The new defender of the West

You really do have to wonder just how bad things have become before the religious left* finally acknowledges they have screwed up and that some other approach is required. The wheels do grind slowly but a decade or two is not that long in the history of nations and civilisations. Time is also not on our side. From Roger Kimball discussing the United States, with the bad news first:

Now that the transformation is well underway, there are fewer if any cheers. The economy is moribund. Obamacare is more unpopular than ever. Racial tensions are far worse now than when Obama came to office. Everywhere one looks, Obama’s domestic agenda is in shambles. And when it comes to international affairs — well, let’s just say that Obama must be rueing the day he drew that red line about Syria or heard the name Vladimir Putin. Has there ever been a more cringe-making presidential speech than the incoherent bilge that oozed out of Obama’s mouth last Tuesday? Jimmy Carter’s infamous ‘malaise speech’ is the only thing that even comes close, and at least Carter’s speech had the intelligence of Christopher Lasch’s book The Culture of Narcissism as a source.

But he thinks the problem with electing the hollowest of men as president is finally beginning to dawn on the left. This is the good news, such as it is:

I believe that we are witnessing the gradual, or possibly not so gradual, decomposition of the emotional consensus that put Obama into the White House in 2008 and, not without a struggle, returned him in 2012.

I’ll believe it when I see it. In the meantime, Obama has ceded the defence of the West to Vladimir Putin.

* The religious left are socialists of one kind or another who have substituted their political beliefs in place of an actual religion.

UPDATE: You have to click over to Powerline to see just how unlikely it is that the American media are going to walk away from their own creation, the man who represents their values almost down to the ground. The media are a fifth column of immense power. Until they are dealt with, the answers to our problems will not be forthcoming.

Julia Gillard on Julia Gillard

Julia Gillard really could not help herself and I can’t say that I blame her. She has a long article at The Guardian, itself an interesting choice on where to speak out, which comes under the title, “Julia Gillard: power, purpose and Labor’s future“. I picked this up at Andrew Bolt who has quite a bit to say on the article as well. But the part that gets to me is that sense of how wonderful Labor has been in all the handouts they have manufactured. She sees no down side in all of the visionary stuff she has been responsible for. Let me draw on just one:

It is impossible to imagine modern Australia without Medicare, our universal healthcare scheme, which was introduced by the Whitlam government, repealed by the Coalition and then introduced by Labor again. This reform has become so significant a part of our national story that the political contest which surrounded its birth is now over. No serious candidate for public office runs on a platform opposing Medicare. Today’s Australia is not home to the kind of conservatives who would be ideological enough or dumb enough to contemplate such a political campaign. If anything, the national mood around Medicare is one of smug complacency. How much smarter are we than the Americans, still struggling with health reform, we think to ourselves.

Let me just stop you right here. Australia does not have a universal healthcare scheme. It has a dual track system which is why ours is the best in the world. Left to Whitlam, there would have eventually been no private healthcare option. It was intended to be a universal health care scheme. We would have been like the Poms, the Canadians and as the US is about to become. But under Malcolm Fraser, before he became a socialist, there was this one change made that has made all the difference: “‘Medibank Mark II’ was launched on 1 October 1976 and included a 2.5 per cent levy on income, with the option of taking out private health insurance instead of paying the levy.” They are slowly slowly introducing the private component into overseas universal healthcare systems as the Americans go about ruining theirs. We have had it all along. For a hilarious look at the Canadian system you have to see The Barbarian Invasions. This is where the Whitlam/Labor approach would have taken us.

This is the economic problem with the sainted Julia’s way of thinking. The government will remove market considerations to the greatest extent possible to fix whatever is not in their minds working perfectly by getting the government to do whatever it is itself. Everything is then fantastic except the outcome. And as for it being “impossible in modern Australia to find an advocate for the Howard government’s Work Choices laws” I wouldn’t be all that sure of this myself. But while on policy, as in making the economy work and that sort of thing, she is utterly wrong; on the politics of what draws votes I am more than sure that if not quite 100% correct she is pretty close. We still do not have the dependency class in the way others do. We have managed to maintain just enough of the ancient work ethic and notions of self reliance to still make an Abbott electable. But how long this will be it is impossible to know. But as these attitudes erode a less certain future beckons.

