Etiquette Versus Annihilation

By Thomas Sowell

Recent statements from United Nations officials, that Iran is already blocking their existing efforts to keep track of what is going on in their nuclear program, should tell anyone who does not already know it that any agreement with Iran will be utterly worthless in practice. It doesn’t matter what the terms of the agreement are, if Iran can cheat.

It is amazing – indeed, staggering – that so few Americans are talking about what it would mean for the world’s biggest sponsor of international terrorism, Iran, to have nuclear bombs, and to be developing intercontinental missiles that can deliver them far beyond the Middle East.

Back during the years of the nuclear stand-off between the Soviet Union and the United States, contemplating what a nuclear war would be like was called “thinking the unthinkable.” But surely the Nazi Holocaust during World War II should tell us that what is beyond the imagination of decent people is by no means impossible for people who, as Churchill warned of Hitler before the war, had “currents of hatred so intense as to sear the souls of those who swim upon them.”

Have we not already seen that kind of hatred in the Middle East? Have we not seen it in suicide bombings there and in suicide attacks against America by people willing to sacrifice their own lives by flying planes into massive buildings, to vent their unbridled hatred?

The Soviet Union was never suicidal, so the fact that we could annihilate their cities if they attacked ours was a sufficient deterrent to a nuclear attack from them. But will that deter fanatics with an apocalyptic vision? Should we bet the lives of millions of Americans on our ability to deter nuclear war with Iran?

It is now nearly 70 years since nuclear bombs were used in war. Long periods of safety in that respect have apparently led many to feel as if the danger is not real. But the dangers are even greater now and the nuclear bombs more devastating.

Clearing the way for Iran to get nuclear bombs may – probably will – be the most catastrophic decision in human history. And it can certainly change human history, irrevocably, for the worse.

Against that grim background, it is almost incomprehensible how some people can be preoccupied with the question whether having Israeli prime minister Benjamin Netanyahu address Congress, warning against the proposed agreement, without the prior approval of President Obama, was a breach of protocol.

Against the background of the Obama administration’s negotiating what can turn out to be the most catastrophic international agreement in the nation’s history, to complain about protocol is to put questions of etiquette above questions of annihilation.

Why is Barack Obama so anxious to have an international agreement that will have no legal standing under the Constitution just two years from now, since it will be just a presidential agreement, rather than a treaty requiring the “advice and consent” of the Senate?

There are at least two reasons. One reason is that such an agreement will serve as a fig leaf to cover his failure to do anything that has any serious chance of stopping Iran from going nuclear. Such an agreement will protect Obama politically, despite however much it exposes the American people to unprecedented dangers.

The other reason is that, by going to the United Nations for its blessing on his agreement with Iran, he can get a bigger fig leaf to cover his complicity in the nuclear arming of America’s most dangerous enemy. In Obama’s vision, as a citizen of the world, there may be no reason why Iran should not have nuclear weapons when other nations have them.

Politically, President Obama could not just come right out and say such a thing. But he can get the same end result by pretending to have ended the dangers by reaching an agreement with Iran. There have long been people in the Western democracies who hail every international agreement that claims to reduce the dangers of war.

The road to World War II was strewn with arms control agreements on paper that aggressor nations ignored in practice. But those agreements lulled the democracies into a false sense of security that led them to cut back on military spending while their enemies were building up the military forces to attack them.

SOURCE

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The Green-Card Racket for Beltway Cronies

By Michelle Malkin

Can we stop putting America up for sale to the most politically connected bidders yet? Where is our self-respect?

Since 2001, I've warned about the systemic and bipartisan corruption of America's EB-5 immigrant investor visa program. The latest report from the Department of Homeland Security's inspector general — which outlines the meddling and pandering of No. 2 DHS official Alejandro Mayorkas, Nevada Sen. Harry Reid, Democratic bagman Terry McAuliffe, Hillary Clinton's brother Tony Rodham, former Pennsylvania. Gov. Ed Rendell and former Mississippi Gov. Haley Barbour, to name a few — provides yet more sordid evidence that the green cards-for-sale scheme should be completely scrapped.

Created under an obscure section of the expansionist 1990 Immigration Act, EB-5 promised bountiful economic development for the U.S. in exchange for granting permanent residency (and eventual American citizenship) to foreign investors. A few years later, Congress conjured up the idea of EB-5 "regional centers" — government-sanctioned business groups and corporate entities acting as middlemen to administer the immigrant investments and facilitate the visa peddling.

Beltway cronyism was embedded in EB-5's DNA from the get-go. The original Democratic House sponsor and his spokesman went on to establish for-profit companies that marketed the program and provided consulting services. Former federal immigration officials from the George H.W. Bush administration formed lucrative limited partnerships to cash in on their access and EB-5 expertise. An entire side industry of economic book-cookers arose to supply analyses of the "job creation" benefits of EB-5 projects and to gerrymander Census employment data to fit the program's definition of "targeted employment areas" in order to qualify for lower investment thresholds (as was done in New York City's Atlantic Yards/Pacific Park EB-5 deal).

Think Solyndra and federal stimulus math on steroids.

Since the program's inception, rank-and-file adjudicators have tried to enforce the investment standards. But senior managers leaned on them to reverse EB-5 rejections when wealthy donors, law firm pals and political hacks complained.

Fast-forward to 2015. The blood pressure-spiking DHS IG report released last week confirmed what whistleblowers have been telling Capitol Hill for years.

Behind the scenes, the IG found, Dirty Harry Reid pressured Deputy DHS Secretary Mayorkas to overturn his agency's rejection of expedited EB-5 visa applications for Chinese investors in a Las Vegas casino hotel, which just happened to be represented by Reid's lawyer son Rory. Adjudicators balked at the preferential treatment. Mayorkas steamrolled the dissenters, who reported on shouting matches over the cases. Reid's staffers received special briefings from Mayorkas to update them on the project's progress.

One underling called it "a whole new phase of yuck."

Meanwhile, in the words of one DHS official at the Immigration and Customs Enforcement bureau, Mayorkas "absolutely gave special treatment" to electric car racket GreenTech, which zealously sought EB-5 visas for another group of deep-pocketed Chinese investors. McAuliffe helmed the company after it was spun off from a Chinese venture. He plugged in Rodham as president of Gulf Coast Funds Management, which won designation as an EB-5 regional center certified to invest foreign capital in federally approved commercial ventures in Louisiana and Mississippi, including GreenTech. Louisiana GOP Gov. Bobby Jindal and former Mississippi GOP Gov. Haley Barbour both signed letters urging DHS to approve Gulf Coast as a regional center.

After adjudicators dismissed the company's job claims as "ridiculous," "flawed" and "not approvable," McAuliffe personally leaned on then-DHS Secretary Janet Napolitano, "complaining about the denial of the Gulf Coast amendment and requesting her assistance to get the amendment approved and to expedite more than 200 investor petitions."

In violation of recordkeeping and disclosure rules, Mayorkas met with McAuliffe in February 2011 after USCIS denied GreenTech's requests. Mayorkas mysteriously took no notes and could not recall just exactly how many phone calls he took from McAuliffe and what exactly they discussed, though he did remember the "caustic" Democrat yelling "expletives at high volume." Mayorkas met personally with senior staff to urge the agency to reverse its denials and give McAuliffe and company what they wanted and even offered to write the reversals himself.

On a third front, Mayorkas intervened on behalf of EB-5 petitioners seeking green cards by investing in Hollywood studios such as Sony Pictures and Time Warner. He had received pressure from the L.A. mayor's office, where an aide helpfully mentioned she knew a mutual acquaintance of his from his old law firm, O'Melveny and Myers, and from Rendell, a paid consultant to the EB-5 regional center representing the foreign investors. Mayorkas reversed his staff's rejections of more than 200 suspect EB-5 applications and set up a special "deference review board" to bow to Hollywood.

Two decades ago, when the program's failures were first exposed, Rep. John W. Bryant, a Texas Democrat, protested on the House floor: "This provision is an unbelievable departure from our tradition of cherishing our most precious birthright as Americans."

How much more evidence do you need that this foreign investor pay-for-play swindle makes an irremediable mockery of the American Dream? The only effective way to "reform" this abomination is to kill it.

SOURCE

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The Next Bubble

By John Stossel

When the last housing bubble burst, politicians blamed “greedy banks.” They said mortgage companies lent money recklessly, making loans to people with dubious credit, for down payments as low as 3 percent.

