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  • Archive for the 'Big Government' Category

    Bonhoeffer on Stupidity and the Public Sphere

    Posted by David Foster on 19th January 2018 (All posts by )

    Dietrich Bonhoeffer, a German theologian who became a leading member of an anti-Nazi conspiracy, wrote the following while he was in prison awaiting execution:

    Upon closer observation, it becomes apparent that every strong upsurge of power in the public sphere, be it of a political or a religious nature, infects a large part of humankind with stupidity. … The power of the one needs the stupidity of the other. The process at work here is not that particular human capacities, for instance, the intellect, suddenly atrophy or fail. Instead, it seems that under the overwhelming impact of rising power, humans are deprived of their inner independence and, more or less consciously, give up establishing an autonomous position toward the emerging circumstances. The fact that the stupid person is often stubborn must not blind us to the fact that he is not independent. In conversation with him, one virtually feels that one is dealing not at all with him as a person, but with slogans, catchwords, and the like that have taken possession of him. He is under a spell, blinded, misused, and abused in his very being. Having thus become a mindless tool, the stupid person will also be capable of any evil and at the same time incapable of seeing that it is evil. This is where the danger of diabolical misuse lurks, for it is this that can once and for all destroy human beings.

    via Intellectual Takeout

    Posted in Big Government, Deep Thoughts, Germany, Human Behavior, Leftism | 10 Comments »

    Flyoverphobia

    Posted by Sgt. Mom on 17th January 2018 (All posts by )

    So, there has always been a tension existing between city folks and country folks; the tale of the city mouse and the country mouse being an example. Then there are all those jokes about the city slicker and the country bumpkin, the effete city dweller and the down-to-earth country folk, the books, movies and television series painting the city as a glamorous yet spiritually and physically unhealthy place, the country being dull, desperately boring, backwards, even a bit dangerous … all in the spirit of good fun, mostly. But now we have a new and malignant version, and there is nothing at all fun about it. Here we have the bicoastal enclaves, all drawn as the glamorous and fabulously wealthy, sensitive and with-it woke folks … and then you have the flyover country in between, filled with – as the bicoastal see it – with those hateful, stupid looser deplorables, clinging to their guns, and religion, and hating on all those with darker skins.
    Read the rest of this entry »

    Posted in Big Government, Business, Conservatism, Deep Thoughts, Entrepreneurship, Leftism, Trump | 38 Comments »

    It’s looking as though the Trump team surveillance was done without a FISA warrant.

    Posted by Michael Kennedy on 10th January 2018 (All posts by )

    The war between President Trump and his government and the Democrats is heating up.

    Yesterday Diane Feinstein declassified and released the Simpson testimony transcript.

    In doing so, Feinstein and her Democratic colleagues are acting at Simpson’s behest. In his recent New York Times op-ed column (written with his colleague Peter Fritsch), Simpson complained about Republicans’ leak of selected details from his testimony to various congressional committees.

    Judiciary Committee Chairman Grassley has resisted the release of the transcript while the committee has yet to complete its investigation. Senator Grassley is not happy with Feinstein.

    One assumption, that I think well founded, is that this was done to coach subsequent witnesses to get their stories straight.

    Kim Strassel is one who has been reporting on this She has a new report.

    consider an email recently disclosed by the Young Turks Network, a progressive YouTube news channel. It’s dated Dec. 19, 2017, and its author is April Doss, senior counsel for the committee’s Democrats, including Vice Chairman Mark Warner.

    Ms. Doss was writing to Robert Barnes, an attorney for Charles C. Johnson, the controversial and unpleasant alt-right blogger. Mr. Johnson’s interactions with Julian Assange inspired some in the media to speculate last year that Mr. Johnson had served as a back channel between the Trump campaign and WikiLeaks. There’s still no proof, but in July the Intelligence Committee sent a letter requesting Mr. Johnson submit to them any documents, emails, texts or the like related to “any communications with Russian persons” in a variety of 2016 circumstances, including those related to “the 2016 U.S. Presidential Campaign.”

    Mr. Barnes seems to have wanted clarification from Ms. Doss about the definition of “Russian persons.” And this would make sense, since it’s a loose term. Russians in Russia? Russians in America? Russians with business in the country? Russians who lobby the U.S. and might be affected by the election—though not in contact with campaigns?

    Ms. Doss’s response was more sweeping than any of these: “The provision we discussed narrowing was clarifying that the phrase ‘Russian persons’ in [the committee letter] may be read to refer to persons that Mr. Johnson knows or has reason to believe are of Russian nationality or descent”.

    This is actually humorous. “Russian descent?” There are now jokes about ordering Russian Dressing in DC can get you investigated.

    The truth is not as funny.

    It looks like the surveillance of the Trump campaign was done by DOJ and the FBI without warrants at all. That is very illegal and should put some people in prison.

    President Obama’s political operatives within the DOJ-NSD were using FISA 702(17) surveillance “about inquiries” that would deliver electronic mail and phone communication for U.S. people (Trump campaign). The NSD unit (John Carlin) was working in coordination with the FBI Counterintelligence Unit (Bill Priestap, Peter Strzok etc.) to look at this campaign activity. DOJ Attorney Lisa Page was the intermediary between the DOJ National Security Division and he FBI Counterintelligence Division.

    In an effort to stop the FISA 702(17) activity NSA Director Mike Rogers initiated a full 702 compliance review. However, before the review was complete the DOJ-NSD had enough information for their Russian narrative; which was built upon FISA-702(17) that began in July ’16 per James Comey. Mike Rogers stopped the FISA702(17) process on October 26th 2016. As a result of his identifying the activity, Rogers became a risk; DNI James Clapper demanded he be fired.

    The plot was the “insurance policy” Strzok mentioned. The story is becoming more clear every day.

    On November 17th, 2016, NSA Director Admiral Mike Rogers went to see President-Elect Donald Trump in Trump Tower, New York. –SEE HERE– Director Rogers never told his boss DNI, James Clapper.

    ♦ On November 18th, 2016, the Trump Transition Team announced they were moving all transition activity to Trump National Golf Club in Bedminster, New Jersey. –SEE HERE– Where they interviewed and discussed the most sensitive positions to fill. Defense, State, CIA, ODNI.

    The transition team was set up in Trump Tower. The very next day, November 18th 2016, Trump moves the entire transition team to Bedminister New Jersey?

    Does this make more sense now?

    Yes, it does.

    It looks like they dd not even apply for a FISC warrant after they were turned down in July. They just “did it.”

    Sort of like the scene from “Absence of Malice.”

    Posted in Big Government, Conservatism, Elections, Trump | 32 Comments »

    I Am a Barbarian

    Posted by Jay Manifold on 23rd December 2017 (All posts by )

    Scott, James C. Against the Grain: A Deep History of the Earliest States. New Haven: Yale University Press, 2017.

    Scott has hit another metaphorical grand slam with this one, a worthily disconcerting follow-on to his earlier work. I have previously read (in order of publication, rather than the order in which I encountered them) The Moral Economy of the Peasant, Seeing Like a State, and Two Cheers for Anarchism, and found them congenial. Scott is particularly good at encouraging a non-elite viewpoint deeply skeptical of State power, and in Against the Grain he applies this to the earliest civilizations. Turns out they loom large in our imagination due to the a posteriori distribution of monumental ruins and written records—structures that were often built by slaves and records created almost entirely to facilitate heavy taxation and conscription. Outside of “civilization” were the “barbarians,” who turn out to have simply been those who evaded control by the North Koreas and Venezuelas of their time, rather than the untutored and truculent caricatures of the “civilized” histories.

