numerical probabilities serve to gratify one’s cognitive biases which in essence is a form of self-entertainment rather than a dependable methodology for risk analysis
When an individual erroneously believes that the onset of a certain random event is less likely to happen following an event or a series of events. This line of thinking is incorrect because past events do not change the probability that certain events will occur in the future.
The Federal Register, a publication with all the country’s (federal, nonclassified) rules is now over 81,000 pages long. President Obama’s Affordable Care Act is 906 pages. The Dodd-Frank Act totals 849 pages. Once upon a time, in 1913, the Federal Reserve was created with only 31 pages. The U.S. Constitution required only six pages.
After beginning 1990 at $12.8 TN, Total System Marketable Debt ended June 2012 at $55.0 TN. And Washington politicians and central bankers are now doing everything they can to sustain the Credit boom and avert the downside of an historic Credit cycle. Similar efforts are afoot globally.
The Fed is in effect subsidizing U.S. government spending and borrowing via expansion of its balance sheet and massive purchases of Treasury bonds. This keeps Treasury interest rates abnormally low, camouflaging the true size of the budget deficit. Similarly, the Fed is providing preferential credit to the U.S. government and covering a rapidly widening gap between Treasury's need to borrow and a more limited willingness among market participants to supply Treasury with credit.The failure by officials to normalize conditions in the U.S. Treasury market and curtail ballooning deficits puts the U.S. economy and markets at risk for a sharp correction.
Finance is a black box covered by a veil. Not only are the inner workings hidden, but the inputs are also obscured, by bad economic data, conflicting news report or outright deception…And then there is the most confounding factor of all, anticipation. A stock price rises not because of good news from the company, but because the brightening outlook for the stock means investors anticipate it will rise further, and so they buy. Anticipation is a feature unique to economics. It is psychology individual and the mass—even harder to fathom than the paradoxes of quantum mechanics. Anticipation is the stuff of dreams and vapors.
Recently I quoted Wendy McElroy’s the Myth of the Greater Good.
Yesterday’s headline news would seem like a great example
From Yahoo.com
The government is prepared to "blast" houses and other illegal structures along riverbanks and waterways if inhabitants refuse to transfer to safer areas, Public Works and Highways Secretary Rogelio Singson said yesterday.
Singson said President Benigno S. Aquino III has authorized the use of force to remove obstructions in the tributaries in Metro Manila and nearby provinces, citing the government's "political will" to implement its P352-billion flood control and mitigation program.
He said the government plans to relocate around 190,000 illegal settlers in the water channels as part of its efforts to reduce floods and minimize casualty during stormy weather.
"I just received instructions from the President that if push comes to shove, we will have to blast the houses if they don't leave within a certain period," Singson said in a Palace press briefing after presenting the flood control master plan to the President.
Political priorities that cater to the alleged “greater good” as shown in the above are reactive, presumptive, short term oriented and populist. Such also demonstrates the innate nature of the state.
The usual stereotyped responses by the government to fleeting immediate popular concerns are short term oriented, where the typical solution centers on throwing of more money at the problem, more regulations or prohibitions and or more taxes.
Never mind that the past centrally planned flood projects have been ineffective. Nobody questions if such fiascos have mainly been consequences of the knowledge problem and of the fragility of central planning operating on a highly complex environment. Everybody has been made to superficially think or believe that such blemishes have been mainly about the lack of money and or mismanagement and of the supposed necessity of government action.
So to address these, for politicians and the bureaucracy, such failures require even grander and more lavish projects. Of course these will be accompanied by the presumptions of expertise.
And anything that obstructs on their visions has to be met by force. Since environmentalism has been today’s politically correct theme, thus illegal settlers or squatters have become targets for coerced actions.
The so-called poor, whom were frequently used as convenient rationalizations for raising taxes, have been transformed into objects of political wrath.
Political priorities are dynamic. The shifting nature of government’s attention greatly depends on popular circumstances which dominate the headlines or which reflect on the public’s opinion.
A few months back, the public has been mesmerized with territorial claims dispute. And with calls for populist nationalism, the government’s response has been to increase their budget with implicit popular approval. According to globalsecurity.org, the Armed Forces modernization bill that would add 75 billion pesos ($1.8 billion) for defense spending over the following five years to acquire more weapons, personnel carriers, frigates and aircraft. Yet all such increases in military spending will hardly bolster the nation’s defense or do anything substantial to address the so-called controversial regional dispute.
Instead what these does is to pressure taxpayers into supporting non productive activities which will be used against them.
In the future, should there arise other popular immediate concerns such as natural calamities, e.g. earthquakes or tsunamis or others, expect the response to be the same—throw money at the problem, and wish or hope for their success.
