Kejda Gjermani her miscellaneous musings

12Jul/100

The Problem of Economic Calculation

Census 2010This morning, while riding the express train to work, I stood facing one of those ubiquitous census ads and, for the first time, began considering its wording in earnest. I am sure you’ve seen it too: “If we don’t know how many schoolchildren we have, how can we know how many schools to build? … If we don’t know how many people we have, how can we know how many hospitals to build?” And so on and so forth.

That the government should still pose such questions—innocent as they are—suggests that the so-called problem of economic calculation afflicts the endeavors of central planners today no less than it did in the 1920s, when Ludwig Von Mises first set it forth. Not only that, but the government has also failed to find tools more efficacious in tackling this problem than the nationwide survey—that is, the census. And what a crude device that is!

For one thing, any information collected through it soon becomes outdated, since the census is taken at intervals of no less than 10 years, during which time a lot can happen in terms of economic development and population shifts. For another, delivering the surveys to every doorstep in the country, entreating the citizens to fill them out, and ensuring that a tolerable number of them actually do so amounts to an onerous affair not cheap to orchestrate—as is plainly evinced by the handsome budget of $11.3 billion allocated to the accomplishment thereof. And for all the pains that go into collecting it, this information winds up reaching the government incomplete and only approximately accurate—the proportion of falsified surveys that alloy the census results being a matter of contentious and largely partisan debate.

Read the rest at Commentary.

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12Oct/0715

Jeffrey Sachs sucks: “Poverty Trap” debunked

I was peripherally acquainted with Jeffrey Sachs' work from a while ago, and didn't think much of it. Nothing seemed to distinguish him from the many misguided Keynesians who dominate the public arena of mainstream economics by default nowadays. But while all purist free-enterprise champions are alike in what they advocate, I guess every dull little statist economist is a statist in his/her own way, with a unique master plan for development, each involving creative offshoots of applied Communism, some more deranged than others.

Sachs' uniqueness doesn't end there: He is not your run-of-the-mill statist economist always on the perpetual brink of choking on his own triviality. He knows what he is and he certainly knows what he is doing. Unlike most laughable economists who sound so stupid only because they cannot see how overly seriously they take themselves, Jeffrey Sachs is pure self-aware evil!

Fascista Sachs

In his interview with Steven Colbert he sounds like a crook and a charlatan. Listen to him talk, pay attention to his smile, the look on his face, and tell me if you don't see a man who knows he is lying on the spot. There is nothing misguided about him, he is fully premeditated in what he is doing.

Hanging out with Bono and Angelina Jolie has got to make Sachs second-handedly feel like a superstar, and second-hand glory is more then enough for a pathetic authoritarian creature to get off on. He knows he will be long dead before his voodoo economics falls out of fashion so he's completely safe and comfortable riding the wave of popularity propelled by the cumulative mediocrity of Oprah-worshiping drones in particular, and the entire ecosystem of leftist-strife spewers in general. Good for him!economist rock-star

Note in the Colbert interview how cheaply he is pandering to the moonbat base by spewing venom on the military and W. Bush. Sachs is befuddled at how "the President" has allotted to the crusade against malaria (read: handouts to Africa) for the next five years, the measly equivalent of the daily budget of the military. That makes no sense "in his book/s", since the military is just killing people and not helping anyone, whereas Sachs could save the world with that cash! Oh brother... They just have trouble figuring out anything at all in Washington these days. Instead of signing Sachs a blank check, they give him a laughable $1.5 billion to work with.

If only "the President" were a feudal lord free to piss the spoils from his taxpayer vassals on grandiose personal-charity events to his heart's content! W. Bush is certainly under no obligation to give any money at all; it is in fact arguable that he is under an implicit constitutional obligation to not spend taxpayer money on handouts to other countries, which generally end up benefiting only their dictators and some distinguished ungrateful parasites like Sachs, whose genial administrative plans for that money are sure to entail much more than just a multi-billion-dollar mosquito-net shopping-spree.

