Atlas Shrugged: The Mocking

Sunday, March 2, 2014

The Defeat Of The Douthat

Shorter Ross Douthat: Now that gays have gained more civil rights it would be churlish of them to expect to use them.

Douthat fancies himself surrendering at the Battle of Appomattox in his Civil War Against Homosexual Aggression. No longer can a man stand up straight and proud, look another man in the face, and say, "We don't serve you kind in here." Nor can a fine example of American womanhood look at a young bride in love choosing her wedding dress with her mother and tell her, "Get out of my shop you degenerate whore. God bless!"
We are not really having an argument about same-sex marriage anymore, and on the evidence of Arizona, we’re not having a negotiation. Instead, all that’s left is the timing of the final victory — and for the defeated to find out what settlement the victors will impose.
Poor, poor Ross. Conservatives are always honorary Southerners, lamenting the lost glories of times past when they were able to subjugate others by law, thus proving their innate superiority. He already knows that settlement the victors will impose; they will expect everyone to obey secular discrimination laws instead of letting fundamentalists force everyone to obey religious "laws."

If everyone would only obey Douthat's religious laws he wouldn't be weird, left behind and out of touch. You know, uncool. He would be a big man, a religious leader; important, influential. Now he's just a soft white man with a broken sword, forced to kneel before a gay General and admit defeat.

And because he's nothing but a weak, powerless moral scold, he begs and whines for the winners to be generous and give up everything they just fought for.
One possibility is that this division will recede into the cultural background, with marriage joining the long list of topics on which Americans disagree without making a political issue out of it. In this scenario, religious conservatives would essentially be left to promote their view of wedlock within their own institutions, as a kind of dissenting subculture emphasizing gender differences and procreation, while the wider culture declares that love and commitment are enough to make a marriage. And where conflicts arise — in a case where, say, a Mormon caterer or a Catholic photographer objected to working at a same-sex wedding — gay rights supporters would heed the advice of gay marriage’s intellectual progenitor, Andrew Sullivan, and let the dissenters opt out “in the name of their freedom — and ours.”
It would take a series of posts to examine the phenomenon that is Andrew Sullivan so let's just say that we see no need to bow to religious laws over secular laws. Douthat admits that religious people persecuted gays in the past but doesn't want people to be too hasty here and actually stop persecuting gays.
So being marginalized, being sued, losing tax-exempt status — this will be uncomfortable, but we should keep perspective and remember our sins, and nobody should call it persecution.
But they will anyway; they still are in the South, 150 years later. And Douthat will make sure that everyone knows he is a persecuted minority, continuously beset by a degenerate liberal culture that is trying to marginalize him from existence.
Meanwhile, pressure would be brought to bear wherever the religious subculture brushed up against state power. Religious-affiliated adoption agencies would be closed if they declined to place children with same-sex couples. (This has happened in Massachusetts and Illinois.) Organizations and businesses that promoted the older definition of marriage would face constant procedural harassment, along the lines suggested by the mayors who battled with Chick-fil-A. And, eventually, religious schools and colleges would receive the same treatment as racist holdouts like Bob Jones University, losing access to public funds and seeing their tax-exempt status revoked.
Then maybe the religious subculture will learn to keep their noses where they belong, in the religious sphere, instead of constantly attempting to replace secular laws with religious laws.

Comet Sighting

Megan McArdle makes an extraordinarily rare Sunday post to link to her husband and pretend to analyze Obamacare under the filter of her book, How I Got On TV And Radio A Lot By Contradicting Everything I Have Ever Said. It's too dull and unimportant to discuss but when a rare and curious natural phenomenon occurs, one likes to mark the occasion for posterity.

Friday, February 28, 2014

On Undermining Religious Authority

Alexis de Tocqueville :

In speaking of philosophical method among the Americans I have shown that nothing is more repugnant to the human mind in an age of equality than the idea of subjection to forms. Men living at such times are impatient of figures; to their eyes, symbols appear to be puerile artifices used to conceal or to set off truths that should more naturally be bared to the light of day; they are unmoved by ceremonial observances and are disposed to attach only a secondary importance to the details of public worship.  
Those who have to regulate the external forms of religion in a democratic age should pay a close attention to these natural propensities of the human mind in order not to run counter to them unnecessarily.  
I firmly believe in the necessity of forms, which fix the human mind in the contemplation of abstract truths and aid it in embracing them warmly and holding them with firmness. Nor do I suppose that it is possible to maintain a religion without external observances; but, on the other hand, I am persuaded that in the ages upon which we are entering it would be peculiarly dangerous to multiply them beyond measure, and that they ought rather to be limited to as much as is absolutely necessary to perpetuate the doctrine itself, which is the substance of religion, of which the ritual is only the form.1 A religion which became more insistent in details, more inflexible, and more burdened with small observances during the time that men became more equal would soon find itself limited to a band of fanatic zealots in the midst of a skeptical multitude.

