Keeping up with the FITs, 5/14

Alberto Mingardi on epistemic humility; Kling's history of the Great Financial Crisis; Noah Smith on the 1970s; Brian Stewart on the history of the right; Peter Zeihan on disorder

Alberto Mingardi writes,

Populists and technocrats each assume that politics is an inferior and detrimental profession. It accustoms its practitioners to strike deals and come up with compromises, but true solutions need to be pristine—free from political influence. “Both populism and technocracy,” write Bickerton and Invernizzi Accetti, “dispense with the dimension of political mediation because they claim to have direct access to the ultimate ground of political legitimacy itself.” Each shares a conception of power as a technique that can actually solve social problems, if only it were entrusted to honest and competent people. “Populism relies on the cultivation of a direct relationship of ‘embodiment’ between the populist leader and his or her electoral base,” they add, “whilst technocracy is based on an informal relationship of ‘trust’ between the technocrat and those he is supposed to govern, rooted in the assumption that the former possesses a specific ‘competence’ or ‘expertise,’ tied to his or her personal qualities and professional qualifications.”

This reminds me of Jeffrey Friedman’s Power Without Knowledge. The common assumption of populists and technocrats is that there is a known solution to problems. The technocrat claims that the solution is understood by experts. The populist claims that the solution is understood by ordinary people, or at least by their preferred political hero.

My recent essay describes the role that expert failure played in the Great Financial Crisis.

In terms of the fire metaphor suggested earlier, in hindsight, we can see that the markets for housing, sub-prime mortgages, mortgage-related securities, and inter-bank lending were all highly flammable just prior to the crisis. Moral hazard, cognitive failures, and policy failures all contributed the combustible mix.

. . .The crisis also reflects a failure of the economics profession. . .Economists have a strong preference for parsimonious models, and they look at financial markets through a lens that includes only a few types of simple assets, such as government bonds and corporate stock. This approach ignores even the repo market, which has been important in the financial system for over 40 years, and, of course, it omits CDOs, credit default swaps and other, more recent innovations. . .The economics profession has a long way to go to catch up with modern finance.

In the wake of the crisis, the media gave Bernanke, Paulson, and Geithner slobbering kisses for TARP and other measures. If you want to know how I felt about that, think about the way you feel about the slobbering kisses given to Fauci in the wake of COVID.

Noah Smith recommends five books to understand the 1970s.

And of course the culture war that started in the 60s is still with us today. That’s the thesis of Nixonland — which makes it all the more remarkable that the book was published in 2008, before Obama was even elected or Trump was on anyone’s radar.

Anyway, if you read just one book to understand modern American politics and social divisions, this is the one.

I think that Smith is correct in seeing a pattern of leftist overreach leading to conservative backlash in the 1970s, with a similar dynamic evident today. Also, I would say that each side thinks it is losing.

Both the right and the left are catastrophizing. The right sees the institutionalization of CRT, puberty blockers, and woke corporations; the left is appalled at the prospect of free speech on Twitter and at having abortion laws settled democratically.

But the 1970s saw much of America escape from politics. The extreme radicals on the left (most notoriously the Weather Underground, and note that word: Underground) were hiding from society’s institutions and engaging in acts of symbolic violence against them. Today, they are exerting leverage within Disney, the New York Times, and the Democratic Party.

I also would recommend watching these iconic movies of the 1970s: American Graffiti, Easy Rider, Network, All the President’s Men, Annie Hall, Dirty Harry, One Flew Over the Cuckoo’s Nest, Patton, The Last Picture Show, Taxi Driver, Apocalypse Now, Mash. What an amazing decade for movies. I’m intentionally leaving out some of the leading films in order to restrict my list to ones that I think offer the keenest cultural insights into the 1950s, 1960s, and 1970s.

Brian Stewart reviews Matt Continetti’s new book.

Fearful of globalization, suspicious of America’s foreign commitments, and hostile to the cause of limited but energetic government, the New Right has left America without a party dedicated to ordered liberty and national greatness. The GOP is no closer than it has been in decades to forging a consensus that addresses the daunting challenges of our time. And Trump, evicted from office by the voters before being served with his second impeachment, took his leave with “the Republican Party out of power, conservatism in disarray, and the Right in the same hole” dug by its worst tribunes. Continetti’s conclusion is unsparing: “Not only was the right unable to get out of the hole; it did not want to.”

For anyone vaguely acquainted with the story of the Grand Old Party, this latest sordid chapter of Republicanism—the subversion of American democracy and the diminishment of American leadership in the world—can be strange and bewildering. For anyone invested in this uniquely American tradition of political thought, it has been nothing short of devastating. Nevertheless, it’s the natural upshot of the fatigue and exhaustion gripping the Republican Party combined with the noxious prejudices of its new base under the influence of its present standard-bearer. Despite his 2020 defeat, and his brazen anti-democratic acts that followed it, Trump retains a firm hold on that party, and remains its most probable candidate in the next presidential contest. Whatever the electoral prospects of a Republican Party actuated by the needs and urges of one man, the imprint of conservatism properly understood is unlikely to be felt again anytime soon. Until Trump is unhonored and unsung in the Right Nation, conservatism will continue to be sullied by the association, and deservedly so.

He is as much #neverPaulRyan as #neverTrump. With nothing nice to say about anyone, Stewart does not come off as a friendly or constructive critic of conservativism. But his summary of the book seems pretty helpful.

Here is a Peter Zeihan interview. For years, he has been predicting a significant contraction of global trade. It so happens that with the virus and the now the war, we have had two adverse shocks to global trade that make him seem prescient. In a deglobalizing world, countries will wish they had robust agriculture, good energy resources, and enough young workers to support the rest of their population. The U.S. has all of these. China has none of these. So he dismisses the China threat. Near the end of the podcast, he casually predicts that soon a famine will kill a billion people worldwide.