Dienstag, Mai 31, 2011

Finally Someone From the World Bank Makes Sense...

This is a good read. Solid research, honest work.

It's titled "On the Relevance of Freedom and Entitlement in Development, New Empirical Evidence (1975-2007)", by Jean-Pierre Chauffour.

If you are at all interested in why some countries succeed and others don't: read it.

Key quote:

These results tend to support earlier findings that beyond core functions of government responsibility—including the protection of liberty itself—the expansion of the state to provide for various entitlements, including so-called economic, social, and cultural rights, may not make people richer in the long run and may even make them poorer.

That's right: expanding functions of the state beyond core functions tends to make people poorer, rather than richer.

The reason is simple:

...the extent to which political institutions and human interactions in society are formed around the concept of freedom constitutes one key determinant of growth, perhaps the ultimate cause of why economic agents actually create and accumulate.

The emphasis is in the original. The fundamental is this: that people actually create and accumulate, generate economic growth, because left to their own devices, free to do what they want to, they can.

Finally, we do not find any robust relationship between entitlement rights and economic growth. The initial level of the entitlement right is negative and statistically significant in regression where only this variable has been included ... and not statically significant in other specifications. The change in entitlement rights seems to influence the average economic growth positively, but this relationship is not robust to the inclusion of economic freedom.

Duh. Not so much what Mr Chauffour writes, but much more: of course. There can't be any robust relationship between entitlement rights and economic growth because the former inhibits the latter: the relationship is inverse. Entitlement rights are the opposite of economic freedoms!

From the conclusion:

Freedom and entitlement are largely two different paradigms to think about the fundamentals of economic development. Depending on the balance between free choices and more coerced decisions, individual opportunities to learn, own, work, save, invest, trade, protect, and so forth could vary greatly across countries and over time. The empirical findings in this paper suggest that fundamental freedoms are paramount to explain long term economic growth. For a given set of exogenous conditions, countries that favor free choice—economic freedom and civil and political liberties—over entitlement rights are likely to growth faster and achieve many of the distinctive proximate characteristics of success identified by the Growth Commission (2008): leadership and governance; engagement with the global economy; high rates of investment and savings; mobile resources, especially labor; and inclusiveness to share the benefits of globalization, provide access to the underserved, and deal with issues of gender inclusiveness. In contrast, pursuing entitlement rights through greater state coercion may be deceptive and even self-defeating in the long run.

I've highlighted the key point: entitlements are nothing less than coerced decisions. Take free choice awaz and coerce decisions, and you run counter to the natural state of man, that of freedom. Fundamental freedoms are not some sort of old white man political constructs: they are the very foundation of long-term economic growth.

Don't take it from me: take it from the World Bank.

Who Lost The Middle East?

There is a writer whose last name became a verb, after so many decided to deconstruct and make fun of his reporting, which was so obviously biased and subjective that it belonged on the OpEd pages, rather than "factual".

His name?

Robert Fisk. Of "fisking" fame. I've done it here.

Read this now. For the record, this is classified as a commentary by the Independent, so they are capable of learning.

So it starts:

This month, in the Middle East, has seen the unmaking of the President of the United States. More than that, it has witnessed the lowest prestige of America in the region since Roosevelt met King Abdul Aziz on the USS Quincy in the Great Bitter Lake in 1945.

While Barack Obama and Benjamin Netanyahu played out their farce in Washington – Obama grovelling as usual – the Arabs got on with the serious business of changing their world, demonstrating and fighting and dying for freedoms they have never possessed. Obama waffled on about change in the Middle East – and about America's new role in the region. It was pathetic. "What is this 'role' thing?" an Egyptian friend asked me at the weekend. "Do they still believe we care about what they think?"

President Obama isn't interested in the Middle East for two reasons: they aren't doing anything for him, and he has seen how previous Democratic presidents failed, with perhaps the exception of Carter and getting the Egyptians at least to talk. Of course, that got Sadat killed.

Now, the rest of the Fisk article descends into the usual US and Israel-bashing that he is infamous for, but this is the key quote:

Indeed, Obama's policy towards the Middle East – whatever it is – sometimes appears so muddled that it is scarcely worthy of study.

