Self-disfiguration

At Quillette:
Motivated Reasoning Is Disfiguring Social Science

A good criticism of the state of social science, a field closely engaged in tarnishing the meaning of the word “science.”

I will make 3 points. First, an excerpt:

The second is the culture of institutions. From my experience and perspective, these tend to function on a corporate structure… they do not appear to foster an appropriate level of critical thinking, skepticism, caution, or solicitation of opposing views… This is a recipe for conformity and groupthink. (… APA policy appears to forbid scholarly special interest groups under its fold from taking public positions that differ from its own central stated positions…consistent with a business but not an academic or scholarly model.)

The classic model of a capitalist business actually forces critical, creative thinking, or the business dies. The academic model has baked in incentives and protections for the groupthink we observe. “The University,” could only survive as a respectable institutional concept so long as diversity of thought was critically valued. It isn’t anymore. In fact, the opposite is true.

Groupthink came before the abandonment of “critical thinking, skepticism, caution, or solicitation of opposing views,” and was necessary for that abandonment.

I think the parallel here is better described by the words “corporatist” and “bureaucratic” than by “business.” Academia displays, on average, less “critical thinking, skepticism, caution, or solicitation of opposing views,” than “business.”

Now, you may accurately point to Google’s treatment of James Damore as a business exemplifying advanced hardening of the categories, but this is also only possible where diversity of thought is suppressed – and where amoral business practices are hidden from customers. That may be business, but it will not be good business in the long run.

IAC, I’ll posit that even Google fosters a higher level of freedom of conscience than your average sociology department.

As to “ignoring entire fields of research,” and “task force[s] appear[ing] … stacked with people who had taken prior … views,” we can see this rot in the social sciences penetrating the hard sciences. The IPCC folks serve as a clear example.

Looting and Freedom

Whether political freedom or economic freedom is more important is a moot question.

The most basic property right is self-ownership. To the degree that right is compromised, so is freedom. A commenter at the linked article above noted this:

“I propose in the following discussion to call one’s own labor, and the equivalent exchange of one’s own labor for the labor of others, the ‘economic means’ for the satisfaction of needs, while the unrequited appropriation of the labor of others will be called the ‘political means’.”

   – Franz Oppenheimer, The State. New York: Free Life
      Editions, 1908 (1975), pp. 24-25

Beyond the unabashed wealth redistributionism of a Bernie Sanders, ‘unrequited appropriation of the labor of others’ includes all forms of rent-seeking: Regulation favoring entrenched business (from tariffs to requiring hair braiders to take hundreds of hours of training, to subsidies for solar panels, movies, art, mortgages, etc., etc., etc.); union shops; civil asset forfeiture and eminent domain; and zoning laws.

We may agree politically to give some portion of some of those freedoms to the State, but we will, by definition, be less free; and bureaucracies will always take more than is granted.

Principled resistance to the looting is a requirement of freedom.

Crimestop

Is free speech under assault on college campuses? Well, some people, including President Trump, think not.

Most of those skeptics promote a distinction between free speech and “hate speech,” a term Mr. Zuckerberg has yet to define for us; but he’s working on an AI to apply the definition he comes up with: Once all those messy linguistic, contextual, semantic issues humans can’t even deal with are programmed.

That is, he dreams of automating enforcement of Silicon Valley values conforming to regulation he’s requested from our technology-naive and Constitutionally slipshod Congressional placeholders. They’ll be looking to erect an emanating penumbra since: No, there’s no “hate speech” exception to the First Amendment. They have to help Mr. Zuckerberg add one.

We can look to George Orwell for insight into how that public/pirate partnership is likely to work out.

“The mind should develop a blind spot whenever a dangerous thought presented itself. The process should be automatic, instinctive. Crimestop, they called it in Newspeak.”
-George Orwell, 1984

A model is already apparent. Google fired James Damore for failure to crimestop. On campus, they’re calling it “self-censorship.”
The Skeptics Are Wrong Part 2: Speech Culture on Campus is Changing

Click to enlarge.

Very Liberal students care far less about giving offense than about being judged. That is, they worry more about tribal membership in-good-standing and find it implausible their opinions would offend anyone. A collectivist approach.

Conservative students are much more concerned about campus thought police than Liberal students. I would have liked to see them less concerned about giving offense to peers as an indication of individualism, but they know they are surrounded by a great number of people who easily take offense. And they are probably just more polite.

