Varoufakis's parallel payments system

Stephen Capsaskis recently penned what is thought to be the most widely read letter ever addressed to the Financial Times. In it, he castigates the FT editor for promoting the works of Yannis Varoufakis, given the damage the latter's negotiation caused.

The issue I take is not that the FT has given space to Vraoufakis's arguments per se, but that it has failed to critically analyse them. In particular, one of the articles referenced by Mr. Capsaskis says:

"The former Greek finance minister, Yanis Varoufakis, had plans to introduce a parallel payments system that would have allowed Greece to default on its debts while formally remaining a member of the eurozone. It was a daring plan, and in my view would have produced a better outcome than capitulation."

This plan has not been examined at all by the FT; instead, we are meant to take the author's assertion that it would have produced a good outcome on faith. This is shoddy journalism, very uncharacteristic of the FT.

I started writing this post with the intent to analyse Varoufakis's plan myself, but I realised I lack the necessary knowledge of economics to do a good job; instead, I will summarise the plan as I understand it, and list my questions on it - questions that the FT's journalists ought to be answering, if they are that keen on discussing Varoufakis.

The plan proposed by Varoufakis would work as follows: the government creates a special tax account for each citizen and company in Greece. The government then starts paying anyone to whom it owes money, not in actual cash, but in units deposited to these accounts. These units cannot be exchanged for Euros, but they can be transferred from one person or company to another; they can also be used to offset any taxes owed to the state.

For example, if the government owes me 100,000 Eur, instead of paying me this money, it deposits 100,000 units in my tax account. If my tax bill comes up to 200,000 Eur, I now only need to pay 100,000 EUR out of my pocket. If I owe 10,000 Eur for a mortgage payment, I can deposit 10,000 units into my bankers' tax reserve account.

I am not 100% clear on how the government would kick-start this parallel payments system: in an excerpt from his latest book that he posted on his blog, Varoufakis says the state would use these units instead of cash to cover its liabilities towards companies and citizens; he also mentions that the government could allow citizens to buy these units, incentivising them by giving a 10% discount to anyone who pays for their taxes using the units; finally, Glen Kimm, Varoufakis's advisor, claims that the system would start with the government paying 10% of civil servants' salaries in units instead of Euros.

Either way, Varoufakis envisions every Greek participating in this payments system by issuing micro-chip enabled ID cards, linked to the citizens' tax reserve accounts - so that the ID cards would function, in effect, like credit cards.

My questions on the scheme are:

Would the units issued by the government be enough?
The objective of this parallel system is to alleviate the effects of a liquidity squeeze. A liquidity squeeze arises when a company cannot access enough cash to meet its short-term obligations. It is bad for the economy, because companies are often forced to sell their assets at a discount to meet their short-term obligations, often depressing a market and causing it to enter a vicious cycle. Furthermore, a liquidity squeeze by definition means there is no money for investment.

If a government wants to alleviate these effects, it must inject money into the economy. That's what quantitative easing does: a central bank prints new money and introduces it into the economy by buying securities in the market. Clearly, the success of such an intervention depends on how much money is injected.

Now, this is a bank of the envelope calculation, and I may be missing a few things, but in Greece

• 2016 public sector salaries = 19 Billion EUR;
• 2014 money overdue by the state = 4 Billion EUR;

So, Varoufakis's plan would introduce = 19 Billion *10% + 4 Billion = 6 Billion units. Would this injection be large enough to be meaningful? For perspective, Greek bank deposits have dropped by about $130 Billion since 2010... so to me, 6 billion does not look very significant.

Furthermore, I am not sure we should include the public sector salary portion: this is money that would be injected into the economy anyway - all this plan does is introducing them in a new format.

Is the scheme legal?

What if a company that is owed money by the state doesn't want to be paid in units? Is it legal for the government to force it to accept payment in something that is not legal tender? Similarly, what if a civil servant would rather be paid in cash, rather than in units?

How would the system work in practice?

It's one thing to assume that every Greek will magically get an updated ID card that they can use as a credit card; it's quite a different thing to put such a system in practice. First of all, Greeks are not super-into technology - only 67% of the population uses the internet, and only 2.7 million Greeks have credit cards. So it's a bit of a stretch to imagine that the population will enthusiastically adopt this new way of doing things.

Even if they did, how would Varoufakis enable people to use their cards to buy groceries, as he writes? Who will design the system for accepting such payments? Who will run it? Who will pay for it? 