Even on the smaller question of whether it was right to switch to Kevin, it is not the number of seats that matters but the way in which the lies, chaos and policy incoherence of the Gillard government has more or less disappeared from the active memory of the country. Julia was a disaster and not only would have led her side to defeat but would have remained a symbol for inept governance for a generation. That has now gone completely. There is no horror within the community at the six years of Labor in the way there ought to be. That is why she is able to write this article and maintain her dignified pose. It amazes me how thoroughly Kevin has saved Labor from an entrenched communal memory of incompetence and deceit it so completely deserved. Now, sadly, it is possible to imagine a Labor Government if not quite within three years but certainly in six.

Just how bad is modern economic theory? Really bad – Ronald Coase in 2012

It’s hard to appreciate just how useless economic theory today is in explaining how an economy works and in devising policies to make it run better. This is by Ronald Coase in a brief essay written in 2012 which he titled, “Saving Economics from the Economists“:

Economics as currently presented in textbooks and taught in the classroom does not have much to do with business management, and still less with entrepreneurship. The degree to which economics is isolated from the ordinary business of life is extraordinary and unfortunate.

That was not the case in the past. When modern economics was born, Adam Smith envisioned it as a study of the “nature and causes of the wealth of nations.” His seminal work, The Wealth of Nations, was widely read by businessmen, even though Smith disparaged them quite bluntly for their greed, shortsightedness, and other defects. The book also stirred up and guided debates among politicians on trade and other economic policies. The academic community in those days was small, and economists had to appeal to a broad audience. Even at the turn of the 20th century, Alfred Marshall managed to keep economics as “both a study of wealth and a branch of the study of man.” Economics remained relevant to industrialists.

In the 20th century, economics consolidated as a profession; economists could afford to write exclusively for one another. At the same time, the field experienced a paradigm shift, gradually identifying itself as a theoretical approach of economization and giving up the real-world economy as its subject matter. Today, production is marginalized in economics, and the paradigmatic question is a rather static one of resource allocation. The tools used by economists to analyze business firms are too abstract and speculative to offer any guidance to entrepreneurs and managers in their constant struggle to bring novel products to consumers at low cost.

This separation of economics from the working economy has severely damaged both the business community and the academic discipline. Since economics offers little in the way of practical insight, managers and entrepreneurs depend on their own business acumen, personal judgment, and rules of thumb in making decisions. In times of crisis, when business leaders lose their self-confidence, they often look to political power to fill the void. Government is increasingly seen as the ultimate solution to tough economic problems, from innovation to employment.

Economics thus becomes a convenient instrument the state uses to manage the economy, rather than a tool the public turns to for enlightenment about how the economy operates. But because it is no longer firmly grounded in systematic empirical investigation of the working of the economy, it is hardly up to the task. During most of human history, households and tribes largely lived on their own subsistence economy; their connections to one another and the outside world were tenuous and intermittent. This changed completely with the rise of the commercial society. Today, a modern market economy with its ever-finer division of labor depends on a constantly expanding network of trade. It requires an intricate web of social institutions to coordinate the working of markets and firms across various boundaries. At a time when the modern economy is becoming increasingly institutions-intensive, the reduction of economics to price theory is troubling enough. It is suicidal for the field to slide into a hard science of choice, ignoring the influences of society, history, culture, and politics on the working of the economy.

It is time to reengage the severely impoverished field of economics with the economy. Market economies springing up in China, India, Africa, and elsewhere herald a new era of entrepreneurship, and with it unprecedented opportunities for economists to study how the market economy gains its resilience in societies with cultural, institutional, and organizational diversities. But knowledge will come only if economics can be reoriented to the study of man as he is and the economic system as it actually exists.

My thanks to Julie Novak for finding and posting this brief note.

