2012 May 30 Wednesday
Celebrities Hurt By Supporting Politicians

Since most celebrities lean left and many have impractical views their hurting their own careers probably helps the country overall.

In this case, the data showed that people who are not particularly fond of Republicans were turned off by Manning's support for the Republicans and adjusted their opinions of him accordingly. Similarly, people who disliked the Democratic Party viewed Jennifer Aniston more negatively after learning about her support for Democrats.

"If this study has a practical meaning," Nownes said. "Its advice for celebrities: keep a low profile."

Even celebrities who have leanings more similar to my own cause me to have doubts about celebrities when they support individual candidates. Think about it. Do you lean Right? Think it was a good idea for right wing action hero actors to support George W. Bush? I don't think so.

What we need: Better ways to identify who is a good judge of political character. Primaries decide the major presidential and Congressional candidates months before the general election. We need better advice for voters in primaries. We also need better voters too.

My preferred voters: serving military officers. My guess is they'll do the best job of any major group I can think of. They'll be smarter than cops. Though the advantage of cops is that they deal with lots of evil people and know how dangerous the evil people are.

By Randall Parker 2012 May 30 08:14 PM  Democracy Failure
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2012 May 29 Tuesday
Mitt Romney Wants To Overthrow Assad In Syria

On the Middle East Tweedledee would not be an improvement over Tweedledum.

He called for the United States to “work with partners to organize and arm Syrian opposition groups so they can defend themselves” — a policy that goes somewhat further than Mr. Obama’s but falls short of the airstrikes advocated by Republicans like Senators John McCain of Arizona and Lindsey Graham of South Carolina.

Well, at least he's not advocating boots on the ground.

Overthrow of minority dictatorships in the Middle East just leads to dictatorship of the illiberal majority and ethnic cleansing of Christians. Why should the US government favor this?

By Randall Parker 2012 May 29 07:52 PM  Mideast Iraq Ethnic Cleansing
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2012 May 28 Monday
Randomly Chose Small Subset To Serve As Voters?

Obviously having many tens of millions of people voting leads to very sub-optimal outcomes. A couple of research initiatives argue for a return to the ancient Athenian practice of randomly choosing a small subset of the population to serve as voters. The idea is that the smaller set, knowing their votes count for far more, will take their responsibilities more seriously and try harder to become informed.

Two separate research initiatives—one from a pioneering cryptographer and a second from a team based at Stanford University—have proposed a return to this purer, Athenian-style democracy. Rather than expect everyone to vote, both proposals argue, we should randomly select an anonymous subset of electors from among registered voters. Their votes would then be extrapolated to the wider population. Think of it as voting via statistically valid sample. With a population of 313 million, the US would need about 100,000 voters to deliver a reliable margin of error.

Since these proposals would tend to pull in people who do not vote today I think the outcome would be even worse. The people who do not vote are, on average, both less intelligent and more apathetic. Giving the dumb and apathetic incentives to vote seems like a bad idea. Prospective voters should be subjected to both IQ and knowledge tests. Any who can't make the intellectual grade should not be granted the power to vote.

The Founding Fathers did not grant everyone the power to vote. Neither did the Athenians. The modern liberal Blank Slate view of everyone as capable of intelligent and responsible citizenship has caused us to lose the benefits of wisdom of the these innovators in civic decision making. Since America's democracy has become increasingly dysfunctional I think we ought to consider a return to more ancient practices of democracy.

By Randall Parker 2012 May 28 10:32 PM  Democracy Failure
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Public Pension Funds Headed For Financial Disaster

Lots of state and local governments use very unrealistic assumptions about rates of return on public pension fund investments and are headed for a fall. The City of New York assumes an absurdly high long term rate of return for their pension funds.

In New York, the city’s chief actuary, Robert North, has proposed lowering the assumed rate of return for the city’s five pension funds to 7 percent from 8 percent, which would be one of the sharpest reductions by a public pension fund in the United States. But that change would mean finding an additional $1.9 billion for the pension system every year, a huge amount for a city already depositing more than a tenth of its budget — $7.3 billion a year — into the funds.

Billionaire Mayor Michael Bloomberg quite correctly points out that even 7% is indefensible.

