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Thursday, October 31, 2013

Government Itself is the Problem – Not the Form of Government

Government Itself is the Problem – Not the Form of Government
As the Yellow Hermit kingdom reeks withs corruption – the Philippines and Filipinos are in search for solutions. Obviously each group has their pet solutions – as I have mine.
I would state that there two basic camps in the search for solutions – authoritarian and libertarian.
You can easily recognize the supporters of authoritarianism. These people think that government is the answer to improving lives. They think that government can be “fixed” by changing its form of government.
The libertarian camp is a rather new phenomenon in the Philippine debate. Libertarians think that government cannot be fixed because government by its coercive and intrusive nature – is the problem. No matter what form of government is adopted (presidential, parliamentary, monarchial, socialist) – government will dip its hand into your income and redistribute your money to the vested interests – whether rich cronies or grassroots associations of the political base of the incumbents.
Separating the Chaff from the Wheat
Here is an example of how the authoritarians presented their case
Orion's FLAWED Analysis
Note further, the fixation on GDP per capita. Now would be a good time to remind people that GDP per capita is a measure of national income  - and is not a measure of individual incomes. All it does is divide the GDP by the population size.
Comparisons of national wealth are also frequently made on the basis of nominal GDP, which does not reflect differences in the cost of living in different countries.
When only 2% to 3% of the population control all the assets in the country – the GDP per capita values no longer apply to the 97% of the population who don’t own jack.
You know what this reminds me of? It reminds me of Noynoy Aquino, who keeps on talking about GDP growth. It’s growth alright – but, only for the few 2%-3% who control 80% of the country’s assets.
And here is the reply of the libertarian camp.
When we look into the details of Orion’s chart, he was pointing out the “dishonesty” in the hybrid systems. Now, the hybrid systems are a combination of presidential and parliamentary systems – thus, semi-presidential and semi-parliamentary can be in both camps.
What Orion conveniently missed in his chart, are the items he highlighted in green, and which for further clarity, I have encircled in red. Obviously, these highlighted items are not hybrid systems and are PURE parliamentary systems.
Thus while Orion was chewing the bone on the hybrid systems, he just had to pretend that the items  highlighted in green and encircled in red – PARLIAMENTARY SYTEMS –  which have high unemployment, have high spending – do not exist.
The phenomenon of singling out the hybrids – while conveniently blocking out the presence of PURE PARLIAMENTARY systems is an example of cognitive bias.
A cognitive bias is a pattern of deviation in judgment, whereby inferences about other people and situations may be drawn in an illogical fashion.Individuals create their own subjective social reality from their perception of the input.
An individual’s construction of social reality, not the objective input, may dictate their behaviour in the social world. Thus, cognitive biases may sometimes lead to perceptual distortion, inaccurate judgment, illogical interpretation, or what is broadly called irrationality
The rhetoric of “more efficient government” is alluring. However, what are the facts?
On Public Spending
Spending and System of Government

On Taxation
Tax Burden and System of Government
On Unemployment

More Irrelevant Indexes
The supporters of authoritarianism claim that parliamentary systems are less corrupt – based on the Corruptions Index of Transparency international.
The corruption perceptions index makes good headlines BUT it is facing severe criticism in its methodology.
Elaine Byrne, in an article titled “Problems with Transparency International corruption perception index” pointed out the following:
The CPI has been credited widely with putting the issue of corruption on the global policy agenda and raising international awareness about the phenomenon. Nonetheless, the CPI has been the focus of much criticism regarding its methodology (Arndt and Oman 2006; Galtung 2006).
There is growing concern among anti-corruption agencies and the international community that perception-based indexes are not accurate measures. The best perception-based surveys do not always account for indirect effects of subjective factors, and their margins of error are large when compared with actual corruption (Bertrand and Mullainathan 2001).

Orion's Flawed Analysis 2
As the country searches for solutions, we need to be very careful not to be hoodwinked by supporters of authoritarianism.
Frankly, presidential yellow, parliamentary yellow – same yellow welfare state policies – and yet the authoritarianists expect different results.
The INCORRECT 3 point agenda.
The incorrect 3 point agenda boils down to this – open the economy so that people will have jobs and incomes – that can be taxed and redistributed more efficiently by government.
To the authoritarians, the implosion of the economies of the Euro parliaments does not exist because there is a parliamentary Singapore that did not implode. Which again brings out the point consistently missed by the authoritarians – given the same parliamentary system – ceteris paribus – all things being equal in the form of government, it boils down to economic policy – just compare the health care systems of Singapore (which has minimal government intervention) versus the health care of Australia.
Then there’s also the matter of social security – compare the privatized social security system of presidential Chile versus the government run social security system of presidential USA.
For short, so what if you have an open economy with a federal parliamentary form of government – and still be saddled with HIGH TAXES, HIGH PUBLIC SPENDING, and HIGH UNEMPLOYMENT as has been the experience of the Euro parliaments – it still does not make your lot in life any better at all.
So what then is the GENUINE CORRECT 3-POINT AGENDA, here it is:
1 – Free Open Markets and Free Enterprise
2 – Minimal Taxation and Regulation
3 – Limited and Small Government
Even as we seek clarity in the current “As-Is” state. We also need to be very careful in choosing the “To-Be” future state.
Learn from the experience of other countries so that you don’t have to reinvent the wheel.
Nor do you want to  jump from the frying pan into the fire.

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