Why Do Left-Leaning Economists Ignore IQ Data?

It’s pretty obvious: because it would undermine their entire philosophy.

And no, there is no debate among researchers over the genetic, race and class composition of IQ.

That debate is only conducted among the political class.

Conservatives observe natural laws. Not ideology but natural law.

Hierarchy is just letting the best people have the freedom to produce excellences for the rest of us.

Efficiency and equality are dirty words.

Break up the eurozone. That’s what should be done.

Why create another even more totalitarian bureaucracy that abuses our freedoms in europe to match the one in the USA?

The west is special because no one was unable to consolidate power, and had to rely upon the balance of powers, specialization and trade.

China solidified, the muslims and ottomans solidified, the hindus solidified at least somewhat, and look what happened. The west, despite being poor and backward invented the industrial revolution TWICE. No one else invented it even once.

The balance of power and freedom are more important to us and to humanity than efficiency and equality.

“Efficiency and equality are dirty words.”

Krugman Watch: What Will Happen With Conservatives In Three Houses Of Government?

Paul Quotes David Frum saying:

Backed by their own wing of the book-publishing industry and supported by think tanks that increasingly function as public-relations agencies, conservatives have built a whole alternative knowledge system, with its own facts, its own history, its own laws of economics. Outside this alternative reality, the United States is a country dominated by a strong Christian religiosity. Within it, Christians are a persecuted minority. Outside the system, President Obama—whatever his policy ­errors—is a figure of imposing intellect and dignity. Within the system, he’s a pitiful nothing, unable to speak without a teleprompter, an affirmative-action ­phony doomed to inevitable defeat. Outside the system, social scientists worry that the U.S. is hardening into one of the most rigid class societies in the Western world, in which the children of the poor have less chance of escape than in France, Germany, or even England. Inside the system, the U.S. remains (to borrow the words of Senator Marco Rubio) “the only place in the world where it doesn’t matter who your parents were or where you came from.”

to which Jay from Boston Replies:

A serious question is, what will likely happen when these characters completely control all three branches of government?

What will happen when (conservatives) control all three branches of government? Not much really. The stalemate will continue indefinitely.

However, if we’re lucky, we will restore our search freedom over equality, restore merit over Harrison-Bergeron’ing, support commercial invention over redistribution, restore the western tradition by eliminating the DOE and teaching history, philosophy and literature, mandate our anglo language, restore our common law and constitution, return sovereignty to the states, and thankfully, reverse the anti-white-male bias and narrative.

The west is special because of balance of power. Balance between states. Between classes. Between the church and state. The anglo west is special because of its class-based system of government, and its use of constitutionalism, common law, and property rights. Despite being the poorest, most remote from the first cities, and the least populous civilization, first Greece then England developed the industrial revolution – science, logic, reason and debate. And it did so because the militial culture of the aristocracy wished to retain their sovereignty while cooperating toward common ends and had to develop debate to do so. This set of affairs led to the last most important talent of the west – which was, that despite small numbers, they were the best warriors on earth.

That is what made the west special and nothing else. And it is that special nature that the left seeks to replace — with the same poverty-inducing authoritarian, egalitarian tyranny-of-the-bottom that had eventually taken over the rest of the world — and which we escaped for nearly half a millenium, until the 20th century liberal took on faith that he had discovered the end of history, and could abandon the political and economic system that made prosperity possible.

The foolhardiness of Schumpeterian Public Intellectuals is writ large on these pages daily. It is silly public intellectuals that bring about tyranny.

Is The US Any More Or Less Redistributive Than Europe?

On the Economist’s View, a Dr Why, a commenter says

In the United States, countercyclical fiscal and monetary policies redistribute income mainly from the rich to the poor, which is politically acceptable. In Europe, countercyclical policies also redistribute income from the German pensioners to the Greek civil servants and the Italian Mafia, which is much less acceptable.

Eventually, Germany will probably have to capitulate, since it needs the euro more than anyone else; but for now German politicians have no choice but to play this game of chicken in order to get the best possible deal for their voters.

This is true ideologically but not not in practice.

The resistance we see in the states is driven by a redistribution from white to non-white. Today’s poll numbers, divided along racial lines, illustrate natural human tribal sentiments. And that any concept of ‘fair’ is governed by the transfer of status signals in exchange for money. This means that groups with different status signals will never permit monetary transfers. And since racial groups contain different status signals, they will, at least under duress, fail to be charitable with their money.

The status signal economy provides all human incentives because it determines access to mates and experiences. THe status signal economy is as real an equilibrium as are supply and demand or IS-MP curves.

It is unscientific to believe otherwise.

Why does the right lean toward NGDP targeting?

On Worthwhile Canadian Initiative, Nick Rowe asks “Why isn’t NGDP targeting a lefty thing?” and asks why the right seems to support it, instead of supporting inflation targeting.

