The importance of D.O.G.E.

Donald Trump has asked Elon Musk and Vivek Ramaswamy to lead what is basically an audit of the entire US Federal Government.  There is much consternation about this in the expected circles - no doubt due in part of the proclivity of Musk and Ramaswamy to stir the pot and troll their opponents.

I mean, the Department of Government Efficiency?  D.O.G.E.?  Srlsy?

 Fun and games aside, this is a really important project.  It's not just that Elon says you can reduce the Federal budget by $2T/year - nice though that would be.  Instead, it circles back to something that Trump has been talking about for years.  Remember him asking why we can't get a growth rate of 4%?

I wrote this a long time ago, and updated it 6 years ago for the age of Donald Trump.  I think that it's even more important today, with D.O.G.E. explicitly intended to address the issues I called out.

(last ported 2 January 2018)

Why Donald Trump will transform America

Donald Trump understands something that nobody else knows, and he is doing something about it.  If he accomplishes what he is setting out to do, it will completely change America.  To understand what this is, we need to look at what's changed in the past few decades, and before.

Something unprecedented happened during the eighteenth century, something that is a sharp dividing line between the modern world and what came before. The Industrial Revolution transformed first Britain, then Europe and the United States, and then the world.

It started with cloth making, where initially water power drove a set of rapidly evolving machine types that made cloth literally thousands of times easier to make. Prices plummeted, and consumption rose by a factor of 12 between 1770 and 1800. People's lives began to change, as now underwear was affordable to more than just the wealthy.

Then came steam and iron. James Watt invented the first really successful steam engine, but it was only unleashed when Henry Cort approached him with a "grand secret". Up until then, Iron was frightfully expensive, because manufacturing basically had to heat the molten ore until the slag floated off. Cort had figured out how to use Watt's engines to drive huge hammers to beat the slag out of the metal. He could make fifteen tons of wrought iron in twelve hours. Iron production soared by a factor of 150 between 1740 and 1852. The price of iron plummeted, to the point where it entirely changed architecture.

Something was in the air - creativity had been unleashed, and continued in the nineteenth century, infecting industry after industry: Bessemer and Steel, Tennant and industrial chemicals (chemicals manufactured in ton weights, like chlorine bleach), railroads, electricity, internal combustion, aviation, the communications revolution of telegraphy-radio-television-Internet.

 

What was striking about this was that each industry would exhibit precisely the same growth characteristics. The "S" curve described a slowish initial takeoff, an exponentially rising growth period, and then a slow tailing off. All of these industries followed it in turn: cotton, iron, steel, railroads. What was key to the miracle that occurred between 1720 and 1990 was that as one reached the top of the curve and began to falter, a new industry emerged to drive things forward. Income per capita went from around $450 in what would become the United States (in 1700) to $18,300 in 1989.

In many ways, this seems to be spinning down. More and more industries seem to be in the top flat part of the curve. Fewer new industries are emerging with robust growth to pick up the slack. People look towards the future and do not see a doubling of real per capita national income.

We are told that the people are ignorant, and aren't smart enough to know what they're talking about. We're told this by an Educated Class with complex computer models of the financial system. We're asked, what do the hoi poloi know of the grand sweep of the world economic system?

I think that the feeling of dread is well justified, by a good view of the forest rather than the trees. And after all, the financial models didn't predict the 2008 collapse or the stagnation that followed, so a little more humility might be called for. But in general, the critique is correct - people don't know what's causing this, just that they're unhappy. They see a change, which makes them unhappy. They don't know the cause.

Immodestly, I would like to say that I think that I do. It's related to the size of government, but the usual arguments over which side of the Laffer Curve we're on, or what the optimal rate of marginal taxes are pretty much beside the point. Something is slowing the system down, and it's not the 35% that the Fed.Gov takes off the top (OK, a little, but that's a second order effect).

Let's think about fast and slow. The Empire State Building was built in a little over 15 months. The World Trade Center (Tower 1) took 52 months, and that was in 1970. Most recently, One World Trade Center took 7 years to complete.  We're slowing down; we're not as good at what we used to do.

The reason for this is regulation (and its bastard child, litigation). That's the problem. We have buildings full of people that make us stop what we're doing, fill out forms in triplicate, and then wait months or years before we are allowed to pick up where we stopped. Think for a minute what this does. It pushes some of the middle of the S-Curve into the flat part, reducing the overall value of the industry, as resources get sidelined instead of being engaged in production. More damagingly, it pushes the next S-Curve to the right, increasing the time that it takes to bring a new industry online. Most damagingly of all, it possibly completely eliminates some S-Curves from appearing at all, because the risk is too high to attract investors.

It's not the tax rate, it's the regulation rate that's making the economy run down. Sarbanes-Oxley, passed in great haste after Enron's collapse, has all but destroyed the high tech IPO market. Think of that as S-Curves that never came into existence.  The Silicon Graybeard posted about this 7 years ago:

Although the legislators and regulators never consider this, every regulation consumes some amount of time and money to comply with.  The new Finance Reform bill has been estimated to required the development of 250-300 new regulations.  Every regulation slows down, hinders and costs every honest business real money.  Despite the widespread talk of corrupt CEOs and general lack of corporate ethics, I've been working in the manufacturing industry since the mid 1970s, and every company has had an active, if not aggressive, ethics compliance program with requirements for training and seminars every year.  There are exceptions but most companies do their best to be honest and law-abiding.  Government seems to think it's mere coincidence that countries with lower tax rates and lower regulation attract business, and they demonize companies for moving to countries where the environment is better.  