    By these criteria, the United States of America is predominately a barbarian nation. In the order given above:

    Read the rest of this entry »

    Posted in Americas, Anglosphere, Big Government, Book Notes, Civil Society, Crony Capitalism, Culture, Current Events, Education, Entrepreneurship, History, Immigration, International Affairs, Latin America, Law Enforcement, Libertarianism, Markets and Trading, Military Affairs, National Security, North America, Political Philosophy, Politics, Society, Systems Analysis, Tradeoffs, Transportation, USA | 7 Comments »

    A Pretty Good Explanation of the “Russia did it” story.

    Posted by Michael Kennedy on 12th December 2017 (All posts by )

    This is an article that was deleted from Huffington Post without explanation after a long time contributor submitted it.

    Here is the Deep State at work.

    A lesson of the 2016 campaign was that growing numbers of Americans are fed up with three decades of neoliberal policies that have fabulously enriched the top tier of Americans and debased a huge majority of the citizenry. The population has likewise grown tired of the elite’s senseless wars to expand their own interests, which these insiders try to conflate with the entire country’s interests.

    America’s bipartisan rulers are threatened by popular discontent from both left and right. They were alarmed by the Bernie Sanders insurgency and by Donald Trump’s victory, even if Trump is now betraying the discontented masses who voted for him by advancing tax and health insurance plans designed to further crush them and benefit the wealthy.

    He is obviously not a Trump fan but his criticism of both sides sounds pretty accurate.

    I’ve pitched numerous news stories critical of U.S. foreign policy to a major American newspaper that were rejected or changed in the editorial process. One example is the declassified Defense Intelligence Agency document of August 2012 that accurately predicted the rise of the Islamic State two years later.

    The document, which I confirmed with a Pentagon spokesman, said the U.S. and its Turkish, European and Gulf Arab allies, were supporting the establishment of a Salafist principality in eastern Syria to put pressure on the Syrian government, but the document warned that this Salafist base could turn into an “Islamic State.”

    But such a story would undermine the U.S. government’s “war on terrorism” narrative by revealing that the U.S.-backed strategy actually was risking the expansion of the jihadists’ foothold in Syria. The story was twice rejected by my editors and has received attention almost entirely — if not exclusively — on much-smaller independent news Web sites.

    Again, he is a left winger but so was the guy who originally published the Deep State argument on Bill Moyer’s site.

    The concerns may be distorted by the writer’s own bias but the reality is that we are all threatened.

    Much of this spreading global hysteria and intensifying censorship traces back to Russia-gate. Yet, it remains remarkable that the corporate media has failed so far to prove any significant Russian interference in the U.S. election at all. Nor have the intelligence agencies, Congressional investigations and special prosecutor Robert Mueller. His criminal charges so far have been for financial crimes and lying to federal authorities on topics unrelated to any “collusion” between the Trump campaign and Russians to “hack” Democratic emails.

    It’s a long article and marred a bit by the writer’s left wing bias but it is worth reading.

    More Deep State News.

    In an otherwise well-buried interview between former interim CIA Director Mike Morell, (the temp director following Petraeus ouster used during initial Benghazi cover), there’s an admission by Morell about the politicized Deep State Intelligence leadership targeting candidate Donald Trump.

    What this interview tells CTH is that the Intelligence Community, writ large, is on the precipice of massive institutional change -perhaps high level firings of remaining mid level operators and management- and those who participated in the historic politicization are now attempting to shape an explanation.

    The CIA was participating in Hillary’s campaign.

    Posted in Big Government, Civil Liberties, Elections | 8 Comments »

    America’s Principal-Agent Problem

    Posted by Michael Kennedy on 10th November 2017 (All posts by )

    Instapundit frequently links to another story of government incompetence with the comment “We have the worst ruling class in our history.”

    There are so many examples, it is hard to list them but I will try with a few.

    First, let’s have a definition.

    The principal–agent problem, in political science and economics, (also known as agency dilemma or the agency problem) occurs when one person or entity (the “agent”) is able to make decisions on behalf of, or that impact, another person or entity: the “principal”.[1] This dilemma exists in circumstances where agents are motivated to act in their own best interests, which are contrary to those of their principals, and is an example of moral hazard.

    The Founders were well aware of this problem and tried to protect the citizens with certain provisions of the Constitution.

    No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.

    This provision was violated by Barack Obama who spent billions to subsidize insurance companies to support his “Affordable Care Act” which was not successful.

    Of course, the Amendments were intended to protect the rights of the people but the one that has been ignored for 100 years is the Tenth.

    The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

    The Civil War largely ended Federalism.

    Read the rest of this entry »

    Posted in Big Government, Civil Society, Elections, Politics | 23 Comments »

    Sputnik Anniversary Rerun – Book Review: Rockets and People

    Posted by David Foster on 4th October 2017 (All posts by )

    Today being the 60th anniversary of the Sputnik launch, here’s a rerun of a post about a very interesting book.

    Rockets and People, by Boris E Chertok

    Boris Chertok’s career in the Russian aerospace industry spanned many decades, encompassing both space exploration and military missile programs. His four-volume memoir is an unusual document–partly, it reads like a high school annual or inside company history edited by someone who wants to be sure no one feels left out and that all the events and tragedies and inside jokes are appropriately recorded. Partly, it is a technological history of rocket development, and partly, it is a study in the practicalities of managing large programs in environments of technical uncertainty and extreme time pressure. Readers should include those interested in: management theory and practice, Russian/Soviet history, life under totalitarianism, the Cold War period, and missile/space technology. Because of the great length of these memoirs, those who read the whole thing will probably be those who are interested in all (or at least most) of the above subject areas. I found the series quite readable; overly-detailed in many places, but always interesting. In his review American astronaut Thomas Stafford said “The Russians are great storytellers, and many of the tales about their space program are riveting. But Boris Chertok is one of the greatest storytellers of them all.”  In this series, Chertok really does suck you into his world.

    Chertok was born in Lodz, Poland, in 1912: his mother had been forced to flee Russia because of her revolutionary (Menshevik) sympathies. The family returned to Russia on the outbreak of the First World War, and some of Chertok’s earliest memories were of the streets filled with red-flag-waving demonstrators in 1917. He grew up on the Moscow River, in what was then a quasi-rural area, and had a pretty good childhood–“we, of course, played “Reds and Whites,” rather than “Cowboys and Indians””–swimming and rowing in the river and developing an early interest in radio and aviation–both an airfield and a wireless station were located nearby. He also enjoyed reading–“The Adventures of Tom Sawyer and Huckleberry Finn met with the greatest success, while Harriet Beecher Stowe’s Uncle Tom’s Cabin gave rise to aggressive moods–‘Hey–after the revolution in Europe, we’ll deal with the American slaveholders!” His cousin introduced him to science fiction, and he was especially fond of Aelita (book and silent film), featuring the eponymous Martian beauty.

