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Draining the swamp - Thank you Donald Trump

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Robert Tulip

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Re: Draining the swamp - Thank you Donald Trump

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DWill wrote:No one's self reliance is harmed by having motor vehicle departments, public works departments, police and fire departments, the military, and many others of which libertarians would quickly feel the loss if defunding occurred.
Yes, these are essential services, but the problem is the steady slow drift into debt and dependency. It is like obesity; no one meal makes you fat, but the overall lack of self-control adds up over time, hardening the arteries, slowing you down, sapping your energy and increasing the risk of heart attack and cancer and diabetes and dementia. Exercise and diet are difficult but necessary, and when you have good habits it is easier to keep them. So too with government, a lean and efficient public sector creates space for an energetic economy. The military may be the area of government with the greatest potential for budget cuts. A good entry point is https://en.wikipedia.org/wiki/United_St ... ral_budget. We have the same problem in Australia, an electorate unwilling to pay for government and a growing proportion of people dependent on the public dole.
DWill wrote: These public services are just about as likely to be insufficiently funded as bloated with waste; you just can't say except in individual instances.
Government services should be prioritised by rigorous cost-benefit analysis. That is not possible in a plutocracy.
DWill wrote: What you are saying has "taken hold" is too much public sector social spending. I don't know what standard should be set in terms of percentage of total public sector spending going to what is often derisively called welfare. According to a wikipedia chart, the U.S. spends 44% of GDP through the public sphere, with 19% of that being social spending (about the same as Australia's). That figure is not particularly high in world terms. I would hope that the level of this spending in any democratic country reflects the will of the people. If it does, I don't see much to complain about.
I am an optimist about the potential for technology to drive growth, but that leaves precious little room to cope with crisis. Times of plenty should be used to store up surplus, not steal from the grandchildren’s inheritance. The problem with the popular will as the criterion of policy is that bad policy can be popular. And the risk that creates down the track is a difficult crisis.
DWill wrote: Your own ideal would seem to be Singapore, with low public sector spending and a low percentage of that going to social spending.
Yes, I think Lee Kuan Yew is the greatest man of Asian history. Singapore has a series of lucky coincidences, with location on trade routes, diligent Chinese population, good British institutions and above all visionary strategic leadership. The best overseas aid program in world history was the help Mr Lee gave to Chairman Deng to reform China’s bureaucracy along capitalist lines.
DWill wrote: The U. S. really doesn't have much experience with strong nationalized education standards, so a ruling ideology producing herd mentality hasn't happened.
But herd mentality is the emerging tendency due to internet conformism, no-platforming, bubble worlds and increase in the size of government. Obviously the real herd mentality is in toilet countries like North Korea where everyone gets brainwashed. I am using that term because I have just read Demian by Hermann Hesse who identified herd mentality as a problem in Germany causing the First World War. It comes from Rousseau’s idea of the popular will.
DWill wrote:Herd mentality is anyway a term of some prejudice.
Yes, because a culture that promotes critical thinking and individuality will prosper more strongly than one valuing conformism where people are too timid to set their own agenda.
DWill wrote:British public schools (what we call private schools) reputedly turned out citizens with strong notions of duty to the country and high ethics, a kind of herd mentality, if you will. In fact any system of schooling should try to inculcate values and pass on an ideology to students.
No, you are using herd mentality incorrectly in this case. You do not get a herd of cats, you get a herd of cows. Herds follow the leader. The British Public School ethos cultivated self-reliance and independent critical thinking. The degree with the best job prospects in the UK is a first in classics.
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Re: Draining the swamp - Thank you Donald Trump

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Harry Marks wrote:
Robert Tulip wrote:I am not at all saying there is no need for a public sector, but rather that an ideology of primacy of the public sector has taken hold, and its advance is crowding out the need for self-reliance.
You would have trouble substantiating that as well.
Robert Tulip wrote:The advance of the public sector appears in the willingness of the USA to run up public debt of twenty trillion dollars. Debt is a 'lifestyle residue', like carbon emissions.
Not all debts are residuals of the same forces. The public sector debt of the 2010s was called for by the drastic decline of private sector employment and the very serious decline of private sector investment. The real irony is that efforts at austerity were in fact responsible for slowing the closing of the deficit and thereby increasing the overall level of debt. The multiplier effect is a real and demonstrable result in economic conditions with high levels of unused resources.

The largest increase in public spending during the Obama administration was for a shift in medical care costs from private burden on the sick and the urban hospitals to public burden. As forecast, this slowed the rate of growth of medical care costs in the US. If the public sector can manage a more efficient system than the private sector, and both theory and evidence argue that it does, then such a shift is a useful development.
Robert Tulip wrote:The burden of interest payment brings a vulnerability to risk.
Yet we do not castigate businesses who incur such risks to invest. Investment for the future requires borrowing. If the government can do that effectively, and spending during a serious recession is effective without knowing anything about what it is spent on, then it should.
Robert Tulip wrote:Even if the cause of debt is the imbalance of revenue and spending, the political system creates a demand for spending that undermines the fiscal resilience of the society, feeding expectation of growing public support that cannot be sustained.
Now we are in more difficult waters. Politics demands both more spending (including on defense) and less taxation. Negotiating the net balance is supposed to be the job of the budget committees of Congress, but they have had no real power since Gramm-Rudman expired in the second Bush administration, and before that did not make real decisions since the early Reagan years inaugurated budgeting by voodoo.

