Common Sense is Not Common

Lately conservative pundits are using the term "common sense" an awful lot, and the term is rubbing off on their followers. Recently I was debating the proper steepness of the "inequality curve" to provide necessary motivation to work harder and better. Slightly higher taxes on the wealthy will allegedly make them unmotivated.

The right-winger argued that the curve has to be pretty steep; that is, heavy inequality is necessary in order to provide sufficient motivation by his view. I argued that perception of social ranking is largely relative to position (ranking among near-peers) and thus a slightly shallower curve will not kill motivation. Observations of animal behavior tend to bear this out, forgive the pun.

The right-winger then said, "Well, it's common sense that you need a steep curve" (paraphrased). I then argued that it's not common sense. We really won't know for sure without some kind of careful study of human economic behavior. I cannot cite any clear-cut direct studies that back my position and neither could he. However, my point is that common sense is not sufficient to answer such questions. (I'm sure there are plenty of indirect studies that both sides could use as ammunition.)

Not having a definitive answer from science and statistics, I can at least agree to respect somebody with the steep curve opinion if they do the same with my opinion. However, this particular right-winger insisted that "common sense" backs the steep curve view and those who don't share it are somehow brainwashed by the "left-wing media" or "commie professors". In other words, exposure to these evil entities allegedly washed away my common sense.

It turned into the usual shouting match over who is more brainwashed. But in retrospect, I believe it to be yet another manifestation of the right's anti-intellectualism. Scientific and statistical studies and processes are not to be trusted by the right. Thus, common sense, or at least their version of it, is more reliable in their view, and thus given special rank. Who needs science when you have ol' Uncle Jesse to hand down "common sense"? Probably while cleaning his shotgun.

Palin Jumps the Occupied Shark

Quote from ABC News:

"I disagree with the Obama administration on that," Palin told Walters. "I believe that the Jewish settlements should be allowed to be expanded upon, because that population of Israel is, is going to grow. More and more Jewish people will be flocking to Israel in the days and weeks and months ahead...

So, if we in the US crank out too many kids and decide we all want to live in Canada, then we should be allowed to just go there and make it part of the US, regardless of what Canada wants, because we are making it "grow"???

Unfairly Blaming Obama for Deficit

A chart in a New York Times online article shows that Obama's policies contributed only about 12% to the current federal budget deficit. The rest, roughly 88%, is caused by a roughly-even mix of the recession itself (lower tax revenues) and Bush's policies. And this is ignoring the fact that a stimulus package was based on mainstream economic advice. (As I pointed out earlier, China has shown that sufficient stimulus plans work.)

Another break-down of the deficit can be found at Think Progress.

A Red on Blue State Blues

A conservative was bragging that the recession hit blue states the hardest, implying it was because liberals don't know how to run things.

I then pointed out that one cannot have a significant real-estate bubble in places where nobody wants to live. That quieted him up nicely.

Sex in the Bible City: Conservative Logic Misfire

I encountered a conservative the other day who was posting a printed rant about how an Obama appointee once approved "sexually explicit" books for school libraries. A companion then pointed out that the Bible also has some rather salacious passages, including rape and incest.

This caught the Con off guard. He was a deer caught in the headlights of the SUV of Logic heading straight his way. After fumbling around for a while, he finally came up with a half answer: "It's the context and intent that makes the difference. The Bible is to teach moral and spiritual lessons, and those sexual stories are part of those lessons."

I then replied, "But isn't it possible that library books you are ranting about also have moral lessons?".

He then stated, "I don't know, I didn't read them".

"Then how do you know they put sex in a poor context or have bad intent?" I asked.

He then mumbled something like, "If they were written by liberals, then they are probably of ill intent."

Thus, the truth comes out: conservatives don't want to necessarily ban sex from library books, but want to ban books written by liberals. This is done in the guise of "protecting the children from sex". It's liberals they want to protect the children from, not sex. Con moral platitudes are often a disguise for something else.

Is America Afraid of Competition?

An article by CNN's Ruben Navarrette Jr. claiming Americans are shunning competition has some key problem areas commonly ignored by the right and business lobbyists.

Consider this statement: "Imagine that. What people in other countries accept as the natural order [competition], we continue to resist." That's hogwash. Most economies are far more protectionist than America. It just doesn't seem that way because our trade is so lopsided (creating other problems discussed in other posts).