My reply was:

Nick,

I think you miss the point that from the right’s position, NGDP targeting would require that the government focus its efforts on industrial policy in order to be able to fund redistribution, and therefore cooperate rather than prey on business and industry. This in turn would require we correct our dysfunctional education system that creates uncompetitive workers, and it would reduce class warfare by focusing on specific policy initiatives that would make the nation competitive rather than devolutionary. The right originally abandoned industrial policy because of the collaboration between unions and the state. Now that they see unions as weak and foreign states as a threat, they would prefer to return to industrial policy and very likely, away from free trade – which was just a vehicle for competing against the government-union alliance while the USA had a temporary postwar technological advantage.

Conservatism is the sentiment and subsequent philosophy of inter-temporal group persistence by the concentration of capital in all it’s forms. In the USA conservatism also includes an allegiance to the status quo of classical liberalism, which in itself is a commercial meritocratic philosophy that retains the english system of class cooperation through multiple houses of government. The democratic socialist movement is an attempt by the proletariat and public intellectuals to obtain political and economic power by propagating the mythos of equality in order to undermine the multi-class system of government in which tehy are at a disadvantage compared to the commercial productive classes. But it is nothing more than an appeal to power for the purpose of material gain. Nothing more and nothing less.

While conservatism is more likely to rely on historical metaphor and moral argument because of their inter-temporal content, and the left is more likely to argue for empirical positivism because it specifically lacks that inter-temporal content and replaces that historical view with an absolute faith in the human ability to manage it’s own destiny, that does not mean that conservatism cannot be articulated as a rational philosophy. It simply means, that because it is more complex, it is harder to do so.

But then again, concepts of this depth are usually outside of the understanding of macro economists, and are instead the provenance of political philosophers and historians to whom economic activity is a predictable cycle driven by little more than institutions, military power, trade routes, and population composition.

Can We Predict Bubbles? And Don't We Really Want Them?

Predicting Bubbles on Modeled Behavior:

I think we can see and measure booms and bubbles. I just think we’re lying to ourselves when we say we want to stop them.

We WANT people to live beyond their equilibrial (‘natural’) value to the world market. Bubbles and credit help us do that.

If predicting bubbles meant that the class structure would become even more rigid (it would) then would you want to eliminate bubbles? Or would you simply try to allow them to pop earlier?

We can predict bubbles. Because they’re easy to predict. A bubble occurs whenever people seek to sieze opportunities in a domain in which they have no expertise. ie: when they are gambling on momentum – swarming.

You cannot necessarily deduce a bubble from the trading data as other than some vague heuristic driven by price volatility. But if you survey consumers you can deduce bubbles all the time. If members of the lower middle class, and upper proletariat are speculating then it’s a bubble. If people outside a field are rallying to create speculative gains rather than PRODUCTIVE gains, then it’s a bubble. (PRODUCTIVE meaning that they applied additional capital to the thing that they purchased, prior to reselling it.) There is always value created by speculators who identify asymmetry of information and profit from informing others of that asymmetry. There is no value created by speculators who are swarming information that they do not understand, and where capital is not applied to transform the asset they wish to resell — in effect, where speculators are distorting information in the pricing system. (Ethically, this means liquidity encourages fraud.)

If we are borrowing to create productive increases so that people can live a higher standard of living now than they could in the future if they had the ability to use current knowledge to create current production, then it’s good spending. If we are providing liquidity because of a shortage of ‘money’ (money in the broader sense) then we are helping people to create the highest level of productivity possible. If we are borrowing to to increase consumption without increasing relative production (exports) somewhere else in the economy, then we are not creating productivity and spreading it around, we are just going into debt by consuming now despite not increasing productivity — i.e. the ability to pay it back.

A bubble is a knowledge problem caused by the failure of the pricing system to convey accurate information to participants in the economy. Cheap GENERAL credit allows average consumers to swarm opportunities.

Productivity matters. The inter-temporality of consumption vs production matters. And disconnecting consumption from productivity causes booms and busts.

So, again, maybe we (you) actually want our booms and busts if it gives people the ability to consume during booms that would never be able to consume goods above their economic class otherwise?

But targeting inflation or nominal GDP is too loose a tool for accomplishing policy goals unless the country is small and relatively homogenous.

Krugman Watch: Culture Is A Status Economy

The assertion that Europe’s crisis proves that the welfare state doesn’t work comes from many Republicans. … The idea, presumably, is that the crisis countries are in trouble because they’re groaning under the burden of high government spending. But .. the nations now in crisis don’t have bigger welfare states than the nations doing well — if anything, the correlation runs the other way. Sweden, with its famously high benefits, is a star performer… Meanwhile, before the crisis … spending on welfare-state programs … was lower, as a percentage of national income, in all of the nations now in trouble than in Germany… Oh, and Canada … has weathered the crisis better than we have.

( Sweden is a small homogenous protestant germanic country. It is an outlier. )

No one argues that highly redistributive societies are possible. We argue that large redistributive empires are impossible. This impossibility is caused by the fact that the social ‘economy’ that consists of opportunities, habits, manners, ethics and morals consists of a set of ‘costs’ that people must bear by ‘forgoing opportunity for privatization’. This forgone opportunity economy’s currency is status and this status economy rewards people for paying the fees of forgone opportunities. Money is the tool by which people pursue status by competing in the market.

