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11/30/2008

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Brett Bellmore

I'm having a bit of trouble figuring out how opposition to gun control is supposed to be *opposed* to libertarianism. And the idea that this 'crisis' to the extent it is one, is a result of insufficient regulation verges on the delusional. This is not your best piece of work, by a long shot.

neilehat

Jim, Don't forget a good cigar with that drink. Oh..., That's right, the "Do Gooders" have banned them in our self interest! Alcohol is next. Ahh ..., what sweet madness.

John Seater

Scott deB responded (2Dec) to my earlier (1Dec) comment:

"This is precisely the problem. Akin to what Japan experienced in the 90s. Rock-bottom interest rates yet no lending. A very bad situation to be in."

Scott's remarks about the volume of lending reflect the language routinely seen in the "news"papers but are grossly inaccurate. Just check out the St. Louis Fed's FRED database for the volume of bank credit in the fall of 2008 to see that it *went up* rather than down. So did the volume of consumer credit. A longer discussion can be found in Chari, Christiano, and Kehoe's working paper #666, Oct 2008, from the Federal Reserve Bank of Minneapolis. In short, the routine assertion that there was "no lending" is completely wrong.

Discussions of the financial "crisis" and the future of conservatism are not very useful if they are based on extreme misperceptions of reality.

emerich

I'm stunned that neither Judge Posner nor the many commentators seem unaware of the government's biggest role in creating the crisis: its aggressive encouragement of sub-prime lending via the Community Reinvestment Act.

The CRA, created under Carter but given bigger teeth in 1993 in the Clinton administration, created de facto quotas for banks to lend to "under-served" (poor and minority) borrowers. Home-ownership rates rose as a result from 64% in 1994 to 69% in 2003, the highest in our history. All these new buyers in the market put upward pressure on housing prices and help feed the delusion that housing prices go only up. To accommodate all those new and financial weak buyers, time-honored lending metrics, such as 20% down requirements and prudent loan-to-value ratios, were junked.

Then there's Fannie and Freddie. I know Judge Posner knows what moral hazard is. Every attempt to reform those creatures of the government (Fannie was spun out of the Federal government in the late 60's) were opposed Congress. In 2005, Greenspan said: "If we fail to strengthen GSE regulation, we increase the possibility of insolvency in crisis." Earlier this year, even a Congressman had the honesty to admit his and his colleagues' role:

"Like a lot of my Democratic colleagues, I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie: We were wrong." (Cong Arthur Davis, D-Alabama)

In the absence of the role of government programs and creatures of government such as Frannie and Freddie, the housing boom wouldn't have been nearly as extreme, sub-prime CDO's would have been much smaller in quantity, and we would most likely be in a run-of-the-mill recession instead of a "crisis."

Looks to me more like unintended consequences of government programs that innate weakness in free markets, and more like wrong-headed regulation than "deregulation" to me.

emerich

Needless to say, "unaware," in the first line, should be "aware." sorry.

Chris Graves

I disagree with Judge Posner this week in much of his comment. My disagreement centers on one basic starting point. While I agree that Judge Posner does accurately identify several aspects of conservatism and the different factions bringing a different focus to these various features of modern conservatism, he overlooks and then attacks what I see as being at the heart of conservatism, viz. veneration of a rooted way of life that provides continuity and stability in which to live. This core of conservatism dates back to Edmund Burke’s attack on the decontextualized implementation of classical liberalism in France at the time of their Revolution. Burke correctly predicted the rise of a dictator (who turned out to be Napoleon) to reestablish order after the revolutionaries destroyed many of the institutions and customs that facilitated daily informal living arrangements that had taken centuries to develop. I get the sense that Judge Posner is as tone deaf on these kinds of issues of social complexity as were Keynes and Bentham.