I showed in the first Part of this work how the American clergy stand aloof from secular affairs. This is the most obvious but not the only example of their self-restraint. In America religion is a distinct sphere, in which the priest is sovereign, but out of which he takes care never to go. Within its limits he is master of the mind; beyond them he leaves men to themselves and surrenders them to the independence and instability that belong to their nature and their age. I have seen no country in which Christianity is clothed with fewer forms, figures, and observances than in the United States, or where it presents more distinct, simple, and general notions to the mind. Although the Christians of America are divided into a multitude of sects, they all look upon their religion in the same light. This applies to Roman Catholicism as well as to the other forms of belief. There are no Roman Catholic priests who show less taste for the minute individual observances, for extraordinary or peculiar means of salvation, or who cling more to the spirit and less to the letter of the law than the Roman Catholic priests of the United States. Nowhere is that doctrine of the church which prohibits the worship reserved to God alone from being offered to the saints more clearly inculcated or more generally followed. Yet the Roman Catholics of America are very submissive and very sincere.  
Another remark is applicable to the clergy of every communion. The American ministers of the Gospel do not attempt to draw or to fix all the thoughts of man upon the life to come; they are willing to surrender a portion of his heart to the cares of the present, seeming to consider the goods of this world as important, though secondary, objects. If they take no part themselves in productive labor, they are at least interested in its progress and they applaud its results, and while they never cease to point to the other world as the great object of the hopes and fears of the believer, they do not forbid him honestly to court prosperity in this. Far from attempting to show that these things are distinct and contrary to one another, they study rather to find out on what point they are most nearly and closely connected.  
All the American clergy know and respect the intellectual supremacy exercised by the majority; they never sustain any but necessary conflicts with it. They take no share in the altercations of parties, but they readily adopt the general opinions of their country and their age, and they allow themselves to be borne away without opposition in the current of feeling and opinion by which everything around them is carried along. They endeavor to amend their contemporaries, but they do not quit fellowship with them. Public opinion is therefore never hostile to them; it rather supports and protects them, and their belief owes its authority at the same time to the strength which is its own and to that which it borrows from the opinions of the majority.  
Thus it is that by respecting all democratic tendencies not absolutely contrary to herself and by making use of several of them for her own purposes, religion sustains a successful struggle with that spirit of individual independence which is her most dangerous opponent.

 It's too bad that authoritarians instinctively ignore anything that threatens their view of the world. The public is, publicly, rejecting their authority, showing and telling them that they have no power. Conservative authoritarians tried to keep a Black man out of the White House and failed. They tried to get rid of Hillary Clinton and failed.  They tried to shove gays back into the closet and failed. If you can't demonstrate your power you have none.

Their belief that a conservative sugar daddy will always come through for them and make the bad people go away doesn't work when it comes to making money.  They are accustomed to hiding behind the churches' skirts, depending on civil authority to preserve their religious authority. By attempting to reinforce their power, the right has only exposed its weakness.

Now is the time to press back on abortion. Fighting religious authority has always been difficult because both civil and religious authority say "do not kill." The strawman issue of fetus/not fetus distracts from the real issue: we must choose between secular law and religious law, and adopting religious laws regarding abortion is conceding to religious law over secular law. (The religious law of some (but not all) religions.)  We have chosen secular law and the authoritarians are very unhappy about that as well.

Catholic doctrine says only God can kill. Secular law (in reality if not always theory) says we can kill if the president says so, if we feel threatened, if the judicial system chooses to execute a criminal, if a woman wants to have an abortion. Women do not need to apologize for choosing civil authority over religious authority. The right never apologizes when it chooses American secular laws over Muslim, Jewish, or any other religious laws.

The religious right will not want to hear that they are obviously weak but they will never believe it until the majority tells them so, as often and as loudly as possible. Civility never won a battle.