On that he is right. The rest is a quagmire of conspiracy and speculation, But once in a year of blue moons, the old Fisk, the reporter getting his facts right, glimpses through the rest of the madness and gets something right.

That President Obama and his administration is getting it wrong.

Montag, Mai 30, 2011

American Indulgences...

Read this to understand the choices facing us.

It really is pretty much that simple: America can choose to be a superpower or it can choose to be a welfare state, but not both. We're past the point where a President like Lyndon Baines Johnson could persuade Congress to finance both guns and butter: this is the starting point of the slow, dreary and inevitable breakdown of the US government's finances.

You can't have both. Or, more exactly, you can't have both forever without coming up empty. We're at this turning point, reached when US government debt reached 70% of GDP (a while ago) and put off by dealing with symptoms, rather than causes, over the last 30 years or so.

This will be the key debating point of the next presidential election: whether we pay for 30-year old to indulge in their sad sexual fantasies or whether we pay the price in weapons and blood to ensure that the US continues to be the beacon of reason and law in a world that only occasionally behaves.

It really is that simple. That we have come to this point is appalling enough in and of itself. Entitlements creep forward, slowly, insidiously, with the original good intentions - and this road to fiscal hell is paved very well indeed, thank you - perverted as they always will be by the very human desire to have something for nothing and your chicks for free. It's easy and convenient to be indulgent, especially when you have a political party dedicated to making sure that whatever turns you on will be tolerated, supported and no stern words said, all in exchange for supporting that party and casting your vote their way.

If the choice is between paying for the lifestyle of a diapered, infantile (by choice) 30-year old who cannot fathom why the government won't be paying for his choice of sexual perversion and lifestyle, or paying for the soldiers who stand in the line and keep us safe, there is no argument.

You can't have both. Not any longer.

Donnerstag, Mai 26, 2011

Well, of course he wouldn't think it corrupt: he's a Democrat...

While I really shouldn't be surprised, things like this still astound me. Not so much the clear corruption as much more the rejection that it is anything out of the ordinary.

Because apparently Democratic politicians don't have to obey the law. It's the only explanation of why he thinks that this being a conflict of interest is "nonsense".

God help the people of Boston "represented" by Barney Frank. The only thing he represents is the need to clean out the stables.

Mittwoch, Mai 25, 2011

And this is surprising?

When three of the most famous astronauts that ever lived write an op-ed about US space policy, it's worth a read.


As far as the Obama Administration is concerned, America does not need to waste money on a space program. That's the clear message being set.

And this is surprising?

President Obama comes from that portion of the Democratic Party that views space flight as a waste of money, with the money being spent better "at home" (ignoring the fact that the money was spent at home: what they really mean is that they want to use the money to create additional dependencies for the aggrandizement of their own power).

The real reason why NASA is being gutted and space programs being deleted? Because there is no constituency for the Democrats here, none that is beholden to them. I've told you here many times, President Obama is a Chicago Democrat: unless there is an in for him, a deal that helps and supports him, helps him directly, then forget about it.

What we have isn't so much a lack of vision, but rather a venal and self-serving vision that doesn't care about space travel. Why should he? It never did anything for him.

The election of President Obama was a disservice to the notion of nation that made Kennedy decide that we would go to the moon in 10 years. Given that challenge, the US government (NASA) and the aerospace industry surpassed that goal and did what no other country could do.

Today? What vision does President Obama bring to the nation? One of decay and a long, slow decline from the world's only superpower to a nation dismayed and divided. That way it's easier to exploit for personal and political gain.

Oh how have the mighty fallen...

Montag, Mai 23, 2011

95 Days...and Irony...

It's not so much that there isn't anything to say and for that reason I haven't written, but rather it's much more that there is so much to say that I don't know where to begin.

Start with this.

The problem with big government is that it is BIG. Seriously big, as in too big to fail big, too big to be ignored big, and above all: taking too much, spending it inefficiently, and then pretending that everything is fine.

If we're in a situation where cutting government spending permanently means entering a recession, that is the definition of government spending out of control.

The road to ruin is paved with the very best of intentions, with the gaps filled by platitudes and all covered with a nice, comfy surface so that those driving along feel no pain, feel no disturbances, but instead blithely continue on their journey.