Jollysachs

It is obvious to me that Jeffrey Sachs is a conman, but it might not be obvious to you, so I will stop pushing on that front because at the end of the day it's not so relevant whether he is a crook or just a misguided moron, but rather whether his economics adds up. So let's turn to his economic ideas and consider them on their own merits. Everything Jeffrey Sachs has said (and I expect him to ever have to say) about development pivots around the "poverty trap", a conjecture whose gist can be safely summarized as follows:

Poor countries are so poor today because they started out so poor for one reason or another, that their people cannot even minimally afford to save today to accumulate capital for investment. And it takes a critical mass of investment to achieve any tangible results in development, since for example, a bridge constructed only half-way through is of no use, but once it is fully built, it will rock the world! But the dirt-poor subSaharan Africans cannot afford to save for projects that will deliver results the day after tomorrow: they would starve by tomorrow if they cut their consumption every-so-slightly today to give rise to investment! So you see, they're stuck in a Poverty Trap, and we the West need to give them just enough aid for them to make it through the initial hump, to get out of the trap. They'd be all set from there on.

This is the focal point of Sachs' argument for development. Please watch carefully while this snotty undergrad blasts off Mr. Smarmy Harvard PhD with a single unpretentious quasi-rhetorical question:

If the key to development is escaping this poverty trap, then wouldn't foreign direct investment be perfectly capable of doing the job instead of foreign aid?

The opposite of Sachs' booga-booga poverty crap should normally be observed: countries starting out at the very bottom of the developmental ladder for "one reason or another" should grow at rates much faster than normal due to the proverbial catch-up effects. Investment in India returns a whooping 19% on average! Countries too poor to save for themselves don't need to: rich foreigners can supply the capital, the natives only have to freely accommodate it. Everybody wins, and no Big Plan is needed, just a native government that sufficiently tolerates free enterprise.

But there is no foreign investment going on in Africa. Investors won't inject their funds into those countries because the volatility of institutional thuggery that doesn't give a shit about its citizens' life, liberty, and property, let alone the property of foreign investors, is not conducive to profit-generation. Africa doesn't need any handouts: they just fatten its dictators, cripple whatever free independent spirit its people have, give parasitic jobs to an army of bureaucrats, and hold these countries back from moving towards freedom and self-reliance. What Africa desperately needs is government, of the kind that will let its people be. The best thing that could ever happen to the continent would be for America to colonize it and govern it according to its constitution for a century or so.

But Jeffrey Sachs urges governments to throw money to a cause which no private investor is willing to back. There would be no returns from it, no end to poverty through it, and no end to it, period... just handouts after handouts after handouts. He knows it too, if you read between the lines he is calling it what it is in so many words: perpetual charity.

And being the authoritarian cock that he is, he won't stop at urging people to donate individually and privately. His great cause, his Big Plan is larger than life: not only private investors won't walk the walk, but even private philanthropists will not give enough to satiate Sachs. The Government is his only hope, the only agent rich and careless enough to finance his Big Scheme. And despite receiving insane amounts of taxpayer money, he yet bites the fat hand feeding him, complaining that the US government won't just give him any number he fancies. Every cent that he does receive is taken by force, since he has not been able to raise it voluntarily through cheesy U2 concerts, private charity, and private investment combined. It's a $1.5 billion no one else but the government would give him, and it's still not enough, it's never enough.

BonoSachsJeffrey Sachs makes me sick.

I rest my case...

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16Aug/070

A Quasi-Repenting Liberal’s Beautiful Rant: The American Left’s Silly Victim Complex

This post is so impressive that I would feel compelled to reproduce it in its entirety if that was cool, but it's not. so here's the link to the full thing. While the author, Matt Taibbi, doesn't seem to have any good solutions to the problems he himself brings up about Liberalism (perhaps because he is still too invested in it), his exposé is nevertheless very relevant:

...The American left has turned into a skittish, hysterical old lady, one who defiantly insists on living in the past, is easily mesmerized by half-baked pseudo-intellectual nonsense, and quick to run from anything like real conflict or responsibility.alt

It shies away from hardcore economic issues but howls endlessly about anything that sounds like a free-speech controversy, shrieking about the notorious bugbears of the post-9/11 “police state” (the Patriot Act, Total Information Awareness, CARNIVORE, etc.) in a way that reveals unmistakably, to those who are paying close attention, a not-so-secret desire to be relevant and threatening enough to warrant the extralegal attention of the FBI. It sells scads of Che t-shirts ($20 at the International ANSWER online store) and has a perfected a high-handed tone of moralistic finger-wagging, but its organizational capacity is almost nil. It says a lot, but does very little.

