Category Archives: Economy

The Dismal Scientists Of Microeconomics Are ALSO Struggling To Do Science

Critique, Economy, Intelligence, Pseudoscience, Science

Almost every bit of research cited in support of some or another ridiculous claim in the popular press seems abysmally designed. At least to this former student of research methodology.

Samples are too minuscule to claim generalizeability of findings beyond the sample, to the broader, targeted population. Likewise, you just know sample selection is poor, too. Variables are not often operationalized in an intelligent way. The actual hypothesis frequently sounds wacky. On and on.

It transpires that the same methodological flaws that “bedevil most social sciences, and some hard sciences, too,” have infected the dismal scientists of microeconomics.

Many results in microeconomics are shaky.” From the a series “on the shortcomings of the economics profession” in the Economist:

A recent examination in the Economic Journal, of almost 7,000 empirical economics studies, found that in half of the areas of research, nearly 90% of those studies were underpowered, ie, that they used samples too small to judge whether a particular effect was really there. Of the studies that avoided this pitfall, 80% were found to have exaggerated the reported results. Another study, published in Science, which attempted to replicate 18 economics experiments, failed for seven of them.

1 Reason The State Department Turned On #RexTillerson: He Tried Trimming Budgets & Getting Rid Of Deadwood

Business, Economy, Federal Reserve Bank, Free Markets, Government, Political Economy, Taxation, The State

The Economist notes that Rex Tillerson was a poor secretary of state—but not for the reasons I would advance.

One reason for their opinion is that, “Disastrously for morale, he declined to defend his own department when the White House proposed cutting its budget by 25% or more … Mr Tillerson squandered goodwill with a corporate restructuring that felt to many staff like an invitation to resign. At one point, outside consultants sent round a questionnaire asking: “To optimally support the future mission of the Department, what one or two things should your work unit totally stop doing or providing?” (“Trump Unbound: In foreign affairs, America just moved closer to one-man rule,” March 17, 2018.)

TILLESRSON TRIED TO CUT GOVERNMENT! Defending your employees, The Economist here equates with increasing or maintaining the budget for the department, it diplomats, envoys and other career and or deadwood staff.

State institutions are self-reinforcing and not amenable to reform; they grow through failure.

So while it would be nice if state institutions were able to reform, because of the structure of incentives, the state cannot be corrected. The incentive structure underlying state institutions is antithetical to reform.

To correct processes that may be killing people—affirmative action, when the subject of special privileges isn’t qualified—you have to cut budgets in the billions. This likely will never happen, in state institutions, because they don’t abide by the profit motive. So to express belief in this is to express belief in the possibility of the state fixing itself.

The libertarian grasps that the state grows through inefficiency. The more it bungles—the greater its budget will be. Economically, the state’s incentives are inverted.  A private company, on the other hand, grows through economic and performative efficiencies; by singles the customer. The state is the opposite. As a monopoly, it need please nobody. For example, the education system is a giant failure.  Will it be scrapped? Of course not. The system will reward itself with MORE, not less, funds to fix the problem.

This is a structural fact of the state.

Why can the state grow and prosper through inefficiency? Because it has access to the funds of an indentured third party, taxpayers, and has the promiscuous use of the printing press.

A private institution can come back from the abyss, because, economically, it will go bust if it doesn’t start pleasing customers. However, if, like the Florida bridge collapse, a private enterprise is working in tandem with the state, then taxpayers bail it out.

Profit is privatized, loss is socialized.

Most people no longer read or understand the economics of the state. Ten years ago, I had readers who had at least read Hazlitt’s Economics in One Lesson.

 

More Mediocre, IT Worker-Bees On The Way From Bangalore

Economy, IMMIGRATION, Labor, Outsourcing, Regulation, Technology

Nothing much has changed. “Government”—what a neutral way way of putting it—is preparing to hand out H-1B visas for so-called high-skilled (they’re not) foreign workers by lottery, without changes to previous policy. See “U.S. Prepares to Distribute H-1B Visas Without Trump-Demanded Changes.” Who’s the biggest winner, Tata, Infosys or Microsoft?

