Watson my mind today

Apart from grading, reviewing, and my soon-to-be 5-yr-old’s birthday, that is…

–  A good question from Don Boudreaux. “Assuming (contrary to fact) that American trade deficits do necessarily cause Americans’ indebtedness to foreigners to rise, why do you bemoan these deficits? Why not instead cheer them? … Being indebted to foreigners means that we Americans must repay these debts, which in turn means that we Americans must in the future work to produce more goods and services for export. Isn’t this situation precisely what you and other protectionists want? Isn’t a rise in the demand for American exports – especially a rise not derived from, or offset by, a simultaneous rise in American imports – your very ideal?”

–  Speaking of protectionism, Tyler Cowen on Elizabeth Warren’s agriculture proposal: “a disappointment on two fronts: too wonky to be considered a purely political document, but not nearly wonky enough to be defensible in terms of substance.” It fails to understand inflation and food price data, calls for more protectionism, and doesn’t remove subsidies. He says he might be persuadable on a “right to repair” law, but worries about copyright infringement.

–  One of the issues Ludwig von Mises himself, I am told, never fully settled in his mind was over patents and copyright. It seems a necessary evil to encourage innovation, but granting someone a government-sanctioned monopoly just grates the wrong way. Now we’ve got “patent trolls” to add to the mix, who do not innovate themselves but buy up patents to collect licenses and sue or threaten to sue others. A paper finds that patent trolls encourage more upstream innovation while discouraging downstream innovation.

–  Why does Scott Sumner simultaneously support the Federal Reserve’s interest rate hike last year and expect a cut this year? As a market monetarist, he would like the market to dictate Fed policy and “the fed funds futures market forecasts a rate cut. … Because markets continue to forecast slightly below 2% inflation, even as the economy slows, the market forecast of an interest rate cut should be taken as evidence that a rate cut is probably needed at some point this year.” I also enjoyed the picture that goes with the article – he is an owl, neither a hawk nor a dove.

–  There’s a dictionary, detailing how Africans speak about politics, including some fascinating idioms. “Three-piece suit voting” refers to supporting the same party for all elected positions. On the contrary, “skirt-and-blouse voting” means to vote for different parties for presidential and legislative elections.” Other enjoyable examples at the link.

–  538 has an interesting piece on the perceived fairness of kidney donation systems, and the real struggle that still exists trying to get people to accept slightly less-regulated systems (let alone actually compensating donors’ families).

–  David Henderson: Occupational Licensing is a Bad Idea. Still. Really.

Can Elizabeth Warren help turn the populist tide?

During her recent visit to China, a Democratic Senator from Massachusetts, Elizabeth Warren (perceived by many as a potential Presidential Candidate of the Democratic Party in 2020), came down heavily on US President Donald Trump’s approach towards foreign policy, arguing that it lacks substance, is unpredictable, and does not pay much attention to liberal values and human rights, which according to her has been the cornerstone of US foreign policy for a long time.

Trump’s unpredictability

Commenting on Trump’s unpredictable approach towards Asia, Warren stated:

This has been a chaotic foreign policy in the region, and that makes it hard to keep the allies that we need to accomplish our objectives closely stitched-in.

Critical of US approach towards China

Warren met with senior Chinese officials including Liu He, vice-premier for economic policy, Yang Jiechi, a top diplomat, and the minister of defense, Wei Fenghe, and discussed a number of important issues including trade and the North Korea issue.

Warren criticised China for being relatively closed, and stated that the US needed to have a more realistic approach towards Beijing. She also spoke of the need for the US to remain committed to raising Human Rights issues, and not skirt the issue, while dealing with China.

Said the Democratic Senator: Continue reading

From the Comments: What do progressives think of Hillary Clinton?

This comes from Professor Terry:

I suspect I’m the only one around here that spends significant time on progressive blogs etc so let me tell you what it’s like over there….Progressives seem depressed but resigned. HRC will be the nominee. There are no other viable candidates. Sanders will be entertaining, O’Malley not so much….there’s no one on the sidelines. Prof. P’s [‘P’ is for ‘Pinocchio’ – bc] lust driven fantasy about Sen. Warren aside, no last minute candidacy from her.

Progressives take some solace in not having someone from the Republikan Klown Kar selecting Supreme Court nominees but that’s about it. Progressives take it for granted that the Democratic nominee will win the general election [they can read the electoral map and count]. They aspire to take back the senate but have no illusions about the House of Representatives so no significant new legislation will happen.

