Addicting Misinformation

Articles like the one I'm about to rant about drive me completely apoplectic.

First, I will admit that "Addicting Info" is - to be fair to my own sanity - one of the most unabashedly biased "leftist" blogs on the web and is staffed by some of the most ignorant amateurs out there, so I probably shouldn't care that much, but this article has over 7,000 "likes" on Facebook and not a word of it is true or even particularly sane.

I don't really want to give it any further traffic, so I will simply copy & paste the article here, with a few highlighted points of incredible stupidity (emphasis mine). It's not very long anyway. One Nathaniel Downes (about whose credentials I cannot currently find a shred of viable information) writes:

"Across Europe, the failure of austerity is clear. However with the weakness of the Eurozone’s de-centralized government apparent, France took upon itself a very different path to rectifying its financial woes. Instead of cutting services, punishing its population for the excesses of the élite, France has taken a page out of history, and taking the old tactic of raising its taxes.

The new tax rates top off at 75% of income earned over $1 million euro (approximately $1.3 million USD) for individuals. Some economists are quick to proclaim that such a tax rate would cause the economic conditions to become worse and that it sends a message that France does not like the rich and is not open for business.

This of course is nonsense. France, like many nations, has a tax penalty for taking money out of the country. France also utilizes a value added tax on goods going into the country. This means if a business decides on moving, to say Africa, to avoid the higher taxes, it would find any of its goods at a severe penalty when they returned to sell their goods and services to one of the largest economies in the world. Any business which decides on not selling to the market, of course, is being stupid. They are doing the metaphorical cutting off of their nose to spite their face. Every business can be replaced, so if a market is there, a company will come to fill it.

Instead of being anti-business or anti-rich, it is instead very pro-business. Now a business cannot waste its resources in supporting overpriced leisure-rich. Instead, the businesses which for invest in expansion, in its customers, and in its employees will find themselves rewarded. This becomes a very business friendly environment, companies which work in France will be very pro-growth. This will in turn expand their owners fortunes and overall wealth.

This is not a record for taxes, the United States once sported a 94% income tax rate. What this is, however, is a rejection of the Chicago and Austrian school of economics which have dominated the world for the past 40 years, and an embrace of the American school of economics, a school which has been sorely missing from the austerity debate."

Let that sink in for a minute.

Here's my response, which I posted to as a comment on the article itself. Here I will also add links so that my points are supported:

This has to be the dumbest, most poorly researched or argued article I have seen in years.

1. "Austerity" hasn't actually been attempted in nearly any part of Europe, and even to the extent that anyone could claim it exists even in Greece, it is overwhelmingly comprised of further economy-crippling tax increases and levies on incomes, goods & services, imports and everything else... ALL of which make people worse off and takes more money out of individual's hands, giving it to politicians to spend instead (which is largely why this isn't working), and the few instances where spending is being "cut" are either roll-backs in growth or things like raising the retirement age before social security benefits can be collected, selling *some* of the thousands of state-owned businesses and assets to cronies, and limiting or eliminating bonus payments/freezing public sector wage increases.

NO PART of this is a reduction in state control over the economy in Greece - or in Spain, or France for that matter, and nobody else has done anything but TALK about "austerity".

It is one of the most ludicrous things in the world to engage in policies that no reasonable person would call "austere" and then declare austerity a failure when raising taxes on everything under the sun and exploding Keynesian stimulus spending doesn't work to bring about prosperity.

So that's retarded... and it brings me to point #2.

And no, that Krugman quote is not out of context.

2. The Monetarist "Chicago School" had some influence 40 years AGO, but hardly has any influence on American policies now - and barely had any influence worldwide any way... but more importantly, the Austrian School has had ABSOLUTELY NO INFLUENCE over policy at any point.

You could discover this if you took two goddamn seconds to look at what Austrian School economists actually advocate, and what kinds of policy conclusions their methodology would support. They were the ones most seriously warning against the policies that brought about the financial collapse in the first place, and they are not the ones in charge of policy-making in the US or anywhere in the world today either.

