Category Archives: Economics

The Death Of Expertise

Thoughts from Glenn Reynolds:

In the realm of foreign affairs, which should be of special interest to the people at Foreign Affairs, recent history has been particularly dreadful. Experts failed to foresee the fall of the Soviet Union, failed to deal especially well with that fall when it took place, and then failed to deal with the rise of Islamic terrorism that led to the 9/11 attacks. Post 9/11, experts botched the reconstruction of Iraq, then botched it again with a premature pullout.

On Syria, experts in Barack Obama’s administration produced a policy that led to countless deaths, millions of refugees flooding Europe, a new haven for Islamic terrorists, and the upending of established power relations in the mideast. In Libya, the experts urged a war, waged without the approval of Congress, to topple strongman Moammar Gadhafi, only to see — again — countless deaths, huge numbers of refugees and another haven for Islamist terror.

It was experts who brought us the housing bubble and the subprime crisis. It was experts who botched the Obamacare rollout. And, of course, the experts didn’t see Brexit coming, and seem to have responded mostly with injured pride and assaults on the intelligence of the electorate, rather than with constructive solutions.

By its fruit the tree is known, and the tree of expertise hasn’t been doing well lately. As Nassim Taleb recently observed: “With psychology papers replicating less than 40%, dietary advice reversing after 30 years of fatphobia, macroeconomic analysis working worse than astrology, the appointment of Bernanke who was less than clueless of the risks, and pharmaceutical trials replicating at best only 1/3 of the time, people are perfectly entitled to rely on their own ancestral instinct and listen to their grandmothers.”

There was also the failure of the CIA to see the Iranian revolution coming. And certainly the “experts” in charge of space policy haven’t been covering themselves in glory, at least if the goal is to expand humanity’s economic sphere into the solar system (as Marburger once said).

Stem Cells

in spaaaaaaaace:

“Stem cells are inherently designed to remain at a constant number,” Zubair explains. “We need to grow them faster, but without changing their characteristics.”

The first phase of the investigation, he adds, is answering the question: “Do stem cells grow faster in space and can we grow them in such a manner that they are safe to use in patients?”

Investigators will examine the space-grown cells in an effort to understand the mechanism behind microgravity’s effects on them. The long-term goal is to learn how to mimic those effects and develop a safe and reliable way to produce stem cells in the quantities needed.

Just once, it would be nice to discover something that can be done in space that can’t be later mimiced on the ground. I hope that Made In Space has found one.

And of course, as I point out in the book, this kind of research could be accelerated if they added one more crewperson to ISS. The only reason they haven’t is lifeboat requirement, something that doesn’t exist in Antarctica.

A New Cholesterol Drug

I’m suspicious of these results. And like most such studies, they’re not properly controlled, and we don’t know if we’re treating a symptom. It may be that the drug does reduce risk, but that the LDL reduction is a side effect, not the reason that the risk is reduced. And notice that there is no mention whatsoever of diet. My LDL is very low since I cut back on carbs.

The Laffer Curve

Yes, there’s more to tax revenue than rates. I think that from an economic growth (and revenue) standpoint, a reduction in regulations would be more effective. I don’t think that most people understand the regulatory cost to the economy. It’s probably trillions.

[Update a while later]

This, on the continuing and growing ignorance of the media, seems related:

The article explained that unlike Egypt or Pakistan, America doesn’t really have a powerful deep state, and to claim that it does “presents apolitical civil servants as partisan agents.”

Give me a break. “Apolitical civil servants”?

A deep state absolutely exists. Some call it “administrative state” or “regulatory state.” These are the people who crush innovation and freedom by issuing hundreds of new rules. Regulators, if they don’t pass new rules, think they’re not doing their jobs.

Even “anti-regulator” President George W. Bush hired 90,000 new regulators. Calling them “nonpartisan” doesn’t make them harmless—it just means we put up with them through multiple administrations.

Even if you exclude the military and post office, more than 20 million Americans work for the government. Because of civil service rules, it’s almost impossible to fire them.

The Times calls these 20 million people “apolitical”. Please. Most are just as partisan as you or I. Maybe more so, as leaks and signs of bureaucratic resistance to presidential edicts demonstrate.

The notion that George W. Bush was an anti-regulator is ludicrous.

Sorry, Saudis

You have lost control of the oil market, probably permanently. Boo hoo.

[Monday-morning update]

OPEC’s cuts are treading water. “The simplified version is that U.S. oil production is reaching a point where OPEC can choose to sell 100 barrels at $50, or 125 barrels at $40. They can choose between higher profit margins or larger market share, but the days of having both are over for now.”

Trump’s NASA Proposal

Loren Grush has the details.

This is just a proposal; as she notes, Culberson is likely to restore the Europa lander. And in general, the White House proposes, and Congress disposes. What really matters is what gets appropriated.

Shared Risk

No, that’s not how insurance works. The word “insurance” has lost all meaning in the context of the health-care debate.

But this raises another issue. I’ve been seeing stories that insurance companies are factoring “climate change” into their premiums. These people have real skin in the climate game, and I’m wondering if they’re taking the “climate scientists” too seriously, and creating a market opportunity for an insurer who doesn’t buy the nonsense?