2012 April

April 30, 2012

Left/Right Authoritarianism

By Don Kirk in Conservatism, Political Psychology

Today’s blog of the AFSCME–the Left-liberal labor union of government employees–reports that a federal district judge in Miami this morning declared that Florida’s conservative Governor’s executive order of random drug testing for all state employees is unconstitutional.

No kidding. Thank God, again, for the nation’s Founders making the judiciary a check on the power of the other two branches of government.

A Frederick Taylor ‘scientific management’ argument could be made that it is the idiocy of management that sends workers to form a union. Random testing of every employee? This is the third time that random drug testing has been turned down by the courts in Florida; when will the conservative governor get a clue?

A voluminous amount of academic research declares that authoritarianism is solely a phenomenon of the conservative Right. That’s blatant “confirmation bias” by Left-liberal academics–the extreme Left is every bit as authoritarian as the extreme Right–but this clueless Florida governor appears to be determined to prove that authoritarianism has a home on the conservative Right. Clearly, this manager is no freedomist…but then, neither is the labor union.

April 28, 2012

Inhaling Morality

By Don Kirk in Economics, Philosophy of Freedom

Dr. Paul Zak, a neuroeconomist at U.C. Irvine, has a book out in two weeks on the positive effect of oxytocin in generating feelings of empathy and trustworthiness in people, resulting in better morality. He has a TED talk available on the Web wherein he sprays a mist of oxytocin from a syringe into the air; it doesn’t take too much imagination to understand his unstated premise.

Morality from a syringe. Sounds so easy. Spray some oxytocin on to a Viagra pill or on a marijuana joint, or mix it into milk at the dairy, or add it to a Budweiser at the brewery and achieve world peace over-the-counter at every grocery store. So why does drug-induced morality evoke an addict’s false sense of emotional happiness from the physical pleasure inside a needle? On the other hand, if it really works, why not have all the finger-pointing, hate-filled, whip-wielding moralizers on both the socialist Left and religious Right take a regular sniff of oxytocin? Shouldn’t the oxytocin act to increase the trust that is so lacking in all Left/Right political extremism? However, trust and morality are definitely not the same thing.

If we were all sniffing oxytocin regularly, like drinking fluoridated water or popping a vitamin pill at breakast, lunch, and dinner, then we could eliminate all partisan political parties with their competing moralities, and certainly we could eliminate all clergy and socialism. The obvious problem is two-fold: where is the science that ‘morality’ is as chemically influenced as ‘trust’ is? Oxytocin is, in Zak’s terminology, “the Trust molecule.” It is never described as the ‘morality molecule.’ And second, the free-rider problem is going to require finger-pointing, whip-wielding, mandated use. So, in the name of increasing morality you have to reduce individual freedom; how is this not the immorality of repression, committed in the name of morality?

Either Dr. Zak is no freedomist or he should stop equating morality with trust.

April 26, 2012

Will and a Way

By Don Kirk in Political Theory

Conservative columnist George Will wrote in today’s Boston Herald about the massive fiscal problems in the State of Illinois and cautioned against a bailout by the federal government. Instead, he argued that the restraining influence of federalism means the fiscally imprudent States facing bankruptcy (such as Illinois, California, and Rhode Island) must face the harsh discipline of the open markets, in this case, the bond market for State of Illinois debt.

The pressure for a federal government bailout of the most profligate States is not going to abate. Often, the States with the worst finances are among the most populous, so they have commensurate influence in the halls of Congress. An interesting argument could be made that it is actually the combination of suburban and central city voters in and around the largest and wealthiest cities which are bankrupting the State governments. Then how to stop the profligate spenders in the large cities from bankrupting the entire federal system of State governments?

Why not create more restraining federalism by creating more States? In the act of creating more federalism to check the financial irresponsibility by a few but very populous States, divide the worst-offending large population States into two parts: one new State that is largely rural and less wealthy, and the existing State organized around the wealthier yet profligate population centers.

Thus, Nevada becomes two States, southern and northern. The much smaller, wealthier, but more populous southern portion around Las Vegas would still be named ‘Nevada,’ while the much larger, less wealthy and less populous northern portion could be called, ‘Sierra.’ Smaller, wealthier but more populous northern Illinois around Chicago would still be ‘Illinois,’ while the larger, less populous and less wealthy southern portion might call themselves, ‘Lincoln.’ Tiny Rhode Island is never going to be divided, but the West Coast States of California, Oregon, and Washington could be divided by the north-south mountain ranges that already divide their states into wealthier populous cities in the coastal areas (the roll call of prosperous coastal cities includes Seattle, San Francisco, San Jose, Santa Barbara, Los Angeles and San Diego) and less wealthy, less populous interiors.

