Frequently I find myself holding what one might consider a politically incorrect opinion, such as having scorn for Islam, disagreeing with myths peddled by the third wave feminist movement or finding no legitimacy in the claims of the black lives matter movement.
As a result my adversaries are more than ready to deviate from the laws of discourse, veering off into ad hominem, red herring or appeal to emotion fallacies…..
To disagree with the wage gap myth should not equate to being misogynist. One who believes that the doctrines of Islam and tenets of Sharia Law cannot peacefully run alongside a secular, democratic society should not be labelled “Islamophobic” or xenophobic.
To suggest that black-on-black crime is a cause for increased police confrontations in African American communities should not equate to being a racist. To comment that the institution of marriage is aimed at incentivising long-term heterosexual relationships as they are most conducive to a positive upbringing for a child, should not be tantamount to homophobia.
We are amidst an era of ideological fascism, incited by the left-leaning media, celebrities and television which has begun to pervade every crevice of popular thought……
Michael A. McFaul, director of the Freeman Spogli Institute and a senior fellow at the Hoover Institution, both at Stanford, served as United States ambassador to the Russian Federation from 2012 to 2014:
…We will not find security in isolationism. No missile defense shield, cybersecurity program, tariff or border wall can protect us if we disengage. Menacing autocracies, illiberal ideas, and antidemocratic and terrorist movements will not just leave us alone or wither away. The threats will grow and eventually endanger our peace, as we saw in Europe and Japan in the 1930s, and Afghanistan in the 1990s.
Conversely, the growth of democracy around the world serves American interests. Democracies do not threaten us; autocracies do. Democratic allies also vote with us at the United Nations, go to war with us, support international treaties and norms, and stand with us against tyranny.
So we must push back, in new ways. Just as the Kremlin has become more sophisticated at exporting its ideas and supporting its friends, so must we.
We should think of advancing democratic ideas abroad primarily as an educational project, almost never as a military campaign. Universities, books and websites are the best tools, not the 82nd Airborne. The United States can expand resources for learning about democracy……
I agree with the sentiment but not the execution. Win friends by promoting education and building infrastructure abroad. These have practical, tangible benefits to citizens of developing nations. Democracy can come later. In many parts of the world it is as foreign a concept as gay marriage.
Great column by Peggy Noonan in the Wall Street Journal on the growing detachment between political and cultural elites and the problems facing ordinary citizens on the lower rungs of society. There is plenty of evidence of out-of-touch elites, including Brexit and Angela Merkel’s unilateral decision to allow 800,000 migrants and refugees from Muslim countries.
Nothing in their lives will get worse. The challenge of integrating different cultures, negotiating daily tensions, dealing with crime and extremism and fearfulness on the street — that was put on those with comparatively little, whom I’ve called the unprotected. They were left to struggle, not gradually and over the years but suddenly and in an air of ongoing crisis that shows no signs of ending — because nobody cares about them enough to stop it.
The powerful show no particular sign of worrying about any of this. When the working and middle class pushed back in shocked indignation, the people on top called them “xenophobic,” “narrow-minded,” “racist.” The detached, who made the decisions and bore none of the costs, got to be called “humanist,” “compassionate,” and “hero of human rights.”
Surprising support for Donald Trump and Bernie Sanders also reflect the disillusionment of the bottom half with leadership by the 1 percent. They feel they have been taken for granted — if not shafted — and their anger will be reflected at the ballot box. Hopefully we can avoid the rise of tyranny as in the 1930s — after the last financial crisis — but these are dangerous times.
During the Federal Election campaign, Labor’s shadow treasurer, Chris Bowen, confirmed that the overall tax burden would hit 24.8% GDP by 2026-27 under Labor, up from 23.5% in 2019-20:
Mr Bowen told The Australian Financial Review that his number was lower than the 25.7 per cent of GDP that Treasurer Scott Morrison claimed Labor would deliver, but higher than the Coalition’s ceiling of 23.9 per cent.
Mr Bowen said the alternative would be spending cuts to essential services.
