Baseball Economics

Trying to explain America without baseball is like trying to explain France without all that "surrendering." Considering that Baseball is America's Pastime, it should not be surprising that it contains lots of "data" that can be "weighed, measured, and analyzed" by evil republican's such as myself.

Therefore, it should not be surprising that there is a whole website devoted towards sifting through the data and explaining why all those GM's and owners are dopes. If you are really interested in baseball statistics, www.baseballprospectus.com is an invaluable resource.

One particular page on this site that I highly recommend is this page http://www.baseballprospectus.com/statistics/standings.html, which readjusts the standing utilizing various statistical mechanisms.

There are two divisions that really do not make much sense. Prospectus projects the Boston Red Sox to be leading the AL East by at least 3 or 4 games over the New York Yankees. In reality, the Yankees hold a 10 1/2 game lead and are posed to win their 8 division title since 1996. The Red Sox are doing -8.3 games worse than they should be while the Yankees are doing 6.6 games better than they should be.

The statistics here may be skewed, as the Yankees pitching is not as bad as the statistics are saying it is (this is because injuries have plagued the Yankees staff. For a good month and a half, the Yankees had to put 3 or 4 bums out on the mound.) The past week has seen stellar performances by Kevin Brown (2), Javier Vazguez (1) and Orlando Hernandez (3). If Mike Mussina comes back healthy, the Yankees staff is actually a bit above average on paper. Regardless, I cannot think of one reason why the Yankees should be this far out ahead of the Red Sox at this juncture.

The second division that makes the least sense is the AL East, where the New York Mets are projected to be in second place (albiet, all teams should be within a few games of eachother). The Mets have 2 of the highest rated pitchers in the league (Tom Glavine and Al Leiter) and a third ranked as above average (Trachsel). So why are the Mets so bad?

Well, understanding why the Red Sox and the Mets consistently underperform is an extra-statistical (perhaps even metaphysical question).

Newsday's pathetic Economics

As everyone who lives on Long Island knows, Newsday is one of the worst written partisan shrills in existence. Their analysis is pathetic and poorly argued. Nevertheless, I am a Long Islander and I do occasionally suffer through the paper in order to get some news. Today was such a day and I wrote the following letter infuriated at their "reporting" the new economic statistics:

Dear Editor:

If Newsday insists on being a propaganda machine for the Kerry Campaign, they should drop their phony pretense to objective news coverage. As a graduate Economics student, I was appalled with Newsday’s coverage of the recent spat of economic statistics (“Good and Bad News on Jobs”). Newsday asserts that “The recent run of federal statistics have painted an uneven picture with modest growth in car sales, slumping consumer spending, rising inflation and oil prices, slumping stock prices, and a mounting federal deficit.” One would think from these numbers that this “uneven picture” meant the world was collapsing.

Of course, none of this is remotely true. The underlying numbers support a continuing robust economy. The index of manufacturing activity rose for the fourteenth consecutive month. Consumer confidence is high. The retail market is strong and the housing market continues to grow. Nor is Newsday’s coverage of the employment figures and budget deficit fair. Unemployment is at 5.5%, down from 6.3% at the end of the last recession. In fact, unemployment is exactly where it was when Bill Clinton was running for his second term. The budget deficit is projected to fall to $331 billion next year and then to $229 billion by 2009, bringing it to a manageable level. For a country that experienced a recession, a massive terrorist attack, two wars, and corporate scandals it is remarkable that our economy has held up so strong. It is unfortunate that Newsday fails to mention any of this.

Matt Festa
Mineola, NY

Jobs numbers

The data is in and last months job creation number is below expectations. Non-farm payroll jobs increased by only 32,000 this month, which is way below expectations. On the flip side, the unemployment rate dropped from 5.6% to 5.5%. Surely the liberal media is going to give the Kerry campaign lots to play with here, but the reality of the situation is that our employment numbers are fine.

The media and the Kerry campaign will decry the mere 32,000 jobs created and 5.5% rate of unemployment as sure sign that the Bush campaign is a malignent cancer, probably put in place by the Saudi Royal Family, that must be thrown out in order to go back to the days of "low unemployment."