As Friedrich Hayek pointed out, no one mind or committee of people can process the barrage of complex information that is necessary to understand and then regulate an economy or society. The process that works well in the physical sciences of isolating variables and then analyzing their causes and effects is not appropriate to the social sciences since social phenomena are not reducible to the causal interactions of individual elements. In fact, social or economic phenomena do not function at all unless there are large numbers of actors gathering within certain structures. Only then are the players able to perform their roles within the overarching structure. These interactions are so complex that no one person or small group of persons can ever adequately grasp what is occurring and how it is occurring. In economic relations, price acts to transmit vital information that coordinates individual actors in the system. In a social system, tradition and custom serve to coordinate the actors. As Burke observed, tradition also operates to condense information about the optimal way some common issues should be handled as it synthesizes the collective experience and judgement of many people over time within a certain social environment. As times change, people adjust the tradition accordingly in their daily lives as they respond to shifting factors. The individuals on the spot can make the appropriate determinations of what aspects of their accustomed way of life to adjust much more effectively than can a central planner.

The scientific pragmatism of John Dewey falls into the same problems that Hayek identified with Keynesian and Marxian economics, viz. a social scientist cannot effectively process and analyze the barrage of constantly fluctuating complex social and economic relationships as they open out to even more dynamic relationships. While we can understand some basic general principles that govern human conduct, a judge or a social scientist cannot ever grasp the enormous complexity of the entire web of economic or social relationships even in, say, one neighborhood as James Q. Wilson observes in American judges’ repeatedly failed attempts to alter the racial power balance in neighborhoods they have attempted to socially reconstruct. As G.E. Moore advised us concerning utilitarianism, one should not think as a pragmatist on pragmatic grounds.

I do think that we can learn from Dewey’s very insightful analysis of aesthetics. Dewey sees art as identifying and expressing essences. Aesthetic intuition allows us to identify these essences, which are meanings made more clearly evident. This understanding is heightened in conversation in which we spontaneously cooperate with others to clarify these meanings. Humans adapt natural or social events for the purpose of conversation. The arts provide a forum for conversation that allows us to form common understanding and meaning. Scientific or logical statements can be delivered artistically with greater force and impact. The arts also create a common perceptual field permeated with emotional pulls and repulsions that shape our immediate visceral engagement with our surroundings. Without this aesthetic/emotional sense, we would be unable to function normally in the world. Merleau-Ponty developed a similar analysis demonstrating how a person spontaneously interacts with the environment effortlessly and artfully. When the person cannot move freely in this way, pathologies are sure to follow. In the analytic tradition, Allan Gibbard in his *Wise Choices, Apt Feelings* has argued that feeling appropriate emotions in relation to others’ actions facilitates socially harmonious interactions. So, the claim made by Judge Posner that there is an inherent dichotomy between the emotional and the intellectual is not well founded. In fact, what some aspects of contemporary global capitalism along with the liberal/left are creating is an aesthetic and emotional wasteland for people to live in. Intellectuals and elites have turned from beauty and social harmony to outlandish attacks on the Christian Western tradition.

I would argue that Darwinism and materialism form a key part of creating this social garbage dump that we are being forced to live in. First, the evidence against Darwinism is overwhelming. Niles Eldredge correctly observes “Darwin's prediction of rampant, albeit gradual, change affecting all lineages through time is refuted. The record is there, and the record speaks for tremendous anatomical conservatism. Change in the manner Darwin expected is just not found in the fossil record” (*The Myths of Human Evolution,* 1982, p.45-46). Evolution in the sense of offering an explanation for the origin of life and its diverse forms fails on empirical grounds if nothing else. As I have pointed out previously, the debate on this issue is really one between atomists and teleologists, not between advocates of the scientific method and the superstitious. William James, a pragmatist par excellence, argued that the moral dimensions of a theory must be taken into account in distinguishing various scientific explanations. When we consider the practical effects of Darwinism on the psyches of those who have been immersed in it along with its implicit atheism, (in fact, we can consider Darwinism a creation myth of the atheist materialist), we find a sense of despair, darkness, hopelessness pervading the minds of many today. The insights of King Solomon reflecting on life under the sun in Ecclesiastes came to the conclusion that all is vanity. We are rediscovering Solomon’s conclusions for ourselves today as we experiment in all that this life has to offer apart from the transcendent. Instead of relying on the truth of Christianity as well as the media of our European traditions that include pagan images that have been de-spiritualized, the young have turned to a black nihilism that naturally flows from the claims of Darwin. As Cornell biologist William Provine correctly points out, Darwin drove a stake through the heart of the religion and culture that had shaped the civilization that nurtured him.