What about companies? In Varoufakis's narrative, if company A owes money to company B, it can simply pay it in units. But that's easier said than done: how would such units be treated on an income statement? How would they be reflected in the company's systems? Varoufakis says this system could be implemented at a touch of a button - but for most companies, this would take thousands of man-hours of hard work - if it's possible in the first place. 

How would these units permeate society?

The average citizen is not owed money by the government. And, though we do have more civil servants than we need, they still represent only 6% of the population. How would the remaining 94% get units, so that they can then spend them on groceries, petrol &c as Varoufakis suggests? 

(Yes - he did say people might be able to buy units directly from the government; but remember that the incentive for doing so is that using these units to settle a tax bill would lower it (the tax bill); so you may buy units to settle your taxes, but why would you buy extra units to then use to buy groceries?)

Furthermore, even if citizens somehow got these units, trading at the scale Varoufakis imagines would only take place if people trusted that the units would maintain their value. The current Greek government has a pretty poor track record of keeping its promises; that, in conjunction with low financial literacy rates in Greece, means that trust in a novel and exotic system is far from guaranteed.

How is this system different to a parallel currency?
Varoufakis writes

"in reality, I had rejected a parallel currency from the outset, opting instead for a parallel payment system. (Nb. journalists incapable of distinguishing between a payments system and a currency should perhaps disqualify themselves from this debate!)"

But if these units can be used to buy groceries, discharge debt &c, in what way do they differ from a currency - besides the fact that they cannot be converted to foreign currencies? Is this distinction enough to disqualify their classification as fiat?

Conclusion

Overall, this parallel payments scheme sounds like an elegant solution to a liquidity scheme; however, it very much sounds like an academic exercise that would not be easily implemented in reality. It is quite sad that even credible newspapers like Kathimerini or the FT have taken to either dismissing or praising Varoufakis's ideas without bothering to look into his proposals in depth and educate their readers on their feasibility.

A (mathematical) critique of SYRIZA

In his Foundation series, Isaac Asimov narrates a diplomat's visit to a planetary colony of scientists. Most of the scientists are really impressed with the diplomat, and are confident in the government's support when he leaves. But one scientist is unconvinced. He tells his colleagues that the diplomat didn't really say anything, didn't make any promises or commitments. The other scientists are all like "how can you say that, he said so many things, it was great".

So the skeptic translates all of the diplomat's speeches into logic symbols, simplifies the equations that describe the diplomat's words and speeches and proves that his (the diplomat's) statements contradict each other or are arbitrary and noncommittal. The skeptic is thus able to prove his colleagues that the government doesn't plan to help them.

I want to do the same to prove with mathematical rigour that SYRIZA is staffed by people who are either incompetent or corrupt or crazy. Before I geek out, I am going to make my critique in plain English, and I will then translate it into maths.

Plain English Critique
First, let me be clear about my objective in this post: I am not about to argue that SYRIZA's intended policies are wrong. Nor am I going to argue that SYRIZA is the reason Greece is doing worse than ever (though I certainly think so). Perhaps the reason Greece is doing so badly is because of the EU or the IMF or austerity or neoliberalism or lizard people, SYRIZA would do a great job if all of the above were removed from the picture (especially the lizard people).

I am not even going to talk about the manifestly corrupt practices SYRIZA has engaged in - hiring demonstrably unqualified people for advisory positions, paying out insane amounts to public company executives when there are people literally starving in Greece &c.

What I am going to talk about is how even you are a SYRIZA supporter, even if you agree with SYRIZA's intended objectives, you ought to condemn SYRIZA because they have failed to implement these policies. I am also going to argue that this failure is inexcusable.

Thankfully, making this argument is far easier than evaluating the appropriateness of a particular goal or policy ex-ante: I just have to look at what is promised and compare it to what is achieved. Of course, I have to take into account mitigating circumstances. If the love of your life misses your appointment at the top of the Empire State Building because (60 year old spoilers) she was hit by a car, or fails to meet you at a train station because her grandmother died, it's not fair to accuse her of malice, cruelty or incompetence.

Let's start by looking at what SYRIZA promised "committed" to do (in the words of its leader) and what it delivered. I have compiled a list of key commitments outlined in the "Thessaloniki Programme", a manifesto unveiled by Alexis Tsipras just before winning the national elections, and the actions he took when in government. Each promise is colour coded based on whether it was upheld or not (in what I think is a pretty self-explanatory way (i.e. the colours' meaning is self-explanatory)).

