A Skeptical Audience

So Donald Trump fired FBI director James Comey, as everybody knows by now. This immediately drew parallels to the Saturday Night Massacre, where Nixon ordered his Attorney General to fire special prosecutor Archibald Cox.

At the heart of the matter are three questions. First, whether Comey was the best person for the job. The second question is whether this will hinder any ongoing investigations, specifically the investigation into Russian involvement in the Presidential election; and what if anything will be done to safeguard these investigations.

The third question is the most important, and is simply; which of the first two questions did Trump answer when firing Comey? That is, did he fire Comey because he felt Comey wasn’t a good director? Or did he fire Comey specifically to stop the Russian investigation (or any other)?

If it’s the first, and Comey wasn’t the best fit for the job (or even if Trump just honestly thinks so), then there’s no real problem. If it’s the second, then basically Trump is abusing the office to enact a personal agenda, using the department of justice as a political tool, and obstructing justice. Essentially, what Trump did is either a standard (if somewhat unusual) way of acting as President, or an impeachable offense; either it was as bland as Bill Clinton dismissing FBI director William Sessions, or as corrupt as Nixon firing Cox.

* * *

Having just finished a class on negotiation; I was struck by an study by Huthwaite inc, called “The Behaviors of Successful Negotiators” which looked at (no surprise here) the behaviors of successful negotiators. It was one of those truly great readings, the point of which seems obvious to me after reading it, but never once occurred to me beforehand. There were some behaviors which were kind of boring, (such as skilled negotiators talking more about long term topics), some which were somewhat reasonable but not much use elsewhere (skilled negotiators don’t have a predetermined sequence of when they wish to discuss which issue), but some which were meaningful and profound.

The fact I was most impressed with were the fact that skilled negotiators rarely used words like “generous,” “fair,” or “reasonable” to describe their own offers. Within a negotiation, calling something “fair” which you present, even if you think it is fair, is unlikely to convince your counterparty; it will only serve to aggrevate him or her if they don’t think its fair.

The second fact which I thought was really valuable was that skilled negotiators often made fewer arguments in their favor; but those were typically better quality. That is, if you’re trying to convince a hostile (or even skeptical) audience of a fact, and you present 5 arguments, they’re naturally going to latch on to the weakest argument you make. People are not rational Bayesian calculation machines, 2 strong arguments in favor are greater at convincing humans than 3 strong and 3 weak arguments in favor.

In both cases, the lesson is similar, in convincing a skeptical audience less is often more. Using more neutral language is more persuasive than persuasive language, and using fewer arguments is more persuasive than using many. The stronger you believe something (or come across as believing that thing), the less persuasive you can be to a skeptical audience.

* * *

Today, while packing up my apartment, I was listening to a several months old episode  of Bill Simmons’ podcast, the BS report. Simmons’ guest was one of my favorite essayists, Chuck Klosterman. In it, they were discussing who the NBA MVP will be, Russell Westbrook or James Harden. Klosterman had a very intriguing argument, which essentially went like this (I am of course paraphrasing):

1: The people who favor Westbrook think its obvious that the MVP should be Westbrook and there’s no other choice. (Westbrook averaged a triple double over the season, something that hasn’t been done since the legendary Oscar Robinson).

2: The people who favor Harden think its an interesting question and there are arguments for multiple candidates, but Harden is overall their favorite.

3: The people who are undecided will see the above two arguments, and almost tautologically will relate to 2nd one more. Because (by definition) they haven’t made up their mind, they can relate to those who think its a close race, who favor Harden.

Its an almost brilliant idea, and I have no idea if it will be correct or not, but it has a certain logic to it. Underlying it all is the same lesson, your ability to convince a skeptical party of something can be inversely related to the strength of your own belief.

* * *

Trump’s approval rating is low, but its not historically low. 538.com has him at 41%; Gallup had Obama at the low 40’s for much of 2011 and 2014 (of course this time in 2009 Obama was in the low 60’s, 20 points better than Trump is now.) Gallup had W Bush’s low at 25%, HW Bush at 30%, Clinton at 40%, Reagan at the mid 30’s, Carter at 30%, and Ford at 40%. (the counterclaim is that none of these Presidents were this unpopular this soon in their Presidency, but that’s kind of beside the point).

I’m not a Trump fan, and I certainly don’t think I will be. I see a number of things which Trump has done as being bad, corrupt, or incompetent, and the demeanor in which he has conducted himself has at times seemed unhinged and almost crazy. This to go with his numerous scandals, problems, gaffes, and remarks he made while campaigning and as a public figure.

Yet as much as 41% of American voters still approve of Trump. Why is this?