As SiGraybeard points out, Big Business excels at managing the top end of the S-Curve, and they have big offices capable of dealing with the paperwork. Big Business doesn't mind regulation - in fact, if you believe (as I do) that Regulatory Capture is the equilibrium state of any government agency, Big Business uses regulation to hobble small but dangerous competitors. They get the Fed.Gov to do their dirty work, while they extract maximum value from the end phase of their old products. We pay for that in higher prices and lack of better alternatives.

Scale this up to cover the entire economy, as the government has tripled in the post war period, and it becomes obvious why we can't build skyscrapers any more. They don't seem to have trouble with this in Dubai - it's us that keeps us from doing it.

Regulation stifles innovation - quick, name the last revolutionary program that came out of the Department of Education. That effectively transfers wealth from future generations (our children and grandchildren, who will have lower standards of living). The recipients of that transfer are government employees - those folks that read and file your application (in triplicate) and the Big Business that captures the regulatory agency.

We have made so many layers of cruft - allowed so many barnacles to grow on the bottom of the ship - that we're noticeably slowing down. People feel it. People are nervous, because they think it's going to get worse. And while the recent Congresses and the Obama Administration poured gasoline on that flame with Health Care "Reform" (written by Big Pharma, the Insurance Companies, and the AMA), I'd like to point out that the Republicans ran Congress and the White House when Sarbanes-Oxley passed.

One way to look at things is that it's been a good long 300 year run. Too bad it's over, nothing lasts forever. Get used to stasis, with fewer and smaller S-Curves, and get used to declining living standards as Big Business and a bloated government take ever more from National Income, immizerating the masses.

A different way to look at things is government regulation didn't give people affordable underwear, or bleach to keep them clean. Get out of our way, and we'll do it again. The tax rates are annoying, but the buildings full of fussy balls-and-chains telling us that we'll hear back from them in 3 to 6 months are infuriating.

This is what Donald Trump knows.  He knows that there are winners in this game - the Ivy League, the Non-Governmental Organizations, "Big Green" (The Sierra Club, Friends of the Earth, Greenpeace).  Trump knows that they all hate him, and are engaged in a scorched earth campaign to destroy him. He also knows that the losers in this game are the working classes, who vote for him.  

So what do you think is his motivation?  Is it to change governance to unleash economic growth, rewarding his supporters and humiliating his opponents?  Or is it to fade quietly into the background, sitting in the corner and thinking about his many failings?  To ask the question is to answer it.

This is the big thing that Trump knows that nobody else does.  It's a big idea, which seems to be how he likes to think.  It's transformative.  So far, he has quashed nearly 2000 regulations in his first year, and seems only to be getting started.  And all the geniuses who hate him are so focused on his tweets that they have no idea what's hitting them.

Note: This post is based on one I did 7 years ago.  It's taken this long for a politician to come on the scene who looks like he wants to do something about it.

UPDATE 2 January 2018 22:17: Even the New York Times recognizes this in an (inadvertently) hilarious story.  It would take a heart of stone not to laugh at their attempts to spin soaring business confidence due to reduced regulation under Trump.  Almost every person quoted is a former Democratic administration aparachick, and there are precisely no quotes from business leaders who think that reduced regulation helps business expansion, hiring, and wage increases.  And there's this, of course:

There is little historical evidence tying regulation levels to growth. Regulatory proponents say, in fact, that those rules can have positive economic effects in the long run, saving companies from violations that could cost them both financially and reputationally. Cost-benefit analyses generally do not look just at the impact of a regulation on a particular business’s bottom line in the coming months, but at the broader impact on consumers, the environment, public health and other factors that can show up over years or decades.

Oooooooh kaaaaaaay.  [rolls eyes]

US bans Chinese "Connected Car" tech

They say it's a security concern.  They're right:

Now, the US Commerce Department is set to enact a de facto ban on most Chinese vehicles, by prohibiting Chinese connected car software and hardware from operating on US roads, according to Reuters.

The rationale? National security concerns. "When foreign adversaries build software to make a vehicle [connected], that means it can be used for surveillance, can be remotely controlled, which threatens the privacy and safety of Americans on the road," said Commerce Secretary Gina Raimondo.

"In an extreme situation, a foreign adversary could shut down or take control of all their vehicles operating in the United States all at the same time, causing crashes, blocking roads," said Secretary Raimondo, a scenario we saw depicted in Fate of the Furious (where it caused me a headache), as well as more recently (and to better effect) in Leave the World Behind.

Yup.

Now I expect there's a whole lot more behind this and the security risks are just nice window dressing, but it's pretty hard to argue with this.

So it's Price Controls now, eh?

So Kamala doesn't know much about history, it seems.  Or economics.

Inflation impoverishes the poor

So says The World Bank:

Using polling data for 31,869 households in 38 countries and allowing for country effects, Easterly and Fischer show that the poor are more likely than the rich to mention inflation as a top national concern. This result survives several robustness checks.

Also, direct measures of improvements in well-being for the poor - the change in their share of national

income, the percentage decline in poverty, and the percentage change in the real minimum wage - are negatively correlated with inflation in pooled cross- country samples.

High inflation tends to lower the share of the bottom quintile and the real minimum wage - and tends to increase poverty.

So record inflation (remember that the Fed.Gov changed the way that inflation is measured so that food and energy prices are no longer counted - meaning that the "Highest inflation in 40 years" actually means "Highest inflation ever") is driving people into poverty at a record rate.  Because the resident of the Oval Office has a "D" after his name I don't expect this to be reported in the Media, but keep this in mind when anyone tells you nonsense like "the Democrats are the only ones to do anything for the poor."

Yeah, they do something, all right.  Good and hard.