Current political obsession over the environment comes in response to the monsoon rain flooding where popular opinion has been shaped by flawed ideas of environmental experts. One of whom has even blamed economic growth and urbanization as responsible for the current disasters.
Never mind if the citizens of the metropolis have shown increased wellbeing from economic development (table from NSO).
For the environmentalist religion, the argumentative framing has been to put up a strawman and beat them down.
The thrust of the environmental nirvana fallacy extrapolates that we should remain poor so as to allegedly “save the environment”. Yes, use one event (fallacy of composition) to highlight the need for socialist interventionist misanthropic (anti-people) policies by ignoring all other important factors.
High approval ratings thus becomes a license for political boondoggles premised on the supposed omniscience of “experts” whose reasoning can’t even pass the logical rigors of economics.
High approval ratings also mean that current policies have been designed based on the outcome most preferred by the median voter—Median Voter theory or populist politics.
Yet politics has always been a zero sum or even a negative sum activity.
So the Philippine government has turned the heat against the illegal settlers or squatters whom incidentally are mostly creatures of the state through the decriminalization of squatting or the Lina Law. The immoral statute has encouraged rampant squatting which has mostly been used by local politicians for election purposes.
Never mind too that despite the immorality of the actions of the illegal settlers who were mostly incentivized by law and became instruments of politicians, these people still have natural rights enshrined by Article 3 of the Philippine 1987 constitution (hat tip my beloved daughter) which holds that
No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.
“The government is prepared to "blast" houses and other illegal structures” signifies that the privileges of the natural rights of life, liberty, or property only belong to the political class and to those designated by them. All the rest are standing vassals of the state and whose lives are seen merely as statistics.
This also shows that the nature of the state is institutional violence, such that violence and the threat of violence can be used indiscriminately, especially targeted against their own citizens, depending on the caprices of those that wield them.
As the great Professor Ludwig von Mises explained,
State and government are the social apparatus of violent coercion and repression. Such an apparatus, the police power, is indispensable in order to prevent antisocial individuals and bands from destroying social cooperation. Violent prevention and suppression of antisocial activities benefit the whole of society and each of its members. But violence and oppression are none the less evils and corrupt those in charge of their application. It is necessary to restrict the power of those in office lest they become absolute despots. Society cannot exist without an apparatus of violent coercion. But neither can it exist if the office holders are irresponsible tyrants free to inflict harm on those they dislike.
In reality, both illegal settlers and the threat of violence against them, to justify the administration’s new pet flood project, signify ethically as two wrongs which do not make right.
Yet for the current crop of politicians, high approval ratings translates to political superciliousness and the license to conduct political repression which elevates the risks of a tyrannical rule.
History shows us of the myth of the rational voter where people junk rationality in terms of politics to support “systematically biased ideas concerning economics” or widespread social ideas grounded on economic ignorance.
Populist politics have been premised on what people want to hear rather than what they need to hear.
Nazi chief Adolf Hitler’s popular rise to power should be a magnificent example. Chart from Spiegel Online
At the end of the day, the “greater good” is in essence the bamboozling of the gullible public using feel good political themes, for them to support the self-interests and the priorities of the political class coursed through institutionalized violence.
[P]oliticians trying to select policies that will attract voters know that the voters will put much less energy into trying to make a correct choice than they would when purchasing an automobile or some other item whose shortcomings and advantages will accrue to them alone. The voters, therefore, are likely to be badly informed and may favor a politician or policies that are directly contrary to their interest. From the standpoint of the individual candidate, what is important is what the people want given their perception of the value of their vote on the outcome and the cost of becoming informed, not what they would want if they were better informed.…
But when I vote I am aware that my vote will have almost no effect on the kind of policies I shall get. The result occurs because the policies and politicians chosen will be determined to a much greater extent by the votes of other people. Politicians once again know this, and hence attempt to design policies which shall attract ill-informed voters.
That’s from Gordon Tullock’s 2005 collection, The Economics of Politics, which is Vol. 4 of The Selected Works of Gordon Tullock page 36 as quoted by Professor Don Boudreaux at the Café Hayek.
This is so very much relevant or applicable to Philippine politics.
Controversial issues brought to the table by the incumbent administration have essentially pandered to public’s perceived sense of value namely “anti-corruption” or “nationalism”.
Little has there been the realization that these actions have not only been designed for the coming 2013 elections, but most importantly, meant to subtly annex or to expand political power, by means of appealing to the popular sentiment or values of the "ill informed" voters, for personal goals.
It is as simple as saying that if there has been any one trait this administration has been adept at, it has been in the dexterous handling of voter's rational ignorance to their advantage.