I did not cherry pick promises to only highlight the ones he didn't live up to; I just focused on the ones I considered the most important. Feel free to read through his speech to see the full list. Now then, Tsipras promised to...

1. Restructure the debt, which he deemed unsustainable =>Not only has SYRIZA not achieved this, but Tsipras now apparently believes the debt is viable and is now arguing against the IMF which thinks otherwise.
2. Increase the Public Investments Programme budget by 4 billion => The 2015 budget was 200 million EUR lower than the 2014 budget; the 2016 budget was 350 million EUR higher than the 2015 budget - but clearly, there was no 4 billion increase.
3. Increase pensions => Haha, no. And sorry, I can't resists a bit of sensationalism: not only did SYRIZA not increase pensions, but police harassed the pensioners who protested against further pension cuts.
4. Replace memorandum policies immediately, without waiting for the outcome of future negotiations => Clearly not.
5. Provide free electricity and food and rent subsidies to 300,000 households => I can't tell whether Tsipras delivered on this. Some news sources say he did, some he didn't - so let's be charitable and mark this promise as upheld.
6. Give a Christmas pension bonus to 1,200,000 people => Delivered.
7. Cut oil tax => Nope. Oil in 2016 was about 10% more expensive driven by tax increases.
8. Cut ENFIA (property tax) => Nope. On average it went up.
9. Increase the tax-free income level to 12,000 => SYRIZA actually decreased the tax-free income level (except for families with more than 3 children).
10. Increase the minimum wage to 751 EUR for all ages => Nope.
11. Create new agency to tackle tax evasion, "very modestly" forecasting 3 billion EUR tax recovery in the first year => I do not know whether such an agency was created, though I can't find mention of it in the government's budget letter. However, the 3 billion income certainly didn't materialise: total direct tax income increased by about 800 million EUR and indirect tax income by about 1.2 billion EUR. These are driven by increases in tax rates, not tax evasion crackdown (at least, no mention of the latter is mentioned as a source of growth in the budget letter).

So. 11 promises, of which SYRIZA delivered on 2. In most cases, not only did SYRIZA not do what they promised to do, but they did literally the opposite. Then there is the matter of the referendum. SYRIZA called for a national referendum asking the Greek public's opinion on whether the government should agree to the terms of the 2015 bailout. The Greek public overwhelmingly voted "no". Two days later, Tsipras ignored that result and signed a new deal with the EU. (I suppose he was hoping that a "No" vote would scare the EU into offering better terms. When this didn't happen he capitulated).

In summary then, SYRIZA imposed more austerity measures, increased taxes, lowered the tax-free income level, cut pensions and capitulated to Europe's demands. All this after Tsipras said that he's not an "all-weather prime-minister" and that he's not glued to the prime-ministerial chair - implying that if he could not deliver on his promises he would resign.

I think that even the most ardent socialist will have to agree that SYRIZA has failed to accomplish its self-imposed goals. Let's now visit the mitigating circumstances clause. Those who are still inexplicably sympathetic to SYRIZA claim that the party and its leader had all the best intentions, and would have delivered on all their commitments, had Europe let them. They (the inexplicably sympathetic apologists) say that Tsipras has been strong-armed by the EU and the IMF. That he couldn't have done anything else.

I find this defense lacking. To explain why, let's think about what makes for mitigating circumstances when breaking a promise. Personally, I take promises very seriously. I believe a person can be forgiven for breaking a promise in extremely rare cases, only if an event that is truly material and unexpected occurs.

But let's be very clear here: traffic or a late request from your boss are not material and unexpected events that would justify breaking a promise to meet for dinner. Things like this happen all the time - and they're why you should never make promises about casual things like a dinner date. To me, a person who has integrity will carefully consider all the possible scenarios in which he would not be able to uphold a promise, and will either not make it, or will make a specific caveat in case such a scenario transpires.

Back to Tsipras, he was not literally forced to impose more austerity cuts - Germans didn't invade Greece and put a gun to his head (which would be unexpected and material to say the least). The EU and the IMF could only "force" Greece to agree to more cuts in the same way they have always done: by threatening to withdraw support, causing Greece to exit the EU and default on its debt. This threat isn't new. Tsipras made all his promises knowing that this was the EU's position. He didn't say he would do all these things if the EU and the IMF let him; he said he would do them regardless (see promise 4 above).