Quote of the Day: Southwest Pilots "Sick-in" edition

This quote (and the post it is from) makes no mention of the pilots, and was written from the point of view of the working man.  But it explains clearly what is going on (you'll have to read the whole thing to see how this applies to pilots as well):

I think that in retrospect, the decision to lock down entire societies to stop the coronavirus will end up in the history books as one of the most spectacular blunders ever committed by a ruling class. Partly, of course, the lockdowns didn’t work—look at graphs of case numbers over time from places that locked down vs. places that didn’t, and you’ll find that locking down societies and putting millions of people out of work didn’t do a thing to change the size and duration of the outbreak. Partly, the economic damage inflicted by the lockdowns would have taken years to heal even if the global industrial economy wasn’t already choking on excessive debt and running short of a galaxy of crucial raw materials. But there’s more to it than that.

If you want people to put up patiently with long hours of drudgery at miserably low wages, subject to wretched conditions and humiliating policies, so that their self-proclaimed betters can enjoy lifestyles they will never be able to share, it’s a really bad idea to make them stop work and give them a good long period of solitude, in which they can think about what they want out of life and how little of it they’re getting from the role you want them to play. It’s an especially bad idea to do it so that they have no way of knowing when, or if, they will ever be allowed to return to their former lives, thus forcing them to look for other options in order to stay fed, clothed, housed, and the like.

Like I said, no mention of the pilots.  But when a corporation makes you merely one of the factors of production, you had damn well better be replaceable or they have a problem bigger than they think.

This is an outstanding post from The Blogger Formerly Known As The Archdruid.  I cannot recommend this more highly.  The Revolution will not be televised, but it sure as shootin' will be blogged.

Dad Joke XLVIII

Did you hear about the guy who made a boatload of money investing in Apple?  It turns out that it was in cider trading. 

In which I disagree with Tam

Well, I actually disagree with P.J. O'Rourke, who she quotes:

"Populism is a lie and a logical sophistry. The very idea of the “struggle of the haves against the have-nots” presupposes the zero-sum fallacy that only a fixed amount of good things exist in the world, and I can only have more good things if I take them from you." -P.J. O'Rourke

Now O'Rourke is a smart guy so it's very interesting what he left out of his piece - because what he left out sets up a straw man for him to knock down.  Silly populists!  Don't you know that you're getting in the way of the march towards a history so bright we'll have to wear shades?

Except that's not how it's worked out over the last 40 years, is it?  Public policy has focused on a very specific set of preferences - environmental regulation, free trade, and open borders.  Each of these has had two consequences.  First, it has led to massive off-shoring of manufacturing to east Asia in particular, padding the bottom line of corporate America and leading to a lot of great high paying government jobs for Ivy League graduates like O'Rourke.  Second, it has hollowed out the working class and the towns they live in.  Not for nothing is it called the "Rust Belt".

This isn't an issue of mechanization and productivity reducing employment.  Rather, it was an explicit choice (by both political parties) that U.S. Government policy should encourage factories and their high paying jobs to be located elsewhere than in the U.S.A.

And now Mr. O'Rourke wonders, mystified, where all this populism came from all of a sudden.  And look at how cynically he phrases the issue: "I can only have good things if I take them from you" - when that's precisely what corporate America and O'Rourke's swell Ivy League buddies did to working class America.

They have made out very well financially on the destruction of industrial America.  O'Rourke knows this - after all, he hails from Toledo Ohio.

And so to "populism", by which O'Rourke no doubt means "Donald Trump".  I posted about this dynamic way back in the summer of 2016, when I linked to a post by the blogger who went by the nom de blog Archdruid.  The Archdruid posted what I thought was all you needed to know to understand what was happening.  This bit is most relevant to O'Rourke's rather pathetic strawman:

The result in both countries [UK and USA] was a political climate in which the only policies up for discussion were those that favored the interests of the affluent at the expense of the working classes and the poor. That point has been muddied so often, and in so many highly imaginative ways, that it’s probably necessary to detail it here. Rising real estate prices, for example, benefit those who own real estate, since their properties end up worth more, but it penalizes those who must rent their homes, since they have to pay more of their income for rent. Similarly, cutting social-welfare benefits for the disabled favors those who pay taxes at the expense of those who need those benefits to survive. 

In the same way, encouraging unrestricted immigration into a country that already has millions of people permanently out of work, and encouraging the offshoring of industrial jobs so that the jobless are left to compete for an ever-shrinking pool of jobs, benefit the affluent at the expense of everyone else. The law of supply and demand applies to labor just as it does to everything else:  increase the supply of workers and decrease the demand for their services, and wages will be driven down. The affluent benefit from this, since they pay less for the services they want, but the working poor and the jobless are harmed by it, since they receive less income if they can find jobs at all.

At this point I must point out that I'm a member of that salary class, and have done very well over the last 30+ years.  However, my chosen field (Computer/Network Security) sure doesn't seem to have taken away any working class jobs - and my upbringing leaves me infuriated by O'Rourke's sneering.  And even more so by his seemingly intentional blindness to the consequences of the policies he advocates.  This song brutally exposes what he can't be bothered to cast his eyes upon:

These people are our neighbors.  They are our fellow countrymen.  Are their dreams for the future of less import than our own?  Should public policy in this country crush those dreams?  Is there a reason why public policy should preference Palo Alto over Toledo?

I'm afraid this turned into a rant - that certainly is not directed at Tam.  But the smug self-satisfaction of folks like O'Rourke - people who listened to their professors telling them that they were "the best and the brightest" and who actually bought into that malarky - they are really just showing the world that they're a bunch of dumbasses.  Nice strawman, O'Rourke.  Be a shame if someone knocked it down, amirite?