There is a simple rule for budgeting the public sector effectively, which is to balance the budget over the business cycle. This means deficits in times of recession (and slack) and surpluses in times of high growth. Since neither party has been able to resist the temptation to demagogue violations of this rule, the U.S. has had bad budgeting for more than half the years since the Carter Administration. On the other hand, the deviations from effective budgeting have not been all that bad, and if you are willing to accept a military that is twice the size needed, a social safety net that pays more to people with more income, and a health care sector more than 50% more expensive than in other industrialized countries, (https://en.wikipedia.org/wiki/List_of_c ... per_capita) we seem to be managing resources within the bounds of reason.
Robert Tulip wrote:Also, on climate change, there is an expectation it is something for governments to solve by taxing carbon.
No, a market for traded GHG permits would work just fine.
Robert Tulip wrote:Paradoxically, that attitude crowds out private investment in research and development of new technology, which the climate problem requires on a faster scale-up than the whole carbon tax emission reduction mentality of government can deliver.
I already know your line on this, but I am not going to let that stop me from pointing out that it is a pernicious lie. Incentives to reduce GHGs would accelerate, not crowd out, private investment in climate salvation.
Robert Tulip wrote:
Harry Marks wrote: leave half the population uneducated to encourage self-reliance.
Reducing the effective marginal tax rate on parents who choose to fund their children’s education would bring a shift from public to private schooling, which would increase overall education investment and free up state resources to lift the quality of the public sector while also giving teachers a better career path and salary.
Because education is a positional good, meaning that parents will pay more to get education that is better than others get than they will for the absolute quality level of it,
https://en.wikipedia.org/wiki/Positional_good
your prediction of improved quality is probably 180 degrees off. The result if secondary school were privatized would probably be close to the result of increased private university resources in the U.S. starting in the 80s, namely increased competition for high profile factors which add mainly to prestige, but neglect for the actual education process.

Furthermore, since the easiest input to demonstrate is education level of classmates' families, schools would compete to get the children of Ph.D.'s in and charge the other students extra for the privilege of going to school with them. While this might provide some satisfaction to Ph.D. earners who normally do not recoup the opportunity cost of their years of graduate school, it is hardly likely to lead to uplift of the overall society.
Robert Tulip wrote:In Australia at least, public schooling is the most unionised sector. This brings a level of teacher control of policy that has prevented competition, while also enabling a Gramscian ‘march through the institutions’ to indoctrinate children with progressive opinions.
It is always easier to complain about the things you don't like about a system than to demonstrate a case for an alternative. Introducing competition in the U.S. has produced a few cases of dramatic improvement (even fewer of which can be clearly shown to result from effects other than increased selectivity of students) and on balance no improvement in the areas where it was introduced. Private schools on average add no more value than public schools. As with medical care there is a huge barrier to the logic of market incentives, because the consumer is simply not in a position to assess the effectiveness of the producer. Not a single case of improvement attributable to competition has resulted in a business plan which can be scaled up for use in many other schools.
Robert Tulip wrote:The condemnation should be of the upward direction of government as a share of GDP.
All services have had an upward trend in their share of GDP. Education, government, medical care, transport, entertainment, retailing, and on and on. This is due to the higher level of productivity growth in goods, which can be standardized and mass produced much more easily. No one wants a society with government taking only 20 percent of GDP, as in pre-FDR nations, because today we can better afford the improved services that come from a government which produces scientific knowledge, effective support for the weaker elements, and social insurance over the lifetime.
Robert Tulip wrote:the question of whether the public or private sector is more fact based. Your examples imply that because business is not to be trusted on some things, such as pollution and product quality, we should support a steady increase in overall regulation, since only governments care about facts. The other side of that coin is that businesses require rigorous fiscal accountability that incentives close attention to facts, in ways that governments are shielded from by the absence of a profit motive for their investments.
Many government activities have been privatized or spun off as self-sustaining businesses. There is nothing wrong with requiring accountability in government. In fact government these days regulates other governmental institutions, with federal government watching over state activities and vice versa.