An “unexpected” deterioration in the labour market

employed persons aug 2013

unemployment rate aug 2013

The left hand picture shows the level of employment and the right hand side the unemployment rate. The one that should be going up is thus going down and the one that should be going down is going up.

This ought to be seen as the benchmark moment with the unemployment rate having returned to its peak level at the height of the Global Financial Crisis. The rate is going to get worse before it gets better but there needs to be some clear recognition that the stimulus was not all that stimulating after all.

The reporter in The SMH is either a regular reader of Instapundit or doesn’t read him at all since he describes this turn of events as “unexpected”. Even the participation rate fell which means things are even worse than the stats actually show.

The economy unexpectedly shed jobs in August, taking the unemployment rate to a fresh-four year high and reviving the chance of a rate cut.

The number of people employed fell by 10,800 from the previous month, when it declined by a revised 11,400, the statistics bureau said today. That compares with expectations of a 10,000 increase. The jobless rate rose to 5.8 per cent from 5.7 per cent. . . .

The number of full-time jobs declined by 2600 in August, and part-time employment fell by 8200, today’s report showed. The participation rate, a measure of the labour force in proportion to the population, dropped to 65 per cent in August from 65.1 per cent a month earlier, it showed.

This is with record deficits and public spending continuing to rise. Needs explanation is all I can say.

[The data and the SMH story first noted by Andrew Bolt.]

The poisonous mind rot of Keynesian economics

The poisonous mind rot of Keynesian economics never seems to go away. I hate to throw an apple of discord into the middle of the party, but this sentence from our new Treasurer should not be allowed to go unremarked. From The Australian today:

Following the election result on Saturday, incoming treasurer Joe Hockey said the Coalition’s victory would encourage consumption. ‘You can go forward and spend your hearts out because we’re going to have a good Christmas,’ he said.

Perhaps I have misjudged what was being said. If the point was that the economy is turning up, real value adding production is going up and you will therefore be able to buy more at Christmas, well OK, although I would not be entirely sure what the point was since in such circumstances you can spend at other times besides Christmas.

But if this is an attempt to get the economy to grow faster through encouraging higher consumer demand, then we are back on the same old Keynesian merry-go-round.

Spending of all kinds draws down on your resource base. Whether it’s by consumers, businesses or government it uses our resources up. Only some of that spending, that drawing down on resources, will eventually add back even more than has been drawn down, and this is almost entirely made up of productive business outlays and innovation that help build the economy.

Not being able to separate the building up from the drawing down is the largest mistake a government can make. Governments can no doubt do all kinds of beneficial things but it should never think that it is making the economy stronger when it is re-distributing the output of industry. The only thing that makes an economy stronger is productive investment, and the benefits do not even occur until the investments are brought on stream and are contributing to the production process. Until then, it is all a negative. It is all drawing down.

I perfectly well understand that Treasury, like economists everywhere, are deluded by the nonsense of Y=C+I+G. Hopefully this government will be different but it won’t be if it believes that strong consumer demand is good for the economy. It is absolutely the other way round. It is a strong economy that is good for consumer demand. The government’s job is to make the economy run better, and if they are going to keep their eye on the ball, it is business investment with a tiny addition of government investment that are the ingredients required. Nothing else will do.

Spinoza’s God

Another fine article on Spinoza, this one by Steven Nadler with the title,
Why was Spinoza Excommunicated? He sounds like any one of a large number of academic backyard barbeque atheists but what makes him so extraordinary is that he was the first person ever to say what he said.

What God is, for Spinoza, is Nature itself—the infinite, eternal, and necessarily existing substance of the universe. God or Nature just is; and whatever else is, is ‘in’ or a part of God or Nature. Put another way, there is only Nature and its power; and everything that happens, happens in and by Nature. There is no transcendent or even immanent supernatural deity; there is nothing whatsoever outside of or distinct from Nature and independent of its processes.

Spinoza’s God is definitely not a God to whom one would pray or give worship or to whom one would turn for comfort.