The right does not want religious freedom laws They want religious supremacy laws.

Wednesday, February 26, 2014

Following the Money

April Ponnuru posted an article on The Corner titled The White House’s Attack on Medicare’s Prescription-Drug Plans Is Obamacare 2.0. In this post she defends Bush's prescription drug bill, which as we know was a giveaway to the drug industry.

April Ponnuru is the wife of Ramesh Ponnuru and was Executive Director of  the National Review Institute. She is now Policy Director at YG Network. YG Network is a 501(c)(4), as is the YG Action Fund. The "YG" stands for Young Guns, tea-party  politicians determined to supplant an older Republican establishment.

From Roll Call:

It’s not easy to explain the three entities that fall under the YG umbrella — all of which have nuanced missions and legally separate purposes. There’s the super PAC, YG Action Fund; the nonprofit, YG Network; and the wonk shop, YG Policy Center.

They make independent expenditures for candidates, such as Hudson, through the super PAC. Among other missions, the nonprofit served as a testing group for energy policy messaging in the Indiana primary. It also recently started a partnership to cultivate young donors with MavPAC, a political project of George P. Bush.

John Murray is both the Senior Strategist for YG Network and the president, founder and treasurer of YG Action Fund. The latter had little resources until it received a $5,000,000 donation from Sheldon Adelson and his wife, Dr. Miriam Adelson. Dr. and Mr. Adelson founded the Adelson Clinics, which treat drug addiction with methadone. The YG Network is, ostensibly:
The YG Network is organized as a non-profit 501(c)(4) dedicated to supporting conservative center-right policies and the efforts of policymakers who fight for those policies. By seeking solutions that create jobs, encourage innovation, instill fiscal discipline, establish a patient-centered health care system and pursue energy security, we can foster the optimal environment for America’s businesses and entrepreneurs to succeed and flourish. The YG Network will operate independently of any officeholder, candidate or political party.
So it is a wonder that Mrs. Ponnuru would support the socialist Medicare Part D.
Medicare Part D, which covers prescription drugs for senior citizens, is one of the few government health-care programs that has demonstrated success in increasing coverage, reducing costs, and improving the health of its beneficiaries. The Obama administration’s new regulations threaten this achievement. Part D has worked so well because it is more market-oriented than most health programs.  
But the administration appears to want to remake it in the image of Obamacare — inserting the federal government into negotiations between prescription-drug providers and pharmacies, limiting the number of prescription-drug plans an insurance company can offer, and putting an end to the preferred pharmacy networks that have dramatically reduced costs for America’s seniors.

Until you follow the money. Then it becomes the most natural thing in the world for Mrs. Ponnuru to state that the free market functions better when the producer is able to control prices and the consumer is not able to negotiate for lower prices.

The YG has had a few bumps in its short history.
Much of the organization's money -- likely including that additional amount not reported to the FEC -- went to digital and radio ad campaigns in support of various hot-button issues like the sequester. Among the ads the YG Network paid for in 2012 were a digital and radio campaign warning of the dangers of automatic budget cuts to national security, as well as a digital campaign focusing on preventing tax hikes for small businesses. In addition, though -- despite stating on its tax documents that it was formed "primarily for the purpose of informing the public on, and advocating for" various conservative issues -- YG Network got involved in several big congressional races in 2012. During the Indiana Senate GOP primary it generated some controversy when it spent $200,000 on mailers encouraging votes for incumbent Sen. Richard Lugar (R-Ind.) over his challenger, state Treasurer Richard Mourdock. Many Republicans were angered by the fact that the mailers targeted Democrats and independent voters, urging them to support Lugar. In the end, the mailers didn't make much of a difference: Lugar lost to Mourdock in the primary, who subsequently lost to Democratic candidate Joe Donnelly. Overall, YG Network spent nearly $2.9 million directly asking people to vote for or against 24 congressional candidates in 2012.
Mrs. Ponnuru is a perfect fit for her organization's goals and actions.

Tuesday, February 18, 2014

Assessing Failure: Obamacare

Because Megan McArdle is a noted and respected propagandist, not a noted and respected journalist and author, McArdle's opinion is even more valuable than her journalistic skills. When you add her keen and elegant prose, McArdle was obviously destined for far greater things than most reporters: media stardom, piles of books listed in the politics section on Amazon, lucrative speaking gigs,  the best table at the local gastropub. And a column in the Times, of course, to lead public opinion and tell everyone else the very best way to live their lives.

