WND column

Evolution, Economics, and Evil

The Mind of the Market: Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics
Michael Shermer
Rating: 7 of 10

It is no secret that I hold a rather low opinion of various books produced by a few well-known atheists. Without exception, they are riddled with factual ignorance, easily demonstrable illogic and fraudulent appeals to science. While Michael Shermer is every bit the atheist that Sam Harris or Richard Dawkins are, his scientific expertise happens to be applicable to his subject matter and his approach is entirely different. And unlike the New Atheists, Shermer makes intelligent use of both science and logic in utilizing various aspects of evolutionary theory to consider homo economicus.

By the way, something that I didn’t manage to work into the column was Shermer’s articulation of “Darwin’s Dictum”, which he developed from a letter Darwin wrote to Henry Fawcett.

“About thirty years ago there was much talk that geologists ought only to observe and not theorize, and I well remember someone saying that at this rate a man might as well go into a gravel-pit and count the pebbles and describe the colours. How odd it is that anyone should not see that all observation must be for or against some view if it is to be of any service!

Shermer writes: “This quote was the centerpiece of the first of my monthly columns for Scientific American, in which I elevated it to a principle I call “Darwin’s Dictum,” as identified in the final clause: all observation must be for or against some view if it is to be of any service. Darwin’s Dictum encodes the philosophy of science of this book: if observations are to be of any use they must be tested against some view—a thesis, model, hypothesis, theory, or paradigm. Since the facts never just speak for themselves, they must be interpreted through the colored lenses of ideas—percepts need concepts. Science is an exquisite blend of data and theory—percepts and concepts—that together form the bedrock for the foundation of science, the greatest tool ever devised for understanding how the world works. We can no more separate our theories and concepts from our data and percepts than we can find a truly objective Archimedean point—a god’s eye view—of ourselves and our world.

I found this to be an intriguing perspective, especially in light of the vociferous claims of science’s pure objectivity made so often by those who fetishize it. It tends to raise two questions, of course. In service to what, or to whom? And by what standard are competing interpretations of the same facts to be judged?

NFL Week Three

This is the weekly open NFL post. I’m thinking All Day will bring the thunder against San Francisco once Favre shows that they can’t stack the box against him. I’m hoping Matt Forte will finally get rolling against a bad run defense – although coaches changing defensive priorities often shows the obvious to be nothing of the sort. I’m wondering what is wrong with Clinton Portis, and I will be very amused if the Titans start out 0-3.

Democratic integrity

Peter Schiff does the right thing:

While Peter Schiff has the money to hire an experienced campaign team, he’s shied away from that approach. Andrew Schiff said that when his brother first formed an exploratory committee, he put together a team of Washington-based consultants to help hone his campaign message. When they expressed doubt about the political viability of his libertarian message, Schiff let them all go.

“We decided we didn’t want to be put in a standard box, and Peter wasn’t impressed with their ideas and how they wanted to sell him,” said Andrew Schiff. “The guys in D.C. wanted to spend lots of money, and we saw how the game was played and how they got their money. It left a bad taste in our mouth, and we moved on.”

There’s no point in playing bait-and-switch with the American people. If they genuinely want to be impoverished serfs living in a post-apocalyptic economic landscape, that’s their right. Schiff is giving them the option to choose freedom, and that’s all one can reasonably hope to do. If you focus on winning uber alles on the grounds that you can’t effect change without holding political office, you have already lost regardless of how the election turns out.

The NFL must face facts

I love the NFL. I am delighted with the league right now, not because both the Vikings and Meerkats are 2-0, but because their customer service has been excellent. Last week, NFL Game Pass slowed down so much that the early games became unwatchable partway through the second quarter. I assumed it was my Internet connection, which I’m planning to change at the next opportunity.

However, on Tuesday, I got an email from the NFL taking responsibility for the problem, apologizing for it, and giving a one-sixteenth refund. It was totally unexpected and very well done. So, someone in the NFL organization clearly understands customer service. And perhaps whoever that is should be put in charge of dealing with the developing problem of head trauma, because this is an ugly situation that the NFL has, unfortunately, not handled well for fear of lawsuits from former players and their families:

[Dr. Omalu] wrote a paper detailing his findings. He titled it “Chronic Traumatic Encephalopathy in a National Football League Player” and put it in an envelope and sent it to the prestigious peer-reviewed journal Neurosurgery. He thought NFL doctors would be pleased when they read it. He really did. He thought they would welcome a finding as important as this: scientific evidence that the kind of repeated blows to the head sustained in football could cause severe, debilitating brain damage. He thought they could use his research to try and fix the problem.

“I was naive,” he says now. “There are times I wish I never looked at Mike Webster’s brain. It has dragged me into worldly affairs I do not want to be associated with. Human meanness, wickedness, and selfishness. People trying to cover up, to control how information is released. I started this not knowing I was walking into a minefield. That is my only regret.”

