Monday, December 31, 2012
2013: Some Predictions, Mostly Unpleasant
Currently the left, represented politically by the Democrat leadership and the mainstream media, appears to smell blood. In my opinion they want to crush their Republican opposition at the national level and move on a number of issues, and set the stage for taking the House in 2014. And roughly 50% of the American population is dead set against them. I hope it's more, maybe it's less, but regardless, consensus, agreement, and compromise seem nearly impossible under the current situation. And the sorts of things the Democrats favor -- draconian gun controls, economic regulation, expansion of entitlements, and general big government -- are practically an existential threat to a substantial share of us. I don't see how anything good can come of this. The best we might hope for is incompetence and gridlock, because instituting major change when the country is so deeply divided will unleash terrific backlash, regardless of whether the changes are good, bad, or indifferent.
Against this happy backdrop, here are my predictions for 2013. Needless to say, I sincerely hope I have no idea what I am talking about.
First, I refuse to make predictions regarding gun control in the U.S. Sipsey Street Irregulars is doing an excellent job of covering the growing threat and counseling how to respond should the state try to disarm us. But there are some very good arguments for why legislative attempts impose a new and more draconian AWB will fail. This post on the AnarchAngel blog does an interesting political analysis of why it will fail. Gary North on Lew Rockwell's site has a nice piece on why the gun control movement will prove an utter failure, more of an economic argument. Suffice it to say the laws of demand and supply can't be repealed, and demand won't go away and will be satisfied. (You know it's serious when I'm endorsing Gary North and Lew Rockwell!) And Cody Wilson of Defense Distributed (the 3D printer firearms makers) explains in this great interview why gun control is in essence technologically impossible. (This one is particularly worth reading for its philosophical insights, especially into how the progressive mindset devolves into a regressive, ultra-conservative "ban, ban, ban" kneejerk reflex.)
I hope they are right. If the Republican House has any principles and courage, then there's no reason why new gun controls should pass in the next two years. OTOH, President Obama has vowed to impose new controls. It's not unthinkable that he'd try to impose them without new legislation, perhaps by executive order, or by administrative regulation. In this regard, it would be easier to go after manufacturers, importers, and retailers than citizen-owners, but conceivably any could be targeted. But it strikes me that so far Obama has been relatively ineffective at getting things done; he's seemed unengaged and not particularly competent, and certainly not the genius his fawning sycophants in the MSM claim him to be. With Obama, when it comes to anything other than campaigning, failure is definitely an option. I certainly hope so, at least.
But also, if the feds do manage to get a bill or regulation passed that requires confiscation, or mandates transfer of our arms to NFA status (National Firearms Act), or requires federal registration, and they try seriously to enforce it, all bets are off. Forbes just posted an op-ed correctly pointing out that the real purpose of the Second Amendment is to help ensure of civilians are armed and prepared to put down a tyrannical domestic government. If our federal government decides it is time to disarm us, we'll face the choice of defending our liberty or surrendering. I see nothing good about civil conflict, but surrendering liberty is far, far worse. I fervently hope we do not face this choice. But if we do, never surrender.
So, some predictions...
1. Solar Storms will not shut down the American power grid to any appreciable extent. I raised this issue, mostly for the sake of dark humor, in my previous post, but I might as well deal with it here. I've read estimates that put the risk of this occurring as high as 7%...YIKES! But while I think it's a genuine possibility and that we should take measures against it, it's still low probability. Incidentally, protective measures would probably not be very costly at all, but there's no constituency for tackling this because the problem doesn't serve anyone's ulterior political motives, the way climate change does.
2. Assad's regime will fall and Syria will remain enmeshed in civil war. Syria is now a battleground for a war between various forces in the Middle East, particularly the Shiites led by Iran and the Sunnis. Assad himself will soon go, either fleeing or sent to the next world. But the conflict will continue as Syrian ethnic and religious factions battle it out as proxies for their supporters in Iran, Saudi Arabia and the Emirates, Turkey, etc. It's easier for these enemies to fight it out in Syria than in direct confrontation with each other. The difference between Syria and post-Saddam Iraq is the absence of the United States military, which was sufficiently powerful to subdue the civil war. Let's hope we remain absent! The U.S.has absolutely no business in Sunni-Shia religious wars.