“It will work out,” said the optimistic bankers. Regulators didn’t disagree. Everyone said, “Home prices will keep going up.” And home prices did – until they didn’t.

The bubble popped in 2007. Lots of people were hurt, and politicians took more of your tax money to bail out Fannie Mae and Freddie Mac along with reckless banks. They also gave the Federal Housing Administration a $2 billion bailout.

Then the politicians said, “We’ll fix this so it doesn’t happen again.” Congress passed Dodd-Frank and a thousand new regulations. The complex rules slowed lending, all right. It’s one reason this post-recession recovery has been abnormally slow.

But – April Fools'! – the new rules didn’t solve the problem of reckless lending, and it’s happening again.

Because our government subsidizes home purchases, recklessness is invited. Somehow, Americans buy cars, clothing, computers, etc. without government guarantees, but politicians think housing is different.

Both parties support the subsidies.

The left wants government to help struggling families, and the right thinks home ownership sends a wholesome cultural message. Both parties have cozy connections to home-builders and lenders.

At the time of the housing crash, most high-risk loans were guaranteed by the government. Those banks wouldn’t have been as reckless if they had their own money on the line.

But they knew they could grant a mortgage to most anyone and the FHA would back it or government-sponsored companies Fannie Mae and Freddie Mac would buy it. That fueled the frenzy of lending.

After the bubble popped, I assumed the political class would learn a lesson, but they haven’t. Today, even more American mortgages are guaranteed by government. More than 90 percent of new loans are backed by taxpayers. After the crash, Fannie and Freddie did raise their minimum down payment – to a measly 5 percent – but a few months ago, they lowered it again to 3 percent!

Are they crazy? A sensible congressman, Rep. Jeb Hensarling (R-TX), tried to get an answer from the administration’s new mortgage regulator, asking in a hearing, “All things being equal, is a 3 percent down riskier to the taxpayer than a 10 percent down loan?”

A pretty basic question – but one that director Mel Watt still dodged, responding, “Mr. Chairman, that is generally true. But when you pair the down payment with compensating factors … look at other considerations … you can ensure that a 3 percent loan is just as safe.”

What? That’s nonsense. This is what happens when pandering politicians get to dispense your money. Watt is among the worst. When he was a congressman, he pushed for mortgage subsidies for welfare recipients who made down payments as low as $1,000.

Edward Pinto, who studies housing risk for the American Enterprise Institute, says policies like this put us on the way to another bubble: “The government is once again … saying, let’s loosen credit, give loans to people that potentially can’t afford them, and everything will be fine because house prices will go up.”

On my show, former FHA commissioner David Stevens, who did improve lending standards a bit after the crash (before Watt and his cronies weakened them), responded that this time the government has new regulations that will prevent things falling apart: “I think in the effort, post-recession, to make sure we never go down this path again, we have created more rules than ever existed in the history of this country.”

But more rules aren’t a solution. Government’s regulators didn’t foresee the problems last time. Fannie and Freddie got a clean bill of health right up until the collapse.

The solution is less government involvement. Canada doesn’t have a Fannie, Freddie or FHA. Canada didn’t have the trauma of a housing bubble. In Canada, lenders and homeowners risk their own money.

Does that mean Canadians cannot afford homes? No! Without all that government help, Canada’s homeownership rate is higher than ours.

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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Political Correctness Is Destroying the American Dream

People are defined by their deeds, not their words. And yet, our words both reflect and reinforce cultural norms. In other words, how we communicate has the power to change human behavior on an enormous scale.

Consider the Declaration of Independence and the U.S. Constitution. They are just words. But those words played an enormous role in the creation of a great nation. They defined the behavior of a culture that changed the world.

Words incite action. When words and the ideals they represent gain traction, they can change the trajectory of an entire society for better or worse. There is no more visible sign of where we’re heading than the growing pervasiveness of political correctness.

On the surface, the idea of filtering our communication so as not to exclude or offend anyone seems fairly benign, almost Pollyannaish. Maybe that explains how it has so insidiously crept into every aspect of our culture, but its effect has been anything but benign.

Political correctness has had a powerful influence on how we interact with each other, teach our kids, and manage our companies. It’s an existential threat to the meritocracy and personal accountability at the heart of free market capitalism. It’s toxic to the performance and competitiveness of our people, our companies and our economy.

You see, human behavior is all about incentives. All things being equal, people will do what’s in their own best interest.

If people believe that rewards are based solely on their own merits – that the sky’s the limit and how far they go in life rests solely on their shoulders – that’s an incentive to be self-reliant and reach for the stars. And they will generally reach the highest levels of achievement their capabilities and circumstances permit.

There’s proof of that. Those are, in fact, the principles that built America. Everyone gets life, liberty and the pursuit of happiness. The rest is up to the individual. That simple mechanism is responsible for creating the entrepreneurs, innovators and business leaders of the free world. That’s what created the American Dream.

But if you remove the incentive, all that changes.

If people believe it makes no difference how they perform – that everyone’s the same, competition is bad, everyone’s a winner, and exceptional qualities will not be rewarded or even recognized – they’re left with nothing to strive for. Stripped of the will to achieve, they’ll settle into a life of dependency and mediocrity.

Again, it’s all about incentives. All things being equal, people will do what they’re incentivized to do.

So we can all agree that political correctness levels the playing field, removes incentives to excel, and diminishes meritocracy and personal accountability. Well, that has a ripple effect on team performance and effectiveness. We have a term for the resultant state of organizational malaise and mediocrity. It’s called bureaucracy.

While the word conjures up images of mindless drones shuffling around like real-life zombies under the sickly hued fluorescent lights of the local planning department, state Department of Motor Vehicles, or U.S. Postal Service, bureaucracy can creep into any business or company.

It’s simple, really. Just add political correctness to any organization and watch the bureaucratic behavior take over. Think about it.

Bureaucrats do only what they’re programmed to do because there’s no incentive to do more. And since there are no incentives to excel, they’ll do as little as they have to do to skate by. They follow rigid process because that’s how things are done. They’re the keepers of the status quo that stifles innovation and creativity.

You can trace all sorts of chronic business ills to bureaucratic behavior.

Besides reduced company performance and effectiveness, it leads to ever-increasing organizational bloat and complexity. Bureaucratic leaders are always looking for clever ways to increase their budget, grow their organization, and expand their power base.

It leads to dysfunctional behavior that resists change, improvement, initiative, transparency, and anything resembling personal responsibility. It leads to a whole slew of corporate maladies including cronyism, nepotism and the Peter Principle – the promotion of incompetent people.

Bureaucratic managers won’t give employees genuine feedback for fear of being sued or accused of harassment, discrimination, being a bully, or creating a hostile work environment. And they certainly can’t publicly praise anyone – that might make others feel inadequate. The result is a culture wrought with fear and loathing.

There’s a famous quote, “All that is necessary for the triumph of evil is that good men do nothing.” It’s often attributed to Edmund Burke, but many great thinkers, from Plato and Tolstoy to John Stuart Mill and Albert Einstein have made similar observations.

What I find particularly disturbing about the political correctness epidemic is the way so many CEOs and business leaders who are paid the big bucks to act on behalf of their companies are instead behaving like scared little bureaucrats and allowing the spread of this scourge on their watch.

I expect that sort of behavior from politicians and administrators, not from corporate executives and business leaders. After all, if they don’t have the courage to do what’s right, stand up for the meritocracy that made our nation great and carry the torch for the American Dream, who will?

SOURCE

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States Suffer from ObamaCare Regulations

ObamaCare was supposed to reduce the cost of insurance, hence the Affordable Care Act. But is this really what it did? States with less regulations before the law was enacted had more affordable health care costs. Take, for example, North Carolina and Nevada. They saw individual premiums for people in their twenties rise over 150 percent after the law was enacted.

In North Carolina, a twenty-seven year old man, let's call him Peter, would have paid $80 per month on average for his health insurance. After ObamaCare, Peter is paying $217 per month for that same health care coverage. That is an increase of $137 per month, or $1,644 per year. Poor Peter :(.

Peter has a similar situation in other states that had less regulations before ObamaCare was enacted. In Nevada, for example, Peter would have paid $71 per month for his health insurance, but is now paying $276 per month, or $3,312 per year.

The average income in Nevada is $37,361, and people in their twenties almost always make less than the average income. For someone like Peter making around $30,000 per year, having health insurance costs that are more than 10% of that income is totally unaffordable. Prior to the Affordable Care Act, that person would have been paying just $852 per year in health insurance premiums -- less than $1,000, and less than 3% of their total income.