And at this point if you do not understand what is driving populism in this country (both the Donald Trump and Bernie Sanders versions) then watch that video again.  And read the quote from O'Rourke again.  Repeat as necessary.  You will know that you understand modern populism precisely when the hair on the back of your neck stands on end.

Indeed I tremble for my country when I reflect that God is just: that his justice cannot sleep for ever

- Thomas Jefferson

The thought for the day

You can define "privilege" as not suffering from consequences.  We have watched our "Elites" imposing restrictions on us for decades - shutting down whole towns to "save the Spotted Owl", driving oil prices higher by banning drilling (and the high paying jobs that go with that industry), and most especially opening the borders to drive down incomes - it's not just hourly workers suffering from this now, it's also computer programmers put out of work by H-1B visa holders.

We've listened for decades about how "free trade" grows the economy and that everyone will be better off in the long run if we just keep up these policies - all the while watching whole towns, counties, and states wither as jobs flee and the population sinks into poverty.

In 2016 the people who were sinking into poverty actually stirred themselves and voted Donald Trump into office.  It was finally consequences for the "Elite" class.

And we saw how they reacted - with disbelief, rage, contempt, and ultimately destroying the norms that had sustained this Republic by stealing an election.

Privilege in action, right there.

The European Union's winners and losers

Why did the Deutsche Bank give up their beloved Deutsche Mark and join the Eurozone?  It was good business for Germany:

A 2019 German think tank report, entitled ‘20 Years of the Euro; Winners and Losers’, costed the single currency’s impact on individual states. From 1999 to 2017, only Germany and the Netherlands were serious winners with the former gaining a huge € 1.9 trillion, or around €23,000 per inhabitant. 
In all other states analysed the Euro has provoked a drop in prosperity, with France losing a massive €3.6 trillion and Italy €4.3 trillion. French losses amount to €56,000 per capita and for Italians €74,000.

 Those are big numbers.  You could do the same analysis here looking at Rust Belt vs. Coastal enclaves and I suspect you would see the same sort of thing.  The proof point for that is how working class incomes rose under the Trump administration for the first time in decades.  No doubt the Biden administration will get to work on that.

I really struggle to understand how The Powers That Be in both Brussels and Washington don't see the revolutionary implications in this.  Didn't they read Marx?

Hat tip: Samizdata.

The looting of the Middle Class

The Pandemic has been particularly useful to the Powers That Be:

This is what the COVID hysteria is all about. Without this, we would all be allowed to know that COVID is a mild respiratory disease that is only dangerous to the very old and the very sick. This is why we are being lied to and locked up:

Amazon: profit up 100%
Walmart: profit up 80%
Target: profit up 80%
Lowe’s: profit up 74%
Microsoft, Facebook, Apple, Google: stock at record high

Wealth increase in the pandemic for founder/CEOs of
Amazon: $91 billion
Walmart: $38B
Google: $37B
Microsoft: $33B
Facebook: $28B
Nike: $8B
Apple: $8B

Small businesses: collectively lost over $200 billion

We’re witnessing a record wealth transfer

https://twitter.com/DanPriceSeattle/status/1329277596685709315?s=19

(via)

Ten years ago I wrote that the Tea Party is a Marxian response to the looting of the Middle Class:

The deal that Progressives made in the 1930s - the economy would provide a surplus that the government would use to buy social peace - is shattered, as the government finds that it has consumed the entire surplus, and is still hungry for more. The median family is worse off now then they were ten years ago, because they pay more taxes and make about the same. Government at all levels is squeezing the majority of the population at an increasing rate, taking a higher share of National Income, with no end in sight.

Now I'm sure that I could do a better job with the numbers (say, another 15% accuracy), but the trajectory is unmistakable, and is one that Marx clearly understood:

Within the capitalist Progressive State system all methods for raising the social productivity of labour taxes are put into effect at the cost of the individual worker [...] All means for the development of production raising of tax revenue undergo a dialectical inversion so that they become a means of domination and exploitation of the producers; they distort the worker into a fragment of a man, they degrade him to the level of an appendage of a machine, they destroy the actual content of his labour by turning it into a torment, they alienate from him the intellectual potentialities of the labour process [...], they transform his life into working-time, and his wife and child beneath the wheels of the juggernaut of capital The State. [...] It follows therefore that in proportion as capital accumulates, the situation of the worker, be his payment high or low, must grow worse.

- Karl Marx, Das Kapital

My changes are highlighted.

The only thing to add is that Donald Trump was a symptom, not a cause.  Accelerating the immiseration of the Proletariat using Covid hysteria will lead to a very clear outcome, historically speaking.  It will come faster with the collapse of legitimacy we are seeing in the Organs of the State.

I would think that a bunch of Marxist Intellectuals would understand this, but maybe they're too busy looting their political opponents to notice.

Why I'm not on Twitter or Facebook

 They're not even trying to hide the fact that they own you:

Twitter has locked the account of White House press secretary Kayleigh McEnany because she shared a story about Hunter Biden and Ukraine.

Now in all honesty, I haven't cared for the platforms for quite a while.  I don't like Facebook because it has always been rotten about its user's privacy, and all y'all know that I just can't keep myself to the 17 character (or whatever it is) tweet limit.  It's the same reason that I pretty much dropped off of Gab.ai.

But this underlines the fact that they own their users.  Not cool.  I'll stick with our little corner of the Blogosphere, thank you very much.