My point was not a claim that only governments care about facts, but rather that there are some types of facts businesses systematically ignore if they can, precisely because of their rigorous fiscal accountability. There is not a single case of self-policing corporations adopting a self-enforced code of conduct that protects less informed stakeholders. It's just not done.
Robert Tulip wrote:There is a good evidence base for the view that reducing the size of government is a public good. The key here is employment, that a job paid by profitable commerce has stronger sustainability and multiplier effects than a job paid from tax. Smaller government boosts jobs, trade and wealth at all levels.
Not in the evidence I have seen. A smaller military increases private growth, but infrastructure and education have as strong a multiplier as building private buildings.
Robert Tulip wrote:These ‘typical supporters’ of Sanders are led by people whose intellectual heritage is Marxist.
I don't think so, except in the very vague sense that your intellectual heritage is the right-wing conspiracies that gave us George Mason University and the John Birch Society, and democracy has the guillotine as its intellectual heritage.
Robert Tulip wrote:
Harry Marks wrote:when capital as a class is no longer providing value that the state cannot, their uselessness will be responded to appropriately.
Your comment implies the socialist idea that governments can do everything business can, only better.
Exactly the opposite. My use of "no longer" directly implies that capital has done great things that the public sector would not have, and probably could not have.
Robert Tulip wrote: the emergence of dominant urban elites who already have disproportionate influence on public policy.
One of the odd effects of globalization has been to increase the income from "direction" of private sector enterprise. It is easy to show that the shift offshore of manufacturing has been linked to a concentration of headquarters functions in the industrialized countries. Those urban elites are much more likely to be in engineering or marketing than in government.
Robert Tulip wrote:There is much to be said for the values of belonging, loyalty, trust and faith that go hand in hand with living in a smaller community. Cities drive growth, but at social cost.
Agreed, but we are fairly clueless as to how to offset those social costs.
Robert Tulip wrote: You are hinting at a key issue here, that suburban voters don’t trust the Democrats to honour family values. And those voters see such values as more important than the policy dominance of big money in casting their votes.
That is clearly the case. Republicans lost the substantive issue of gay marriage by an overwhelming margin, and Democrats squandered the victory on an immediate push for restriction of any right to dissent from this decision. The same drama has played out repeatedly, with Democrats unable to settle for less than everything they think is right and just, making it very easy for right-wing scare-mongers to play on conservative fears.
Robert Tulip wrote: The risk is that the Republicans are just fraudulently scamming their base.
That train has left the station. There is no force for integrity left in the Republican party, as the tax bill scramble once again made clear. The GOP basically stopped confirming judicial nominations under Obama, and the courts are now being packed with party hacks to create a "deep state" the likes of which the U.S. has not seen since Southerners fought for racism from the Supreme Court. The pretense of making good policy for the entire nation has been thrown under so many buses it is no longer recognizable, and the party is now open about being donor-driven.
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Re: Draining the swamp - Thank you Donald Trump

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Every once in awhile I need to vent about Trump (the man who, according to their PM, just insulted Norway. Norway.) But I don't argue about him anymore. It's pointless. I'm content to sit back and watch him self-destruct.[/quote]

As he did before the election in 2016, no doubt.
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"according to their PM, just insulted Norway."

No, that is fake news. Norway Government declined to comment. If they have since weighed in to back up Haiti and North Korea I have not heard.
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Re: Draining the swamp - Thank you Donald Trump

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Robert Tulip wrote:society should work to minimise the level of government activity consistent with good regulation in order to foster a culture of private autonomy and freedom and initiative.
I'm no so sure these goals should dominate. At face value, they appear to be in lockstep with the more noble goal of collective well-being. But is that really the case? Do private autonomy, freedom, and initiative lead directly to maximizing the collective well-being of a society's citizens? I think it's more complex than that. Too much private autonomy and freedom can cause issues where the economy is red in tooth and claw. Collective well-being goes down as a result.
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Re: Draining the swamp - Thank you Donald Trump

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Robert Tulip wrote:"according to their PM, just insulted Norway."

No, that is fake news. Norway Government declined to comment. If they have since weighed in to back up Haiti and North Korea I have not heard.
You're right. The PM did not say this and I am guilty of spreading fake news. On the other hand, we are discussing Trump insulting Norway. Replace the name Trump with the name of any past president and see how it sounds.
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Re: Draining the swamp - Thank you Donald Trump

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Robert Tulip wrote:Yes, these are essential services, but the problem is the steady slow drift into debt and dependency. It is like obesity; no one meal makes you fat, but the overall lack of self-control adds up over time, hardening the arteries, slowing you down, sapping your energy and increasing the risk of heart attack and cancer and diabetes and dementia. Exercise and diet are difficult but necessary, and when you have good habits it is easier to keep them. So too with government, a lean and efficient public sector creates space for an energetic economy.
Not only are they essential, but they're not essential evils. Without them, the economy would actually lack energy. Nor do they generally increase debt, because most services we get are at the local and state level, funded by taxes. If the monies aren't sufficient, or the taxpayers don't want to pony up, the services will be cut. So the issue here is how much to tax citizens for services and how much governments need to pay their employees in order to get good ones and retain them. Jobs in government are usually prized for their better security and pay, in the low and middles ranges, compared to private sector jobs, but there is a low ceiling on public sector earnings. Employees doing CEO work won't be paid nearly as much as company CEOs.

As Harry has been saying with much more authority than I can, debt has a lot of beneficial uses. That applies both to us as individuals and to the national government.
The military may be the area of government with the greatest potential for budget cuts. A good entry point is https://en.wikipedia.org/wiki/United_St ... ral_budget.
I intend to look at that. I haven't been able to understand entirely the president's determination to increase the military while generally withdrawing from the world. It would seem to be an opportunity to save a great deal of money on defense.
We have the same problem in Australia, an electorate unwilling to pay for government and a growing proportion of people dependent on the public dole.

