The Johnstown Flood

Pennsylvania borrowed more money to build infrastructure supporting canals than any other state to take advantage of the trade opportunities of the Erie Canal. Construction started on the South Fork Dam in 1838 with scheduled completion within a year, but by the time it was finished in 1852 the railroads had made it obsolete. The state wrote it off and it eventually provided a fishing lake for Pittsburgh’s elite. When it burst in 1889, causing the Johnstown flood, the total loss in life and property was probably 100 times the initial construction cost. Pennsylvania, having long since declared bankruptcy in 1841, blamed the rich.

Most every year the Congress metaphorically dances on top of the earthen South Fork Dam looming over Johnstown with the water lapping at their feet. Their solution is always the same: Let’s throw some more dirt on top this year. We’ll drain it when we drain the swamp, after we eliminate the air pollution in Johnstown, the price paid for the industrial revolution raising American living standards in the late 1800s.

The primary issue facing America during the post WW II era was whether its consumerist economy could continue to produce rising living standards for all, the cornerstone of political legitimacy. The leader of America’s competitor Nikita Khrushchev in the Soviet Union put the issue crudely six decades ago: “we will bury you” with a savings and investment rate several multiples of yours. America’s intelligence community and economic elite were shocked by the sudden collapse of the Soviet economy – like a dam bursting – less than three decades later.

Khrushchev, like most of America’s development economists, understood the role of saving and investment but not how important the private capital markets were to the allocation of capital to its highest and best use, politically directed credit being the main cause of their collapse. In Johnstown everyone knew that the valves to lower the water level in the lake had been removed during the last amateurish reconstruction, but fixing or removing it was opposed by rich land owners. The debt ceiling has similarly proven an ineffective mechanism to control America’s flood of debt, with the central bank standing ready to buy it all to the benefit of the wealthy. American politicians, feeling unbound by constitutional constraints, are addicted to issuing debt, the birthing person’s milk of politics. The Biden Build Back Better Plan promises to strengthen the dam, but like the amateurish repairs to the South Fork will weaken the dam’s foundation while causing water levels to rise, possibly to a critical level.

Read more

We Need to Talk About Joe

The fictional mass murderer Kevin is most often described as a psychopath and his mother Eva a sociopath in book and movie reviews, the latter defined the same as the former, but without the insanity defense, i.e., a physical brain disorder rather than a choice. President Biden isn’t suspected of any such brain disorder (although dementia has long been suspected, common for his age). But Bruce Cannon Gibney argues that Baby Boomers, those born between 1940 and 1964, are A Generation of Sociopaths (2017) based primarily on their over-consuming at the expense of future generations, a massive inter-generational injustice. He allows for exceptions, but not among the Baby Boom political leaders, of which Joe Biden was the first on the national scene.

Sociopaths are defined as narcissists with additional characteristics, among which are: superficial charm, glib, manipulative, self serving, grandiose, pathological lairs, without remorse, self-centered, untrustworthy, physically aggressive, impulsive, blaming others, lacking in empathy, break promises, an ability to avoid persecution for illegal acts, and a belief they deserve to rule the world. As a result of the Obama/Biden “Good War” over half the current population of Afghanistan was born under American protection. These and thousands of those who assisted the American occupation and their families have been left behind by Joe to meet repression, and, for many, death at the hands of his captors and other Islamic radicals. His press conferences revealed almost all these sociopathic tendencies, leaving no doubt as to the applicability of Gibney’s diagnosis.

Like Kevin, Joe is competitive among his sociopathic political peers. For sheer narcissism it would be difficult to top former President Trump, and the Clintons are unlikely to ever be surpassed in the team sociopath competition. But Joe Biden, whose first attempt to rule the world over three decades ago was thwarted by a plagiarism scandal, seeks to exceed FDR, the record holder by size of Mall Monument, as a world leader not on his foreign policy experience, but by spending his way to a risky “fundamental transformation” of the US economy and society. Should we trust in Joe, or is he the “Borax Man” (a soap salesman)?

Read more

Looking Back on the Biden Ten Year Plan

(An Ode to Lionel Shriver)

—-

Back in 2021 President Biden reiterated that his proposals, unprecedented in scope and expense, represented an investment in the future with extraordinary returns that could only be evaluated over the longer, e.g., ten- to fifty-year time horizon. This perspective coincidentally facilitated claims it was paid for without new taxes, while postponing an evaluation of actual returns beyond his term in office, even if he should run and win a second term in 2024 at 82 years old.

Saving American Democracy

But it’s now a decade later and Biden is still in office. Well, not exactly in office, as he had been replaced by a hologram in late 2021, addressing the American people from his estate in McLean Virginia, purchased for $50 million cash (before GSA improvements). Following FDR’s precedent people were told that changing leaders in the midst of a crisis, and these continued to accumulate over the decade, was dangerous.

Besides, he had run virtually unopposed in the 2024 election after all those registered Republicans within a half mile of the Capitol on January 6,th 2021 had been arrested, tried, convicted and jailed for “terrorism and crimes against the State,” after which Republican voter registration plummeted.

The expanded Supreme Court, 29 Justices to accommodate race, ethnicity, gender, etc., had finally ruled on the legal concept of “disparate impact,” concluding that everything from global warming and COVID 19 to voter identification, rent collection, college admission requirements and even law enforcement represented illegal racial discrimination. The expanded Court then called an indefinite recess during the construction of a new edifice to house it.