Nothing was welcoming, nothing was collegial, about the NFL’s reaction to Omalu’s article that appeared in the July 2005 edition of Neurosurgery. In a lengthy letter to the editor, three scientists, all of whom were on the NFL payroll, said they wanted Omalu’s article retracted.

“We disagree,” they said.

“Serious flaws.”

“Complete misunderstanding.”

The scientists, Ira Casson, Elliot Pellman, and David Viano, were all members of the NFL’s Mild Traumatic Brain Injury committee. In tone their letter to the editor struggled to remain calm, but everyone could read the subtext: We own this field. We are not going to bow to some no-name Nigerian with some bullshit theory.

There’s a few lessons that can be drawn from this article. First, it proves that the next time anyone tries to snow you with talk of scientific purity, they’re nothing more than lying science propagandists. Scientists are bought as easily as anyone and far more often than most. Second, it’s apparent that for all it is pretending Dr. Omalu doesn’t exist and his theory is “flawed”, the NFL knows he’s probably correct and are attempting to do as much as they can to solve the problem without being sued into oblivion by every ex-player who ever knocked a helmet against another player’s helmet. Third, it completely destroys Sam Harris’s ludicrous and entirely unscientific theory about how those who engage in what he calls “magical thinking”, (in other words, all religious individuals), are somehow rendered incapable of properly performing science.

And fourth, it should help those of us who are fans of the league to understand why the league is encouraging the refs to throw flags on what look like normal helmet-to-helmet action. I’m as opposed to turning the league into two-hand-touch on the quarterback as anyone, and there’s nothing better than seeing a DB lay the smack down on some diva WR, but I really don’t want to see any more players ending up like John Mackey either.

An order of magnitude

Barry Eichengreen and Kevin O’Rourke have been doing a great job of tracking the development of the current recession versus the Great Depression. While one could conceivably quibble with a few of the minor details, such as the starting points, the comparisons are nevertheless highly informative. In their most recent update, on September 1st, a number of the indicators appeared to show that the present situation had improved dramatically vis-a-vis the historical one, as global industrial production and world stock markets in particular appear to be in recovery thanks to the massive global stimulus programs enacted by most of the governments of the industrialized nations. That’s a reasonable interpretation based on the conventional Neo-Keynesian macroeconomics that drove the decision to implement the programs.

However, when I look at the charts, especially those for global production and world stock markets, I see what looks suspiciously like a situation that is developing at a larger order of magnitude. This interpretation fits with my statistical observations of the banking system and credit markets, the Austrian school interpretation of the relative size of the past and present stimulus programs, and with Bob Prechter’s socionomic theories. Note that none of these three factors are conceptually related; the synchronicity is entirely driven by events.

While I’ve added the Elliott wave labels to Eichengreen and O’Rourke’s chart on relative world industrial production, one needn’t subscribe to Elliott wave theory to see the potential pattern that appears to be developing on a larger scale. If my interpretation of a larger scale event is correct and the apparent 1.45 relative magnitude applies to the next major phase as well, then we should expect to see global industrial production to plunge to 65 percent of peak, versus the 90 percent it is at now. This would indicate an ultimate bottom of around 45 percent, compared to 62 percent for the Great Depression.

Inflation vs deflation

I find it a bit tiresome when people leap in and start pontificating about supposed certainties that some of the best minds in the business aren’t sure about, so here’s an easy way of helping us keep track of the single most important economic question of the day. If you’re an inflationist, then provide everyone with one definite consequence of the inflation you expect. If you’re a deflationist, tell us one obvious consequence of future deflation.

For example, if there is inflation, I expect the US dollar price of gold to increase to beyond its inflation-corrected 1980 peak of $2,325. If there is deflation, I expect total credit market debt outstanding to shrink and total credit market debt/GDP to fall below 200 percent. If everyone who has an informed opinion on the matter contributes and we all agree upon the indicators, we’ll have a nice, detailed list of checkboxes to contemplate as the situation unfolds.

My feeling is that the initial indicators have favored the deflationary scenario, since I would have expected much higher CPI and gold prices with the explosion in M2 and interest rates at effective zero.

And for the pedantic, inflation here is defined as “a general increase in the money supply. Often confused with its primary symptom, an increase in the general level of prices. The Consumer Price Index is the primary statistical measure of price levels, not inflation per se.” Deflation, obviously, is a general decrease in the money supply.

In which I rule Steve Sailer

Steve Sailer suggests that the Atlantic Monthly 50 is less than authoritative, at least from an Internet perspective.

The Atlantic Monthly has put together a list it calls The Atlantic 50, which it describes as “the columnists and bloggers and broadcast pundits who shape the national debates:” At a reader’s suggestion, I looked up on Google Trends the number of searches for each name on this list. “steve sailer” came in ahead of 19 of The Atlantic 50.