What follows from Spinoza’s philosophical theology is that there can be no such thing as divine creation, at least as this is traditionally understood. Nature itself always was and always will be. This means, too, that Nature does not have any teleological framework—it was not made to serve any purpose and does not exist for the sake of any end. ‘All the prejudices I here undertake to expose,’ Spinoza says in the Ethics, ‘depend on this one: that men commonly suppose that all natural things act, as men do, on account of an end; indeed, they maintain as certain that God himself directs all things to some certain end, for they say that God has made all things for man, and man that he might worship God.’

And on it goes.

Not coming soon to a theatre near you

This is a trailer for a film that will be coming out in the US in a couple of months that deals with the mega-mess being created by the Federal Reserve. It is titled, Money for Nothing which seems to be a horror film in the genre of crony capitalism meets the Fed.

The reason lower interest rates are not a cure for an economy in recession, of course, continues to elude the economists’ fraternity because they cannot help believing that the problem is not enough demand so that their only cure is more spending. But watch the trailer. Charles Plosser’s perfect comment – “printing money doesn’t produce goods and services; it doesn’t hire people” – exactly captures what needs to be understood but which almost no one with a standard education in economic theory ever seems to comprehend. Yet what I find pleasing is that even though virtually no one is taught these things, the logic eventually dawns on some people that production must precede the purchase. In this case, it was the Chairman of the Federal Reserve of Philadelphia. Such ideas must rule him out as the next Bernanke. Still, there must come a time when the Fed will stop printing money and what will happen then is what I suspect this film is about.

[My thanks to JA for sending me the link to the trailer.]

Don’t call me stupid

A fascinating and utterly convincing account of the assessment made of Kevin Rudd’s personality defects and how these were used during the election campaign. From Pam Williams in the AFR:

The Liberal strategy to turn the focus to Rudd’s dysfunction was supported by a secret tactical tool.

Held deep within the top strategy group of the Liberal war room was a document which gave a name and a diagnosis to the personality of Kevin Rudd. It was a document provided to the Liberal’s strategy team on an informal basis by a psychiatrist friendly to the Liberals after Rudd had returned to the Labor leadership on June 26. In a nutshell, this document offered an arm’s-length diagnosis of Rudd as suffering a personality disorder known as “grandiose narcissism”.

The document was not shown to Abbott, but rather remained within the strategy group as an informal check-list, often as a tool for comparison after Rudd had already behaved in ways that the Liberal strategists believed could be leveraged to their advantage. The Liberal war room had reached its own conclusions about Rudd long ago, based on his public behaviour and the damning revelations of his colleagues.

But the document provided an affirmation that the snapshot of the enemy on which a fighting campaign was based had a context. It listed recognisable symptoms and behavioural patterns linking Rudd’s personality to the clinical symptoms for grandiose narcissism – drawing conclusions about Rudd’s mindset. It also proposed tactics to leverage Rudd’s personality.

Describing grandiose narcissism as less a psychiatric disease and more a destructive character defect, the document suggested Rudd was held together by one key strut: an absolute conviction of intellectual superiority over everyone else. “Kick out that strut and he will collapse; basically he is a self-centred two-year-old in an adult body. Prone to wanting everything – now! If not, then he has a two year-old’s tantrum.”

Rudd, the document went on, was vulnerable to any challenge to his self-belief that he was more widely-read, smarter and more knowledgeable than anyone else “on the planet”. Such a condition of grandiose narcissism would make Rudd obsessively paranoid, excessively vindictive – “prepared to wait years to get revenge”, and “a spineless bully” who would strike an easy target; he would predictably be excessively sensitive to personal criticism. If publicly goaded, he could easily have a “mega tantrum”. If described as “stupid”, such a personality would mount an almost impenetrable intellectual defence. If undermined in front of an audience, with his intellect undermined, Rudd could be prone to “narcissistic rage”.

“Later, in attempts to repair the damage, he will claim, in the calmest, coolest and most reasonable way, that his meltdown occurred because those around him are ganging up on him to prevent him from ‘saving Australia’ or some other such grandiose concept.

