Nathan Taylor

In an interesting twist on the ‘Capital Punishment‘ situation, Donald Trump has been called on to apologise for trying to encourage prosecutors to impose the death penalty on a group of suspected rapists. Trump paid $85,000 US in 1989 for full page ads calling for the death penalty for five youths accused of raping a jogger in New York’s Central Park. Trump’s ads screamed:

“Bring back the Death Penalty

They should be forced to suffer and, when they kill, they should be executed for their crimes. They must serve as examples so that others will think long and hard before committing a crime or an act of violence.”

One of the five men accused of the rape and beating of Trisha Meili, Raymond Santana, was 14 years old at the time.

Santana spent seven years in prison before another man confessed (and was linked via DNA) to the crime and he was exonerated. Santana said of Trump:

“He took the ads out on us. Donald Trump is an opportunist, he’s also a user and abuser…He could’ve  come out and apologised he could have come out and said ‘I was wrong.’…But he never did.”

Ironically, had the death penalty been imposed (even incorrectly) it may have contributed to a decline in overall levels of crime. A pretty horrific form of justice though.

Why are there so many twitter ‘scandals’?

For instance, Jim Wallace, Managing Director of the Australian Christian Lobby made the following comment on ANZAC day:

“Just hope that as we remember Servicemen and women today we remember [the] Australia they fought for – wasn’t gay marriage & Islamic!”

Subject to a barrage of criticisms, Mr Wallace retracted his statement and even went so far as to delete it!

Twitter lets people put out their immediate thoughts on an issue, their initial impressions. This enables them to respond from the perspective of their primal, basic system of though rather than their conscious mind.

As a consequence, people with latent bigotry or, in the case of Mr Wallace, homophobia, more easily express it without the filter of their conscious mind.

So, what do we know? Mr Wallace harbours, at a minimum, deeply negative animus towards gays and Muslims. The fact that he actively works to disenfranchise these groups in the political sphere proves that this animus is conscious as well.

That he subsequently apologised and removed the comment simply proves he is also aware of the broader publics perception of him.

PS. Mr Wallace, if you care about marriage (as you protest you do) then advocate against divorce. Try to return Australia to the time when getting a divorce involved significant social and economic hardships. If you don’t then your only motivation is bigotry – conscious and unconscious.

Our ability to make decisions is incredibly influenced by the environmental stimuli we are subject to. While it feels like we make ‘conscious volitional’ decisions, they are actually impacted on by a variety of factors over which we have no awareness.

One frequently overlooked or underestimated sensation is touch, and Psyblog  details 10 psychological effects of nonsexual touch. The main effects being:

• To increase affinity;
• Increase persuasiveness; and
• Convey status.

A number of studies have found that touch has a very powerful impact on the level of affinity that you can create through very simple level of physical touch.

The act of physically touching someone (within the confines of social norms) will significantly improve their impression of you while also making them more likely to be favourably disposed to you.  The following three studies highlight this:

A waitress who touches a patron on the hand or shoulder as they were returning change received statistically significantly higher tips. While the tipping rate did not vary between the two types of touches, it was higher than in the control group (who did not touch customers). Both men and women were equally influenced by the power of touch.  

Another study, in France where there is more acceptance of physical contact, the salesman who touched customers were significantly influenced by the contact. In this study, the authors instructed a male seller to slightly touch (or not touch) a man who was interested in the car. After the participant left:

“the seller, a female confederate solicited him, asking him to evaluate the car seller on various dimensions. The results showed that for each dimension that the participants evaluated, the touch condition was associated with statistically higher positive evaluations of the toucher than the no-touch control condition.”  

The study found that a one second touch meant the salesman was constantly rated as more sincere, friendly, honest, agreeable and kind.

The final study found that, by touching experiment subjects, people were more likely to provide help. Strangers who were lightly touched on the arm were more likely to help an experimenter pick up things they had dropped(Gueguen, 2003). The percentage of people who helped went from 63 per cent to 90 per cent.  