The sad truth is that if the FBI really is following anyone on the American left, it is engaging in a huge waste of time and personnel. No matter what it claims for a self-image, in reality it’s the saddest collection of cowering, ineffectual ninnies ever assembled under one banner on God’s green earth. And its ugly little secret is that it really doesn’t mind being in the position it’s in – politically irrelevant and permanently relegated to the sidelines, tucked into its cozy little cottage industry of polysyllabic, ivory tower criticism. When you get right down to it, the American left is basically just a noisy Upper West side cocktail party for the college-graduate class.

Here’s the real problem with American liberalism: there is no such thing, not really. What we call American liberalism is really a kind of genetic mutant, a Frankenstein’s monster of incongruous parts – a fat, affluent, overeducated New York/Washington head crudely screwed onto the withering corpse of the vanishing middle-American manufacturing class.

The people who are the public voice of American liberalism rarely have any real connection to the ordinary working people whose interests they putatively champion. They tend instead to be well-off, college-educated yuppies from California or the East Coast, and hard as they try to worry about food stamps or veterans’ rights or securing federal assistance for heating oil bills, they invariably gravitate instead to things that actually matter to them – like the slick Al Gore documentary on global warming, or the “All Things Considered” interview on NPR with the British author of Revolutionary Chinese Cookbook.

alt

Another dirty little secret of the left: at least when it comes to per-capita income, those interminable right-wing criticisms about liberals being “elitists” are actually true. According to a 2004 Pew report, Americans who self-identify as liberals have an average annual income of $71,000 – the highest-grossing political category in America. They’re also the best-educated class, with over one in four being post-graduates.

What makes the American left silly? Four pimply college students wearing I READ BANNED BOOKS t-shirts are taking up a collection to agitate for dolphin-safe tuna... Things that in a vacuum should be logical impossibilities are frighteningly common in lefty political scenes. The word “oppression” escaping, for any reason, the mouths of kids whose parents are paying 20 grand for them to go to private colleges. Academics in Priuses using the word “Amerika.” Ebonics, Fanetiks, and other such insane institutional manifestations of white guilt. Combat berets. Combat berets in conjunction with designer coffees. Combat berets in conjunction with designer coffees consumed at leisure in between conversational comparisons of America to Nazi Germany.

We all know where this stuff comes from. Anyone who’s ever been to a lefty political meeting knows the deal – the problem is the “spirit of inclusiveness” stretched to the limits of absurdity. The post-sixties dogma that everyone’s viewpoint is legitimate, everyone‘s choice about anything (lifestyle, gender, ethnicity, even class) is valid, that’s now so totally ingrained that at every single meeting, every time some yutz gets up and starts rambling about anything, no matter how ridiculous, no one ever tells him to shut the fuck up. Next thing you know, you’ve got guys on stilts wearing mime makeup and Cat-in-the-Hat striped top-hats leading a half-million people at an anti-war rally. Why is that guy there? Because no one told him that war is a matter of life and death and that he should leave his fucking stilts at home.

Then there’s the tone problem. A hell of a lot of what the left does these days is tediously lecture middle America about how wrong it is, loudly snorting at a stubbornly unchanging litany of Republican villains. There’s a weirdly indulgent tone to all of this Bush-bashing that goes on in lefty media, a tone that’s not only annoyingly predictable in its pervasiveness, but a turnoff to people who might have tuned in to that channel in search of something else.

But to me the biggest problem with American liberalism is that it hasn’t found a new legend for itself, one to replace the old one, which is more and more often no longer relevant. I’ve got no problem with long hair and weed and kids playing “Imagine” on acoustic guitars at peace marches. But we often make the mistake of thinking that the “revolution” of the sixties is something that rightly should continue on to today. American college types don’t have to fight for shit anymore. Remember the Beastie Boys’ Licensed to Ill album? Remember that song “Fight for Your Right to Party”? Well, people, that song was a joke. So was “We’re Not Gonna Take It” and “And the Cradle Will Rock.” The only thing American college kids have left to fight for are the royalties for their myriad appearances in Girls Gone Wild videos. Which is why they look ridiculous parading around at peace protests in the guise of hapless victims and subjects of the Amerikan neo-Reich. Rich liberals protesting the establishment is absurd because they are the establishment; they’re just too embarrassed to admit it.

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