Which brings us back to failure, McArdle's self-professed specialty. Failure leads to success because failure never leads to consequences from which one never fully recovers, even though her own failure through success did just that. This, like all her advice, might seem contradictory but it worked for Megan McArdle and it'll work for you too.

It will not, however, work for Obamacare. Obamacare is an exception to McArdle's Path To Success. McArdle does not tell herself to wait until Obamacare fails so she can learn how to make Obamacare succeed. She doesn't want Obamacare to succeed. How do we know this? She tells us so.

Megan McArdle:  But I will say that Mr. Chait says that I’m against national health care and which is actually not true. I have long been proposing that the government should provide catastrophic reinsurance for people, basically picking up medical costs above fifteen percent of their income. It’s something that preserves the market mechanism. It’s progressive. Everyone is -- you know, you're taking care [unintelligible] poor, but otherwise it's progressive. It preserves the market mechanism, it makes sure people do not get bankrupted by their medical bills. I think that is actually the kind of system that you could grow out of Obamacare if it failed.  
John Donvan: Jonathan Chait.  
Jonathan Chait: The reason I wrote that you're against national health care is because in 2009 you wrote a column called "Why I Oppose National Health Care."  
You've also predicted -- a few months ago you predicted the exchanges might not even open on January 1, that the administration would have to stop its whole law. So if you're talking about moving the goal post your definition of failure just keeps getting smaller and smaller.  
Megan McArdle: Well, I'm just saying that in 2010, 2011, and 2012, and 2013, I have written that I support the sort of catastrophic reinsurance program. I've been proposing it for a fairly long time.
Notice Mr. Chait calls McArdle on her well-worn deceptive techniques. First comes the lie necessary to win the argument, which depends on the ignorance and civility of her audience. When someone questions her conclusions, then comes the goalpost-moving to evade responsibility for her rhetoric. McArdle wants the taxpayer to pick up the big bills for the insurance companies and get no benefits in return.

McArdle pulled out another whopper later in the debate, along with a few right-wing rumors created to whip up paranoia.

Jonathan Chait: Then the study that Megan cited is still not a very good use of data. It's not a good use of data for two reasons -- if I may --  
John Donvan: Very --  
Jonathan Chait: Number one --  
John Donvan: Very briefly, but you've got two people lined up to defend themselves.  
Male Speaker: That's right.  
Jonathan Chait: So, there are a series of studies on the effectiveness of Medicaid. Many of these studies -- most of them show what you would intuitively think. Going on Medicaid and being able to see doctors, even if you don't get a lot of choice, even if a lot of doctors don't want to take the low prices, is better than not having health insurance and going to good -- going to the doctor at all. Because as my partner explained in fairly strong detail, not having health insurance is dangerous. It's terrible. Nobody wants to have it. And people are right not to want it --  
John Donvan: Megan McArdle.  
Megan McArdle: Well, it shows actually --  
Here's something interesting -- is a lot of these studies have looked at Medicaid versus the uninsured. And the uninsured do better. Having no insurance is better in these studies than having Medicaid, even when you control for [unintelligible] --  
Now, that said, do I think that having Medicaid is actually worse than being uninsured? No, I don't. It's very hard to actually measure lots of things. But the -- you would want to know about the impulse control, or social support and so forth. But I think that most people agree that Medicaid is bad coverage. It's not good coverage. You wouldn't want to go on it. And there are people who had cheap policies canceled -- got cancellation notices and found that when they went to the exchanges, they were were into Medicaid. That's [inaudible] --  
John Donvan: So, let -- I think -- 
Megan McArdle: So I'm not --
McArdle also told her readers that Obamacare would fail because the insurance companies hated it.
Megan McArdle: I think that Jonathan is way more optimistic than I, that a death spiral isn’t possible. For one thing, you know, a lot of the -- the thing that everyone has been leaning very hard on -- I haven't heard the insurers saying that they are real pleased with the mix. Humana and other people have said it's more adverse than they expected.