“Kevin’s explanation for the meltdown will run something like this: ‘Under the difficulties I face trying to save this country from the terrible threats facing it, any reasonable person would have naturally reacted the way I did.’ And then, blah blah, with grandiose ideas of being the country’s saviour.”

Rudd would be threatened by a rival in any of his fields and would be obsessively paranoid and ready to retaliate to real or perceived threats; he would suffer from excessive suspicion. This could be tactically exploited, the document suggested, by promoting the idea that Rudd was merely a caretaker prime minister, to be terminated by colleagues once the election was won.

Inside the Liberal war room the document explained why Rudd “knew best” and “why he had to take over” again as prime minister. And while the document went to explaining behaviour, it also aided the development of pressure points against Rudd – such as pushing the notion that he was full of flimflam, an accusation designed to undermine a superiority complex. The document was a confirmation that many of the tactics and strategic assessments in the war room were on the mark. It crystallised a view of Rudd rather than creating a framework, confirming views of his likely behaviour – a crucial weapon in the psychological warfare of an election campaign.

While Labor fed a storyline (ultimately proved incorrect) that the enemy, Abbott, was so disliked as to be unelectable, the Liberals fed a storyline (ultimately proved correct) that the enemy, Rudd, was so assured of his own superior ability that his campaign would become mired in chaos as he micro-managed and displayed suspicions of those outside his own small cult circle.

The document – simple in its construct and in many ways echoing a view clearly held inside Labor itself where many of Rudd’s colleagues had described him as dysfunctional – raised a riddle no one could answer; if the symptoms were all so obvious and the character flaws so marked, how was it that Labor had chosen Rudd not once, but twice to lead the country?

If Rudd could be interpreted as a grandiose narcissist, then he could not bear to be ignored. He would demand on cue, “Mr Abbott must respond!”

Views on the Australian election

I did the rounds of the usual American news agencies to see what they were saying about our election but aside from saying it was a landslide, there was not much in their writing that I thought captured how we on our side felt had just taken place.

Diplomad 2.0 has the kind of writing on Abbott and the Liberal win that you never see anywhere. It starts from the premise that Labor for the past six years has been a hopeless government. Because unless you start from such a premise, what has just happened before your very eyes makes little sense. Here’s a taste but I, of course, encourage you to read it all:

A big John Howard fan, I admired his blunt speaking, profound patriotism, and willingness to continue the long Aussie tradition of stepping up to defend the West. His rise to power gave me hope that we could avoid four years of Al Gore after eight years of Clinton. Australia, again, proved the land of tomorrow, and we got George W. Bush. I was appalled when Howard’s long run as PM ended and we saw Labor’s Kevin Rudd incumber the office of PM. I saw Rudd more as a European phony than the down-to-earth and very clear-eyed Australians with whom I worked. His kow-towing to the warmist crowd with his signing of Kyoto, and his “apology” for Australia being a great country turned me off completely. I hoped and prayed that Rudd, and his even more bizarre intra-Labor rival, weird Welshwoman Julia Gillard, would not prove a glimpse of what was in store for the USA. This time, Alas! Australia, again, predicted what was to come. We got an inept anti-American Chicago mountebank by the name of Barrack Hussein Obama, who made the shambolic (Note: A great British word!) Rudd-Gilliard-Rudd administration seem like a Swiss railroad in comparison.

And while I’m at it, this was the post from Mark Steyn at National Review he put up on the night.

We get used to not finding our perspectives reflected in the media. And it is not a process of myth making in the normal sense of it’s not being a true reflection of whoever is writing the story. It is an absolutely true reflection. It is just that the people who write the stories do not understand why 53% of the country wanted to see Labor lose. They just don’t get it. They can see that it happened but they can’t explain why, other than as a xenophobic reaction to refugees and the divisions caused by Rudd. That’s why it’s good to read the occasional outside observer who has a take that is similar to our own, just so we can remember the difference when we see it.