There was really no point in holding a faux election in 2028 in any event. The progressive campaigns to eliminate the electoral college and voter ID laws to prevent “voter suppression” had both been successful, and the ongoing COVID lockdown still allowed mail-in ballots under the rules in place in 2020, so there was no need to go through the motions. The New York Times and the Washington Post, the only remaining Party sanctioned newspapers, simply announced “the will of the people.” By now, 2031, most people have long since forgotten the promises of that Biden Ten Year Plan.

Read more

Biden’s Bogus Chinese Bogeyman: America Should Kowtow Now

The focus has shifted from the typical initial totally perverse justifications for the current unprecedented (historic) spending plans, e.g., to “stimulate GDP” (a measure of spending) and “create jobs” (work is what we do to consume, not an end in itself) to meeting and defeating the threat posed by China’s expanding economic and military might. This is precisely the policy the Chinese would have demanded of their Manchurian candidate in return for their billion dollar Air Force 2 Hunter Biden “investment.”

America’s real casus belli (Thucydides provided three in 400 BC, fear, honor and interest) is part fear but mostly economic interest. China after a seven century hiatus is once again a rising imperial power following a traditional mercantilist approach of accumulating wealth through trade, simultaneously accumulating and investing in gold and a global belt and road trading system while restoring lost honor.

Why War?

Foreign policy, totally ignored during the 2020 Presidential election, is now front and center, with the Biden Administration, which initially kowtowed, now beating the war drums louder than did the Trump Administration. War is a continuation of politics by other means, and the politics among nations generally reflects their imperial interests. America’s Founding Fathers may have been libertarian theoreticians, but their complaints against the King related to the right to exploit America’s vacant land and resources. England may be “an island of coal surrounded by fish,” but the Admiralty of the Navy Winston Churchill recognized that England’s control of the seas required conversion to oil and that required control of the Middle East. The landscape had barely begun to recover from the Great War “to end all wars” when the same parties rearmed for the rematch.

Read more

“Follow the Science”: the Winning Political Slogan of 2020

Voting in the 2020 American presidential election raised the question posed by Johnny Carson’s game show “Who Do You Trust” (1957-1963). Candidate Biden was chosen based on trust in his half century track record as a political centrist opposed to his Party’s left wing agenda to promote racial, economic and environmental justice. “Follow the Science” on the pandemic became a campaign theme to bolster trust because scientists – unlike lifetime politicians – are perceived as purveyors of truth. The campaign worked, then centrism was abandoned.

COVID 19 brought to the fore the differences between advocates of science-driven management – the premise of not just pandemic management but the entire Biden Administration agenda – and competitive markets. How can producers and consumers stumble onto greater truths than scientists? Economist Adam Smith’s “invisible hand” explained how – almost a century before the naturalist, geologist and biologist Charles Darwin’s “origin”. Scientific investigations were historically the domain of idle rich like Smith and Darwin, because in addition to the need for peer review independent from political influence, they were expensive, time consuming and only infrequently produced interesting results.

Today almost-universal government funding either directly or indirectly has inevitably and irredeemable introduced bias (and sometimes worse)  into science, particularly the social sciences. Political narratives feed back into the data, producing more noise .

To Tell The Truth, the Whole Truth and Nothing But the Truth

Panelists grilled witnesses on “To Tell the Truth” (1956-1968) to identify the real from fictitious characters. Economist Raj Chetty notes:

“As is the case with epidemiologists, the fundamental challenge faced by economists — and a root cause of many disagreements in the field — is our limited ability to run experiments. If we could randomize policy decisions and then observe what happens to the economy and people’s lives, we would be able to get a precise understanding of how the economy works and how to improve policy. But the practical and ethical costs of such experiments preclude this sort of approach.”

Hence economists, like virologists, rely on limited models to make generalizations. Virologists study the cellular makeup of a virus to explain pandemics. Economists study discrimination to reach a generalized truth about systemic racism, or financial panics to understand contagion. Physicists search for sub-atomic Higgs Boson particles to explain the origins and workings of the universe(s).

Witnesses in American court rooms on Perry Mason (1957-1966) swore to tell “the whole truth and nothing but the truth” under penalty of law. Scientific truth is a building block. Economists can then apply their tools, e.g., cost benefit, present value, probability, value of life, etc. to various alternatives to determine the whole truth and develop policies that are in the “public interest.”

But economists and politicians don’t take that oath. 95% of social scientists and historians identified as liberal/democratic, a bias toward progressive political action. The word “policy” derives from the Greek word for politics which is generally not aligned with the public interest.

Historians are even more liberal than economists, but most object to the 1619 Project. It’s not the income inequality caused by market capitalism, but government favoritism that’s unjust. Environmentalists use limited anti-capitalist models  to produce seriously sub-optimal policy recommendations. This science isn’t “the whole truth and nothing but.”

Scientific certainties spanning decades or even centuries are often proven wrong with better methods and larger samples or metadata. The federal government has for a half century warned against animal fats in favor of margarine even though metadata disproved the theory in 2018. Just as virology models assume contagion due to irrational public behavior, economic models of “financial panic” assume uninformed individuals irrationally run on solvent banks; in actual fact depositors acted perfectly rational, queuing only at insolvent banks that were paying out at face value on a first come, first served basis. Large scale economic models that suffer from the bias of small scale models tend to over-estimate the benefits of political intervention and under-estimate the unseen “unintended” but predictable indirect costs.

Read more