In my opinion scenario 3 is inevitable, I will dearly miss the Obama administration and it will happen sooner than I’ll like…

Thanks Dr A. This is excellent insight, and I am curious about the names of these progressive blogs. Who knows: some of them might even end up on NOL‘s vaunted blogroll. Professor Terry, by the way, teaches and researches up at a fancy business school in Toronto.

I still don’t have a solid definition of what ‘progressive’ means, though. It’s Left-wing. It’s anti-racist (or purportedly, anyway, as it can be argued that identity politics is itself racist, but I digress). Aside from those qualities, I don’t see much about it that is progressive. They are protectionists. They love big government except when they don’t. They are Democrats, or at least anti-GOP, but doesn’t necessarily approve of the Democratic leadership (especially when it works with Republicans). This leads me to suspect that progressivism is a political movement rather than ideological or intellectual one. This deduction, in turn, suggests to me that progressives are the US’s reactionaries (conservatives). I would be happy to change my tune about progressives once I get a solid definition of what they actually believe in, but again I don’t have one and reactionaries are usually defined by what they oppose (in this case Republicans) rather than what they stand for.

Anyway, NOL‘s blogroll – one of the best, if not the best blogroll out there in my humble opinion – has a bunch of Leftist group blogs on it, including: Angry Bear, Crooked Timber, Disorder of Things, Duck of Minerva, JHIBlog, Lawyers, Guns & Money, the RBC, Monkey Cage, and Mischiefs of Faction. None have coughed up a definition of ‘progressive’ yet, but Professor Terry has an open invitation to do just that here at NOL.

Every society needs its reactionaries, of course. It would just be nice of progressives to actually, honestly identify themselves as the reactionary party here (and as the Tories do in the UK), rather than deceive themselves by referring to their reactions as “progressive.” The Progressives of the 19th century (different bag of reactionaries than today’s progressives) did the exact same thing when they started calling themselves “liberals” in order to make their policies more palpable to the general voting public, and look how that turned out.

Liberty is what creates progress, not legislation. Just ask all of those progressives currently resigned to voting for HRC because she’s “better than the alternative.”

The Wicked Witch

Ordinary, rational Americans are watching with nervous disbelief the unfolding of the Clinton tragedy and low comedy combined. We all think the same thing: “Can’t last. Something is going to stop them. The Democratic Party will come to its senses eventually.” The columnist Peggy Noonan, who often comes up with original and credible analyses, said in last weekend’s issue of the Wall Street Journal that the Clintons are protected by their well-established corruption: Everyone already knows they are corrupt; there is nothing they do that will add measurably to this knowledge. This is an explanation that makes a sort of perverse sense. I dare not subscribe to it completely because it feels self-indulgent; this is a viewpoint few hard-line Republican partisans would dare publicize. It’s too good to be true! It’s too bad to be true!

Hillary Clinton, so far the only Democratic candidate to replace President Obama, is moving on slowly and apparently unperturbed. It matters not that she is a phony, so phony that she can’t even make her hand gestures match her words. She has told numerous lies, some of them transparent. She has lied on matters that could easily be verified, such as landing on a foreign airport under sniper fire. This kind of lie usually indicates mental imbalance; it’s fundamentally different from the ordinary CYA lie. Hillary Clinton failed to come through to protect her own subordinates and their CIA protectors in Libya. Then, she lied, covered up, and minimized the importance of their deaths. She gave constitutional Congressional authority the finger by destroying her email records. Reminder: This is something that never happens to anyone else that you or I know, right? Even the mid-level Obama IRS executive in charge of persecuting Obamanemies, she who took the Fifth Amendment, had the common decency to state that her emails were lost by mistake.

Hillary Clinton has teamed up with her husband in their family foundation to extract money from the most unlikely sources. The foundation pays out about 10% of what takes in. Its main outlays go to reward Clinton friends and facilitators and enablers, and also to help support the couple’s lavish life style. (This, although they don’t get paid a salary by the foundation; they use it it as an expense account.). The latest reports make it sound like the Clintons used Hillary’s term as Secretary of State to bring the US down to the level of your regular banana republic, where lavish gifts buy you influence for anything. “Lavish gifts ” go to the Clinton Foundation but they also include $500,000 speaking fees for Mr Clinton, for example, all in one single motion. I ask, how he can say anything worth half a million dollars when he is not even able to include the adultery and sexual abuses segments of his past?