Jonathan Chait: No, at the JPMorgan Conference a series of insurers were interviewed, and they all said that they were generally expecting getting what they expected.  
Megan McArdle: But that -- neither -- leaving that point aside --  
-- well, I mean, like he can say, "Yes, they have," and we can say, "No, they haven't," and you guys don't know either way, so I think this is not --  
John Donvan: Yeah, I'm actually with her on that.  
Unless -- were any of you at that conference?  
Scott Gottlieb: I was [unintelligible]. 
Jonathan Chait: There were a series of insurers quoted at the JPMorgan Conference on January 15.  
Megan McArdle: There were also a series of insurers quoted, saying that they've had adverse --  
Scott Gottlieb: And they've announced --  
Megan McArdle: That they're announcing earnings adjustments because of their adverse selection. But that's not really even -- the issue is that, you know, a lot of the mechanisms they're depending on are these things called these risk corridors, which are temporary kind of reinsurance facilities to help insurers transition, and also the fact that these subsidies basically grow with the cost of the policy so that if we do start seeing adverse selection, if we do see young people not in the pools, healthy people not in the pools and so costs go up, well, then the subsidies will rise and these risk corridors will kick in. But those things end in 2018. Subsidy --  
John Donvan: All right, let's let  Jonathan Chait --
Jonathan Chait: Right, but what we're seeing right now is that they're not even going to need that kind of adjustment in the first place because they're saying the pool of people is young enough that it's meeting their expectations, that they don't need to raise premiums, whatsoever. And so if you want to -- if you have to ask, "What is the definition of success?" The definition of success is putting in place a law that will get at a certain point to having a dramatic expansion of coverage. So at one point you said, "Well, by January 1, there aren't as many people covered as there were before." 
Megan McArdle: I said we don't know.  
Jonathan Chait: Right, we don't know.  
Megan McArdle: The government will not --  
Jonathan Chait: You're right, you said -- that's correct.  
Megan McArdle: -- the administration will not say --  
Jonathan Chait: Right, we don't know exactly --  
Megan McArdle: -- that we have more people covered.  
Jonathan Chait: -- right -- we don't know the number of people who had their plans cancelled. It's way less than five million. We don't know, so we can't say exactly how many [inaudible]. But why is January 1, the first date the law started, the best mark? The law's supposed to --  
John Donvan: Stop right there because I want to hear the answer to that question.  
Megan McArdle: Well --  
Scott Gottlieb: We know this pool is exceedingly unhealthy by virtue of --  
John Donvan: No, no, no, that's -- his question is "Why set January 1 on the day that everything has to be successful?" It's a fair question. I just want to hear the answer to it. Megan, Megan.  
Megan McArdle: [inaudible] totally fair question, but, again, this is so much worse than I would've predicted. I was a critic of the law, but if you had asked me, "Is it likely that there could be fewer people insured, even that small number, on January 1?" I would've said, "No, that's insane." But that may actually be -- the administration won't -- it's not asking them how many people. When reporters on conference calls say, "Can you assure us that more people are insured through anything, through private insurance, through Medicaid?" they won't say, "Yes."

Here is a demonstration of another McArdle technique, pulling up a lone or disputed or arbitrary study that (she claims) supports her theory and destroys her opponent's theory. McArdle and Chait are debating whether or not Obamacare has failed. McArdle says it has.

Failure: Obamacare

Point of Failure: Goals Not Met By Opening of Exchange

Causes of failure:

1. Sebelius said seven million people would sign up by March 2114 and as February they had not all signed up.

2. "They" said 40% of the exchange needs to be young adults and only 20-25%  are as of now.

3. Slowing health care costs were caused by the recession, not Obamacare changes.

4. We don't have the numbers to determine if Obamacare is successful so far.

5. Some people will have to join Medicaid and Medicaid is so awful that nobody will want to be on it.

Of course it immediately becomes obvious that McArdle etc. are arguing that Obamacare has not met its goals, not that Obamacare has already failed. She attempts to disguise this elision by:

1. Claiming it is better to be uninsured than be on Medicaid while claiming she was not stating it was better to be uninsured than to be on Medicaid.

2. Claiming Obamacare would need more subsidies.

3. Claiming Obamacare would explode the budget.

4. Claiming Obamacare would "tamp down" medical innovation.

5. Claiming cost controls would not "hold."

6. Claiming Obamacare would destroy medical insurance.

7. Claiming the mandate would not be enforced and the law would be slowly dismantled.

8.  Claiming Obamacare will mainly benefit the old and the benefits will become increasingly unpopular.

9. Claiming the popular part of Obamacare have nothing to do with the popularity of Obamacare.

10. Claiming the US is uniquely unfitted to a national health plan because Americans love Freedom and would have different patients and staff than they do abroad.