“The actuary is supposedly going to lower the assumed reinvestment rate from an absolutely hysterical, laughable 8 percent to a totally indefensible 7 or 7.5 percent,” Mr. Bloomberg said during a trip to Albany in late February.

Absolutely hysterical. Laughable. He knows. Listen to him. NYC and many other government units are headed for financial disaster. Huge cuts in services. Huge cuts in pension pay-outs. Big tax increases. We are living beyond our means.

Expect many city bankruptcies due to pension fund liabilities they have no chance of paying in full. Back in November 2011 Michael Lewis wrote a great piece in Vanity Fair about how California cities are headed for bankruptcy due to unpayable public employee pension fund liabilities. San Jose's going down baby.

I expect the problem to be far worse than currently projected even by the pessimists because I expect much lower economic growth (or even an extended period of contraction) due to Peak Oil and deteriorating demographics. Oil extraction costs have gotten too high.

Global inflation might have already pushed the costs of exploring and producing oil from new most expensive projects - known in the industry jargon as the marginal cost of production - above $100 per barrel, according to JBC energy consultancy.

Rising oil extraction costs have already helped cause the Social Security actuaries to pull in by 3 years the date of total drainage of that fund. The real financial disaster comes sooner. Get ready for hard times.

By Randall Parker 2012 May 28 09:47 PM  Economics Sovereign Crises
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Half A Million Americans Brain Damaged From MidEast Wars?

A single blast from an improvised explosive device (IED) causes brain damage.

A team of investigators have shown evidence of chronic traumatic encephalopathy (CTE) in brain tissue from blast-exposed military service personnel.

Laboratory experiments conducted at Boston University, New York Medical College (NYMC) and the Veterans Affairs Boston Healthcare System demonstrated that exposure to a single blast equivalent to a typical improvised explosive device (IED) results in CTE and long-term brain impairments that accompany the disease. They also found that the blast wind, not the shock wave, from the IED blast leads to traumatic brain injury (TBI) and long-term consequences, including CTE.

This research, which represents the first case series of postmortem brains from U.S. military personnel who were exposed to a blast and/or a concussive injury, will be published online May 16 by Science Translational Medicine.

The number of US soldiers exposed to IED blasts: about 460,000. That's a lot of brain damage. Clearly, these wars did far more harm to America than they were worth. We will pay for their costs for decades to come and those costs will come in many forms. How about soldiers made violent (toward family or strangers) by brain damage? Or soldiers driven to drink or drugs? Or soldiers unable to hold jobs? These wars did great damage to the American nation.

CTE, which can only be diagnosed postmortem, is a progressive neurodegenerative brain disorder that has been reported in athletes with multiple concussions or subconcussive injuries. In early stages, CTE is characterized by the presence of abnormal deposits of a protein called tau in the form of neurofibrillary tangles, glial tangles and neuropil threads throughout the brain. These tau lesions eventually lead to brain cell death. CTE has clinical features in common with TBI, including psychiatric symptoms and long-term cognitive disability involving memory and learning deficits. TBI can impact military personnel exposed to an explosive blast and may affect approximately 20 percent of the 2.3 million servicemen and women deployed since 2001.

Can we please stop fighting wars that harm the national interest?

By Randall Parker 2012 May 28 08:40 AM  Military War Costs
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United States Supplying Arms To Syrian Rebels

If the US succeeds in overthrowing the minority Alawite regime in Syria where does the US government expect the Alawites, Christians, and minorities to go? In the Middle East the majority-elected dictatorships that replace the minority dictatorships are always far worse in their treatment of minorities The US favors the Sunni majority in Syria against Alawites, Christians, Shiites, and other minorities. Why?

Syrian rebels battling the regime of President Bashar al-Assad have begun receiving significantly more and better weapons in recent weeks, an effort paid for by Persian Gulf nations and coordinated in part by the United States, according to opposition activists and U.S. and foreign officials.

What's in it for the United States to help create oppressive elected governments of the Sunni Muslim majorities in countries currently run by minorities? The minority rulers grant more rights to other minorities than an elected majority would do. So we should not look upon elected majority governments as automatically a good thing.