    Chertok remembers his school years fondly–there were field trips to study art history and architectural styles, plus a military program with firing of both rifles and machine guns–but notes “We studied neither Russian nor world history….Instead we had two years of social science, during which we studied the history of Communist ideas…Our clever social sciences teacher conducted lessons so that, along with the history of the French Revolution and the Paris Commune, we became familiar with the history of the European peoples from Ancient Rome to World War I, and while studying the Decembrist movement and 1905 Revolution in detail we were forced to investigate the history of Russia.” Chertok purused his growing interest in electronics, developing a new radio-receiver circuit which earned him a journal publication and an inventor’s certificate. There was also time for skating and dating–“In those strict, puritanical times it was considered inappropriate for a young man of fourteen or fifteen to walk arm in arm with a young woman. But while skating, you could put your arm around a girl’s waist, whirl around with her on the ice to the point of utter exhaustion, and then accompany her home without the least fear of reproach.”

    Chertok wanted to attend university, but “entrance exams were not the only barrier to admission.” There was a quota system, based on social class, and  “according to the ‘social lineage’ chart, I was the son of a white collar worker and had virtually no hope of being accepted the first time around.” He applied anyhow, hoping that his journal publication and inventor’s certificate in electronics would get him in.” It didn’t–he was told, “Work about three years and come back. We’ll accept you as a worker, but not as the son of a white-collar worker.”

    So Chertok took a job as electrician in a brick factory…not much fun, but he was soon able to transfer to an aircraft factory across the river. He made such a good impression that he was asked to take a Komsomol leadership position, which gave him an opportunity to learn a great deal about manufacturing. The plant environment was a combination of genuinely enlightened management–worker involvement in process improvement, financial decentralization–colliding with rigid policies and political interference. There were problems with absenteeism caused by new workers straight off the farm; these led to a government edict: anyone late to work by 20 minutes or more was to be fired, and very likely prosecuted. There was a young worker named Igor who had real inventive talent; he proposed an improved linkage for engine and propeller control systems, which worked out well. But when Igor overslept (the morning after he got married), no exception could be made. He was fired, and “we lost a man who really had a divine spark.”  Zero tolerance!

    Chertok himself wound up in trouble when he was denounced to the Party for having concealed the truth about his parents–that his father was a bookkeeper in a private enterprise and his mother was a Menshevik. He was expelled from the Komsomol and demoted to a lower-level position.  Later in his career, he would also wind up in difficulties because of his Jewish heritage.

    The memoir includes dozens of memorable characters, including:

    *Lidiya Petrovna Kozlovskaya, a bandit queen turned factory supervisor who became Chertok’s superior after his first demotion.

    *Yakov Alksnis, commander of the Red Air Force–a strong leader who foresaw the danger of a surprise attack wiping out the planes on the ground. He was not to survive the Stalin era.

    *Olga Mitkevich, sent by the regime to become “Central Committee Party organizer” at the factory where Chertok was working…did not make a good first impression (“had the aura of a strict school matron–the terror of girls’ preparatory schools”)..but actually proved to be very helpful to getting work done and later became director of what was then the largest aircraft factory in Europe, which job she performed well. She apparently had too much integrity for the times, and her letters to Stalin on behalf of people unjustly accused resulted in her own arrest and execution.

    *Frau Groettrup, wife of a German rocket scientist, one of the many the Russians took in custody after occupying their sector of Germany. Her demands on the victors were rather unbelievable, what’s more unbelievable is that the Russians actually yielded to most of them.

    *Dmitry Ustinov, a rising star in the Soviet hierarchy–according to Chertok an excellent and visionary executive who had much to do with Soviet successes in missiles and space. (Much later, he would become Defense Minister, in which role he was a strong proponent of the Soviet invasion of Afghanistan.)

    *Valeriya Golubtsova, wife of the powerful Politburo member Georgiy Malenkov, who was Stalin’s immediate successor. Chertok knew her from school–she was an engineer who became an important government executive–and the connection turned out to be very useful. Chertok respected her professional skills, liked her very much, and devotes several pages to her.

    *Yuri Gagarin, first man to fly in space, and Valentina Tereshkova, the first woman.

    *Overshadowing all the other characters is Sergei Korolev, now considered to be the father of the Soviet space program although anonymous during his lifetime.  Korolev spent 6 years in labor camps, having been arrested when his early rocket experiments didn’t pan out; he was released in 1944.  A good leader, in Chertok’s view, though with a bad temper and given to making threats that he never actually carried out.  His imprisonment must have left deep scars–writing about a field trip to a submarine to observe the firing of a ballistic missile, Chertok says that the celebration dinner with the sub’s officers was the only time he ever saw Korolev really happy.

    Chertok’s memoir encompasses the pre-WWII development of the Soviet aircraft industry…early experiments with a rocket-powered interceptor…the evacuation of factories from the Moscow area in the face of the German invasion…a post-war mission to Germany to acquire as much German rocket technology as possible…the development of a Soviet ballistic missile capability…Sputnik…reconnaissance and communications satellites…the Cuban missile crisis…and the race to the moon.

    Some vignettes, themes, and excerpts I thought were particularly interesting:

    Read the rest of this entry »

    Posted in Aviation, Big Government, Biography, Leftism, Management, Military Affairs, Russia, Society, Space, Tech, Transportation | 15 Comments »

    “Spanish ships of war at sea! We have counted…” all of three?

    Posted by Margaret on 25th September 2017 (All posts by )

    OK, it’s not quite as impressive as the fleet of fifty-three that Sir Richard Grenville encountered. And for “ships of war” read “gigantic cruise ships loaded with Guardia Civil,” and if that isn’t a WTF moment, what is?
    For anybody who’s been sensibly ignoring the news for the last week: Catalonia wants to hold a referendum on independence this coming Sunday. Spain doesn’t want them to.
    So far, Spain has confiscated referendum ballots and ballot boxes, sent Spanish – not local – Guardia Civil to arrest over a dozen Catalan leaders (in dawn raids – shades of Franco!), and parked three cruise liners full of Guardia Civil outside Barcelona and Tarragona.
    The Catalan President Carles Puigdemont has announced that they have more ballot boxes stashed where the Spanish will never find them; the streets of Barcelona are filled with protestors; and the dockworkers of Barcelona and Tarragona have refused to provide any services to boats carrying security forces.
    Oh, and did I mention that at least one of the cruise ships is decorated with oversize Looney Tunes characters? (Some sources say all three, but I haven’t been able to verify that.)
    All this over a referendum that, according to polls before the Spanish Crackdown, was unlikely to garner over 40% support. And that wasn’t legally binding. The Spanish government appears terrified of allowing the Catalans even to express their opinions on the subject. So, naturally, they’ve embarked on a series of measures guaranteed to convert the other 60% of Catalans to the side of independence.
    Yup. Looney Tunes.
    But bear in mind that Sir Richard Grenville lost.

    Posted in Big Government, Current Events | 10 Comments »

    Summer Rerun: Attack of the Robot Bureaucrats

    Posted by David Foster on 20th September 2017 (All posts by )

    (rerun inspired by this story)

    Via Bookworm, here is a truly appalling story from Minnesota. When the fire alarm went off at Como Park High School, a 14-year-old girl was rousted out of the swimming pool, and–dripping wet and wearing only a swimsuit–directed to go stand outside were the temperature was sub-zero and the wind chill made it much worse. Then, she was not allowed to take refuge in one of the many cars in the parking lotbecause of a school policy forbidding students from sitting in a faculty member’s car. As Bookworm notes:

    Even the lowest intelligence can figure out that the rule’s purpose is to prevent teachers from engaging sexually with children.  The likelihood of a covert sexual contact happening between Kayona and a teacherunder the actual circumstances is ludicrous.  The faculty cars were in full view of the entire school.  There was no chance of illicit sexual congress.

