Why Don’t Politicians Have PhDs in Economics?

It seems like every politician in Washington KNOWS the absolute solution to our economic problems.  But how do they know?  The Tea Party has Washington gridlocked because they claim to know, but is their knowledge based on anything substantial?  Are their opinions backed by something other than wanting to promote Christianity and pay less taxes?  How many politicians have advanced degrees in economics, government and political science?

I’m sorry, but it seems to me that all politicians are out for themselves, and their positions are based on personal desires and the special interests of the people that support them.  I’d be far more impressed with the Democrats and Republicans if they each based their policies on giant economic models backed by an army of PhD researchers.  Politicians have no intellectual authority behind their opinions even though they hold them so strongly.  In fact, after recent events I’d be happy to replace all our political leaders in Congress with robots and referendums.

gort

Every major university and think tank in the United States should be developing an economic model.  All their economic and political PhD students, postdocs, and faculty should be researching and writing to support these models.  All the models should compete, like weather models and global warming models, to see which ones best reflect actual reality.  We need to get away from opinions, away from us versus them.  It’s obvious that many of our leaders don’t know shit about economics.

The makers of Sim City should create Sim Economy so we can all play and study how our economy works.

simcity4_ss1

We all need a better economic and political education.  Maybe we have saps for leaders because we’re not smart enough to elect anything better.  If we learn anything from this current political/economic crisis, it’s that we need to elect smarter politicians.  Or replace them with AI robots.

JWH – 10/15/13

An Alternative to Obamacare

In physics scientists seek to solve the mysteries of reality through mathematics, but if a solution involves a complicated convoluted mathematical equation, it’s generally assumed to be wrong.  Often the right solution involves a simple elegant equation.

Healthcare in America is complicated, bureaucratic and expensive.  I’m wondering if there’s a simpler solution to Obamacare.  To be upfront, I’m a liberal and believe all people have a right to quality healthcare.

To simplify the problem to its most elegant equation I’ve wondered if we shouldn’t take a totally different approach to subsidized healthcare.  I think the federal government should just build and run free hospitals and clinics.  Instead of creating a complex reimbursement system, they should just hire doctors and nurses and provide absolutely free healthcare to those who don’t have insurance.

Today, most hospitals ask if you have insurance, and if you don’t, they send you away.  These free hospitals would ask, and if you do, they’ll send you away.

The federal government should build a free HMO type system that works to bring down the cost of healthcare.  It should use every trick in the book to save on costs, while maximizing preventive heath measures.  Employ no remedies that aren’t effective.  Tell all patients that their information will be used for statistical and scientific studies.  This system size should give it clout to get cheaper drugs and equipment.

Much of the cost of healthcare is the bureaucracy to maintain it.  If the government learned to build efficient hospitals and clinics, that hired medical professionals at salaries scaled to reward cost effective productivity, this system could compete with the commercial healthcare systems and help bring down the overall costs of healthcare.

We could keep all existing healthcare systems and just phase in this idea as an experiment.  The new system should not contract with private contractors to do the job.  The new system should aim to be minimalistic as an experiment in efficiency.  The idea could be started by finding locations in the country with extremely high uninsured population and opening a hospital to test its impact.  Be scientific.  Don’t build the second hospital until the lessons are learned from the first.

Innovate with technology.  Instead of having people wait in waiting rooms, use texting or phone messages.  Develop online prescreening questioning.  Push the concept of home medical monitoring.  Create convenience shops for collecting blood, doing x-rays and other simply diagnostic procedures.  Use computers like IBM’s Watson to analyze medical charts and test results, or even prescreen patients.  Develop a universal healthcare record system that allows patients to record health diaries and drug use, along with any daily home monitoring, and their diet and exercise habits.  Test the theory that diet can improve many medical conditions.

This concept should be an experiment in lowering healthcare costs.  Do everything possible so that all money spent goes directly to actual healthcare and as little as possible to administrative costs.  Start small and build on success.

JWH – 9/8/13

The Unwinding by George Packer

yin-yang

George Packer has written a book about America coming unwound.  He theorizes that America has come undone many times before, and we rewind ourselves in cycles over our long history.  I’m not sure if America isn’t always unwinding and rewinding at the same time – like the famous yin-yang symbol.  That if you’re young, the chaos that is America becomes new possibilities bursting forth, while if you’re old, the same chaos becomes cherished traditions breaking apart.

the-unwinding

Packer tells his story not by philosophizing or political rhetoric, but by reporting on the lives of a diverse group of people surviving The Great Recession.  This has far greater emotional impact than abstract commentary on demographics.  We see Youngstown, Ohio through the eyes of Tammy Thomas, and Tampa, Florida through a family of four who becomes homeless.  We see Washington politics through Jeff Connaughton, as he spends decades campaigning for Joe Biden.  We see Silicon Valley via billionaire Peter Thiel, and North Carolina through Dean Price, and up and down businessman.  Packer also profiles some famous people too, like Oprah Winfrey, Colin Powell, Robert Rubin, Jay-Z, Newt Gingrich, Sam Walton, Raymond Carver, Elizabeth Warren and Alice Waters.