That he failed to consider the EU not backing down from its demands as a possibility is therefore not merely incompetence; it's not merely carelessness; it's not wishful thinking; it is lack of integrity. You can argue all you want that the EU is unreasonable, or that the IMF is staffed by incompetent and evil economists. This does not change the fact that Tsipras made promises he did not keep.

BUT. Because English is flimsy and vague and leaves room for misrepresentation, I want to now formally prove this thesis. Normal people, stop reading here. Geeks, read on.

Mathematical Proof
First, you might want to have a look at the basics of propositional logic here or here.

Now, let's start with the following premises. I have made these as thorough as I could, but if you believe I have missed a possibility in any of the implications below, please let me know.

• (A lied) => (A is dishonest) ∨ (A is crazy/does not understand the concept of lying)
• (A is dishonest) => (A is dishonest for selfish reasons) ∨ (A thinks dishonesty will serve the greater good)
• (A thinks he serves the greater good) => (the greater good increases) ∨ (A was wrong)
• (A made a promise) => (A considered likely events that would cause them to break the promise)
• (A broke a promise) => (A lied) ∨ (A faced unexpected change)
• (A faced unexpected change) => ((A had anticipated all likely events) ∧ (unlikely event occurred)) ∨ (A had not anticipated all likely events)
• Tsipras made a list of promises
• Tsipras broke these promises
• No unlikely events occurred.
• Greece is doing worse than ever (i.e. the greater good has not been served)

Based on these, we have:

(Tsipras made a list of promises) ∧ (Tsipras broke these promises)
= (Tsipras considered likely events that would cause him to break the promises) ∧ ((Tsipras lied) ∨ (Tsipras faced unexpected change))
= (Tsipras considered likely events) ∧ ((Tsipras lied) ∨ (((Tipras had anticipated all likely events) ∧ (unlikely event occurred)) ∨ (Tsipras had not anticipated all likely events)))
= (Tsipras considered likely events) ∧ ((Tsipras lied) ∨ (((Tipras had anticipated all likely events) ∧ FALSE) ∨ (Tsipras had not anticipated all likely events)))
= (Tsipras considered likely events) ∧ ((Tsipras lied) ∨ ((FALSE) ∨ (Tsipras had not anticipated all likely events))
= (Tsipras considered likely events) ∧ ((Tsipras lied) ∨ (Tsipras had not anticipated all likely events))
= (Tsipras considered likely events) ∨ (Tsipras had not anticipated all likely events)∧ (Tsipras lied)
= TRUE ∧ (Tsipras Lied)
= Tsipras Lied

Okay. So we formally proved that, if we accept that someone with integrity carefully considers what promises he makes, and that failure to do this constitutes lying, then Tsipras lied. But let's take this further:

Tsipras Lied
= (Tsipras is dishonest) ∨ (Tsipras is crazy)
= ((Tsipras is dishonest for selfish reasons) ∨ (Tsipras thinks dishonesty will serve the greater good)) ∨ (Tsipras is crazy)
= ((Tsipras is dishonest for selfish reasons) ∨ ((the greater good increases) ∨ (Tsipras was wrong))) ∨ (Tsipras is crazy)
= ((Tsipras is dishonest for selfish reasons) ∨ (FALSE ∨ (Tsipras was wrong))) ∨ (Tsipras is crazy)
= (Tsipras is dishonest for selfish reasons) ∨ (Tsipras was wrong) ∨ (Tsipras is crazy)

So there you have it. Officially proven: either Tsipras is dishonest because he wanted to gain power and fame, or he was dishonest because he thought this would somehow serve Greece but was disastrously wrong, or he is literally crazy.

Greece and the IMF

In case you missed it, Greece is on the news again. I wasn't going to write anything about it, because the situation seems so clear to me that I thought that anyone who disagrees with me on this one is either literally crazy or just doesn't know the facts. I genuinely thought that intelligence or political ideology had nothing to do with it anymore.

But I was wrong. A friend, who is neither stupid, nor uninformed, nor (I think) literally insane, told me today that she hates the IMF's approach towards Greece. Now. Everyone who knows me knows that I am not empathetic. I am rarely able to really put myself in someone else's shoes and experience their feelings. But I genuinely (as in, not just saying so for dramatic effect) feel empathy for the IMF staff. Even before this discussion with my friend I had played this scenario in my head, and felt the frustration, bewilderment and total confusion I am sure the IMF analysts are experiencing:

I imagine I am an IMF agent analyst. I look at the following data:

• GDP declining year on year since 2008.
• Debt % of GDP at 177%.
• Unemployment rate at 25.6%
• Declining tax revenue since 2008
• 35% increase in suicides in 2015.