3. The Democrats in the Senate will invoke the "nuclear option" and eliminate or greatly constrain the filibuster. This one is a very risky prediction, but supposedly Harry Reid already has the votes and has declared the intent to do this. This would be very interesting. To me, the nuclear option makes sense only if one controls both houses of Congress. Invoking it when the Republicans control the House is very likely to inflame partisanship and gridlock, rather than help one advance anything. While I think the Democrats are very dangerous, I kind of hope they do trigger the option. In general, the more rapidly they move and the more radical their actions, the more likely they are to generate political backlash that will cook their geese.
4. There will be at least one violent act of domestic terrorism against American gun owners. Progressive politicians, the mainstream media, and leftist political organizations are engaging in an astonishing hate-fest against American gun owners and against groups like the NRA and Gun Owners of America. Excuse me for putting it so bluntly, but one would have to be stupid to think the campaign of vitriol and demonization directed against law-abiding American gunowners (about 50% of the population) has anything to do with preventing crimes such as the butchery at Newtown. For example, the Journal News of White Plains NY is publishing the names and addresses of handgun permit owners, for no other reason than to harass and possibly endanger them. We've already noted the demonstrators claiming the NRA is responsible for the murders and the tweets by people calling for the killing of NRA members. Most of this is hysteria or propaganda, but there's always likely to be a small share who take this literally -- maybe a large share even. Hence, I predict that someone will attempt an act of terroristic violence against American gunowners this year. I don't limit this to non-state actors, BTW; if "Fast and Furious" taught us nothing else it's that the administration and the ATF include people who have no compunction about seeing innocents killed if it serves their purposes. Of course, any ATF action would likely have the smokescreen of "enforcing" some "law," so a "hit" for UC would be difficult to show in this case. And I hope I entirely miss on this one.
5. The opening of the PPACA exchanges will prove to be a shambles. I'm not sure how to phrase this one, after being stung on last years' prediction on the unemployment rate. Maybe the opening (scheduled for fall) will be postponed. Maybe they will function, but not particularly well. Maybe they'll be a total disaster. Any way about it, I think the only people smiling like this will be the ones who said "we told you so."
6. It will become apparent that health insurance premiums will rise sharply. "Sticker shock," it's called.I'm not on a limb here; Bob Laszewski has been predicting this for some time, and it seems to be common knowledge among insurance experts. For individual and small group insurance predictions run as high as a doubling of rates, owing to the new rating requirements and mandatory coverage. Incidentally, changing the rating and the requirements of what was covered always meant that "you can keep your old insurance if you're happy with it" was a bold-faced lie, and Obama, Pelosi, and co. always new it.
A Digression on PPACA: Why should the PPACA (Patient Protection and Affordable Care Act a.k.a. Obamacare) be expected to perform poorly? In January 2012 at the American Economic Association meetings there were several sessions devoted to studies of the Massachusetts health care reform (Romneycare) on which it is based, and in some sense this reform "works." (That's not to say it's desirable, but it it does seem to have functioned as it was supposed too, for the most part.) But here's the problem. Romneycare and Obamacare are different animals and are being implemented in very different settings. The basic insurance structure works perfectly well on the blackboard; the primary designer, Prof. Jonathan Gruber of MIT, is a very competent blackboard economist. But the blackboard and the real world are very different environments, and a design that does not take into account how people can be expected to behave (instead of how one wishes they would behave) is a bad design. Consider that the Massachusetts act was implemented in one state, by a single government agency, for a population facing a common set of problems arising from a common institutional framework -- the state laws. The market for health insurance was probably more screwed up there than anywhere else in the nation. The reform act itself was relatively simple, less than 100 pages long. Given all this, it's not surprising that it "worked" in many respects.