Let's look at China, the rising star of competitiveness:

Even Donald Trump complained that their internal rules make it difficult for an outsider to set up a business there, favoring locals. "If you want to open a business in China, it is virtually impossible," Trump said in 2006. "And yet, if China wants to come here and do something, there is no problem whatsoever." China is also lax about enforcing foreign copyrights.

Further, many countries tend to manipulate their currency and other properties in order to benefit jobs over consumerism. Our system tends to favor cheap trinkets over stable jobs. For whatever reason, other countries have done the opposite. I can personally attest that a bumpy turmoil-filled job market is NOT a "family value".

And consider things like pollution and human rights. Chinese factories often get an edge up over our factories by ignoring pollution standards. The Chinese government has purposely traded in clean skies for jobs. Do we want to do the same? A Chinese worker is happy to get a pay-check until they die of tuberculosis. But there's nothing they can do about it because they don't control that.

The playing field is simply not level. I'd agree with Ruben if it was, but it aint. It's typical of right-wing economic writing: mantra without the details. Thinking is not their comparative advantage.

WSJ Manipulation at Work Again

This WSJ article about faith in politicians is highly un-balanced. While it talks repeatedly about the "sins" of too much government, it barely mentioned the overwhelming role that deregulation played in the current downturn mess.

Here's an example of their manipulation:

"This week the New York Post carried a report that 1.5 million people had left high-tax New York state between 2000 and 2008, more than a million of them from even higher-tax New York City."

The implication made here and later in the article is that they left mostly because of taxes. However, they never justify that with a reason-for-leaving survey, etc. Maybe they left simply because they don't like crowds. WSJ simply runs with the tax-reason assumption. The WSJ does this often, as do most Murdoch-owned outlets. They either lack self-critical thinking, or are purposely duping readers with sales techniques such as pretending like something is already a fact when no such fact has been established by the brochure. They are not "serious" news.

Business Lobbyists Screwing Sci/Tech Students

A study by a Georgetown University demographer suggests that there may be too many citizen STEM graduates in the US, not too few. STEM means science, technology, engineering, and mathematics.

It is "common wisdom" that there is a shortage of STEM workers in the US. But, this is not actually the case, and confirms my own observation of the software development field. Right-wing business lobbyists have simply manufactured a "shortage" in order to justify hiring "A" foreign workers at "C" prices.

Over-encouraging students to go into STEM will simply dilute the wages, making the STEM fields even less attractive. Even the high-end STEM candidates appear to be jumping ship for more lucrative fields according to the analysis.

In an L.A. Times interview, President Obama has noticed an ugly trend whereby technically gifted students often go into the field of financial gimmickry, such as chasing small lags in market reaction to business news rather than work in a field that produces something more tangible, like inventing flying cars or screen-doors that shut right.

We are becoming a nation of marketers and wheeler-dealers. In other words, con artists. We need a wider variety of industries to avoid becoming a one-trick sales pony. Improving economic variety will help economic stability by giving us a diversified portfolio of industries, and improve our morality. Fixing the trade deficit would be a good first step.

Too much salesmanship is bankrupting our morals. The right-wing often talks about morals, but they tend to focus on sexual morals, not business morals, such as honesty toward customers. For right-wingers, screwing too many sexual partners will send you to hell; but screwing customers via clever manipulation is somehow okay with the Big Dude. Would Jesus try to sell a refrigerator with more gizmos than a customer really needs? (Sales is a necessary field, but let's not over-do it.)

Back to STEM, I do agree there are spot shortages in the information technology field; but these are because the field changes so fast, not because there are not enough STEM employees in general. Companies are just too impatient to train talented citizens in emerging trends, opting instead to shop the world for instant experts. Corporations just want to have the up-sides of choice, but dump the down-sides onto citizens

Glenn Wreck Depression

I saw Glenn Beck's book in the store the other day. I randomly flipped through it for the h8ll of it and landed on the page about the Great Depression. The chart Glenn or his handlers supplied fails to show the relationship he claims. It even shows the opposite: when government stimulus amount went up, the job numbers improved the subsequent year or two.

Plus, he conveniently bypasses the part about the worse job numbers ever coming about during the end of Hoover administration, around 1933. Hoover's plan was basically the same as the GOP's plan for the Mortgage Recession: do nothing. (Tax cuts were included in the 2009 stimulus plan.) After FDR came in, the numbers slowly got better.