I’m sure you can infer other interesting theories yourself, but the result is not good for any of these students: The Stifling Uniformity of Literary Theory

One wonders whether the students that the academy is producing today could if asked to, provide the arguments of their ideological or political counterparts, without resort to crude caricature or ad hominem…What might a course look like if a race theorist such as Derrick Bell was studied alongside someone like Thomas Sowell? For about thirty years both Bell and Sowell were consistently among the top five most cited black scholars in American Academia according to The Journal of Blacks in Higher Education.12 However, as with so many prominent intellectuals, while Sowell is revered among classical liberals, libertarians and conservatives, he is practically unheard of on the left, despite his pioneering work on the economics of race and ethnicity.13 To borrow Jonathan Haidt’s phrase, liberal intellectuals are in danger of being ‘blind’ not only to the other side’s moral taste buds, but also to their most important thinkers.14

Here’s another post I think helps explain why Liberals don’t like free discussion of ideas. They mean well, but can’t be bothered to examine consequences in their quest to perfect the rest of us.

Squandered

A very short history of US steel making after WWII.

How the U.S. Squandered Its Steel Superiority

In the early 50’s the Europeans were rebuilding their steel industry with new technology:

“The cost of building steel mills using the basic-oxygen furnaces was 40 to 50 percent lower than conventional open-hearth factories; operating costs were 25 percent lower, though some studies suggested even greater cost savings.

But it was the productivity gains associated with the new process that should have really raised eyebrows. One factory that made the shift could produce 40 tons of steel per hour using the open-hearth process, but after installing basic-oxygen equipment, it managed to quadruple that figure.

Unfortunately, Big Steel was too proud to notice Europe gaining ground. In a typical advertisement from the era, U.S. Steel claimed it was a company “where the big idea is innovation.” But this claim — much like so many of the braggadocios claims of today — could not hide a more disturbing reality.

Indeed, throughout the 1950s, as Europe’s steelmakers built new factories around the basic-oxygen process and simultaneously demolished its remaining open-hearth furnaces, Big Steel made endless excuses. Representatives of the Big Three — Bethlehem, U.S. Steel, and Republic — repeatedly claimed that the jury was out on the new method, all evidence to the contrary.”

And by the 60’s little mammals were nipping at the heels of the Big Steel dinosaurs. It’s quite ironic that one of the biggest corporatists now whining for protection is Nucor, whose success was profiled by Clayton Christensen in Innovator’s Dilemma (2011).

Nucor and others started out making re-bar, which is easy. Bethlehem, U.S. Steel, and Republic saw no money in re-bar, and let Nucor have the business. The upstarts climbed the market chain by recycling scrap steel (with “mini-mills,” which don’t use blast furnaces), and eventually achieved continuous strip steel casting; the high margin product. They ate Big Steel’s lunch.

“But there’s a final twist to this tale that highlights the absurdity of Trump’s strategy. In the 1960s, a man named Ken Iverson took over a conglomerate that acquired a stake in the steel business that became Nucor. Iverson then bet the firm’s future on making steel using the electric arc process, building the first American facility in 1969. It began growing at an exponential rate, competing rather effectively with foreign producers, to say nothing of other American producers.

As other steel producers begged for protectionist trade policy, Iverson mocked the idea. In an interview in 1986, Iverson noted that protectionist measures already instituted hadn’t had the desired effect. “As soon as prices began to rise so that the steel companies began to be profitable, they stopped modernizing,” he said. “It’s only under intense competitive pressure — both internally from the mini-mills, and externally from the Japanese and the Koreans — that the big steel companies have been forced to modernize.””

Nucor is now the largest US steel maker. They used to understand the definitions of innovation, capitalism and competition.

Lack of innovation and unwillingness to compete – sustained by protectionism – is what toppled the big guys from overwhelming superiority. Maybe if Reagan hadn’t ordered “voluntary restraint agreements” in 1984 to reduce steel imports, and Dubya hadn’t put steel tariffs in place in 2002, US steel companies would by now have had an epiphany.

Trump’s tax increases

Tariffs are alleged to benefit the US at the expense of foreigners. In fact, they benefit a small coterie of businesses at the expense of everyone else.

The increased cost of houses due to the President’s lumber tariffs doesn’t just mean fewer houses being sold, it also means those who do buy houses have less money to spend on furnishings, or a new automobile. It doesn’t just mean fewer jobs in construction, it means fewer jobs building couches and cars.

The economic argument for tariffs is, therefore, nonsense. Tariffs neither increase US overall employment, nor raise US wages.

