politics Archives - the patient investor

December 8, 2014

Economics is just politics masquerading as science | Pragmatic Capitalism

From Cullen Roche:

….much of economics is just politics masquerading as science

In an earlier blog, Roche discusses the reasons for this (emphasis added):

Most of economics involves conforming a political bias with a world view. For instance, most Keynesians start with government spending and taxing, how those government policies can influence the economy and then interpret a “model” in such a way that confirms their political bias. Monetarists start with the central bank and interpret a more laissez-faire view of a “model” to interpret how policy can impact the economy. Austrians start with the private sector and build a “model” that seeks to eliminate government. So on and so forth. Every “school” of economics has a very specific ideology and the political lines are very clearly drawn. This doesn’t even approach “science”. It’s more like religion.

If economics were more of a science it would start with stylized fact. It would start purely with how the system works and how it functions at the operational level instead of looking at how a certain political entity can use certain policies to conform to a particular world view.

Why did most economists fail to predict the crisis or prescribe the right cures? Because they’re not working from the foundation of stylized fact. They’re working from a policy bias position that renders their world view inapplicable much of the time.

So, what is economics good for? Unfortunately, not very much given that so much of it is really just a policy debate masquerading as a scientific debate. And until we start getting more scientific, like say, trying to figure out how key institutions (like banks) in our monetary system operate, then we’re just chasing our own tails thinking that economics is useful.

Read more at Economists are Politically Biased and That’s a Good Thing | Pragmatic Capitalism.

November 1, 2014

The US wants to spread democratic values. It can start by cleaning up its act at home.

From Christian Caryl:

Larry Diamond, one of America’s leading scholars on global democracy, brought it up in a rousing speech at a recent conference here in Washington. He noted, with admirable frankness, that “we can’t be credible and effective in promoting democracy abroad if we don’t reform and improve its functioning at home.” He used to make this point, he said, as one of his last pieces of advice to Americans who aim to offer assistance to would-be democrats abroad. Now, he said, “it needs to be the first.” He quoted the old Greek proverb: “Physician, heal thyself.”

He’s not the only one. Just about everyone you meet in the “democracy bureaucracy” these days says the same. There’s a general awareness that democracy is experiencing dark times around the world, and that the attraction of Western models is waning fueled also by Europe’s continuing financial woes and political inertia….

Absence of ethics in advertising [video]

The Pitch from Gruen Planet asks two ad agencies to come up with a campaign concept to sell viewers on the idea of restricting advertising. The first ad is amusing, but the second is chillingly Orwellian.

The Pitch runs from 21:20 to 23:30.

The latter reminds me of Noam Chomsky’s observation about propaganda and the media:

The public relations industry, which essentially runs the elections, is applying certain principles to undermine democracy which are the same as the principles that [it] applies to undermine markets. The last thing that business wants is markets in the sense of economic theory. Take a course in economics, they tell you a market is based on informed consumers making rational choices. Anyone who’s ever looked at a TV ad knows that’s not true. In fact if we had a market system an ad say for General Motors would be a brief statement of the characteristics of the products for next year. That’s not what you see. You see some movie actress or a football hero or somebody driving a car up a mountain or something like that. And that’s true of all advertising. The goal is to undermine markets by creating uninformed consumers who will make irrational choices and the business world spends huge efforts on that. The same is true when the same industry, the PR industry, turns to undermining democracy. It wants to construct elections in which uninformed voters will make irrational choices. It’s pretty reasonable and it’s so evident you can hardly miss it.
~ From lecture titled “The State-Corporate Complex: A Threat to Freedom and Survival,” at the The University of Toronto, April 7, 2011

Two more quotes by Chomsky from Alternet.org:

The leading student of business propaganda, Australian social scientist Alex Carey, argues persuasively that “the 20th century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy.
~ From World Orders: Old and New

If the media were honest, they would say, Look, here are the interests we represent and this is the framework within which we look at things. This is our set of beliefs and commitments. That’s what they would say, very much as their critics say. For example, I don’t try to hide my commitments, and the Washington Post and New York Times shouldn’t do it either. However, they must do it, because this mask of balance and objectivity is a crucial part of the propaganda function. In fact, they actually go beyond that. They try to present themselves as adversarial to power, as subversive, digging away at powerful institutions and undermining them. The academic profession plays along with this game.
~ From Lecture titled ” Media, Knowledge, and Objectivity,” June 16, 1993

Chomsky has been painted as a wacko conspiracy theorist by mainstream media — and some of his later statements on global politics do strike me as odd — but his early insights into the unholy alliance between the media, business and politics and their use of propaganda are chillingly accurate and should not be ignored.

October 23, 2012

Politics Makes Us Worse | Aaron Ross Powell, Trevor Burrus | Libertarianism.org

Excerpt from an opinion by Aaron Ross Powell and Trevor Burrus:

Oddly, many believe that political decisionmaking is an egalitarian way of allowing all voices to be heard. Nearly everyone can vote, after all, and because no one has more than one vote, the outcome seems fair.

But outcomes in politics are hardly ever fair. Once decisions are given over to the political process, the only citizens who can affect the outcome are those with sufficient political power……

The black-and-white aspect of politics also encourages people to think in black-and-white terms……. Nuances of differences in opinions are traded for stark dichotomies that are largely fabrications. Thus, we get the “no regulation, hate the environment, hate poor people” party and the “socialist, nanny-state, hate the rich” party—and the discussions rarely go deeper than this…….

via Politics Makes Us Worse | Aaron Ross Powell, Trevor Burrus | Libertarianism.org.

September 24, 2012

Down with politics | WashingtonExaminer.com

By Gene Healy

Politics makes us worse because “politics is the mindkiller,” as intelligence theorist Eliezer Yudkowsky puts it……. we indulge our tribal hard-wiring by picking a political “team” and denouncing the “enemy.”

But our atavistic Red/Blue tribalism plays to the interests of “individual politicians in getting you to identify with them instead of judging them.”

……..We’ll get more of the same, Yudkowsky argues, until “Republifans and Demofans … stop enthusiastically cheering for rich lawyers because they wear certain colors, and begin judging them as employees severely derelict in their duties.”

via Down with politics | WashingtonExaminer.com.