But probably the biggest objection that we've heard (and heard again, and again) about Donald Trump is that he violates long standing norms of behavior.  What's interesting is that his opponents are the ones who are now the biggest violators of norms.  Here is a media company censoring the White House Press Secretary.  [blink] [blink]

Heck, even a lefty hack like Jake Tapper sums up the situation:

So no thanks.  It's so bad that a raving libertarian like me is totally down with the Fed.Gov breaking up the Twitter and Facebook (and Google) monopolies and declaring them to be publishers, not platforms.  Let it all fight out in the courts, but just those announcements will tank the stock prices which will make it hard for them to acquire new companies and executive talent.  They're the modern Robber Barons and some Trust Busting is well past due.*

Note: blogger Ann Althouse looks at the story's provenance and is skeptical about the emails.  It's an interesting read - not calling them "fake" but rather suspicious.  But she agrees that Twitter and Facebook haven't covered themselves in glory here.

* UPDATE 15 October 2020 09:37: Interestingly, Miguel posted the exact same idea about libertarians.

UPDATE 15 October 2020 09:47: This is an interesting perspective about why the "Streisand Effect" applies so closely here:

Simply put, there is not enough staff at Facebook & Twitter, and they are neither smart enough nor subtle enough, to censor ALL the “fake news” while also suppressing the politically sensitive (read “damaging to Democrats”) real stories. As a result, they are Ham Handed and focus on the “stuff that matters” (as all major corporation management does). The necessary consequence of this, much like the Streisand Effect, is that attempts to HIDE stores become advertising of the stories AND become strong evidence for the veracity of the Story. Essentially: Their actions are a negative indicator. The more they holler “Fake” the more we hear “Here Be Truth”.

... 

Here’s the original story:

https://nypost.com/2020/10/14/email-reveals-how-hunter-biden-introduced-ukrainian-biz-man-to-dad/

UPDATE 15 October 2020 11:48: Lawrence has the second drop from the New York Post about Hunter's corruption with China.  No doubt the Post is getting a lot more views today because of the Streisand Effect.  Oft evil will shall evil mar, and all that.

Obligatory Imperialist Post

This is a Columbus Day post I wrote in 2008, but which seems evergreen.  The words that you will not hear by the Usual Suspects today are the "Great Divergence".  This post talks a lot about that.  It's very strange that people interested in "Social Justice" don't seem to be very interested in getting - and keeping - poor people out of poverty.

Obligatory Imperialist Post

Because it's Columbus Power-Mad Dead White Dude Day.  Insty posted about Admiral of the Ocean Sea (great book) which gives you a great Columbus overview, but entirely misses the Power-Mad Dead White Dude thing.

As a public service, here's something that you should read if you really want to make a liberal's head explode like the fembots in Austin Powers. Or understand why the world's economy is the way it is.  The Wealth and Poverty of Nations, by David Landes. The title is intentionally taken from Adam Smith, but Landes focuses less on describing economics per se, and more on the constraints that a society puts on their economy.

It traces the history of economic development over the last 1000 years, and asks some very politically incorrect questions:

• Why did China, the world's richest and most powerful country in 1000 AD not only lose her lead, but lose it so badly that it was dismembered by the European (and later resurgent Japanese) powers?
• Why did India, fabulously wealthy and populous, not conquor the west, rather than vice-versa?
• Why did England, an undeveloped backwater as late as 1500 AD, ultimately lead the Industrial Revolution and become the world's most powerful country?
• What explains the vast differences in economic development between the USA and Canada, and other New World countries? After all, in 1700, Mexico's GDP per capita was $450, not far short of the colonies' $490 (1985 dollars). In 1989, Mexico's GDP per capita was $3,500, vs. $18,300 for the USA.

No, it wasn't "western imperialism" by dead white dudes. Landes' politically incorrect thesis is that society counts, and some societies foster faster economic growth than others. He uses many, many examples.

The quote for this [2008] election season, if we're smart enough to listen, is about the post-Cold War economies:

Among the heaviest losers in this period of record-breaking economic growth and technological advance were the countries of the Communist Socialist bloc: the Soviet Union at the bottom of the barrel, Romania and North Korea almost as bad, and a range of satellite victims and emulators struggling to rise above the mess. Best off were probably Czechoslovkia and Hungary, with East Germany (the DDR) and Poland trailing behind. The striking feature of these command economies was the contradiction between system and pretensions on the one hand, performance on the other. The logic was impeccable: experts would plan, zealots would compete in zeal, technology would tame nature, labor would make free, the benefits would accrue to all. From each according to their ability; to each according to his deserts; and eventually, to each according to his needs.

The dream appealed to the victims and critics of capitalism, admittedly a most imperfect system - but as it turned out, far better than the alternatives. Hence the Marxist economies long enjoyed a willful credulous favor among radicals, liberals, and progressives in the advanced industrial nations;

You'll hate this if you think that economics a la John Kerry and Barack Obama is the shizzle flippity floppity floop.

Contradiction between pretension and performance: nice phrase, that. For an example, see Patrick, Deval. For extra credit, compare and contrast Obama, Barack.

Dang, I think I must have just got my Hate Speech on, right there.

Stolen prosperity

 Remember when Donald Trump asked why we couldn't get economic growth back to 4%?  Remember how all the Right Sort of people mocked him?  All the regulations he's cutting are aimed at getting growth back up to 4%.  His administration is putting a lot of effort into this.  Why?

It's because over time lower growth rates steal prosperity from the future.  It's actually shocking how much lower per capita income is now than it would have been if we had been able to maintain 4% growth.  Captain Capitalism examined this in depth ten years ago:

We were once growing at 4% per year on average, now we're down to 2.25%.  It also brings a cold, harsh and brutal reality to previous generations who voted themselves in a whole bunch of entitlement goodies in making it quite black and white that the economy is simply not going to be able to produce the wealth necessary to make good on those promises 

...