“Let me be clear: tax-to-GDP will be higher over the medium term under both the Coalition and Labor government. Either that, or the Coalition will continue to deliver more savage cuts to Medicare and education,” he said.
The admission was immediately seized upon by Treasurer Scott Morrison, who claimed that a higher tax burden would damage the Australian economy’s growth:
“Labor might want to think you can have a tax-to-GDP ratio approaching 26 per cent and that will have no impact on the Australian economy. They are kidding themselves…”
The Coalition’s 23.9% of GDP ceiling on tax is based on the National Commission of Audit’s recommendation that taxation revenue as a share of GDP should be capped at 24%.
The assumption that higher tax equals less economic growth is a popular one among conservatives, not just in Australia.
However, four American academics have published an important new book, entitled “How Big Should our Government Be?”, which examines in detail the vexed issue of government size and growth.
According to the Washington Post, which provides a good summary of the book, there is actually a positive correlation between the size of government and economic growth per capita:
Using data on 12 advanced economies from 1870, the authors of the book conclude with the following:
“In the century and a half since then, government expenditures as a share of GDP have risen sharply in these countries. Yet they didn’t experience a slowdown in their long-run economic growth rates. The fact that economic growth has been so stable over this lengthy period, despite huge increases in the size of government, suggests that government size probably has had little or no impact on growth.”
The authors also note that “A national instinct that small government is always better than large government is grounded not in facts but rather in ideology and politics,” and that the evidence “shows that more government can lead to greater security, enhanced opportunity and a fairer sharing of national wealth.”
In particularly, the authors call for more investment in infrastructure, education, as well as proper safety nets for the unemployed and those that get sick.
The Turnbull Government should take note as it considers taking an axe to Australia’s public services.
MY REBUTTAL:
Let me start by saying that I am not in favor of austerity as a response to a major economic slow-down. If anything that will exacerbate unemployment and prolong the contraction. Instead I advocate major infrastructure programs to stimulate the economy. But with two caveats: (1) investments must generate a market-related return on investment; and (2) there must be strong involvement from the private sector. Investment in assets that do not generate direct revenue leaves future taxpayers with a pile of debt and no income (or saleable assets) that can service (or repay) it. Involvement of the private sector should be structured to ensure that the benchmark of market-related returns is not superseded by projects selected to win the most votes. Also, the private sector should have skin in the game to restrict cost blowouts. They are not immune to cost blowouts but are not in the same league as big government.
I also believe that weak government will harm an economy. We need strong regulators, rule of law, police and military to ensure stability. Also spending on education and science to foster growth.
But the article by Jared Bernstein in the Washington Post typifies the kind of rubbish pedaled to voters around election time. And seems to have been swallowed hook-line-and-sinker by the author of the MB article.
Where do I start?
First, the fact that a book by four unnamed academics is cited as proof in itself should tell us how much credibility to attach to their claims.
Second, the author mentions that there is “a positive correlation between the size of government and economic growth per capita…”. A positive correlation is any correlation coefficient greater than zero. The highest correlation is a value of 1.0 which represents a perfect fit. No correlation coefficient is provided in either article and judging from the graph I would assume it is closer to zero than 1, meaning there is only a vague correlation. If you ignore the line drawn on graph, the data looks randomly scattered with no clear trend.
Also the author overlooks that he is only dealing with a sample of 12 countries, which again would give a low level of confidence in any result.
Further, in the WP article the author concedes that correlation is not equal to causation: “That positive slope in the figure on the left above could easily be a function of reverse causality: As economies grow, their citizens demand more from them.” This is omitted in the MB report.
Then the study of data for the 12 economies from 1870 up top the present is used to argue that growth in government expenditures does not hinder GDP growth. I would be surprised if the data didn’t show growth in government across all countries as it spans the era from horse-drawn carts up to the area of modern jets and space travel. From the country GP with a stethoscope to modern nuclear medicine and MRIs. From slate and chalk to super-computers and digital technology. Of course the demand for infrastructure has grown exponentially over that time. To argue otherwise would be stupid.