But is what you in Australia call the dole really the major drag on the budget? I take it that social security in Aus. is what we refer to here as welfare. Our Social Security doesn't correspond to the dole or welfare, because this retirement program is funded by worker contributions. What we have that qualifies as the dole are food stamps, aid to families with dependent children, and disability payments to people under age 62. The first two programs are restricted in terms of who can qualify and for how long. They don't consume more than a few percent of the federal budget (which still is a lot, admittedly). Disability is the program that has grown the fastest in the last 20 years and is quite expensive at about 5% of the federal budget. Then there is Medicaid, the insurance program for the poor, which almost rivals Medicare in cost. I simply don't see healthcare as truly a handout. In my mind it's not part of the dole, but now the federal government disagrees and wants to impose work requirements on the program.

So while the expenditures for welfare aren't trivial, compared to the mandatory spending on Social Security retirement and Medicare, they're not close. I think the reason we tend to focus on such costs has roots in our our social history, in which people not doing their share of work were strongly ostracized. Nobody likes freeriders. Such people are always very visible to us, whereas, especially in complex societies, other forms of freeriderism can be easily hidden. That is the case with welfare for the rich.
But herd mentality is the emerging tendency due to internet conformism, no-platforming, bubble worlds and increase in the size of government. Obviously the real herd mentality is in toilet countries like North Korea where everyone gets brainwashed. I am using that term because I have just read Demian by Hermann Hesse who identified herd mentality as a problem in Germany causing the First World War. It comes from Rousseau’s idea of the popular will.
Is herd mentality, then, following a leader blindly, as cows supposedly follow a lead cow? If so, I can see some limited usefulness in it. But otherwise I don't agree that in the sense of either popular will or conformism such a pejorative is justified. I'm very grateful for conformism when I get out on the highways and wish that we would conform more with the expectation to cast votes. I don't see the internet as creating conformism since it fractures us into so many separate communities.
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Re: Draining the swamp - Thank you Donald Trump

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Harry Marks wrote:The public sector debt of the 2010s was called for by the drastic decline of private sector employment and the very serious decline of private sector investment.
Just firstly, can I say how much I appreciate your courteous, informed, factual, patient, polite replies (mostly). I am interested in having my assumptions and claims challenged, to try to understand what is good and bad about the Trump phenomenon.

Whether the public debt of the 2010s was “called for” is exactly what is debatable. Of course those who incurred it say their decisions were necessary, but it seems equally possible that incurring this massive multi-trillion dollar debt was a big mistake, ratcheting up government role in the economy with significant harm and no good reason.
Harry Marks wrote: The real irony is that efforts at austerity were in fact responsible for slowing the closing of the deficit and thereby increasing the overall level of debt.
That is an argument that can equally be used to support the supply-side trickle-down economics of the Laffer Curve and Trump’s tax cuts. Finding the optimal point of tax that maximises revenue involves big macroeconomic assumptions about the feedback from increased economic activity.
Harry Marks wrote: The multiplier effect is a real and demonstrable result in economic conditions with high levels of unused resources.
Yes, but quantifying the multiplier is imprecise. My impression is that private investment has a bigger multiplier than public spending.
Harry Marks wrote:The largest increase in public spending during the Obama administration was for a shift in medical care costs from private burden on the sick and the urban hospitals to public burden. As forecast, this slowed the rate of growth of medical care costs in the US. If the public sector can manage a more efficient system than the private sector, and both theory and evidence argue that it does, then such a shift is a useful development.
The economics of health care seems to me one of the most devilishly wicked problems to explain. The US health funding system is broken and corrupted. It seems doctors exploit their position as a royal priesthood to extract vast sums of wealth from the populace. Changing that dysfunctional syndrome looks more like an exercise in cultural mythology than rational economics.
Harry Marks wrote:
Robert Tulip wrote:The burden of interest payment brings a vulnerability to risk.
Yet we do not castigate businesses who incur such risks to invest. Investment for the future requires borrowing. If the government can do that effectively, and spending during a serious recession is effective without knowing anything about what it is spent on, then it should.
I find these arguments misguided. The USA owes twenty trillion dollars, putting its debt into a risk category well above any private firm. Much government borrowing is for consumption, not prudent investment. So this alleged “investment” is not effective where it has no rate of return.