* * *

All this brings us back to President Trump and James Comey. If you’re already inclined to believe that Trump is a despot you will probably see the Comey situation as analogous to the Saturday Night Massacre, and Trump as obstructing justice. If you’re a fan of Trump you’re much more likely to see the situation as nuanced, or as analogous to Bill Clinton dismissing Director Sessions. And if you’re in between? Well, articles like this probably won’t convince you.

I think that those people who either support Trump or at least still giving him the benefit of the doubt just see all the criticism blending together, drowning itself out. They see Trump detractors reacting to firing Comey in the same way the reacted to Trump’s February 16 press conference. As long as they see the tone and not the substance of their opponents’ arguments, they’ll get no new information, and of course won’t change their minds.

Take an article like this, very anti-Trump, which purports to list all the bad things Trump has done. Yet it seems like half the things listed aren’t things Trump has done, but rather things he’s said or tweeted. Going back to the fact about skilled negotiators, how they will use fewer stronger arguments. Then compare that to the list in the nymag article. For many of the “Trump said this” arguments, if you’re not convinced now, you may not be ever. And if that argument won’t convince a skeptic, then making it will probably make better arguments less convincing.

With a skeptical audience, the strength of your beliefs can often work against you. There’s no shortage of liberal antipathy towards the Trump administration, yet I wonder if the strength of the left’s beliefs is actually hindering its ability to make a convincing argument.

Bad Arguments vs Bad Faith Arguments

There is a bit of an argument between Scott Sumner and Jason Smith, its a couple months old because I saw it and filed it away somewhere to be used later because I think it illustrates a point. The post is an argument about the sequestration and macroeconomics; read it if you want to.

I’m not really going to comment on the post itself, but on a single sentence of it, which reads “Now that Sumner is on his way to Mercatus, I can only assume it will get worse.”

Mercatus, for those of you who don’t know, is “world’s premier university source for market-oriented ideas—bridging the gap between academic ideas and real-world problems.” Its a libertarian/market oriented think tank located at George Mason University, and is funded in part by none other than the Koch brothers.

So, if I parse the argument from Jason Smith correctly, its that Scott Sumner is dishonest in his opinions, but going to the Koch funded Mercatus center will only make it worse; which on a quick read kind of makes sense, but if you examine it closely, it really doesn’t.

A bad argument is one that is wrong. If I believe that the moon is a hologram and argued so because stuff like this happens, then I would be making a bad argument. If I didn’t believe that the moon is a hologram, but argued that it was anyway, I’d be making a bad faith argument. Bad arguments can be harmful, but the problem is that its impossible to tell a bad argument from a good argument until after you’ve examined it. They’re a necessary evil, after all, many “bad” arguments can turn into good ones after years of examination.

A bad faith argument is different, and they can be more harmful. The Koch brothers, for instance, own large interests in logging companies, one can make a case that they would therefore profit from denying global warming, and that the profit motive, not their actual belief, is partially driving the debate.

Now, why might this be a bigger problem than other arguments? Countering a bad faith argument with evidence will never work, as he was is arguing in bad faith will only ever change when the underlying incentives for arguing in bad faith change (in the global warming case above, the profit motive, but there can be other causes). Whereas if people were simply arguing because of what they believe, then as soon as the weight of evidence changes, people will change their mind. (ding ding ding ding! most naive thing I’ve ever written on this blog award goes to… the previous sentence!). The one arguing badly in good faith can still present ideas which may be missed otherwise or prove a testing ground for good theories, while the arguer in bad faith will twist arguments and attempt to confuse rather than illuminate ideas.

Looking at the original statement in this lens, its pretty clear that Jason Smith is arguing that Scott Sumner will be arguing in bad faith (if he isn’t already). That because not only his opinions but also his economic well being depend on agreeing with market based though, he will compromise himself and his scholarship.

But this can’t be right; if it were it’d essentially be saying that studying with people you argee with or taking a job to advocate a position is inherently bad faith. A logical extension would mean that any environmental activist would be arguing in bad faith so long as they worked for a environmental organization, which in effect would by saying that we can’t trust the sierra club when the speak about preserving the environment, because they only care about preserving the environment. The same principle holds true for the Mercatus center, should we not trust them with regards to market based solutions, because they only care about market based solutions?

One could argue that its the Koch influence which is the problem, and that Mercatus is only a mouth-piece for Koch industries. (I doubt that it is, but at least that’s a plausible story). This may hold true for Mercatus issues in general, but not in macroeconomics. The Kochs may lose if people decide to stop cutting down trees, but nobody wins because of a recession. If the Kochs are backing Scott Sumner for their own selfish reasons, well that just means they think NGDP targeting will prevent recessions/cause growth, and if that’s true that everybody should be for it. If its false, everybody, including Koch brothers, should be against it.