"What would our GDP or "income per capita" be if we had continued to grow at 4%?"

My brain, knowing the power of compounding roughly estimated it to be around $100,000 (click it, see if I was lying) per person per year vs. our $45,000 today.  But I hadn't calculated it out...until now.

Had we continued our traditional, old school, EVIL and OPPRESSIVE 1950's economic growth, our GDP would NOT be the paltry $14 trillion it is today (in 2005 numbers), it would be closer to $26 trillion. [Remember, this is from 2010 - Borepatch]















We take the roughly 310 million Americans in the country today and that translates into a real GDP per capita of about $84,500.  However, that figure is in 2005 dollars.  I was surprised to find out based on the CPI how much inflation has occurred since then (despite what the government tells us) and apparently the US dollar has inflated by about 18%.  You adjust for that and what do you get?

$99,832.

Did I say $100,000 as just a guess?

This is a big problem because that stolen prosperity would be able to fund a lot of programs that are already promised. 

Well because starting with the baby boomers and passing this philosophy on to successive generations we started ridiculing, mocking, criminalizing and villainizing that things that gave us such a luxurious standard of living - Capitalism, freedom, liberty and all that is America. 

You wanted social programs and "The Great Society"

You got it.

You wanted to help out the losers of society?

You got it.

You wanted to reward people for their idiotic mistakes?

You got it.

You wanted to lower standards so to save people's feelings?

You got it. 

But hey, a lot of great, high paying government jobs were created to write and monitor compliance with all the regulations that are choking the economy.  And 93% of the people filling those jobs vote Democrat* so it's all good, amirite?

* Hilary Clinton received 93% of the 2016 ballots cast in Washington, D.C.

Coronavirus data, and some cautious conclusions - and an apology to Aesop

Ignore the hype.  The data are not hype, and the hype is not data.  This is the most important thing to know about the Coronavirus:

This is the weekly US COVID deaths as reported by the CDC.  Even with the shift from "dying from COVID" to "dying with COVID" to "dying in the same Zip code as COVID" (like the Florida buy killed in a motorcycle accident whose fatality is included in the graph here), we see that deaths are way, way down and dropping further.  The data are clear on this.

This is the second most important thing to know about the Coronavirus:

This is the US All Cause Deaths.  You can see the annual spikes during the winter Flu season.  This year is definitely not "just a bad flu season" - deaths are significantly up from two years ago (which was a bad flu season).  The dashed line is all cause deaths minus Coronavirus deaths but again you see the deaths dropping.  The last three dots are most recent reports which are incomplete and which will be adjusted upwards in the future as it can take 8 weeks for all deaths to be reported.

Data are from here, which is worth a read in full.

And this is where I was wrong and Aesop was right - this was not just a bad flu.  The data are crystal clear on that.

However, the data did not justify shutting down the economy.  The data did not justify preventing you from saying goodbye to Grandma on her deathbed.  The data did not justify prohibiting public gatherings at funerals.  The data did not justify shutting down Sunday church.  The data did not justify shutting down the schools.  The data don't justify mandatory mask wearing.  The data don't justify the hype.

The data do justify intelligent measures to protect vulnerable populations.  The data do justify additional health care resources to make sure the hospitals - and their employees - do not get overloaded.  There are probably a couple others that could go here, but I'd be pretty surprised if it's more than a couple others.

But we are not governed by Philosopher Kings, which means that we get the worst of both worlds - we get forced infection of vulnerable populations, we have great stress in the health care system, and we have Autocratic tyranny that would have had the Russian Tsars scribbling notes.

In a younger and more vigorous age of this Republic, the politicians who imposed all this useless misery on the population would have been horsewhipped through the public square.  The data don't say that, but we can figure that out all on our own.

Your must-read post of the day

It's over at Aesop's.  Go.  Read.

Plus (because he hasn't spent his entire career in healthcare, but in film and audio as well) you have a great film clip and a great song to illustrate his post.  Which is 100% correct.

He and I have been jousting over the quality of the CDC virus database (and quite frankly, nobody wins that, at least for 3-4 weeks or more).  But he is one wicked smaht bastid, and you should go get you there for this post.  And probably his others which - while I probably don't agree 100% on all of them - are all wicked smaht.

And oh by the way, Aesop - I wouldn't mind being a Rooftop Korean with you, if it came down to it.  I'm not the world's best shot, but I can ring the gong all day at 200 yards with my Enfield ...

And in the spirit of his posts, and describing what he's talking about, here's John Mellencamp bringing the Coronavirus situation home:



And even though I like to try to keep this place rated PG, this is indisputable:

30 Million unemployed

Great job, CDC.  Told ya.

And the fun is only just begun: Federal Reserve says job losses could top 47 Million.

Tagged "Government cockups" because, well, you know.

How the CDC will destroy American healthcare

The CDC has a track record of incompetence - a better example of Pournelle's Iron Law of Bureaucracy is hard to imagine:

Pournelle's Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people":

 First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration. 

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

So while CDC doubtless has many employees dedicated to controlling disease, the organization is run by people motivated by typical Washington politicking.  That is a very plausible explanation of why CDC looks like it is trying to destroy the American health care system.

Consider:

• The CDC was the source of the estimates of Wuhan Flu death count (6.6M) that were used to shut down the American economy, and
• The CDC was the source of the rationale for the shutdown - slow the spread of the disease in order to reduce the maximum number of ICU patients to a level that would not cause the collapse of the health care system.

It looks like Mission Accomplished.  Hospitals are empty, Hospital ships are leaving the ports they were to serve due to lack of patients, doctors and nurses are being laid off.  The capacity of the health care system has clearly been preserved from the Wuhan virus.