Meanwhile, states like New York and New Jersey, which were heavily regulated to begin with, saw decreases in health insurance premiums. These extreme differences in the price of health insurance before ObamaCare are indicative of states’ priorities. and New York and New Jersey heavily regulated health care, and their citizens paid the price for it.

In North Carolina and Nevada, citizens should not be forced to pay higher premiums just to subsidize the people in states like New York and New Jersey. States should be able to decide their own regulations, and then people can chose where they want to live.

SOURCE

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Civil Forfeiture Violates Property Rights and Freedom

For 38 years, Carole Hinders has owned Mrs. Lady’s Mexican Food in Spirit Lake, Iowa. Mrs. Lady’s only accepts cash payments. In August 2013, the Federal government seized Carole Hinders’ entire bank account of $33,000 because she had a cash-only business. In the best of scenarios, the Federal government merely surmised Hinders was hiding illegal activity. In the worse case, it was simply a shakedown to confiscate her money, and put more money away for the Federal government.

In 2014, the Institute for Justice (IJ) began defending Carole Hinders. With the help of the IJ, Carole Hinders subjected herself to a deposition by Federal prosecutors, which was sworn testimony that could be used against her in a court of law. In time, the Federal government asked the judge to dismiss their lawsuit, and Carole Hinders had her money returned...nearly two years later!

Property rights and the Rule of Law are absolutely essential for our, personal freedoms. George Mason appreciated the importance of acquiring and possessing property when he wrote the Virginia Declaration Rights in 1776.

That all Men (People) are born equally free and independent, and have certain inherent natural Right…; among which are the Enjoyment of Life and Liberty, with the Means of acquiring and possessing Property, and pursuing and obtaining Happiness and Safety.

Tragically, Carole Hinders is not an isolated case. Do you know about a Federal, highway, interdiction program has had 61,000 warrantless seizures amounting to $2.5 billion.

To protect people from governmental abuse, Senator Rand Paul (R-KY), and Congressman Tim Walberg (R-MI) introduced the Fifth Amendment Integrity Restoration (FAIR) Act. The FAIR Act requires:

A court hearing within 14 days to establish probable cause or the property is returned to the owner.

The property seized was instrumental in the commission of a crime.

The government produces clear and compelling evidence before assets are forfeited.

Proceeds from forfeited goods goes to the General Fund instead of the Attorney General’s Asset Forfeiture Fund.

The FAIR Act will effectively halt the very, predatory abuses by the Federal government, and will restore our property rights as well as the Rule of Law. Through the FAIR Act, our personal freedom will be significantly enhanced in America, so it's important to tell your Senator and Member of Congress to support the FAIR Act.

SOURCE

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No wonder the Left shield Muslims

Both deny the most blatant reality with the greatest of ease

On April 1, the Jerusalem Post had a glaring front page story about a borderless, undemocratic, questionably lawless entity known as ‘Palestine' becoming a member of the International Criminal Court.

The PLO was quoted as saying that "It is war crimes and war criminals that undermine peace efforts." The PLO also said that the decision to join the ICC "reflects Palestine's unwavering commitment to peace, universal values, and determination to provide protection for its people and hold those responsible for the crimes they have committed."

Most Israelis must have been scratching their heads and wondering if this was an April Fools trick being perpetrated by the paper on its readers.  Could a Palestinian Authority guilty of decades of incitement, violence, terrorism, that left thousands of Israelis dead or injured, have decided to join the world criminal court to bring charges against itself?

Maybe, in a fit of moral clarity, they had decided the only way to peace was a complete reform of their violent terroristic tendencies and had thrown themselves on the mercy of the ICC to investigate their war and human rights crimes, both against innocent Israelis and their own people?

But no. Despite the repeated rockets and mortars, over ten thousand in number, against Israeli civilian targets, despite launching terror attacks against Israeli civilians by multiple and uniquely gruesome methods and seemingly oblivious to the heinous crimes they commit they, instead, target the target of their violence, hate, and terror with their application to join this global legal chamber.

And so we turned to page two of the same edition of the Jerusalem Post to read that the Shurat HaDin NGO had filed war crimes charges against Hamas on behalf of 26 Americans for their deliberate firing of rockets at Ben Gurion Airport during the 2014 Hamas-initiated Gaza conflict.

One piece of evidence that, hopefully, will convict Hamas on these charges was the statement of their spokesman, Sami Abu Zuhri, who had triumphantly admitted that "the success of Hamas in closing Israeli air space is a great victory for the resistance, and is a crown of Israel's failure."

Like a sick joke, the Palestinian Authority and the PLO became members of the ICC in The Hague on April 1. But the Palestinian Authority and the PLO were found guilty on terrorism charges in a New York court on February 23 in a class action suit brought by the families of ten Americans killed by them in a series of deadly attacks that killed 33 people and wounded more than 400 others in Israel.

So much for a Palestinian "unwavering commitment to peace and universal values." As with all their commitments, it's all smoke and mirrors.  But it really is Palestinian war crimes and war criminals that undermine peace efforts, and it is time that the international community opened its eyes to this truth.

SOURCE

There is a  new  lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race, genes, IQ etc.

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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There are TWO elephants in Acemoglu's bedroom

Why are some countries rich while others are poor?  The answer to that is not far to seek.  With apologies for the army expression, the major differentiating factors stand out "like dog's balls".  The factors concerned, however, challenge basic Leftist beliefs so Leftists do their usual trick of ignoring the elephant in the room -- seeking more politically acceptable explanations.  So the theses put up by the absurd Leftist economist Daren Acemoglu have been eagerly seized on by the Left. Sadly, however, Acemoglu's theories are as full of holes as a Swiss cheese -- as I have already pointed out.  I would have failed his thesis as a Ph.D. dissertation.  There is however a saying that bad theories are driven out only by better theories so  I think it is incumbent on me to spell out what the obvious factors are.  I attempt that below

Acemoglu has addressed the "geography hypothesis", which points to the rather striking fact that poverty mostly seems to  be concentrated in the tropics and their immediately adjacent area.  So is climate the key to wealth and poverty?  Having myself been born and bred in the tropics, I hope not.  Acemoglu rejects the hypothesis in favour of his own tale about governmental institutions but makes a pretty thin argument of it.

His chief counter-argument is the prosperity of the Inca and Aztec civilizations prior to the Conquistadores.  And it is certainly notable that those civilizations were in the warmer parts of the Americas.  One swallow doesn't make a summer however and no statistician would let pass a generalization based on a sample size of one.

Furthermore, I think that what actually went on is fairly clear.  The areas where the meso-American civilizations arose are very fertile agriculturally and easily produced the food  surpluses that are needed for civilization to arise.  Whereas in what is today the USA and Canada, European farming technology was needed before large agricultural surpluses could be produced.

So I think the geography hypothesis is pretty good.  It fits almost all the examples.  Though we could argue about Tasmania, I suppose. But the interesting question is why.  How come that climate makes such a difference?  My answer to that is a very old one.  To oversimplify, in the tropics you just have to pick fruit off a tree to survive whereas in the cold climates you have to lay up food months in advance if you are to survive the winter.  Putting it generally, survival is much harder in cold climates so you need to be smarter to do so.  You have to use a mental model of the future for a start, and that sort of abstract thinking is what lies behind a higher IQ.

So IQ is the first elephant in Acemoglu's bedroom.  You need information about IQ in order to understand relative wealth and poverty. It is high average IQ that produces wealth-creating behaviour.  Even within modern countries, there is a correlation between low IQ and relative poverty. And, as is now I think well-known, Lynn and Vanhanen have shown a strong correlation between average national IQ and national prosperity.  The catastrophically low average IQ of Africans corresponds closely with the pervasive  dysfunction of African societies -- and indeed of African populations everywhere.  If you want evidence that IQ tests measure what they purport to measure, Africa is very strong evidence that they do.

BUT:  IQ is not the sole foundation of national prosperity.  It suits Leftists like Acemoglu to use simplistic single-factor explanations for everything but most of the world is more complex than that.  China is the obvious counter-example.  The average Chinese IQ appears to be very high (though studies of IQ in China have mostly been confined to coastal areas) and China has long been very poor.