Chait responded in part:

So you have to wonder, "Why are they simple moving from one disaster scenario to another disaster scenario?" Actually, I wanted to debunk a couple points they made, because a lot of this is just -- we've heard from the other side -- are not true. I can't give you links and charts to debunk them, but let me say that it's not the case that 5 million policies have been canceled. That's a number that was floating about that you can't verify. It's almost certainly not true. Many journalists have tried to figure out exactly how many policies have been canceled. And they don't have good enough records to know, but they know it's not 5 million. And they suspect -- the administration suspects it's closer to one-tenth of that figure. They can't actually prove that either, but for various reasons, you don't have a good enough count. This -- that's almost certainly nowhere close to 5 million. And that's a big number that's -- they're citing because they're saying, that -- those are the losers. But it's really nowhere close to that. Yet they say -- Megan said we can't -- we can't say for sure how many -- how -- that there are more insured now than there were before. We can't say for sure, because again, this number can't exactly be counted. We don't know that 400,000 -- it was 500,000. But we know it's not anywhere close to 5 million. And it's a mortal certainty that far more people have health insurance now than would have had in absence of the law.

So why are we having this kind of lurch, from one argument, abandoning these arguments when they disappear, and simply coming up with new ones? The truth is, they disagree with the goals of the law. And I think you could hear that in their remarks. They say, "There's less choice.” And it's true. The government says insurers have to provide certain benefits right. They have to provide pregnancy coverage. That's -- and maternity care. Those are the most controversial things that are mostly cited, because they want people who are male or old to not have to pay for those things. And they want people who are young and female and might have to bear children to pay those costs themselves, because that's an ideological difference between the two sides. And that's fine for them to have an ideological difference between the two sides. But we're not here to debate whether this law is a good idea. We're here to debate whether the law is actually working, and the truth is the only reason they're desperately trying to claim the law is not working is because they oppose national health insurance.

Megan McArdle was not hired to give the libertarian view, or woman's view, or even secret conservative view. She's hired to give the tea-bagger view. She quotes National Review writers and Fox News pundits and Koch-fed think tanks. She repeats hysterical right-wing screeds and attempts to gorilla-glue a thin veneer of science over the emptiness of her arguments. And she fails, since her arguments are based on gut feelings that she pretends are actually principled ideology.

But these are not ordinary failures. There is no need to claim responsibility, figure out the point of error, correct mistakes and grow wiser. These failures are ignored because anyone who is being paid six figures to give financial advice to the striving masses or given book contracts for advice that somehow always benefits the wealthy cannot possibly be a failure. Her success proves the superiority of her arguments. Her gut tells her so. And when her argument was battered and beaten, she was still the winner because she had another argument waiting in the wings: Obamacare is certain to fail some time in the future.
The question is whether the law is undermining its own goals. And to think about going forward, we, you know, Mr. Chait says it’s now here. In fact, we still have a long way to go with a bunch of unpopular stuff that is going to happen. Small businesses are starting to get a wave of cancellations that are going to come through the year, and they're being asked for a lot more money. A lot of that is due to Obamacare. The Cadillac tax, 40 percent surcharge on generous health insurance is especially hard on companies with old sick people, but a lot of benefits managers are saying basically everyone is going to have to go to light plans and scale down rather than get hit by that tax. We’ve got comparative effectiveness research which is going to start determining what sorts of things Medicare will reimburse at what rates.
In her book McArdle points out to her successful life as proof that she has recovered from failure. Her property proves her worth and her husband proves her merit. The failure of one relationship just lead to the success of her present marriage. And the failure of one argument just leads to the success of another. The audience laughed at McArdle at least three times. Her arguments were ridiculous and the audience didn't believe them but  failure at one job leads to success at another when there is always a billionaire around to pick up the bill.

Failing up is only for the rich.

(I will now go back to writing my book. I am 1/4 done with the first draft.)

