Belmont Club

Stumbling As Strategy

David Rothkop argues in Foreign Policy the big sleeper story of 2014 is that America has succeeded despite the best efforts of its leaders to fail. After enumerating the world’s catastrophes, he writes: “amid all these stories of 2014, the one that may be the most important is one that no one would have expected”.

America is back. Despite Washington. Despite lousy leadership. Despite the rise of other great powers. Back because its economy is resilient. Back because the other great powers are each facing deep challenges at home — from European coherence to corruption and the slowing growth of job creation in China. Back because America remains a hotbed of innovation. Back because the fiscal deficit that threatened it has receded along with the recession that stirred up fears. Back because it proved that even at a low point in political creativity, the country could flourish — especially in light of the fact that that low point is likely to end soon. …

But the majority of the credit goes to the American people, to American businesses, and to America’s hotbeds of innovation, be they in universities or research laboratories. … Imagine what they could have done with leaders who were more effective at advancing America’s international interests … to better harness the energy and guarantee the future of all U.S. citizens and all those who are here today contributing to our economy?

In the words of the Business Insider, “Asia Slows, Europe Stinks, America’s Great”. Actually relatively few of America’s Founding Fathers would have been shocked by this counter-intuitive result because they understood, perhaps better than we moderns do, how little politicians have to do with the success of a nation. In fact many of the Founders believed the secret to good governance lay in keeping the politicians as divided and as impotent as possible. Checks and Balances meant things were in balance when it took several hundred people to sign a check.

According to that point of view America succeeds not because of the excellence of its Five Year Plan, but because it doesn’t have one. The idea that “in God we Trust” isn’t as crazy as it sounds when you realize it has the benefit of being unbiased. At worst God will be random. When things are random sometimes the wheel of fortune will come up in your favor. By contrast politicians are systematic screw-ups. Events managed by imbeciles and power-mad officials will tend towards imbecility and venality.  The Wheel of City Hall will always come up in City Hall’s favor.

But Rothkop’s cheerful scenario may prove to be only an Indian Summer. Storm clouds on the horizon suggest that God may be spinning the wheel again. Growth in the U.S. manufacturing sector slowed for the second straight month in December, according to AFP. US construction spending unexpectedly falls in November, reports Reuters.

America may still be clinging to the mountain while Europe, Asia and the Middle East are sliding into the crevasse, but there’s a rope around its waist that’s beginning to tighten just now … Moreover, the American political leadership continues to trust in European-style enlightenment with the same fervor the Old Continent does. The California DMV is issuing licenses to illegal immigrants even as people smugglers in the Mediterranean are sending boat after boat, loaded with African refugees in the general direction of the Europe on autopilot, knowing that the authorities must take the unfortunates rather than see them crash against the rocks.  Blind chance would never be so consistently foolish.

Politicians believe that the only reason for their failure is they haven’t tried hard enough. So they’re going to order another product from the Acme Corporation and try again. 2015 is the year Obamacare will finally becomes affordable due to the Employer Mandate, an increase in Individual Mandate Fines and most of all the groundbreaking National Data Warehouse that will store everyone’s electronic health records.

The Department of Health and Human Services (HHS) is looking for vendors to run its “National Data Warehouse,” a database for “capturing, aggregating, and analyzing information” related to beneficiary and customer experiences with Medicare and the federal Obamacare marketplaces. Although the database primarily consists of quality control metrics related to individuals’ interactions with customer service, potential contractors are to “[d]emonstrate … experience with scalability and security in protecting data and information with customer, person-sensitive information including Personal Health Information and Personally Identifiable information (personal health records, etc.).” Vendors are also instructed that one of the requirements of a possible future contract would be “[e]nsuring that all products developed and delivered adhere to Health Insurance Portability and Accountability Act (HIPAA) compliance standards.”

It’s maximum effort across the board. The Washington Post reports the strategy of restricting US advisers to noncombat roles in Iraq is working so well they will probably see fighting soon soon. “U.S. troops have suffered no casualties in the attacks. But the violence has underlined the risks to American personnel as they fan out across Iraq as part of the expanding U.S. mission against the Islamic State, even as President Obama has pledged that U.S. operations ‘will not involve American combat troops fighting on foreign soil.’”