So I go to my meeting with the EU and Greece, and I say "hi guys. Sorry to say this, but things aren't looking very good. I think things aren't really working out". I expect agreement on this, and so without pause I get ready to discuss possible solutions, but before I have a chance to move on, I am interrupted by the EU:

"What are you talking about? Greece is making tremendous progress. I really feel the turnaround is just around the corner".

I am taken aback. "But where do you see that? Because Greece is doing worse in literally every single statistic I could dig - from its economy to corruption levels."

"That may be," Greece jumps in, "but Greece has had it up to here with being the scapegoat for Europe."

I am even more confused at this non-sequitur, but I answer, "I am not trying to make Greece the scapegoat. I am trying to say your debt is unsustainable, which you guys have been saying for years. So now that I agree with you, you are saying I am the bad guy?!"

"Yes, because you at the IMF want us to make further cuts."

"No, we do not! We have very clearly said that we do not want more austerity! In fact, we have said time and again that we want less austerity than the EU, we want a surplus target of 1.5%, not 3.5%."

"But you ask for more measures."

"First, what we are saying is that if you and the EU agree to a 3.5% target, we want to see what measures will get you there. Second, our main point is that you need to re-balance your economy, make Greece a business-friendly environment. Stop driving away companies; stop randomly changing contract terms you have already agreed on; increase your retirement age, it's insane that 75% of people retire early."

And here the scenario ends, because I can genuinely not imagine what possible response could be given to this. "No, we changed our mind, the debt is suddenly manageable"? "No, we are anti-austerity, but insist on a 3.5% target"? "No, we are suddenly pro-austerity and a 3.5% target is fine, but we don't want to explain how we'll achieve it"? I mean, what?!

~ ~ ~ ~

I think one of the reasons for the acrimonious debate in Greece is that the word "austerity" is too vague to describe policy. Austerity in general means to cut spending. But not all spending is the same. Spending on doctors and nurses and teachers is essential; paying 2 public company "executives" 200,000 each before privatising it? Funding another public entity with 1 million EUR even though it was no purpose? Less so.

This is what really drives me insane - that you have pundits and experts and Krugman talking about things they (self-admittedly) do not understand. It seems that the common sense we employ in our daily lives goes out of the window when we talk politics. When my boss tells me to cut costs, she expects me to use judgement: if I went to her and said "I had a great idea for cutting costs - I fired all the engineers! The downside is we can't make anything, but costs have definitely gone down dramatically", she would, in turn, fire me. No-one would turn and say "aha! cutting costs is a bad business practice".

So to conclude: I suspect that most people dislike the IMF because they associate it with "austerity" and they associate "austerity" with the poverty and desolation in Greece. But Greece has not endorsed in spirit the steps the IMF has advocated. It has haphazardly cut vital services without liberalising its economy. It has failed to curb tax evasion, and based on what I see when I go back, has probably driven people to it even more. Saying austerity is a bad concept (and by implication, the IMF is a bad institution) because Greece is in a bad way is sort of like saying the original Star Wars were terrible because of Jar Jar Binks.

EDIT: My friend says she hates the IMF because they are not really trying to help Greece, because by their own admission their past recommendations haven't worked out, because their assessment of the debt is all over the place, because their "experts" are not really that expert &c.

I am not an economist, and she is, so I am happy to take her word that the IMF doesn't have a great track record, or that their experts are overpaid and not very good at their jobs (then again, most people say the same about all economists).

But none of this addresses my specific concerns in this case. Even if all that's true, it's undoubtable that Greece is not making progress, that the debt is not sustainable, and that cutting infrastructure spending while maintaining insane pensions, privileges and tax evasion and discouraging investment are not sustainable policies.

Against meritocracy as a political system

A friend outlined a proposal for keeping populism in check: he suggested that only the legislative branch ought to be elected, with the judicial and executive run by appointed experts. His idea is that these appointed experts would have the power to veto legislative action that they would deem potentially catastrophic.

In the wake of Brexit, Trump, Tsipras, Le Pen &c, I suppose many people have similar thoughts, so I decided to explain why I think this is a bad idea (also, it's much easier typing this on a keyboard vs debating on whatsapp).