And the moral hazard of equating all recessionary countercyclical investment is extreme. In Australia that attitude got us a pile of useless unwanted school halls that were delivered well after the crisis that they responded to had passed, drastically increasing the national debt.
Harry Marks wrote:Politics demands both more spending (including on defense) and less taxation.
That dilemma suggests the USA may be headed for a military dictatorship when the numbers break, unless there is sensible effort to shift back to a sustainable fiscal position. Democratic politics corrupted by money makes sensible policy impossible.
Harry Marks wrote:There is a simple rule for budgeting the public sector effectively, which is to balance the budget over the business cycle. This means deficits in times of recession (and slack) and surpluses in times of high growth. Since neither party has been able to resist the temptation to demagogue violations of this rule, the U.S. has had bad budgeting for more than half the years since the Carter Administration.
With politics ruling out surpluses, the direction is towards gradual bankruptcy unless deficits are incurred by spending with a high rate of return.
Harry Marks wrote: On the other hand, the deviations from effective budgeting have not been all that bad, and if you are willing to accept a military that is twice the size needed, a social safety net that pays more to people with more income, and a health care sector more than 50% more expensive than in other industrialized countries, (https://en.wikipedia.org/wiki/List_of_c ... per_capita ) we seem to be managing resources within the bounds of reason.
Very funny Harry. A military double the needed size will look to justify its existence through further adventures.
Harry Marks wrote:a market for traded GHG permits would work just fine.
That attitude ignores the psychology and physics of climate change. The physics is that there is a security risk of climate collapse this century due to planetary fragility. A permit market cannot address that hair trigger peril. The psychology is that climate politics has become a rallying cry of the unity of the left, so anything proposed by the left will be opposed by the right. Climate needs a ‘Nixon in China’ moment to propose ideas from the right that do not involve a war on fossil fuels. My current focus in this regard is on Iron Salt Aerosol, treating global warming as a fixable chemical imbalance.
Harry Marks wrote:Incentives to reduce GHGs would accelerate, not crowd out, private investment in climate salvation.
As your President rightly pointed out, the Paris Accord addresses only 1% of the climate problem. The Paris emission reduction strategy is a dangerous and pernicious farce with focus on political conflict rather than the physics of global warming. The incentive based approaches such as emission trading are about as effective as pushing on a string, and have economic risks similar to the famous Dutch episode of tulipomania.
Harry Marks wrote: education is a positional good, meaning that parents will pay more to get education that is better than others get than they will for the absolute quality level of it,
https://en.wikipedia.org/wiki/Positional_good
I disagree. The underlying driver of private investment in education is skill formation, which is not just positional, and is far from zero sum.
Harry Marks wrote: your prediction of improved quality is probably 180 degrees off. The result if secondary school were privatized would probably be close to the result of increased private university resources in the U.S. starting in the 80s, namely increased competition for high profile factors which add mainly to prestige, but neglect for the actual education process.
I would like to see education funded by vouchers where private use is funded at about 70% of public use. That would cause a drift to private schooling. The cost of greater social segmentation is outweighed by the benefits of increasing the total education investment, enabling a per capita increase in public school funding, with higher teacher salaries and more personal focus on students, as well as a better teacher career path, school autonomy and better accountability, all leading to better system quality.
Harry Marks wrote: Private schools on average add no more value than public schools.
My impression is that studies on this have been biased by inadequate variable control. It is true that education quality can be hard to measure, but the bottom line is that parents would not make such sacrifices for their children’s schooling costs if they were not convinced they were getting a better product. In Australia a big part of the willingness to pay for private schooling is parental hostility to the group-think values within the public education system.
Harry Marks wrote:the consumer is simply not in a position to assess the effectiveness of the producer. Not a single case of improvement attributable to competition has resulted in a business plan which can be scaled up for use in many other schools.
I am not familiar enough with the US situation to comment on that specific claim, but in Australia teacher unions exercise effective political veto over measures to enhance school choice, and muddy the waters of policy debate through strident ideological campaigns.
Harry Marks wrote: All services have had an upward trend in their share of GDP. Education, government, medical care, transport, entertainment, retailing, and on and on. This is due to the higher level of productivity growth in goods, which can be standardized and mass produced much more easily. No one wants a society with government taking only 20 percent of GDP, as in pre-FDR nations, because today we can better afford the improved services that come from a government which produces scientific knowledge, effective support for the weaker elements, and social insurance over the lifetime.
That is a really interesting question, how the shift to the service economy is funded. My fear is that the claimed affordability is exaggerated, since much service activity is for consumption rather than production and investment. The economic distinction between consumption and investment can be difficult to define, but the problem is that especially in a sector like health there is a perverse incentive to classify expenditure as investment when its real economic rate of return is low or negative, due to the intangible economic value of improved health.

Health and welfare spending is justified by its social value, but it unfortunately looks to be an underlying driver of debt. To get debt under control requires a shift from consumption to investment. Just to raise these points about health funding illustrates how hideously difficult it is to reform government.
Harry Marks wrote: There is nothing wrong with requiring accountability in government.
Yes, but in practice the ability to dissemble makes achieving accountability very difficult. Transparency and accountability based on a strong public interest in evidence are the only remedies for corruption.
Harry Marks wrote: My point was not a claim that only governments care about facts, but rather that there are some types of facts businesses systematically ignore if they can, precisely because of their rigorous fiscal accountability. There is not a single case of self-policing corporations adopting a self-enforced code of conduct that protects less informed stakeholders. It's just not done.
Those externalities are the areas where regulation of commerce is essential to secure rule of law as the basis of prosperity. This debate on attitudes to facts started from your general assertion that “the private sector considers them the enemy.” I am glad to see you stepping back from that broad anti-business claim. It is too easy to allow such sloppy partisan language to go unchallenged and acquire status as assumed truth.
Harry Marks wrote: infrastructure and education have as strong a multiplier as building private buildings.
Yes, precisely because they are productive investments, whereas the political drivers for increased spending seem to be more in unproductive consumption.
Harry Marks wrote: when capital as a class is no longer providing value that the state cannot, their uselessness will be responded to appropriately…. My use of "no longer" directly implies that capital has done great things that the public sector would not have, and probably could not have.
Forgive me for inferring a Leninist tinge in your original comment. When a social class is perceived as superfluous many will see shades of Robespierre.
Harry Marks wrote:
Robert Tulip wrote: Cities drive growth, but at social cost.
Agreed, but we are fairly clueless as to how to offset those social costs.
This is actually where I think the conservative values of faith have much to offer. The indifference of secularity to ceremony and ritual has the perverse impacts of increasing anomie, isolation and depression. Confucius had a good line on the importance of ritual and ceremony http://confucius-1.com/teachings/ .
Harry Marks wrote:Republicans lost the substantive issue of gay marriage by an overwhelming margin, and Democrats squandered the victory on an immediate push for restriction of any right to dissent from this decision. The same drama has played out repeatedly, with Democrats unable to settle for less than everything they think is right and just, making it very easy for right-wing scare-mongers to play on conservative fears.
It is pretty incredible that the modern secular atheist community has such a sense of self-righteousness that many think it is okay to suppress advocacy of values that remain widely held. Bakergate is Exhibit A for how liberal over-reach revs up the conservative base.
Harry Marks wrote:There is no force for integrity left in the Republican party, as the tax bill scramble once again made clear. … the party is now open about being donor-driven.
“No force” is putting it too strongly, but the corruption of money politics shows these are certainly disturbing and dangerous trends.
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Re: Draining the swamp - Thank you Donald Trump