The Washington Post, has a kind of anti-Rothkop list of the tasks our leaders will attempt to make the world a better place in the coming year. They promise to:

  1. Address Syria’s civil war and Iraq’s spiraling violence;
  2. Resolve Russia’s economic collapse;
  3. Restart the Israeli-Palestinian peace process;
  4. Improve the European Union;
  5. Rebuild post-war Afghanistan;
  6. Defuse a crisis in Sri Lanka;
  7. Resolve the crisis in Yemen and Libya;
  8. Make a nuclear deal with Iran;
  9. Stop a newly resurgent Ebola in Africa;
  10. Reduce tensions between China and Japan;
  11. Fix global inequality;
  12. Reach out to North Korea to moderate their immoderation;
  13. Solve the plight of the Rohingya Muslims in Burma who are menaced by Buddhist extremists

One thing you can say for our leaders is they are persistent.On radio yesterday I heard the voice of French economist Thomas Piketty being interviewed by a gushing Australian radio personality who admiringly described how he understood economic development in ways that Americans never could. Thomas Piketty has been awarded the Legion d’ Honneur largely on the back of his runaway besteller Capital in the 21st Century.

Thomas Piketty (French: [t?’ma pik?’ti]; born on 7 May 1971) is a French economist who works on wealth and income inequality. He is professor (directeur d’études) at the École des hautes études en sciences sociales (EHESS) and professor at the Paris School of Economics.

He is the author of the best-selling book Capital in the Twenty-First Century (2013), which emphasizes the themes of his work on wealth concentrations and distribution over the past 250 years. The book argues that the rate of capital return in developed countries is persistently greater than the rate of economic growth, and that this will cause wealth inequality to increase in the future. To address this problem, he proposes redistribution through a progressive global tax on wealth.

With all these awards he must know something and as proof, his expert plan to achieve progress calls for more taxes.  Global, progressive taxes. It fits in with all the rest of the world plans for improvement. The best and the brightest have examined the human condition and decided what mankind needs is less consumption, more rationing, tighter regulation and more accommodation with tyrants.  And more taxes.

The Great and the Good don’t believe in miracles for the very simple reason that they believe in themselves instead. Dr. Richard Smith, a prominent British doctor says “cancer is the ‘best death’ – so don’t waste billions trying to cure it”.  After all, not even the National Data Center, Obamacare or Thomas Piketty can cure cancer.  So it must be hopeless.

If admiring American health care planners are listening closely to Dr. Smith, it is easy to see why they might nod in approval. Diseases like cancer are the products of randomness.  And randomness is the anti-Five Year Plan. Despite all our efforts at wellness a study from Johns Hopkins concludes that cancer is mostly caused by “bad luck”.

Lifestyle choices and genetics are big risk factors for certain cancers, but a new study concludes that the majority of cancer incidence is due mostly to bad luck when our cells divide.

The study comes from scientists at the Johns Hopkins Kimmel Cancer Center who created a statistical model to measure the proportion of cancer cases that are caused mainly by random DNA mutations during stem cell division.

By their calculations, two-thirds of adult cancer incidents can be explained by “bad luck” when stem cells divide.

Curing cancer is beyond the power of the Great and the Good but not perhaps above the capability of human innovation over the long term.  The reason is that miracles, like cancer,  arise from the unforeseen. The very same randomness and creativity which give rise to the world’s problems potentially also give rise to some of their solutions. Innovation by definition is whatever we haven’t thought of yet. It is whatever we have failed to include in the Five Year Plan.

Freedom implies doing something really new.  That’s always risky business.  The better plan is to repeat all the old things and call them new.

The events of 2015 will be shaped, as always, by the interaction of planning and luck.  It will be determined by the interplay of the wisdom of crowds and the snares of the great.  Our leaders will want ever-greater control and most of us will have the good sense to resist. “I aim to misbehave,” may not only be a cool movie line.  It may be our only hope for long term survival.  They scheme and we dream. And so it goes.

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