Category Archives: Politics: International

Venezuela, Economics, Politics and Toilet Paper

Economics

When I heard that in the 2008 Presidential election it would be the first time in a long time that we would have a true wide open primary in both parties, I became interested in politics.  Can you believe that back then, I felt that if Romney didn’t win the GOP primary I would likely support the Jr. Senator from Illinois?

HA!

Anyway, before I started blogging I was a big commenter on Alan Colmes‘ site.  Only after experiencing frustration at being unable to format my responses did I begin blogging.  But while over at Alan’s place, I realized that I knew not thing one about economics.  I Googled basic economics and was driven to Amazon’s “Basic Economics” by Thomas Sowell.

I ordered the book and my life changed.

One of the money quotes?

The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.

A real life example:

The government has announced an emergency toilet paper run for 50 million rolls

Venezuelans are scrounging around for toilet paper. Markets throughout the country have run out, and when they are in stock the rolls fly off the shelves.

The country of Venezuela is running out of toilet paper.

Why?

State-controlled prices — prices that are set below market-clearing price — always result in shortages. The shortage problem will only get worse, as it did over the years in the Soviet Union. [AP]

Venezuela also has tight controls on foreign currency, which makes it hard for companies to import raw materials and equipment, slowing down production of a wide range of goods, according to the AP.

I should add a correction to Mr. Sowell:

There is never enough of anything, when the cost is sufficiently low, to satisfy all those who want it.

 

Introductions And Climate Change

Global Warming.Polar Bear

I have found a great new liberal voice, writer and thinker.  Further, he’s local.  Professor Steve Greene is a Political Science prof here at NC State University.  I firmly believe that the boys at PYM and the good Professor Scott Erb will find Steve’s insights, hopefully here, and at his own place, to be interesting and enjoyable.

I hope to see Steve here often.  Even if he’s wrong 😉

Anyway, while over at Steve’s place I saw one of his posts on climate change.  In it, I was reminded of a story that I’ve had in my stack for some time now.

Which is that global warming has stopped over the last 10-15 years:

OVER the past 15 years air temperatures at the Earth’s surface have been flat while greenhouse-gas emissions have continued to soar. The world added roughly 100 billion tonnes of carbon to the atmosphere between 2000 and 2010. That is about a quarter of all the CO₂ put there by humanity since 1750. And yet, as James Hansen, the head of NASA’s Goddard Institute for Space Studies, observes, “the five-year mean global temperature has been flat for a decade.”

Temperatures fluctuate over short periods, but this lack of new warming is a surprise. Ed Hawkins, of the University of Reading, in Britain, points out that surface temperatures since 2005 are already at the low end of the range of projections derived from 20 climate models (see chart 1). If they remain flat, they will fall outside the models’ range within a few years.

Economist.climate change.1

I think it’s important to point out that this gets to the skeptic’s whole point.  That while the science that suggests higher levels of CO2 contribute to a warming planet, the positive feedback that is central to the alarmist’s argument is not at all understood or accepted.

The mismatch might mean that—for some unexplained reason—there has been a temporary lag between more carbon dioxide and higher temperatures in 2000-10. Or it might be that the 1990s, when temperatures were rising fast, was the anomalous period. Or, as an increasing body of research is suggesting, it may be that the climate is responding to higher concentrations of carbon dioxide in ways that had not been properly understood before. This possibility, if true, could have profound significance both for climate science and for environmental and social policy.

I think that the jury is still out.  I don’t see indications of a catastrophic change that has or is going to occur.  Until then, I think that we need to continue to watch, to observe and accept the fact that perhaps humans only have so much influence on the climate of Mother Earth.

 

Taxation And The Laffer Curve

This has been on my stack for some time.  I came across a story after reading a post by Dan Mitchell of CATO:

CIGARETTE-smuggling continues to soar in Ireland, with new Department of Finance figures showing that tobacco excise tax receipts are falling dramatically short of targets, even though taxes have increased and the number of people smoking has remained constant at 29 per cent of the population.

I especially enjoyed the assumed fact that economic gain made by the voluntary trade in an open a free market somehow first belongs to the government:

What Fianna Fail TD Niall Collins called “Premiership-style criminality” is behind the latest upsurge in smuggling, which is costing the state hundreds of millions in lost revenue.