Darwinism is a key part of today’s Zeitgeist that conservatives are rebelling against. Intellectuals can fall prey to a “group think” among themselves that denies basic tenets of Western civilization that includes an adherence to atheism, materialism, scientism, internationalism ( in the sense of superseding nation states or regionalism with a super-state), pluralism, inclusivism, moral nihilism (on the individual level), and equality of result. We need to find allies wherever we can. Certainly, they can include intellectuals who have escaped the materialist paradigm, but a conservative alliance can include average people who simply have the good sense and courage to fight for their traditions. Nowadays, average people with common sense are more likely to be reliable stalwarts against the onslaught from the atheist left.

What we need to restore is not the Republican Party per se, but the Western tradition that has brought us unprecedented freedom, prosperity, spiritual and intellectual enlightenment, health and longevity, art and science, civility, and a more humane and beautiful way of life for centuries. We should not be partisans about this decline and threat to our way of life. I was brought up in the South and so I naturally gravitated to the Democratic Party and until recently always voted for conservative Democrats for offices other than President. I am encouraged by the recent influence of Jim Webb in the Democratic Party. So, the issue is not a partisan one for me. It is a matter of life and death for us all, and that life and death struggle is to be won in conserving the truths that have evolved in our collective understanding through centuries of experience that we have been in the process of foolishly discarding en masse for the past few decades.

neilehat

Chris, Welcome to the wonderful world of Epistlemology. Where all try to impose some form/ degree of order and meaning to an otherwise un-intelligble world. Hence the rise of Ism's and Ologies. Moore's attempt rests on a linguistic and Common Sense approach. While Russell/Wittgenstien went cartwheeling through the Logical approach. Developing the Analytical School. As for Pragmatism, it's basis lies in the desire to establish Epistlemology on the practical consequences of thought/action as the basis of knowledge.

Conservatism and Liberalism are attempting to do the same in the Socio-Political realm. The end result is an ossification into Ideology and the creation of an otherwise un-intelliglble world. Hence the need for a move to Pragmatism to break the deadlock.

Remember, its come time "to think anew and act anew".

Chris Graves

Thanks for the welcoming comments, neilehat. I am very much in agreement with a certain variety of pragmatism but very much opposed to another. The version of pragmatism that I accept is a blend of rationalism and empiricism along the lines Kant articulated. As Kant observed, "Thoughts without content are empty; intuitions without concepts are blind." So, to function effectively in the world one needs both concepts and sensory experience. Or as William James said, without conceptual categories experience would be a "blooming, buzzing confusion." At the same time, Kant observed that we need to adjust our theories to reality since "what is true in theory is not always true in practice." There has to be a reasonable, contextual modification of what our conceptual analysis predicts would be true in certain cases in light of what we actually experience. For these reasons, some have labeled Kant a pragmatist of a certain sort, and this is the sort that I am in sympathy with.

I think we could say something similar of Edmund Burke. He was guided by principle, but he argued that the application of abstract principles must be adjusted to a certain time, place, and people. In the opening pages of *Reflections on the Revolution in France,* Burke accepts the classically liberal political theory the French revolutionaries are operating from. He very much disagrees with the wooden, ideological way that they imposed theory on people from the top-down without regard to French religion, culture, history, temperament, or common sense.

Contemporary political scientist, Kenneth Minogue, has made a clarification that we need to take advantage of here and that is between philosophy and ideology. In his book *Alien Powers: The Pure Theory of Ideology,* Minogue argues that ideology as such is not philosophy. It is an all encompassing attempt to reduce the entirety of human experience to a simple set of presuppositions. For example, Karl Popper observing that Marxists can take anything and everything from the trivial to the grand and reduce whatever they observe to class interest. Radical feminists reduce even the most innocent comments or body language to sexism and male oppression. Nazis reduced any and all social problems to the nefarious influence of Jews. In contrast, philosophy seeks to understand what we directly experience by identifying relevant principles that govern reality, whether social or natural. Philosophy is closer to science in that it attempts to rationally and objectively identify governing principles in the universe as does science without restricting itself to what can be empirically verified.