Key quote:

Treasury Secretary Timothy Geithner has warned that if the debt limit isn't increased by August 2, the government will no longer be able to spend more than it collects in revenue. That means it will have to cut spending by about 35%, probably choosing among such items as payments to contractors, soldiers' salaries, social security and Medicare.

On average, the cuts would amount to about $3.8 billion a day, according to our own estimates based on projections from the Congressional Budget Office. At that rate, over a period of only 95 days, the cuts would add up to 2.9% of gross domestic product, adjusted for inflation*. That's just enough to negate all the economic growth forecasters expect in 2011.

The first and most fundamental problem here? If government spending is so large that 95 days' worth of cuts - not no spending, but rather cuts in the growth of spending - would wipe out GDP growth for 2011, it means that the economy is seriously lopsided, with government spending accounting for far too much growth.

You see, government spending, unlike any other part of the supply side of the US economy, doesn't add value per se, but is distributive: it takes taxes and fees spent by the companies adding value to the economy and spends it as politicians see fit. It also borrows to spend that money: we are at a crossroads where all paths are thorny and disturbingly difficult, but some lead to long-term recovery and the resurrection of the American dream, while others - most - lead to paths of greater debt, insolvency, and other options better left unsaid.

The ironic part has nothing to do, yet, with the US. It's just this: as the Spanish realize that socialism doesn't work (deliberate pun there: Spanish youth unemployment is over 30%) and give the Socialists there a resounding message at the polls for a change, the city-state of Bremen, in Germany, elects a red-green majority in a city that is broke. In other words, the Spanish are behaving like rational, thoughtful members of society and the Germans are behaving like voters who are collectively burying their heads in the sand and saying "Nanananan" in order to not to be confronted with the catastrophe rolling upon them, of insolvency and massive fiscal problems. Normally these roles are reversed, which is why it's so .... ironic.

Mittwoch, Mai 11, 2011

This is what the scientific community has come to...

I have, sitting in front of me, the IPCC Summary for Policymakers, from 5-8 May 2011, 25 pages of text, released on 9 May 2011. It's easily available on the web.

I've actually read it. To be honest, I had to read it three times, because I wasn't sure I was reading it right.

This is not science. One critic put it this way:

This is policy-based evidence-making. The IPCC's report on renewable energy was written by the renewable energy sector.

One point cannot be denied: the work of the IPCC has become irrefutably captured by lobbyists and special interest groups, which have permanently compromised the working of the IPCC and corrupted the process and purpose of the IPCC to the point that it cannot be taken seriously. Or anyone quoting it as gospel can be taken seriously.

The policy director of Greenpeace is one of the Lead Authors of the report.

That should tell you everything you need to know. If you are a true believer, unswayed by true scientific methodology (as opposed to pseudo-scientific self-referencing "climate science" that is anything but that) and critical questioning, then this is everything you've ever wanted.

This is not a Summary for Policymakers: it is a political pamphlet on how those who consider themselves our masters intend to spend our monies over the next three decades, lining the pockets of those who are courtiers and sycophants whilst ignoring the needs of the world's poor. Put bluntly, if this comes to pass, the world's poor will be worse off, with capital taken away from them to be spent on fanciful energy schemes that benefit only a few in the West. It will kill people because scarce resources will be squandered chasing after a chimera, rather than being spent on economic development. There is nothing in the document that suggests otherwise.

This is what the scientific community has come to. A disgrace.

The Catch With Catch-Share...

Ah, the joys of the internet. :-)

This I found on Drudge, as a small side-line. But it piqued my curiosity: what could be going on here?

As usual, do-gooders destroying people's livelihoods in the name of an abstract hope.

Read this first. It's what the NOAA says catch-share should be.

The key quote:

A catch share program differs from traditional fishery management by dividing up the total allowable catch in a fishery into shares. These shares are typically allocated based on historical participation in the fishery. They may be assigned to individuals, cooperatives, communities or other entities, who would be allowed to fish up to their assigned limit. Catch share participants also agree to stop fishing when they have caught as much as they are allowed.

Under traditional management programs, fishermen compete for a total allowable catch. This has lead to fishermen racing each other to catch as many fish as they can before the total catch limit is reached. This results in more boats and gear than necessary, quotas being exceeded, increasingly shorter fishing seasons, unsafe fishing and high levels of bycatch. It also may result in too many fish brought to market at once, reducing their market value to fishermen and coastal communities.