Further, China's recent stimulus package, which was bigger than ours compared to the total economy, appears to be working well for the Chinese. (They had a rainy-day fund for a bigger stimulus package thanks to our lopsided trading.) If stimulus packages don't work, why is China humming along? Most mainstream economists support stimulus packages. It's not a "mad commie" thing like the conservative ranters claim.

The Right's ACORN Dice Game

Why don't some reporters bribe Halliburton employees using the same tricks the right are using on ACORN? If you try enough individual employees, eventually you'll find some that cave due to the law of averages alone. It's an old PR stunt. Fight right-wing fire with right-wing fire. It's sad we have to stoop as low as the FoxNews types, but sometimes it's necessary to prove a point. Larry Flint was the expert at these kinds of things in his day.

Advanced Degrees and Cultural Luster

It's often claimed that the fact that American citizens are less likely to pursue advanced degrees, such as Masters and PhD's, proves that Americans are lazy or poorly educated. But what's often not understood is that advanced degrees are generally held in higher regard outside of the US.

Managers of US companies value what they see as "actual productivity" and will usually trade a more productive BS for a lack-luster MS. In most countries, especially Asia, advanced degrees are simply given more esteem compared to the US. This includes more money AND more chicks. Often advanced degrees don't prepare one for the real-world, instead focusing on theory and research. Only a small percentage of advanced degree graduates will actually get a chance to use such esoteric abilities; there's simply not enough openings. Thus, usually end up doing more typical production engineering or programming, meaning their skills are largely wasted.

But this matters less in Asia due to cultural and historical reasons. The advanced degree almost automatically gains one instant esteem there. A detailed study of this cultural phenomenon would make a nice research project. But the end result is that there's less external incentive for Americans to pursue advanced degrees compared to their foreign counterparts.

Mortgage Mess Smells Like Lopsided Trade Mess

If the "deregulators" were wrong about mortgages, then perhaps they are also wrong about lopsided "free trade". It has a similar over-leveraged nature to it.

Quote: "Those of us who have looked to the self-interest [invisible hand] of lending institutions to protect shareholder's equity -- myself especially -- are in a state of shocked disbelief," said [Alan] Greenspan...'

http://www.reuters.com/article/newsOne/idUSTRE49M58W20081024

10 Right-Wing Trade Myths

Myth 1: Unfettered free trade is mathematically superior. There are a lot of factors involved in an individual's and country's well-being. Such factors include equality, stability of both individual careers and national economies (lack of bubbles), health, the environment, homeland security, human rights, etc. Unfettered free-traders often ignore or under-weigh such factors and erroneously focus on just total wealth (such as GDP or GNP).

It may be true that GDP is easier to measure than the others, but being easy to measure and being important are not necessarily related. Their calculations focus too much on optimizing total GDP at the expense of other factors. The weight they give to the value of the tradeoffs is based on their personal or political preference, not some universal truth. Economists cannot tell me that I "should" value cheap trinkets at Wal-Mart more than a stable career, for example. In a democracy, people make such decisions, not economists. Economists can only tell us what the trade-offs are (at their best), not which path to walk.

Myth 2: Export surpluses (trade imbalances) are the only way for a 3rd-world country to grow economically. In this view we must allow 3rd-world nations to run a trade-imbalance with us in order to build up their economies. However, one can build up an economy by opening up local businesses by reducing the red-tape needed to do such. Countries should increase trade among their own citizens before depending on the US. The US did not grow into the largest economy via heavy trade, so why should we expect other countries to go the imbalance route (at our expense)?

Myth 3: The US has a trade deficit because our education system is poor and our students are lazy. This is one of the most powerful myths used by pro-trade lobbyists because it is very complex, difficult to refute, and Americans erroneously believe it as gospel truth. Studies by the non-profit Rand Corporation and various universities have refuted the myth that there is a "nerd shortage".

The real reason our students under-perform other nations is because students eventually realize that book knowledge is no longer the competitive advantage it once was. Becoming a manager or "sales king" is the easiest path to the upper middle class, not a stack of engineering books.

Hiring a PhD in India costs about one-fourth of what a US PhD receives. Why would any US student be motivated to get a PhD when such is the case? Brains are becoming a cheap global commodity and "geeks" are being told to learn people, sales, and business skills or risk being outsourced. Science and technology students discover that although such fields pay relatively well out of college, they don't have much upward mobility unless you go into management or sales at a tech company or department.