    But the whole nature of bureaucratic rules, of course, is to forbid human judgment based on actual context.

    Fortunately for Kayona, her fellow students hadn’t had human decency ground out of them by rules: “…fellow students, however, demonstrated a grasp of civilized behavior. Students huddled around her and some frigid classmates [sic], giving her a sweatshirt to put around her feet. A teacher coughed up a jacket.” As the children were keeping Kayona alive, the teachers were workingtheir way through the bureaucracy.  After a freezing ten minutes, an administrator finally gave permission for the soaking wet, freezing Kayla to set in a car in full view of everybody.

    As Bookworm notes, this sort of thing is becoming increasingly common. In England in 2009, for example, a man with a broken back lay in 6 inches of water, but paramedics refused to rescue him because they weren’t trained for water rescues. Dozens of similar examples could easily be dredged up.

    The behavior of these bureaucrats is very similar to the behavior of a computer program confronted by a situation for which its designers did not explicitly provide. Sometimes the results will be useless, sometimes they will be humorous, often they will be harmful or outright disastrous.

    Last year in Sweden, there was rampant rioting that included the torching of many cars.  The government of Sweden didn’t do a very good job of protecting its citizens and their property from this outbreak of barbarism. Government agents did, however, fulfill their duty of issuing parking tickets…to burned-out cars. Link with picture.  In my post The Reductio as Absurdum of Bureaucratic Liberalism, I said…

    Read the rest of this entry »

    Posted in Big Government, Education, Germany, History, Human Behavior, Management, Video | 11 Comments »

    Remedial Reading for a ‘New Yorker’ Writer

    Posted by David Foster on 9th September 2017 (All posts by )

    This New Yorker writer seems to feel that, had government been adequately respected, funded and supported (and the dangers of Climate Change properly recognized), the ‘Cajun Navy’ of volunteer rescuers would not have been needed.

    Glenn Reynolds suggests that the author has apparently never read Alexis de Tocqueville.  (Or, alternatively, I would suggest, may have read him but not really understood him all that well)

    Tocqueville, of course, wrote famously (in his book Democracy in America) about the tendency of Americans to come together and form voluntary associations to accomplish particular goals, without anyone having to tell them to do so.

    Tocqueville also wrote another book, The Old Regime and the French Revolution, in which he traced the constancy of certain aspects of French society across the monarchy and the Republic.  In an appendix, he argues that “the physiognomy of governments can be best detected in their colonies, and rendered more conspicuous.”  Looking at French Canada under Louis XIV and Algeria under the Republic, he wrote:

    In both places the government numbers as many heads as the people; it preponderates, acts, regulates, controls, undertakes everything, provides for everything, knows far more about the subject’s business than he did hiself–is, in short, incessantly active and sterile.

    He contrasts this system–under which “there was not a shadow of municipal or provincial institutions; and no collective or individual action was tolerated” with that in America:

    In the United States, on the contrary, the English anti-centralization system was carried to an extreme.  Parishes became independent municipalities, almost democratic republics.  The republican element, which forms, so to say, the foundation of the English constitution and English habits, shows itself and develops without hindrance. Government proper does little in England and individuals do a great deal; in America, government never interferes, so to speak, and individuals do everything.

    Rose Wilder Lane also found it useful to contrast the differing colonial strategies of European powers:  France and Spain, on the one hand, and Britain, on the other:

    The Governments gave them (in the case of the French and Spanish colonies–ed) carefully detailed instructions for clearing and fencing the land, caring for the fence and the gate, and plowing and planting, cultivating, harvesting, and dividing the crops…The English Kings were never so efficient. They gave the land to traders. A few gentlemen, who had political pull enough to get a grant, organized a trading company; their agents collected a ship-load or two of settlers and made an agreement with them which was usually broken on both sides…To the scandalized French, the people in the English colonies seemed like undisciplined children, wild, rude, wretched subjects of bad rulers.

    Does the New Yorker writer also see Americans as “undisciplined children, wild, rude, wretched subjects of bad rulers,” with the badness of the rulers lying mainly in their not having been given enough power?

    It strikes me that Leftists are mostly very institutional people….they believe that things must be done by people who are properly trained and credentialed, organized in a top-down manner.

    This attitude was very much on display when, immediately after 9/11, the idea of arming airline pilots was first mooted. Media types were appalled; to them, there are people who are trained and credentialed to fly airplanes and there are people who are trained and credentialed to carry firearms on behalf of the government, and never the twain shall meet.

    (And, of course, it was action of the passengers, not coordinated by any central authority, that prevented Flight 93 from being used to conduct even greater devastation on 9/11.)

    Robert Heinlein wrote: “A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”

    Such thoughts are anathema to the Institutional Left.

    See also Lead and Gold on Elite Panic and The Hive Mind, also People are the Design Margin, by Richard Fernandez.

    Posted in Big Government, Civil Society, Deep Thoughts, France, History, Human Behavior, Leftism, Society, USA | 28 Comments »

    Summer Rerun: Six Hundred Million Years in K-12

    Posted by David Foster on 25th August 2017 (All posts by )

    (Millions of kids are already headed back to school, making it an appropriate time to again rerun this post)

    Peter Orszag, who was Obama’s budget director, thinks it would be a good idea to cut back on summer school vacations for kids, arguing that this would both improve academics and reduce obesity.

    I’m with Jeremy Lott:  But to look at the vast wasteland that is American public education–the poor teaching, the awful curriculum, the low standards, the anemic achievement, the institutional resistance to needed reform and say that the real problem is summer vacation takes a special sort of mind.

    I wrote about the war on summer vacation back in 2006, after stopping at a store in Georgia on the first day of August and discovering that this was the first day of school for the local children. My analysis:

    The truth is, most public K-12 schools make very poor use of the time of their students. They waste huge proportions of the millions of hours which have been entrusted to them…waste them through the mindless implementation of fads and theories, waste them through inappropriate teacher-credentialing processes, waste them through refusal to maintain high standards of performance and behavior.

    When an organization or institution proves itself to be a poor steward of the resources that have been entrusted to it, the right answer is not to give it more resources to waste.

    Orszag and similar thinkers seem to have no concept that good things can happen to children’s development outside of an institutional setting. Plenty of kids develop and pursue interests in science, literature, art, music…plus, there is plenty to be learned simply by interacting with friends in an unstructured environment.

    Would the world be better off if Steve Wozniak and Jerri Ellsworth..to name only two of many, many examples..had their noses held constantly to the school grindstone rather than having time to develop their interests in electronics?

    Lewis E Lawes, who was warden of Sing Sing prison from 1915 to 1941, wrote an interesting book titled Twenty Thousand Years in Sing Sing. The title refers to the aggregate lengths of the sentences of the men in the prison at a typical particular point in time.

    Lawes:

    Twenty-five hundred men saddled with an aggregate of twenty thousand years! Within such cycles worlds are born, die, and are reborn. That span has witnessed the evolution of the intelligence of mortal man. And we know that twenty thousand years have seen nations run their courses, perish, and give way to their successors. Twenty thousand years in my keeping. What will they evolve?

    Following the same approach, the aggregate length of the terms to be spent in K-12 schools by their current students is more than 600,000,000 years. What proportion of this time is actually used productively?