Not one pause at the idea that the profits realized by selling tobacco from those who have it to those that want it should first be the property of the sellers.

Unreal.

IQ, Heritage and The Left

Bell Curve

Recently the Heritage Foundation released a report claiming that a currently proposed immigration plan would cost a ton of money.   I haven’t spent much time on the report, though maybe I should, largely because I don’t think that our borders ought to be opened or closed based on the fiscal calculus of the immigrant.

America is a place for anyone in the world to aspire to come to.  And we should make sure that we are accommodating anyone that wants to leave behind an oppressive regime that suppresses economic liberty.  We are, as we are fond of saying, the land of the free.

However, an interesting side story of the Heritage report is the history of one of the authors, Jason Richwine.  It turns out that Mr. Richwine received his PhD at Harvard and his doctoral thesis focused on IQ and immigration.  Last week I mentioned this:

I’ll drift over to our more liberal media sources later to see if this is making waves.

Well, I did and it did.

Everyone is ablush concerning the whole study of Mr. Richwine.

See, it turns out that some people think that intelligence, measured in terms of IQ, is a matter of genetics or, perhaps more accurately, heritability.   The difference being that genetics determines that humans have one nose, two ears and hair.  Heritability determines the size of the nose, the shape of the ear and color of the hair.

At its most basic, the argument that IQ is a matter of “genetics” is the idea that, in general, smart parents, in aggregate, will have smart children, in aggregate.  This is meant to be read in the same way that tall people, in aggregate, will have tall children while short parents will have short children.  Does this imply that all tall parents will only and ever have tall children?  Certainly not.  It’s meant to say that height, ear lobe shape, hair color and even looks are based in some part on the parents.

In short, people with high IQs will trend to have children with high IQs.  Those parents scoring low on IQ tests will, generally, have children who score lower on IQ tests.

I think it’s important to say that  IQ tests may or may not accurately measure intelligence, or G.  In fact many people, most likely correctly, feel that IQ tests are not a strict measure of intelligence but are rather measures of cultural influences and education.  That is, equally intelligent people, having been raised in vastly different homes, may score differently on the same IQ test.

Granted.  Sure, circumstances are going to differ.  Tests measuring intelligence are going to be, to a degree, biased.  However, that doesn’t change the fact that intelligence is a trait.  And people are going to enjoy the benefits or suffer from a deficit of that trait, across a spectrum.  There is no disputing that we have intelligent people and those who lack that intelligence.  Further, we all know that siblings of smart kids are often smart and vice versa.

The science behind the heritability of intelligence is overwhelming.  Intelligence, measured by the albeit flawed IQ, is massively heritable.  Some measures have it at 80% heritable while others, at the low end, have it only at 40%.

When read in this light, the claims made by people who state that some group of people is smarter than some other group of people shouldn’t be surprising.  Or controversial.  Or worthy of all the gnashing of teeth  If, for example, I were to claim that neurosurgeons were, in general, more intelligent than, say, garbage men, I don’t think anyone one would blink an eye.  And if were to take that one step further and say that the children of neurosurgeons were, in general, more intelligent than the children of garbage men, I don’t think that would be surprising either.

So, when Richwine makes a claim that immigrants have a lower IQ, read G, than native born Americans, he’s saying that people that live in America, as a group, are simply more intelligent than the group of people that decide to immigrate to America.  I don’t think he’s saying that the race of people that live in America is inherently and forever going to be more intelligent than that race of people moving to America from foreign countries.

Heck, in one way, it might even make sense.  If people who are less intelligent find that they are on the low end of the economic scale, they might be the very individuals most motivated to immigrate to America in hopes of a better life.  After all, the individuals in a nation who are most economically advanced are going to find the risk/reward calculus to be one that incents them to remain where they are.

And the left goes crazy at this notion.  The idea that some people are simply born smarter smacks them of some .. well, of some “I can’t describe it” impossibility.  We can be born of different heights that fit on a bell curve.  Of weights.  Of heart size and of athletic ability.  Hair color, eye color and freckles all can be described by heritability.  But plain old smarts?

Nope.

That goes against the whole notion that we’re all equal.  Born equal.  Living equal and should be expected to achieve equally if only we can remove the bias of wealth, power and influence.

Which is bullshit.