But that is not an argument in favor of a welfare state or increased government expenditure. In fact, most of those advances in technology were driven by private individuals and not by government.
Finally, I will use another graph from “How big should our government be,” Bakija et al in the same Washington Post article to argue the case for lean government (as opposed to small government circa 1870):
The graph shows that tax revenues as a percentage of GDP have steadily declined, since the late 1990s, for every country except France. Why has this occurred in even model welfare states like Sweden and, to a lesser extent, Canada? Simply because they reached “peak welfare” in the 1990s and realized that the only way to revive GDP growth was to reduce the role of government in the economy.
The only one who hasn’t accepted the evidence is France. Which may well be contributing to their poor economic performance.
JOHANNESBURG — The African National Congress, the party that helped liberate black South Africans from white-minority rule but has become mired in corruption, endured its worst election since taking power after the end of apartheid, according to results released on Friday….
For the opposition Democratic Alliance, the election results are the first significant victories outside of its stronghold in the western part of the country. Whites and South Africans of mixed race make up the party’s core supporters in that area, and blacks make up only about one-third of the population there.
The Democratic Alliance retained Cape Town, the nation’s second-biggest city, with a landslide victory. The party now controls at least two of the nation’s eight biggest cities.
Mmusi Maimane, who last year became the Democratic Alliance’s first black leader, claimed victory in the mayoral race in Pretoria on Friday, with more than 10 percent of the votes still left to be tallied. The A.N.C. did not concede.
Under Mr. Maimane, 36, who grew up in Soweto, the Democratic Alliance appears to have made inroads even in A.N.C. strongholds, especially among young voters whose image of the A.N.C. has less to do with Mr. Mandela than with Mr. Zuma.
“I wanted change,” said Tebogo Malatjie, an unemployed 22-year-old man in Soweto who voted for the first time for the Democratic Alliance. “You cannot vote for the A.N.C. if you want change.”
Apart from the charismatic Nelson Mandela, who made a major contribution in uniting the various tribes and cultures in South Africa, the ANC has proved itself incapable of governing a first-world economy. Mired in corruption and with rampant crime, the country has stumbled from one economic disaster to the next. The former guerilla army has proved incapable of adapting to the task of responsible government.
Nothing depicts the plight of the South African economy better than the demise of the Rand against the US Dollar (USDZAR plotted below with inverted semi-log scale):
The Democratic Alliance has used its traditional stronghold of the Western Cape to showcase the benefits of clean, stable government. A message that is now winning votes in Traditional ANC areas like Nelson Mandela Bay (formerly Port Elizabeth).
A Democratic Alliance win in the national elections, in 3 years time, is the best chance of restoring the country to its former status as the economic powerhouse of Africa.
Senator-elect One Nation’s Pauline Hanson dominated news headlines yesterday after she warned of “terrorism on our streets” and suburbs “swamped by Asians”, prompting righteous indignation from all manner of MSM commentators.
The below extract from The Canberra Times captures some of the shenanigans: At a fiery press conference in Brisbane on Monday, Ms Hanson claimed the major parties should respect the large number of votes One Nation pulled, and urged a return to an Australia “where we as a nation had a right to have an opinion and have a say”…… “We are a Christian country and that’s what I’m saying … [former Liberal prime minister] John Howard said we have a right to say who comes into our country and I’m saying exactly the same.”
My simple advice to Ms Hanson is that if she wants to be taken seriously in the immigration debate, then she must dump the racial overture and instead focus on the level of immigration and why it is too high.
The fact that many of us in major cities are stuck in traffic, cannot get a seat on the train, are experiencing crowded hospitals and schools, and cannot afford a home has little to do with race, but rather a high immigration intake that has overwhelmed our cities’ ability to cope with the influx.
….Ms Hanson should also highlight that the system surrounding so-called skilled and student visas has been corrupted, with widespread rorting and fraud revealed by the recent joint ABC-Fairfax investigation (see Australia’s hidden people smuggling scandal). Again, rather than focusing on race, Ms Hanson should argue to restore integrity to Australia’s visa system so that it is not overtaken by “crooks and criminals”.