    And how many of the officials who supervise and run the public schools, and the ed-school professors who influence their policies, think about this 600,000,000 years in the same serious and reflective way that Lawes thought about the 20,000 years under his supervision? Some do, of course, but a disturbing percentage of them seem to be simply going through the bureaucratic motions.

    And the politicians and officials of the Democratic Party are the last people in the world who are ever going to call them on it.

    Posted in Big Government, Civil Society, Education, USA | 32 Comments »

    “ObamaCare Fines Nailed The Working Class In 2017 And Other Unpopular Truths”

    Posted by Jonathan on 29th July 2017 (All posts by )

    Investor’s Business Daily:

    Preliminary data from the 2017 tax season are in, and they’re shocking. Not only does it look like the working class bore the brunt of ObamaCare individual mandate penalties this year, but people with relatively modest incomes apparently paid a lot more than the Congressional Budget Office anticipated.
     
    [. . .]
     
    The 2017 tax data offer new evidence that there’s much to be gained by moving away from the individual mandate and much to lose by sticking with it. Tax returns that had been processed as of April 27 included 4 million that paid ObamaCare fines (officially known as individual shared responsibility payments), with an average payment of $708.
     
    What is striking about the data is that the average payment is barely higher than the minimum payment of $695. Since people were required to pay the greater of $695 or 2.5% of taxable income above the filing threshold ($10,350 in 2017), one takeaway is that most of the $2.8 billion in fines paid through April appear to have come from people with modest to moderate incomes. As a frame of reference, CBO’s 2014 analysis implied that the average mandate payment for this tax season would be roughly $1,075 and that the total amount paid by people earning up to three times the poverty level would barely exceed $1 billion.

    There is much more interesting information in the article. Worth reading in full.

    Posted in Big Government, Economics & Finance, Health Care, Obama, Politics | 19 Comments »

    Internal Secession ?

    Posted by Michael Kennedy on 15th July 2017 (All posts by )

    The Trump Derangement Syndrome shows no sign of stopping. The alleged meeting between Russians and Donald Trump Jr is reaching a new level of fever.

    The anti-Trump mainstream media is buzzing with news that Rinat Akhmetshin, a Russian American lobbyist and veteran of the Soviet military, attended the June 2016 meeting between Donald Trump Jr. and Russian lawyer Natalia Veselnitskaya.

    Rosalind Helderman and Tom Hamburger of the Washington Post insist that Akhmetshin’s presence “adds to the potential seriousness of the Trump Tower gathering that is emerging this week as the clearest evidence so far of interactions between Trump campaign officials and Russian interests.” I think they mean the only evidence.

    But now does the attendance of this lobbyist add to the “potential seriousness” of the “gathering”? If it was inappropriate for Trump Jr. to meet with one Russian lobbyist with probable Kremlin connections, the attendance of a second doesn’t make the meeting more inappropriate.

    The hysteria shows no sign of abating. What comes next ?

    “Resist” marches all over the country bring out thousands of leftists and feminists.

    Tens of thousands of LGBTQ folk and their allies marched through Hollywood and West Hollywood on Sunday for the Resist March, a protest which this year replaced the colorful and over-the-top celebratory atmosphere of a Pride parade.

    The event was billed as non-partisan, but unmistakeable was the heavy presence of marchers bearing anti-Trump signs, speakers decrying the administration’s immigration, healthcare and civil rights policies, and Democrats calling for a burst of activism to channel into the 2018 elections.

    Richard Fernandez has some thoughts on where this might go.

    Internal secession.

    Our trust hierarchies have collapsed. As with Soviet Russia, the “official” media sources are now distrusted as purveyors “fake news”. To fill the gap a peer-to-peer grapevine, similar to the “friends and family”, a samizdat is emerging to pick up the slack. Sonya Mann at Inc uses a startup to illustrate the growing division of society into trust groups. “Pax Dickinson wants to fund the revolution. Not a blood-in-the-streets revolution, but one where hardcore right-wingers can economically secede from the parts of society they vehemently dislike. “We need parallel everything. I do not want to ever have to spend a single dollar at a non-movement business.”

    That’s the right, the alt-right if you prefer.

    The left has already shown their willingness to boycott any business that does not follow their script.

    Ask Brenden Eich.

    Brendan Eich recently stepped down as CEO of Mozilla, developer of the Firefox Web browser. It may be more accurate to say he was forced out in the wake of a rising boycott against him. The backlash against Eich is related to his position on gay rights, but many feel that the campaign against him is its own form of discrimination and intolerance.

    His crime was to quietly donate $1000 to the Proposition Eight ballet initiative, which resulted in over 7 million yes votes and a 60% margin of approval. The proposition was ruled unconstitutional by a federal judge who promptly married his gay lover.

    California’s AG declined to appeal his ruling. That’s a pretty effective boycott.

    Read the rest of this entry »

    Posted in Big Government, Civil Society, Politics, Texas | 18 Comments »

    THAT AWKWARD TIME

    Posted by Subotai Bahadur on 11th July 2017 (All posts by )

    You know the one I mean. When you can see what is coming at you head on, and yet it is considered very poor form in the proper circles to admit the truth.

    This is written on July 10, 2017. Tomorrow Congress returns from its VERY long weekend for the 4th of July. Note that they refer to it in official documents as the “4th of July” recess, for them the date is more important than the Independence of our country.

    By whatever name, it is the calendar that is of import. Remember, from tomorrow, our worthless, ambulatory violations of Article I, Section 9, Clause 8 of the Constitution take their next vacation after barely a fortnight and 3 days after returning. And they will take the end of July, all of August, and the first part of September off. Technically, there are 12 working days before that respite. Technically. But Congress cannot be troubled, regardless of supposed party, to actually work 5 days a week. Mondays and Fridays are part of the congressional weekend and are not to be profaned by the work of the public.

    So, what of that work remains to be done, and under what strictures?
    Read the rest of this entry »

    Posted in America 3.0, Big Government, Current Events, Elections, Politics | 14 Comments »

    Summer Rerun: Leaving (Several Trillion) on the Table

    Posted by David Foster on 22nd June 2017 (All posts by )

    (Over at Ricochet, James Pethokoukis has a post/thread on French president Macron’s call for American scientists and engineers to move to France.  In comments, someone asked John Walker (cofounder of Autodesk) whether Macron could lure him to France “as part of a Silicon Valley Rhone or Loire?”  Walker’s response is also in the comments.  Also, this post from 2006/2009 about some earlier efforts at top-down technology-industry planning in Europe seemed relevant, so I linked it there as well.)

    The invention of the transistor was an event of tremendous economic importance. Although there was already a substantial electronics industry, based on the vacuum tube, the transistor gave the field a powerful shot of adrenaline and brought about the creation of vast amounts of new wealth.

    As almost everyone knows, the transistor was invented by John Bardeen, Walter Brattain, and William Shockley, all researchers at Bell Laboratories, in 1946. But a recent article in Spectrum suggests that the true history of the transistor is more complex…and interesting not only from the standpoint of the history of technology, but also from the standpoint of economic policy.

    The story begins in Germany, during World War II. Owing to short-sighted decisions by the Nazi leadership, Germany’s position in radar technology had fallen behind the capabilities of Britain and of the United States. (Reacting to the prospect of airborne radar, Herman Goering had said “My pilots do not need a cinema on board!”)