They tried to STOP the $700 Billion bailouts, and the $800 Billion stimulus packages. They argue AGAINST the $1.5 Trillion worth of yearly deficits we've run for the past 4 years. They argue AGAINST having a central bank set interest rates and they argue consistently against the manipulation of the money supply.

Not a SINGLE member of Bush's or Obama's teams of economic advisers, nor anyone at the treasury or at the Federal Reserve (which is, as I mentioned, antithetical to Austrian School ideas from the start) is remotely influenced by the lessons of Mises, Bohm-Bawerk, or Menger... or really even by Schumpeter, Bastiat or Hayek.

We've seen an explosion of government spending, an explosion of regulatory control over the eocnomy during the past 40 years... We've seen NOTHING that remotely fits a model of what most Austrians might support.

3. Tax rates.

Contrary to the article... YES... 75% tax rates are going to create further capital flight from France (UPDATE: They ALREADY ARE.). Likewise, 94% top marginal income tax rates for a couple years, and then the 91% rates we had throughout the 50s and 70% rates we had from the 60s to 80s created incentives for America's wealthiest people to engage in tax-avoidance strategies (i.e. shifting their reported income from salaries to asset dividends, moving money to low-tax off-shore bank accounts and other legal strategies, and assuredly some illegal ones), and while those top rates only applied to those who would be billionaires today (i.e. not people making $250,000+ who are in the top bracket now) to begin with... their effective rates were always far lower.

Nobody has ever paid rates anywhere near 94%... and frankly. Why in the hell would they?

Beyond that... And here's the REALLY important part... What matters to government is not actually the tax RATES. What matters is revenue. And unfortunately, revenue in the US has been steady at 18-20% of GDP for the last 60 years...... In spite of tax rates being at 91%, and 70%, 42% and 39% and now down to 35%, that revenue as a percent of GDP has never substantially changed.

Why not? Because people actually DO change their behavior when rates go up or down, but the amount of blood people allow governments to extract doesn't fluctuate that much.

[Note: I made a video on this very topic not too long ago.]

We are, of course, also spending at about 25% of GDP, which is entirely unsustainable - yet history is not on your side if you think the solution here is to raise taxes.

What worthless garbage this article is.

I followed that up with an addition I meant to include in the original:

One other thing actually... All the freaking major economics textbooks, all the major universities, and all the lead government economists are all overtly Keynesian. And the policies we have are in line with that.

Christ.

Before I go on, I want to point out that the book I linked above is Greg Mankiw's "Principles of Economics" textbook, which is the most widely used intro to economics textbook in the world. To pull from Mankiw's Wikipedia page, note the following:

"Nicholas Gregory "Greg" Mankiw ( /ˈmæn.kjuː/; Ukrainian Cyrillic: Григорій Манків; born February 3, 1958) is an American macroeconomist and Professor of Economics at Harvard University. Mankiw is known in academia for his work on New Keynesian economics.

From 2003 to 2005, Mankiw was chairman of the Council of Economic Advisers under President George W. Bush. In 2006, he became an economic adviser to Mitt Romney and continued during Romney's 2012 presidential bid.[1][2] He is a conservative[3][4][5][6] and he writes a popular blog, ranked the number one economics blog by US economics professors in a 2011 survey.[7] He is also author of the best-selling textbook Principles of Economics, and according to the IDEAS/RePEc rankings, he is the 32nd most widely cited economist in the world today.[8]"

Not only is Greg Mankiw one of the leading voices of "New Keynesian" economic thinking, he was also an adviser to George W. Bush during his term in office, as well as an adviser to Mitt Romney today.

Now... You might be thinking... Hey, this guy is a Republican! The Democrats surely offer something different, right? Are you wondering then what about Obama's advisers?

Well... Bad news, everyone!