My favourite example however is South India.  South India is very warm and yet the average IQ there appears to be high.  It was South Indian mathematicians and engineers who were behind India's recent remarkable Mars shot. In one bound India leapt to near parity with other space-exploring nations.  And South India is well and truly in the tropics.

How South Indians got so smart I will have to leave for another day but the continuity of civilization there has to have a lot to do with it.  Tamil Nadu claims to be the only place where a classical civilization has survived into modern times. And the constant wars between South Indian states probably also had a eugenic effect.

The interesting question, then, is why, like China, South India has long been poor.  And in both cases the answer is blindingly clear:  Socialism.  It is particularly clear in South India, which is the land of envy. All the States have been very socialist for a long time and Kerala for a while even had the distinction of having the world's only freely elected Communist government.  Even the present government is very Leftist.

And the same of course goes for China.  It was the virtual relinquishment of socialism under the leadership of Deng Xiaoping  that allowed the recent breakout into prosperity by China.  No matter how smart the people of a country are, socialism will impoverish them.  We saw that also in Russia.  Russia has made great strides since it abandoned Communism. And even India's recent surge was fired up by the big attack on the "Regulation Raj" in the 1990s.

There are of course numerous other examples of the economic benefits of winding back socialism:  Margaret Thatcher's privatizations and Ronald Reagan's tax cuts both ushered in long booms, for instance.  But let me mention another example that might otherwise go largely unheeded:  New Zealand.

New Zealand had some pretty socialistic governments during the 20th century (even the nominally conservative Muldoon regime was a big government regime) while Australia had long periods of conservative rule (including the market-oriented but nominally Leftist Hawke regime).  And that meant that New Zealand was always a poorer country than Australia. Recently however New Zealand has almost completely caught up.  Why?  Australia recently had 6 years of a vastly wasteful socialist government (the Rudd/Gillard regime) whose only notable legacy was a mountain of debt -- while New Zealand has now for over five years been under the prudent premiership of the conservative John Key.  The results were predictable.

So that is the second -- and presumably most unwelcome -- elephant in Acemoglu's bedroom:  Socialism.  High IQ makes you rich and socialism makes you poor.  You need the right combination of those two factors to have prosperity  -- JR.


John Key. It's rarely mentioned but Key is New Zealand's third Jewish Prime Minister. He is apparently not religious, however

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Let's Recognize Who the Real Haters Are

By David Limbaugh

One may reasonably wonder whether the militant left in this country is solely dedicated to manufacturing issues to keep the nation in a constant state of uproar, angst and disharmony. We're seeing lots of negativity and intolerance from those so concerned that we all love one another.

Their most recent cause for hysterical urgency is Indiana's Religious Freedom Restoration Act. The left has gone absolutely bonkers attempting to paint that legislation as a license for Christians to discriminate against gays for sport and is smearing anyone who supports it as a reactionary bigot.

Don't you long for those days when words had meaning? Now we have propagandists whose principal job is to deceitfully distort word meanings to promote their causes.

A few examples in the context of the issue at hand are "hate," "homophobe," "discrimination" and "anti-." People who oppose same-sex marriage do not fear or hate people who are gay. They are not advocating discrimination against them, and they are not against them.

These calculated distortions have had an enormous impact on our culture, infecting even people who should know better. Now enshrined in our popular culture, these misrepresentations affect the way people think (which is the whole point, of course) and lead to imputed motives with no basis in fact.

Consider U.S. Supreme Court Justice Anthony Kennedy's unfortunate language in his opinion in the Windsor case, in which the court struck down the Defense of Marriage Act as unconstitutional.

Kennedy said the government's refusal to recognize same-sex marriages imposed a "stigma," codified a "separate status" into law and "humiliate(d)" a certain group of people. He said, "The principal purpose and the necessary effect of this law are to demean those persons who are in a lawful same-sex marriage."

Those were grossly unwarranted accusations. In fact, Kennedy's reckless language could cause the exact harm he professed to be condemning, for he flagrantly stigmatized, humiliated and demeaned proponents of DOMA in presumptuously imputing motives to them they don't possess.

Somewhat similarly, Indiana Gov. Mike Pence, in walking back his position on Indiana's law, said, "No one should be harassed or mistreated because of who they are, who they love or what they believe."

That was a profoundly regrettable choice of words that only lends credence to the dishonest activists who are attempting to vilify people who support a law that protects one of this nation's most basic and sacred freedoms, the freedom of religion. Under no reasonable construction of language can business owners' refusal to perform services or sell products for events that celebrate causes that violate their religious beliefs be considered harassment.

The only people being harassed on this issue are the business owners, because of their religious beliefs.

The Indiana law doesn't authorize businesses to deny services to gay people at will. Neither the federal Religious Freedom Restoration Act nor any of the state RFRAs have been used as a license for merchants to refuse to do business with gays. But there is a qualitative difference between refusing to serve gays in general and declining to provide services for the very event that solemnizes their legal marriage.

We should expect better from Kennedy and Pence, but not White House press secretary Josh Earnest, who said the Indiana law "could reasonably be used to try to justify discriminating against somebody because of who they love." That incendiary language completely distorts the motive of those who don't want to service same-sex marriage ceremonies, and he knows it.

Leftists also want to marginalize Christians who support such legislation as hateful kooks and outliers, but the truth is that Christianity sanctifies marriage as between one man and one woman, and that is not only in the Old Testament. Those who claim that Jesus never condemned homosexuality should know that he did affirm marriage as between a man and a woman. Reciting Genesis, he said, "Have you not read that he who created them from the beginning made them male and female, and said, 'Therefore a man shall leave his father and his mother and hold fast to his wife, and the two shall become one flesh'?" (Matthew 19:4-5).

Let's not forget what the federal and state RFRAs, as construed by the courts, do. They seek to balance sometimes-conflicting interests. They say the government can't force people to violate their sincerely held religious beliefs unless it can prove it has a compelling interest in doing so, and only then if it does so by the least restrictive means.

Again, RFRAs recognize potential disagreements and provide for a reasonable balancing of those interests. But the ugly truth is that opponents of RFRAs don't want there to be a balancing test. They don't believe that the religious convictions of Christians on same-sex marriage deserve any protection. They are the extremists in this conflict, not the Christian merchants who choose to respectfully decline performing services for a very minute fraction of transactions involving gays.

What people should keep in mind is that any real hatred involved in this latest hot-button issue is emanating from the people who are falsely claiming to be victimized by hate. The nasty, mean-spirited rhetoric, the desire to harm people for exercising their religion and the efforts to smear a certain group of people are coming from leftist activists against Christians, not Christians against gays. Those are the facts.

The question is, will our Republican politicians have the backbone to stand up for what is right on this issue and vindicate religious liberty?

SOURCE

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Huckabee on Indiana Law: 'This Is a Manufactured Crisis by the Left'

 The furor over Indiana's Religious Freedom Restoration Act "is a manufactured crisis by the Left," former Arkansas Gov. Mike Huckabee (R) told Fox News's Megyn Kelly Wednesday night.

"If they manufactured as many products as they do crises like this one, which is an utterly phony attempt to create some kind of division, 92 million Americans who are jobless would have jobs.

"I've never seen anything so utterly off the mark in my life as trying to pretend that the RFRA law is actually discrimination. It is most certainly not. It simply gives you access to the court. And there's no guarantee that you're going to win when you go."

Huckabee spoke one day after Arkansas, the state he once governed, also passed a Religious Freedom Restoration Act, which the current governor wants to change. Gov. Asa Hutchinson (R) wants the state law to precisely mirror the federal RFRA signed in 1993 by then-President Bill Clinton.

Indiana Gov. Mike Pence (R) also has asked the Indiana State Legislature to make changes, following an "avalanche" of criticism that the Indiana law is a license to discriminate against homosexuals.

"There's nothing in the RFRA that in anyway says a thing about homosexuality, gay marriage," Huckabee told "The Kelly File" on Wednesday.

He said it's important to differentiate between discrimination and discretion: "Discrimination is if when someone comes into the pizza place, they're turned away because they're black or because they're female or because they're gay, although I don't honestly know how you would know someone is gay just because they walked in and ordered a pepperoni pizza.

"But discretion is something that every American should have the right to exercise. Which is that if you come to my place and order cupcakes or a donut, I'll serve you. If you want me to show up and deliver a cake with two men on top of it, because I'm a Christian, because I believe the biblical definition of marriage, then I'm not going to be able to do that. That's not discrimination. That's discretion. And there's a difference."

