Importance Of Government For Economic Growth Nonsense

Posted: 6/30/2016

Trigger

Just read this Great inventions are important for growth. So is policy. I pick this article, because I believe their are a lot more economists or intellectuals out there who would argue along similar lines. That such laughable articles are published by the American Enterprise Institute is a bit shocking.

A Critique

The article opens with this paragraph:

“In both research papers and his excellent book “The Rise and Fall of American Growth,” economist Robert Gordon writes about the huge economic impact of some “could only happen once” inventions: the internal combustion engine, running water and indoor toilets, electrification. Newer inventions — the IT revolution today, robotics and AI tomorrow — won’t provide the same transformational oomph to productivity going forward, he argues.” (emphasis added)

This is already highly arguable whether contemporary inventions/innovations are having lesser an impact than the older ones.

Then the article goes on to argue that:

1. “we present a more optimistic historical narrative in which government policy and institutional design have the power to support technological progress. … And the researchers illustrate this point by comparing the rise of patenting (a measure of innovation) to the establishment of post offices (a measure of government “infrastructural” capacity). The theory here is that having a post office around made it easier to patent because mail service made it easier to obtain new knowledge and information, made it easier to submit patent application, suggested a functioning government ”
   [What a baloney! A measure of innovation, what a joke! Without government there still would have been some kind of private postal service, if customers had found it useful. Patents, or government enforced, temporary monopolies, are actually a considerable impediment to growth and innovation.]
2. “... We find a significant correlation between a history of state presence–using the number of post offices as a proxy–and patenting in US counties. … This relationship is not only statistically significant, but also economically meaningful. … Taken together–while we do not establish unambiguously that the post office and greater state capacity caused an increase in patenting-–our results highlight an intriguing correlation and suggest that the infrastructural capacity of the US state played an important role in sustaining 19th century innovation and technological change. ”
   [What a baloney again! The typical confusion of correlation and causation!]

Naive Libertarians

Posted: 6/26/2016

Introduction

First, of course, not all libertarians are naive.

Second, I find the name libertarian awful and appalling. It sounds infantile. How it ever happened that the leftists/socialists in the U.S. were able to claim the term liberal for themselves to fool everyone (at least once) is still a mystery to me. They are anything, but liberal!

Third, libertarians quite often appear to be quite unaware or ignorant of realities not unlike a fundamentalist or orthodox sect. Not infrequently, they appear to be uncompromising as if they were morally superior.

Fourth, I just read this article Immigration Is a Fundamental Human Right published by the Foundation for Economic Education (Don’t get me wrong, many of their articles are great, just not this one. :-) ). Even if this article was not written by a libertarian or even if the FEE were not a libertarian think tank, then I still would say a libertarian would argue along similar lines.

This blog post is not about refugees fleeing from armed conflict like war. This article is more about individuals seeking better economic opportunities for themselves and their families beyond their current location.

Immigration As An Example

Yes, immigration is a fundamental human right, however, it is an individual human right. Therefore, libertarians also tend to argue for open borders to human mobility.

Once tens or  hundreds of thousands or millions of individuals decide to migrate (mass migration) from one country to another within a short span of time (e.g. less than a year, a year, or a few years), it becomes a whole different issue.

For as long as we have still very different or drastically changing economic systems or environments on this planet, mass migrations will remain a common and, I am afraid, often unpredictable phenomenon.

Libertarians try to counter e.g. that welfare states could introduce e.g. time limited exclusion or restrictions to welfare entitlements for immigrants (as does the above article). This might dispel to some extent the widely held, controversial fear that migrants are at least partially motivated by welfare entitlements. Well, this is perhaps not a bad solution, but it is not sufficient.

Any country accepting migrants would probably still need quotas to manage the flow of immigrants. This aspect of the immigration issue will likely not be addressed by libertarians and was not addressed at all by the above article about immigration. How to define such quotas is a thorny or controversial issue itself, should they be based on e.g. the health and/or age of the migrant, country of origin, professional skills or any combination of conceivable, reasonable criteria etc.

From a perspective of individual freedom, the least controversial selection criteria of an immigration quota system would be health and age of the migrant in combination with random drawing. Selection criteria like country of origin or professional skills introduce bias/distortion or worse allows the government to select “winners” according to some probably misguided goal or fancy of the time.

Unfortunately, the U.S. has evolved a very convoluted and complicated system of immigration for the past 100 years or so.