They're all Keynesians as well - and even less influenced by the more free market teachings of the Chicago School, even when a few of them were influenced by Milton Friedman (it was hard not to be, for the record) in areas like statistics and modeling like Austen Goolsbee.

Here's the list of current & former members of the United States "Council of Economic Advisers" going back to 1949... I'm not going to go through each person one by one here, but I dare you... Go find me a single person substantially influenced by the Austrian School.

Spoiler alert: You're going to fail.

Even Milton Friedman - who was one of the most influential economists of all time by himself - isn't even on this list. But Joseph Stiglitz is. The point is easy. If you look at who has influence over the universities and over policy, it is NOT the Austrian School economists holed up at George Mason, or Auburn, or the other few outposts around the US. Pete Boettke, Don Boudreaux, and Steve Horwitz don't have any say over what's going on... and even less so do people like Robert Murphy, Mark Thornton or Peter Schiff... and somewhere way, way, wayyyy down on this list are people like

To say that they are the cause of all economic problems in the world is disastrously wrong and frankly... it's simply a lie written at "Addicting Info" to further provide confirmation of biases to those who don't know any better and don't want to know any better. It's very much like what I wrote many years ago in my first ever published op-ed on economics for the Ludwig von Mises Institute responding to similar stupidity coming from Thom Hartmann.

That said... I cannot even begin to say how irritating and borderline enraging this kind of stuff is.

And let's be honest... There's so much more to be enraged about in this article than I even commented on at the post!

I mean... Downes' argument here is literally that the government of France can keep all of its rich people by imprisoning them in a brutal taxation gulag.

If you don't want to be taxed at 75%, that's cool... leave the country, except... oops, we're going to tax everything you have when you leave and restrict all imports from coming in. So you'll be "stupid" if you don't just stay and take the beating while continuing to produce all you can for your starving fellow citizens. I'd ask if anybody honestly believed that any of this was a good idea or would make people in France better off... But apparently, around 7,000 people DO believe this!

What in the hell, world?

Restrictions on imports just mean that goods in France will be more expensive, and of poorer quality as French producers assuredly will not have comparative advantage in all cases but are insulated from outside competition thanks to consumers being literally or virtually prohibited from acquiring better or cheaper goods made elsewhere. Taxing rich people at those rates will utterly crush production to begin with, but the notion that rich people - who tend to have some ability to bribe public officials or to work around laws where they need to, and who also tend to be rather savvy about financial issues - won't just be able to leave or that they will simply take the punishment is insane.

It has NEVER worked that way.

All this economic thuggery is going to do - and IS already doing - is push out all the investment, all the capital and all the jobs and prosperity away from France to other, friendlier places. Places like Singapore & Hong Kong, or if you want to stay in Europe, Switzerland or even just across the channel in the UK. No matter what the idiot author of this piece thinks, France isn't engaging in "pro business" activities by punishing rich people, which isn't what I want government to be in any case, but it also sure as hell isn't "pro market" which is actually what matters if you want economic growth.

Capital availability for private entrepreneurship (a French word, by the way!) is absolutely essential to a thriving economy. The French government simply cannot redistribute its way into national prosperity no matter how many times they try.

It's all just so incredibly stupid that it literally gives me a headache, and if people don't get educated even well enough to know when they're being lied to, we're never going to get out of these kinds of messes as a species.

The October Pledge & Revealed Preferences

I'm feeling a bit like a crappy friend and a crappy human being.

My best friend at my work, Jeff Proctor, came up with a really cool idea. Or at least, I want to believe that it's cool. I love it, actually...

The idea is called "The October Pledge" (which you should totally like on Facebook right now!), and the idea is simple... For the whole month of October, or the month leading up to this year's presidential election, you agree to do the following:

"No matter how I vote (or don't vote) in November, I pledge to spend the month of October creating value and bringing joy to the lives of others. I will abstain from political commentary (positive or negative) and, instead, spend my time taking actions that make my life -- and the lives of people around me -- better. When November comes, I will take whatever political action my beliefs warrant, but for now, I choose people over politics!"