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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Are American young men nogoodniks?

In 2011 Kay Hymowitz wrote an article for the WSJ under the heading "Where Have The Good Men Gone?", which basically said that college-educated American  men in their 20s are nogoodniks.  They still behave like adolescents and are no good to young women -- who are far more mature.  And she put forward a number of reasons why that should be so.

Hymowitz herself is a broadly conservative and married New York Jewish lady born in 1948.  So it would not be inaccurate to refer to her as an old lady.  So is she just lost in the era of her youth (which is roughly also mine) or is there something in what she said?

The article has got a lot of attention.  Google has over 17,000 references to it, and most that I have read agreed with it to some degree -- with feminism getting a lot of blame for the problem.  I am not an American and my stays in America were not long enough to allow me to make any judgments about that particular demographic category.  I think however there are two things I can say about the debate that need to be said:

1). "The men are no good" is an old cry.  Women who have not paired up by age 30 have been singing that song for a long time. The men they met in their 20s were not good enough for them and they somehow think the men they meet in their 30s should be better!  One example from my own life I always find amusing:  I was at a singles party and knew an attractive lady there.  We were chatting and she said to me:  "Where are all the men?".  I pointed out that there were in fact a slight preponderance of men in the room.  She replied: "Not THOSE men".  She had standards much higher than what was available.  So it may be that Hymowitz too has unrealistically high standards when she evaluates young American men.

2).  Value judgments aside, it is incontrovertible that young people these days are not marrying nearly as much as they used to.   Why is that?   I think all the reasons advanced by Hymowitz and others have a part to play but who can doubt that young men have noticed the traumatic divorce cases that regularly feature in the papers?  So often a divorce is reported as disastrous for the man financially and sometimes disastrous in other ways too.  Who would wish that on themselves? And the sure way of avoiding such damage is not to marry in the first place.  Feminism has turned many women into women of easy virtue so sexual deprivation is not a problem.  So if any woman complains that the men she meets "won't commit", just refer her  to the divorce laws in her State.  A man has to be slightly insane to marry these days.  The laws are largely feminist inspired but conspire heavily against what many women want.  Feminists are good at conspiring against the interests of normal women.

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Easter

For Christians, six or so weeks of penance, atonement and self-denial come to a close this weekend. Time to hang up those horse-hair undergarments, unlock the fridge and indulge. Or at least that used to be what happened with the end of Lent.

But several high-powered Anglican bishops, who are urging the Church of England to prove its commitment to battling climate change, want the spirit of Lent to be extended indefinitely. And they are not alone. From lifestyle cops obsessed with our waistlines to the greens obessessed with the contents of our bin liners, too many seem to think life-long self-denial is the way forward. So, here’s an alternative Easter message: buck the miserablism and enjoy yourselves!

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Free Fall in the Middle East

As bombs fall on Yemen and a sectarian war between the Middle East’s leading powers becomes more likely by the day, the Obama Administration seems to feel it might have some spinning to do about the success of its Middle East policy. But as President Ahab glances around his deck, few of his shipmates are manning their posts—in fact, most seem to be scrambling for the lifeboats. Oh well, there’s always that trusty tar, Unnamed State Department Official, to rely on for a friendly quote in Politico:

“There’s a sense that the only view worth having on the Middle East is the long view. […] We’ve painfully seen that good can turn to bad and bad can turn to good in an instant, which might be a sobriety worth holding on to at moments like this. The truth is, you can dwell on Yemen, or you can recognize that we’re one agreement away from a game-changing, legacy-setting nuclear accord on Iran that tackles what every one agrees is the biggest threat to the region.”

But among those who are willing to give their names, there is less philosophizing. James Jeffrey, Obama’s former Ambassador to Iraq, cuts through the commentary on U.S. foreign policy in the Middle East with a certain pithiness:

“We’re in a goddamn free fall here.”

Meanwhile, over at the New York Times, writers are doing their tortured best to say something other than that a catastrophic breakdown of the President’s foreign policy is taking place in the Middle East—but the defense is less than effective. What can you do, the world is just a mess, seems to be their take:

"Few disagree that the continuing tumult in the Middle East has scrambled American priorities there. This has led many to argue that the Obama administration’s policy for the region is adrift — without core principles to anchor it.

But amid the confusion, some experts said that there cannot be an overarching American policy in the Middle East at the moment. The best the White House can do, they said, is tailor policies according to individual crises as they flare up."

If we had a Republican President and the Middle East were in this much of a mess, and the Administration had been repeatedly exposed as having fundamentally misjudged major developments (calling ISIS the “jayvee team,” Yemen a success, Erdogan a reliable partner, etc. etc.), the NYT would be calling for impeachment and howling about the end of the world. As it is, the newspaper of record reflects philosophically on the complexity of the world, and suggests that nobody could really do anything given the problems around us.

Nobody should be surprised by this, but nobody should miss the most important point here: even the President’s ideological fellow travelers can no longer mount a cogent defense of his Middle East policy. The MSM will still do all it can to avoid connecting the dots or drawing attention to the stark isolation in which the White House now finds itself as ally after ally drops away. It still doesn’t want to admit that the “smart diplomacy” crowd has been about as effective at making a foreign policy as the famous emperor’s smooth-talking tailors were at making a new suit of clothes. But it’s getting harder and harder to find anybody willing to gush about how snazzy the President looks in the sharp foreign policy outfit that he’s sporting around town. The shocked silence of the foreign policy establishment, the absence of any statements of support from European or Asian allies about our Middle East course, the evidence that the President and the “senior officials” whom he trusts continue to be blindsided by major developments they didn’t expect and haven’t provided for: all of this tells us that our Middle East policy is indeed in free fall.

 SOURCE

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The Tricks Obama Is Trying to Play with the Iran Announcement

If you look at what happened today between the U.S. and Iran through the lens of domestic American politics, Barack Obama has made a very clever play here—because what might be called “the agreement of the framework of the possibility of a potential deal” gives him new leverage in his ongoing battle with the Senate to limit its ability to play a role in the most critical foreign-policy matter of the decade.

The “framework” codifies the Obama administration’s cave-ins but casts them as thrilling reductions in Iran’s capacities rather than what they are—a pie-in-the-sky effort to use inspections as the means by which the West can “manage” the speed with which Iran becomes a nuclear power.

Obama’s tone of triumph this afternoon was mixed with sharp reminders that the deal is actually not yet done—and that is entirely the point of this exercise from a domestic standpoint. the triumph signals his troops and apologists that the time has come for them to stand with him, praise the deal sheet and pretend it’s a deal, declare it historic, and generally act as though the world has been delivered from a dreadful confrontation by Obama and Kerry.

But since the deal is not yet done, it could still be derailed. And that is where Obama’s truly Machiavellian play here comes in: He may have found a way to put the Senate in a box and keep Democrats from melting away from him on Iran and voting not only for legislation he doesn’t want but also to override the veto he has promised.

The Senate has two provisions at the ready with which it could go ahead any time. One, called Kirk-Menendez, imposes new sanctions on Iran. Obama promised a veto of this bill should it pass, and after today, one ought to presume that it’s dead.

The other, Corker-Menendez, requires the administration to submit any deal to the Senate within 60 days of its signing. This is a key provision because, of course, what the Iranians want—and what they said today they got—was the lifting of all sanctions. The president, in his statement, vowed to lift the “nuclear” sanctions (there are others involving human rights) if the Iranians comply by the terms of the deal.

Existing sanctions legislation features waivers the president can arguably use to do that. But those sanctions were put into place specifically to make it incredibly painful for Iran to retain any nuclear-weapons capability—not as a means of acceding to Iran’s retention of a nuclear capability.

For this reason, and for the reason that the president is essentially negotiating an arms-control treaty with Iran, the Senate should approve any final deal. Obama disagrees and claims this is merely a nuclear-agreement, not a treaty, and therefore Congress has no role.

That’s a very nervy argument. It is not only disrespectful of the Senate but it misrepresents the nature of what’s being negotiated. And that’s why it’s an argument it appeared the president would lose—that senators would not only vote for Corker-Menendez but would override his veto of it.

Which is why the deal-that’s-not-yet-a-deal works in his favor. Talks are now to continue until the end of June. Obama can and will argue to Democrats that they owe it to him, to their base, and to their governing ideology to give him all the room he needs to get to June 30.

Of course, if the legislation does not pass by June 30 and Obama signs a final deal, the game is up; the Senate can’t retroactively insist in July he bring it to them for a vote.