They also learn that such careers are highly volatile. Just like stocks and bonds, you expect a bigger payback in exchange for risk, but sci/tech careers are not delivering that risk premium over the longer run. If investments are expected pay a premium for volatility, why shouldn't careers? Not knowing when and which country your career will be outsourced to obviously adds uncertainty to a field.

The only way education can become our comparative advantage is to make it more flexible. Formal degrees perhaps should be done away with and replaced with a more affordable and adaptable multiple mini-degree program, a "just-in-time" modularized education that allows Americans to change gears faster than their 3rd-world counterparts. Americans have a higher tolerance for change than most our competitors (although free-trade change is stretching our patience), so we should use it for our education system also. Our education system needs to out-run the competition, not out-test them. Once a subject matter is commoditized enough to formally test on, it's often already ripe for offshoring.

Myth 4: People voted for free trade. Until the early 1960's, the US had pretty high tariffs on imported goods and services. The change to lower tariffs was mostly the political decisions of a few powerful individuals rather than something voters explicitly asked for. Businesses eventually grew addicted to cheap labor and began to actively lobby for it. In the 1970's factory and farm workers began loosing jobs, but there was the promise of "higher level" careers that kept the backlash from growing too large. However, now that it is also eating into highly technical and knowledge-intensive professions, this is changing. Education (above) is no longer a safe haven from the widening career cannons of free trade.

Myth 5: "Jobs that Americans don't want". Pro-trade and pro-work-visa lobbyists often use this phrase to justify the temporary importation or offshoring of labor. They are jobs Americans don't want anymore because globalization has "flooded" them, dragging the wages, hours, and conditions down below McDonalds cashier levels. It is another clever lobbyist-induced self-fulfilling prophecy. It's like poisoning cattle and then claiming that "nobody likes to eat cattle anymore, so we should poison more."

Myth 6: If non-Americans want to work for less money than Americans, then they deserve the job. There are at least two problems with this reasoning. First, the cost of living is often lower in 3rd-world countries. For example, even though an Indian programmer earns about 1/4 of a US counterpart, he or she can often afford a house maid, a luxury beyond the wages of most US programmers. They are not bidding lower because they are more willing to sacrifice, but because either US wages go much further in their home country, or they have fewer alternatives. The second problem is the assumption that sucking jobs from the US is the only way for a country to get ahead. See Myth #2 for a response to this.

Myth 7: Lack of free trade caused the Great Depression. The biggest problem with this myth is that the US had a trade surplus at the time trade was reigned in. A trade surplus is a good thing and they stopped this good thing early in the depression cycle. Nobody is disputing that yanking away a surplus is a bad thing. The fact that so many Asian countries currently rig their currencies and regulations to keep their surpluses is evidence of this.

Second, free trade may have contributed to the Great Depression by tying economies too close together. The problems of one nation are easier to "leak" into other nations if their economies are heavily dependent on each other.

Myth 8: Most who oppose free trade are xenophobic. Some of these accusations are merely slanderous personal attacks. Others are due to confusion between temporary workers (legal and illegal) and immigrants. Temporary workers, such as farm workers and information technology workers, often send most of their paychecks back to their home country. However, immigrants tend to lay down roots and consume US services, keeping more money in the US. They are also less likely to tolerate labor abuses such as unpaid overtime and sub-minimum wages. Such abuses result in American citizens having to compete with virtual slaves for the same job. Of course employers are going to prefer near-slaves over citizens.

Myth 9: Opposing free trade is communism. This is merely yet another slanderous personal attack. Until the mid-1960's, tariffs were fairly high in the US such that trade was at a much lower point than it is today. Does this mean that the US was "communist" until the 1960's? Free-traders got some splainin' to do.

Myth 10: Opposing free trade is opposing all trade. Most of those who have a gripe against free trade do not want to end all trade. They merely want more balance. Currently, the US has a giant trade deficit. If we put pressure on say China to open up its markets to our goods and services or face tariffs, they may actually start complying under such pressure. Not only would our trade deficit go down, but total trade may stay the same and even increase. If we offer no incentive for them to balance their trade, they won't be motivated do it.

Huge trade imbalances also risk nasty bubble bursts, not unlike the turmoil caused by the 2008 mortgage crisis and the dot-com meltdown recession of 2001-2004. Large imbalances often snap back with a vengeance. Our trade deficit's Karma may not be friendly at all.