That's it. Should be easy enough... The only problem is, for me... It isn't easy at all.

So, I'm here to talk about the difficulty for me, and make a little note about revealed preferences. The concept of "revealed preferences" is an idea in economics in which we recognize that people say they like or dislike all sorts of things, but at the end of the day, what matters is how we act.

I can claim that I love backpacking (and I do claim this), but if I spend my Saturdays sitting on my couch watching a movie instead, I'm demonstrating a revealed preference such that movie-watching is in reality a higher valued way to spend my time than is backpacking. Unfortunately, in addition to being a good example to illustrate the concept, it's also a true story.

I wish it wasn't sometimes.

Honestly... I really do wish I was the guy who went out by himself wind, rain or shine and did cool outdoorsy activities. I wish I spent more (any) time this summer with my kayak than I did at my desk working on Learn Liberty videos. Alas, that's not what I did. I revealed a preference all summer for working over kayaking.

I am proud to say that this morning I did go out to an archery range nearby to get some target practice with my brand-new recurve bow. I suppose that's a bit random, but it's fun and it's decent light exercise combined with skill & hand-eye coordination, so it's pretty engaging. Maybe next week I can get someone to go out there with me... Plus, at least the bow is something I can easily toss in my car. The kayak is a ton of work by comparison. So is backpacking... Especially when you don't really have anyone to go with you.

Anyway, the thing is... Movie watching makes me very happy too, and it isn't a ton of work. It also benefits me by keeping me in the loop on what industry people are doing, what audiences care about and I can totally rationalize it as professionally beneficial behavior. And I mean, it is... But also, I just enjoy doing it. So that's what I do.

So........ What's all this got to do with the October Pledge?

Well, I've come to realize that as much as I don't care about politicians or "politics" per se, and while it would actually be very easy to not talk about the election or engage in any kind of armchair punditry for the next month, I do get a great deal of benefit from having intellectual discussions about economics & philosophy, and these things intersect with politics so much that I think it'd be very difficult for me to abide by the spirit of the pledge. You can see this as a revealed preference in action nearly every day if you follow my twitter or Facebook feeds.

So I can't make the full promise.

What I can do is say that I won't engage in any punditry, and I won't talk about Romney or Obama's electoral campaigns, or whether or not one or the other will win... I don't care very much about that in any case, and frankly, I really don't think it matters which wins to a large degree. I will probably still write about and engage in discussions philosophy & economics, and frankly, I don't see how I can avoid these things being perceived of as "political", even when I don't necessarily believe they are in the strictest sense.

I will also do my best in the next 4 weeks to make the overwhelming majority of my posts be about art, music, film, and other creative endeavors. To the extent that I can create value for other people... well... I gave blood last week, which was good, I've written two in-depth emails to people recently in response to their questions seeking advice about how to get into creative careers, and I'm working on a bunch of value creation at work and as a freelancer.

For myself, even though it's getting to be a bit more problematic weather wise, I'm going to try to get out and do some more active things like the archery or kayaking, and meanwhile, I have a bunch of skills I want to learn creatively as well... particularly in the realm of animation.

I may even get back actually into writing a science-fiction feature film script which I had a "winning" concept for about a year ago. Just to see if I am actually capable of something like that.

Who knows.

Jeff's right. Politics is stupid, particularly around election time, and now is the time every four years when everyone tends to go completely bonkers anyway. It's a time when a bunch of amateurs who don't care enough to even learn the first thing about the ideas or issues in play suddenly come out of the woodwork with innumerable opinions based on nothing but their own team allegiances. It's a pretty dismal time, to be honest.

So I agree entirely that I don't really want to be a part of it.