Other, related issues: 1) Are accepted migrants allowed to settle anywhere they like or not

Hot Recent Science & Technology Articles (27)

Posted: 6/26/2016

1. Contagious cancer found in clams and mussels (More evidence that some forms of cancer are transmissible)
2. ‘Undead’ genes come alive days after life ends (“What they found instead was that hundreds of genes ramped up. Although most of these genes upped their activity in the first 24 hours after the animals expired and then tapered off, in the fish some genes remained active 4 days after death.”)
3. Scientists glimpse why life can't happen without water (“... strong direct evidence that on ultrafast time scales (picoseconds, or trillionths of a second), water modulates protein fluctuations ... used ultrafast laser pulses to take snapshots of water molecules moving around a DNA polymerase ... to precisely locate optical probes on the protein surface ... The researchers inserted molecules of the amino acid tryptophan into the protein as a probe, and measured how water moved around it. Water molecules typically flow around each other at picosecond speeds, while proteins fold at nanosecond speeds 1,000 times slower. Previously, ... demonstrated that water molecules slow down when they encounter a protein. Water molecules are still moving 100 times faster than a protein when they connect with it, however. In the new study, the researchers were able to determine that the water molecules directly touched the protein's "side chains," the portions of the protein molecule that bind and unbind with each other to enable folding and function. The researchers were also able to note the timing of movement in the molecules.”)
4. Important milestone reached on road to a redefined kilogram (The kilogram is the only SI base unit that is still measured using an old fashioned prototype. Soon to be replaced by “[a] measure a fundamental physical quantity called Planck's constant, or h. Planck's constant relates a quantum particle's frequency to its energy, which is turn can can be related to mass through Einstein's E=mc2.”
5. Scientists Create Compound that Erases Disease-Causing RNA Defects
6. Discovered: a New Protein Crucial to Normal Forgetting (““Understanding the process of forgetting could have an enormous impact on how we treat a whole range of diseases,” … “Certain memories are intrusive and, with sufficient knowledge of how the brain forgets, we should be able to remove selective memories.”)
7. World's first 1,000-processor chip (“A microchip containing 1,000 independent programmable processors has been designed … The energy-efficient "KiloCore" chip has a maximum computation rate of 1.78 trillion instructions per second and contains 621 million transistors. … The KiloCore chip was fabricated by IBM using their 32nm CMOS technology. Each processor core can run its own small program independently of the others … enabling high throughput with lower energy use … Because each processor is independently clocked, it can shut itself down to further save energy when not needed … Cores operate at an average maximum clock frequency of 1.78 GHz, and they transfer data directly to each other rather than using a pooled memory area that can become a bottleneck for data.”)
8. Researchers Come Closer to Making Everyone a Universal Blood Donor  The approach uses an enzyme to snip off the parts of blood cells that can prove problematic
9. Scientists amplify light using sound on a silicon chip
10. http://phys.org/news/2016-06-layer-dna.html
11. Saving the Sea from Salt A chemist finds a way to cut supersalty discharge and CO2 as the Middle East relies ever more on seawater desalination
12. http://www.rsc.org/chemistryworld/2016/06/meteorite-origin-life-asymmetry-homochirality-sugar
13. Chemical synthesis injects new life into old antibiotics (This is one of the big stories! “The method produced over 300 structurally diverse macrolide antibiotic candidate molecules previously inaccessible via semi-synthesis. These included the approved drug telithromycin, and the clinical candidate solithromycin, which are effective against community-acquired pneumonia. What's more, gram quantities of macrolides were made which is ample for drug discovery purposes. Tests revealed that most of the compounds had antibiotic activity against an array of pathogenic bacteria, and some were active against bacterial strains that show resistance to macrolides in current use. These included the clinically relevant ‘superbug’ strains methicillin-resistant Staphylococcus aureus, better known as MRSA, and vancomycin-resistant Enterococcus.”)
14. Tiny lasers enable next-gen microprocessors to run faster, less power-hungry (“Traditionally, the lasers used for commercial applications are quite large - typically 1 mm x 1 mm. Smaller lasers tend to suffer from large mirror loss. But the scientists were able to overcome this issue with "tiny whispering gallery mode lasers - only 1 micron in diameter - that are 1,000 times shorter in length, and 1 million times smaller in area than those currently used," said Lau.)
15. Meta-lens works in the visible spectrum, sees smaller than a wavelength of light (This could be a huge advance! “Researchers ... have demonstrated the first planar lens that works with high efficiency within the visible spectrum of light - covering the whole range of colors from red to blue. The lens can resolve nanoscale features separated by distances smaller than the wavelength of light. It uses an ultrathin array of tiny waveguides, known as a metasurface, which bends light as it passes through, similar to a curved lens.”)
16. Possible case for fifth force of nature
17. AFM maps bacteria on skin
18. Biologists identify the backup systems that ensure genes build limbs
19. Physicists discover a new form of light or Photons with half-integer angular momentum are the latest twist on light (“One of the measurable characteristics of a beam of light is known as angular momentum. Until now, it was thought that in all forms of light the angular momentum would be a multiple of Planck's constant  … have demonstrated a new form of light where the angular momentum of each photon … takes only half of this value.”)
20. Galactic 'gold mine' explains the origin of nature's heaviest elements (“The origin of many of the most precious elements on the periodic table, such as gold, silver and platinum, has perplexed scientists for more than six decades. An analysis of the starlight from several of the brightest stars in a tiny galaxy called Reticulum II, located some 100,000 light years from Earth, suggests these stars contain whopping amounts of r-process elements. …  The abundances of elements in the stars squarely implicates the collision of two neutron stars.”)