The coastal area of California would still be the State of California from the City of Redwood down to the City of San Diego, but why not have the lee side of the coastal mountains called the State of Inland? State of Oregon and State of Trail? State of Washington and State of Cascades?

This strategy might leave New Jersey and Texas and Florida intact, but why not the smaller and wealthier southern State of New York around New York City and the larger, less prosperous, northern State of Hudson? Or the Philadelphia to Pittsburgh corridor as Pennsylvania and call the new State in the western portion, Allegheny. The potential total is seven new States with fourteen new Senators and no mega-city, all carved from more rural yet less wealthy areas of the parent State. The political theory of federalism suggests that all seven new rural States, as a natural function of their less prosperous condition, would be much more financially prudent than their wealthier and more populous parents.

When there are calls for the federal government to bailout any of the wealthy yet financially irresponsible States, then have any federal bailout simply buy the State’s bond debts only after it divides. In Illinois, this increased federalism would give wealthier suburban and urban Chicago voters their own State, and all the rest of the less prosperous citizens of Illinois would no longer have to pay for the City of Chicago’s unwillingness to live within its means.

April 24, 2012

The Left vs. Laffer

By Don Kirk in Left-Liberalism, Socialism's "intellectual suicide"

Economics Nobel laureate Peter Diamond and Berkeley economist Emmanuel Saez have an Op-Ed in today’s Wall Street Journal which argues that higher personal income tax rates upon the wealthy will not impede national economic growth. This argument is, of course, postulated by two Left-liberal economists in the nation’s pre-eminent conservative newspaper in an attempt to influence passage by Congress of the Buffett Rule, which will raise income taxes on the wealthy.

Part of their argument is that our current tax rates on the wealthy are not even close to the top range of the Laffer Curve, which is a supply-side economic theory of maximizing tax revenues by avoiding over-taxing. The two brilliant Left-liberal economists argue that the current top rate of 35% on the richest Americans could be safely increased to 50%, or even to 70%, without harming economic growth. They back up their argument by noting that since tax rates in Ronald Reagan’s first term were at 50% maximum and yet an economic boom began in Reagan’s mid-term, 50% is not anti-growth.They conclude their argument by calling for higher taxes upon the already-wealthy, while also suggesting that, in the interest of promoting economic growth, the approaching-wealthy should not have their tax rates increased.

Oops. This is an intellectually-corrupt example of using fact-filtered ideology to make an argument. The Diamond/Saez argument relies, in part, upon what is known in philosophy as a fallacy by conflation and in economics as a “static” analysis: 50% maximum taxes in 1982 yet we had a boom, so we can safely raise maximum taxes to 50% in 2012 and the higher rates will not shut down growth. In a “dynamic” analysis, the economic historian would quickly point out that the 50% tax rates under Reagan were a Laffer Curve DROP of rates from 70%, thus spurring economic growth. If we adopt 50% taxes now, that represents a RISE in tax rates from 35%, thus likely to dampen economic growth.

As I understand their second argument, once you are rich you no longer invest for greater economic growth but instead invest for passive income, therefore you should be taxed at higher maximum rates. Otherwise if you are merely almost-rich, you are still investing in greater economic growth and should pay a lesser tax rate.

Let’s first tackle their Laffer Curve argument. When I studied the Laffer Curve at university years ago, the optimum personal income tax rate was believed to be 40%. Above 40% would result in a fall of tax revenues as the wealthy altered their productive behavior in order to avoid paying at the higher tax rate. Perhaps there is just something about the human being ever since the Roman Empire that naturally resents paying more than half their income to the government, and if that’s true then keeping the maximum tax rate below 50% makes sense if you want to maximize actual tax collection.

The argument that the Laffer Curve permits 50% to 70% as the top tax rate for individuals before negatively affecting economic growth is fallacious. 40% is the suggested maximum, which is perhaps why President Obama years ago suggested increasing personal income taxes only to a maximum of 41%; he was apparently trying to squeeze an extra 1% for the maximum tax rate just above the Laffer Curve’s 40% optimum.

Also, the Diamond/Saez secondary argument–that the wealthy are no longer active investors in economic growth so they should therefore pay higher tax rates on passive income–is plainly wrong. Many tax-free municipal bonds that the wealthy purchase finance infrastructure projects for local cities, counties, and States. As the two eminent economists point out elsewhere in their Op-Ed, infrastructure investments can be high-return investments in future economic growth. So their argument that the wealthy are not investors in economic growth is refuted by their ignoring the greater infrastructure investment financed by the wealthy who buy tax-free bonds. Their argument is self-contradictory, hence, fallacious. If their ‘static’ argument is flawed about the maximum tax rate that diminishes tax revenues, and if their argument is also wrong about the wealthy being non-investors in greater economic growth, then doesn’t their main argument–that higher taxes do not impede economic growth–suffer from an irrational grounding?

