Present Bad Interferences To Correct Past Bad Interferences

I know that not everyone is on board with this, but it really is true that most of our economic messes are caused by governments interfering in things they don’t understand competently enough, and by rival politicians (either in the same party, or in opposition) trying to fix the bad interventions with other bad interventions that both exacerbate the original messes, and create new messes at the same time. 

To use a DIY analogy, Dave decides to drill a hole in the wall to put up a picture, but goes through an electric cable, causes a short circuit and starts a small fire; Jenny tries to put it out, but leaves damaged walls that Frank comes round to replaster and paint afresh. In doing so, Frank bashes into a pipe, and floods the downstairs kitchen; whereupon Pete the plumber rushes to the scene, but slips and crashes through the French doors. Monica the glasier comes rushing to the rescue to fix the glass, but cuts her finger and bleeds all over the floor, meaning Charlie has to come and replace the living room carpet, where in fitting it, the hammer flies out of his hand and cracks the floor tiles by the woodburner, and so on.

This is what politicians do to our economy. And all the time, the public are just egging on these mess creators to interfere with different messes. Even when they are not making a big mess, they habitually make small messes and pass them off as tidying up jobs. The example hitting the headlines this week is that in trying to gain popularity by promising borrowers billions of pounds to help them though the mortgage crisis, the opposition parties are merely giving one group of people a helping hand at the expense of other groups. If you fund the mortgage help by increasing the money supply, you make the problem bigger, not smaller. And if you fund it through taxing banks, the increased costs will be passed on to other customers of the bank. 

On the other hand, subsidising the mortgage would have a similar kind of distortionary effect, whereby demand for mortgages increases, and with not enough supply to keep up with demand, the price of property would go up even more. This meddling creates the law of unintended consequence of targeted benefits for one group at the expense of others, to which politicians are either oblivious or indifferent. It’s a kind of pass the explosive parcel fallacy.

And then we get the ingenious idea for rival meddling from Shadow Chancellor Rachel Reeves:

1. Borrowers will be able to switch to interest-only

2. Borrowers will be able to increase mortgage length

3. Borrowers can undo No.s 1&2

4. Six months before lender can start a repossession

5. FCA to advise credit ratings should be unaffected

I’ve always thought of Reeves as being quite dim, but this policy would take us beyond the dim into the downright ethically and economically hazardous. The first four are further examples of the pass the explosive parcel fallacy I mentioned, which is a sub-group of the law of unintended consequences. But number 5 is a completely ignoble form of meddling that distorts the picture beyond what anyone should hope or expect. Were the FCA to start advising under a political mandate that credit ratings should be unaffected by mortgage switches, it would have a terrible effect on the utility of credit ratings, and on mortgage rates more widely. 

Under ordinary circumstances, transparency is important, because if prospective lenders can gauge risks accurately from credit agencies, the lending and the perceived risk of defaulting are fairly well tailored for the transaction. But, if under Labour’s guidance, lenders can no longer trust credit ratings in the same way, they will have to be more risk averse with their loans – which means many prospective borrowers will be unable to get loans for mortgages, and many others will get loans but be forced to pay even higher interest rates.

All these political bright ideas I mentioned above are just the latest in a line of bad interferences designed to clean up the mess created from previous bad interferences, and so it goes on.

Dodgy Belief Bandits: The Hawks, Pigeons and Sparrows

 

There are lots of mistaken belief systems that depart from the facts and logic of their counterpart. The cure to the disease is always the medicine that corrects the damaging symptoms. The cure for atheism and false religion is Christianity; the cure for socialism is good economics; the cure for young earth creationism is biological evolution and sound theology; the cure for astrology is astronomy, and so forth.

But it's clear that people afflicted by dodgy belief systems are not particularly keen to take their medicine. Instead, they often take an ironically absurd view that the medicine they are being offered is really a poison. Having quite a bit of exposure over the years to proponents of these dodgy belief systems, I've observed that the members of these groups largely fall into one of three categories: what I've defined as Hawks, Pigeons and Sparrows.

Hawks
The Hawks are the ones most heavily influencing the perversion of the truth; they are usually public figures who use the dodgy belief systems to establish their own careers, publish their own material, increase their own following, and widely influence the Pigeons and the Sparrows with their distorted views of the world. Most of the untruths and fabrications that make up these dodgy belief systems start with the Hawks - they have a set of carefully rehearsed arguments and statements - and their influence trickles down into the minds of the Pigeons and Sparrows. The Hawks make up the smallest group.

Pigeons
The Pigeons are not as influential or as damaging as the Hawks, but they establish their own perverted influences on the basis of what the Hawks are doing. They forage around for the scraps, and use the influences of the Hawks to share their interpretations of the bad beliefs wherever they can. Whereas the Hawks are likely to be in mainstream newspapers, on TV, and creating their own institutions based on the bad beliefs, Pigeons are more like to be blogging, posting on social media and making comments in debating groups and on other people's pages. The Pigeons make up the middle sized group - they are much larger in number than the Hawks, but much smaller in number than the Sparrows.

Sparrows
The Sparrows are the group that play a much more passive role in the proceedings. They have been influenced by the Hawks and Pigeons, and they believe the same misinformed things that the Hawks and Pigeons believe, but more as background noise, in a much more innocent fashion. If you asked the Sparrows to explain why they believe what they do, their answers would be circumspect, non-engaging and deferential - usually just a brief justification of their naked assumptions, while being unable to formulate proper justifications. The Sparrows are the main victims of the Hawks and the Pigeons - they do not know any better, but they blindly trust their influences, while not being wide influencers themselves. The Sparrows make up the largest group.

You can use the basic algorithm of thinking of an individual and one of their primary dodgy beliefs, and it will usually be fairly obvious whether they are more like a Hawk, a Pigeon or a Sparrow. Consider evolution-denying creationists who hold the absurd belief that the earth is only a few thousand years old. The Hawks are people like Ken Ham (Answers In Genesis), Grady McMurtry (Creation Worldview Ministries), John Mackay (Creation Research) and Kent Hovind (Creation Science Evangelism) - the intellectual fraudsters who make a living and a career out of deceiving people, and whose false teachings gain them a significant following.  

The Pigeons are those doing the most to propagate the falsehoods of the Hawk charlatans - you'll find them scattered throughout churches, writing and commentating online, telling fellow Christians how erroneous and compromising it would be to accept evolution, and being the main champions of the Hawks. The Sparrows are far more innocuous in terms of the pernicious influence of evolution denial - they are not out to cause trouble, but they are, in a sense, the biggest victims of evolution-denying creationism, as they are more numerous, and have remained uncritical enough to have swallowed the fabrications whole.

The falsehoods of those dodgy belief systems are usually equally false, whether they are spouted by Hawks, Pigeons or Sparrows - but the folk who believe in them are not all of the same influence or persuasion.