So, a full-blown pragmatism a la William James and John Dewey as well as less obvious pragmatists David Hume, Richard Rorty, and Ludwig Wittgenstein reject the view that reality is rationally structured. They argue that nature and human action are inherently structureless and unpredictable. There is no rational foundation to reality, so anything and everything might happen. There is no rational framework that shape experience or an independent reality. We can only know what is before us at this moment (phenomenalism). Therefore, the course of action that we can "reasonably" expect to take can only be short-run and then deal with ramifications from each short-run decision as they come. In effect, they undercut the entire enterprise of science and philosophy. The full-blown pragmatic view is very similar to Lucretius' atomic swerve. You never know when it is coming or where it is going. Judge Posner seems to buy into this view of human existence as inherently changeable and radically unpredictable. I just cannot accept this view. While I do agree that things do not always turn out as expected, as Kant observed, or no one can simply impose a rationally consistent theory on a rooted culture and not disrupt a complex order that cannot be reduced to a limited set of propositions (as intellectuals are prone to wanting to do), I do not see everything in capricious flux. I do not think human nature or social relationships are in open-ended, erratic process of mutation. Contrary to Darwin, I do not see the natural world that way either.

Again, I think that we have to grope for a balance here between aspects of reality and human capacities to grasp where we are in that reality. We need ideas and reflection as well as experience and reality testing. There is a rational order to life, but at times, we cannot find our bearings on the compass. We are thrown into a particular time and place with its own idiosyncrasies, but yet there are universal truths that can give our personal experience meaning and purpose.

Terry Bennett

I for one was hopeful when George W. Bush proclaimed in his first (I think) State of the Union address that the debate over "more government, regardless of the cost" and "less government, regardless of the need" was to be relegated to the last century. That was the last I heard of it - bummer.

Pragmatism is fine, but we don't all agree on what "works". For some, it's preventing murder, and for others, it's being rid of the unwanted responsibility of a child incontinently conceived. The ideologues themselves are not just spinning their wheels to make life hard for those who disagree with them. They are after a particular world order that "works" as they see fit.

I am an unapologetic capitalist, because I believe down to my toes that each individual's toil is a primary life-lesson (and to expose once and for all the meaning of life, we are here to learn). It is appropriate to our experience in this time that we take individual responsibility. On the day that we all feel a presumptive universal love for one another, like a family, communism will be appropriate.

Above all other American blessings, I cherish the environment of freedom wherein I can accumulate wealth to whatever degree I choose, or live stupidly if it happens that my lessons lie there. If that makes me a conservative and / or libertarian rather than a consequentialist, then I must doubt that conservatism shall disappear in my lifetime.

Wag the Dog

"Epistlemology"

Hmm... is that the tendency to post over-long and self-indulgent posts/personal manifestos on blogs?

Epistemology, maybe?

Wendy

Nice try. You can't blame this on the free market because there is no free market. This collapse was 100% caused by the government. How can you know about the roles of the Federal Reserve's irresponsible currency inflation, the GSEs, the FHA, the CRA, the underwriting rules imposed by the government, and the mark-to-market rule and still argue that the free market caused this?

The attempt to see things as non-ideological, pragmatic, or "Third Way" is nothing but a cynical con game designed to support the irrational ambitions of people who want to have their statist cake and eat it too. The latest prominent example of this is Krugman declaring that The Great Society wasn't actually Keynesian policy. It was Keynesian policy. Just stop with the B.S., people. Just admit that government interference in the private sector is causing our problems.

Ken

Judge Posner,

I enjoyed your commentary as usual. I saw a documentary a little while back about Barry Goldwater made by his grand-daughter. I was heartened by the fact that he seemed to be praised more by people on the left than on the right. I think the true center of the country is slowly shifting to a world-view that describes itself as socially liberal but fiscally conservative. I hear more and more people describe themselves in this way. A person thusly described does not really fit into the Democratic or Republican party. Maybe the established parties have some catching up to do.

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stevelaudig

I'd like to know if any of this is blogging is done at a government office, on a government computer. A conservative wouldn't use government resources for a private venture.

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