Contrast this with Obamacare. The PPACA must be implemented across 50 states, all with differing laws, regulations, populations, and problems. It must be implemented between the State and Federal governments. And the act is a nightmare of complex and yet unknown details; the damned thing is over 2000 pages long -- we still don't know what's in it. Gruber's basic plan gave zero consideration to questions of federalism, Constitutionality, political incentives, and then has incredible numbers of additional programs, initiatives, and regulations tacked on; just the sort of thing we'd expect if Franz Kafka and Rube Goldberg got together to design a Frankenstein's monster of bureaucratic central planning.
In sum, Unforeseen Contingencies recommends a bear position on PPACA.
7. Chinese recession in 2013. Nothing has happened to make us change our view here. This prediction is just a matter of getting the timing right.
8. Civil disturbances in the U.S. More bad news. But there are a couple of things that point to this. First is the increasing divergence among various political factions in the U.S. Second, there seems to be a disturbing rise of anti-white racism among some sectors of the black population. Third, I don't see economic conditions improving much and very possibly worsening. There's also the class war card played by various politicians. We've already had racially-motivated flash mob violence in the past couple years (ignored by the MSM) and the occupy movement, plus there's a contingent of dangerous white racists who want a race war and would happily start one. A few years back, I heard from a friend that a very successful portfolio manager for whom he'd worked was predicting relatively serious violent civil disturbances in the U.S. in a few years. At the time I was skeptical. Now I'm not.
9. Success of Wiki weapons AR platform. Unforeseen Contingencies predicts that before the end of the year they'll have one that will fire a thousand rounds without breaking down. (Finally, some GOOD news!)
10. A bill to ban or strictly regulate information on firearm design, software that encodes it, and 3D printer hardware and materials that will print it will be introduced into Congress. I also think it won't pass, but that's not part of the prediction, only the attempt to violate the First Amendment is.
11. Wild card: Scientists will announce discovery of life on a planet in another star system. Yes, again. If I keep predicting this, eventually I will get it right.
12. Wild card #2: Scientists will announce discovery of evidence of life on Mars. It's no fun if I don't go out on a real limb, so there it is; any evidence of life, past or present, will be a hit.
So there they are. I particularly hope that there's no civil conflict, that predictions 4 and 8 prove to be creations of my own imagination, and that liberty and prosperity dominate in 2013. If they do, it would not surprise me much. I predict based on what I have seen and what I foresee, but the very nature of human knowledge is that we mostly face sheer ignorance, and that unforeseen contingencies dominate. And as it has been in the past, so I expect it will be in the future. Even if 2013 turns out as badly as I've predicted here, I still expect reason and liberty and civilization to continue to expand over the long run.
Happy 2013! May my predictions be wrong, and may the year bring us liberty and prosperity.
Sunday, December 30, 2012
Keeping Score on 2012
First, as a general rule, the best single predictor for future values of any variable are the past values, and for short term prediction, it's the "present" (most recent) value. Second, if one does predict change, it should be on the basis of some sort of rationally established theory. In other words, don't predict anything to change unless you have a good reason to. With this in mind, let's look at UC's ten predictions for 2012.
We are pleased to report a "hit" rate of 50%! That is enough to make a fortune on Wall Street, we're told.
Prediction 1: The various end-of-the-world predictions for 2012 will prove to be false. Hit for UC! With only about 24 hours or so left, and Nibiru nowhere in sight, claiming success on this one seems quite safe. Even Harold Camping has given up on the-end-is-nigh predictions (although perhaps that should scare us all, since he always seems to get it wrong). In fact, we're willing to make this one indefinitely, for as long as Unforeseen Contingencies is around. The world is pretty solid, and will remain so for a very long time. That's not to say that the end of civilization as we know it might not happen. According to NASA, 2013 may be a particularly bad year for solar storms, you know, of the sort that could knock out America's electrical power grids for months. A few months w/o electricity and people will be eating each other. But we are not making predictions here, we're just enjoying the fact that the world still exists and gloating that we got this one right.