But, the President says, for steel it’s not economics, “It’s a national security issue!” Really? While it’s true the US steel and aluminum industries will benefit from forcing consumers to pay more to steel companies and to aluminum producers, the makers of tanks, airplanes and munitions will experience higher costs. How, exactly, does increasing the cost of the things our military uses to defend us increase national security? It does so only if “national security” is defined as “the profits of the steel industry.” Which, by the way, “posted a combined net income of $869 million in Q4 2017,” while “all the charted steel stocks, except for one, showed increases in average share prices.”

But, the President objects, “What if we can’t produce steel in the future because the US industry disappears?” Well, the US is the world’s 16th largest steel exporter. Nearly 60% of those exports go to Canada and over 30% to Mexico, markets our President is endangering by threatening to torpedo NAFTA. We could stop exports to “protect” domestic supply, but that would increase the “trade deficit”.

In 2017 (through September) we exported 7.6 million and imported 26.9 milliion metric tons of steel, for a difference of -19.2 million. For this to be a national security issue we need to assume a few things. 1) We don’t have spare capacity to handle the shortfall. 2) We do not stop exporting steel. 3) Extreme measures (like WWII scrap drives and diversion of steel to military from consumer production) cannot be taken.

Let’s see. According to the Department of Commerce, in 2017 (through December):
&nbsp&nbspUS Steel production “Capacity utilization was estimated at 73.9%.”
&nbsp&nbsp”Total U.S. steel production in 2017 was 81.6 million metric tons.” Which includes
&nbsp&nbsp8 mmt of exports.

&nbsp&nbsp”Total [domestic] steel demand in 2017 amounted to 99.7 million metric tons.”


This leaves us about 18.1 mmt short for the year.

81.6 mmt represents 73.9% of capacity, so another 28.8 mmt could be produced with the remaining 26.1% capacity. Or, comfortably more than we import and without ceasing to export.

Tariffs are taxes. The president is raising them – and threatening trade war.

Here’s 5 minutes of Milton Friedman on this question:

Inconsistent consequences

The United States has recently imposed tariffs on Canadian lumber, Korean washing machines and Chinese solar panel components. The President is itching to slap import duties on steel. All those tax increases offset the income-tax cut, while enriching crony capitalists, fomenting a net reduction in American employment, and curtailing consumer choice.

How do these increased taxes balance out with the recent income-tax reduction?

The income tax cut will give 25 million taxpayers in the middle income quintile (or those with incomes from $49,000 to $86,000) an average of $930 of their own money back, BT (Before Tariffs). That’s about $25 billion.

I pick that quintile because I need a number, calculating the net-net of tax increase/decrease is very complicated, and the absolute dollar amount of all income-tax reduction is (naturally) skewed toward the top quintile.

Washing machines
The effect of a $50 increase is more economically significant than for lower or higher quintiles. The lowest quintile can’t afford a washing machine in the first place, and pays no income tax. Using the second lowest quintile could open my argument to charges of cherry picking. For higher quintiles $50-$100 in disposable income is irrelevant. For the discussion, I take the middle quintile as the exemplar of consumer sensitivity to the effect of increased tariffs.

In any case, what’s the amount of the offsetting tax increases? Well, washing machines, on average, will each cost $50 to $90 more. Ten million are bought every year. Consumers will pay at least an additional half billion dollars annually; not counting the as yet unknown additional consumer cost of the threatened steel tariffs.

I’ll call the mid-quintile share of that 50%, or $250 million.

Solar panels
Costs for residential solar panel installation will increase by an average of $650.

In 2017 there were only about 2,500 residential installations, so the residential cost increase would total a bit more than $1,500,000. Peanuts. It won’t make much difference for the mid-quintile.

Note, though, that commercial/utility scale installations would have a much higher value, and do have an effect.

This is because of the inherent contradiction of Fed solar panel policies. The Feds give a 30% tax credit for installing solar, while raising the price through tariffs. Taxpayers in all quintiles are subsidizing all solar projects, so there’s a tax of 6.5% (the tariff’s contribution to increased gross install costs) times the 30% subsidy on taxpayers in all quintiles. Taking $210 million as the revenue of the solar power industry in 2017, that would be about $40 million (6.5% x 30% x $210,000,000). This is a rough approximation, because I don’t know the breakdown of that revenue. What it does show is that the solar industry is not very big, and the clout to have a tariff imposed can’t come from its industrial importance. Must be “climate change” hype.

Of that total, let’s call the mid-quintile cost 15%, or $600 thousand.

New housing
The lumber tariffs added about $1,000 to the cost of a new house, pricing some 300,000 families out of the housing market. An estimated 1,202,100 housing units were started in 2017. That’s over a billion dollars, a disproportionate amount of which falls on the mid-level quintiles.