They make a collander argument, full of holes. Higher tax rates on the wealthy might very well be a policy most Americans want, but this argument is too hollow to achieve the goal. This Diamond/Saez argument is an example of socialism’s “intellectual suicide,” the ideological myth-making by the liberal-Left, which is no better than the ideological myth-making in economics by the conservative-Right.

April 22, 2012

Dennett’s incompatability

By Don Kirk in Prudent, Pragmatic Pluralism, Yin & Yang

Andrew Sullivan, in his ‘Daily Dish’ blog, today quotes philosopher Daniel Dennett on clergy who have lost faith but continue to be priests. Professor Dennett is famed for being a compatabilist–someone who believes that free will and determinism are compatable–and for being one of the Four Horsemen, a group of prominent, intellectual, activist atheists.

Dennett’s compatability on free will and determinism fails him on religion and atheism. For Dennett, religious belief is irrational and self-limiting. To be a believer is to be in the clutches of superstition and subject to wild flights of emotional insensibility. Lapsed priests are rarely able to break free from the “tragic trap” of their religious career path.

Religiosity is not “tragic,” and it is not a “trap.” Religion will always be a normal, integral part of human socialization, just as atheism will always be a normal skeptical response to metaphysical claims. Neither is ever going to conquer the other; they both will endure forever as part of being a normal human.

That’s what compatability is: the eternal binding of complete opposites, like the pluralism of the Yin and Yang, where one cannot even exist without the presence of the other. Dennett’s religious/atheist incompatabilism is what is truly ‘self-limiting.’

April 20, 2012

Haidt’s anti-hate

By Don Kirk in Human Identity Formation, Political Psychology

Just sent to Amazon a five-star review of Dr. Jonathan Haidt’s latest book, The Righteous Mind, a truly remarkable work by the eminent moral and evolutionary psychologist. A few weeks ago when this book first came out, I watched the Bloggingheads video of an interview with Haidt by ‘The Atlantic’ writer Robert Wright, author of The Moral Animal. My impression of the interview is that Wright’s moral animal lost. Wright’s personal moral biases (or his published research) were apparently so undone by Haidt’s recent research that Wright during the entire one hour interview looked as if he had been kicked in the stomach by a mule.

Disclosure: I’ve had some small amount of mutually complimentary personal correspondence with Jon Haidt.

April 18, 2012

Supply-side Silliness

By Don Kirk in Economics, Free Markets Myth

Noted supply-side economist Arthur Laffer argued in today’s ‘Investors’ Business Daily’ that the ‘Buffet Rule’ tax increase proposed upon the wealthy will drive prosperous Americans out of the country, just as higher taxes on the wealthy drove prosperous people out of California into other states. Supply side economics would have a better chance of earning a hearing from voters if the messengers were not so ideological.

There is no data whatsoever that Americans are fleeing the United States because of tax rates. And the data on California emigration do nothing to inspire confidence that the high tax rates in California are what is motivating people to flee the state. The immigration into California every year is nearly as great as the emigration. True, the annual net loss of population is now a reversal of a long-term trend of annual gains, but still, hundreds of thousands of people move to California every year for a host of personal reasons even as hundreds of thousands move out every year for their host of personal reasons. If higher taxes were the primary motivation to move out, then what is the primary motivation to move in; they have a DESIRE to pay higher taxes? Dr. Laffer’s argument makes no sense, especially without any hard data to back up his claim.

His argument is ideological, which is another way of saying, he is making a myth. This is simply another example of the ‘free market myth,’ where so many highly intelligent people substitute the emotional appeal of ideological myth for the more difficult work of impartial reasoning. It’s amazing how much of economics is dominated by myth-makers on the political Left and Right.

April 16, 2012

Election-year Inflation

By Don Kirk in Economics

Last month the Consumer Price Index, a deeply flawed measure of inflation that often understates the actual rate, recorded an annual inflation rate of 2.7% for the American economy, down from 2.9% and 2.8% in the first few months of the year. The Federal Reserve Board meets next week in a scheduled review of Fed monetary policy, so the unexpected high inflation rate should generate a considerable debate in the Fed. The reason the declining inflation rate is still very worrisome is because the growth rate of the economy for all of last year was only 1.6%, despite a 3% growth in the final quarter. That means, the growth of inflation is higher than the growth rate of the economy, which means we are steadily going broke as the prices we pay rise faster than our ability to pay them.