First, I want to challenge the notion that experts operate differently to populists. My friend said policy should be made by adults who base their decisions on evidence, not emotion; I agree, but I do not think experts are much better than the average person at doing that:

a) Academics, elites and intellectuals have all too often been on the wrong side of history (women weren't admitted at Cambridge until 1869, and were only allowed to become full members of the university in 1948; Yale changed its admission policy in the 1920s to reduce the number of admitted Jews ; plenty prominent scientists have held racist views, such as James Watson; &c).

b) Scientists are just as prone to bias as anyone else. Only 6-8% of social sciences professors identify as conservatives, with Democrats outnumbering Republicans 8 to 1. This would be fine, except that researchers tend to let their political leanings influence their research:

1. They mistake their values for objective truth (e.g. one research team found (and I am oversimplifying here a bit) that conservatives make more unethical decisions than non-conservatives, but whether these decisions were ethical or not were evaluated from a liberal perspective! In other words, research that says "conservatives are more unethical" was basically "conservatives are not liberal".)
2. They focus on research that reinforces their narrative and avoid research that contradicts it. E.g. there was (apparently) for a long time a surprising lack of empirical research into the accuracy of stereotypes; and when research was finally performed (by conservative academics), it actually found that stereotype accuracy is one of the strongest effects in sociology. Similarly, there has been far more research in prejudice against right wing-targeted groups (e.g. ethnic minorities) than in prejudice against left wing-targeted groups (e.g. devoted Christians).
3. Researchers are actually more prone to confirmation bias than non-academics, since it seems that confirmation bias is positively correlated with IQ.
4. Academics are hostile towards those who hold different political views to the extent of discriminating against research that discredits their views. In one experiment, researchers produced two papers, identical in all respects except their conclusion: one showed that leftist activists were less mentally healthy than average, and the other showed the opposite. They then asked other psychologists to rate the two papers. Liberal psychologists rated the second version as more publishable; less liberal ones showed no such bias. Furthermore, most social psychologists explicitly say they would discriminate against conservative job candidates.

c) If science were purely evidence-based, the source of funding for a particular study shouldn't correlate with the study's result. Yet studies show that source of funding correlates with results that favour the funding body's interests. For example, one study found that 65% of pharma industry-sponsored studies produced results in favour of new drugs, vs 40% of independent studies. Wikipedia has an article on funding bias. Whole research fields have been influenced by sponsorship - such as the sugar industry managing to downplay the role of sugar in heart disease, blaming fat instead.

So, I think this all shows that scientists and academics are far from infallible: they can be prejudiced, biased and corrupt just like everyone else.

Second, it's a bit suspicious that people like the idea of meritocracy only when it leads to outcomes that agree with their own intuitions. For example, I am pretty sure that lots of people I know who dislike populists, and to whom this idea of meritocracy appeals, would still consider the Supreme Court to be in the wrong if they strike down Roe v Wade - even though the Supreme Court Justices are amongst the best legal scholars in the world.

Third, and most important, even if it were the case that experts were perfectly honest, scrupulous and unbiased, even if it were the case that people would respect expert judgement, it would still be a mistake to give absolute power to a small group of people. Maybe this group is good; what about their successors? The good thing about democracy is that it is mutable: if we make a mistake now, we can reverse it later. If you move to a system where a group of people can veto anything they don't like, the only way of changing it is violence and revolution.

Finally, I am constantly shocked at the degree of arrogance people who call for such systems are displaying. When I said this to my friend, he replied, "how am I being arrogant? I didn't say I should be the one to rule". True, but the whole call for meritocracy comes from believing that the crowds have got it objectively wrong; that some of us, the better educated ones, know better. I find this hard to stomach.

Evaluating Trump's Presidency

In the interests of objectivity and the scientific method, I suggest the following: come up with a list of metrics by which you will evaluate Trump’s presidency in 4 years. Rules:

a) Be fair: we all know Trump will most probably appoint a conservative Justice. It’s not fair to judge an entire presidency by one such action.

b) Make sure your criteria are sufficient to judge a presidency: if, upon finding out that Trump has done more or less well with respect to the criteria you have set, you cannot go looking for new criteria by which he has not done well and vice-versa – unless…

c) Trump does something objectively horrible that you hadn’t accounted for in your criteria – e.g. he deports all Muslims or turns out to be literally the Antichrist.

It turns out creating such a list of criteria is heavy work. First, it's difficult enough identifying metrics that provide a reasonably complete view of a country's performance. Second, it's not always easy to find data. Third, setting a target is a bit arbitrary.

