RedStateEclectic

Short Term Serial Correlation and Long Term Mean Reversion - You What?

The Adam Smith Institue has a piece by Tom Papworth on Why Interventionism Works that puts the jargon into intelligible perspective:

Short Term Serial Correlation and Long Term Mean Reversion sound rather heavy. And so they should. They were conceptualised by statisticians, after all; people who make economists sound normal. Yet an understanding of these two phenomena helps explain why the myth that politicians can and do solve real problems continues.

Short Term Serial Correlation emerges because people like to see patterns. Random events are never evenly distributed; some areas will manifest more incidents than others. Geographically, there may be a larger concentration of accidents, or geniuses, or Stephens in one locality; chronologically, there will be more crimes, or jackpots, or bankruptcies in one month than another. For some of these there may be real causes (a criminal has moved into the area, thus triggering a local crime wave) but very often apparent rises or falls in frequency are just the results of random coincidence.

Long Term Mean Reversion is the inevitable “return to form”. If there is no cause for these clusters, in the long run they will even out. The average reasserts itself. Because there was no reason for the cluster of incidents, it is not sustained and everything returns to normal. All very dry stuff, you might think, and blindingly obvious. Except that this duel-phenomenon may explain why interventionism is so popular. Take two examples:

• A number of traffic accidents in a short space of time lead to a public outcry and a demand that something be done to improve safety in what is, apparently, a dangerous stretch of road. Local people focus not on the 10 year average but the tragedies of the past 12 months. Action is called for and local councillors step in. Money is spent changing the road layout, building speed humps or erecting a camera. The following year the number of accidents falls (returns to the long-term average) and both councillors and residents claim it is a success.
• The economy goes into a bit of a slide. Shares fall and unemployment rises. Worried citizens demand that something be done to prop up asset values and protect jobs. The government – ever eager to please – steps in with a lot of expensive and headline-grabbing measures. After a period, economic activity recovers its upward momentum. Government officials are quick to point out that the recovery results from their own policies. Put like this, the significance of these phenomena should be obvious.

The natural instinct of people to cry that “Something must be done” very often leads to policies that appear to have the desired result. This perpetuates the belief that politicians can make a difference and that without them the world would rapidly go to hell in a hand basket.

The Dismal Social Sciences

The social sciences (especially economics, law, and political science) have entirely lost their way. A long time ago.

On a world-historic scale, three most momentous events have occurred virtually at the same time (roughly during the course of the 18th century):

(1) the social sciences were borne, that is: they discovered their proper subject-matter,
(2) the theory of liberty reached a stage of unparalleled fruition (in the form of classical liberalism).
(3) after billions of years, evolution developed to the point where it discovered itself through the conduits of (1) and (2).

(1), (2), and (3) are simply different aspects of the same phenomenon.

The original and true, yet long abandoned subject-matter of the social sciences is the nature of self-generating order in human society.

It was through the observation of what originally was termed "the social" (the ability of society to organise itself without human design, a precondition of any human community of a higher complexity and capacity to sustain large populations) that classical liberalism discovered principles whereby an extended order consisting of millions of mutual strangers could persist and flourish in a way no rulers could ever accomplish.

This insight was the result of understanding grown order, or evolutionary processes, as one might call them today.

Before their untimely death, the social sciences passed on the paradigm of evolution to Darwin - and it is very sad that most people nowadays do not realise that biology is just another fruitful user of the concept of spontaneous growth, and that a society that confines the concept to biology is not likely to fare too well.

Ever since, the social sciences have strayed from this fundamental approach and reverted to treating social matters and the good society as a kit of readily observable and manageable components waiting for an interior decorator with bright ideas of arrangement. In that way, the social sciences have become the maidservant of ephemeral concerns, dirigism and its underlying intellectual hubris.

They are about feeling important (i.e. being in possession of the powerful ability to shape society properly) rather than probing into a way of order-generation exceedingly hard to understand, because this kind of order occurs amongst a far larger number of elements than we are used to deal with in our ordinary lives and occupations, or even natural scientists in capturing the comparatively simple phenomena that, say, physics ventures to make authoritative statements about.

I think, Arnold Kling is expressing an important aspect of this sad development in a post where he writes (I read his term "political economy" as synonymous with my term "social sciences":

The main science of political economy is the science of obtaining and retaining power. As far as expertise goes, the pollster, the fundraiser, and the media expert are all fundamental to the operation. The public policy expert is for decoration. If you want to be an economic policy adviser when you grow up, then my advice is to learn to rationalize the methods used by leading politicians to obtain power.