Friday, February 14, 2014

Systemic Falure

As we all know because we read the brilliant and incisive Megan McArdle, failure has no villains, it just happens for systemic reasons.
All of these papers suggest that the search for a villain behind the crisis will ultimately be fruitless. There are two basic narratives of what happened. The first is that bankers had bad incentives: they took massive risks because the profits were so good in the up years that it was worth the risk of the bad, or because they could pass the risks onto some other sucker, or they thought Uncle Sugar would bail them out. The other narrative is that bankers had bad information: they didn't understand the risks they were taking.  
I've always preferred narrative B, because Narrative A doesn't make much sense. The CEOs of big banks lost vast sums of money, and their jobs, most of their social status, and so forth. They held onto the worst tranches of their securities, which implies they didn't know how badly they were going to blow up. Etc.  
I find it vastly more plausible, if not so comforting, to believe that systems can occasionally produce bad results even if the incentives basically point in the right direction. The FICO score revolution was valuable, but we took it too far. The money sloshing around US markets disguised the problems, because people who got into trouble tapped their home equity, or in a pinch, sold the house at a tidy profit. Everyone from borrowers to regulators was getting the same bad signal, that their behavior was much less risky than it actually was.  
That doesn't mean that nothing can be done. Maybe we decide we want a less complex financial system. But it won't be because there's some villain manipulating everything into ruin; rather, we may decide that there are certain kinds of risks we can trust ourselves to handle.  
I'm not sure that this would work, and I'm skeptical that it's a good idea. But the more time we waste trying to figure out who did us wrong, the less quickly we will arrive at an actual solution.
Problem Identified: The System

Basis For Claim: Gut Feeling

Causes Of Problem: Unknowable

Solution For Problem: Solve problem without figuring out what went wrong.

It is absolutely incredible that Megan McArdle can be splashed all over tv, radio, and internet peddling a book that directly contradicts her earlier work. McArdle is being presented as a brilliant economist/journalist/Big Thinker, her book praised and welcomed and feted, called innovative, illuminating, humble, intelligent, "gracefully written, carefully researched," vibrant, seminal, and wise. But when the financial system collapsed under the weight of its own greed and graft McArdle leaped to its rescue, telling us nobody could know anything ever and there are no villains and CEO compensation shouldn't be cut. For systemic reasons.

Failure also, however, tells us exactly what went wrong. Ms. McArdle said, "Failure tells us exactly what doesn't work" and "Failure tells us more than success because success is usually a matter of a whole system." Now that she is selling a book on failure, she tells a different story.

God bless America, where income and social mobility are so easily achieved. All you have to do is be born to wealth and then latch onto a billionaire like a remora, spending the rest of your life sucking up the crumbs that fall from his mouth.

This is why I keep taking mental vacations. It is as stomach-churning as it is sad.

Thursday, February 13, 2014

Reviewing Failure

More reviews of Megan McArdle's book The Failure Of America To Obey My Ideology are pouring in, this time from The Corner's Yural Levin, one of the few Cornerites who hasn't jumped ship. Yet.
Megan McArdle’s new book, The Upside of Down, is out this week, and I just can’t recommend it enough.  
We conservatives value markets and like to argue that they make for far better means of obtaining and applying knowledge than the a priori certitudes of technocratic know-it-alls. But we are not always ready to contend with what that commitment to decentralized, dispersed, trial-and-error learning really means: It means lots and lots of errors, and lots and lots of failures, and it requires us to constantly keep in mind that these errors and failures are what make success possible.  
That sort of humility doesn’t come easy, especially if you’re the person doing the failing. It requires great champions who will help us see the virtue of humble open-mindedness and the value of learning from calamity, grueling and difficult though it always is. I think McArdle’s wonderful book puts her high on the list of such champions. Her easy command of the intricacies of our complicated economy make her especially well suited to the task in our own time, and her talent for storytelling, disarming humor, and keen eye for just the right detail to make a key point would serve readers well at any time. You should read this book.
I suspect he did not read the book, going by the fact that he did not mention anything at all in the text. But at least we know how humble and open-minded McArdle is.

Tyler Cowen give McArdle's book an enthusiastic if oddly nebulous thumbs up.
That is the forthcoming book by Megan McArdle and the subtitle is Why Failing Well is the Key to Success. I think this book will be a big deal. It is extremely well written, engages the reader, is based upon entirely fresh anecdotes and research results, and develops an important point. I look forward to seeing it make its mark.
As some commenters point out, Cowen comes perilously close to damning with faint praise. He does not say the book is good or important. But he does say it's well-written; a lot of people like McArdle's chatty style and copious anecdotes, although going by what I have seen in reviews, McArdle has told those tales many times before.

