Friday, April 29, 2011

A Conventional Mind.

Apparently, my discomfort with our current President is easily explainable.  He's just too smart!  This, at least according to Dana Milbank of the Washington Post and a host of "leading academics in the fields of psychology and behavior."  Here is the core of the Milbank article.
“What distinguishes Obama particularly is the depth and carefulness of his thinking, which renders him somewhat unfit for politics,” said Jonathan Haidt, a professor of social psychology at the University of Virginia. “He is a brilliant social and political analyst, which makes it harder for him to play hardball or to bluff.”

Obama’s strengths and weaknesses come from his high degree of “integrative complexity” — his ability to keep multiple variables and trade-offs in mind simultaneously. The integratively simple thinker — say, George W. Bush — has one universal organizing principle that dominates all others, while the integratively complex thinker — Obama — balances many competing goals.
Philip Tetlock, a professor of psychology with the University of Pennsylvania’s Wharton School of Business, found that politicians on the center-left (where Obama dwells) tend to have the highest degree of integrative complexity, followed by politicians on the center-right. Politicians on the far left and far right are the most simple.
Oh puhleeze.  The first red flag, among many in this article, is the astonishing coincidence that a professor of psychology who most likely views his own politics, and those of most of his ivory tower colleagues as center-left (this is an assumption, but fairly safe I think) discovers, to his great surprise I'm sure, that center-left politicians have the highest degree of integrative complexity.  No bias here, nothing to see, just move along.

The second is this.  If President Obama is so fantastically adept at "keeping multiple trade-offs and variables in mind simultaneously", why does he never integrate a shred of empirical, real-world evidence into his analysis of what government should do on behalf of the people.  To the left, the good intention is the thing, results and costs never matter.  And so they never ask why it is that the last time black unemployment  was less than white unemployment was in 1930, which coincidentally was the last year in which there was no minimum wage law.  Or why the rate of black children born out of wedlock, with all of the negative consequences that entails, has sky-rocketed since the expansion of welfare in the 1960's.  To President Obama and the left, the programs themselves, and the incentives they create, are never the problem.  When the programs fail, when the unintended negative consequences inevitably reveal themselves it is always external factors--racism, corporate greed, fraud, ineffeciency, not enough funding, that are the reasons for the failure.  To me, this naive, ideological committment to "help people" and "solve problems" in the face of failure after failure is the very definition of a simple mind.

President Obama may be an adept politician, and skilled at advancing the causes of the left, but his mind seems pretty conventional to me.

p.s. This article, in which Dennis Prager takes note of the poisoned view of America held by a left-leaning professor of psychiatry, is just how I view the mind of President Obama.  Mr. Prager writes this about his subject:
But at some point, perhaps in college, he assimilated the leftist world-view, with the dogmatic but meaningless phrases that appear in his column: “underlying forces of greed and hate”; “American imperialism”; “corporate avarice”; and “abuses of our power abroad.”
President Obama has also, I suspect, assimilated the leftist world-view, and it is his inability to move past this adolescent ideology that most compromises his so-called mega-mind.

Tuesday, April 19, 2011

Don't Need O'Reilly Lookin' Out For Me Either.

Unless you live under a rock you most likely know who Bill O’Reilly is. His early evening opinion show on Fox News is the top-rated cable news show in the United States, and it has been so for many years. He prides himself in being a tough, but fair-minded interviewer who is always “looking out for the folks”, and I probably agree with his positions on a lot of issues. But not on the price of oil. Every time the price of oil goes up Bill goes on a crusade to illustrate that oil companies and speculators are fleecing the American people. The crux of his argument is always that increases in the price of oil are artificial because they are not “market based.” When he makes that statement he is implying that the fundamentals of supply and demand have not changed and that this reveals that speculators and oil companies are behaving in an unscrupulous and greedy fashion. What he fails or chooses not to recognize is that the amount of oil produced in the world on a given day, and the amount consumed on that same day are not the only fundamental aspects of supply and demand. The price that a buyer is willing to pay for a barrel of crude oil is also fundamental, and if a speculator is willing to offer more for a barrel of oil right now because he thinks the price will be higher in 30 days, then the fundamentals of supply and demand have indeed changed.

Speculation is a real part of any free market, and speculators perform the valuable service of transferring some of the inherent risks of productive activities (like finding and producing oil and gas) to those who are best equipped to handle those risks, the speculators themselves. In this case the inherent risk is the risk of price fluctuation caused by supply disruption in the Middle East, and the producers of oil mitigate this risk by signing futures contracts which guarantee them a certain price for their product. The owners of family farms do exactly the same thing with the wheat and the soybeans that they produce and sell.  The prices they are paid are market-based and absolutely real because speculators and other buyers are competing with each other to offer these higher prices. Gasoline refiners, who need crude oil right now to supply feed stock to their refineries must follow suit and also offer higher prices to producers in order to be able to purchase crude from the spot markets. In order to maintain margins, it follows that the price of refined products must also rise. What Mr. O'Reilly portrays as insidious and harmful is the normal response of a free market to risk, and the normal behavior of companies (or farmers) who have a fiduciary responsibility to their shareholders to manage business risks and maximize returns. If Middle East conflict continues to burn cooler rather than hotter the upward trend of oil and gas prices will soon reverse.

Though he claims to be “just lookin’ out for the folks,” he is in fact doing them a disservice by encouraging the voices of those who advocate for increased regulation of legitimate financial activities, and for price controls. The inefficiencies, unintended consequences, and political interference that would surely follow in the wake of such regulation and control would be much harder on “the folks” than any temporary, but real rise in the price of crude oil.