When I mention”unlikely sources,” I mean, for example, the likes of the Algerian government, an oil and natural gas-ed state plutocracy. You would think that government would have plenty of worthy causes right at home in Algeria where the unemployment rate is “down to” about 10%. There are even better opportunities to spend Algerian oil money right south of the country, in the miserable Sahel countries. Why would it donate munificently to an ex-president’s foundation unless it were also because it was a current Sec. of State’s foundation? When his attention was drawn recently to such unseemly gifts, Mr Clinton’s only response was that there were no proofs, “no evidence.” How low can you get?

I worked out two scenarios about the future of the Clinton candidacy. Both are nightmare scenarios.

First, the upper reaches of the Democratic Party may be allowing things to take their course with Hillary in a sort of passive bait-and-switch. They let her gather attention on their party in the context of the 2016 presidential election and will persuade her to step down in time for a surprise candidate. That candidate is likely to be Elizabeth Warren. After all, she is a woman too; she is a Senator; she does not carry much baggage. The only significant piece of luggage is her identifying herself as American Indian, 1/16th or was it 1/32th? Democrat voters will easily forgive this whether it’s true or not because that was said to help her obtain an academic job she deserved anyway and that she might have been denied otherwise because she is a woman. Still with me? Besides, self-serving lies that are hard to contradict do not indicate mental imbalance, like an untruth about landing under sniper fire does, for example. Moreover, Ms Warren, unlike Ms Clinton, is a genuine leftist, not a pure opportunist. Besides, some centrist voters might be so relieved to be spared the walking Clinton debacle that they might become blind to Ms Warren’s small pimples. Nothing to lose there.

The second scenario implies that Democrat strategists know something ordinary, politically conscious people like me don’t know. It may just be that they are making the bet that nothing disgusting anyone will bring up or discuss will do any harm to Ms Clinton’s candidacy for president. Just take for granted a union vote of 80% for any Democratic presidential candidate, of 90% for African-Americans (98% for black union members), 65% for Latinos promised a quick path to citizenship for illegals (whom they think – wrongly – are mostly theirs). (All figures made up but entirely realistic.) Then, think of the millions of female voters, and potential female voters who rarely or never vote, who take no interest in politics, who don’t know anything except that the candidate is a woman. How unlikely is it that such people can be made to vote this one time? With the frame of mind I am imagining, it’s even probable that any attack on Ms Clinton, no matter how justified, even direct, open sale of favors will be viewed as bullying, as ganging up on the girl.

Many women, even literate women, actually think that it’s the turn of a woman to be president. The affirmative action fallacy that gave us the Obama presidency may just be about to be repeated.

It may be too late for rational people to do much of anything against the broader fallacy of phony identity politics. It seems to me that they can gnaw at its edge – this time – by tirelessly contradicting the now common false premise that Ms Clinton is well qualified for the job of president. Even ignoring her many failures, she did not achieve anything either as Senator or as Secretary of State, no legislation, no international agreement, no treaty, nothing. Unlike the current president, she was not even good at being elected. She got her Senate seat from the Democratic machine from a safe district where she ran essentially unopposed. Her appointment as Secretary of State was such an obvious debt repayment between Democrat factions that anyone but a Clinton would have been embarrassed.

The pessimist in me nourishes a further nightmare: There will be a time soon when I miss the Obama presidency.

From the Comments: Populism, Big Banks and the Tyranny of Ambiguity

Andrew takes time to elaborate upon his support for Senator Elizabeth Warren, a Native American law professor from Harvard who often pines for the “little guy” in public forums. I loathe populism/fascism precisely because it is short on specifics and very, very long on generalities and emotional appeal. This ambiguity is precisely why fascist/populist movements lead societies down the road to cultural, economic and political stagnation. Andrew begins his defense of populism/fascism with this:

For example, I still have more trust in Warren than in almost anyone else in Congress to hold banks accountable to the rule of law.

Banks have been following the rule of law. This is the problem libertarians have been trying to point out for hundreds of years. See Dr Gibson on bank regulations and Dr Gibson again, along with Dr Foldvaryon alternatives. This is why you see so few bankers in jail. Libertarians point to institutional barriers that are put in place by legislators at the behest of a myriad of lobbying groups. Populists/fascists decry the results of the legislation and seek a faction to blame.