    But by 1943, even the dullest Nazi could see the advantages that the Allies were obtaining from radar. In February of that year, Goering ordered an intensification of radar research efforts. One of the scientists assigned to radar research was Herbert Matare, who had been an electronics experimenter as a teenager and had gone on the earn a doctorate.

    A key issue in military radar was the need for shorter wavelengths–which allowed for better target resolution (such as the ability to pick up the periscope of a submerged submarine) and also facilitated the miniaturization of radar equipment. Vacuum tube diodes (diode: a device that allows electricity to travel only in one direction) did not work well at these wavelengths, because the distance between the electrodes in the tube was too large. Matare was working with an alternative: crystal rectifiers similar to those he had tinkered with as a teenager.

    In the course of this work, he noticed that when configured in a certain way, a device made of germanium could do more that provide a one-way gate: it could amplify. A small signal could control a more powerful current. In principle, the vacuum tube–fragile, bulky, power-hungry, and hot-running–could be replaced with devices of this type.

    Focused on his war work, Matare did not have time to pursue the possibilities of his invention. (And very fortunately, he and his colleagues in German science and industry never came close to matching the Allied achievements in radar.) After the war, Matare moved to Paris and went to work for a Westinghouse subsidiary, Compagnie des Freins et Signaux Westinghouse. There he met Heinrich Welker, another German, a theoretical physicist who, remarkably, had also developed a transistor-like device, and the two men began working together on understanding the technology and its potential. After they began obtaining consistent results, in 1948, they contacted the director of the PTT, the French government agency responsible for posts and telecommunications. He was too busy to come by for a demonstration. But after the announcement of the transistor by Bell Labs in July of that year, there was a sudden upsurge of interest in the Welker/Heinrich project, and the PTT minister found time to visit the lab. He urged them to apply for a French patent on the device and also suggested that they call it by a slightly different name: the transistron. By 1949, the device was in limited commercial use: first as an amplifier on the Paris-Limoges telephone line, and later on the lines running from France to Algiers.

    The Spectrum article tells what happened next: not much. But the French government and Westinghouse failed to capitalize on the technical advantages in semiconductors that they then appeared to have. After Hiroshima, nuclear physics had emerged as the dominant scientific discipline in the public mind, and nuclear power was widely heralded as the wave of the future. France became enchanted with pursuing the nuclear genie unbottled in the 1940s, while ignorant of its promising transistron.

    Read the rest of this entry »

    Posted in Big Government, Business, Europe, France, Germany, Tech, USA | 4 Comments »

    WHAT HAPPENS AFTER YOU TURN IT UP TO “11”?

    Posted by Subotai Bahadur on 23rd May 2017 (All posts by )

    A conversation elsewhere brought up a topic that lets me get ahead of things and put down a marker for future reference. It was noted that the Democrats and their allies farther Left have had their outrage meters literally turned up to “11” [on a 1-10 scale] since the election. The first calls for Trump’s impeachment actually came from the Democrats as soon as he was nominated. And for that matter, during the General Election campaign, it was not restricted to Democrats. Republican Congress-critter Mike Coffman [CO-6] was running radio ads in English and Spanish promising to oppose Trump in everything he tried to do if Trump was elected.

    That outrage got a boost when Neil Gorsuch was confirmed to the Supreme Court. But the increase was slightly muted because it was a case of a conservative Justice replacing the late conservative Justice Antonin Scalia who died under questionable circumstances. It would not be a net change of the balance of the court.

    Starting a few weeks ago, rumors started that Leftist supporting Justice Anthony Kennedy might retire. And the scale went at least a couple of notches higher. Then a week or so later people were reminded that Ruth Bader Ginsburg, who dares not visit a medical school for fear that her resemblance to a cadaver might get her dissected by a doctor in training, has health problems. She has had colon cancer and recovered after surgery and radiation therapy. She has had pancreatic cancer; it is said that she recovered from that. And three years ago, she had to have a stent placed in her right coronary artery. That medical history in an 84-year-old woman is not encouraging. Leaving aside the jokes about doing a Supreme Court remake of the movie “Weekend at Bernies”, the odds of her reaching the end of Donald Trump’s term in office [and age 90] are not good.
    Read the rest of this entry »

    Posted in Big Government, Civil Society, Current Events, Predictions | 11 Comments »

    A Slow Motion Coup d’Etat.

    Posted by Michael Kennedy on 20th May 2017 (All posts by )

    Here is a pretty good article about the Trump phenomenon.

    I disagree with the premise that “Trump is supremely unfit for his White House job.”

    The rest of the article is pretty much on target and follows Angelo Codevilla’s piece on the “Ruling Class.”

    This is pretty much the way I see it.Then there is the spectacle of the country’s financial elites goosing liquidity massively after the Great Recession to benefit themselves while slamming ordinary Americans with a resulting decline in Main Street capitalism. The unprecedented low interest rates over many years, accompanied by massive bond buying called “quantitative easing,” proved a boon for Wall Street banks and corporate America while working families lost income from their money market funds and savings accounts. The result, says economic consultant David M. Smick, author of The Great Equalizer, was “the greatest transfer of middle-class and elderly wealth to elite financial interests in the history of mankind.”

    The news now is 99% Trump 24 hours per day. 97% of it is bad or negative on Trump.

    Analysis: Only 3 percent of reports on CBS, NBC positive for Trump

    A new analysis by a nonpartisan media research firm shows that just 3 percent of the reports about President Trump that aired on NBC and CBS were deemed positive.

    The data comes from an analysis by Media Tenor, an independent media research firm founded in 1993.

    The firm’s analysts watched 370 news stories about Trump on the “NBC Nightly News,” “CBS Evening News” and Fox News’s “Special Report” between Jan. 20 and Feb. 17. Trump took office the day the analysis began.

    Overall the analysis found that on NBC and CBS, 43 percent of stories on Trump were negative, while only 3 percent were positive. Fifty-four percent of reports were considered neutral.

    I’m not sure I would agree on what is “neutral.”

    I am not the only one who thinks a coup d’etat is under way.

    Spengler, who is my #2 go to guy after Fernandez,
    thinks what is going on is a coup attempt.

    A ranking Republican statesman this week told an off-the-record gathering that a “coup” attempt was in progress against President Donald Trump, with collusion between the largely Democratic media and Trump’s numerous enemies in the Republican Party. The object of the coup, the Republican leader added, was not impeachment, but the recruitment of a critical mass of Republican senators and congressmen to the claim that Trump was “unfit” for office and to force his resignation. Read the rest of this entry »

    Posted in Big Government, Elections, Politics, Trump | 28 Comments »

    The FBI Director Meets Pres. Trump’s Hatchetman

    Posted by Trent Telenko on 10th May 2017 (All posts by )

    The no-leak, no-warning, firing of FBI Director Comey is riling up Washington D.C. like nothing I’ve seen in years. So many powerful people, so many lost minds.

    This Instapundit tweet about covers it, as removing “unwritten limits on executive power” was only supposed to help the Deep State power club, not anyone else.

    This  USA TODAY piece at the following link (James Comey memo: Why his bosses say they fired the FBI director) outlines the five key points in Deputy Attorney General Rod Rosenstein’s and Attorney General Jeff Sessions’s firing recommendation memo:

    1. “The FBI’s reputation and credibility have suffered substantial damage, and it has affected the entire Department of Justice. That is deeply troubling to many department employees and veterans, legislators and citizens.”