Prediction 2: Someone in the "west" will engage in an overt military action against Iran. Miss. So far as we can tell, this didn't happen. Instead, most of the interested parties are fighting a proxy war in Syria. I suspect this will continue for some time.
Prediction 3: Barack Obama will win a second term, defeating Mitt Romney in a close race. Hit! I'm particularly pleased by this one, since the forecast required some ability to discern what would ensue, and I think my logic was corroborated. Despite the fact that hardly anyone in the GOP based seemed enthused by Romney, I figured he had the edge over his Republican challengers. They tended to be poorly organized and very narrowly focused (e.g. Rick Santorum, who really could only appeal to the small share who vote on explicitly religious grounds) or prone to say kooky things at a moment's notice (e.g. Newt Gingrich). Romney's organization proved surprisingly bad in the presidential election, just as McCain's had four years earlier. In general I think the GOP is badly organized. I also assumed Obama's organization hadn't gotten worse, even if his base was far less enthusiastic. Hence a close race, going to Obama.
Prediction 4: TBTF banks will increase in size and share of the financial sector. Hit! The number of banks is shrinking, and the ones that are Too Big To Fail are bigger and badder and better connected politically than ever. So points out Nouriel Roubini, and evidence from the Fed corroborates him. OK, I was shooting ducks in a barrel with this one. Roubini is right; this problem will not be solved given the current politicians. The banks own them.
Prediction 5. The U.S. Supreme Court will fail to rule that the individual mandate in the Affordable Care Act is unconstitutional. Hit! I'm almost embarrassed by this success, because of the Alice-in-Wonderland "reasoning" employed by Justice Roberts to save it. (See this and this as well.) But as a general rule, assume that SCOTUS is loathe to overrule Congress, and will do so rarely. Even so, I'm still astounded at the lengths to which Roberts went to save PPACA. He'll go down in infamy for his dishonesty and crazy "logic." Incidentally, this means Obamacare will figure in my 2013 predictions, to be issued tomorrow. It won't be pretty.
Prediction 6: The United States will make no progress in getting their debt problem under control. Hit! This one was quite hard to predict and I really went out on a limb here because...hahahahahahaha!
Prediction 7:The Eurozone crisis will deepen. Greece will go bankrupt. Unless the Germans agree to subsidize the rest, the Eurozone as a monetary union will break up. Miss. I certainly missed this one. First, the Greek government seems to have managed to actually get their structural balance under control, and so far the Greek citizenry has failed to incinerate the entirety of the country in response. Second, and even more importantly, the ECB has now decided to bail out European banks if needed. Even Roubini got this one wrong. The printing press to the rescue! I now think the Eurozone may well survive...at the cost of printing press money, massive transfers of wealth from the productive to the unproductive, and capital destruction, of course. That still amounts to Germany subsidizing the rest, but not in the way I suggested.
Prediction 8: China will undergo a sharp recession. Miss. No recession, just a slowdown. Timing is difficult. Some think it's now behind them, but I don't. Their shift from relatively free enterprise to investment in the politically favored state sector and pointless capital projects make their economy something of a house of cards.
Prediction 9: India and Pakistan will go to the brink of war. Miss. Thank heavens! The subcontinent is a potential Balkans for a WWIII. Every year we dodge this, India will grow and modernize (and maybe Pakistan too) and lead us away from this nightmare scenario. Strength and prosperity make war less likely. Happily the Pakistanis are currently focused on the U.S. drone strikes that have slaughtered innocent civilians willy nilly (Barack Obama is responsible for the execution of 158 more children than Adam Lanza, and hardly anyone cares) and their own butchery of children. Meanwhile, Indians are justifiably more upset over the murder of a 23 year old medical student who was gang raped and then gutted by her attackers, and the state's general refusal to take such crimes seriously. Or as Diane Feinstein so aptly put it, "thank goodness that at least she didn't have access to a gun, someone might have been shot."