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Robert Tulip wrote:Just firstly, can I say how much I appreciate your courteous, informed, factual, patient, polite replies (mostly).
Well, I occasionally have to grit my teeth to remain courteous and patient, so I am not shocked if sometimes I don't manage it. It is (mostly) a pleasure to engage intellectually with a well-informed, thoughtful advocate for a very different point of view.
Robert Tulip wrote:Whether the public debt of the 2010s was “called for” is exactly what is debatable. Of course those who incurred it say their decisions were necessary, but it seems equally possible that incurring this massive multi-trillion dollar debt was a big mistake, ratcheting up government role in the economy with significant harm and no good reason.
To make a case that it was not necessary and appropriate, you need very strong assumptions about reasons those unused resources would not have been taken up by a revived economy. So far, of course, no one, including the WSJ editorial page, the Financial Times or conservative academia, have made any effort to spell out such an argument (much less substantiate the assumptions). Nevertheless the right wing party continues to play the droning note of opposing deficits as long as they are in opposition to the president, and drop it like a hot potato when they get the chance to increase deficits for their priority. The pretense of justifying their logic never even made an appearance.
Robert Tulip wrote:
Harry Marks wrote: The real irony is that efforts at austerity were in fact responsible for slowing the closing of the deficit and thereby increasing the overall level of debt.
That is an argument that can equally be used to support the supply-side trickle-down economics of the Laffer Curve and Trump’s tax cuts. Finding the optimal point of tax that maximises revenue involves big macroeconomic assumptions about the feedback from increased economic activity.
The difference is that the macroeconomics of the multiplier effect is strongly supported by evidence while the Laffer Curve has no evidence to support its application, or at best arguments from anecdote. The issue is not optimal tax revenue, (which is supposedly what the Laffer Curve argument is about) it is demand-side constraint in a serious recession. All evidence, including the lack of inflation from Quantitative Easing, indicates that the old Keynesian arguments applied strongly. A tax cut now has very little positive effect on the economy, but a tax cut in the Great Recession would have been helpful, which is why Obama continued the Bush tax reductions when he had the chance to let them expire.
Robert Tulip wrote:Yes, but quantifying the multiplier is imprecise. My impression is that private investment has a bigger multiplier than public spending.
There is a "Long Run" multiplier which mainly comes from adding productive capacity. This applies even when the economy has full employment, and private investment pretty much always creates this effect. The usual multiplier instead looks at demand-side stimulus, and it is essentially zero at full employment (though estimates of as much as 2.5 in the short run have been made). But in a severe recession it is probably more like 4, and not limited to short-run effects (which would be undone over a longer horizon - probably 4 to 6 years). Whether you use 2.5 or 4, the austerity moves by the Republicans added to debt in the long run: the revenue sharing with states, for example, which they cut, would have paid for themselves in added government revenue from added GDP and lower unemployment within two years.
Robert Tulip wrote:The economics of health care seems to me one of the most devilishly wicked problems to explain.
I would agree with this. I had the pleasure of discussing the issue with William Hsiao, a top health care economist at Harvard, and came away uncertain that there are any good options for providing it. The feedback loops can be very slow, and so it is very difficult to even quantify the trade-offs. Still, it is somewhat heartening that the CBO managed to get the numbers pretty close with their forecasts about Obamacare (erring on the side of conservative views, at least in the medium term).
Robert Tulip wrote:The US health funding system is broken and corrupted. It seems doctors exploit their position as a royal priesthood to extract vast sums of wealth from the populace.
Some do. Remember that much of the med school system is privately funded, so that doctors often start with fearful debt, unlike most industrialized countries.
Robert Tulip wrote:Changing that dysfunctional syndrome looks more like an exercise in cultural mythology than rational economics.
Worth thinking about, but it is plain that the Bernie Sanders/Michael Moore mythology leads toward fixes that are just as problematic as the pre-Obamacare mythology or the technocratic approach of Obamacare.
Robert Tulip wrote:
Harry Marks wrote:Investment for the future requires borrowing. If the government can do that effectively, and spending during a serious recession is effective without knowing anything about what it is spent on, then it should.
I find these arguments misguided. The USA owes twenty trillion dollars, putting its debt into a risk category well above any private firm.
True, but firms don't owe most of the money to themselves, while the US people do.
Robert Tulip wrote:Much government borrowing is for consumption, not prudent investment.
Back in the heyday of serious budgeting that was the 90s, the idea of a capital budget was revived. But you can imagine the absurdities of, say, classifying social science research as capital investment. How much of our armaments budget is productive investment that generates spin-offs for private industry (this is a serious question, but not one with a usable answer)? For that matter, is a fighter plane investment, because it is long-lasting, or is it consumption, because we never use them to make anything? Not an easy question.
Robert Tulip wrote:So this alleged “investment” is not effective where it has no rate of return.
The rate of return on schooling is still pretty good. The rate of return on medical care for children is probably pretty good. Defense may be overdone, but it probably has a good implicit rate of return for the first 50 percent or so of expenditures. Social insurance is something people should be allowed to choose, even if it isn't productive investment.
Robert Tulip wrote:And the moral hazard of equating all recessionary countercyclical investment is extreme. In Australia that attitude got us a pile of useless unwanted school halls that were delivered well after the crisis that they responded to had passed, drastically increasing the national debt.
Well, someone can always look into spending it better, but the increase in the debt comes more from fading private production than from the government spending. It is simply not the case that government needs to follow the same rules about borrowing that private households do.
Robert Tulip wrote:the USA may be headed for a military dictatorship when the numbers break, unless there is sensible effort to shift back to a sustainable fiscal position. Democratic politics corrupted by money makes sensible policy impossible.
There is a centrist caucus growing in importance. It may never amount to more than the LibDems in the UK, forever trying to stand for something by backing quixotic projects with wonky tendency to turn off the average voter. But they would do well to focus on campaign finance and internal rules before they try to undertake much substantive agenda.