But, as Steve Antler points out, strong evidence exists that without the tech boom the lowest rate of unemployment during the 1990's boom would have been 5.5%

http://www.econopundit.com/archive/2003_09_01_econopundit_archive.html#106286508959156382

This supports my contention, and the contention of most economists, that America's natural rate of unemployment is somewhere around 5.5%, which is what our current rate currently is. This means that economy is back at full employment and growing at its natural rate.

If this is the case, it is impossible to get the unemployment rate back to its low of 4.0% without experiencing sustained and harmful inflation, which is worse than the supposed cure.

No matter, though the real economic data supports the evidence for a robust recovery, the Kerry campaign and their allies in the media will get nice news clips out of this.

Death of Political Science and Economics

One of the conclusions that I have drawn from my publius fellowship is that political science and economics are both in SERIOUS trouble. The problem centers around method. In both political science and economics the diciplines have discarded natural law/natural right in favor of the empirical method (statistics, logical positivism). Because of this, economics and political science are unable to give an account of themselves. Economists cannot tell people why property rights are just and political scientists cannot tell us why democratic republics are better than tyrannies.

Leo Strauss, in Natural Right and History (currently reading), gives us an account as to why. Since political scientists had rejected natural law, they had no principle reason to object to fascism. Behaviorialism, the dominant theory of the time, was unable to say "Hitler is evil." Likewise, economists at that time were completely unable to make the moral (and economic) case against communism and socialism. John Maynard Keynes, the most famous economist of the 20th century, claimed that his theories were as compatable with communism as they were with capitalism. (Note: Keynes was anti-communist. I am just using this to show that he had no PRINCIPLE reason for opposing communism.)

One would think that things are changing today. Political science had its Strauss and Economics had its Milton Friedman (and the Austrians like Hayek). Yet the disciplines are in even worse shape today than they were in the 50's (which is saying something!). The American Political Science journal recently ran two articles. One article argued that no war existed between liberal democratic republics and hence peace would reign once the world democratized. The other argued that no war existed in an autocracy. Which one should we choose? and why? Well, political science cannot answer that.

Economics is a little better. Most economists today accept the basics: private property, markets, incentives, etc. Yet they too are delving into areas they do not belong when they claim that all human behavior is "economic." They try and argue that everyone is a rational optimizer (weighting costs and benefits to maximize our utility). If this is taken as literally as the economists is trying to argue, then humans are incapable of transcending their base self-interest.

In order to overcome this absurdity, we need to return to the classical understanding of natural law. Economists must understand that "rational optimization" really means that all humans by nature seek happiness, which has a far broader meaning than what is currently being suggested. Political scientists need to crawl out from under the hole they have been living in for the past 50 years and start articulating what the best regime is.

Until this happens, the citizens of the United States would do best to ignore the prestigious journals and rely on their flawed, but more accurate, common sense.

Foreign Policy

For the first time in the entire program the Publius fellows showed a split. The issue at hand was American foreign policy and what the role of America should be with relation to the world. During the course of the discussion, four major foreign policy approaches were discussed.

1) Isolationism-this is the ridiculous idea that America's problems will just go away if we just shut down the borders and bring the troops home. These people seem to have no idea that America's economic and military power is dependent on an open society with free trade. Isolationism does not work when you are the greatest superpower on the planet. To my knowledge, no one held this opinion.

2) The Founders approach-This approach, which ended up being my view, cannot be reduced to modern "realist," "idealist" classifications. The founding fathers wanted to have a foreign policy that was centered around American interests but was not divorced from the principles of morality as laid down in the Declaration of Independence. They were skeptical of permanent treaties and humanitarian missions for the sake of humanitarian missions. Sure, when America had to act, they would act with the principles of justice and liberty, but they would not succumb to the imperialist temptation that their European counterparts did.