Is health care reform about health care? No, it is about seizing and retaining power. Was the stimulus about stimulus? No, was about seizing and retaining power. Is cap and trade about global warming? No, it is about seizing and retaining power. Was TARP about saving the financial system? No, it was about seizing and retaining power.

The social scientist's role in the political process is to say, "X is a problem. Government must solve X. Here are some solutions." The solutions that rationalize seizing and retaining power will bubble to the top.

Suppose you believe that regulators cannot possibly have the wisdom to direct human activity. Suppose you believe that politicians spending other people's money tend to choose less wisely than people spending their own money. If you want to get anywhere as a public policy adviser, keep those beliefs to yourself.

The source.

(PS: I do not consider that the evolutionary paradigm is committing one to an anti-religious position - rather to the contrary.)

The State of the Nation - 4th July 2009 (1)

"It is the duty of the patriot to protect his country from its government."
Thomas Paine

What Might the Founders Make of It?

David Boaz writes:

Both President Obama and Sen. John McCain cited the Founders in their weekly radio addresses today, as they made the case for government actions that would have appalled those Founders. Obama invoked “the indomitable spirit of the first American citizens who made [independence] day possible” in arguing for a federal takeover of education, energy, and health care.

He might have trouble explaining how his policies reflect the spirit of the men who left us such words as these:

He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.

If we can prevent the government from wasting the labors of the people, under the pretence of taking care of them, they must be happy.

Were we directed from Washington when to sow and when to reap, we should soon want bread.

A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.

Meanwhile, McCain called for the American government to more vigorously support the protesters in Iran. What would the Founders say to him?

The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, to have with them as little political connection as possible….Harmony, liberal intercourse with all nations, are recommended by policy, humanity, and interest.

Peace, commerce, and honest friendship with all nations, entangling alliances with none.

[America] has abstained from interference in the concerns of others, even when conflict has been for principles to which she clings, as to the last vital drop that visits the heart. …Wherever the standard of freedom and Independence has been or shall be unfurled, there will her heart, her benedictions and her prayers be. But she goes not abroad, in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own.

Maybe each week there should be three national radio broadcasts: one from the incumbent president, one from the other big-government party, and one reflecting the views of the Founders.

The source.

Help Is On The Way

Adam Kokesh has a Money Bomb going on today in his run for the House.

Resigning as Governor to Run for President?

Apparently not wanting to wait until her FIRST TERM as Governor was up, Sarah Palin has decided to resign early—maybe to run for President.

"Once I decided not to run for re-election, I also felt that to embrace the conventional 'Lame Duck' status in this particular climate would just be another dose of 'politics as usual,' something I campaigned against and will always oppose. It is my duty to always protect our great state. With that in mind, my family and I determined that it is best to make a difference this summer, and I am willing to change things, so that this administration, with its positive agenda, its accomplishments and its successful road to an incredible future, can continue without interruption and with great administrative and legislative success."

As for her future, Palin said: "I look forward to helping others -- to fight for our state and our country, and campaign for those who believe in smaller government, free enterprise, strong national security, support for our troops and energy independence."

During her press conference, Palin ran off a list of accomplishments during her two-and-a-half years as governor, from helping move forward a North Slope natural gas pipeline to rewriting oil taxes to revising state ethics laws.

Is two and a half years as Governor of one of the smallest (population wise, it might be THE smallest—I’m not sure and too lazy to look right now) states in the country long enough to qualify you as President?  Will be people get sick of Sarah Palin if she starts campaigning this summer yet, for 2012? 

LLE

UPDATE:  An “iceberg scandal”?

A Trust That Will Lead to Our Undoing as a Great Nation

...is a phrase, I borrow from Walter E. Williams' article Why a Bill of Rights?

Following up on The Ninths and Tenth Amendment, and The Battle of Our Lifetime, and Bootleggers and Baptists, and also The Idea of Rights,  you might want to consider this article, and the below clip:

Bootleggers and Baptists

“Baptists” point to the moral high ground and give vital and vocal endorsement of laudable public benefits promised by a desired regulation. Baptists flourish when their moral message forms a visible foundation for political action.

“Bootleggers” are much less visible but no less vital. Bootleggers, who expect to profit from the very regulatory restrictions desired by Baptists, grease the political machinery with some of their expected proceeds. They are simply in it for the money.