So, does the comment offered by Richwine:

No one knows whether Hispanics will ever reach IQ parity with whites, but the prediction that new Hispanic immigrants will have low-IQ children and grandchildren is difficult to argue against. From the perspective of Americans alive today, the low average IQ of Hispanics is effectively permanent.

sound offensive and harsh?  I think it does both.  While I don’t like the aspect that speaks to “ever reach IQ parity” I do find myself resonating with the concept that a group of people with low IQs are going to have children with equally low IQs even extending to their children’s children.

And while sensitive to discuss, I don’t think it poses a conceptual reality that we would dismiss if, instead of having differing IQ, immigrants had differing heights.

And ALL of this is not ever saying that the ability of a group of people to increase their collective IQ isn’t possible.

By the way, one of the defenses of Richwine’s statements comes from the left itself:

First, the concept of “race”: There is no “Hispanic race.” It’s a census category, not a biological one. What we call “Hispanics” in the United States includes Indian peasants from Yucat&aaccute;n and doctors from Mexico City (and Madrid).

You cannot be racist if you are describing a group of people that has nothing in common regarding race.  “The Nation” is correct in asserting that Hispanic is not a racial descriptor, rather, it is one of, perhaps arbitrary definition.  The fact that the left dances between outrage and smugness should be no surprise.  Consider, for example, how folks on the right are “racists” when it comes to immigration reform while simultaneously pointing out that George Zimmerman is a “white Hispanic”.

As if.

Finally, like a nail in the coffin, is the logical conclusion of the left’s argument.  Namely that anyone claiming that intelligence is heritable is a racists is based on the idea that racism is a result of low IQ:

The last word in this story goes a study published in 2012 the journal Psychological Science. “In an analysis of two large-scale, nationally representative United Kingdom data sets (N = 15,874),” the researchers wrote, “we found that lower general intelligence (g) in childhood predicts greater racism in adulthood.”

As I predicted, the left is going nuts regarding Wichwine and anyone who might indicate that one group of people, for whatever reason, might be more intelligent than another group of people.

You Know It’s Bad When

Maureen Dowd

You know it’s bad when you are a democrat and Maureen Down is piling on:

THE capital is in the throes of déjà vu and preview as it plunges back into Clinton Rules, defined by a presidential aide on the hit ABC show “Scandal” as damage control that goes like this: “It’s not true, it’s not true, it’s not true, it’s old news.”

The conservatives appearing on Benghazi-obsessed Fox News are a damage patrol with an approach that goes like this: “Lies, paranoia, subpoena, impeach, Watergate, Iran-contra.”

(Though now that the I.R.S. has confessed to targeting Tea Party groups, maybe some of the paranoia is justified.)

And more:

… a simple truth: The administration’s behavior before and during the attack in Benghazi, in which four Americans died, was unworthy of the greatest power on earth.

And still more:

In the midst of a re-election campaign, Obama aides wanted to promote the mythology that the president who killed Osama was vanquishing terror. So they deemed it problematic to mention any possible Qaeda involvement in the Benghazi attack.

Looking ahead to 2016, Hillaryland needed to shore up the mythology that Clinton was a stellar secretary of state. Prepared talking points about the attack included mentions of Al Qaeda and Ansar al-Sharia, a Libyan militant group, but the State Department got those references struck. Foggy Bottom’s spokeswoman, Victoria Nuland, a former Cheney aide, quashed a we-told-you-so paragraph written by the C.I.A. that said the spy agency had “produced numerous pieces on the threat of extremists linked to Al Qaeda in Benghazi and eastern Libya,” and had warned about five other attacks “against foreign interests in Benghazi by unidentified assailants, including the June attack against the British ambassador’s convoy.”

When the left begins to attack the left….you know it’s bad.

Benghazi – ABC Reports

Benghazi

ABC is finally reporting on Benghazi.  And the latest report from them has email showing the Talking Points went through multiple revisions, up to 12:

 

When it became clear last fall that the CIA’s now discredited Benghazi talking points were flawed, the White House said repeatedly the documents were put together almost entirely by the intelligence community, but White House documents reviewed by Congress suggest a different story.

ABC News has obtained 12 different versions of the talking points that show they were extensively edited as they evolved from the drafts first written entirely by the CIA to the final version distributed to Congress and to U.S. Ambassador to the U.N. Susan Rice before she appeared on five talk shows the Sunday after that attack.