If one-third of that total falls on the mid-quintile, it’s a third of a billion.

Total cost
Now the total is approaching $600 million. Not much compared to the income tax decrease. But the real burden falls on the consumers who actually pay the extra $50 on their washing machine, the extra $650 on their solar installation, and the extra $1,000 on their house. They didn’t get a tax cut. They had their wealth redistributed to corporatists.

But, it’s more than just the increase in consumer costs: It’s also loss of jobs in retail, because fewer washing machines will be sold; the job reduction in construction of new houses; and the requirement for fewer installers of solar panels.

When steel tariffs are finalized, the job destruction in steel-using industries will be additive to washing machine manufacturing and solar panel installation. It will also affect car makers, pipeline building, skyscraper construction, tractor manufacture, ship building, etc.. Consumers will pay this tax, too.

There’s no doubt tariffs on steel will cost jobs in steel-using industries. It’s happened many times before. If Trump’s tariff accomplishments are anything like George Bush’s, we will see a cost to American consumers of $400,000 per “saved” steel job and the loss of more jobs in steel-using industries than all employment in steel manufacturing: The Perils of Protectionism

All these effects have been known since at least Adam Smith, and are documented by analysis of US tariff experimentation back to at least 1984.

Mr. Thompson* speaks

“I have a Twitter account,” is the populist version of “I have a pen and phone.”

You might say these are just negotiating positions, but if the negotiating positions are immoral, where do the negotiations end up?

On health care

“We’re going to have insurance for everybody,” Trump said. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.”

No, I get it. If you can’t pay for it we’ll steal it from others.

“In some circles,” is worthy of an Obama speech.

“It’ll be another plan. But they’ll be beautifully covered. I don’t want single-payer. What I do want is to be able to take care of people,”

Depends on your definition of “plan” and “single-payer,” I suppose: Direct from the Feds, or from insurance companies run by the Feds. A distinction without a difference. The former is socialist, the latter fascist. Both are statist.

“The question of whether the government should start negotiating how much it pays drugmakers for older Americans on Medicare has long been a partisan dispute, ever since the 2003 law that created Medicare drug benefits prohibited such negotiations.”

There’s a reason for that: It wouldn’t have passed if it put the Feds in control of pricing drugs. It was a partisan (a question of principle) issue when one party promoted fascism and the other paid lip service to free markets. Even that small distinction is being dissolved. The question that’s been forgotten is whether the government should be doing this at all. Just like “repeal and replace” is surrender because it assumes Obamacare should be replaced.

On tariffs

“Trump then attacked another carmarker, previosuly [sic] unnoticed by the president-elect, when he warned the United States will impose a border tax of 35 percent on cars that German carmaker BMW plans to build at a new plant in Mexico and export to the U.S. market.”

Now foreign companies are to be punished for operating in Mexico? Actually, it’s Mexico and American consumers being punished.

Ask yourself what Hank Reardon would have said.

*Mr. Thompson was US “Head of State” in Atlas Shrugged.

“He is not particularly intelligent and has a very undistinguished look. He knows politics, however, and is a master of public relations and back-room deals. Rand’s notes indicate that she modeled him on President Harry S. Truman, and that she deliberately decided not to call him “President of the United States” as this title has “honorable connotations” which the character does not deserve.”

Econ 001

If you read the brief articles below, you’ll have a better understanding of the obstacles the President elect faces in implementing his economic agenda, and you’ll understand the damage much of that agenda will do.

Reason Magazine:
A Stronger Economy Will Also Destroy Jobs, but It’s Necessary
Luddites need not apply.

The Brookings Institution:
Global economic forces conspire to stymie U.S. manufacturing
Stopping productivity increases will preserve jobs for some and destroy jobs for many others. All of them will be poorer.

The Foundation for Economic Education:
Taxing Global Trade Is Not Deregulation
The Regulatory State is where you find it.

I heard some guy named Sexton (guest hosting for Rush) making excuses for cronyism and protectionism on Tuesday. Hannity, too (while flipping stations).

The corruption of conservatism is well underway. These guys only ever paid lip service to the idea of small government. They’re just fine with Statism if the “right people” are in charge.

Cafe Hayek:
Trump’s Ignorance Is Matched Only by His Thuggishness
Remember when Obama screwed GM bondholders and fired the CEO? Donald Trump probably liked that. Conservatives didn’t.

Now, apparently, we’re supposed to cheer the big bully in the pulpit.