Tuesday, September 6, 2016

Blackford on Friedman

Blackford on Friedman and the need to strenuously denounce pseudo-science,

"This may seem to make sense to an engineer who wishes to learn the current state of the art of bridge building, or to an ideologue who wishes to provide a logical foundation for his or her most cherished delusions irrespective of the circular reasoning and false assumptions upon which that logic is based, but this is not science!  If physical scientists had taken this approach to science throughout the course of history—relying on “folklore” and “the tenacity with which hypotheses are held” and on those who have been exposed to “the ‘right’ scientific atmosphere” as they ignored the realism of assumptions—we would still be living in a Ptolemaic universe cataloging the situations in which Aristotle’s assumptions do and do not work.

"Friedman is quite wrong in his assertion that there is a “thin line . . . which distinguishes the ‘crackpot’ from the scientist.”  That line is not thin.  It is the clear, bright line that exists between those who accept arguments based on circular reasoning and false assumptions as meaningful and those who do not. This should be obvious, yet there are economists who hold tenured positions at prestigious universities and responsible positions in government agencies and international institutions who accept Friedman’s nonsense as gospel. ..."

To wit, economics needs more effort invested in housecleaning, in pointing out those like Friedman's followers who like the emperor believe themselves attired in finery yet in reality wear no clothes.

Thursday, July 28, 2016

Red Implications

Anyone else suspecting that -- aside from the direction of the US Supreme Court for the next several decades -- the 2016 US Presidential election will also determine whether Ukraine gets annexed by Russia in 2017 or not?

And who wants to bet Putin would stop there?

Tuesday, June 14, 2016

Commonsense

from President Obama's remarks in PBS video, June 2, 2016:
"First of all, the notion that I or Hillary or Democrats or whoever you want to choose are hell-bent on taking away folks’ guns is just not true.
And I don’t care how many times the NRA says it. I’m about to leave office. There have been more guns sold since I have been president than just about any time in U.S. history. There are enough guns for every man, woman and child in this country.
And at no point have I ever, ever proposed confiscating guns from responsible gun owners. So it’s just not true.
What I have said is precisely what you suggested, which is, why don’t we treat this like every other thing that we use? I just came from a meeting today in the Situation Room in which I got people who we know have been on ISIL Web sites, living here in the United States, U.S. citizens, and we’re allowed to put them on the no-fly list when it comes to airlines, but because of the National Rifle Association, I cannot prohibit those people from buying a gun.
This is somebody who is a known ISIL sympathizer. And if he wants to walk in to a gun store or a gun show right now and buy as much — as many weapons and ammo as he can, nothing’s prohibiting him from doing that, even though the FBI knows who that person is.
So, sir, I just have to say, respectfully, that there is a way for us to have commonsense gun laws. There is a way for us to make sure that lawful, responsible gun owners like yourself are able to use them for sporting, hunting, protecting yourself, but the only way we’re going to do that is if we don’t have a situation in which anything that is proposed is viewed as some tyrannical destruction of the Second Amendment. And that’s how the issue too often gets framed."

Monday, June 13, 2016

We Now Have More Examples of Libertarianism In Practice, But It Still Isn't Modern Economic Theory

For quite a while, the best example we could give fans of Ayn Rand regarding how their libertarian notions would work out in practice might have been Somalia. But, as Denise Cummins outlines in "What Happens When You Believe in Ayn Rand and Modern Economic Theory," recent times have seen at least two more examples: Sears and Honduras.

If there's one obvious quibble with Cummins' work there, it's in too blithely describing libertarianism as "modern economic theory" and equating libertarians with economists. While there are all too many libertarians who claim to be economists, there are quite a few economists who feel that these libertarians' claims are shaky (at least without inserting the adjective "shoddy" or at least "misguided" in front of "economists" when speaking of the libertarian ones). And there's strong argument that rather than "modern economic theory", libertarian would better be described as a throwback to neoclassical or Walrasian economics (albeit with some updating via Friedman). Friedman's Randian apologetics for neoclassical economics do not make it particularly "modern", even if his efforts combined with the eager fanboys of Rand have made libertarianism all too popular.

Saturday, February 6, 2016

Running Government Like a Corporation

Former factory site in Flint by Blueskiesfalling
In the wake of the Flint leaded water scandal, we're seeing many decrying "running government like a corporation" or "running government like a business".

It goes deeper than that. The problem isn't just that we've got people trying to run government like it's a for-profit institution with no concern that should be weighed higher than cost savings. The problem starts with that so many of our businesses run that way. It doesn't work for corporations either. At least not in the long run.

Wages account for a lot of the budget the typical businesses. What happens when an employer is consistently stingy with salaries? They have trouble attracting top talent and maintaining morale.

Another big cost is quality materials. What happens when a company skimps on the quality of materials from which to make their goods? The quality of their products suffers, and customers eventually learn to avoid their products.

Then there's research. What happens when a company puts less into research than its competitors? It falls behind and its product line eventually stops appealing to buyers.

The illustrations could go on and on. In so many ways, a business that uses cost cutting and profit maximizing as a large part of its strategy sets itself up for being a short term success that will fold in the medium to long run.

We don't just need to "stop running government like a corporation". We need to stop running government like a mismanaged corporation in which the short-term profits are being maximized to earn big compensation bonuses for the CEO at the cost of the long term strength and stability of the corporation. And maybe just as important, we need to stop running businesses that way too.

Monday, February 1, 2016

December Just The Tail Of The Fed's Iceberg?

Did the Fed make a mistake in December?

Or is it more accurately put as David Beckworth tells it, "The Fed did not make a mistake in December. It made a mistake all last year by talking up interest rate hikes and signalling a tightening of future monetary policy."

Thursday, January 28, 2016

Cognitive Dissidents of Cognitive Dissonance

A more recent Barry Ritholtz article spurred re-reading of his entry from Jan 6th, 2016 remarking on the Big Short, and those of us frustrated by recurring myths can at least take some enjoyment in his prose. At least for some of us, worth a second read.
"These false claims, however, delight fans of cognitive dissonance, and they provide us with a textbook case of what occurs when facts intrude on an ideology that has failed real-life tests. Indeed, some of the people who helped cause the crisis are the biggest proponents of this counternarrative: radical deregulators, free-market absolutists and others simply couldn’t accept the facts, and rather than change their belief systems, they simply refuse to reckon with reality. The psychology behind this is well-understood: The reason to ignore a mountain of facts aligned against an ideological narrative is the brain’s refusal to cope with the possibility that a deeply held belief system might be wrong."