The theory’s name draws on colorful tales of states’ efforts to regulate alcoholic beverages by banning Sunday sales at legal outlets. Baptists fervently endorsed such actions on moral grounds.

Bootleggers tolerated the actions gleefully because their effect was to limit competition.

It is worth noting that it is the details of a regulation that usually win the endorsement of bootleggers, not just the broader principle that may matter most to Baptists.

Thus, for instance, bootleggers would not support restrictions on the Sunday consumption of alcoholic beverages, although Baptists might. Bootleggers want to limit competition, not intake. Important to the theory is the notion that bootleggers can rely on Baptists to monitor enforcement of the restrictions that benefit bootleggers. [...]

B&B theory helps to explain how leaders of consumer groups help major pharmaceutical companies — the ones with approved chemical entities — by valiantly supporting a cautious FDA approval process.

The theory explains why holders of permits to produce and market EPA-approved insecticides value the efforts of environmental groups who oppose rule changes that facilitate the entry of new, and sometimes less risky, substitutes. Indeed, once the theory is explained, bootleggers and Baptists seem to come out of the woodwork. They are every where.

Perhaps we should expect no less. Political action, which by definition always serves some interest groups, requires politicians to appeal to popular icons. By making a “Baptist” appeal, the canny politician enables voters to feel better by endorsing socially accepted values in the voting booth.
 
The same politician, if he is adroit, also can enjoy the support of appreciative bootleggers in the costly struggle to hold office. Bootleggers and Baptists are part of the glue that binds the body politic.

The source.

The Battle of Our Lifetime

If democracy, as we know it, and spread it by "nation building" wars of aggression, is the process by which the people vote themselves into serfdom, fascism - essentially a variety of socialism - is  the subjugation of the business world by government, para-government and other forces of political domination.

Witness live how presently democracy leads to fascism in America.

From Amy Ridenour's National Center Blog, featuring Glenn Beck's guests Tom Borelli of the National Center for Public Policy Research and David Kreutzer of the Heritage Foundation.

The source.

See also, Obama's Socialist Agenda - The Leakage of Reality from American Life

Obama's Socialist Agenda - The Leakage of Reality from American Life

"Das kommt mir spanisch vor" - literally, "this strikes me as being something from Spain" - is an odd German idiom, meaning: "there is something fishy going on." (A mere idiom, I doubt that anyone using the phrase has Spain in mind, a great and beautiful country actually very popular with Germans.)

Obama's "green jobs" strike George Will as something literally from Spain.

Read what Will has to say about a study that elicited the following exchange between a journalist and the president's press secretary, Robert Gibbs:

Questioner: "Is that a suggestion that his study [see below, G.T.] is simply flat wrong?"

Gibbs: "I haven't read the study, but I think, yes."

Questioner: "Well, then. [Laughter.]"

In a political system habitually relying on propaganda and fairy tales to secure power by serving special interests, it is no surprise that decision-makers make apodictic statements and take momentous decisions on the strength of arrogant dogma. Politics today is the art of appearing knowledgable about what one does not know anything (of substance and coherence) about.

As for Obama and his press secretrary, another German idiom comes to mind: "Wie der Herr, so's Gscherr" - "Like master like man" - qualis dominus, talis et servus, as is the master, so is the servant.

From Will's article:

Calzada, 36, an economics professor at Universidad Rey Juan Carlos, has produced a report that, if true, is inconvenient for the Obama administration's green agenda, and for some budget assumptions that are dependent upon it.

Calzada says Spain's torrential spending — no other nation has so aggressively supported production of electricity from renewable sources — on wind farms and other forms of alternative energy has indeed created jobs. But Calzada's report concludes that they often are temporary and have received $752,000 to $800,000 each in subsidies — wind industry jobs cost even more, $1.4 million each. And each new job entails the loss of 2.2 other jobs that are either lost or not created in other industries because of the political allocation — sub-optimum in terms of economic efficiency — of capital. (European media regularly report "eco-corruption" leaving a "footprint of sleaze" — gaming the subsidy systems, profiteering from land sales for wind farms, etc.) Calzada says the creation of jobs in alternative energy has subtracted about 110,000 jobs elsewhere in Spain's economy.

The leakage of reality from American life is further exemplified by USA Today's non-coverage of the narrowly passed Waxman-Markey American Clean Energy & Security Act that could result in “the largest tax increase in history;” instead the newspaper devoted its coverage most amply to the death of pop star Michael Jackson.