     

    2. “I cannot defend the director’s handling of the conclusion of the investigation of Secretary Clinton’s emails, and I do not understand his refusal to accept the nearly universal judgment that he was mistaken. Almost everyone agrees that the director made serious mistakes; it is one of the few issues that unifies people of diverse perspectives.”

     

    3. “The director was wrong to usurp the Attorney General’s authority on July 5, 2016, and announce his conclusion that the case should be closed without prosecution. It is not the function of the director to make such an announcement. At most, the director should have said the FBI had completed its investigation and presented its findings to federal prosecutors.”

     

    4. “Compounding the error: The director ignored another longstanding principle: We do not hold press conferences to release derogatory information about the subject of a declined criminal investigation.”

     

    5. “Although the president has the power to remove an FBI director, the decision should not be taken lightly. I agree with the nearly unanimous opinions of former department officials. The way the director handled the conclusion of the email investigation was wrong.”

    Deputy Attorney General Rosenstein was right, whatever way you cut it, Comey violated a basic trust.

    The problem here is that DC is about power, not ethics. And Comey was acting in the mainstream of Wash. DC political deep-state culture of the last 25 years. This was one of the reasons Trump was elected President.

    And please carefully note — Pres. Trump’s firing of Comey was staged in a way to completely cut FBI Director Comey off from all of his political connections and most especially his personal FBI Director eyes-only files with no notice.

    The fact that the Deep State just lost control of America’s chief federal investigative and counter intelligence agency with no warning has made them all lose their collective minds.

    They haven’t had time to coordinate a story because too many are calling their lawyers.

    Posted in America 3.0, Big Government, Culture, Current Events, Trump | 50 Comments »

    Should we renew the Foreign Intelligence Surveillance Act?

    Posted by Michael Kennedy on 15th April 2017 (All posts by )

    There has been quite a bit of concern about an opposition to the Trump presidency set up in Washington by Obama and his allies.

    Obama used the US intelligence apparatus to spy on Trump’s presidential campaign.

    June 2016: FISA request. The Obama administration files a request with the Foreign Intelligence Surveillance Court (FISA) to monitor communications involving Donald Trump and several advisers. The request, uncharacteristically, is denied.

    October 2016: FISA request. The Obama administration submits a new, narrow request to the FISA court, now focused on a computer server in Trump Tower suspected of links to Russian banks. No evidence is found — but the wiretaps continue, ostensibly for national security reasons, Andrew McCarthy at National Review later notes. The Obama administration is now monitoring an opposing presidential campaign using the high-tech surveillance powers of the federal intelligence services.

    Why would the FISA court approve such a thing ? Why would the Obama people continue when no evidence was found ?

    The controversy has continued and Susan Rice, the Obama NSC head, seems to be at the center of it.

    Read the rest of this entry »

    Posted in Big Government, Elections, Politics, Privacy, Trump | 6 Comments »

    Our Quasi-Soviet Fiscal Policy

    Posted by Kevin Villani on 5th April 2017 (All posts by )

    “It’s like deja vu all over again.”

    Do Yogi Berra‘s words of wisdom apply to the “new” trillion dollar “public infrastructure” program? The last program, still unpaid, focused on “shovel-ready” projects but somehow missed most potholes. Meanwhile, private companies are prepared to spend $100’s of billions on a new fiber optic internet super highway.

    Is the current proposed public spending program more likely to pay off for taxpayers than the last one?

    Historical Precedent

    When the hammer and sickle flag was lowered for the last time in Moscow on December 25, 1991, the international finance agencies created in Bretton Woods in 1944, led by British economist John Maynard Keynes and the Undersecretary of the U.S. Treasury Harry Dexter White, found a new mission.

    The International Monetary Fund (IMF), which is a “bank” according to Keynes, provided the financial infrastructure for international trade. The World Bank (WB), or a “fund” according to Keynes, was promoted by, known communist and accused Russian spy, Undersecretary White to help reconstruct European infrastructure, but primarily Russia’s infrastructure, in the wake of WW II destruction.

    The IMF lost its raison d’être in 1971 after President Nixon eliminated dollar convertibility into gold, ending the Bretton Woods function. Russia turned down World Bank membership, so the Bank turned to lending for infrastructure projects in the “underdeveloped” nations, which by 1991 faced overwhelming political obstacles.

    Assisting in the conversion of formerly centrally planned economies into capitalist market economies became the finance agencies’ new post-Soviet mission. However, few people had much of an idea of how to accomplish this. It had never been done before, and the IMF and WB were particularly ill-equipped as their charter limited them to lending only to governments. They were essentially statist organizations with little experience with (or sympathy for) competitive private markets (which helps explain why they remain chronically underdeveloped).

    Read the rest of this entry »

    Posted in Big Government, Economics & Finance, Organizational Analysis, Politics, Public Finance, Russia, Trump | 3 Comments »

    The state of state surveillance technology

    Posted by Mrs. Davis on 25th March 2017 (All posts by )

    All the discussion of the Trump “wiretapping” seems to assume that there are targets of surveillance. I thought that had passed away years ago and that NSA was simply capturing all transmissions in the ether, converting them from voice to text and storing both in a searchable data base. While additional land lines may be intercepted, the vast majority of signals are now airborne at some point so the NSA has access to virtually all electronic communication, foreign and domestic. Likewise, they do not, except in extraordinary circumstances, have acres of analysts sitting in cubes listening to conversations in real time. Instead, software constantly crawls the text database for terms of interest or manually input searches, such as the names of everyone on the Trump transition team. This is how team 0bama got the dirt that has been leaked to the press.

    Politics is now under the influence of those at NSA with search authorization much more than the Kremlin, except to the extent they have comparable capabilities. I suspect the Kremlin has comparable intellectual capabilities but less access to transmissions and even less processing bandwidth. Given the acceptance of the loss of privacy by the facebook generation, this can only expand. And to think that only 80 years ago a Secretary of State could opine that “Gentlemen do not read each others mail.” Things have changed, and once again, not for the better.

    Got that off my chest. Now if only the tin foil would stop irritating my scalp.

    Posted in America 3.0, Big Government, Current Events, Human Behavior, Just Unbelievable, Politics, Privacy | 11 Comments »

    Free Trade with a Hostile Mercantilist Empire?

    Posted by Kevin Villani on 14th March 2017 (All posts by )

    2017 marks the 200 year anniversary of David Ricardo’s publication on the theory of comparative advantage that underlies the economic case for free trade. Several years later Frederic Bastiat wrote the satirical Candle Maker’s Petition debunking the arguments in favor of protectionism. This was an ironic choice, as candle makers were politically protected by the Founding Fathers as necessary for the Revolutionary War. These protections lasted several centuries, and in 2016 Senator Chuck Schumer sought it re-instated on grounds of unfair competition from China.

    President Trump’s trade representative economist Peter Navarro is making both the political and economic case against free trade with China, which he considers a mercantilist trader with military ambitions hostile to the U.S.

    Navarro’s political case is an update of that faced by the Founders regarding candle making. China is viewed as pursuing a trading strategy to accumulate wealth and technical know-how to challenge the U.S. militarily in the South China Sea and globally. China’s mercantilist trade practices result in huge export surpluses with the U.S. He argues that China uses this advantage to weaken America’s industrial base and future defensive capability.