White House emails reviewed by ABC News suggest the edits were made with extensive input from the State Department.  The edits included requests from the State Department that references to the Al Qaeda-affiliated group Ansar al-Sharia be deleted as well references to CIA warnings about terrorist threats in Benghazi in the months preceding the attack.

That would appear to directly contradict what White House Press Secretary Jay Carney said about the talking points in November.

“Those talking points originated from the intelligence community.  They reflect the IC’s best assessments of what they thought had happened,” Carney told reporters at the White House press briefing on November 28, 2012.  “The White House and the State Department have made clear that the single adjustment that was made to those talking points by either of those two institutions were changing the word ‘consulate’ to ‘diplomatic facility’ because ‘consulate’ was inaccurate.”

Now, I’m well aware that documents go through review and editing.  I’ve been part of that process.  However, the changes made to these talking points are to clarify some obscure detail or correct a time stamp in a timeline.  These revisions changed the story.

However, it is important to point out:

Like the final version used by Ambassador Rice on the Sunday shows, the CIA’s first drafts said the attack appeared to have been “spontaneously inspired by the protests at the U.S. Embassy in Cairo” but the CIA version went on to say, “That being said, we do know that Islamic extremists with ties to al-Qa’ida participated in the attack.”  The draft went on to specifically name  the al Qaeda-affiliated group named Ansar al-Sharia.

Once again, Nuland objected to naming the terrorist groups because “we don’t want to prejudice the investigation.”

It does appear that the initial report contained language surrounding the events in Cairo.  However, the testimony from the hearings gave no credence to the fact that anyone at anytime felt that the attacks were nothing but an organized terrorist attack.

Money and Happiness: This Should Surprise No One

Money Happiness

An interesting chart from The Economist:

THE Easterlin paradox, named for economist Richard Easterlin, reckons that higher incomes do not necessarily make people happier. Since Mr Easterlin first made his conjecture in 1974, economists’ views have evolved: money matters, studies suggest, but only up to a point. Become rich enough, and a bigger paycheque no longer leads to more happiness. Yet a new NBER working paper by economists Betsey Stevenson and Justin Wolfers, both of the University of Michigan, casts doubt on this chestnut. They use a trove of data generated by Gallup, a polling firm, from its World Poll. Gallup asked respondents around the world to imagine a “satisfaction ladder” in which the top step represents a respondent’s best possible life. Those being polled are then asked where on the ladder they stand (from zero to a maximum of 10), and how much they earn. Though some countries seem happier than others, people everywhere report more satisfaction as they grow richer. Even more striking, the relationship between income and happiness hardly changes as incomes rise. Moving from rich to richer seems to raise happiness just as much as moving from poor to less poor. One never really grows tired of earning more.

Bombing Suspect: The Hopes of the Left

Salon

A day after the tragedy in Boston, David Sirota summed up the collective hopes and prayers of the left:

Let’s hope the Boston Marathon bomber is a white American

In a way and manner, I guess I’m glad he’s honest enough to admit what the collective is feeling.  However, why does he think this?

Likewise, in the context of terrorist attacks, such privilege means white non-Islamic terrorists are typically portrayed not as representative of whole groups or ideologies, but as “lone wolf” threats to be dealt with as isolated law enforcement matters. Meanwhile, non-white or developing-world terrorism suspects are often reflexively portrayed as representative of larger conspiracies, ideologies and religions that must be dealt with as systemic threats — the kind potentially requiring everything from law enforcement action to military operations to civil liberties legislation to foreign policy shifts.

This is utter bullshit.

The reason that the United States treats different groups who engage in terrorism differently is not because of where the person comes from or what religion they are, it’s because of how that society deals with the terrorist.  Here in America we kill them.  In other nations, they harbor them and give them asylum.  THAT is the difference.

And if you’re not convinced of that, consider how the United States has treated these two guys:

Timothy McVeigh

And then this guy:

Hassan Nadal

In one case, the guy is executed.  In the other, the guys isn’t even accused of terrorism.

Runnin’ With The Devil

Dick Cheney

I wonder if Obama ever thought that a policy he campaigned against would be supported by the man he vilified:

Former Vice President Dick Cheney became the highest profile Bush Administration official to come out in support of President Obama’s drone targeted killings policy when he dismissed concerns about “checks and balances” and explained on CBS This Morning that Obama’s “paid to make difficult, difficult decisions.”

