Sunstein's Sophistry

"That's right. Brantley is Whitfield; Whitfield is Brantley."
--Brantley Foster (The Secret of My Success)

If you're proponent of political correctness, then you need to counter criticisms of PC to keep the herd in line. Enter Cass Sunstein, propagandist-in-chief of the Obama administration. Using a recent paper grounded in signaling theory as a backdrop to provide an air of legitimacy, Sunstein argues that political incorrectness is actually politically correct when viewed in certain circles.

Thus, Republicans who take politically incorrect positions with respect to Democratic policies and ideologies are doing so in order to be popular (i.e., politically correct) with prospective voters.

This is classic propagandist strategy. Take a term and, using some type of expert support, try to reverse or obscure its meaning. Those in the herd, observing that the argument seems to have the backing of experts, slurps it down without thinking it through.

Work oriented toward truth begins by defining key terms and explaining why those definitions are valid. Notice that Sunstein offers no definition of political correctness at the outset. That's because he wants to roll his own. Bernaysian propagandists know that they must control meaning rather than cede it to outsiders.

Individuals seeking to hone their critical thinking skills should have little trouble dismantling Sunstein's sophistry.

Middle Class Shrinkage

Play the tape machine
Make the toast and tea
When I'm mobile
--The Who

In his discussion of why the middle class is shrinking, Prof Steve Horwitz shares an interesting graphic developed by the Financial Times using data from a recent Pew Research study.

The theme of both the FT and Pew pieces is that the middle class is losing ground--a message that is popular at the present time.

However, the graph indicates that since 1971 the distribution of wealth has gradually become less skewed to the right, meaning that the middle class has generally moved up, rather than down, the income ladder. Watch the graph and observe an overall increase in the fraction earning more than $80,000 and an overall decrease in fraction earning less than $80K.

Prof Horwitz suggests that this progress should be expected. Indeed, while all will not realize the benefit equally, incomes should generally improve as productivities and income mobilities increase.

What he misses, however, is that, as indicated by the FT graphic, nearly all of the reduction in the income distribution skew occurred in the first 25 or so years of the graphic. By the early 2000s, little further improvement in income can be observed--save for the extreme right end $200K+ wage earners (which, naturally, captures the attention of the envious).

Why the slowdown in progress? Because interventionary forces have been applied at increasing frequencies and magnitudes, and since the early 2000s have been building to extreme levels. These forces hamper markets and serve to skew incomes and wealth in unnatural manners. Monetary policies and other interventions have impaired general economic progress and granted windfalls to the wealthy.

In unhampered markets, the middle class becomes more mobile and gets richer. In hampered markets, the condition of the middle class stagnates and declines.

Political Correctness

"You see, according to Cacteau's plan, I'm the enemy. Because I like to think. I like to read. I'm into freedom of speech, freedom of choice. I'm the kind of guy who would sit in the greasy spoon and think, 'Gee, should I have the T-bone steak or the big rack of barbequed spare ribs with the side order of gravy fries?' I want high cholesterol. I want to eat bacon, butter, and buckets of cheese, alright? I want to smoke a Cuban cigar the size of Cincinnati in a non-smoking section. I wanna run around naked with green jello all over my body reading a Playboy magazine. Why? Because maybe I feel the need to, okay pal? I've seen the future. You know what it is? It's made by a 47 year old virgin in gray pajamas soaking in a bubble bath drinking a broccoli milkshake and thinking 'I'm an Oscar Meyer Wiener.' You wanna live on top? You gotta live Cacteau's way. What he wants, when he wants, how he wants. Your other option: come down here, maybe starve to death."
--Edgar Friendly (Demolition Man)

Article proposes that political correctness is about control rather than politeness. Political correctness (PC) is defined as "the conscious, intentional manipulation of language intended to change the way people speak, write, think, feel, and act, in furtherance of an agenda." Use of positive substitute symbols is a common tool of those seeking to foster political correctness.

Political correctness can be considered propaganda. However, unlike other forms of propaganda, PC tends to be all-encompassing, seeking to mold individuals into submissive beings with no capacity for critical thinking. In a politically correct world, natural law is diverted and rerouted. Truth is not absolute, and can be bent to serve the purposes of those who manipulate language.

The author credits much of 19th century Austrian Edward Bernays with much of the basis of political correctness. Bernays was a press agent. He was employed by the Wilson administration to gin up popular support for US entry into WWI. He was also employed by the private sector to direct several successful advertising campaigns for consumer products such as Ivory soap and Lucky Strike cigarettes.

Central to Bernays approach was the exploitation of herd psychology in the "manufacturing of consent," a term used by British psychologist Wilfred Trotter in his work Instincts of the Herd in Peace and War published in 1919.

Herd instinct relates to concepts in social identity theory and involves deep seated desire to win the approval of social groups. Through the herding lens, the desire to fit in is seen as paramount and overwhelms most other human urges.

