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In Sync Economics

“Capitalism succeeds 90% of the time. Central economic planning fails 90% of the time. The arduous task of our leaders is to get that 10% where central planning improves our lot in sync with the 10% failure rate of capitalism.”  HKO

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Selling the Illusion

wizard of oz

Don Boudreaux quotes from David Mamet in his excellent blog, Cafe Hayek:

Government is only a business.  Past the roads, defense, and sewers, it sells excitement and self-satisfaction to the masses, and charges them an entertainment tax, exacted in wealth and misery.  It cannot make cars, or develop medicines.  How can it “abolish poverty” (at home or abroad), or Bring About an End to Greed or Exploitation?  It can only sell the illusion, and put itself in a position where it is free from judgment of its efforts.  It does this, first of all, by stating inchoate goals, “change, hope, fairness, peace,” and then indicting those who question them as traitors or ogres; finally, it explains its lack of success by reference to persistent if magical forces put in play by its predecessors and yet uneradicated because of insufficient funding.

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Middle Class Squeeze

from 15 Statistics That Destroy Liberal Narratives by John Hawkins in Townhall:

Sentier Research, a firm led by former census officials, used census data to tabulate an estimate of the median household income — how much is earned by families at the exact middle of the nation’s income distribution. In June 2014, it found in a report issued Wednesday, the median household income was $53,891, down from $55,589 in inflation-adjusted dollars when the economic expansion began in June 2009. The economic paradox isn’t much of a paradox at all in this light: The purchasing power of the typical American family is 3.1 percent lower now than it was five years ago. No wonder people are unhappy about the economy! The benefits of rising levels of economic activity have simply not accrued to middle-income wage earners. – Neil Irwin

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Clarifying Science

wilderfrankenstein

from Nature.com, Twenty tips for interpreting scientific claims

excerpts:

Bias is rife. Experimental design or measuring devices may produce atypical results in a given direction. For example, determining voting behaviour by asking people on the street, at home or through the Internet will sample different proportions of the population, and all may give different results. Because studies that report ‘statistically significant’ results are more likely to be written up and published, the scientific literature tends to give an exaggerated picture of the magnitude of problems or the effectiveness of solutions. An experiment might be biased by expectations: participants provided with a treatment might assume that they will experience a difference and so might behave differently or report an effect. Researchers collecting the results can be influenced by knowing who received treatment. The ideal experiment is double-blind: neither the participants nor those collecting the data know who received what. This might be straightforward in drug trials, but it is impossible for many social studies. Confirmation bias arises when scientists find evidence for a favoured theory and then become insufficiently critical of their own results, or cease searching for contrary evidence.

Regression to the mean can mislead. Extreme patterns in data are likely to be, at least in part, anomalies attributable to chance or error. The next count is likely to be less extreme. For example, if speed cameras are placed where there has been a spate of accidents, any reduction in the accident rate cannot be attributed to the camera; a reduction would probably have happened anyway.

Extrapolating beyond the data is risky. Patterns found within a given range do not necessarily apply outside that range. Thus, it is very difficult to predict the response of ecological systems to climate change, when the rate of change is faster than has been experienced in the evolutionary history of existing species, and when the weather extremes may be entirely new.

tips to Sydney McKinney

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Trading for the Public Good

from Selfishness, Greed, and Capitalism by Christopher Snowden

The observation that man can help others by helping himself is easily mistaken for a celebration of greed and selfishness. And since greed is morally objectionable, nothing good should come of it – the best intentions should result in the best outcomes. But Smith showed this to be untrue. Not only did those who worked for profit often do good for society, but those who professed to be working for society often did ill. ‘I have never known much good done by those who affected to trade for the public good,’ he wrote (Smith 1957: 400).