Friday, May 29, 2015

Whatever Happened to The Third Way of Bill Clinton and Tony Blair?

The Third Way is a position that tries to reconcile right-wing and left-wing politics by synthesizing conservative economic and social welfare policies.  It was exemplified by a group of political leaders in the 1990s that included President Bill Clinton, Prime Minister Tony Blair, Chancellor Gerhard Schroder, and leaders of Brazil, Portugal, the Netherlands, and Israel.

The Third Way dissipated after Clinton and Blair left office, becoming the way to acquire vast fortunes.  President Bill Clinton accumulated an estimated $130 million in personal wealth, Tony Blair anywhere between $45-100 million, and Al Gore $300 million.

Many politicians and appointed officials of all stripes–left, center and right-prosper after they leave office.  These include cabinet officials, agency heads, generals, legislators, governors, mayors, and other prominent public officials.  Public service has become a path to millions in private (self) service.  No doubt President Obama will top them all with a book contract, board memberships, speaking fees, investments, and partnerships.

It is not illegal to reap large rewards trading on influence and contacts made during office after leaving office.  Nor is it necessarily unethical.

Your friendly proprietor believes that “public service,” which conveys a higher order of virtue than earning a living in the private sector, should not be a means to acquire large fortunes.  It demeans the high offices these individuals held.  He finds this kind of money-grubbing distasteful, unbecoming, and undignified.  Better are the words of Star Trek’s Lieutenant Worf, “they have no honor.”

Is it any wonder that public servants are held in such low regard.

Friday, May 8, 2015

Identity Politics in the United Kingdom

Why did the pollsters get it so wrong in the United Kingdom?  How can this be?

The pollsters were not willing to accept the rise of identity politics. They could think only in conventional class terms of right vs. left, Conservative vs. Labor.. 

Identity prevailed:

Scots voted for Scotland (the Scottish National Party).
English voted for England (the Conservative Party).

Diversity failed:

Diversity oriented Brits voted for a United Kingdom (Labour, Liberal Democrats).  They were trounced.

Ethnicity is now the dominant factor in British politics.  Get used to it.

Thursday, May 7, 2015

Change the Narrative

Replace Diverse with Heterogeneous

Replace Sustainable with Durable

Replace Sensitive with Civil

Replace Equality with Equal Opportunity

Replace Democracy with Constitutional Republic

Replace Justice with Equal Treatment Under the Law

A Challenge:  Try going a whole day with the new narrative.

Wednesday, May 6, 2015

A Day in the Life of.....

the intelligentsia.

Six words frame almost all written and spoken discourse.  It's increasingly difficult to read an article or hear remarks on any subject that does not include one or more of the six words or their correlates which underpin the contemporary liberal (bigger government) narrative:

Diversity (Diverse)
Sustainability (Sustainable)
Sensitivity (Sensitive, Insensitive)
Inequality (Equality)
Justice (Social Justice)

Every dimension of life requires diverse, sustainable, sensitive, equal, democratic, just policies and outcomes.

A challenge:  See if you can go a whole day without uttering or writing any of the six commandments.

Wednesday, April 22, 2015

Simple Arithmetic for California's Water Crisis

In 2013, California state GDP amounted to $2,220 billion, of which $46.4 billion (2.1%) was contributed by agricultural commodities.  All other output amounted to $2,173.6 billion (97.9%). 

In 2013, urban use of water amounted to 8 million acre-feet (AF), about 10% of state water resources. Irrigated agriculture consumed 23.9 million AF (41% of total), while environmental usage took 29.2 million AF (49% of total).

California agricultural statistics can be found here.  In 2013, the top 20 commodities ranged from a high of $7,618 billion for milk and cream to a low of eggs and chicken of $380 million.  But water usage does not correlate with the dollar value of output of each of these commodities.

Blaine Hanson in the Department of Land, Air and Water Resources at the University of California, Davis charts water use of California crops on page 4 of his report.

Here are a few shocking calculations.

Alfalfa amounts to $1.57 billion of output using 5.3 million AF of water.  Divide the value of output by the amount of water used yields $296 per AF.

Rice output is valued at $790 million, using 2.7 million AF of water. This amounts to $293 per AF.

Cotton output is valued at $623 million, using 2.3 million AF of water ($271 per AF).

All other non-agricultural state output amounts to $2,175 billion. Using only 8 million AF yields output valued at $271,875 per AF. Urban use produces 925 times as much output value as each of three of agriculture's most thirsty crops. (Except for pasture, all other cash crops produce higher valued output per AF of water than alfalfa, rice, and cotton.)

Alfalfa and rice use as many AF of water as all urban usage.  It is true that urban water usage can be made more efficient, enough to meet Governor Brown's statewide mandatory reduction of 25%.

But what if the drought continues for 1, 2 or more years?  Should California continue to allocate 8 million AF of water to growers of hay and rice?  This makes no sense, never mind historical rights. It's vital that the state legislature get cracking with a comprehensive overhaul of water usage (the Australian solution would be a good place to start) so that it can enact legislation if the drought continues through the 2015-2016 rainy season and beyond.

Thursday, April 16, 2015

Analysts Were Looking For a Number.....

that was [higher, lower] than actual [earnings, jobs created, unemployment rate, trade deficit, last quarter's GDP growth, etc.].

For example, the first Friday of the month (April 3, 2015) "New Jobs Created Report" for March fell dramatically short of consensus estimates.  Not a single prominent business or academic economist has stepped forward to claim an accurate forecast. Dozens of business and academic forecasters that were wildly inaccurate scrambled to find reasons why they were so off-target.

And yet, the Congressional Budget Office, Treasury, Office of Management and Budget, Social Security Trustees, private business forecasters, and professors routinely issue 1, 2, 5, 10, all the way up to 75-year forecasts of economic activity, government expenditure, unemployment rates, and so forth.

Reporters, pundits, and media personalities then report these forecasts with few qualifications about their future accuracy or inaccuracy as events unfold and new real-time data are released.

Any wonder that the federal government and most professional economists missed the Great Recession and financial crisis that erupted in 2008!  The forecasting community cannot get next month right, but have no problem issuing long-term projections.  Were John McEnroe a pundit, he would say "You cannot be serious!"

So please take every political candidate's statements on how their proposals will increase growth, reduce inequality, reduce deficits, improve middle-class wages, and so on with mountains of salt. Their promises are as accurate as next month's jobs report!

Wednesday, April 15, 2015

The Progressive Mantra Grows

Some months ago your friendly proprietor reported the discovery of a third tablet on Mt. Sinai, which turned out to be the 11th through 15th Commandments.

They were:  Diversity, Equality, Sustainability, Democracy, and Sensitivity.  A footnote on the reverse side of the tablet noted that the order of the five could fluctuate with changing political and economic conditions.

A broken shard of clay was recently found amidst the dust.  It was a proposed 16th Commandment: Social Justice, or Justice more  broadly.

Much as a country's constitution lays out broad principles of governance, the 11th through the 16th Commandments state broad principles.  The details are left to individual societies to work out for themselves.  Current political and economic conditions throughout the world have propelled justice to 11th place, pushing the other five down one notch.

The beauty of generic Commandments is that they can mean, in practice, whatever the loudest side claim.

P.S.  For example, Stanford Law School will host an event on "Justice and Climate Change" on April 16, 2015.