Will there be a deal by June 30? Maybe, maybe not; maybe they’ll finish, maybe they won’t; maybe the Iranians will say they didn’t agree to this or that and blow up the whole thing; who knows. Probably the total collapse, after all this, would bring the Kirk-Menendez sanctions back to life. Which is why there will never be a total collapse—because these talks can simply go on….

 SOURCE

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Sanctions against Russia backfire

Boost Russian exports; depress Australian and Indonesian exports

Russia is starting to erode the dominance of Australia and Indonesia in the Pacific thermal coal market thanks to the steep depreciation of the rouble over the past 12 months, according to energy consultancy Wood Mackenzie.

Coal exports from Russia to the Pacific have already increased by about 8 million tonnes and the country is making inroads into the market share of the leading suppliers, said Kiah Wei Giam, senior Asia-Pacific region analyst for the firm.

Under cost conditions of 12 months ago, Russian production would have made up about 17 per cent of the first 200 million tonnes of supply to Pacific buyers. But with the depreciation of the rouble, combined with the impact of lower prices, its share jumps to 35 per cent.

"With even closer proximity to the north Asian market, which are typically heavy coal consumers, Russian coal can potentially displace the Australian and Indonesian tonnes," Mr Giam said in a media briefing.

"It is Russia which tops the list of benefactors" with the rouble falling 70 per cent against the US dollar, Mr Giam said.

SOURCE

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Some Indiana Interrogatories

The whole Indiana RFRA controversy prompts a few interrogatories.  Such as:

 *  If a member of the Westboro Baptist Church asks for a bakery to create a cake with their motto “God hates fags,” will the baker be charged with discrimination if she refuses?

 *  If a baker agrees to bake a cake for a gay wedding, but as matter of practice includes the slogan “God hates fags” in, say, Aramaic script on the side of the cake, wouldn’t this be protected speech and/or “expression” under the First Amendment?

 *  Just curious: why hasn’t anyone been to a Muslim bakery to press this newfound frontier of anti-discrimination?  Ah—Steven Crowder has.  Will the Human Rights Campaign Fund descend upon Dearborn, Michigan, tomorrow about this outrageous injustice?  I’m not holding my breath. Short video at link.

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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An interesting confirmation of a troublesome truth

As far as I can tell, it has always been known that we all get on best with people like ourselves.  The whole history of tribalism, nationalism and xenophobia tells us that. Even Hitler knew it.

Have a look at the 1939 Nazi propaganda placard below (a Wochenspruch for the Gau Weser/Ems). The placard promotes one of Hitler's sayings. The saying is, "Es gibt keinen Sozialismus, der nicht aufgeht im eigenen Volk" -- which I translate as "There is no socialism except what arises within its own people". Hitler spoke a very colloquial German so translating that one was not easy but I think that is about as close to it as you can get.



Hitler saw that people are more willing to share and get involved with others whom they see as like themselves -- leading to the view that socialism will find its strongest support among an ethnically homogeneous population.  He wanted Germany to be racially homogeneous so that socialism could work

With their equality mania, however, modern-day Leftists have been  prone to deny or ignore that old truth.  They are good at denial.  Reality is so pesky for them that they need to be.

Eventually, however, realization of the reality seeped into the social sciences via the work of Robert Putnam.  Putnam was a committed Leftist but what he saw in his research made such a powerful impression on him that he could not deny it.  And it took him some soul-searching before he decided to publish his findings.  But publish them he did and it now seems to be generally accepted in the social sciences that social co-operation and involvement is highest among homogeneous groups of people.

That is awkward for Leftists as they are all for "unity".  They basically agree with Hegel that the ideal society is like an anthill with everyone agreeing with one another and everyone marching together in lockstep towards some utopia.  But the revelation that only the most homogeneous groups can approach anything like that degree of unity undermines the universalism that they also preach.  "All men are brothers" is thoroughly undermined by work such as Putnam's.  But Freud showed us that compartmentalization is a useful psychological defence so I guess that Leftists put Putnam into a mental compartment all by himself.  It must be trying to be a Leftist.  No wonder they get angry when conservatives pop their bubbles.

Anyway it seems that Putnam is now respectable so the recently published confirmation of his finding reproduced below is interesting.  It shows what a bad place the USA is in at present.  Not only racial diversity but also income diversity contributes to alienation between people.  The marked differences between the three major ethnic groups in America are bad enough for social amity and co-operation but when those three groups are also characterized by big average income differences, we have  to say:  "Houston, we have a problem".

So can anything be done about that?  With typical Leftist dullness, the author below thinks we should take more money off those white guys and give to to the black guys -- but that solution has surely been tried and found to do more harm than good.

So that leaves only the traditional human solution:  In order of severity that solution is:  Segregation, Apartheid and Ethnic cleansing.  Such words reek of the Devil in modern-day America however, so the agony of America's hostile race relations will stretch on on well into the future.

Fortunately, the informal segregation provided by white flight and black clustering in areas of high welfare availability will continue to offer some relief.  So legislators who wished to enhance social co-operation in their area could presumably cut welfare to the bone -- quite the opposite of what the unimaginative writer below recommends

Racial income inequality reduces levels of trust and social capital in communities

By studying survey responses on trust from 110 metropolitan areas from 1973 to 2010, the author finds that racial income inequality decreases trust within communities, and that this lack of trust is exacerbated when communities are more racially fragmented and as this inequality increases    

Andrea Tesei

Income inequality

During the last decade, policy-makers and scholars alike have become increasingly concerned about the social and economic effects of income inequality and racial diversity in the United States. One crucial concern is that diversity - both in race and income - seems to be associated with lower levels of social capital in society. Inhabitants of diverse communities, in particular, tend to withdraw from social life, participate less in collective activities, and trust their neighbours less. Since these dimensions of social life are considered key lubricants of the economic activity, the findings have spurred a public debate about the workings of the American melting pot.

Perhaps surprisingly, the debate has focused almost exclusively on the independent effects of income inequality and racial diversity, overlooking the fact that much of the income inequality in the US has a marked racial connotation. Still in 2010, the median Black and Hispanic household earned, respectively, only 58.7 per cent and 69.1 per cent of that of the median White household.

In a recent LSE CEP working paper, I contribute to the debate by emphasising the role of the income inequality between races (racial income inequality). This aspect of community heterogeneity turns out to be important. My results suggest that it is not racial diversity or income inequality per se which ultimately reduces the level of trust and participation of individuals in US metropolitan areas. Instead, what is key to understanding this lower participation in social life is the extent of racial income inequality in their community.

Trust  


Figure 1 - Similar Characteristics but Different Trust

      Figures 1 and 2 help to illustrate the point. Figure 1 plots the average level of trust reported by citizens of 110 different U.S. metropolitan statistical areas (MSA), against the average level of racial diversity and income inequality in their MSA. The figure clearly corroborates previous studies, by showing that trust is lower in more racially diverse and income unequal communities. However, it also makes clear that racial diversity and income inequality alone cannot fully account for the difference in trust between similar cities, like San Francisco and Houston. In spite of their almost identical levels of racial diversity and total income inequality, citizens in the two cities have very different levels of trust: while 40 per cent of those living in San Francisco say they can trust others, only 31 per cent in Houston do so.


Figure 2 - Are They Really Similar?

      The explicit focus on racial income inequality helps to understand this difference. Figure 2 now shows on the horizontal axis the share of total income inequality due to differences between racial groups. Under this dimension, the two cities turn out to be actually very different. The share of total inequality due to differences between races is twice as large in Houston as in San Francisco. This in turn is related to the level of trust in the two cities. In San Francisco, where the probability of meeting an individual of a different race but similar income level is relatively high, the level of trust is higher than in Houston, where belonging to a different race is also likely to be associated with a difference in income.

This same pattern of apparent similarity, which is in reality masking an additional dimension of heterogeneity, is repeated over different pairs of cities in the US My empirical analysis documents the pattern in a systematic way, exploiting answers from 20,000 respondents to the US General Social Survey (GSS) between 1973 and 2010. The survey contains a variety of indicators on the respondents' political views, social behavior and socioeconomic characteristics. Crucially, it also asks respondents whether they think that most people can be trusted. I match their answers to this question to their socioeconomic and demographic characteristics, and to the level of racial diversity, total income inequality and racial income inequality in the MSA of residence.