Of course there are differences in opinion on controversial issues, (that’s pretty much a tautology if I’ve ever seen one), and maybe the Kochs are right about NGDP targeting (or maybe they just fell that the Mercatus center is doing good work in general and are happy to help fund it), maybe they’re wrong. But regardless, so long as neither they nor Dr. Sumner are arguing because of a hidden incentive then they’re simply part of the debate. We can’t commit to evaluating only good arguments, because we can’t tell if an argument is good or not until after we evaluate it.

Why I’m not a Keynesian

After world war II, the decline in government spending was enormous. Government spending as a percent of GDP went from over 45% to around 15%, which threw the US into a terrible recession, where GDP fell by over 12% in 8 short months. To put this in perspective, the “Great Recession” which lasted from 2007 to 2009, and which was the second worse recessions in the drop of GDP since WWII, only saw GDP decline by 4.3%.

This recession saw unemployment skyrocket to 5.2%. The average person was hurt by this, in 1946, while the GDP in 1946 fell by 11.6%, personal consumption grew by a paltry 12.4%, to put that in perspective it was the 85th worse year since 1930 (source: http://www.bea.gov//national/nipaweb/DownSS2.asp).

So what actually happened? We see that the decline in government defense spending after World War II caused the measured GDP to fall a lot, but what this meant is that the government stopped building tanks, aircraft carriers, rifles and ammunition. This meant that the US “produced” a lot less in 1946 than it did in 1945 or 1944, but that production was for military purposes only. While this created a recession, it was a recession on paper only. If you haven’t noticed, that 85th worse year for personal consumption growth? Out of a period of 85 years, (ie, the best).

The decline in one sector of GDP (government spending) was great enough to cause GDP to significantly retract (worse year for GDP since the great depression), but it did not make other sectors of GDP fall. In fact, not only did personal consumption have its best year eve (or since 1930 when the BEA statistics start), so did Gross Private Domestic Investment (same source as above). Unemployment did increase, but not to a very high level (we’ve seen a steady fall in unemployment for 6 years, but we’re still above the 5.2% immediate post war peak). Basically, the idea that the end of the war would throw the US back into depression was wrong, the only fall in GDP was only a reduction in anti-Nazi spending. Its a bit like saying that the best measure of a person’s economic well being is his consumption spending. And that in year 2, when he was healthy, he spent significantly less than in year 1, when he was fighting cancer. It was good that he was able to spend money fighting cancer in year 1 no doubt, but it was better that he didn’t have cancer in year 2.

If we’re to tell the story more, the drop in government defense spending allowed resources to be dedicated to other areas, such as business investment, new home construction, and creation of consumer goods. But this this the opposite of what is supposed to happen according to Keynesian economics. The fall in government spending is supposed to depress incomes in general, as all the soldiers return home and the tank builders are laid off, the total demand for goods and services wil fall, causing GDP to fall, not just in terms of fewer tanks and rifles, but everything else as well. This didn’t happen.

Now, this may not be the best case. You can argue that the proper Keynesian government level was still much lower in the war than actual government spending, or that the special circumstances dominate in immediate aftermath of the war.

More recently, we saw two major changes in government spending in the past 8 years. The first was the stimulus bill of 2009, which was supposed to jolt us to recovery and keep unemployment below 8%. The second was the sequestration, which, due to the Republican preference for lower government spending and political fighting about the debt limit, caused government spending to be reduced (and taxes to raise, both of which are considered anti-stimulative effects by Keynesians). Let’s look at how this effected the economy:

GDP Growth 2009 to present

Unemployment 2009 to present

It looks to me like government spending had little to no effect on GDP growth, and unemployment looks totally unaffected. It went up during the recession and a little bit afterwards, and has fallen consistently since, regardless of what the government tries to do.

This is my biggest complaint against Keynesian economics, or I guess fiscal stimulus to be specific. We had an $831 billion government program, and nothing to show for it. The Keynesian economist can make the case that things would have been worse without the stimulus or better without the sequester, that’s certainly a possibility and I don’t want to dismiss it. But I do think that the burden of proof should be on the people proposing trillion dollar expenditures. And I don’t think that the burden of proof was at all met. This is the strongest case I have against fiscal stimuli, they have enormous costs and very unclear benefits.

None of this is a counter to the idea that we shouldn’t have government spending.  There are many great things that government has provided, including roads, schools, police.  To return to the World War II example, we basically prevented a madman from conquering the world, which is a worthy a goal as there can be.  But what I am arguing against is the idea that government spending by itself typically stimulates the economy; the idea that we’re better off having the government hire people to do useless things.

There may be instances when this is true, that simply borrowing and spending money by the government can counteract a bad economic environment.  But as of right now, I’m convinced that it’s probably not true generally (ie, that any bad economic environment can be improved by the government spending more money), and that we can’t distinguish the instances where government spending helps from when it hurts or has minimal effect.