On Liberty Watch

It is often said that the problem with socialism is socialism, while the problem with capitalism is capitalists. Ray Dalio, founder of Bridgewater Associates the world’s largest hedge fund, is only the latest to prove the case. Lately he has jumped on the income inequality bandwagon and has taken to suggesting public policies designed to make capitalism “work” for all.  The problem as he defines it in a recent paper posted online is that “capitalists typically don’t know how to divide the pie well and socialists typically don’t know how to grow it well”. 

Among his solutions are  (1) a bipartisan commission to design policies to grow the economic pie and divide it better; (2) clear metrics to measure progress and hold people accountable–whatever that means–and (3) redistribution of resources from the top of the income distribution to the middle and lower rungs. This last would be accomplished in part by taxing the top tier that “would be engineered to not have disruptive effects on productivity”  and that would be earmarked to help the middle and lower income tiers that would also improve the overall productivity of the economy. 

When pigs fly. 

It would appear that Mr. Dalio is blissfully unaware that politicians in general, and progressives in particular, have been selling this fantasy for the better part of 50 years. What they have to show for it is a polarized society that is teeming with class resentment, and a poverty rate that has barely budged since the “War in Poverty” began in the 1960s. Perhaps Mr. Dalio ought to mark his policy prescriptions to market and think about why they have been such an abject failure for so many years.

The answer is relatively straightforward. Policies that rely on command and control rather than human ingenuity inevitably produce suboptimal results—at best. And command and control is precisely what Mr. Dalio is suggesting. Consider the language he uses to describe the “problem”. “Capitalists typically don’t know how to divide the pie well”. 

Of course they don’t. Nobody does. That’s why we have markets to guide resource allocation through the price mechanism rather than self-interested politicians and bureaucrats. Calling for fictional disinterested experts to allocate resources wisely is simply a pipe dream, and a naive one at that. If it weren’t we would be looking at the Post Office as a model of efficiency. 

Which brings up the main point. The government of the United States was not designed to be efficient. Just the opposite. It was designed to make it difficult for the government to do things because government is dangerous. At the American Founding the raison d’être of the government was to secure liberty. Free people are more than able to take care of themselves, their families and communities once the rule of law, property rights and a culture political Liberalism — with a capital L — takes hold. With certain notable (and rare) exceptions like defense, when Government steps in to solve problems, the problems get worse. 

Mr. Dalio rightly decries that disastrous state of our public school system, especially in comparison to private schools. He mistakenly ascribes the outperformance of private schools to the fact that they spend more per pupil than public schools. If spending was the key determinant of outcomes, public schools would be improving over time, although perhaps at a lower rate of improvement compared to private schools. In fact, public school performance has been deteriorating for at least 5o years. 

There are many reasons for the failure of the public school system, especially in the cities, despite all the tax money that has been thrown at them over the years. But one feature of the public schools stands out that is germane to this discussion. They have adopted Mr. Dalio’s top-down command and control bureaucratic structure of governance.  Not surprisingly, they are run by the teachers unions for the benefit of the teachers. They are also protected public monopolies, largely immune from competition.

The monopoly power of public schools is most pronounced in poor neighborhoods. In affluent areas where the parents can afford to send their kids to private schools, the public schools do face some competition, and not surprisingly they achieve better results. Which is to say that the failure of the public schools is attributable in part to the rent-seeking behavior of self-interested politicians and bureaucrats, especially when parents lack the resources to exit to greener pastures. So much for disinterested experts.

The problem the United States faces is not too much capitalism. The problem is too much government and its attendant rent-seeking and bureaucracy.  The problem will not be solved until government is smaller, not larger, and local communities are able run their own affairs without having to answer to their political masters in Washington, DC.  

If Mr. Dalio would like a metric of success, how about this one: a decently functioning public high school. When Detroit or Newark or Bridgeport or St. Louis or Kansas City or New York or Milwaukee or any large city finally manages to establish a decently functioning public high school system that will be a sign that we are on the road to recovery. And that will not happen until the schools have to compete to attract and retain students by offering a quality service at a reasonable price. That requires a greater dependence on markets and consumer choice.

There are different paths to increasing consumer choice and establishing competitive markets in public education. These include school vouchers and charter schools. It does not include doubling down on command and control, rent seeking and reliance on the bureaucratic “experts” who have already made such hash of it.

JFB

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Just the other day, Joe Biden, who lives in a fact free zone, urged Americans to tackle a “white man’s culture” that he claimed allowed violence against women to perpetuate. He went on to say that “We all have an obligation to do nothing less than change the culture in this country.” But his new-found disdain for “white man’s culture” whatever that is supposed to mean, isn’t going to help him very much when it comes to winning the Democratic Presidential nomination. 