Negative effect

I start out by showing that racial diversity and total income inequality have a statistically significant, negative effect on individual measures of trust, a result that is consistent with previous studies. But I then find that these effects become statistically insignificant once I account for the income inequality between racial groups, which instead remains negatively and significantly associated to the level of trust of the respondent.

I then show that the negative impact of racial income inequality on trust is larger in more racially fragmented communities, and that members of minority groups reduce their trust towards others more, when racial income inequality increases. These results are consistent with a simple framework in which individuals can be similar in both race and income, and trust towards others falls at increasing rates as individuals become different in both dimensions.

Overall, my results suggests that racial diversity is more detrimental when associated with income disparities between races and that, similarly, income inequality is more harmful when it has a marked racial connotation. This in turn suggests that policies aimed at reducing income disparities along racial lines might be particularly effective in increasing the level of social participation and trust in US communities.

SOURCE

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Higher Minimum Wage Leaves Working Poor Without Childcare

Oakland’s voters who approved the March 1 increase of the minimum wage to $12.25 apparently drank the Kool-aid that it would “help the poor.” Tell that to the working poor parents who will now be scrambling to find good, affordable child care:

Workers who benefit from Oakland’s minimum wage hike might soon lose a service that enables them to work in the first place. It turns out the well-intentioned law is putting a financial squeeze on Oakland’s child care industry, leading some providers to panic.

“Panic” may help sell newspapers, but those who have to keep their doors open deal more in Cold Hard Facts:

Revenues < Expenses = Bankruptcy

So when its main expense (labor) increases by more than 36% overnight (from $9 to $12.25 per hour), Cold Hard Facts say: Increase Revenues or Decrease Expenses.

For a non-profit early childhood development center in Oakland which had recently garnered the highest rating in the county, the only way “out” is decreased costs. Parents of the 63 children cared for there—all working poor—pay little to nothing for the care provided five days a week, every week of the year. Because it is a nourishing environment—providing professional care, guided recreation, stories, socialization and pre-school instruction—it is by definition very labor intensive. And much of that labor is provided by minimum-wage teachers’ aids. The immediate, first-year budget shortfall to meet the mandated wage increase: $146,500

But it’s really more than that: in practice, a rise in the minimum wage puts upward pressure on the pay of those employees who had been earning above minimum wage, but whose relatively higher pay has now disappeared with the mandated minimum-wage increase—so the amount needed to keep everyone equal “relatively” is actually closer to $200,000.

Unfortunately, as a non-profit, it can’t raise “prices” and it doesn’t have an angel it can tap to write a check, so cuts are the reality to keep the doors open.

Infant care, which demands a higher teacher:child ratio, will be discontinued, and staff let go accordingly.

Bottom line: the elimination of care for 11 infants of the working poor, and the jobs of three teacher aids.

This means working poor parents of infants in Oakland now have fewer sources for their care, with higher costs. And three formerly minimum-wage workers are now unemployed.

And that’s just one childcare center. The story is similar across the sector, as reported by the San Francisco Chronicle. Will parents be able to re-juggle their household budgets and work schedules to ensure their children are well cared for while they work?

San Francisco also raised its minimum wage, and on both sides of the bay the immediate effect has been the close of a popular science fiction bookstore, restaurants—from highest rated to humble Chinatown establishments—and worsened job prospects for youth.

In any case, it’s time to wake up and face reality: raising the minimum wage is a lousy way to “help the poor.” As noted here:

…minimum-wage workers are typically not in low-income families; instead they are dispersed evenly among families rich, middle-class and poor.

Virtually as much of the additional earnings of minimum-wage workers went to the highest-income families as to the lowest. Moreover, only about $1 in $5 of the addition went to families with children supported by low-wage earnings. As many economists already have noted, raising the minimum wage is at best a scattershot approach to raising the income of poor families.

Just another tragic tale of those for whom “Sorry, Your Minimum Wage Law Is a Nightmare.”

SOURCE

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Harry Reid -- Another Master of the BIG Lie

In 2012, Senate Majority Leader Harry Reid took to the Senate floor and made a serious and unsubstantiated allegation about Republican presidential candidate Mitt Romney: "Let him prove that he has paid taxes, because he hasn't." Reid knew this was a BIG Lie, which would gain traction for the Left's class warfare game.

Asked this week for his thoughts on that episode -- specifically that his remarks had been called "McCarthyite" -- Reid shrugged and replied, "Well, they can call it whatever they want. Romney didn't win, did he?" Reid's smug gloating is beyond unmitigated arrogance, and speaks volumes about the Left's approach to politics. The ends always justify their means.

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

List of backup or "mirror" sites here or  here -- for when blogspot is "down" or failing to  update.  Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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The deplorable Daren Acemoglu

The gradual Leftist takeover of American education has now become extreme.  Many American universities and colleges are very reminiscent of Mao's China during the "Cultural Revolution".  The tiniest departure from Leftist orthodoxy is heavily condemned and often punished.  If you doubt it scroll through some of the episodes I have collected on  EDUCATION WATCH.

One area that has to a degree resisted the takeover, however, is economics.  Almost any study of economics uncovers the sheer ignorance of the Left.  Economics makes obvious lots of things that Leftists don't want to know about -- such as the efficiency of markets.  And central to what Leftists hate about economics are the lessons it gives about what it takes for countries and populations to get rich.

Which is where Daren Acemoglu comes in.  He dismisses all the usual explanations such as reliance on markets and the rule of law and provides his own explanation.

And it is a testament to how desperate Leftists are that they find his explanation attractive.  He essentially says that what you need is more democracy. Given their Fascist tendencies, that would not normally be a congenial idea to the Left.  But given their hatred of market economics, Acemoglu is apparently the lesser of two evils.  So he has become something of a rockstar among Leftist economists.

Sadly, however, much as we would ALL like Acemoglu to be right, he is not.  There have been many examples of rapid economic growith under authoritarian regimes:  Meiji Japan, postwar South Korea, present-day China, the Crown Colony of Hong Kong, Kuomintang Taiwan, Pinochet's Chile, Singapore under Lee Kuan Yew etc.  In all of those, democratic influence was very limited if it existed at all.

And that is without going into micro-examples such as the great economic success of South African Indians during the Apartheid era. Facing it fairly, one would have to say that RAPID economic growth requires some degree of authoritarianism in government.

So Acemoglu is clearly wrong.  And both I and Steve Sailer have pointed that out in some detail some time ago (here, here, here and here).  So I was a little surprised to see that Steve Sailer returned to the fray rather recently, with an article  late last year.  I think I now however  might know what motivated Steve.  A correspondent has suggested to me that Acemoglu is in line for a Nobel.  That is such a horrible thought that I feel that I too should return to the fray.  I am not however going to say much more personally.  Instead I am putting up below a brief essay by one of the world's brightest and most knowledgeable men:  Bill Gates.  Gates is reviewing Acemoglu's book Why Nations Fail

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

By Bill Gates

Why have some countries prospered and created great living conditions for their citizens, while others have not? This is a topic I care a lot about, so I was eager to pick up a book recently on exactly this topic.

Why Nations Fail is easy to read, with lots of interesting historical stories about different countries. It makes an argument that is appealingly simple: countries with “inclusive” (rather than “extractive”) political and economic institutions are the ones that succeed and survive over the long term.

Ultimately, though, the book is a major disappointment. I found the authors’ analysis vague and simplistic. Beyond their “inclusive vs. extractive” view of political and economic institutions, they largely dismiss all other factors—history and logic notwithstanding. Important terms aren’t really defined, and they never explain how a country can move to have more “inclusive” institutions.

For example, the book goes back in history to talk about economic growth during Roman times. The problem with this is that before 800AD, the economy everywhere was based on sustenance farming. So the fact that various Roman government structures were more or less inclusive did not affect growth.

The authors demonstrate an oddly simplistic world view when they attribute the decline of Venice to a reduction in the inclusiveness of its institutions. The fact is, Venice declined because competition came along. The change in the inclusiveness of its institutions was more a response to that than the source of the problem. Even if Venice had managed to preserve the inclusiveness of their institutions, it would not have made up for their loss of the spice trade. When a book tries to use one theory to explain everything, you get illogical examples like this.

Another surprise was the authors’ view of the decline of the Mayan civilization. They suggest that infighting—which showed a lack of inclusiveness—explains the decline. But that overlooks the primary reason: the weather and water availability reduced the productivity of their agricultural system, which undermined Mayan leaders’ claims to be able to bring good weather.