DCist lets us know McArdle's message: "We can turn failures around best by learning from them, and failing faster next time in order to sooner reach success." The more times and the faster you fail the more successful you will be, and everyone needs to hurry up and fail often  in order to learn what will work!

Failure magazine reviews the book as well, naturally.

McArdle traces cultural attitudes to failure back to differences between hunter-gatherers and farmers. Hunter-gatherers forgive failure easily. They must, as hunter-gatherers can scour a forest for prey and still return home empty-handed if they aren’t lucky enough to cross paths with an animal. Thus, survival requires that successful hunters share meat with those who failed to catch anything (often through no fault of their own). When a community transitions to agriculture, though, that lax approach is disastrous because inadequate sanctions for shirking mean people play hooky from the fields. Thus, agrarian societies emphasize individual responsibility and insist that those who neglect their crops suffer the penalty of meager or nonexistent harvests. McArdle explains that modern economies are more like hunter-gatherer societies in terms of the uncertain connection between effort and reward. No one can tell for sure if a new product will take off or flop. Accordingly, she argues that gentle policies toward failed risk-takers, such as the option to declare bankruptcy and start over, encourage industriousness and enterprise.

I would dearly love to know how McArdle determined these "facts." Early societies of prehistoric man often hunted in groups, going by their artwork and artifacts. They would share the meat because they all participated in the hunt. Others might have operated differently; McArdle's gross generalization leaves holes in her narrative that one could drive a truck through. And McArdle has obviously never read the Bible or heard of gleaning. Prehistoric society wrote into their laws that crops must be shared with the poor and hungry.
Old Testament  
According to the Holiness Code and the Deuteronomic Code of the Torah, farmers should leave the corners of their fields unharvested, and they should not attempt to harvest any left-overs that had been forgotten when they had harvested the majority of a field.[2][3][4] On one of the two occasions that this is mentioned by the Holiness Code, it adds that, in vineyards, some grapes should be left ungathered,[5] an argument made also by the Deuteronomic Code.[6]  
These verses additionally argue that olive trees should not be beaten on multiple occasions, and whatever remains from the first set of beatings should be left.[7] According to the Holiness Code, these things should be left for the poor and for strangers,[3][5] and the Deuteronomic Code commands that it should be left for widows, strangers, and paternal orphans.[4][6][7]  
The Book of Ruth features gleaning by the widow Ruth to provide for herself and Naomi, also a widow.[8]  
New Testament  
Jesus and his disciples practiced a form of gleaning as they walked through grain fields breaking off heads of wheat to eat.[9] The expectation to glean rather than beg, steal, or covet is a basis for Paul's seemingly harsh injunction: "Whoever does not work, neither shall he eat."II Thessalonians 3:10[10]
Ah, McArdle. You never disappoint. No doubt her failures will lead her to even greater literary success!

Wednesday, February 12, 2014

The Failure Begins!

Very briefly, let us look at Megan McArdle's excerpt of How To Fail Up If You're Just Like Me. I will return to her excerpt later when I have more time. Here is The Secret To Shortening Long-Term Unemployment:

McArdle attacks the unemployment problem by dividing the world into Democrat and Republican approaches to the problem, and then telling us that the Republicans are right. She tells us there are no villains; evidently unemployment just happens for structural reasons. Although she earlier said that the government shouldn't create jobs because they would just be make-work, she now says that the government should provide jobs that pay less than "normal" jobs temporarily, waive the payroll tax for new employees, or provide "grants" so people could move to a place where jobs are available. Or perhaps, like Denmark, the government could pay support and for retraining, but McArdle understands if her reader doesn't like the idea of helping his fellow man.

She does not tell us how a guy over 50 in middle management in Pennsylvania with a house he can't sell, a wife who managed to hold on to her job, and a couple of kids in school could sell his home and move to North Dakota to work in the oil industry, but she can't solve everyone's problems, can she? And while it was a tragedy when the rich were no longer able to afford prep school for their children, it's nothing for a middle class kid to leave school and end up in North Dakota.

Failure: Too many people on unemployment for too long (note that the problem is not the lack of jobs)

Point of Failure: The unemployed stop looking for jobs until benefits are about to run out. Then they look for jobs again. (Note that McArdle does not discuss what happens if they can't find a job. For Randians, there is always another job out there just for the taking, if you look hard enough.)

Cause of Failure: Looking for work is painful so people stop, according to a survey McArdle read.

Solution: Make it easier to look for a job.

Unemployment solved!