Thursday, September 23, 2010

A pathetic president

President Obama has a new plan for economic assistance around the world:
Addressing world leaders, Obama offered no new commitments of U.S. dollars, but rather a blueprint of the development policy that will drive his government's efforts and determine where the money flows. His message was that the United States wants to help countries help themselves, not offer aid that provides short-term relief without reforming societies.

"That's not development, that's dependence," Obama said. "And it's a cycle we need to break. Instead of just managing poverty, we have to offer nations and people a path out of poverty."
President Obama's foreign policy is that countries mired in poverty are just going to have to do more with less, because the United States can't keep throwing money at a poverty problem that isn't going to just go away. President Obama's domestic problem, however, is to continue to throw money at a poverty problem -- economic malaise and 9%+ unemployment "as far as the eye can see" -- and hope that it just goes away.

The picture attached to the Fox news article underscores the point about our incredible shrinking President.

Thursday, September 16, 2010

Vox Genius strikes again.

According to Vox day, voluntary exchange is a generally bad idea:
The second and much more serious error is in the statement that "voluntary exchange benefits both parties". This is both logically and empirically false because it posits a non-existent human rationalism without temporal limits. While it is true that value is subjective, thereby allowing the possibility to defend totally irrational actions as at least nominally rational, this still doesn't avoid the problem of how the subjective values that the Misean acting man assigns are necessarily momentary in nature. What the acting man defines as a beneficial exchange at one moment he may very well not define as beneficial in the very next moment for a wide variety of reasons. And it is this fatal flaw in the logical foundation that causes the entire edifice in support of free trade to collapse.
Most people tend to revise their positions when they derive a contradiction, but not Vox. So, having "proven" that free trade is a really stupid idea, how does he account for that fact that free-trading South Korea is so much more prosperous than its relatively non-trading neighbor to the north?

The way that reality works is that voluntary exchange and free trade are almost certainly economically good ideas in the presence of perfect information being possesed by both parties. There's always that slight possibility that, say, a meteorite strike will take out human civilzation, thus preventing you from purchasing your morning cup of coffee. Voluntary exchange and free trade are therefore not absolutely certain to be of mutually benefit even with perfect information possesed by both side.

In the presence of limited or asymmetric information, voluntary exchange and free trade are generally of economic benefit. Yes, it is true that the possibility of irrational decision making, rapidly changing conditions of worth, and human trickery -- in general, risk -- make exchange problematic. There have been some developments that have been discovered that mitigiate the effects of risk. For example, advanced civilizations typically develop an information economy in which some economic actors specialize in providing reliable economic data in exchange for monetary renumeration. Even primitive societies deal with risk by creating institutions such as tribes and kinship groupings. Risk management is one of the keystones of economic success, right?

The key misrepresentation that Vox Day makes in his blog post is assuming that all potential transactions are plagued by utterly disabling levels of risk, which of course makes the possibility of useful exchange disappear. In the real world, that is simply not true.

Monday, September 06, 2010

The President of the United States is stuck on stupid.

The major problem with the Obama presidency is that Obama himself is too politically weak to rein in a completely inept, out-of-control Congress.

The roots of this phenomenon appear to go back all the way to the fallout of the Clinton trial in the Senate in 1999. The major political effect of the Clinton trial was to discredit the conservative leadership of the Republican party to the extent that a Republican moderate, John McCain, was able to seize control. Control of the Republican party gave McCain a clear shot at winning the Republican nomination in 2000. McCain also wasn't shy about leveraging his party power to increase his odds of becoming president. He was more than willing to open the Republican primaries to the general public in order to build a Republican moderate/independent/liberal voting alliance to defeat the conservatives. I think it can also be taken as a given that Pat Buchanan didn't leave the Republican party by accident in 1999.

By the 2000 primary season, McCain winning the Republican presidential nomination was almost a fait accompli. Of course, the conservatives fought back and managed to engineer the presidental nomination of a fusion candidate, George W. Bush (i.e. Mr. "Compassionate Conservatism"). The end result was a situation similar to the Tyler administration: a conservative president with a weak base of support squaring off against a de facto party leader who is master of the Senate.

The election of Barack Obama to the presidency in 2008 represented the same process occuring in the Democratic Party. After the 2000 elections, both Bill Clinton and Al Gore ended up being weakened as Democratic party power brokers. Clinton spent most of his time earning megatons of money for his wife's future presidential bid. Al Gore left formal politics to launch into a new career as a climate crusader. This left the Democratic party in the hands of the Democratic master of the Senate, Ted Kennedy.

Kennedy's first candidate for the presidential nomination was his own protégé, John Kerry. After Kerry's loss of the presidency to Bush in 2004, Kennedy ended up forging the Massachusetts-Illinois alliance that led to the nomination of Obama in 2008. Obama was chosen to be the nominee because of his obvious non-qualification for the position, his personally immunity to criticism in the mainstream media, and because he was personally enough of a cynical "operator" to accept being a presidential puppet.

The end result is that Obama has quickly morphed into perhaps the weakest president in all of American history. He has done nothing to lead the United States on any question. His legislative achievements in office all consisted of him free-riding on his Democratic Congress, acquiescing in whatever legislative mish-mash they decide to send to him. His presidency has consisted of golf and going on vacation; he is literally a president with nothing to do.

The end result is a massively strengthened Republican party that is going to ride a tidal wave of support into this year's elections. Paradoxically, this is expected to lead to a strengthening of the Obama presidency. Why? Because the mass extinction of Congressional Democrats will leave Obama alone as the remaining major party leader. Whether this will be enough power to get Obama re-elected in 2012 will be the next question.