But it has not been preserved from the CDC.  Where are the recommendations from CDC to allow elective surgeries, reopening closed hospital wings and saving hospitals from bankruptcy?  The World wonders.  Hospitals from sea to sea are in precarious financial straits, due to the lockdown that was explicitly justified by CDC to prevent the same hospitals from collapsing.

But there's more, so much more.  Consider:

• Most people in the United States get health insurance as a benefit from their employer.
• By the end of this week, probably 30M people will have been made unemployed due to CDC's recommended economic lockdown.
• The average number of people in the typical US household is 2.5.  Taking an estimated 1.5 employed workers per household, this means that by Friday probably 50M people will lack health insurance.

But those 50M people will need health care.  They just won't be able to pay for it.  Hospitals must (by law) provide services anyway, and so hospitals that are already in financial trouble due to CDC's recommended lockdown will face a flood of additional non-paying patients.

Oops.

Now none of this is controversial, although no doubt CDC would engage in a lot of ass covering to try to cover up all their past fear mongering.  The implications are inescapable - the cure for American healthcare is worse than the disease.  CDC is burning the village in order to save it.

Relax, we're doctors ...

We don't even need to go into motivations, because they're entirely irrelevant.  It doesn't matter whether CDC is doing this because they're Deep Staters who hate Donald Trump and want to take him down, or whether they see this as an opportunity to collapse the health care system and have the Government take it over, or whether they're just a bunch of incompetent nincompoops who rose to control the agency due to superior bureaucratic infighting skills - none of this matters.  What matters is that CDC's recommendation is causing what is clearly a worse outcome for this country than just letting nature take its course.

Ronnie Dunn - Cost Of Livin'

We're only tracking half the cost of the Wuhan Virus.  We have meticulous (if somewhat suspect) data on the number of deaths; we have increasingly inaccurate data on the number of sick and the number of recovered.  There are big gaps in the data, but data are being collected and published.

But this is only half the story.  The country has been locked down, and a million people lose their jobs each day.  The Press is full of stories about people who are sick and their sufferings.  But when it comes to the unemployed Stalin's dictum is on full display: One death is a tragedy; a million deaths is a statistic.

All we are told about the unemployed are the statistics - that hides the human face.  This song shows it.



Cost of Livin' (Songwriters: Ronnie Dunn, Phillip Coleman)

Everythin' to know about me
Is written on this page
A number you can reach me
My social and my age

Yes, I served in the army
It's where I learned to shoot
Eighteen months in the desert
Pourin' sand out of my boots

No, I've never been convicted of a crime
I could start this job at any time

I got a strong back, steel toes
I rarely call in sick, a good truck
What I don't know I catch on real quick
I work weekends, if I have to, nights and holidays

Give you forty and then some
Whatever it takes
Four dollars and change at the pump
The cost of livin's high and goin' up

I put Robbert down as a reference
He's known me all my life
We attend the same church
He introduced me to my wife

I gave my last job everythin'
Before it headed south
Took the shoes off of my children's feet
Food out of their mouths

Yesterday my folks offered to help
But they're barely gettin' by themselves

I got a strong back, steel toes
I rarely call in sick, a good truck
What I don't know I catch on real quick
I work weekends, if I have to, nights and holidays

Give you forty and then some
Whatever it takes
Three dollars and change at the pump
The cost of livin's high and goin' up

I'm sure a hundred others have applied
But rumor has it you're only takin' five

I got a strong back, steel toes
I'm handy with a wrench
There's nothin' I can't drive
There's nothin' I can't fix

I work sunup to sundown
Ain't too proud to sweep the floors
The bank has started callin'
And the wolves are at my door

Four dollars and change at the pump
The cost of livin's high and goin' up

Nobody will argue your virus math

They will argue your virus assumptions.

To err is human; to really foul things up you need a computer.

- Unknown, from the 1960s

This is the problem with the virus models (as with all models).  The math is the easiest part, and modeling software libraries are pretty thoroughly debugged.  The crank and the gears that turn are doing what they're supposed to do.

But if the input data is wonky, then the output will never be accurate.  Some of the inaccuracies are unescapable, for example delays in reporting deaths.  Different countries have different reporting policies and cadences, and there's really not much that can be done about that.  After all, the data are the data.  But some really important data are poorly known, or not known at all:

• True infection rate can only be known with mass testing of the population.  You don't need to test everyone, but you do need to test a statistically significant sample.  For the US, we're talking about hundreds of thousands or even millions of people.  Nobody is working on this, so we simply can't know what the infection rate really is.  several small scale studies strongly suggest that it is much higher - perhaps ten times or more higher - than is being reported.
• The recovery rate can only be known with mass testing of the population.  We are seeing that many people who catch the virus are asymptomatic; since they don't feel (or act) sick, they don't get care and so are not included in the total number of infected.  Again. small scale studies suggest pretty strongly that the recovery rate is much higher than is being reported.
• The number of deaths includes a wide range of victims, some of which almost certainly were not killed by the virus - rather, they were killed by other ailments ("co-morbidities") but also had the virus along for the ride.  Right now, all of these are included in the virus death rate, overstating its lethality by an unknown amount.
• Since lockdowns vary by geography and by what is allowed or prohibited, tracking the result of the lockdowns is fiendishly hard, and I haven't seen anything that is even trying.  We're told that "we're all in this together" and "we're making a difference" but there's no data about how much - if at all.

Put all of these together and it's simply impossible to provide good inputs into any model.  This is basically a game of guessing, and the result has been a series of model re-works that dropped the projected death toll from 6+M to 500,000 to 120,000 to now (maybe) 60,000.