Again and again this column has relayed the truth about the H1B scam. The last time was in Why The H-1B Visa Racket Should Be Abolished, Not Reformed“:

… Why doesn’t the president know that the H-1B visa category is not a special visa for highly skilled individuals, but goes mostly to average workers? “Indian business-process outsourcing companies, which predominantly provide technology support to corporate back offices,” by the Economist’s accounting.

Overall, the work done by the H-1B intake does not require independent judgment, critical reasoning or higher-order thinking. “Average workers; ordinary talent doing ordinary work,” attest the experts who’ve been studying this intake for years. The master’s degree is the exception within the H-1B visa category.

More significant: THERE IS a visa category that is reserved exclusively for individuals with extraordinary abilities and achievement. I know, because the principal sponsor in our family received this visa. I first wrote about the visa that doesn’t displace ordinary Americans in … 2008:

It’s the O-1 visa.

“Extraordinary ability in the fields of science, education, business or athletics,” states the Department of Homeland Security, “means a level of expertise indicating that the person is one of the small percentage who has risen to the very top of the field of endeavor.”

Most significant: There is no cap on the number of O-1 visa entrants allowed. Access to this limited pool of talent is unlimited.

My point vis-à-vis the O-1 visa is this: The H-1B hogs are forever claiming that they are desperate for talent. In reality, they have unlimited access to individuals with unique abilities through the open-ended O-1 visa program.

There is no limit to the number of geniuses American companies can import.

Theoretically, the H-1B program could be completely abolished and all needed Einsteins imported through the O-1 program. (Why, even future first ladies would stand a chance under the business category of the O-1A visa, as a wealth-generating supermodel could certainly qualify.)

Now you understand my disappointment. In his April 18 Executive Order, President Trump promised to merely reform a program that needs abolishing. That is if “Hire American” means anything to anybody anymore.

MORE: “Why The H-1B Visa Racket Should Be Abolished, Not Reformed.”

Didn’t Zimbabwe Just Oust A Tyrant? Yes, But There Are Plenty More Where Mugabe Came From

Africa, Economy, History, Political Economy, Racism, Welfare

Good luck in taking the tyrant out of Africa’s Strongmen. The reality is that, “in Africa, you oust a tyrant, not tyranny”.

Rhodesia was once the breadbasket of Africa. Who was the Prince among Men responsible for the good times in Rhodesia? We are never told. The phantom was Ian Smith, prime minister of Rhodesia, RIP.

Now that the wicked whites have been replaced and robbed,

“About 90% of working-age people lack formal jobs. The legions reduced to hawking on the streets of Harare and Bulawayo, Zimbabwe’s second city, are preyed on by Zanu-PF thugs demanding pay-offs. Electricity and water are intermittent, even in hospitals. ATMs are empty. State workers’ wages are paid months late. In a residual population of 13m, 3m survive on food handouts from America and Britain. Perhaps 3m Zimbabweans have fled abroad.”

To guarantee the “right” outcome in the upcoming election,

3,000 soldiers have already been sent to the countryside in civilian garb to campaign and bully. Villagers fear that rural chiefs and headmen will withhold food aid if they suspect them of voting the wrong way. Zanu-PF’s national political commissar menacingly told a rural gathering that people should remember 2008, when thousands of MDC activists in the countryside were set upon by Zanu-PF militias and hundreds were murdered. Many analysts think that Zanu-PF’s rural voting bloc should ensure victory for Mr Mnangagwa, even without resorting to violence. “Just the memory of 2008 is enough,” says a former MDC campaigner.

MORE at The Economist: “Zimbabwe’s new president says he is a democrat. Is he?”

“THE land resettlement was a huge success in terms of our people, 367,000 of our people, back in possession of the land,”Says President Emmerson Mnangagwa of the expropriation of most of Zimbabwe’s white-owned farmland since 2000—a move that wrecked the economy and pushed millions into poverty. Was it fair that bigwigs of his ruling Zanu-PF party took several farms each? “No, no, it is one farm, one person,” he says. “I have 404 hectares and I paid for the equipment myself.

… his economic vision is hardly liberal. He extols a “command” model where agriculture is guided by government. He blames the economy’s collapse on sanctions, even though these were targeted on leading figures such as himself. He testily rejects a suggestion that they were far lighter than those levelled against the white-supremacist regime of Ian Smith before Mr Mugabe took over in 1980. “You are plain ignorant,” he tells The Economist.”

A good man:


Another good man deceased: