View From The Couch - 9/Jan/2017

"The Government Totally Sucks"

Song of the day (again)!



Yeah I know it sounds totally gratuitous to say that the government totally sucks, but hey, we actually have a government that's stinking it up pretty badly.

Here's something from Pleiades as a followup, coming off the pages of Crikey:

The latest global economic news is mostly excellent, though better for some countries. We now have figures on most of the world’s economies for the last quarter of the 2015-16 financial year. This enables comparisons with earlier periods, including Australia’s last three years (almost) of Coalition rule with the previous administration.
For the entire period 2009 to 2013 Australia’s economy was the best performed in the Organisation for Economic Co-operation and Development. Alone in that club of 34 wealthy democracies, Australia maintained positive growth, kept most workers employed and increased productivity, incomes and wealth. Australia was the toast of the economic world. 

Three years later, Australia is the stand-out economy again, but for the opposite reason. Australia is the only OECD member not to record improvement over the last three years in any of the six key indicators of economic health.

And the article tells us our jobs are down; our wages are rising the weakest of the group; our trade is in a disastrous slump thanks to the commodities tanking; the budget deficit is ballooning; our gross debt is climbing when other nations are cutting theirs; and our GDP growth is merely okay.

That leads us to this bit:

Of the 34 developed OECD countries, no fewer than seven have advanced on all six variables. Leading the pack are Germany, Ireland, Hungary, the Czech Republic, Poland, the Netherlands and New Zealand. Another six have gained in five areas — Denmark, Iceland, Luxembourg, Sweden, Italy and, surprisingly, Greece. Seventeen economies have improved in three or four areas, bringing to 30 the countries enjoying the fruits of the current sturdy global recovery.
That leaves just four laggers. Three nations have advanced on only two of the six variables — Chile, Finland and, perhaps another surprise, Canada. Just one country — Australia — has failed to advance on any indicator, keeping GDP growth steady and declining in the other five.
The conclusion thus seems highly probable: Australians have swapped the best economic administrators in the developed world for the worst.
Perhaps the one success the Coalition can claim is that the mainstream media has no desire to report what is actually happening.

So when I say the government sucks, I actually mean, the idiots in power who brought about this dismal, pathetic turn of performance. We always knew this bunch of conservatives were talentless, unprincipled hacks, but when you see their handiwork in numbers, it sure puts the bleak future into sharper focus.

Bromancing The Oil

When it gets down to the cui bono of the alleged Russian tampering of the US elections, and the subsequent good will between Donald Trump and Vladimir Putin, you would have to say Vladimir got his man, because his man Trump is the most likely to ignore climate science and give Putin's Russia a break from all the sanctions.

Let's face it, Russia's main export is oil. Without it, there's really just arms exports with Russia, something President Obama pointed to. These sanctions are hurting Russia, and so one shouldn't underestimate the motivation to get out from under these sanctions. A Trump Presidency essentially puts it on the table.

It's a scary thought because if Trump lifts the sanctions, then Russia effectively gets away with the Crimea annexation as well as the odd bit of military adventurism into Ukraine. Whatever one thinks of those places, it remains true that Russia simply grabbed hold of those places without contest. If Trump sells out the sanctions, he's effectively selling out NATO - and this would be disturbing in the extreme because it would mean he's at least rolling back America's commitment to keeping security in Europe.

One can indeed conjecture a whole lot about how all this plays out in say, eastern Europe, but the more compelling point might be that for Trump, it's all about money. Effectively the United States has just elected a President who may be willing to sell out on its most important strategic positions - gained over decades of hardworking and sacrifice - just to enrich his own billionaire coffers. It's actually a sick kind of joke that things have turned out the way they have. So, uh, their government is going to totally suck as well.

The Mathematics Of History

There was this interesting article in Wired.

Turchin — a professor at the University of Connecticut — is the driving force behind a field called “cliodynamics,” where scientists and mathematicians analyze history in the hopes of finding patterns they can then use to predict the future. It’s named after Clio, the Greek muse of history. 

These academics have the same goals as other historians — “We start with questions that historians have asked for all of history,” Turchin says. “For example: Why do civilizations collapse?” — but they seek to answer these questions quite differently. They use math rather than mere language, and according to Turchin, the prognosis isn’t that far removed from the empire-crushing predictions laid down by Hari Seldon in the Foundation saga. Unless something changes, he says, we’re due for a wave of widespread violence in about 2020, including riots and terrorism.

You could'a fooled me. Cyclical theories of history are interesting heuristics that come and go. I think the one I read recently - and this is a decade ago - was by a guy called Harry S. Dent Jr. who wrote an extensive book about how the market behaves in different cycles of economic expansion and debt accumulation. In as much as it was empirical in that a whole lot of data went into it, you still had to take it with a grain of salt because even as Dent was predicting all kinds of things, there was the calamitous GFC going on. You could easily argue the events of 2007-2008 were a cyclical thing or a total breakdown of an old system or a restructuring we had to have.

So in that light, let's have a look at what Turchin is offering:

In the simplest of terms, Turchin and his colleagues will build a mathematical model using one data set and then test that model against other historical data sets they’re unfamiliar with. That way, they can see if the model holds. This isn’t exactly the psychohistory described by Isaac Asimov. “For the most part, we don’t predict the future. It’s too far. We can’t wait 200 years to see if something’s right,” Turchin says. “I’m not a prophet.” But cliodynamics moves in that direction — and it’s not science fiction. Though traditional historians are often wary of the practice, others very much see the value. 

“It’s very important to do. It should force traditional historians to respond,” says Yale historian Joseph Manning. “Most people in my field just publish documents and don’t go behind them.”

What Turchin and his colleagues have found is a pattern of social instability. It applies to all agrarian states for which records are available, including Ancient Rome, Dynastic China, Medieval England, France, Russia, and, yes, the United States. Basically, the data shows 100 year waves of instability, and superimposed on each wave — which Turchin calls the “Secular Cycle” — there’s typically an additional 50-year cycle of widespread political violence. The 50-year cycles aren’t universal — they don’t appear in China, for instance. But they do appear in the United States. 

The 100-year Secular Cycles, Turchin believes, are caused by longer-term demographic trends. They occur when a population grows beyond its capacity to be productive, resulting in falling wages, a disproportionately large number of young people in the population, and increased state spending deficits. But there’s a more important factor, one that better predicts instability than population growth. Turchin calls it “elite overproduction.” This refers to a growing class of elites who are competing for a limited number of elite positions, such as political appointments. These conflicts, Turchin says, can destabilize the state. 

Many of these issues persist in industrial societies. Although population growth is no longer likely to result in mass starvation, it can push the supply of labor beyond demand, leading to increased unemployment.

And there you have it - the kind of conclusion Harry S. Dent Jr. came up with, which leaves you going, "yeah sure mate". I'm not sure how predictive these kinds of heuristics can be, given the kinds of parameters being lined up. Also, it does seem to have a deterministic underpinning that utterly fails to explain why the 1970 peak was so low, for instance. And while terrorism is indeed way up, lynchings are way down, so you wonder if lynchings is even a relevant term to be including in such an analysis.

One of the best ideas to come out of quantitative analysis of baseball was the notion of "replacement level". That is to say, if you state that something is good, or bad the natural question is "compared to what?" And that leads to the notion of an arbitrary mathematical straw man we can call the replacement level player. In a sense if we're going to put up stats and give them qualitative assertions, we need to at least have a framework of comparison - are 100 murders/riots/terror acts a year good or bad? Compared to what? It's this kind of benchmarking that is completely lacking in these numbers.

Still, I thought some people might be interested in this stuff.