Do not expect anything to be done.

The Fed is already on record that it intends to keep interest rates low until 2014, believing that deflation is the greater risk than inflation to the economy. Why would the Fed not adjust its low-interest rate policy in the face of obvious inflation and no sign of deflation? Because it is an election year.

If the Fed were to raise interest rates this spring and summer to fight inflation, the politically unpalatable national unemployment rate of 8.2% would rise, crushing the slow recovery from the Great Recession and dooming the re-election possibilities of President Obama in the fall. It’s not that the Fed is pro-Obama; it’s just that they emphatically do not want to become the target of demonizing campaign speeches by politicians blaming the Fed for mounting an anti-inflation fight just before an important election. As bad as the inflation/GDP relationship is, because of politics it is going to be ignored.

Depending upon your point of view, the Fed doing nothing now about inflation is either political prudence or political cowardice. The report on the first quarter of 2012 GDP is due late this month. If the U.S. GDP growth continues to be below inflation rates again, look for the value of the dollar to fall this summer as the Fed dawdles and does nothing. Today, the dollar buys .7619 Euros (€) and is at 122.17 Yen (¥).

April 14, 2012

The Psychology of Gun Control

By Don Kirk in Political Psychology

Steve Kornacki has an article in today’s ‘Slate’ that begins with psychology and concludes with gun control history in the Democratic Party. The article is timed with Republican presidential nominee Mitt Romney’s appearance today before the national convention of the National Rifle Association, the politically influential NRA. Let’s consider what Mr. Kornacki never mentions about gun control.

Gun control is the human political goal to defang and declaw the feared predator. It is the psychology of frightened prey which motivates the desire for gun control. The opposing psychology of the predator views the attempt to declaw and defang with just as much existential fear; without its weapons, the predator will starve to death. Because natural human fears are involved on both sides of the gun control issue, personal political hate for the opposing view is all too predictable.

The human animal is an omnivore, part predator and part prey. Every one of us has both animals inside our brain at all times, so the desire for gun control will be eternal, as will the desire to be left alone with our calorie-obtaining, life-nourishing weapons. Our prey side is at least 400,000,000 years old, in the repto-mammalian brain of the human brain’s lymbic system. Our predator side is younger, and likely resides in the “executive functions” area of the pre-frontal cortex. Which psychology will eventually dominate the other in any human being we do not know, but their interaction is continuous and dominance fluctuates back and forth, forever making us a plural animal with unquenchable opposing points of view.

Leftists argue for gun control in moral terms–which is a complete myth–while conservatives argue for gun ownership in legal, constitutional terms. They talk past each other. What both sides fail to realize is that the argument is entirely psychological, and both psychologies are normal.

A moderate position between gun banishment and unrestricted ownership would restrict gun ownership by felons, mentally ill, and sociopaths, while permitting gun ownership to any urban adult or rural teenager who has no record of trouble with society and is trained in safe gun use. Since both sides of the issue have honest intellectual grounds for their opposing position, ‘prudent, pragmatic pluralism’ suggests that a balanced policy addressing both positions is best. So, restrict gun ownership from those who are irresponsible, and stress responsible gun ownership for everyone else.

April 12, 2012

China-bashing

By Don Kirk in Foreign Affairs

Richard Ramirez at his wonderful Belmont Club blog highlighted the current scandal in Chinese politics and the potential for China’s economic collapse. My comment:

“When I studied the Chinese economy at university years ago, the problems with the SOE’s and banking sector and currency controls were well documented and the subject of numerous academic research, documentaries, and risk-analysis studies by major financial analysts all over the world. The consensus of all the research then and now was that the extraordinary growth of the Chinese economy was unsustainable, the stellar numbers reported by the Chinese government were likely cooked and hence unreliable, and that the true question about the China miracle was merely whether the entire system would soon implode or explode.

Clearly to long-time political observers, China today is in a transition stage. With the rapid income rise by the Chinese peasant over the past thirty years, the Communist Party has a tiger by the tail, and well knows it. Yet every single prognosticator of imminent collapse in China has been proven wrong. For example, the current ‘slowdown’ of the Chinese economy has simply dropped their annual 9-10% growth to 7-8% growth rates that the rest of the world would love to have.

The numerous problems in the Chinese economy are well known. But there is more than a little parochial nationalism in arguments that the contradictions in the Chinese economy will soon result in China’s collapse. They grow robustly despite their many problems, and show no signs whatsoever that their economy’s many problems have them on a decline.”

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