Archive for May, 2009

Best Line of the Week: Not-So-True Conservatives

May 25th, 2009 No comments

Okay, so the week happened to be more than two years ago. But it’s the best line of my week:

The old formulation defined conservatism as the desire to protect traditional values from the intrusion of big government; the new one seeks to promote traditional values through the intrusion of big government.

“More Investment Needed!” Oh, Really?

May 9th, 2009 No comments

Following up on posts here, here, and here questioning the supply-side orthodoxy that more money for the rich results in more investment, hence prosperity for all (see the long-discredited Say’s Law), I give you this (click for source):

Derivatives and Capital Formation

Between 2003 and 2008, US gross fixed capital increased by about 25 percent, a reasonable number during an economic expansion, but hardly a boom. During the same five-year period, the global amount of over-the-counter (OTC) derivatives increased by 300 percent.

Those “creative” investment vehicles didn’t really increase the national (or global) wealth–its capital stock. At best they improved the pricing mechanism of the markets a wee bit, at the margins. (But since they mispriced risk so egregiously, even this is questionable.)

As James Livingston has pointed out, when too much money goes up the ladder, there simply aren’t enough productive investments available for that money (because there’s not enough money and spending down the ladder to make those productive enterprises profitable). So rich people have no option but to resort to…gambling.

We need a healthy financial sector to support productive enterprises–one that is much smaller relative to the economy than it was in recent years. And we need money and enterprise circulating in the lower tiers to generate prosperity for all—including the rich.

The American President: Why IQ Matters

May 6th, 2009 2 comments

In a recent post I pointed out that Humans are Pathologically Nuts. In particular they’re forever playing obvious win-win games as if they were zero-sum or worse, and everybody loses as a result.

Now I come across this study (PDF) showing that there’s a significant correlation between lower IQ and that very type of irrational behavior.

Which leads me to ask: is it a good thing to have a smart president? The study doesn’t mention presidents. But it does show that smarter people act more rationally and reasonably.

1. They’re more patient when patience will yield superior outcomes.

2. They’re much better at choosing among different risky options–they’re more risk-averse when it makes sense to be, but they’re also more likely to take risks when the calculated outlook is good.

3. They’re better at choosing among short-term vs. long-term benefits–factoring time into the considerations of pro and con to achieve the best results.

4. They’re more consistent in their decisions–they don’t jump all over the place when the conditions are largely the same, or choose “no” when conditions are even more favorable than for a previous “yes.”

5. They’re more likely to persevere in a job when quitting has a big penalty.

6. They have “higher social awareness and a greater tendency to be cooperative in a strategic setting.”

7. They “more accurately forecast others’ behavior and differentiate their behavior as a second mover more strongly depending on the first-mover’s choice.” IOW, they’re superior Machiavels in zero-sum games, and (see #6) they also win more of the win-win games–along with the people they’re playing “against.”

Which president does this sound like? Which previous president, and which ramblin’ ‘n gamblin’ recent (vice-)presidential candidate does this not sound like?

Before you respond, let me put a few things out of the way.

Yes: smart people make unreasonable, irrational, ill-considered, and stupid decisions. Frequently. The point is that (according to this study) they do it less frequently. Save your stamp.

Yes: The pointy-headed intellectual cliché has justifiable legs. (Clichés are only clichés because they’re true…) I have almost no patience, for instance, for the post-structuralist “Theory” school of academe that the Right is also so keen to vilify. Which means…we shouldn’t elect those types. Next?

Yes: Being really smart is not a sufficient condition for a great president. I’m saying that it is a necessary condition. Anything else?

Yes: “IQ” is a kind of tricky thing to define. And there are many (other) mental skills and abilities. (Calling them “intelligences” instead of “talents” or whatever does not seem to be useful or clarifying.) But the bottom line is, some people are smarter than others. Some are way smarter. Anyone who claims otherwise is just being…stupid. Can we move on now?

What I am mainly responding to here are the criteria that many use to judge a candidate or president: “(s)he’s like me”; “(s)he can relate to my problems”; “(s)he’s not one of the supposedly brainy types who got us into all this.” And etc.

I’m not the first to ask: Who–if they’re a fairly normal (read: mediocre) person like me–would possibly want a president like themselves? I want an extraordinary president. In particular, I want one who is far less subject to the manifold rational failings that human flesh is heir to.

In other words: Character. Judgment. Temperament. And yes: Brains.

Religious “Indoctrination”?

May 3rd, 2009 No comments

I am really confused by Charles Blow’s confusion in the opening paragraph of his latest column:

…most children raised unaffiliated with a religion later chose to join one. Indoctrination be damned. By contrast, only 14 percent of those raised Catholic and 13 percent of those raised Protestant later became unaffiliated.

So kids raised unaffiliated feel free and even inclined to join a religion if they want to. Those raised religious don’t show similar independence of mind.

And this is supposed to prove that religions don’t engage in (effective) indoctrination?

If he’s trying to prove that religions are good because lots of unaffiliated people like to join them, he really should consider the number-one finding from the Pew survey he’s citing:

The category of people who are unaffiliated with any particular religion has grown more rapidly than any other religious group in recent decades. According to the 2007 Landscape Survey, 16% of American adults say they are currently unaffiliated with any particular religion, compared with only 7% who were raised unaffiliated.

By Blow’s (unstated) reasoning, being unaffiliated is good because lots of people are becoming unaffiliated.

I don’t think that’s what he was trying to say. But in any case, I would suggest the causation is opposite.