3) Wilsonian Idealism- This is the progressive approach to foreign policy that begins to fudge the distinction between domestic and foreign affairs. Wilsonians want to take the same tasks that government has with domestic affairs (promotion of political rights, democracy, education, tree hugging) and export them abroad. This sounds tempting but quickly becomes untenable when you realize its implications. Besides the United States and ARGUABLY Europe, most of the rest of the world is in a Hobbesian hell-zone. People in that area are constantly at war with exceeder and vocational problems are severe. For America to devote its task to spreading democracy anywhere, without regards for the cost, is to destroy the original intent of foreign policy: to secure the natural rights of the people living under the constitution.

4)Neo-Conservatism-This tries to take what is good from the Wilsonian approach and good from the founding approach and mend the two into one package. Some forms of this approach, like that of Charles Kraughtheimmer (sic), are very close to the principles of the founding. Others, like that of Bill Kristol, tend to fudge the approach of the founding and look more like Wilsonianism.

The divide in the class fell within two groups
1) Those who were with Mr. Kraughtheimmer-like me and a few others
2) those we were hard core neo-conservatives-the rest

The neo-conservatives argued that National Greatness was an indispensable doctrine to raising American from their crass self interest. My response is that declaring war on 2/3rds of the world is not a good way to promote the higher virtues. They responded that they were not advocating declaring war but rather for calling a spade a spade. In this we agree. Yet them seemed to be too willing to engage in warfare.

My main point is that there are severe security threats to the US today (witness the Middle East). Americans should focus their main focus to this region and attempt to wage just war there. Americans will support a war that has a strong relation to its own self-interest over a war that has nothing to do with American interests (like Somalia). The Founding Fathers were perfectly willing to call a spade a spade, but they realized that America, no matter how powerful, will never be able to force freedom and equality on people that have had no prior experience, have no republican habits, and have severe factional problems.

(Note: I am not in anyway arguing against what we are doing in Iraq. I agree with trying to stabilize that area because America has no other choice. Stabilizing Iraq will go a long way towards solving our problems with Terrorism).

The Theological-Political Problem

The central problem the founder(s) of a regime must face in establishing a form of government is the relationship between the religion and the polity. If the regime cannot justify itself to the religious polity, then it will never be able to succeed. In ancient times, the theological-political problem was much easier to solve. Laws of the ancient city were derived from the God of that city. Greek cities derived their laws from the pagan gods. Jewish people derived their laws and government from the revelatory laws of the one God.

Christianity caused a significant departure from this model. It separated God from the laws of the city. The famous phrase in the bible that illustrates this is when Jesus says, "render under to Caesar what is Caeser's, to God what is Gods." Christ's kingdom is not of this world and thus ultimate authority does not reside with him, but with Christ. For over a millennium, Christian and political thinkers were trying to figure out a way to solve this problem. They asked themselves, "how do you create loyal citizens when the religion claims a source higher than the city?" This question is the main indictment of Machiavelli.

In my opinion, no absolute solution is ever possible. The only recourse Christians have is to take note of Augustine's city of God and City of Man. Because man is in a fallen nature, there is no way that the City of God can ever be brought down to the City of Man. Therefore, Christians must accept the fact that the regime will not be perfect.

The American founders attempted to solve this problem by lowering the aims of the political sphere. The American government is not the ultimate authority over its citizens. It is authorized to do certain things, to do them well, and order its citizens in the habits they will need to become as happy as possible. Church, therefore, is responsible for the salvation of the souls.

This is a good solution, considering the state of the polity. For over 200 years, the American regime has fostered peace and prosperity. Today, however, it is in danger of falling prey to the dogma's of relativism and secularism that seek to destroy any and all religion. Since American's are free by nature to pursue and worship God, it is now the task of those who are loyal to the regime to see to it that the secularists are defeated in this battle.

Movie Review: Spiderman

Spiderman 2 picks off right where the first one left off. Peter Parker, having been given spider like superpowers, rejects the offer of love from Mary Jane out of fear for her life. Parker now has to live with the consequences of rejecting love for the life of a superhero and the second movie deals with the reprecussions of this choice.