Even Karl Rove agrees with Obama on this.  If nothing else, pure tribe warfare dictates that the left MUST go crazy about Obama’s drone strikes.

Deficits and Debts: Spending and Taxes

Money.  The spending of it.  The making of it.  Revenue and expenditure.

How to manage it all responsibly?

Recently, always[?], there has been a debate regarding the deficit and the debt.  How we as a nation spend vs how much we as a nation bring in.  The most recent event was the fiscal cliff.  The new event is the debt ceiling negotiations.  And yes, there will be negotiations regardless of what the President says or what he wants.

Leave aside the partisan bickering for a second and let’s just look at this in a way that people kinda get; real world.

Typically, a household has an idea on how much money they bring in.  And this amount of money dictates how much they spend, typically.  In college I brought in very little – I spent very little.  Out of college I brought in more and spent more.  And during these times, my spending would, indeed, fluctuate.  I could count on certain bills and expenditures but others would just come up.  A broken muffler, a wedding out of state.  Maybe dental work.

My budget would often shift.  But it was always thought of in relation to how much I could bring in.  I knew that I was taking a short term hit but long term gain by going to college.  Earnings would suffer but the long term outlook was positive.

But my debt was always defined in relation to MY reality.

Earlier this week, the fellas at Poison Your Mind posted on the fact that the United States is a low tax country:

Of course, one can have a political preference that the US maintain extremely low taxes and/or reduce the size of government, but neither political inclination is compelled by The Math.

I assume, with all the risks commensurate, that by referencing “The Math” RR is referring to the fact that republicans claim spending is to blame for our deficit, not taxes.  In fact, the chart accompanying the post shows that the United States is near the bottom in tax revenue indicating that tax revenue, and not necessarily spending, is the problem.

But to me, that doesn’t jive.

Back to younger me.  I existed in my own reality.  I went to school, church and lodge with members of my community that existed on a range of socioeconomic status.  Virtually ALL earned more than I did.  And now, flash forward to today, I exist in that same strata, many peers earn more, many less.  None of which have any bearing on defining the health of my financial status.

I must balance my spending with my revenue.

In some cases I earn less due to sheer ability.  They have it and I don’t.  In other cases it’s based on desire; they have it and I don’t.  In others, I earn more because I am the one with the desire or the ability.  And yet in others, people have decided that compensation takes forms other than money; time off, value to society and personal growth are examples.  Whatever the individual situation is, basing fiscal health on the experience of others is rather short sighted.  And in the end, not at all healthy.

For whatever reason, perhaps because we are an independent colony all grown up.  Maybe it’s because we have access to massive natural resources.  Or education, or – well, whatever.  Whatever the reason, America has decided that it only wants to generate “X” amount of revenue.  We don’t wanna work harder to earn more per hour, or take an second job.  We’re cool where we are.

Given that reality, our spending has to reflect that fiscal reality and adjust.  It just has to.  And if it doesn’t, then spending is the problem.

But back to the chart, it IS rather stark.  After all, we are the United States of America and certainly have reason to expect that we come in better than 4th from the bottom.  Am I missing something?

Well maybe.

See, we may only be taxing at a very low rate of GDP, but we are a very VERY rich nation. So, while a person may argue that a policy of higher tax revenue is desirable, the larger question may be ignored.  Namely, is the nation wealthier as a result of such taxation or less wealthy as a result.

There is data:

It turns out that America does well compared to her high tax peers.  For example, Denmark, the nation with the highest revenues, is very poor compared ti the states of the United States.  In fact, if Denmark WERE a states, it would rank only as the 44th richest state in the Union.  Behind Kentucky.  And Belgium, the nation with the 3rd highest tax revenues?  Why, it would rank below even Denmark, poorer even than Idaho.

The EU as a whole, with Spain, Israel, Italy, Greece and Portugal all, ALL, rank lower than the poorest state in our nation; Mississippi.

This might mean that such high tax rates lead to less prosperous nations.  Or it might mean that such high tax rates are really an illusion of mathematics – revenues compared to a paltry GDP may seem higher than they really are.  Whatever the explanation, I doubt anyone would argue that we would wanna live in a nation that would rank among the poorest of our states.