Brexit - Congratulations To The British People!

Posted: 6/25/2016

I am in awe to witness this historic moment of a popular vote for the right thing to do!

I am envious that I could not vote! (just kidding)

British history of individual liberty strongly suggested that the British would vote to leave the EU, because the EU has increasingly become a more centralised, homogenized, and bureaucratic power, restricting individual and entrepreneurial freedoms and reducing federalism. Unfortunately, the UK adopted way too much socialism latest since the end of World War II. Margaret Thatcher succeeded only partially to roll back socialism in the UK.

Historically, Europe has greatly benefitted from its variety and diversity of approaches.

London will probably or has the opportunity to reinvent itself to become a far better global financial center than before. First, the British would have to unshackle the financial sector from the many ridiculous government restrictions imposed ever since the Great Depression and, more recently, since the Great Recession.

British businesses are now free to seek global opportunities unencumbered by European hegemonic or radical environmentalist aspirations! The British economy should benefit from it and prosper.

Together, with Hong Kong, Singapore, Australia, New Zealand, and India, the U.K. now could pose a serious challenge to China’s communist, authoritarian, one party regime.

Scotland may first vote for independence from the UK, but later may well decide to leave the European Union as well. I bet, they will eagerly cooperate with a prosperous England.

Ireland has a chance to finally become reunited again!

The European Union will no longer be a one way street anymore. The believers in Europe would be well advised to discover that voluntary cooperation among European countries on issues and more federalism is a better way to go. European monetary policy and the European Central Bank have undertaken disastrous measures for many years now. Important agreements of the European Union were violated with impunity and so on (e.g. Maastricht Treaty).

Given the many misguided and ill-informed anti-American sentiments in Europe, the relationship between the U.S. and the UK should improve a lot unless another Obama is elected. The world will be a better place for it. A win for humanity!

I am sure I am missing something here! :-)

P.S. It amuses me a lot that in the aftermath of the Brexit vote that so many news outlets and pundits pointed to the expected, temporary overshooting of the financial markets as if it was an “we told you so”. Baloney!

Prohibiting Trash Bags Folly

Posted: 6/25/2016

Nothing beats human ingenuity, but human folly and superstition! Unfortunately, there are a lot more human fools than humans with ingenuity! We need to privatize public education.

No wonder, many incompetent politicians get elected who then engage in stupid prohibitions like trash bags (or light bulbs) or sin taxes or GMO labeling of food and so forth.

Anyway just read this article Scientists have found a way to turn trash bags into fuel. Not only trash bags, but any container made with polyethylene. Landfills are man made resources for the future.

US President Monroe Attempts To End Slavery

Posted: 6/18/2016

Trigger

Among the Founding Fathers, James Monroe is least known to me. Today, I finally took some time to read most of the Wikipedia article on him.

Anti-Federalist

To my positive surprise, I was reminded that James Monroe was among the Anti Federalists. Given the Big Government we have today and the unnecessary American Civil War, one sometimes wonders what history would have been like if the Anti Federalists had prevailed or if they had  had more influence. I have a sense, We The People, would have been better off.