Bernays viewed herd instinct as volatile, irrational, and unpredictable. To control it, herd psychology must be steered by 'smarter people' in many small, imperceptible ways. Imperceptible because it is important that the people being herded do not realize that their thoughts are being influenced.

As such, Bernays employed techniques designed under the basis of several assumptions. One was that people are generally not creative and individualistic at heart. Instead, they are malleable and desperate to fit in with groups. He also understood the importance of third party authorities (e.g., athletes, actors, politicians, wealthy elites) to promote causes and products. People take their cues from positions of authority. Finally, he understood the role that emotion plays in tastes and preferences. It is not the substance of the political candidate or consumer product that we deem important, Bernays believed, but rather the emotional content that affects us.

Today, PC campaigns are designed with similar assumptions in mind. People who permit statists to frame debates and control narratives are likely to cede power over their lives.

Central Banks, Manipulation, and Risk

"Looking good Windsor. Now watch it. 30 knot crosswinds and the runway is icy. Attaboy. We've got ya...we've got ya...we've got ya."
--Col Stuart (Die Hard 2)

Good explanation of how central banks have manipulated markets and elevated risk. Suppressing interest rates has enabled leveraged speculation and forced more risk taking in search of yield. Moreover, bailing out market participants during price declines has erected an enormous moral hazard.

Near term cycles siphon off some confidence in central bank capability to keep the charade alive. At some point, the residual CB confidence will be insufficient to coil the risk spring back after it has been let go. by natural rebalancing forces

It seems unlikely that the majority of market participants will be able to correctly anticipate when this will be.

position in SPX

Legitimizing Plunder

You, telling me the things you gonna do for me
I ain't blind, and I don't like what I think I see
--Doobie Brothers

In this recent missive concerning forcibly taking from some for the benefit of others, the always insightful Walter Williams makes this observation about democracy:

"A majority consensus does not does not make acts that would otherwise be deemed immoral moral."

Indeed. Many people like to use majority rule to legitimize plunder. Robbing a person on the street is deemed illegal. But forcibly taking people's property indirectly via strong armed tax collectors that have been approved by majority vote is deemed legal.

In this way, democracy becomes an instrument of offensive force.

Signaling Theory

Destroyed by ABC
I hate to bite the hand that feeds me so much information
--Duran Duran

Prof Tim Groseclose discusses signaling theory in the context of controversy surrounding Prof Richard Sander's work on mismatch theory at UCLA. One implication of signaling theory is that the credibility of a message depends in part on the tastes and values of the person conveying the message.

If a conservative criticizes affirmative action, stating that it often puts minorities at a disadvantage in environments such as higher ed, then many observers would discount the message's credibility because it is generally assumed that conservatives oppose affirmative action regardless of the logic and facts at hand.

However, if a progressive (such as Prof Sander) similarly criticizes affirmative action, then that criticism is likely to be seen as more credible because people generally expect progressives to support such programs unilaterally.

Groseclose suggests that this helps explain why the left has attacked Sander so viciously and tried hard to suppress discussion of his research. Progressives realize that arguments against affirmative action, particularly those backed by solid research, that are advanced by one of their own are of great danger to their ideological position.

Immanuel

"The child of imagination is the child I fear."
--Herod (The Greatest Story Ever Told)

He is with us once again.

Thanks be to God.

Capability and Capacity

And maybe you'll go away and never call
And a taste of honey is worse than none at all
--Smokey Robinson & the Miracles

Capability is skill or talent for doing something. Thinking, observation, doing, repetition build capability.

Capacity is the maximum amount of output possible from production. The upper limit, threshold for production volume.

While often related, capability and capacity are not the same. A process can be capable of producing something while have limited capacity. On the other hand, a process may be able to produce high volumes but have little skill for delivering valuable output.

It is usually desirable, of course, to possess both capability and capacity.

Regulation and Prices

My creation
Is it real?
--Oingo Bingo

Graphic of price changes in select product categories over time. Many of the categories that show price increases are highly regulated, while those showing price declines are less regulated.

The implication is that unhampered markets encourage higher productivity. Higher productivity (more output per unit of input) drives prices lower.

Strong Manufacturing

Well we're living here in Allentown
And they're closing all the factories down
--Billy Joel

Common wisdom has it that US manufacturing is on the decline. Data to support such claims are usually percentages of US GDP tied up in manufacturing--which indeed indicate that the fraction of US output attributed to manufacturing has been declining for years.

On an absolute basis, however, the value of US manufacturing output has been increasing. Currently, America produces more manufactured output than any other country (with the exception perhaps of China). And the value of US output exceeds the total output of most other countries ($2 trillion+).

When viewed in this manner, US manufacturing can be seen as very strong rather than weak and getting weaker.