Mistaking effect for cause

Democracy does not make people good, good people make democracy work.

It is time to retire the illusion that freedom and democracy makes people good and prevents young people from becoming terrorists. It was a central rational of the Bush administration to over-through Saddam Hussein and bring freedom to the Middle East. As the brutality of ISIS makes clear, it is mostly young, western educated Europeans who opportunistically join the jihadists’ fight and are beheading their western victims. It is time to retire the feel-good propaganda of us v them, of good v evil, and start talking in terms of power and disenfranchisement.

Economy > Ecology > Biology

Economy should be a branch of biology. Consider behavioral economics. Or the wisdom of diversification when building a financial portfolio.

This post is one of an occasional exploration of economy as an organismal entity. Diversification is a mainstay of financial investment advice. Diversity is also the mainstay of how species survive. It is an essential component of evolution, where a multitude of organisms ensures the future success of life on earth, and where a multitude of diverse individuals ensures the future success of the species. Like the stock market, evolution cannot foresee which individual will be the beneficiary in a new environment. Like in the stock market, past results are no guarantee of future gains.

I have earlier compared a thriving economy with the blood circulation. In the body, all cells need adequate supply and inequality is bad for the whole body. An economy is as good as the flow of money through its various parts. Excessive savings and reduced lending are bad and cause recessions. Excessive lending and no savings also cause recessions. High blood pressure is like inflation, not immediately harmful, but bad for the future. One message is important here, blood, like money is not something one can own, but something one can get and spend. There is a need for adequate supply and reserves, so the analogy goes only that far. But coming back to blood pressure changes, they are a part of daily life, as are the changes in stock prices, where the overall market is a reflection of all actors without knowing what each actor is actually motivated to do. Without wanting to know, one thing is always certain, that what happens in one part of the body, affects another part, and so people respond to other people’s action, even when not understanding what they do.

Who’s a scientist?

Are liberals scientists and conservatives not? Cable TV comedians have a field day lately showing clips of Republicans claiming not to be scientists. What these politicians are really saying is that they do not believe in the science of climate change (e.g. global warming is man made; that it even exists). Not being a scientist at least helps not having to basically deny the scientific evidence of climate change. But are Democrats scientists? Depends on what question you ask. When climate change is the topic, they are solidly behind the science (even if they are not scientists), but when genetically modified organisms (for food) are the topic, they are just as ready to flee the scientific evidence (because they are not scientists, and even if they are) that GMO food is safe.

What have these two responses in common? The fear or denial of the unknown and likely catastrophic future. Conservatives have a hard time accepting that climate change is catastrophic as it challenges their unfettered trust in capitalism, and liberals are unable to concede that GMOs are not catastrophic, as it challenges their embrace of environmentalism. In my view, both reactions are based on the deep-seated human conditioning of the Apocalypse. In the West, these are the remnants of the evangelical stick and carrot of coercing the church goers into fearing God just enough to behave well on Earth and not loose the privilege to go to Heaven. Environmentalism on the left and unregulated capitalism on the right are simply a secular extension of this conditioning, the former a priestly ritual of enforcement and the latter a messianic self-approval.

Trickle-down Econonomics is a Lie.

Everyone should be in Kansas these days, because Brownback’s real life trickle down economic experiment turns out to be an abject failure, not just hurting the poor, but the state itself as revenues are completely below sustainable. Trickle down economics is a paternalistic lie invented by the ultra-conservatives who claim that giving money to the rich benefits everyone. Well, besides modern day Kansas, we also know that wages for workers have stagnated and are below the 1970 levels, while income for CEOs has increased 10-100 times. We call it income inequality. Turns out, the rich (self described job creators) neither create jobs with their extra cash not paid to the public purse, nor do the jobs they create pay a living wage, which means many workers depend on state subsidies and federal tax credits, creating a viscous circle.

Do people understand the downward spiral for the public purse and the enrichment of the rich? If trickle down economics actually were the goal of conservatives, they would not resist calls to increase to minimum wage, since higher wages is exactly the idea of trickle down economics, where workers benefit from companies having more cash to invest. Well they do not invest in their workers, as the recent example of IBM makes clear, a company that spent 12 billion dollars to buy back its own shares, making shareholders happy and richer, while creating the illusion of improved business activity and income.