Prediction 10. The U.S. unemployment rate will be roughly unchanged at 9%. Miss. The official rate is now "only" 7.7%. I missed it, but this one is worthy of multiple essays. In lieu of such... First, here's a pointer about prognosticating: be sure you pick the variable you really want to predict. Stupid me. When I made my prediction in 2011, I was thinking that there would not be a substantial economic recovery in terms of employment. But the unemployment rate, by itself, isn't the measure I should have picked, because it only measures the share of the labor force that is employed. If the labor force shrinks, then the unemployment rate falls, since the denominator is shrinking. And since the onset of the Great Recession the labor force participation rate has steadily declined by enough to more than generate the stagnation of which I was thinking. Second, the evidence is that the fall in participation rate is concentrated among the people who certainly should be working. It's been suggested that the retirement of baby boomers should indeed drive the LFPR down. But since 2008, their participation rate has actually increased (who can afford to retire when portfolios are devastated?) while young people have dropped out of the labor force. My own calculations (available on request) suggest that increased college enrollments can't account for this. Here's a very good explanation of what's happening, and here's analysis from the KC Fed that corroborates it. Both are somewhat technical and well worth reading, but for the punchline, here's a great piece by Celia Bigelow, one of my former students. Anyhow, I missed this one. And regardless, what is happening is bad news.
Wild Card Prediction 11: Scientists will announce discovery of life on a planet in another star system. Miss so far... but it's coming!
So there it is, "our" first annual prediction scorecard, with a respectable 50%. Not bad, for beginners.
Stay tuned for our 2013 predictions, many of which will be quite dark indeed, unfortunately.
* Including one direct quotation which "we" attribute without source. Some might call this "putting words in someone's mouth," but we think of it more as simply helping them apply their ideas consistently. We'll let the reader decide.
Photo: a junior member of the Unforeseen Contingencies staff hard at work on our 2013 predictions.
Tuesday, December 25, 2012
Yes, we're back on the Gregorian calendar, at least until Orthodox Christmas roles around. I hope everyone has a wonderful Christmas. Photo: a cabbage-stuffed kulebiaka I made last night. The recipe is available here.
Saturday, December 22, 2012
Why the Second Amendment?
"Assault Weapons" – Who Needs 'Em?
Who needs "assault weapons?" This is a really interesting question; interesting because it is far less straightforward than most people think. Let's begin at the beginning, with Barack Obama's Newtown speech. In it he claimed that "we" didn’t do enough, "we" bear responsibility, "we must change." "And we will have to change."
Tuesday, December 18, 2012
The War on the Bill of Rights
Q: Why does Obama oppose the Second Amendment? A: Because it's the one thing between him and the First Amendment. Hahaha...ha...ha... not funny.
We are about to start reaping the fruits of the 2012 election. They'll be bitter. I think we're about to see a full and overt assault on the Bill of Rights and on those who support individual liberty. I hope I'm entirely wrong. But don't bet on it.
Immediately on the heels of the terrible Sandy Hook School murders, Obama and the left were in high gear. It had long before been announced on pro-gun blogs that Diane Feinstein was meeting with Obama to discuss her new draconian Assault Weapons Ban. With this mass murder, the Obama administration is taking full advantage (never let a crisis go to waste!) and is going to milk this for all they can, assisted by their media wing (NYT, CNN, NBC, ABC, etc.) The MSM and left are now in a frenzy and demanding draconian gun control now. Some left liberals go so far as to call publicly for killing of NRA members. How progressive!
Unforeseen Contingencies' position on this issue has already been made clear; there's nothing new to say, unless perhaps μολὼν λαβέ. The issues are being covered quite well elsewhere. I'll note a few that are perhaps more obscure but worth noting: a blog post from biophysicist and libertarian Mary Ruwart, Ph.D. and an op-ed in the Daily Caller on Australia's experience with AWB. Eugene Volokh and co. have a number of good pieces that are bit different, such as this and this. And as always, Sipsey Street Irregulars is the go-to place for these topics.
