0 DE via Wikimedia Commons.

Unfortunately, the ubiquity of the myth that the Marshall Plan rebuilt Germany is proof that state-controlled education favors propaganda over economic literacy. Despite the fact that most modern historians don’t give the Marshall Plan much credit at all for rebuilding Germany and attribute to it less than 5 percent of Germany’s national income during its implementation, standard history textbooks still place it at the forefront of the discussion about post-war reconstruction.

Consider this section from McDougal Littell’s World History (p. 968), the textbook I was given in high school:

    This assistance program, called the Marshall Plan, would provide food, machinery, and other materials to rebuild Western Europe. As Congress debated the $12.5 billion program in 1948, the Communists seized power in Czechoslovakia. Congress immediately voted approval. The plan was a spectacular success.

Of course, the textbook makes no mention of the actual cause of the Wirtschaftwunder: sound economic policy. That’s because, for the state, the Marshall Plan makes great statist mythology.

Not only is it frequently brought up to justify the United States getting involved in foreign conflicts, but it simply gives support for central planning. Just look at the economic miracle the government was able to create with easy credit, they say.

And of course, admitting that the billions of dollars pumped into Germany after WWII accomplished next to nothing, especially when compared to something as simple as sound money, would be tantamount to admitting that the government spends most of its time making itself needed when it isn’t and thereby doing little besides getting in the way.

The Inconvenient Truth of Currency Reform

You are unlikely to find the real cause of the Wirtschaftwunder mentioned in any high school history textbook, but here is what it was. In 1948, the economist and future Chancellor of West Germany Ludwig Erhard was chosen by the occupational Bizonal Economic Council as their Director of Economics. He went on to liberalize the West German economy with a number of good policies, the most important being currency reform.

The currency in Germany immediately after WWII was still the Reichsmark, and both the Nazis and then the occupying Soviet authorities had increased the amount in circulation significantly. As a result, by 1948 the Reichsmark was so worthless that people had turned to using cigarettes and coffee as money.

To give people a true store of value so that they could calculate economic costs accurately, assess risk and invest in the future, Erhard created the Deutsche Mark, West Germany’s new currency. Like ripping off a bandaid, he decreased the money supply by 93 percent overnight.

It’s also worth noting that while Erhard, following his school of Ordoliberalism, did form a central bank, it was at least designed independent from the government and followed a hard-money policy (preserving a stable amount of money) through the length of the Wirtschaftswunder. In fact, the original Bank Deutsche Länder was rather limited in scope until it was reorganized as the considerably more centralized Bundesbank in 1957, incidentally when Germany’s economic miracle began to lose steam.

Other notable liberal policies instituted by Erhard included removing all price controls and lowering taxes from the Nazis’ absurd 85 percent to 18 percent. The American occupational authorities opposed these reforms, but Erhard went through with them anyway. This liberalization had an immediate effect. The black market disappeared almost overnight, and in one year, industrial output almost doubled.

Perhaps most poignantly, unemployment dropped from more than 10 percent to around 1 percent by the end of the 1950s. Normally the government tries to justify currency manipulation as a means to eliminate unemployment, but the Wirtschaftwunder is evidence that sound money does the job far better.

May 29, 2024

A visit to failure pier

Filed under: Middle East, Military, USA — Tags: , , , , , , , — Nicholas @ 04:00

CDR Salamander has some advice for any US congresscritter with a spine (unfortunately, that probably means none of them):

This old operational planner has one bit of advice to Congress in their role of having oversight of the Executive Branch; subpoena the Decision Brief for the Gaza pier operation.

This was on the lowest of low scale of military operations, Humanitarian Assistance/Disaster Response. There is little to nothing classified about any of this rump of a capability. Call in member of the Joint Staff who were involved in this planning — and I would prefer if you could find a few terminal O5/6 to testify as well. You might actually enjoy some candor.

The Commander’s Intent, the Higher Direction and Guidance, the Planning Assumptions, the Constraints and Restraints, the Critical Vulnerability analysis, etc. It is all there. If not, the Chairman of the Joint Chiefs of Staff and the Secretary of Defense should tell the American people to their face.

This is a larger issue than anything happening in that impossible corner of the globe. Over the weekend, we saw yet more indications of an empire in decline deteriorating from bad to pathetic.

From the time the first load came off the pier, the aid barely made it past 300 meters until it disappeared into Hamasistan.

I’ll go ahead and tap the sign;

[…]

Generally this latest act in this other-end-of-the-Med-from-the-Greeks tragedy that has unfolded in front of everyone. As we saw at the top at Ashkelon Beach, first some ancillary bits floated over to Israel as the Eastern Mediterranean reminded everyone it is at the eastern end of a big sea with weather and waves and stuff.

We then found out that three soldiers were injured in a forklift accident. Just to add insult to injury, as the locals laughed, it appears more of the business end decided to try to make it to Haifa on its own.