I will detail the other two ways in which touch can influence decision making in subsequent blogs.

 A woman had the misfortune of replacing her mother’s old mattress only to realise it 
  contained a life’s savings.

 The Israeli press reported a woman, identified only as Anat and a resident of Tel Aviv, had
  brought a mattress for her mother as a surprise. It was not until after she had thrown the
  mattress out that she found out it contained $1,000,000. The image below is of Anat
 burrowing through a huge pile of trash.

What a horrible situation to be in! But I like her attitude, as indicated by the reported quote:

“People have to take everything in proportion and thank God for the good and the bad,” she said.

It just goes to show, there is wealth all around us. We just have to make sure we don’t throw it out.

Her stoacism reminds me of this amazing woman.

 Very embarrassingly for Jessica Irvine an  
 economist with a good grasp of the Australian
  economy also commented on the Treasurer’s claim
  he ‘proved’ John Maynard Keynes right. Michael
  Stutchbury stated:

  “Australia escaped the global recession not because of Swan’s Keynesian budget stimulus but because we were rescued by China. Now China’s economy is in danger of over-heating. After two decades of growth, we’re overdue for a modest recession.”

This is obvious and very embarrassing to miss. Plasma TV’s do not a recovery make.

 The real danger of Swan’s failures are that they leave Australia very vulnerable to economic shocks arising from any change in China’s fortunes.

Sigh.

If only we had a federal treasurer willing to make hard decisions (note to Jessica – it is not a ‘politically difficult’ task to give people money) and create a national buffer for a potential change in China’s fortunes.

The notion that Wayne Swan saved Australia from a recession is absolutely farcical.

The premise of this article is highly flawed. Keynesianism hasn’t been validated – it was, and always will be, poor economics that encourages the perpetuation of inefficiency. You can forestall structural readjustment (by handing people a shovel and telling them to dig) for only so long. Eventually you have to pay the piper and realise that the only sustainable jobs are those that are paid their marginal productivity.

The Australian government moderated the impact of the GFC by blowing our collective savings. Those moneys were wasted. Can anyone argue the ‘Building the Education Revolution’ was anything but a waste of public funds? What about the Pink Batts folly? The $900 free gift from Treasury was just right to buy a flat screen TV (remember how the price of a plasma became just about $900?)

It is all well and good to say:

“The Keynesian treasurer must expend considerable political and financial resources enacting the stimulus plan. It will hamstring you financially from anything else you wanted to achieve in government. And no mug punter will ever thank you for it. In fact, they will seize on any perceived wastage to argue you are unfit to govern.”

But I would suggest that there is wisdom in crowds after all!  

The only reason Australia did not enter into a major recession was because we did not have to undergo major structural readjustments of the US, UK and other European economies. The reason we don’t have to undergo those readjustments is because of some sound economic policies (independent monetary policy and, relatively, tight fiscal policy) and, most particularly, the Chinese windfall.

We would, collectively, be in a better situation if the Government had focused funds on those most at need rather than handing almost everyone some ‘free’ cash.  This would have allowed the economy some slack during the GFC. Now we are exiting the recession and unemployment is at incredibly low levels.

The US, and other countries in the doldrums, are experiencing a pronounced readjustment. They spent too much in general, and far too much on housing in particular. The parties over and they are getting over their collective headache.

Not pretty.

Australia does not need this structural adjustment because we are servicing the Chinese economies voracious need for resources. Let’s hope we don’t have to find out if our own party was not too excessive if/when China’s stimulus disappears!

Attempting to justify its continued existence, the Philosophy department in University of Nevada argued the following:

“Philosophers look at what can and can’t be inferred from prior claims. They examine what makes analogies strong or weak, the conditions under which we should and shouldn’t defer to experts, and what kinds of things (e.g., inflammatory rhetoric, wishful thinking, inadequate sample size) lead us to reason poorly. This is not to say that doctors, district attorneys, or drain manufactures cannot make decent assessments without ever taking a philosophy class. It’s also possible for someone to diagnose a case of measles without having gone to medical school. The point is that people will tend to do better if, as part of their education, they’ve studied some philosophy.”