I can't sway anyone's opinion at this point in the year in any case, and even if I could, if at all possible I'd sway it away from voting at all. Or I'd at least try to sway it towards voting "no confidence" or for a 3rd party or write-in candidate. I'd also probably tell you to vote down every expansion of government and every increase in spending you can at a local level... But since I can also do basic math, and have a perfunctory understanding of Public Choice Theory, I don't know that it would matter even if you did.

That seems cynical, but it is pretty realistic.

Alright, so... I'll do my best to avoid the whole subject for the next few weeks, but I make no promises. If you want to support the October Pledge, and I really do think you should - particularly if you don't work in a politically-charged field like I do - then by all means, share the Facebook page and change your profile picture. Get on board.

Creating value for yourself and others is something we should be doing all the time, and even if the state makes that harder to do by initiating and supporting violence against peaceful people and restricting individual choice... we can still opt to ignore it wherever possible.

This might be one of those moments. Good luck.

"My bigotry is just common sense."

This has to be one of my favorite things in a long time...

Thaddeus Russell, the fabulously interesting historian, and author of "A Renegade History of the United States" is a buddy of mine. This evening, on Facebook, he posted an interesting Ronald Bailey article about how "Liberals Admit to Discriminating Against Conservatives" in Reason Magazine. I also posted it tonight, and it's definitely worth reading.

From the article: 

"...a new study, "Political Diversity in Social and Personality Psychology," by Dutch psychologists finds that overt discrimination against conservatives [PDF] likely plays a role. The researchers surveyed several hundred social psychologists, most of them American, and found that 6 percent identified as "overall conservative""

Then Bailey quotes the researchers, who say [PDF]:

"The current results suggest one answer: Members of the conservative minority are reluctant to express their political beliefs publicly. Survey 2 shows why: Hostility toward and willingness to discriminate against conservatives is widespread. One in six respondents said that she or he would be somewhat (or more) inclined to discriminate against conservatives in inviting them for symposia or reviewing their work. One in four would discriminate in reviewing their grant applications. More than one in three would discriminate against them when making hiring decisions. Thus, willingness to discriminate is not limited to small decisions. In fact, it is strongest when it comes to the most important decisions, such as grant applications and hiring."

When Thaddeus put this on Facebook, it sparked what I think is a truly hilarious series of comments, that everybody really needs to see. At least you should see the first few:

I'm sorry, but that is just spectacular to me!

David begins by claiming the article/study is "Bullshit!", presumably meaning that he doesn't believe liberals discriminate against conservatives in academia. He follows that up instantly with saying that conservatives/Republicans are "RACIST PIECES OF SHIT" and shouldn't be allowed to be employed at universities.

Of course, he's not bigoted. Oh, no... His positions are just "common sense". You can tell by how he used all caps.

There are more comments like this, and for the most part they are equally oblivious, cognitively dissonant and  - in my opinion - hilarious in their astounding irony. David supports his position by linking to a Huffington Post story about a single, Republican member of the Arkansas State House of Representatives who wrote in a book that the descendants of black American slaves might be better off in the US than they would have been had they been born in Africa. That's not actually that controversial statement, as far as I'm concerned, but it seems that he goes on to make a lot of racist statements as well.

Now... It's a Huffington Post article, so I'm assuming there's more than a little bias working against this guy here, but given that we're talking about a state-level politician from Arkansas, it's not like it'd be surprising that that guy was an out an out racist.

But............. Taking a single person's views and then ascribe them to all conservatives is - I pointed out - insane, dishonest and stupid. Thus we get my second favorite part of the thread, where David calls me a conservative for criticizing his logic.

There's another bit that I think is worth saying something about as well, though... One of the commenters, "Joe", who I believe is a university professor, lists a bunch of reasons that he believes conservatives shouldn't fit into the social sciences. But, quite consistent with the bulk of my experience talking with "liberals", his descriptions of conservative beliefs are generally inaccurate and misstate the arguments conservatives actually make.