The authors believe that political “inclusiveness” must come first, before growth is achievable. Yet, most examples of economic growth in the last 50 years–the Asian miracles of Hong Kong, Korea, Taiwan, and Singapore–took place when their political tended more toward exclusiveness.

When faced with so many examples where this is not the case, they suggest that growth is not sustainable where “inclusiveness” does not exist. However, even under the best conditions, growth doesn’t sustain itself. I don’t think even these authors would suggest that the Great Depression, Japan’s current malaise, or the global financial crisis of the last few years came about because of a decline in inclusiveness.

The authors ridicule “modernization theory”–which observes that sometimes a strong leader can make the right choices to help a country grow, and then there is a good chance the country will evolve to have more “inclusive” politics. Korea and Taiwan are examples of where this has occurred.

The book also overlooks the incredible period of growth and innovation in China between 800 and 1400. During this 600-year period, China had the most dynamic economy in the world and drove a huge amount of innovation, such as advanced iron smelting and ship building. As several well-regarded authors have pointed out, this had nothing to do with how “inclusive” China was, and everything to do with geography, timing, and competition among empires.

The authors have a problem with Modern China because the transition from Mao Zedong to Deng Xiaoping didn’t involve a change to make political institutions more inclusive. Yet, China, by most measures, has been a miracle of sustained economic growth. I think almost everyone agrees that China needs to change its politics to be more inclusive. But there are hundreds of millions of Chinese whose lifestyle has been radically improved in recent years, who would probably disagree that their growth was “extractive.” I am far more optimistic than the authors that continued gradual change, without instability, will continue to move China in the right direction.

The incredible economic transition in China over the last three-plus decades occurred because the leadership embraced capitalistic economics, including private property, markets, and investing in infrastructure and education.

This points to the most obvious theory about growth, which is that it is strongly correlated with embracing capitalistic economics—independent of the political system. When a country focuses on getting infrastructure built and education improved, and it uses market pricing to determine how resources should be allocated, then it moves towards growth. This test has a lot more clarity than the one proposed by the authors, and seems to me fits the facts of what has happened over time far better.

The authors end with a huge attack on foreign aid, saying that most of the time, less than 10% gets to the intended recipients. They cite Afghanistan as an example, which is misleading since Afghanistan is a war zone and aid was ramped up very quickly with war-related goals. There is little doubt this is the least effective foreign aid, but it is hardly a fair example.

As an endnote, I should mention that the book refers to me in a positive light, comparing how I made money to how Carlos Slim made his fortune in Mexico. Although I appreciate the nice thoughts, I think the book is quite unfair to Slim. Almost certainly, the competition laws in Mexico need strengthening, but I am sure that Mexico is much better off with Slim’s contribution in running businesses well than it would be without him.

SOURCE

CODA regarding one of the world's most authoritarian regimes:

I don't want to make this a major part of my argument but I think it can reasonably be said that, depending what you compare it with, even Soviet economic progress was not all that bad.  In the post-1945 era, when African countries mostly went backwards economically and India stagnated, the Soviet performance in science and technology was world-class.  The Sputnik was the first unambigiuous evidence of that but Soviet military machines (tanks, submarines, aircraft) were also a severe challenge to American efforts in that field.  Could any African country produce a T-34 tank, let alone design one?

Is it unfair to compare Russia with African countries?  If so why? It would be difficult to suggest a politically correct reason why, I think.  The plain fact is that the people are different and that matters. When the British left Africa, they left behind them nations organized in ways that Acemoglu would applaud.  It didn't help.

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Another authoritarian idea from the Left Backfires

In the latest, if not the best, example of why liberals should not be in charge of health care, national security, retirement, foreign policy, or anything else, a Rand Corporation study concluded that Los Angeles' seven year ban on new fast food restaurants did nothing to reduce obesity in the predominately African-American community of South L.A.

Last week, NBC nightly news, hosted by Savannah Guthrie, teased an upcoming segment about the Rand study in which she said: "One city takes an aggressive stand against obesity by banning new fast food restaurants, but what happened next might come as a shock."

Come as a shock to whom? It should have been obvious that a 2008 Los Angeles City ordinance banning, not limiting, but the outright banning of new fast food restaurants in Baldwin Hills, Leimert Park, and portions of South and Southeast Los Angeles would accomplish nothing. What's really shocking is the number of jobs and the amount of tax revenue lost by the city as a result of this nanny, feel-good ordinance.

African Americans suffer the highest rate of unemployment of any group. Instead of promoting economic activity where they live, the City Council chose to depress the economy on the guise of promoting weight loss to improve health, just as the "Great Recession" was taking hold.

Let's assume the ordinance had never been enacted, and just one of each of the following ten fast food chains established new restaurants in the four areas of the city targeted by the ordinance: McDonald's, Burger King, Wendy's, Carl's Jr., KFC, Panda Express, In-N-Out Burgers, Taco Bell, Pollo Loco, and Jack-in-the-Box. That would create 40 additional businesses.

According to an August, 2014 Forbes Magazine article by Carol Tice titled, "7 Fast-Food Restaurant Chains That Rake In $2M+ Per Store," some of the companies I selected were mentioned. For simplicity, if each of the 40 new stores took in an average of $2 million dollars per year, that would equal $80,000,000 in sales per year. At L.A.'s nine percent sales tax rate, these restaurants would generate $7,200,000 in yearly tax revenue. In the seven years this ordinance has been in existence the city has lost $50,400,000 so far!

In addition, think of the impact these restaurants would have made on local unemployment.  At an average of 40 employees per restaurant, that would be 1,600 people off the unemployment rolls who would now have money to spend, generating additional tax revenue and economic activity.

The increased property values of each of these restaurants would generate higher property tax revenues for Los Angeles County.

Now, consider all the jobs created to build each of these 40 restaurants: carpenters, brick masons, concrete pourers, landscapers, electricians, surveyors, tile setters, etc. Also consider the manufacturing and production of the materials needed for these 40 restaurants: glass, tile, insulation, drywall, roofing, lightbulbs, wiring, cable, speakers, microphones, ovens, stoves, grills, fans, heaters, toilets, sinks, railing, stainless steel counters, advertising, plastic utensils, napkins, plastic trays, trash receptacles, tables, chairs, soap, brooms, and mops. To prepare meals they need, hamburger meat, chicken, beef, rice, tortillas, lettuce, onions, tomatoes, soft drinks, coffee, ice cream, condiments, all of which need to be farmed, processed and then sold, generating more jobs and tax revenue.

As an added bonus, new overweight employees working in fast pace restaurants would help with their weight loss, instead of standing in unemployment lines all day.

When liberals don't like something, they want it banned. Banning new fast food restaurants in one part of the city makes no sense if they can be found elsewhere.

But, that's what liberals do, and everyone suffers for it

SOURCE

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This Doc Fix Is an Outrage

Over the 2015–2025 period, CBO estimates, enacting H.R. 2 would increase both direct spending (by about $145 billion) and revenues (by about $4 billion), resulting in a $141 billion increase in federal budget deficits (see table on page 2). Although the legislation would affect direct spending and revenues, it would waive the pay-as-you-go procedures that otherwise apply.

That is, less than three percent of this spending binge is paid for. Over 97 percent is deficit financed. This is how Republicans are showing how they can govern, especially on health reform?

What is the big deal, anyway? Currently, Congress has a certain amount of money every year to pay doctors. This amount of money increases according to a formula called the Sustainable Growth Rate (SGR), which was established in 1997. The SGR is comprised of four factors that (by the standards of federal health policy) are fairly easy to understand. Most importantly, the SGR depends on the change in real Gross Domestic Product (GDP) per capita.

The Medicare Part B program, which pays for physicians, is an explicit “pay as you go” system. Seniors pay one-quarter of the costs through premiums, and taxpayers (and their children and grandchildren) pay the rest through the U.S. Treasury. Therefore, it is appropriate that taxpayers’ ability to pay (as measured by real GDP per capita) be an input into the amount.

The problem is, the amount is not enough. If growth in Medicare’s payments to doctors were limited by the SGR, the payments would drop by about one-fifth, and they would stop seeing Medicare patients. So, at least once a year, Congress increases the payments for a few months. The latest patch was passed in March 2014 and runs through March 31, 2015. It costs $15.8 billion.

This has happened 17 times since 1997. Congress has never allowed Medicare’s physician fees to drop.

SOURCE

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

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