So, this task being harder than I thought, and myself feeling lazy, I haven't put in this as much work as I should. Nevertheless, I have put together a few metrics that I think are okayish. In terms of targets, for the most parts I've benchmaked Trump vs Obama. In those areas where Obama has done well, I've set Trump's target to match Obama's performance. In those areas Obama has not done well, I've set Trump's target to either maintain the status quo, or if he has claimed that he will bring back the good old days etc, I've set his target to, say, 2012 levels.

In some specific cases, I've set sort of unfair targets for Trump, but he's had it coming. So, for example, it's not sufficient for him to reduce the crime rate in the USA, because that's already been happening; but since Republicans have been complaining that people feel less safe, he has to convince the population that they are safer.

Anyway, here we go:

Economy

• GDP CAGR of 2%, with 4% in his final year. Source: World Bank
• Debt no higher than today ($19.9 trillion). Source: US Treasury
• Unemployment rate at 4% (vs 4.8% today). Source: US Bureau of Labour
• Labour Force participation at pre-crisis level, i.e. 66% (vs 63% today). Source: As above.
• Bottom 10th percentile of households income growth. Note: the bottom 10% of households earns less now than in 2009, whereas the top 10% earns about 7% more. Source: Census Bureau

Race & Gender Equality

• Female income % male income at  83% vs 79.6% (maintain past 4Y CAGR). Source: Pay Equity
• Black household income % white income at 61.4%, flat vs today. Note: black households earn less as a % of white households than they did in 2009. Source: Census Bureau (link above).
• % of blacks with >=4 years highschool = % of whites. Source: Census Bureau
• % of blacks with >=4 years college at 24.5% (+2% vs today). Source: as above
• Blacks' trust in the police at 2012 level, i.e. 36% vs 30% today. Source: Gallup

Crime

• Violent crime rate down 0.9% per year. Source: FBI
• Rate rate flat vs today. Note: the rate has been increasing over the past 3 years. Source: as above.
• Level of concern about violent crime down to 2010 level, i.e. 42% vs 53% today. Source: Gallup

Education

• PISA score back at 2012 level. Source: PISA

Ochlocracy

Polybius wrote that ochlocracy is the culmination of a society’s progression through different political systems, succeeding democracy. Following Brexit, a lot of liberals now seem to think that we are on the verge of transitioning from the latter to the former.

I agree that our society is beginning to see signs of ochlocracy – but Brexit has nothing to do with it. Brexit was, in fact, decided in accordance with perfectly democratic principles. Elected representatives voted to hold a referendum; the population voted in accordance with established procedures, free from coercion or intimidation; and the government is currently trying to implement the outcome.

Wikipedia doesn’t offer a precise definition of the term, so let me explain quickly what I think it means: ochlocracy in my view refers to mob rule, whereby a group of people impose their will and influence policy through aggression, bypassing the rule of law and established rules, policies & procedures. Ochlocracy does NOT refer to efforts to have direct democracy or policy-making through referenda, nor does it refer to the election of populist leaders.*

But as I said at the beginning, I do see signs of a transition to ochlocracy – and ironically, the “ochlos” I fear is not the majority that voted for Brexit, but the extremely aggressive, oppressive and abusive liberal minority. Let’s look at a few examples:

a) In 2015, Yale students cornered and abused Nicholas Christakis because of his and his wife’s argument that students should not be adverse to being challenged, eventually leading to their resignations.

b) In 2013, a programmer at a conference joked with the person sitting next to him about “forking” and “dongles” (technical terms). A woman sitting close to them overhead and tweeted a picture of him it with the caption “Not cool. Jokes about forking repo’s in a sexual way and “big” dongles. Right behind me”. The tweet went viral, generated controversy, and the programmer was fired. The woman herself was fired a few days later, as her tweet generated backlash too.

c) Again in 2013, Justine Sacco tweeted a joke about how she can’t get AIDS because she’s white just before taking off from Heathrow. By the time she landed in Cape Town, she had received tens of thousands of abusive tweets, which led to her being fired from her job.

d) In 2015, the University of York cancelled a planned “Men’s Day” aiming to highlight issues affecting males (such as higher suicide rates) after a number of students & members of staff penned a letter suggesting that such an event would “amplify existing, structurally imposed, inequalities”.

e) In 2015, the judge presiding over “People v. Turner” handed out a lenient sentence to Brock Turner. The backlash that followed led the judge to refuse to hear more criminal cases.

f) Following the documentary series “Making a Murderer” in late 2015, more than 100,000 people signed a petition to the President to pardon Avery – although thankfully, in this case, this public reaction didn’t have an effect.