So how is it working in the real world?

Read this for one take. And then there's this, and this.

It's killing the industry.

Key quote that got me started here:

Local fishermen said they were told by the federal team not to discuss the new regulations, just their effects.

Ye gods. In other words, they're not interested in having fisherman criticize the regulations. They just want to know what the effects are.

And if you don't think it's killing the industry - 400 years of fishing in New England - then read this.

Even Barney Frank thinks it's a bad idea. Which, in the normal scheme of things, would mean that it would have some merit.

But not in this case.

Unintended consequences? Reducing the fishing fleet in just five months by over 50%? That's not an unintended consequence: that's a deliberate plan. The result, the intended result?

Of the 247 ground-fishing vessels left in New England, 55 boats accounted for 61% of revenue. In other words, the industry is being concentrated in a few well-connected companies. The wealthy ones. not the small fisheries and independent fishermen.

So, who is in charge of doing this?

Jane Lubchenco.

Among other things, she is an environmental activist (former vice-president of the Environmental Defense Fund: you don't get that job without being an activist).

Key quote:

In fishing for a problem to support the regulatory agendas of the EDF and the Obama administration, Lubchenco netted a policy that has wreaked havoc on the fishing industry, and which will continue to put fishermen out of business until its repeal.

For all those who voted for hope and change, this is what you get. Until this is changed, there is no hope.

Mittwoch, Mai 04, 2011

Another Inane Idea From DC...

As if there weren't enough inane ideas from that den.

Barney Frank, always good for making sure that the baby is thrown out with the bathwater, wants to not allow the regional Feds to set their own interest rates, permitting only a single one to be set from Washington.

Good lord.

The reason that the Europeans have a crisis is the simple fact that they cannot set regional interest rates. It is a real problem for the EMU, as it means that the ECB has to balance, say, the needs of Portugal against the needs of, say, Germany, resulting in policies that muddle through, rather than being decisive.

This is what Barney Frank wants: he wants to give up flexibility of interest rates to address regional needs in order to have greater control over what interest rates are.

He's a control freak who doesn't care what damage is done as long as he can ensure that Congress controls what is going on.

Is the man completely incapable of thinking?

Sorry, that was a rhetorical question, Of course not. He's a Democrat.

Nov 2012 can't come along soon enough. These fools need to be removed from office. Perhaps the new ones won't be that much better, but at this point, it's hard to see how it can get worse.

Montag, Mai 02, 2011

The Death of Osama bin Laden...

Anima eius et animae omnium fidelium defunctorum per Dei misericordiam requiescant in pace.

The above is from the Roman Catholic burial service. It is based in Isiah 57, 1-2:

The righteous perish, and no one ponders it in his heart; devout men are taken away, and no one understands that the righteous are taken away to be spared from evil. Those who walk uprightly enter into peace; they find rest as they lie in death.

Obama bin Laden did not walk uprightly. He did not belong to the righteous, he was not devout in any civilized sense, and he embraced evil wholeheartedly.

Hence let us understand that there is evil in the world, that evil always fails because at the end of the day, good will prevail. It is of utmost importance that we never forget that in order for evil to prevail, all it requires is that good men allow it. We do not do enough in our policies, in our education, in our culture, in our daily lives, in ourselves to stop evil in its tracks: we are merely human, frail and corruptible, weak and easily distracted. But there are times when we rally and do the right thing at the right time for the right reasons.

My deepest and heart-felt thanks for those whose service to the ideals of the civilized world made it possible to fight this evil and help to end it. These are the true heroes, the righteous and devout, those who walk upright for they are fighting the right fight. Evil is still out there, evil will disappear only when the hearts of men are not clouded by their baser interests and that enlightenment, in one form or another, brings peace to us all, allow us to transcend temptation and not be led to evil.

Until then, lock and load. Keep your ammunition dry, your batteries charged, water clean and the rations healthy. Keep you spirits on the goal, your mind on the situation and above all, love those you do love with all your heart and body.

Keep the faith. It was a good day when Osama bin Laden died. It aggrieves me to say that, I deeply wish that he hadn't done what he did, that his twisted path had been a righteous one. It was not, and his personal evil, at least, has ceased.

That is all.