…More broadly, Ms Hanson should highlight that for a major commodity exporter like Australia, which pays its way in the world by selling-off its fixed endowment of resources, ongoing high immigration can be self-defeating from an economic standpoint. That is, continually adding more people to the population year after year means less resources per capita. It also means that Australia must sell-off its fixed assets quicker just to maintain a constant standard of living (other things equal).
Again, none of this has anything to do with race – i.e. where the migrants come from – but rather that the overall immigration intake is too high and has overwhelmed the capacity of the economy and infrastructure to absorb them, eroding individuals’ living standards in the process.
There has also been no proper debate within the community about the appropriate level of immigration and no political mandate for pursuing a “Big Australia”.
…..We should not forget that an Essential Research opinion poll published in May revealed that the overwhelming majority of Australians (59%) believed “the level of immigration into Australia over the last ten years has been too high”, more than double the 28% of Australians that disagreed with that statement.
….under current policy, Australia is on track to double its population by 2050 to more than 40 million people – something most Australians oppose. Again, this comes amid virtually no discussion nor mandate for this dramatic change, nor any plan on how to cope with this growth.
As long as Ms Hanson plays the “race card”, she will be rightly ridiculed and has already lost the debate. Population policy is far too important an issue to be segregated into pro- and anti-immigration corners based upon views about race and cultural supremacy. Instead, the issue needs to be debated rationally and based upon whether or not immigration is benefiting the living standards of the existing population.
I agree. This has nothing to do with race or religion. Pauline Hanson is barking up the wrong tree. This is about numbers. I suspect the same is true of the Brexit vote. I am all in favor of skilled migration (being a migrant myself) but any newcomer should ask themselves how they can contribute to existing Australian values and culture….rather than preserve their own.
Consider Boris Johnson, the man who appears best positioned to emerge as the UK’s next prime minister. In becoming the public face of the Brexit campaign in defiance of fellow Tory Prime Minister David Cameron, Boris seized on the opportunity he saw in the aftermath of the Cameron government’s own politically cynical ploy to hold a non-binding referendum on EU membership…. Boris, heeding Machiavelli’s warning that “there is nothing more important than appearing to be religious,” took on the role of the high priest of Tory euroskeptics in favor of leaving the European Union.
….Direct democracy by mean of referendum, in the context of Brexit, was a tool evoked of political necessity (Cameron seeking temporary political ballast) and taken advantage of for political ambition (Boris’ skewering of Cameron). That the people of the UK voted and told us what they really think is ultimately a neutral event, on balance.
…..The takeaway from ‘Brexit’, thus, shouldn’t be a hardening of contempt for popular will and the one-person-one-vote principle that underwrites all forms of modern democracy, but to continue to expect politicians to be politicians.
Barry Ritholz ascribes the BREXIT vote to “culturally constructed ignorance”:
….there is a disconcerting trend that has gained strength: agnotology. It’s a term worth knowing, since it is going global. The word was coined by Stanford University professor Robert N. Proctor, who described it as “culturally constructed ignorance, created by special interest groups to create confusion and suppress the truth in a societally important issue.” It is especially useful to sow seeds of doubt in complex scientific issues by publicizing inaccurate or misleading data. Culturally constructed ignorance played a major role in the Brexit vote, as we shall see after a bit of explanation.
….Current agnotology campaigns seem to be having similarly desired effects. We see the results in a variety of public-policy issues where one side has manufactured enough doubt through false statements, inflammatory rhetoric and data from dubious sources that they can mislead public opinion in a significant way, at least for a time.
….In the aftermath of the Brexit vote, there is evidence that people didn’t fully understand what they were voting for. Some didn’t think their protest vote would matter, or misunderstood what they were voting for, or what the EU actually was. There seems to be a rise in voters’ remorse the days after. Many blamed the tabloids in the U.K.. The misstatements and myths which were being pressed by the leave campaign about the EU were so rampant and absurd that the European Commission had to put out repeated corrections and maintain a blog to rebut the nonsense.