Which is about what the death toll from seasonal flu is.  I'm not saying that this new virus is no more lethal than the flu; I'm saying that the people running the models are saying that maybe this is the case.  Those models have been wildly inaccurate repeatedly in the past, so take the latest model results with a huge grain of salt.

But governments are sitting on top of increasingly restive populations.  The populations have very good reason to be restive - the world economy has taken probably a $10T (that's Trillion) hit.  That hit has been very unevenly distributed.  In economic terms this is a very regressive tax targeting the poor and working classes.  Ask Louis XVI or Czar Nicholas II how that turned out.

And so very interesting things are happening to the data.  Very interesting things indeed:

Last week we saw that we went from dying from, to dying with, to just plain dying. Even people who haven’t been tested are now classed as dying from coronavirus. This is juicing the numbers in the direction of the models. Whether this was intentional, to avoid confessing to the most colossal and costly blown forecast of all time, or this is more panicked over-reaction, I’ll let you decide. Either way, they did get a boost in the numbers from the re-definitions, which we’ll see below.  

We saw yesterday that counting who dies of flu or any virus is not so straightforward, that it’s always the result of a statistical model. Every single flu death is not trumpeted from every media organ for months on end, but if they were, then we’d have counts similar to the way we have counts for coronavirus.  

Something else strange in the numbers. Remember how every week I’d cut and paste the CDC’s update flu hospitalization and death estimates? Can’t do it anymore, because why? Because the CDC stopped reporting on them. This could be because of over-burdened government workers, or because flu deaths aren’t as sexy as coronavirus deaths (even though the totals are similar), or because something else is going on.

And it's not just here in the New World:

It isn’t only in the US where the numbers are looking funny. France, too: 

It’s already happening – France has stopped publishing the weekly mortality report in mid March – where (the lack of) excess mortality could readily be seen. Instead they created a new publication focused only on covid deaths.

Is this all political ass covering by the health services?  Beats me.  Certainly it looks like the motivation exists.  Remember, the reason for all this government-imposed misery was to protect the health care services from becoming overwhelmed.  Well, we're seeing hospital ships with no patients and Army field hospitals being demobilized because there are no patients and the Javits Center (which had been turned into a makeshift hospital) empty and there are doctors and nurses being laid off all over the country.  And there are very odd things happening to the data.

But juicing the numbers can only go so far:

The temptation to juice coronavirus deaths must be overwhelming! The models promised unimaginably huge numbers. We haven’t come anywhere close to them. Millions and millions and millions of lives the world over have been ruined, with more ruin on the way, as the result of trusting expert models. They have to find a way to bring actual numbers in line with models. 

They’re running out of options, though. Dying with from dying from was a good move, and we saw it immediately pop up in the death counts. Dying with suspicion from dying with was also clever enough, and we saw that, too. 

What else is left, though? Only one thing. 

If “dying from” is defined as dying with presence of COVID-19 antibodies, then once we reach herd immunity, which it seems is close in many places, then about 80% of all deaths can be classified as coronavirus deaths.

So where is the crisis?  It's entirely fair to ask this question when literally everything we were told about this "pandemic" has turned out to be somewhere between overblown and flat out wrong.  And quite frankly, not unusual in recent historical terms:

As with the Global Warming hysteria, if the science were as settled as we're being told there would be data falling off of trees confirming everything.  Instead, everywhere we look we see data that calls the projections into question.  If we want science-based public policy then its reasonable to ask for, well, science-based public policy.

Two days ago I posted that we need to re-open the economy.  We're seeing a million people a day lose their jobs, so that's 2 Million more people without a paycheck, just since Sunday.  It may be for nothing: there's actual data that suggests that the lockdown doesn't do much, if anything: Sweden hasn't implemented a lockdown at all and their death curve looks basically identical to the USA's:

The caveat about the problems with the data is a good one, and echoes what I wrote here.  But the data are what we have, and if the lockdown - and the 25M newly unemployed - were actually effective you'd think you'd see something.  You don't.

Enough, all ready.  There is simply no rational, science-based justification to keep the lockdowns in place anymore.  We see this recognized by Governors (who are starting to end the lockdown) and by the population in general (who are starting to willfully violate the lockdown).  Everybody but the "experts" is starting to recognize this, and the "experts" may be refusing to recognize it so that they don't get blamed

The CPC Virus models are total crap

"Experts" told us that he had to pull the master breaker switch on the economy because the Fung Flu virus was so damn infectious that a huge portion of the population would catch it.  "Experts" told us that most of those infected would end up in the ER, turning American health care into a scene from the Black Death.  "Experts" told us that millions would die and we needed to pull the dam switch RIGHT DAMN NOW!!!!11!!!eleventy!!!!!!!

Well, never mind:

The Centers for Disease Control and Prevention is now “actively looking into” results from universal COVID-19 testing at Pine Street Inn homeless shelter.

The broad-scale testing took place at the shelter in Boston’s South End a week and a half ago because of a small cluster of cases there.

Of the 397 people tested, 146 people tested positive. Not a single one had any symptoms.

My emphasis.

My goodness, whatever would we do without fancy computer models?  Next you'll tell me that the Earth will become uninhabitable unless we end use of fossil fuels and turn the everything over to a Socialist World Government ....

This would all be light hearted mockery if it weren't for a 600% increase in calls to the Suicide Prevention hotlines.  The company I work for supplies software that the National Suicide Prevention Hotline is using to rapidly scale work-from-home to handle the load.  It's cool that this can be done, but it seriously stinks that it has to be done.

At this point, the projections that were the justification for shutting down the economy are worthless.  Entirely worthless.  Nobody has a basis for the shutdown that's more than having a bad feeling.



That's not a justification, that's a cliché.