    While economists can’t reject this political concern out of hand, it does seem several decades premature given the relative size of the two countries’ navies. At present the US could quickly secure sources of supply for military purposes, and protectionism tends to linger for decades or even centuries.

    The second case against free trade with a mercantilist trader relates mostly to the loss of jobs due to “unfair” competition, i.e., not due to inherent comparative economic advantages as much as political subsidies, in China’s case a purportedly cheapened currency and weak labor and environmental protections. The standard argument is that such trade generally benefits consumers at the expense of high cost producers, resulting in a less political more fair distribution of consumption as well as a higher overall level. Read the rest of this entry »

    Posted in Big Government, Business, China, Economics & Finance, International Affairs, Japan, Markets and Trading, Politics, Public Finance, Trump | 11 Comments »

    Dodd-Frank, Obamacare grew out of same faulty reasoning

    Posted by Kevin Villani on 6th March 2017 (All posts by )

    The current partisan war over the Dodd-Frank Act is just one dispute in a broader ideological divide about the government’s role in industry. This dispute, which has deep historical roots, includes a similar battle over Obamacare. The common disagreement at issue with both laws — now in the cross hairs of a GOP-controlled Washington — is the extent to which politicians should subsidize their constituents indirectly through regulation of private companies.

    The Affordable Care Act governing health insurers was about 1,000 pages, and Dodd-Frank governing most other financial institutions was more than twice that. Both stopped short of nationalizing their respective industry, instead generating more than 10 pages of regulation for every one page of legislation, although many view nationalization as an eventual but inevitable consequence, particularly for health care.

    The distinction between public control and public ownership is the primary distinction between the competing mid-20th-century ideologies of fascism and communism. In contemporary terminology, this distinction is between crony capitalism and nationalization, neither of which can be reconciled with competition and freedom of choice.
    Read the rest of this entry »

    Posted in Big Government, Business, Capitalism, Crony Capitalism, Economics & Finance, Health Care, Obama, Political Philosophy, Public Finance, Systems Analysis | 10 Comments »

    The Boom/Bust Cycle Isn’t about Emotion

    Posted by Kevin Villani on 27th February 2017 (All posts by )

    My first experience with manias was in the 1950’s. As a pre-schooler, I was dragged along to the Filene’s Basement annual designer dress sale. Thousands of women of all types and sizes pressed against the glass doors opening into the subway station. Within minutes of the doors opening, these “maniacs” cleared all the racks and, holding armfuls of dresses, began stripping to their slips. That’s when I panicked.

    Looking back, those women acted rationally. There was a limited supply of deeply discounted dresses available on a first come basis. They traded among themselves to get the right size and their most desired dress. Buyer’s remorse was cushioned by Filene’s liberal return policy.

    The premise of U.S. financial regulation is that actors within private markets are irrational, but the evidence shows that it’s not maniacal, illogical behavior that sends markets into freefall.

    Great Depression and Recession

    Now in its seventh edition, Manias, Panics and Crashes: A History of Financial Crises, Charles Kindleberger’s seminal work provides the narrative that underlies virtually all public financial protection and regulation: First, the irrational exuberance of individuals transforms into “mob psychology” and fuels an asset bubble. Then, when the exuberance of a few turns to fear, the mob panics and overreacts, causing a crash that brings down both solvent and insolvent financial institutions.

    In his memoir, the former Federal Reserve Bank President and Treasury Secretary Timothy Geithner, who was at the epicenter of the last crisis, concluded, “It began with a mania — the widespread belief that devastating financial crises were a thing of the past, that future recessions would be mild, that gravity-defying home prices would never crash to earth.”  

    Most U.S. federal financial regulation originates from the Great Depression and the subsequent introduction of federal deposit insurance provided by the Federal Deposit Insurance Corporation (FDIC), which was established in 1933 to protect “small” savers. All prior state attempts to provide insurance failed. Because there were no effective, non-politicized regulations that could prevent the moral hazard of insured banks and savings institutions taking on excessive risks, an extensive regulatory infrastructure was put in place.

    Rational Actors

    Now, the U.S. has about 100 financial regulators, including those in the U.S. Treasury and the Securities and Exchange Commission (SEC), the FDIC, and the Fed. With near-universal deposit insurance, bank runs have become a rarity, but systemic crises have occurred more frequently. It is incontestable that big bubbles eventually burst, asset prices crash, and financial crises ensue. What causes the bubbles to inflate to systemic proportions, and to ultimately burst, is more contentious.

    At the time of Kindleberger’s analysis, individuals were assumed to be rational. The latest edition of his book, written after the 2008 financial crisis, postulates numerous theories about mob psychology (mania) that could lead rational individuals to produce irrational markets, but these ideas are all rather lame.

    Read the rest of this entry »

    Posted in Big Government, Business, Capitalism, Economics & Finance, Human Behavior, Markets and Trading, Public Finance, Real Estate, Systems Analysis, Tradeoffs | 9 Comments »

    “More Trump”

    Posted by Jonathan on 24th February 2017 (All posts by )

    Assistant Village Idiot:

    Consequently, the standard for avoiding mistakes is now the same for you as you have been applying to others for your whole career. When accusing Trump of making some inaccurate statement, if you get that wrong once it outweighs nine times that you got it right. And, just between you and me and the lampost, you aren’t close to getting it right 90% of the time just now. so in the minds of the public, you are digging yourself in deeper and deeper. Fresh examples are best. There was a lot of excitement this past weekend about Trump claiming something had gone wrong in Sweden, but there hadn’t been any big incident that anyone could recognise. When I first read it, I thought What the hell is Trump talking about there? I thought the story plausible, because Trump does stuff like this. Then I saw the transcript, and without even knowing the rest of the story, I thought Unh, there’s some window there. It’s a little clumsy in the wording, but he could be talking about events in general in Sweden, maybe an “Every Friday night…” You shouldn’t try to slam dunk these, because they keep hitting off the rim. So when I read the full response, that Trump had watched Tucker Carlson on the news Friday with a story about the increase in rape and violence in Sweden due to immigration, it made entire sense.
     
    The people who always believe you – the people who will believe any bad thing about Trump (and his minions – don’t forget his minions) will throw up their hands, roll their eyes and say “Aw come on, that’s a ridiculous excuse. You got caught out, you old windbag. Don’t try to bring that crap in here.” Except it’s not ridiculous at all. That’s exactly how Trump talks, and how he thinks. He’s been talking like this for years. His claim is entirely plausible. It not only could be true, so you can’t get your slam dunk, it is actually the most likely thing that happened. Because why the hell else would Sweden suddenly occur to him? The news story was in his stew, it bubbled to the top, and he spooned it.
     
    Net result: Your pals, no change. They still don’t believe Trump but even if he had some sort of definite proof they would just scowl and wait for the next time. (We’ll get him next time.) Trump’s pals, no change. Even if you had proof they’d just shrug it off. People in the middle, that one-third of the population, most will now remember They lied about Trump again, about something really small and pointless like it was a big deal. Maybe a few will think you scored a point, but also notice that it doesn’t much matter. Small potatoes. So now you need to catch him nine times, without a miss, to make up for it. Welcome to the world you made. How does it feel to be on the receiving end?
     
    Remember the first rule of holes.

    Worth reading in full.

    Posted in Big Government, Elections, Human Behavior, Leftism, Media, Politics, Trump | 11 Comments »