The Daily Caller op-ed makes an important point: gunowners and the Second Amendment are not the only target of the left. "The odd thing about gun control is that a culture of censorship often increases after anti-gun laws fail to deliver. ... Only a 'thought control' culture can sustain a “gun control” culture." This is something I've thought for quite a while. Example: given the recent success of the first 3D printed AR-15,* the only way an AWB can work is by also imposing controls over plans, software, 3D printers: information. Hence, if there's to be a successful AWB, the First Amendment must go. If a new "no grandfather" AWB were passed, the Fourth Amendment (search and seizure) and what's left of the Fifth Amendment (no taking of property without due process) would also have to go. I think the left is ready for this.
Democrats have been insistent that Citizens United be reversed, so much so that they are proposing amending the Constitution with a "People's Rights Amendment." It was already introduced in Congress by Rep. Jim McGovern (D., Mass.) and has been endorsed by Nancy Pelosi, among others. In fact, there are at least 13 versions of such laws that have been introduced, all by Democrats, save for the one from Socialist Bernie Sanders. McGovern's version is the one "Free Speech for People" thinks best. It appears to be the most draconian (i.e. comprehensive), and has the sponsorship of the Democratic House leadership.
Go ahead and read the proposed amendment. It doesn't take much analysis to see that under this amendment, only individuals would have protected speech; people who join together in organizations would not. For example, the National Rifle Association would lose the right to argue against gun control. Cato Institute would lose the right to argue for limited government. Ironically, "Free Speech for People" would lose the right to post its website and campaign against free speech. The amendment would cut every which way -- under McGovern's variant, no organization would be exempt, even political parties.
Legal scholar Eugene Volokh and others have pointed this out on the Volokh Conspiracy blog; so has George Will in WaPo. What can one say about this? What the amendment proposes at the very least is to gut any practical importance of the First Amendment. While it's doubtful that this particular amendment would be adopted, perhaps one of the less draconian ones that exempts labor unions could get more support; perhaps further exemptions for the "legitimate" MSM, as well as "approved" nonprofits might further increase a base of supporters. (NRA and Cato need not apply.)
But the real point isn't so much that this damnable amendment will be passed, but rather that it reveals the genuinely totalitarian mindset of modern "progressive" left-liberals. As George Will observes, "By proposing his amendment, McGovern helpfully illuminates the lengths to which some liberals want to go. So when next you hear histrionic warnings about tea party or other conservative 'extremism,' try to think of anything on the right comparable to McGovern’s proposed vandalism of the Bill of Rights."
Unfortunately, the problem goes far deeper than this particular amendment madness. I've already documented here and here that some very serious left-liberal legal scholars support the idea of restricting free speech protections, particularly when speech "causes" violence (i.e. people who don't agree with what was said respond violently). (You know, as in "Kill NRA members for supporting the Second Amendment.") And there is longing among some on the left for the days of the FCC's "Fairness doctrine," as a way to "get" right wing talk radio. It isn't even inconceivable that some anti-libertarian social conservatives could be induced to sign on if they think it gives them a chance to suppress the expression they dislike. Add to this the hatred often exhibited by many on the left for those of us who support individual rights rather than "human rights," and it's very ugly.
Is this really a serious threat? Yes, damned right it is! This is a genuine threat that comes from people who have not hesitated to wield power, even when they aren't certain what it entails (think PPACA), so long as it increases their power. And with the attacks on the First and Second Amendments it's no mystery what is entailed. Again, it would be difficult to get a constitutional amendment passed that would end free speech or repeal the Second. But there are other, far more likely ways of getting at the same goal. Obama thinks he has a mandate, the left thinks they have the driver's seat, and they are about to accelerate the war on the Bill of Rights and their political opponents. I don't expect the Bill of Rights to be changed -- passing a new amendment is not easy -- but I do expect all sorts of ruses to try to render it a dead letter.
As dire as the situation is, though, I think it may prove more difficult than they realize. Unforeseen contingencies have a way of interfering with the best laid plans of central planners and men.
*The weapon broke down after firing six rounds. The proper comparison the Wright brothers' first airplane. Success!