[…]

I’m not sure how you scatter Army property all over the Eastern Med without a boot getting dry, but maybe I’m wrong. Gaza is lava, and all.

Empires don’t often die in a blaze of glory, no. More often than not they end in simpering apologies and excuses from poor leaders putting the wrong people in positions they have no place being, and when they fail — there is no accountability.

May 10, 2024

A different take on the Russo-Ukrainian War

Filed under: Economics, Europe, History, Military, Russia — Tags: , , , , , — Nicholas @ 04:00

Kulak suggests that far from being a model for future wars, the ongoing conflict in Ukraine may not prefigure anything at all about future wars:

Few weeks go by where I don’t read a piece on how Ukraine is the Future of warfare and armies and thinkers need to adjust to the reality that the warfare of the future will involve massive unaccountable amounts of artillery, trenches, conscription and grinding warfare.

While sometimes they point to relevant lessons: Yes the inability of the US to quickly reindustrialize and produce artillery shells at a rate comparable to Russia does speak to a profound rot in American governance, the military industrial complex, and American business regulation more generally,

Often times the conclusions drawn are dangerously delusional: A draft would be more likely to break the American nation than save it. As indeed conscription has resulted in Ukraine’s population collapsing with somewhere between 6 and 10 million Ukrainians (out of a pre-war 36 million) having fled the country, not to escape the mostly static war, but to escape the Totalitarian conditions the Zelensky regime has imposed in response to the war. (1.1 million of whom escaped INTO Russia, for any who deny this [is] largely an ethnic conflict between Western and Russian Ukrainians, as it has been since 2014).

And the thing is all of these discussions rest on a assumption that seems ludicrous the second you stop and think about it: Ukraine is not the future of Warfare, these conditions will be almost impossible to ever create again.

Ukraine had a pre-war Nominal GDP of 199 billion USD. Officially this only declined to 160 billion in 2022 as a result of the war, but there’s good reason to think its actual internal private sector economy collapsed far further [given] it had collapsed from 177 billion in 2013 to 90 billion in 2015 as a result of the US backed Coup/Revolution.

Indeed given the population flight, conscription, and impositions on the populace, it is very likely a SUPER-MAJORITY of that 160 billion GDP in 2022, was actually the result of US and NATO pouring hundreds of billions into the country. Where it was either used or siphoned off as corruption.

Simply put Ukraine has received military, financial and other aid most like in excess of what its entire internal economy produced in the same period, and as of writing it’s still losing territory.

When commentators say this is a war between NATO and Russia they are almost entirely correct. If you combine all the economies that are funding, arming, or fighting on one side or the other of this war you get a majority of the entire global economy.

And they have used all that money to pay off the Ukrainian regime to refuse any peace agreement, even ones their own negotiators had agreed to, and that were clearly in the best interest of the country … you know if you value hundreds of thousands of young men and not having your population collapse more than narrow stretches of land being bought up by Blackrock.

March 6, 2024

QotD: Mansa Musa’s disastrous foreign aid to Cairo

Filed under: Africa, Economics, History, Middle East, Quotations, Religion — Tags: , , , , , , , — Nicholas @ 01:00

Mansa Musa’s good intentions may be the first case in history of failed foreign aid. Known as the “Lord of the Wangara Mines”, Mansa Musa I ruled the Empire of Mali between 1312 and 1337. Trade in gold, salt, copper, and ivory made Mansa Musa the richest man in world history.

As a practicing Muslim, Mansa Musa decided to visit Mecca in 1324. It is estimated that his caravan was composed of 8,000 soldiers and courtiers — others estimate a total of 60,000 — 12,000 slaves with 48,000 pounds of gold and 100 camels with 300 pounds of gold each. For greater spectacle, another 500 servants preceded the caravan, and each carried a gold staff weighing between 6 and 10.5 pounds. When totaling the estimates, he carried from side to side of the African continent approximately 38 tons of the golden metal, the equivalent today of the gold reserves in Malaysia’s central bank — more than countries like Peru, Hungary or Qatar have in their vaults.

On his way, the Mansa of Mali stayed for three months in Cairo. Every day he gave gold bars to the poor, scholars, and local officials. Mansa’s emissaries toured the bazaars paying at a premium with gold. The Arab historian Al-Makrizi (1364-1442) relates that Mansa Musa’s gifts “astonished the eye by their beauty and splendor”. But the joy was short-lived. So much was the flow of golden metal that flooded the streets of Cairo that the value of the local gold dinar fell by 20 percent and it took the city about 12 years to recover from the inflationary pressure that such a devaluation caused.

Orestes R Betancourt Ponce de León, “5 Historic Examples of Foreign Aid Efforts Gone Wrong”, FEE Stories, 2021-06-06.

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