But it’s the less famous people that tell his story best, like the immigrant woman who owns a motel but hates to hire Americans because they are such poor workers.  Packer talks about the fall of unions and good wages, and even how the mob held some towns together, because after they left all the towns had were street gangs fighting.  Our lives depend on complex social  and economic organizations, and when they unwind, it’s changes what we think of normal living, even if it’s corrupt to begin with.

Parker showing the rust belt neighborhoods eroding through Tammy Thomas lifetime is heart breaking.  Ditto for the Hartzell family showing Tampa coming apart at the seams because of the housing crisis.

These stories are riveting.  The sum of their impact is very emotional, and I’m afraid depressing.  I read this book with my friend Linda, and we constantly emailed back and forth about how we felt The Unwinding made us yearn for solutions to start the rewinding of America.  Through the biographical sketches Packer shows America breaking down in many key areas of life – work, democracy, health, food, energy, housing, schools, etc.  – all the stuff you see on the news every night, but told through moving personal stories.

I have lived through the Great Recession without seeing all of this directly.  My wife and I kept our jobs and house.  Most people are like us.  But for ten to twenty percent of the country, times were very bad.  It’s like news reports of a tornado.  Seen focused in on the damage, a whole city can appear destroyed, but if you back away some, you’ll see the devastation is limited.  If your house is in the devastation your world is destroyed.  If you live far enough away from where the twister hit, you might not even think anything is wrong.  The Unwinding lets us experience a tiny bit of the misery of being at ground zero of The Great Recession.

The trouble is The Great Recession wasn’t an act of nature, but a man-made tragedy.  And it didn’t have one cause but many.  We all brought about the unwinding.  Whether Packer’s book is an early report of the collapse of the American Empire, or just a narrative about catching an economic cold, is yet to be seen.  I do believe things have permanently changed, a lot of things.  The American middle class used to be the large bell in the bell curve of American economics.  That bulk of that bell is collapsing.  It’s not the 99% versus the 1%, but bulk of the bell has shifted backwards toward the lower class.  Average incomes are declining.  But then average wages around the world are rising.  We’re all homogenizing around a much lower standard of living worldwide.  This is just change, but does it have to be negative?  Do we have to suffer man-made economic storms?  Do we have to accept lower wages as everything becomes cheaper?

What’s unfair is a lot of people got very wealthy without creating very much, and in some cases by destroying a lot of what used to exist.  That’s a very vague way of stating the problem.  Read The Unwinding for a detailed view.

JWH – 8/13/13

Where are the Economists in the 2012 Election?

I have memories of past presidential elections going all the way back to 1960, and it seems to me that past elections spent more time with actual economists in the spotlight?   Have you seen any economist this election year?  In the past, CBS, NBC and ABC would routinely interview economists about politics, but I haven’t seen hide nor hair of them this year.  Has politicians and the public given up on the Ph.D.s of the dismal science?

We have numerous computer climate models to predict the weather, and we have gigantic cosmological models of the universe, telling us how our universe was formed 13.7 billion years ago, so why don’t we hear about super computers contemplating the economy?  You’d think both the Republicans and Democrats would offer some kind of scientific proof to back their economy philosophies.  Are we supposed to just believe what the candidates tell us without reference to academic authority?

economic-model

From what I’ve read, economists work with computer models all the time.  They have been refining their equations for decades.  So why don’t we see economic superstars interviewed on television?  Why aren’t their computer models shown on the nightly news?

First off, it’s impossible to predict the future, but we can model rough trends.  Modeling complex systems is hard.  Modeling the Big Bang and the formation of the universe is easier than modeling the weather, which is more successful than modeling the economy, but modeling the world economy should not be impossible.  Most Americans would want a model of the U.S. economy, but I would imagine it wouldn’t be very accurate without it being part of the model of the world economy.  No matter what Romney or Obama get to do for Americans, it will affect the rest of the world, and then they will affect us right back.

I know very little about economics, but I wonder why economists can’t build an economic model that allows the average citizen to understand  how various tax plans would affect the economy.  What would happen if Romney did get to kill off PBS and Big Bird?  What would happen if we added three trillion to the national debt while the economy recovers?  What would balancing the budget do to the economy?

Here’s the thing about computer models, the more data points the more accurate the model.  A data point would be like a weather station collecting all kinds of measurements.  The best economy model would contain 311,591.917+ data points, one for each citizen of the United States, and to be really accurate, have 7,043,958,151+ points for every person in the world.  We also need one data point for every business in the world.  Another for each aspect of government.  And each data point would measure many factors, such as various tax rates, incomes, assets, debts, etc.  And we’d need equations for every interaction.  So if we lower the corporate tax, how would it affect all other data points?

For example, Romney claimed his criteria for deciding on government spending was:  Does the cost of a program justify borrowing the money from China?