The debt problem, including "entitlements" is eminently solvable. The problem of generating public spirited mythology is much more difficult.
Robert Tulip wrote: A military double the needed size will look to justify its existence through further adventures.
The public appetite for adventures is very low. Ironically, the military-industrial complex is the main source of resistance to cuts in foreign aid, since no one knows better than the generals that the actual ability to influence events overseas and to achieve greater security is much higher with money than with weapons.
Robert Tulip wrote:My current focus in this regard is on Iron Salt Aerosol, treating global warming as a fixable chemical imbalance.
I'm for it, but as a stopgap measure to delay doomsday, not as a long-term solution. I could be wrong about the long term, but the numbers I have seen don't really look so good.
Robert Tulip wrote:The underlying driver of private investment in education is skill formation, which is not just positional, and is far from zero sum.
True, and some parents and teachers can actually tell that skill formation is going on. But mostly, it is just as easy to create a lame level of skill formation and look like really impressive stuff is going on. The closest thing we have to an accurate measure, which is before-and-after testing, is very vulnerable to gaming. For example the quickest way for a school to get its numbers up is to exclude children with learning problems.
So when you look at what parents decide their spending based on, it comes down to: 1) the appearance of adequate skill formation (which admittedly is correlated with the actual level of skill formation); and 2) comparison with other schools based on readily observable but usually not substantive measures.
Robert Tulip wrote:I would like to see education funded by vouchers where private use is funded at about 70% of public use. That would cause a drift to private schooling. The cost of greater social segmentation is outweighed by the benefits of increasing the total education investment, enabling a per capita increase in public school funding, with higher teacher salaries and more personal focus on students, as well as a better teacher career path, school autonomy and better accountability, all leading to better system quality.
It might be worth the try to experiment with this, but I have no faith that it would improve accountability or overall quality. And the social segmentation is a real issue, though I agree it would be worth some difficulties along this line. Interventions subsidizing the private schooling more for those with less income could conceivably offset the segmentation.
Robert Tulip wrote:
Harry Marks wrote: Private schools on average add no more value than public schools.
My impression is that studies on this have been biased by inadequate variable control. It is true that education quality can be hard to measure, but the bottom line is that parents would not make such sacrifices for their children’s schooling costs if they were not convinced they were getting a better product.
An article in the January 2018 American Economic Review http://pubs.aeaweb.org/doi/pdfplus/10.1257/app.20160634 [paywall]
looks at the effects of school choice. Its brief review of studies of lotteries to enter charter schools, in which students who apply are sorted randomly because only those selected by the lottery get the "treatment", finds positive or neutral effects in most studies, and some charters "increase achievement markedly", usually for "select groups". (The review piece I saw in the Atlantic on such studies concluded that the really effective schools were the product of a single principal with the ability to recruit faculty who align with that person's philosophy and energy, i.e. not transferable to a general case).