That is because the former Vice President is undergoing a rapid transformation from “beloved” Joe Biden to Joe-the-Ogre. A woman has emerged with an accusation that Biden is guilty of “inappropriate touching”. That charge was leveled by Lucy Flores, a Democratic member of the Nevada State Assembly and a Bernie Sanders supporter. Biden promptly denied the charge. It is unlikely to do him any good. In Progressive circles a claim of victimhood is a prized possession. Things like evidence and due process don’t count for much. 

It turns out that Flores’s complaint is not that Biden sexually harassed her; it is that he invaded her personal space. And for that, she concludes that Biden should not run for the Democratic nomination. Right on cue the social justice mob went to work looking for evidence of additional suspect  behavior. They came up with a photo of Biden with his hands on the shoulders of Jane Carter during the swearing in ceremony of her husband Ash Carter, who had become Secretary of Defense under President Obama.  

The photo went viral, and as a result, Jane Carter came to Biden’s defense.  She said that Biden—an old friend—was merely trying to steady her because she was nervous since she had  slipped on ice on the way to the Pentagon. (See the story at Politico.)

If she had let it go at that, some of the insanity could have possibly been avoided. Then again this is 2019, and we are talking about the contest for the Democratic presidential nomination. In any event, Carter decided to weigh in further. She said that while she does not know Flores, she [Carter] supports “her right to speak her truth” and added that Flores and “all women” should be believed. 

That sentiment—the my truth construction— has become the Party’s mantra. For instance, Senator Cory Booker (D, NJ) invoked the same idea during the Bret Kavanaugh hearings. 

So when women speak “their truth” we are supposed to believe them.  

Why?

The only reason to believe something is because it is presumptively true, or failing that, there is evidence that it is true. To refer to “her truth” is to deny the very idea of truth and simply relegate everything to opinion and perception. And that is being charitable. Because the idea of truth doesn’t mesh very well with the victimhood sweepstakes now consuming reason in the Democratic Party. And so Party leaders (who are more like followers) choose whom to believe depending on demographic considerations. Which is why prosecutors dropped the charges against an obvious liar like Jussie Smollet, after Obama fixer Tina Tchen intervened. 

There was a time not too long ago when women were believed without question. They were white women in the Jim Crow South who accused black men of raping them. Progressives ought to think about how well that worked out. 

JFB

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For the last two years the Democratic Party has been engulfed in hysteria over charges that Trump’s shambolic campaign “colluded” with the Russian government to tilt the 2016 election in Donald Trump’s favor. Add to this some breathless reporting (by the New York Times, the Washington Post and CNN among others), that implied a “bombshell” was just around the corner that would establish once and for all that Trump, either wittingly or unwittingly, was a Russian “asset”. And if that were not enough, John Brennan, former CIA Chief under President Obama point blank accused Trump of treason. At the same time House Intelligence Committee Chair (then ranking member) Adam Schiff (D, CA) insisted that there was plenty of evidence of collusion, not available to the public, that he had seen in his role as a committee member. 

All that came crashing down this past Sunday when Attorney General William Barr summarized the findings of Robert Mueller’s investigation into the charges. AG Barr reported that Mueller’s investigation did not find sufficient evidence to support the charge that either Trump or his campaign colluded with the Russians. Quoting the Mueller report, Barr’s summary said “The investigation did not establish that members of the Trump campaign conspired or coordinated with the Russian government in its election interference activities.”

In addition, AG Barr together with Assistant AG Rosenstein determined that there was insufficient evidence to charge the President or anyone in his orbit with obstruction of justice. This determination, which was made by Barr and not Mueller, is correct on the face of it. (It was altogether appropriate for Barr to make the decision because political accountability demanded it. In this case he showed courage, unlike Loretta Lynch in her handling of the Clinton e-mail affair). 

In the event it is instructive to look at the legal definition of obstruction to put all this in context. 18 U.S.C. § 1503 defines “obstruction of justice” as an act that “corruptly or by threats or force, or by any threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice.”

In point of fact, the Mueller report makes clear that the Trump administration never interfered with the investigation. Rod Rosenstein, who supervised the investigation, never refused a single request that Mueller made. Moreover, the White House turned over 20,000 pages of documents to Mueller; the Trump campaign turned in over 1.4 million pages; 20 people from the White House including 8 from the White House counsel’s office, and 11 other individuals were interviewed by Mueller’s team. So how, exactly, was the administration of justice impeded?