What did the US invasion of Iraq enable? Freedom? Nope. Ethnic cleansing.

TORONTO — Christians in Egypt and Iraq are an endangered minority and are emigrating in droves, says Canadian journalist and broadcaster Martin Himel.

...

Since the U.S. invasion of Iraq in 2003, half of its Christians have fled. Some have gone to Iraq’s northern Kurdish region, others have settled in neighbouring lands, while still others have left the Mideast.

The US invasion of Iraq Saddam Hussein treated Christians better than the Shiites do.

“In 2003, there were thought to be 800,000 to 1.4 million Chaldean Catholics, Assyrian Orthodox, Assyrian Church of the East members, Syriac Orthodox, Armenians (Catholic and Orthodox), Protestants, and Evangelicals in Iraq. Today, community leaders estimate the number of Christians to be around 500,000,” the report reads.

Dictators in the Middle East shield minorities.

The situation threatens to worsen as the Arab Spring removes dictators who, paradoxically, shielded Christian communities. The parties that are gaining power in Libya, Egypt, Tunisia, and other countries tend to be offshoots of the fundamentalist Muslim Brotherhood.

Even under Mubarak Christians could not build churches in Egypt. But under democratic Islamic rule Christians are going to become 3rd class citizens.

One of the long standing grievances for Copts are the state-imposed restrictions on the right to build and maintain churches, regulations that Muslims don't face when building mosques. National security police have the right to reject any application or suspend approvals for years without being held to account, says Sidhoum. A new church also requires a presidential decree, while repairs need a governor's approval. What's more, Sidhoum says Copts are woefully underrepresented in the military, judiciary, diplomatic corps, academia and almost all electoral bodies.

I had low expectations for Egypt's revolution because the Egyptians are very illiberal and are strongly opposed to religious and personal freedom. What's not clear: How illiberal are the Syrians? How much more oppressive will the future democratically elected Syrian government be toward Christians, Alawites, and other religious minorities? How many rights will women lose?

By Randall Parker 2012 May 28 08:24 AM  MidEast Religious Persecutions
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2012 May 27 Sunday
Approaching Half Of US Households On Government Benefit

Our ratio of parasite to productive is getting too high.

49.1%: Percent of the population that lives in a household where at least one member received some type of government benefit in the first quarter of 2011.

This will get much worse in future years due to both aging and effects of immigration. Declining per capita income due to rising numbers of Hispanics will cut government tax revenue while increasing the number of people getting taxpayer money for their medical care, child care, food, rent, and other goods and services.

The coming decline in US national per capita GDP is going to cause a US sovereign debt crisis resulting in large cuts to entitlements. Better plan on working more years. Lower your living standard and save more. The rising marginal cost for oil production will make the economic decline even more severe. Marginal costs are already putting a very high floor on oil prices if world oil production is to remain at current levels.

Global inflation might have already pushed the costs of exploring and producing oil from new most expensive projects - known in the industry jargon as the marginal cost of production - above $100 per barrel, according to JBC energy consultancy.

Peak Oil comes when the price of a marginal barrel of oil goes high enough to cause global oil demand to decline. We are getting close to that point. The European currency crisis, demographic problems in the US (see above), and the end of easy fast growth in China are together undermining the ability of the world economy to grow. Without that growth the world economy can't pay continually rising prices for oil.

We live in an era of declining expectations. You can get ahead of that game by adjusting your expectations faster than everyone else does. Expect worse times, lower your living standard, save more, develop a better skill set.

By Randall Parker 2012 May 27 10:22 AM  Economics Entitlements
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2012 May 26 Saturday
Tyler Cowen: Power Vacuum Killing Euro Zone

The debate is raging about whether Greece will leave the euro currency zone. Hard to see how it can manage to stay. But now the debate is starting to shift toward the question of the euro's survival. The Europeans are blowing it on a monumental scale. A grandiose epic mistake.

AS problems mount in the euro zone, it’s increasingly evident that we’ve been witnessing an institutional failure of monumental proportions.

Read the full essay. His conclusion is horrible but likely true: The Euro zone is a failed idea. Given the speculation (see below) about what Greece's exit from the euro zone will do to Greece imaging a larger scale failure of the euro. Many more countries would get thrown into depression.