In any economy, racial and cultural (linguistic) diversity creates diverse sets of status signals cause economic competition that discourages redistribution.

Therefore a redistributive economy can only persist in a homogenous society.

And a rich, redistributive economy is only LIKELY to persist in a country where people are homogenous — culturally and racially. So, all external factors being equal, because of signaling, all empires are under constant pressure to fragment into tribes, and all tribes are under pressure to develop competitive institutions. Nationalism then is a prerequisite for wealth and redistribution.

As Taleb states, the Levantines thought they were special too. Until there weren’t enough christians… Germanic protestants resent Northern germanic-italians resent souther greco-italians.

And public intellectuals resent the status of both politicians and entrepreneurs and seek to alther the status economy for their benefit — just as Schumpeter said they would. :)

Economics is a subset of politics, not the other way ’round. In the long run we are all human.

from Modeled Behavior on the Jobs Report

…here is the long-run trend on private sector service sector employment.

Notice that its just as strong as the last recovery though coming sooner. Not quite as strong as the 80 and 90s.

On the other hand goods and government over that period look like this

To the extent there is a structural transformation afoot in the US economy, this is it.

Yes, the average citizen can attest to the fact that you’re correct simply by casual observation while living daily life.

The problem you’re stating is obvious. But the question that is currently circulating in the popular media is whether increased money supply that increases demand, and whether additional taxation and redistribution, will improve that long term trend, or whether we had better improve our schools, improve our industries, improve our infrastructure, and improve the world marketability of our unskilled, and semi-skilled working classes. We cannot make our lower classes more productive by demonizing our upper classes. And we are too heterogeneous now to form a ‘society’ that will support different classes under the emotional sentiments of tribal nationalism.

Germany promises the working classes skilled labor. America promises the working classes entry into the middle and upper middle classes. But, america’s promise if false. Its just not possible. And what you’re seeing today is the acknowledgement among the laboring classes that their status is depreciating along with their incomes, and that given their ages and knowledge, that the rest of their lives are questionably comfortable due to the false promise of middle class membership — given to them to assuage the natural problem if integration of races and cultures with different potentials both environmental, physical and cultural.

Economics is a subset of politics, not the other way ’round. In the long run we are all human.

Jarrow On Predicting Asset Bubbles

In, How to Detect an Asset Bubble, Robert Jarrow, Younes Kchia and Philip Protter describe the method by which asset bubbles can be deduced from the asymptotic behavior of prices.

I can just about follow the reasoning, and it make sense – although they don’t explain WHY it makes sense as a series of incentives and actions – which an Austrian would require.

And I while I appreciate their work, I’m struck the the fact that, at least for me, asset bubbles are so easy to detect that it’s ridiculous: The old adage that if your gas station attendant or your school teacher is concerned about it then it’s ready to pop, and you should sell.

Why 30 Large Companies Paid Only 18% Tax

Rick writes:

RE: “One big one is accelerated depreciation that lets them write off equipment faster than it actually wears out. Deductions on executive stock options help. So do tax breaks for research and development and for making products in the United States instead of overseas. Offshore tax shelters play a role, too.”

They enacted accelerated depreciation because the usa has the second highest total corporate tax burden in teh world, second only to japan. And this tax burden is equally distributed against low risk companies like the financial, legal, accounting, and other services sectors as well as the high risk companies that require significant capital investment in order to function. So what was happening, because of this extremely high corporate tax rate, was that high capital investment companies were going broke or leaving the country, depriving the country of unskilled, and low skilled, labor-class jobs.

For example, the state says that your laptop must be depreciated over three to five years, however, in reality, it becomes almost valueless the moment you buy it. IN this way the state artificially increase profits and increases taxes on those profits by disallowing companies to expense things like laptops at the low end and mechanical equipment at the high end. This process effectively forces heavy industry to be uncompetitive on the world stage where other nations actively subsidize those heavy industry investments.

These tax breaks effectively BUY JOBS that would depart if not. IN the case of power companies, it makes no sense to tax them if the all it does is pass through costs for energy to consumers. So we are BUYING cheaper energy for consumers by offering tax breaks to them. Executive stock options are not ‘real’. The purpose of stock options is to create an incentive for execs to increase the value of a company for shareholders. Options differ from stock in that they are not taxable until you exercise them. If you grant stock to someone they have to pay taxes on it now, despite the fact that no one has made any money yet. That would be like asking you to pay your taxes for the year, before you could take a job and earn the income. Options differ in that they give people incentives even though they are rarely paid out except in public companies, but that the employee only earns income if the stock appreciates in value – ie: they were successful.

Offshore income is necessary because most corporations make their money these days outside the country. If they did not, then they might not even exist. We give shelters to people and companies because if we didn’t they would just circumvent the system or they would leave teh country entirely because the opportunities in the developing world are higher than they are domestically.

The majority of depositors in swiss accounts are average european citizens who are hiding their incomes from high taxes so that they can retire safely and in some degree of comfort. Europeans rarely own homes and they tend to live in apartments, and so they do not have home equity to rely upon at retirement.

If you want to tax goldman sachs you won’t get any complaints. But politicians making tax policy are far more rational than we think they are