Now, to be perfectly clear, I am not making an argument as to the legitimacy of the arguments in each case (though I do have strong views for cases a – d). Nor am I suggesting people shouldn’t be able to protest or argue for their positions. What I am saying is that when people disagree with a particular person, or policy, or action, their protest should aim to have that person, policy or action reviewed and evaluated in accordance to due process; instead, what we see is an angry public demanding that due process be by-passed. In each of the cases above, the people on the opposite side of the protesters were not granted fair evaluation. People lost their jobs or were pressured to change their careers regardless of how good they were at them. The men’s day cancellation was led by 200 people; more than 3,000 launched a counter-petition to reinstate it (unsuccessfully (?!)). And the public requesting Avery’s pardon is so ignorant of the relevant legislation that they did not realise the President does not have the power to pardon him.

I could give so many more examples – accused rapists convicted by the public before their case is even heard, speakers dis-invited and refused platforms, academics fired from their positions or physically attacked for holding controversial views &c. THIS is what ochlocracy means. And it is far more worrying than Brexit.

* I want to be very clear on this – some people have effectively claimed that policy-making through referenda is ochlocracy because people are called on to make decisions which they are not qualified to make, and that true democracy in today’s world is representative democracy. This definition of ochlocracy is flawed in many ways:

a) It’s just begging the question – how come we can claim the average Briton is poorly qualified to vote on the EU, but qualified to vote for a representative, when different representatives advocate for wildly different policies, all very difficult to evaluate? On what criteria are citizens meant to vote for representatives if not based on their policies, which they are not educated enough to understand?

b) The system where the best qualified rule is not democracy, but aristocracy… rebranding aristocracy as democracy because it’s sounds less elitist is disingenuous.

c) Such a definition would qualify Switzerland as an ochlocracy – and given that the term is a pejorative, few people would agree with such a classification.

Finally, saying that the election of a leader unpopular with the elite constitutes ochlocracy is, well, unbelievably elitist and arrogant even for me.

Trump is basically a five year old

Today I watched the second US presidential debate. Halfway through, I had a horrible realisation: I found myself disliking Clinton more than Trump, and, emotionally, I got a kick whenever he scored a point.

To be clear: were I voting in the States, and had to choose only between these two candidates, I'd choose Clinton. But that's due to rational thought. If I were voting purely emotionally, I think I'd go for Trump.

I know how horrible this sounds, so I spent some time thinking about why I feel this way. Here's what I came up with: I consider Trump emotionally and mentally almost challenged. He is either pulling a fantastic act, or he is genuinely delusional, paranoid, psychologically damaged and childish. I think this last adjective describes him best: childish. He throws tantrums, can barely string together a coherent sentence, jumps from topic to topic, has a short attention span &c. Seriously, watch him do anything and ask yourself, what would a 5 year old do in the same situation? In most cases, you'll realise their actions will be identical.

The thing is, when you stop taking a person seriously, and start treating them as a child in your mind, it's hard to get angry at them. In the same way I wouldn't take it seriously when a child says it hates its mother, I can't take Trump seriously when he comments on, say, immigrants. Whenever Gingrich opines on anything, I feel revolt and disgust. Whenever Trump offers an identical view, I just shrug it off.

Hillary, in contrast, is smart and grown up. So her flaws are far less easy to forgive. When Trump brings up the fact that she has made hundreds of millions for herself while being in public service, I cannot help getting annoyed; when she talks about Wall Street banks being greedy, and then makes millions off giving speeches at these same banks, I get angry; when she says one thing in public, and another in private, and tries to justify herself by comparing herself to Lincoln, I become incredulous. And when her supporters overlook these facts, when a lot of the media to which I subscribe hate the idea of Trump so much they end up exalting Clinton, I begin leaning the other way.

I am writing all this because I think a very big percentage of Trump's supporters feel(s?) the same way. So, for those of you who are actively trying to prevent a Trump presidency, I say this: stop fact-checking him; stop pointing out all the horrible things he has said or done - that's not necessarily going to sway people. The more you try to influence people by pointing out Trump's misdeeds, the more they are going to get riled at the hypocrisy of overlooking Clinton's.

So, instead, make this argument: Clinton will be a meh president. She's predictable. She won't shake things up. But Trump is unpredictable. Do you really want a 5 year old having access to the world's largest nuclear arsenal?