Financial contagion baby!

What is to be done about Greece? Simply keeping it in the euro zone won’t help much, even if it’s possible. The continuing crisis has sapped confidence in banks not only in Greece, but also in Spain, Italy, Portugal and Ireland, though to varying degrees. Unless there are explicit guarantees to these banks soon, the market will likely take a further turn for the worse.

Government ownership of industries is a major reason for the Greek economic failure.

Aside from shipbuilding, most of Greece’s industrial base has eroded in the 30 years since the government nationalized large areas of industry. Wealth-generating businesses diminished, and tens of thousands of laid-off workers were absorbed by the state to reduce unemployment.

The whole world economy will go into deep recession if the Euro zone falls apart.

Greece will be like Argentina.

There’s no question that quitting the euro would be an easy way for Greece to shrink its unsupportable debt. Yet if Greece does leave or is kicked out of the single currency, it will most probably suffer inflation, layoffs, capital flight, shortages of essential commodities, and civil unrest, judging from what happened in Argentina when that country quit its dollar peg a decade ago.

But Greece will go through this chaos after a few years of economic contraction and therefore already high unemployment and lowered living standards. How bad can things get? The economy of poor pathetic Greece shrank 6.9% in 2011 and will shrink 5% in 2012. The Greek economy also shrank 2% in 2009 and went down 4.5% in 2010.

An exit from the Euro will lop off another 10% from the Greek economy. The total contraction might exceed a quarter of its 2008 economy once it bottoms out after a return to the drachma.

The International Monetary Fund estimates that a Greek exit from the euro would lop more than 10 percent from Greece’s gross domestic product for at least the first year after a return to the drachma.

That's just one small European country. If many countries exit the euro zone then the disruptions would feed on each other and the downturns would be much worse for each country. So if Tyler's right about the euro as a failed idea Europe is headed for an economic depression and a the rest of the world is headed for a deep recession.

By Randall Parker 2012 May 26 11:34 PM  Economics Sovereign Crises
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2012 May 07 Monday
Total Factor Productivity And Stagnant Living Standards

Many of you are too young to have experienced the era when it was normal for living standards to go up ever year for the vast majority of workers. Rising productivity was once expected to translate into continuously rising living standards (really). In a Technology Review blog post Christopher Mims considers why hourly worker compensation has been flat since the mid 1970s while productivity per hour has gone up by about a factor of 2.5.

Here's how I would interpret the odd coincidence of these two trends: in a perfectly capitalist system, increased profit produced by automation flows to the owners of the business. Worker compensation stagnates because, while automation makes each worker more productive, it doesn't make them any more valuable. While all these machines and IT infrastructure do require a quasi-elite caste of Mandarins to keep them running, on the whole, the skill required of individual laborers has actually gone down.

It is telling that in the US manufacturing employment has dropped by about a third since the late 1970s while the total value of manufactured goods has gone up by about 50% over the same time period. With greater automation a few things have happened at once:

  • Demand for manufacturing labor has dropped. Demand drops usually cause price drops. Why should labor be an exception? In fact, manufacturing labor rates have dropped sharply.
  • The demand drop has been especially sharp for higher skilled manufacturing workers. Machines do more of the most difficult steps. Why? Automation raises quality. It makes sense to automate the most demanding steps because those steps are most prone to error and quality problems.
  • The supply of less skilled workers has soared due to an immigration policy that favored the less skilled over the most skilled.

I do not see a reason why this trend will reverse in the foreseeable future. The capitalists will use more machines that do not need human operators. A resurgence of political support for unions will just drive more factories abroad and increase incentives for even faster development of robots. Lights-out factories with only robotic workers will make poor targets for union strikes.

My advice: Take a hard look at your job and estimate the odds of it being automated out of existence. If your risks of job skill obsolescence are high then start working on a strategy to get yourself ahead of macroeconomic trends. Even if you've been lucky in your career so far that does not mean your luck will hold out until retirement. Step up your game and try to get ahead of coming changes.

By Randall Parker 2012 May 07 09:29 PM  Economics Labor
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