Spiderman 2 deals with honor, sacrifice, and courage. Yet the movie does not potrary a fairy tale version of the life of a hero. The movie shows that choosing the heroic life has its consequences. Mary Jane despises Peter for being distant and his best friend is furious at Parkers protection of Spiderman (Spiderman caused the death of his father, the villian of the first movie). Parker is fired from his job for being late, his grades are slipping, and he forced to live in a one room shack. The entire first half of the movie deals with Parker's response to his altered circumstances.

Most have compared the movie to Superman, which is considered the best of the comic book movies. But such a comparison does not do Spiderman 2 justice. Spiderman 2 is easily the best comic book movie that has ever been made because it transcends its genre. The movie is not merely a comic book movie. It is a movie about heroism and love that happens to use the comic book motif to tell its tale.

Safety in Iraq

The New York Times reported last week that the United States is significantly behind its post-war reconstruction effort. Bremer has promised to employ 50,000 Iraqi's to rebuild Iraq's electricity grid and only 20,000 have been hired so far. Also behind scheduale is road building, sewage repair, and other infrastructure.

This is actually fairly easy to explain: the United States has ignored law and order issues at the expense of economic issues, which is classic New Deal liberalism. Instead of focusing on safety issues (setting up an Iraqi police force, court system, routing out the terrorists) the U.S. focused on food distribution, recreating and economic rehabilitation. That stuff is all fine, but without safety none of it will be long lasting. Entreuprenuers are afraid to go into Iraq because the risk of investing is too high and citizens are fearful of the insurgents. It seems that the administration made a huge mistake in downplaying safety issues after the war. This mistake gave ample time for an insurgency to take place and a counteroffensive to be launched.

With that being said, it seems that the adminstration has realized this and reversed course. Prime Minister Allawi is talking tough and proposing tough law and order policies in order to render the insurgency irrelevant. In the upcoming months, we will see if Allawi is able to act on what he promises

Limits of Social Compact Theory

The social compact is the modern theory of government that underlies all liberal democratic regimes. This theory has its origins in the thought of Thomas Hobbes, who argued that in the state of nature there is no natural government. Because the state of nature is the state of war, people leave in perpetual fear for their self-preservation. To get out of this state of war, the people get together and form civil government to create a peaceful order.

Without entering into a debate on John Locke, Locke also believed that in the state of nature life was "nasty, brutish and short." In contrast to Hobbes, however, Locke believed that all governments received their power from the consent of the people. Without consent there was no just government.

This theory is the main justification for the revolution against the King of England. The King was trying to tax the people without their consent and was thus ruling as a tyrant.

Many consider the American regime to be based solely on this premise of the "social contract." It does, however, have two main draw backs.

1) It precludes the need for a founding. If you take the Hobbesian teaching to its extreme, all one needs to do to form civil society it get people in a room and hatch out a contract. Nowhere is there any mention in Hobbes' account for the need of a "founding," in the classical sense
2) It relies solely on a utilitarian or self-interested theory of government. While this theory has its advantages it also has its limitations. The drawback here is that if people rely solely on self-interest, their consent will always contain a "but not in this case" clause. For instance, if the goal of the regime is self-preservation, why should I lay down my life for the sake of my country? This in and of itself shows the drawback of the Hobbesian thesis.

After the Articles of Confederation were in operation for a number of years, a number of founders recognized this flaw in the social compact theory and saught a solution. Their solution was published in the Federalist Papers (Madison, Hamilton, and Jay) and contains the following premise

1) A founding is necessary to a republican regime. You cannot rely solely on enlightened self-interest
2) The union needs perpetual upkeeping. It will not survive on its own without the proper mechanisms and people.

To solve this problem, the authors of the Federalist went back to the classical understanding of "founding" and to the thought of Montesque. Their solution was a constitution that was to be revered and a separation of powers doctrine that would keep the federal governemnt from ovvereaching.

Thus, to call the American founding completely Lockean or completely modern is missing the bigger picture. While the American founding contains many Lockean elements, it also recognises the limits and the drawbacks of Locke's thesis.