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Tag: economics (Page 1 of 2)

Problems with Populism

Or, why populism irritates me.

Economics and sociology are mind-bendingly complex because of the human element. Humans are mind-bendingly complex and often irrational, and we bring that mess to everything we do. That’s how we are. We’re not robots. Each of us is unique, composed of our life story, experiences, hopes, fears, wants, knowledge, and neuroses. Politics is a mixture of economics and sociology, so it’s equally complex.

My observation is that populists oversimplify. Populists think they have all the answers. They think they’re real smart. They think they know more or see more than the rest. In fact, they know less and see less. That’s why they don’t see the complexities of reality and think things are simpler than they really are.

Because populists think everything is so simple and obvious, they’re like a bull in a china shop, with little respect for the complexities of humans. They look down on and ridicule people who have a genuine understanding of the complexities.

Populists are often idealists. They’re unwilling to compromise. This is a fatal flaw when it comes to politics because the practice of politics is the art of compromise. That’s what politics is. You never get what you want. If all goes well, you get something closer to what you want than what you had, but that’s all you’ll get. In politics, if you try to stand your ground, you’ll get run over and end up worse off than when you started. That’s how politics works, how it’s always worked, and it will never change because: human nature.

All of these things that I see in populists today are way too familiar. Populists remind me of libertarians. Back in the 1970s I was a libertarian and I exhibited all of the flaws I describe above, and so did all my libertarian friends. We used to hang out and talk about how all the world’s problems could be solved if we just did a few simple things, A, B, and C. It was all so obvious. How could anyone with a brain not see it? Unfortunately, the truth is that we didn’t understand the problems because we omitted human nature from our analyses. In particular, we omitted human greed and its overwhelming power. This is breathtakingly ironic because libertarians are all about capitalism. What is capitalism? Capitalism is institutionalized greed. Greed is the engine — the only engine — that drives capitalism. This and its ramifications somehow never occurred to us. It was like some kind of blindness that I still find astonishing to think back on.

Populism is enabled by a similar form of selective blindness and/or refusal to accept reality. There’s an old saying that “familiarity breeds contempt”. It’s true in my case. When I talk to populists today, it’s like I’m talking to who I was in the 1970s and it irritates the heck out of me.

By the way, this rant was triggered by a good post here: https://truth-sandwich.com/2019/02/15/tastes-like-chicken/

China Losing Taste for U.S. Debt

I like being right but sometimes I wish I wasn’t. Last March I wrote a couple of posts about what I foresaw for the U.S. economy. Now another piece of the puzzle that I discussed is coming to pass:

China Losing Its Taste for U.S. Debt
http://www.nytimes.com/2009/01/08/business/worldbusiness/08yuan.html?th&emc=th

Here’s the post I wrote back in March 2008

Slow Motion Train Wreck
http://shuttersparks.blogspot.com/2008/03/slow-motion-train-wreck.html

Bush’s Argument in Favor of Drilling is Nonsense

President Bush is pushing Congress to drop the ban on U.S. offshore oil drilling.

http://www.nytimes.com/2008/06/19/washington/19energy.html?ref=todayspaper

This argument is nonsense. It’s a red herring. First of all, everyone needs to understand that $130 oil is not due to a lack of supply. Most people automatically assume that the price of oil has been driven up by market forces. If the price goes up, it’s because of demand, right?. Normally this would be true but that is not the case right now. There is plenty of oil in the market. There is no shortage. This is why the Saudi’s have come out and said “there’s no reason for prices to be this high” and they pretended to be puzzled. However the President of Iran put his finger on the real cause, which is the revelation of the long-latent inflation in the U.S. dollar. As the dollar is collapsing one of the first places investors run is oil futures. The run on oil futures drove up the price. It had nothing to do with the oil producers setting the price at $130. They didn’t set anything. The $130 price is set in the commodities exchanges of the world.

Inflation in the U.S. dollar, which has previously been masked by massive foreign infusions of investment capital into the U.S., is now being revealed. This is the reason for the rise in the price of oil. And since much of the world’s economy is tied to the U.S. dollar, the pain is being experienced throughout much of the world.

Now, with that in mind, be very clear that if the U.S. resumes offshore drilling and production, and / or if the U.S. develops the ANWR, since there is no shortage of oil, the oil from offshore drilling and the ANWR will be sold at the market price, which will still be $130. You don’t think the oil companies are going to sell the oil for less than the market price do you?

President Bush’s proposal will give the oil companies what they have been wanting for 27 years but it will not bring down the price of oil. Be very clear on that.

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