This is not to say that Philosophy should not be taught, but if this is the best argument that they can raise, then they are in trouble.

On one level this is a valid argument. Some studies (details to follow when I dig them up) suggest that people become better thinkers and decision makers when they examine basic logical rules.

But where the argument is weak is that there are a number of schools of thought that examine ways in which people make decisions. One of my early economics lecturers made the statement:

“Reality is an interesting test run.”

Economics teaches many of the same mental disciplines that philosophy does. However, it does in the context of a real world phenomenon. In a similar way almost any academic field of study involves developing models of reality and testing them robustly. To say this is a unique facet of philosophy is to make a spacious claim.

Perhaps Professor Todd Jones is using dry humour when he states: someone can diagnose a case of measles without having gone to medical school… Well, I haven’t studied philosophy, but I can spot an argument by metaphor.  I’d prefer my doctor to have spent more time studying medicine than philosophy.

Professor Jones, if that is the best argument you can come up with then:

There is a tendency to make important decisions on the basis of a strong narrative of events. For instance, ‘house prices only go up’ and clear evidence that house prices were increasing led to the largest build up in housing the US has seen. Eventually it led to the worst financial crisis since the great depression. Now, whole suburbs are being bulldozed in the US because there is no one to live in them. Not only can house prices fall – they can go WAY down!

Take this quiz and see what I mean from a trivial (but illuminating) perspective.

Is Western Australia going the same way? Given the role of the mining sector in the State’s economic performance, and the dominance of China, it is worth questioning some of the underlying assumptions of this view. Centre for Independent Studies Research Fellow, John Lee has an excellent article on China’s growth that is well worth considering.

Lee’s main argument is that:

1. China’s demand for commodities is being driven by property speculation; and
2. As a consequence, China has major ‘ghost cities’ that are being built and are sitting vacant.

The money quotes from his excellent article are:

“Let’s look at the argument that urbanisation is the primary driver of growth in Chinese demand for commodities such as iron ore. We often hear the mind-boggling figure that around 15 million rural Chinese are moving to cities every year. But the urbanisation rate is only slightly above 1 per cent each year. Yet, Chinese consumption of iron ore has increased by 80 per cent since 2003. China’s own economic and social planners estimate that they can reduce steel production by one third and still meet demand resulting from ongoing industrialisation and urbanisation.”

The reason for the gap?

“In the first half of 2010, a Chinese report revealed that 64.6 million urban electricity meters registered no electricity usage. This amounts to unused housing that could accommodate 200 million people. Andy Xie, the former chief economist for Asia at Morgan Stanley, crunched his own numbers and estimated that residential vacancies for commercial housing is around 30 per cent. Speak to Chinese middle class property investors and they will tell you that they buy property not to rent but to hoard as assets – in the same way one buys gold.”  

Lee’s basic point is that investors are ‘hoarding’ property and that China’s varacious demand for commodities is a result of internal policy failings and is not viable in the long term.

I’d highly recommend looking at the entire article.

Don’t get me wrong. I believe that the Chinese industrialization is powering the HUGE build up in commodity prices. This, in turn, is spurring on business investment and the extraordinary growth of the WA economy. However, it is always worth entertaining contrary views to make valid decisions. To ensure you are not caught up with the herd, as yourself the following questions:

• What impact would a Chinese economic collapse have on your business? Your personal finances?

From expensive personal experience I’ve found it is always better to ‘measure twice and cut once’ when it comes to major financial decisions. This means, when you hear a narrative gaining traction, always look for the Jeremiah crying it is a fraud. They will generally be wrong, but it will make your decisions that much stronger.