Okay, I can accept that.  But how do we decide for each program?  It can’t be just whim.  Let’s take PBS.  I heard that $450 million of the Federal budget goes to PBS, and that’s just 15% of it’s funding.  What do we get for borrowing $450 million dollars from China by giving it to PBS?  If we had an economic model, could we calculate the early childhood educational benefit of Sesame Street?  PBS teaches me a tremendous lot about American History.  How valuable is American History to American citizens?  Can you put a dollar amount on it?  PBS teaches me a lot about science and nature.  Does that have value?  Can that kind of educational TV be quantified as expanding the economy in some way?

PBS might be an economic powerhouse of early childhood and adult education that generates many times it’s $450 investment.  Just because conservatives want to save a few bucks on their tax returns are we being penny wise and pound foolish to get rid of PBS?  Can we really know without numbers?

I hate it that politicians expect us to take their opinions as facts.  I also hate that so many of my fellow citizens think opinions are facts.

Romney tells people we should say no to PBS, but other than his opinion, what’s backing that idea?  Is his opinion about PBS right?  I’d like to see an economic study done on the impact of PBS before I’d accept cutting  PBS from the budget.  Even as a jobs incentive program, how many jobs are created with that $450 million dollar investment?

Economics might be the dismal science, but I’d rather hear facts and figures about the economy from an economist than a politician.  I just can’t accept opinions from the left and right, I want some hard cold facts to chew on.

JWH – 10/6/12

The Country & The Country–America in 2012

In 2009 China Miéville came out with The City & The City, a fantasy novel about two cultures, living in one physical location, that were so alienated from each other that they believed they lived in two separate cities, even though both cities were located in the same geographical location.  Citizens of each city spoke a different language, had different laws and culture, and they had been trained since birth to ignore each other so well that they were invisible to each other.

When I read The City & The City I thought the idea too far out to believe, but the 2012 Presidential election is making me change my mind.  This afternoon was I was reading news feeds on my iPad with the app Zite about climate change.  There were two kinds of stories.  90% of the stories were science articles about the effects of global warming around the world.  Not stories theorizing the coming of global warming, but reports of its effect right now.  The rest of the stories were from climate change deniers.  They no longer try to attack the science of global warming, they laugh at the the absurdity that anyone should even consider the possibility of climate change.  They sneer at liberals who believe these science fictional fantasies.  They applaud Romney, Ryan and the Republicans for giving zero thought and time to such Chicken Little fears.

We’re now living in The County & The Country!

What I’m writing now is completely invisible to conservatives.  If they read this essay they would only see some silly story that sounds like nonsense.  It’s doubtful any would even try to read it.  And I’m not writing this to appeal to their reason.  I know I’m invisible to them.  They can’t hear me.

We have become so polarized in the United States that we can no longer see members of the opposite political party.

I could take the time to list many pro and con articles I read today, but what’s the point, those that see, do – those that don’t, can’t.  Anyone can go to Google Alerts and set up a news watch on any topic.  Just set up a “climate change” News Alert.  You’ll be sent an email once a day with all news of any kind about the topic.

Global warming has been happening for decades.  The effects have been felt for decades.  Humans change the planet all the time in endless ways.  We affect the weather all the time.  And it’s all invisible to you if you choose to ignore it.  I think even people who understand that climate change is happening refuse to pay attention.  People do not want to change their lives.  People do not want to make sacrifices.  People do not want to believe that bad things are going to happen.

New Scientist has an interesting article that asks:  “If 2013 breaks heat record, how will deniers respond?”  I often wonder about that.  At what point do the people who can’t see climate change suddenly start feeling the heat?  Will they ever?  How powerful is mind over reality?

The Republican party claims President Obama has been a failure as a leader and now it’s time for Republicans to lead the country.  Only they can lead us out of our economic mess.  I’ll admit that Obama hasn’t been a great leader.  I’ll also admit that Republicans can be great at leading the country.  But they are a one trick pony when it comes to leadership.  All they know how to do is lower taxes, regardless of the economic impact.  Voting Republican means voting to lower taxes on the wealthy.  You can be absolutely sure they can lead the country into lower taxes.  Whether they can lead us anywhere else is doubtful.  But it’s also a 100% guarantee, that they won’t do anything about the environment, other than run away, or stick their heads in the sand.

Voting Republican means:  “We want NO leadership on environmental issues.  Zip.  Nada.  Nothing.  Nix. Zero. Zilch.”

America is now two countries coexisting in the same spatial plane.  There are two cultures, liberals and conservatives.  They do not speak the same language.  They can not communicate.  Conservatives see reality on the North American continent different from liberals.  It’s cool and refreshing where Republicans live.  All they see is high taxes, wasteful governmental programs, welfare squatters, sin and a black man as President.

They want to grow the defense budget to protect America from any harm when our only real enemy is ourselves and climate change.  Is that leadership?

[One reason I don’t give Obama high marks for leadership is he hasn’t lead on climate change.  He does accept the problem, he just hasn’t made it a political issue.  Read “Obama and Romeny on Climate Change Science” at the Washington Post.]

 

JWH – 9/3/12.