Since lotteries are a reasonably controlled experiment, it appears to contradict the conclusion I stated. However, the gains are not normally very large. Parents may think they are getting a great improvement for their child, but in practice not much happens.
Robert Tulip wrote:In Australia a big part of the willingness to pay for private schooling is parental hostility to the group-think values within the public education system.
You might be interested to know that this same article studied a case in which introducing school choice resulted in a marked decline in student achievement. This was due to selection for other factors, such as conservative religious views and racism, leading to people choosing inferior schools. In the U.S. this is almost always due to Creationist parents. Sometimes "groupthink" is just a slur on "people who think differently from me."
Robert Tulip wrote:in Australia teacher unions exercise effective political veto over measures to enhance school choice, and muddy the waters of policy debate through strident ideological campaigns.
This is usually a mix of self-interest, since private schools tend to be exploitative toward teachers and hostile to unions in addition to the draining of political will to support public school quality, with genuine concern for their students. American teachers' unions are also hostile to choice programs, and I would say until studies find a reliable benefit that we know how to achieve on a deliberate basis, this is probably appropriate policy.
Robert Tulip wrote:especially in a sector like health there is a perverse incentive to classify expenditure as investment when its real economic rate of return is low or negative, due to the intangible economic value of improved health.
Well, making young people healthier adds to measured economic output, while making old people healthier just adds to the amount of enjoyment in life. Do we really want to make policy distinctions on that basis?
Robert Tulip wrote:Transparency and accountability based on a strong public interest in evidence are the only remedies for corruption.
My next project is to act on this.
Robert Tulip wrote:Forgive me for inferring a Leninist tinge in your original comment. When a social class is perceived as superfluous many will see shades of Robespierre.
Oh, I think confiscation (er, appropriation for the public interest) will prove quite sufficient. I just want it clear that I acknowledge past glories as well as reason for believing they are likely to continue.
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Re: Draining the swamp - Thank you Donald Trump

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This is about to get so, so good:

FBI-gate: The Outlines of the Story Are Coming into Focus

...In the space of a year, as the presidential campaigns got rolling in the fall of 2015, James Comey moved his team into top positions in the intelligence and counterintelligence apparatus of the FBI. That's where the surveillance capacity exists. Thanks to the efforts of Chairman Devin Nunes of the House Intel Committee and Senators Grassley and Graham, we have the basic story already outlined and have received the first installment of the plot: the issuance of the FISA warrants on the basis of a fiction pushed by the Clinton campaign....

...However, a game-changer is about to drop. Last Saturday, we got the first indirect, inferential evidence of a major revelation on its way: there is an informant from among the cast of characters Sharyl Attkisson highlighted in yellow, a canary singing to save himself.

This mystery figure is the man who, a number of observers noticed, has never been mentioned as the information has dripped out of the FBI. His name is Bill Priestap, and he was brought in by James Comey as assistant director of the FBI, Counterintelligence Division, in December 2015....

...Already, despite the mainstream media's best effort, half of the public now believes that senior law enforcement officials broke the law to hinder the Trump presidency, according to Rasmussen. A grand narrative of breathtaking conspiracy and corruption awaits us as the biggest political scandal in American history unfolds. The story now has a face and a narrator named Priestap, even though his information can't yet be revealed. All in good tine, but preferably before November.

https://www.americanthinker.com/article ... focus.html

How Bad Will This Get for Hillary and Obama?

...The noose tightened this week upon the entire FBI leadership over the scandal to destroy candidate Trump and then, President Trump. But it’s no longer just the FBI leadership facing prison time for conspiracy and obstruction of justice. It’s no longer just Hillary and her pals at the DNC and the Clinton Foundation facing prison time....

*Texts confirm FBI investigators were using untraceable burner phones. Why would FBI agents be using burner phones? Does criminal conspiracy come instantly to mind?

*Texts also reveal President Obama was in the middle of the whole “destroy Trump insurance plan.” Strzok had to prepare talking points for FBI Director James Comey to give to President Obama. Because and I quote, “Obama wants to know everything.”

*It appears Hillary was smack dab in the middle of the conspiracy too. Lisa Page texted to Strzok “…she actually knows what you’re doing this time. And that the American presidential election, and thus, the state of the world, actually hangs in the balance.”

*It gets worse. The Hillary exoneration letter wasn’t just changed to exonerate Hillary. The FBI changed “President” to “senior government official” when describing who Hillary sent illegal personal emails to while traveling in a nation called a “sophisticated adversary” to the USA. Could that nation be Russia?

*Texts also indicate FBI Deputy Director McCabe knew about confidential emails discovered on Hillary aide Huma Aberdin’s laptop and delayed informing Congress. The FBI also ignored that many of these emails were marked “C” for confidential.

*Texts from Democrat Senator Mark Warner show while investigating Russian interference in the election by Trump, Warner was texting with the lobbyist for a Russian oligarch, representing the fraudulent dossier. WOW.

*We also learned a Yahoo news story used to gain the FISA warrant to spy on Trump was written by a former DNC employee.

*Finally, a top FBI informant testified to Congress that Moscow routed millions of dollars to the Clinton Foundation in a “Russian Uranium Dominance Strategy.” He also claims to have video evidence of Russian bribe money stuffed into suitcases for the Uranium One deal. He says Obama knew about all of this, yet allowed the Uranium One deal to go through.

http://investmentwatchblog.com/how-bad- ... and-obama/

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https://www.youtube.com/watch?v=6bWyhj7siEY
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