Here's Joe's comment:

"Climate change denial is by far the dominant position in the GOP. Beyond that I can see research scientists as not likely to be Repubs because the party has turned its back on science on everything from stem cell research to NSF and NIH funding in general. In social science, many conservatives don't even believe in something called the social - preferring explanations that at the level of the individual or family. And as for the humanities, these disciplines have been under assault from the right for a long time, particularly the business right which sees any intellectual endeavor not in pursuit of profit as a waste of time and resources. Not to mention the fact that conservatives are far less likely to support student grants and manageable loans to attend college. Having said all of that, I have Republican colleagues both in my dept and elsewhere. In fact, one of my former PhD students, an arch-conservative if there ever was one, just got a tenure-track position last year. I visited him in the summer, and he appears to be thriving."

.So... Here's the thing.

First of all, Democrats turn their backs on science all the time as well. Ronald Bailey wrote another recent article about this as well called, "Who's More Anti-Science: Republicans or Democrats?", noting that the anti-vaccination crowd, the fears of GMO crops, the appeals to failed Malthusianism, the fear-mongering about pesticides and even fracking and things like that - all actual evidence to the contrary of their claims - tends to come from Democrats and "the left". Not to mention that there is so much more bias against advances in technology when coming from entrepreneurs & business. One key passage:

"Expanding on his argument at DeSmogBlog, Mooney asserts that the left doesn’t abuse science; it merely has policy disagreements about it. As an example, he cites affection for the precautionary principle. “There is always much scientific uncertainty, and industry claims it’s safe, but environmentalists always want to be more cautious—e.g., adopting the precautionary principle,” he notes, adding: “The precautionary principle is not an anti-science view, it is a policy view about how to minimize risk.”

But as University of Chicago law professor and current administrator of the White House Office Information and Regulatory Affairs Cass Sunstein noted in a 2003 working paper entitled “Beyond the Precautionary Principle,” this idea “imposes a burden of proof on those who create potential risks, and it requires regulation of activities even if it cannot be shown that those activities are likely to produce significant harms.” Note specifically the latter point.

Furthermore, Sunstein observed, the precautionary principle is now pervasive, applying to global warming, nuclear power, pesticides, and biotech crops. Restraint on experimentation is unscientific in the sense that it demands the impossible: Researchers can never show in advance that any technological or scientific activity will never produce significant harm."

Point being... There's plenty of anti-science ideology on the left, and even more so what actually concerns me is that often a policy disagreement surrounding a scientific is assumed - by liberals, in my experience - to be a disagreement over "the science".

Take Global Warming, for example. Contrary to what Joe claimed, I don't encounter a ton of conservatives (and I'd be willing to bet that I meet and know/am friends with many more than he is) who don't believe global warming exists. I know many who believe that either the risks, the causes, or the severity (or all of the above) of global warming are overblown, but I don't know many who deny that it's happened.

Most are happy to look at NASA data and say what most intelligent people say: "NASA scientists have the tools, the expertise, they're collecting good data from space... they're probably right."

But where they diverge - and I'm in this camp - is that simply because global warming exists does not mean that every totalitarian, "world government" scheme some progressive wants to impose on billions of people to "solve" the problem should be allowed or supported.

That disagreement isn't a disagreement over the data. It's a disagreement over policy and what constitutes an acceptable way to solve - even potentially very large - problems.

Consider what Joe said about the NFS or NIH as well. I've never really met a conservative who wants to "defund" science. I've met plenty, and of course nearly all libertarians, who don't want THE STATE to fund science.

Not using force to pay for something, and not doing something are two totally different things.

Republicans have their baggage to be sure, but the assumption that they are always evil, stupid or wrong gets tiresome to me, because it invariably comes from people who couldn't articulate a non-progressive opinion accurately if their lives depended on it. I find the reaction to Thaddeus' posting fairly instructive in this regard, but keep in mind that it's merely one of hundreds of comparable examples I've experienced in the last decade or so.

And on that note. Anytime you find yourself about to justify your angry bigotry by claiming that it's just common sense............... Well....Just take a step back and listen to yourself.