Partisans will be quick to note, correctly, that Trump fired James B. Comey, director of the FBI.  But that action was fully within the scope of Trump’s constitutional powers acting as President. A charge of  obstruction would have required the government to prove beyond a reasonable doubt that the intent behind the firing was (1) corrupt and (2) designed to impede the administration of justice. That would be virtually impossible since (1) there was no underlying crime (2) predictably enough, firing of the FBI director accelerated the appointment of a special counsel, and  (3) the Trump administration provided all the evidence that the Mueller investigation demanded. That’s a pretty strange way to impede the administration of justice. 

Not that any of this will dissuade Democrats from their quest to delegitimize the Trump presidency, which is what all this has been  about from the very beginning. For better or worse, Trump won the 2016 election, and the Democrats still refuse to acknowledge it. 

JFB

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From The Patch–a Primer in Bad Reasoning

“You have a better chance of hitting the jackpot if you let the computer pick your numbers, according to the Multi-State Lottery Association, which operates the Powerball game and reports that about 75 percent of winning tickets have numbers chosen by a computer.” See The Patch.

This is a classic of bad statistical reasoning. Since the winning number is selected at random, and the distribution of chosen numbers is randomly distributed, the process by which a customer chooses a number selection is irrelevant. There are two possible exceptions. First the outcome is rigged so that the number chooser already knows the winning number. Second, the tens of millions of numbers chosen over time by various individuals are not randomly distributed; they have a non-Gaussian  distribution that makes them more likely to be selected. That possibility is highly unlikely, to say the least.  

Moreover it leaves out a piece of obviously important information: the percentage of tickets purchased where the number was generated by computer. Published estimates suggest it is between 70% and 80%, so naturally enough, the percentage of winners is about 75%, which is what a random distribution would suggest. 

This analysis leaves out the definition of win, which ranges the gamut from a few thousand dollars to hundreds of millions. From a probability standpoint the important question concerns the likelihood of purchasing a winning ticket, the expected earnings of a winning number, which includes splitting the winnings with other people with the same number, and the cost of purchasing a ticket. 

Enough. Now for the News.

CNN Reports

“…the latest ideas emerging in the 2020 campaign target the underpinnings of the US federal system of government itself.” See CNN Reports.

A Republic, Not a Democracy

For some reason or other the proponents of these changes seem to be congenitally unable to understand that we do not, and never have, lived in an unmediated democracy—and for good reason. An unmediated democracy is tantamount to mob rule that would quickly extinguish minority rights. Rights which the U.S. Constitution was designed to protect. 

In fact, the entire structure of the U.S. Constitution is designed to resist the passionate demands of the majority in favor of protecting individual rights.

CNN lists four changes to the structure of American governance proposed by leading Democrats, all of which would grievously undermine the protection of minority rights. (As an aside, proponents of majoritarianism should ask themselves how minorities fared under Jim Crow or the internment of Japanese Americans during WWII and German Americans during WWI.) 

Leaving that aside, the common thread that runs through the proposals is rank partisanship. All of them would have the effect of bestowing more political power on today’s Democratic constituencies. And all of them would undermine liberty.

Here is a list of proposed structural changes. 

Abandon the Electoral College

This perennial is being touted by Elizabeth Warren. While in Mississippi she said that doing so would “make every vote count”. Actually, eliminating the Electoral College would diminish voting power in places like Mississippi and enhance it in places like New York City, LA, San Francisco, Chicago, Detroit, Philadelphia and so on. 

Which is to say that the new—actually actually very old—proposals seek to make the system more “democratic”.  

Presidential elections would be decided by densely populated urban areas, which surprisingly enough, represent the core constituencies of the national Democratic Party. 

There are good reasons why we have an Electoral College. Rather than repeat them I refer to an excellent article written by Kevin Williamson of National Review on the larger subject of the Progressive attack on our governing institutional arrangements. One of those institutions is the Electoral College. Here is a link to the article.  

Expand the Supreme Court.

This is becoming more and more popular among progressives as a way to perhaps re-create a progressive majority on the Court, and to at least intimidate the current conservative Justices the way FDR did in the 1930s. 

Create a New State by shrinking DC to encompass the National Mall and using the remaining area to form a New state. Coincidentally, this would create a solidly Democratic State. 

Lower the Voting Age to 16. 

Just in case you thought that politics couldn’t get even more juvenile than it is today. 

So there you have it. The crowd that professes to be aghast at Donald Trump’s routine trampling of political norms is one upping him by trying to alter the structure of our institutions that are meant to constrain people like—Donald Trump. Perhaps because they anticipate being able to wield executive power in the near future.

JFB

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Bernie Sanders and Friends — Wake up. Sweden is not a socialist country.

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JFB

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