I have to admit, I was a little surprised that I managed to edge out Steve by his alternative metric. But then, I am remarkably handsome, so if you take out the women who come merely to bask in the radiance of my arrogance and the Queer Party Friends, I’m sure he’d have the advantage.

AGW: the biggest science fraud yet

The budding scandal about the disappearing global warming data doesn’t surprise me in the least. The whole thing has been an obvious scam from the beginning. What it demonstrates is that science hasn’t merely been corrupted, it has been co-opted. It is rapidly becoming obvious that due to the increased dependence upon government funding by scientists, they can be expected to provide information of approximately the same reliable quality as employees at the Department of Motor Vehicles provide service.

In the early 1980s, with funding from the U.S. Department of Energy, scientists at the United Kingdom’s University of East Anglia established the Climate Research Unit (CRU) to produce the world’s first comprehensive history of surface temperature. It’s known in the trade as the “Jones and Wigley” record for its authors, Phil Jones and Tom Wigley, and it served as the primary reference standard for the U.N. Intergovernmental Panel on Climate Change (IPCC) until 2007. It was this record that prompted the IPCC to claim a “discernible human influence on global climate.”…

Warwick Hughes, an Australian scientist, wondered where that “+/–” came from, so he politely wrote Phil Jones in early 2005, asking for the original data. Jones’s response to a fellow scientist attempting to replicate his work was, “We have 25 years or so invested in the work. Why should I make the data available to you, when your aim is to try and find something wrong with it?”

Reread that statement, for it is breathtaking in its anti-scientific thrust. In fact, the entire purpose of replication is to “try and find something wrong.” The ultimate objective of science is to do things so well that, indeed, nothing is wrong.

Then the story changed. In June 2009, Georgia Tech’s Peter Webster told Canadian researcher Stephen McIntyre that he had requested raw data, and Jones freely gave it to him. So McIntyre promptly filed a Freedom of Information Act request for the same data. Despite having been invited by the National Academy of Sciences to present his analyses of millennial temperatures, McIntyre was told that he couldn’t have the data because he wasn’t an “academic.” So his colleague Ross McKitrick, an economist at the University of Guelph, asked for the data. He was turned down, too.

I think Vox’s Second Law applies here: If a government agency says X, then Not-X is true. I’m just wondering which would be considered the bigger science scandal. The AGW/CC fraud or the so-called Moon landings if the discovery of Moon water turns out to prove that Man never landed there.

On a related note, assuming Krugman’s Keynesianism doesn’t destroy his reputation once it becomes clear that this second stimulus plan has failed because economic theory is over the average NYT reader’s head, this conclusion to his column today should eventually suffice: “The claim that climate legislation will kill the economy deserves the same disdain as the claim that global warming is a hoax. The truth about the economics of climate change is that it’s relatively easy being green.”

Reason to homeschool #3,534

I’m sorry, but if you still haven’t figured out the need to keep your children out of the clutches of the NEA indoctrination squads, you deserve what’s going to happen to them. The sad thing is, they don’t. The creepiest part is the line about how everyone is “equal in his sight”.

Debt-deleveraging arrives

It has taken a while to show up, but the long-expected contraction of total credit market debt outstanding has finally begun. The effect is disguised somewhat due to the GDP revisions that reduced Debt/GDP from the previously reported 375 percent to 373 percent, but the raw debt figures show a clear, albeit small, decline.

Q1 2009 373.2 percent $52,915 billion
Q2 2009 373.3 percent $52,793 billion

To put into perspective how even such a small decline such as this $122 billion one is unusual, the Fed’s Z1 report shows how debt rose to the present level from $13.8 trillion in 1990 by increasing more than $500 million per quarter and at a quarterly rate of $921 million since 2004. Debt expansion even continued through 2008 and the first quarter of 2009, although it slowed to a rate of $579 billion per quarter.

This decrease in total credit market debt may be the first sign of the debt-deleveraging process that Steve Keen of Debtwatch has already detected taking place in Australia now starting to roll in the USA.

“We are currently deleveraging at the 4% rate, and debt has fallen from 165% of GDP in March 2008 to 159% today–a 6% fall as a percentage of GDP, as noted above.”

Note that this $122 billion decline in total debt has taken place despite a large $390 billion increase in state, local, and federal debt and another $40 billion increase in corporate debt. However, it is NOT the household sector that is driving the deleveraging, although households did shed nearly $133 billion of debt in the first half of the year. The primary contributor is the financial sector, which has reduced its debt burden by $562 billion since peaking at the end of 2008, most of it in the second quarter. This suggests that the next stage in the global economic contraction is on deck and ready to begin in earnest once the markets turn south again.