While I am as concerned as Barry over the dumbing down of political debate, ably assisted by the tabloid press and the Internet, where “false statements, inflammatory rhetoric and data from dubious sources” are used to inflame the public, this is nothing new. That is politics. When emotions are aroused, the intellect is dormant.
But we should guard against the arrogance of presuming that voters are misinformed. Perhaps it is us, as George Friedman points out, who are aloof from issues on the street:
Immigration is socially destabilizing. There is always friction between older residents and immigrants…..But, better educated and wealthier individuals normally don’t experience this…
….the British who were for it, to a large extent, did not feel the profound social costs of immigration. That fee was going to be paid by those who—again with many exceptions—voted for leaving.
As troubling as Europe’s economy is, it was not the prime mover in the referendum. The contentious immigration debate holds that honor. And immigration itself was not really the issue. Britain was quite comfortable with immigrants until Brussels began making demands.
The EU dictating the rules was the problem. It was a question of sovereignty. That the EU could make decisions that would change the character of Britain was not okay.
Granted, there was a large vote for staying. The British media have been eager to point out that those who voted to leave were less educated, had lower incomes, and so on. They were also most likely to be affected by immigration.
Immigration is socially destabilizing. There is always friction between older residents and immigrants…..But, better educated and wealthier individuals normally don’t experience this element of immigration. The tension on the streets rarely enters the halls of academia, senior civil service, or banking.
Not surprisingly, the question of sovereignty wasn’t critical to this class. Just as large-scale immigration did not concern them.
….In Britain, the immigrant issue was critical and created a sense of powerlessness. First, Britain was not in control of its immigration policy. Second, the British who were for it, to a large extent, did not feel the profound social costs of immigration.
That fee was going to be paid by those who—again with many exceptions—voted for leaving. So it was a revolt against the British establishment and the EU. As with most things, it was much more complex than it seemed.
When All Else Fails, Acknowledge the Obvious
The EU has already responded. This statement from the foreign ministers of Belgium, France, Germany, Italy, Luxembourg, and the Netherlands, defines the future: We will continue in our efforts to work for a stronger and more cohesive European Union of 27 based on common values and the rule of law. It is to that end that we shall also recognize different levels of ambition amongst Member States when it comes to the project of European integration. While not stepping back from what we have achieved, we have to find better ways of dealing with these different levels of ambition so as to ensure that Europe delivers better on the expectation of all European states…. However, we are aware that discontent with the functioning of the EU as it is today is manifest in parts of societies. We take this very seriously and are determined to make the EU work better for all our citizens.
This was the EU’s answer to Brexit. They recognized that not everyone wants the same level of integration and will respect that. They are aware that many are discontent with the EU.
In other words, after the British vote, they acknowledge the obvious. This is a unique evolution. It is not clear what they are going to do, but they are not going to punish Britain. They can’t afford to.
…..In Eric Hoffer’s classic 1951 tract, The True Believer, he sketches the dynamics of a genuine mass movement. He was thinking of the upheavals in Europe in the first half of the century, but the book remains sobering, especially now. Hoffer’s core insight was to locate the source of all truly mass movements in a collective sense of acute frustration. Not despair, or revolt, or resignation — but frustration simmering with rage. Mass movements, he notes (as did Tocqueville centuries before him), rarely arise when oppression or misery is at its worst (say, 2009); they tend to appear when the worst is behind us but the future seems not so much better (say, 2016). It is when a recovery finally gathers speed and some improvement is tangible but not yet widespread that the anger begins to rise. After the suffering of recession or unemployment, and despite hard work with stagnant or dwindling pay, the future stretches ahead with relief just out of reach. When those who helped create the last recession face no consequences but renewed fabulous wealth, the anger reaches a crescendo…..
Sullivan argues that Donald Trump is riding this populist backlash to the White House. I believe that the same populist forces are behind the BREXIT vote. This is a major threat to stability of the Western world over the next decade.