Death On Fourth Of July

I did not know there was a third U.S. President that died on Independence Day and who was among the Founding Fathers. But, I digress.

A Few, Brief Remarks

In the Wikipedia article on James Monroe, I found following passages (emphasis added):

1. “As president of Virginia's constitutional convention in the fall of 1829, Monroe reiterated his belief that slavery was a blight which, even as a British colony, Virginia had attempted to eradicate. "What was the origin of our slave population?" he rhetorically asked. "The evil commenced when we were in our Colonial state, but acts were passed by our Colonial Legislature, prohibiting the importation, of more slaves, into the Colony. These were rejected by the Crown."
2. “To the dismay of states' rights proponents, he was willing to accept the federal government's financial assistance to emancipate and transport freed slaves to other countries. At the convention, Monroe made his final public statement on slavery, proposing that Virginia emancipate and deport its bondsmen with "the aid of the Union."””
3. “Monroe was part of the American Colonization Society formed in 1816, the members of which included Henry Clay and Andrew Jackson. They found common ground with some abolitionists in supporting colonization. They helped send several thousand freed slaves to the new colony of Liberia in Africa from 1820 to 1840. Slave owners like Monroe and Jackson wanted to prevent free blacks from encouraging slaves in the South to rebel. With about $100,000 in Federal grant money, the organization also bought land for the freedmen in what is today Liberia. The capital of Liberia was named Monrovia after President Monroe.”

The above passages clearly convey that there were alternatives to an American Civil War to free slaves pursued prior to the civil war. The federal government together with northern states and abolitionists could have done so much more to peacefully free slaves and abolish slavery over time.

Last, but not least he promulgated what is referred to as the Monroe Doctrine of 1822 to keep the European powers/colonizers out of the Americas. Since the Monroe Doctrine was largely successful, this may have also contributed to significantly reduce slavery in the Caribbean region, Central and South America.

Reckless Monetary Policy Dooms Western Democracies

Posted: 6/17/2016

I have blogged here numerous times about the irresponsible and reckless monetary policies pursued by the likes of Alan Greenspan and the dim witted economic professor and successor Ben Bernanke. The current head of the U.S. Federal Reserve System, another very pale economic professor, Janet Yellen is not much better. Mario Draghi (or Dracula) or his predecessor at the European Central Bank have not been better either. By the way, Ben Bernanke and Mario Draghi were both students of Stanley Fischer.

To destroy western civilization and individual freedom politicians start by debauching the currency. This basic wisdom has been known hundreds of years before Maynard Keynes or Lenin.

If awful monetary policies are pursued in conjunction with irresponsible fiscal policies (more deficits and more government debt and more government regulation instead of lower taxes and more economic freedom) as is the case in the first decade of the 21st century, then our elected politicians have created the perfect storm.

Why the considerable rise of populism in recent times in Europe or the USA?

Why are Western democracies in crisis as I blogged here before?

Why Were Three Police Officers Unable To Stop The Orlando Mass Killer?

Posted: 6/16/2016  Updated: 6/17/2016

Trigger

I did not follow all the news closely about the horrible, terrorist act! However, I learnt early on that there was apparently an armed guard (an active duty police officer) working at the Pulse Club in Orlando, when the coward killer arrived and that both exchanged shots.

Since I did not see or read anything else anymore about this armed guard and his response to the killer, I became curious again today.

I found this FactCheck report: Orlando Club Had Armed Security. Here I learnt to my surprise that a few minutes after the killer began shooting inside the club, two more police officers arrived on the scene and exchanged fire with the killer.

A Lot Of Questions!

1. The coward killer apparently did not first shoot the armed guard. Did he not know about the armed guard despite prior canvassing of the club? Why did he not kill the armed guard first before he went on to kill all the other victims?
2. How is it possible that these three police officers were not able to stop the killer? Were they waiting for backup? Did they misjudge this situation as a hostage taking? Did these police officers leave the scene? Did they call for advice? These puzzling questions warrant a thorough investigation
3. Did the coward killer wear body armor during while committing his heinous act or not? Or did he only try to buy it?
4. That the police officers were outgunned by the killer cannot be taken very seriously as an argument given that this horrific crime went on in a tight space at close range
5. Why was the coward killer not afraid or nervous about the early life threatening encounter with these police officers?