If you wanted to be thought of as an open-minded, fairly intelligent individual, which framework would you present to those who you wished to impress: the institutional one that libertarians identify as the culprit for the 2008 financial crisis or the ambiguous one that the populists wield?

And populism=fascism=nationalism is a daft oversimplification. I’ll grant that there’s often overlap between the three, but it’s far from total or inevitable overlap. Populists target their own countries’ elites all the time.

Sometimes oversimplification is a good thing, especially if it helps to clarify something (see, for example, Dr Delacroix’s work on free trade and the Law of Comparative Advantage). One of the hallmarks of fascism is its anti-elitism. Fascists tend to target elites in their own countries because they are a) easy and highly visible targets, b) usually employed in professions that require a great amount of technical know-how or traditional education and c) very open to foreign cultures and as such are often perceived as being connected to elites of foreign societies.

The anti-elitism of fascists/populists is something that libertarians don’t think about enough. Anti-elitism is by its very nature anti-individualistic, anti-education and anti-cooperative. You can tell it is all of these “antis” not because of the historical results that populism/fascism has bred, but because of its ambiguous arguments. Ambiguity, of course, is a populist’s greatest weapon. There is never any substance to be found in the arguments of the populist. No details. No clarity. Only easily identifiable problems (at best) or ad hominem attacks (at worst). Senator Warren is telling in this regard. She is known for her very public attacks on banks and the rich, but when pressed for details she never elaborates. And why should she? To do so would expose her public attacks to argument. It would create a spectacle out of the sacred. For example, Andrew writes:

Still, I’d rather have people like Warren establish a fuzzy and imperfect starting point for reform than let courtiers to the wealthy and affluent dictate policy because there’s no remotely viable counterpoint to their stances […] These doctrinaire free-market orthodoxies are where the libertarian movement loses me. There are just too many untrustworthy characters attached to that ship for me to jump on board.

Ambiguity is a better alternative than plainly stated and publicly published goals simply because there are “untrustworthy characters” associated with the latter? Why not seek plainly stated and publicly published alternatives rather than “fuzzy and imperfect starting points for reform”?

Andrew quotes a man in the street that happens to be made entirely of straw:

“Social Security has gone into the red, but instead of increasing the contribution ceiling and thoughtfully trimming benefits, let’s privatize the whole thing and encourage people to invest in my company’s private retirement accounts.”

Does the libertarian really argue that phasing out a government program implemented in the 1930s is good because it would force people to invest in his company’s private retirement accounts? I’ve never heard of such an example, but I may just be reading all the wrong stuff. Andrew could prove me wrong with a lead or two. There is more:

This ilk of concern trolls (think Megan McArdle: somewhat different emphasis, same general worldview) is one that I find thoroughly disgusting and untrustworthy and that I want absolutely no part in engaging in civil debate. Their positions are just too corrupt and outlandish to dignify with direct responses; I consider it better to marginalize them and instead engage adversaries who aren’t pushing the Overton Window to extremes that I consider bizarre and self-serving. They’re often operating from premises that a supermajority of Americans would find absurd or unconscionable, so I see no point to inviting shills and nutters into a debate […].

Megan McArdle is so “disgusting and untrustworthy” that her arguments are not even worth discussing? Her name is worth bringing up, of course, but her arguments are not? Ambiguity is the weapon of the majority’s tyranny, and our readers deserve better. They are not idiots (our readership is still too small!), and I think they deserve an explanation for why McArdle is not worthy of their time (aside from being a shill for the rich, of course).

I think populism/fascism is often attractive to dissatisfied and otherwise intelligent individuals largely because its ambiguous nature seems to provide people with answers to tough questions that they cannot (or will not) answer themselves. Elizabeth Warren’s own tough questions, on the Senate Banking Committee, revolve around pestering banks for supposedly (supposedly) laundering money to drug lords and terrorists:

“What does it take, how many billions of dollars do you have to launder from drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution?” Warren asked at a Banking Committee hearing on money laundering.

Notice how the populist/fascist simply takes the laws in place for granted (so long as they serve her desires)? The libertarian would ask not if the banks were doing something illegally, but why there are laws in place that prohibit individuals and organizations from making monetary transactions in the first place.

Senator Warren’s assumptions highlight well the difference between the ideologies of populism/fascism and libertarianism: One ideology thinks bludgeoning unpopular factions is perfectly acceptable. The other would defend an unpopular faction as if it were its own; indeed, as if its own freedom were tied up to the freedom of the faction under attack.