Hotz on the Trail

Most Science Studies Appear to Be Tainted by Sloppy Analysis
September 14, 2007; Page B1
SCIENCE JOURNAL
By ROBERT LEE HOTZ

We all make mistakes and, if you believe medical scholar John Ioannidis, scientists make more than their fair share. By his calculations, most published research findings are wrong.

Dr. Ioannidis is an epidemiologist who studies research methods at the University of Ioannina School of Medicine in Greece and Tufts University in Medford, Mass. In a series of influential analytical reports, he has documented how, in thousands of peer-reviewed research papers published every year, there may be so much less than meets the eye.

These flawed findings, for the most part, stem not from fraud or formal misconduct, but from more mundane misbehavior: miscalculation, poor study design or self-serving data analysis. "There is an increasing concern that in modern research, false findings may be the majority or even the vast majority of published research claims," Dr. Ioannidis said. "A new claim about a research finding is more likely to be false than true."

The hotter the field of research the more likely its published findings should be viewed skeptically, he determined.

Take the discovery that the risk of disease may vary between men and women, depending on their genes. Studies have prominently reported such sex differences for hypertension, schizophrenia and multiple sclerosis, as well as lung cancer and heart attacks. In research published last month in the Journal of the American Medical Association, Dr. Ioannidis and his colleagues analyzed 432 published research claims concerning gender and genes.

Upon closer scrutiny, almost none of them held up. Only one was replicated.

(Nod to Robert Higgs, who knows from bad science)

Hold the phone, Calderón!!

There is good news and bad news from Mexico.

First the good news: President Calderón is working with opposition parties in the legislature and getting things done in a way that his predecessor Vicente Fox never could / would.

Now the bad news: President Calderón is working with opposition parties in the legislature and getting things done in a way that his predecessor Vicente Fox never could / would.

His current achievements? A convoluted tax increase and a gutting of the independent electoral board (IFE) that helped bring real democracy to the county over the last 7 years.

Lets use the NY Times as our perfect negative indicator for all things economic:

President Felipe Calderón won his first major legislative victory Friday when the Mexican Congress passed a comprehensive tax bill aimed at one of Mexico's biggest economic problems: its meager tax take and miserly public spending.

Ah, yes Mexico's problem is that the government is too small. Thank you Elisabeth Malkin. Holy Crap. Meager and Miserly, not to be judgmental or anything.

Mexico's problem is that it is a lower middle income country stuck in a rut. It needs sustained economic growth. Improving the country's educational system and infrastructure would definitely help, but there is nothing like this being discussed for these revenues, and not even the Times yet advocates tax increases as the path to higher economic growth.

The real problem with Mexican tax revenues is non-compliance. Evasion, off the books transactions, underreporting are legendary there. Adding a new "alternative minimum tax" on companies is not likely to improve this issue.

The IFE overhaul is just plain bad. In the old days, the incumbent party (always the PRI) counted the votes and regulated the election. Needless to say, this didn't always please the opposition. To me, Ernesto Zedillo is the real unsung hero of Mexican democracy. As he was the PRI president who was instrumental in creating an independent electoral commission. And, this commission showed exceptional fortitude in the face of incredible political pressure, when it certified Calderón as president.

The Times actually gets this one right: Getting rid of the institute’s board members before the end of their term in 2010 would make a mockery of the autonomy that was meant to protect the institute — and Mexico’s electoral system — from the vagaries of Mexico’s politics. It would also open the door for the loser of the next election to try the same gambit again.

Man, if this is success, give me gridlock!

Ayn Rand, Robert Reich, and CEO Pay: A Neo-Rawlsian Non-Stynthesis

NYT piece on Ayn Rand, mentioning a guy I admire very much, John Allison:

"One of the most influential business books ever written is a 1,200-page
novel published 50 years ago, on Oct. 12, 1957...'I know from talking to a
lot of Fortune 500 C.E.O.'s that 'Atlas Shrugged' has had a significant
effect on their business decisions, even if they don't agree with all of Ayn
Rand's ideas,' said John A. Allison, the chief executive of BB&T, one of the
largest banks in the United States. 'It offers something other books don't:
the principles that apply to business and to life in general. I would call
it complete,' he said...She was born in 1905 in Russia. Her life changed
overnight when the Bolsheviks broke into her father's pharmacy and declared
his livelihood the property of the state...Shortly after 'Atlas Shrugged'
was published in 1957, Mr. Greenspan wrote a letter to The New York Times to
counter a critic's comment that 'the book was written out of hate.' Mr.
Greenspan wrote: ''Atlas Shrugged' is a celebration of life and happiness.
Justice is unrelenting. Creative individuals and undeviating purpose and
rationality achieve joy and fulfillment. Parasites who persistently avoid
either purpose or reason perish as they should.'...Every year, 400,000
copies of Rand's novels are offered free to Advanced Placement high school
programs. They are paid for by the Ayn Rand Institute, whose director, Yaron
Brook, said the mission was 'to keep Rand alive.'...Mark Cuban, the owner of
the Dallas Mavericks, who was born in 1958, and John P. Mackey, the chief
executive of Whole Foods, who was 3 when the book was published, have said
they consider Rand crucial to their success. The book's hero, John Galt,
also continues to live on. The subcontractor hired to demolish the former
Deutsche Bank building, which was damaged when the World Trade Center towers
fell, was the John Galt Corporation. ." [NYT]

And, then, from someone I admire MUCH less, Robert Reich:

"There's an economic case for the stratospheric level of CEO pay which
suggests shareholders -- even if they had full say -- would not reduce it.
In fact, they're likely to let CEO pay continue to soar. That's because of a
fundamental shift in the structure of the economy over the last four
decades, from oligopolistic capitalism to super-competitive capitalism. CEO
pay has risen astronomically over the interval, but so have investor
returns...CEOs have become less like top bureaucrats and more like Hollywood
celebrities...This economic explanation for sky-high CEO pay does not
justify it socially or morally. It only means that investors think CEOs are
worth it...if America wants to rein in executive pay, the answer isn't more
shareholder rights. Just as with the compensation of Hollywood celebrities
or private-equity and hedge fund managers, the answer -- for anyone truly
concerned -- is a higher marginal tax rate on the super pay of those in
super demand." [Reich, WSJ op-ed]

(Nod to KL, who could NEVER get paid enough, in my book!)

Dear Ben: Do something bold tomorrow

Tomorrow is the showdown at the OK Corral for Bernanke and the FOMC. I personally think Bernanke is a terrific economist who has inherited a truly tough situation and done well so far.

I think the Fed would be best served by making a clear stand one way or the other. Either hold steady against moral hazard and inflation or make a real, significant, sizeable rate cut to try and forestall (or minimize) a recession.

A .25 rate cut doesn't do anything really, it's the conventional wisdom, but really it's an empty gesture that leaves the Fed's intentions unclear, and people on both sides of the issue dissatisfied.

So stand pat or go big I say! Personally, I'd stand pat. I'd send a clear message that, as long as I am Chair, the Fed will focus on inflation first and foremost, but I could accept a clear signal of the other kind.

Greenspan Spills the Beans: Fed NOT Independent

Since my dissertation (completed in 1984 but not published in the Journal of Monetary Economics until 1991) I have argued that there is strong statistical evidence that political events like presidential elections and changes in the partisan control of Congress and the White House have systematic impacts on monetary policy(see this, this, this, or this). Needless to say, this view is not widely shared by macroeconomists.

Now, Alan Greenspan, the "maestro" has a book coming out and he's basically pulling a Jose Canseco, going on media outlets and saying outrageous things, like he was against the Bush tax cuts even though he repeatedly testified in favor of them, to try and move some product.

For my purposes though he did say something interesting to the FT:

Critics say the Fed should have tried harder, raising rates sooner and faster. Mr Greenspan counters that that would not have been acceptable “to the political establishment” given the very low rate of inflation. He says “the presumption that we were fully independent and have full discretion was false.”

Thanks Al !!!!

Bill Gates, pauper?

All-time richest Americans with wealth reported in billions of 2006 valued dollars according to Bernstein & Swan:

John D Rockefeller: 305.3
Andrew Carnegie: 281.2
Cornelius Vanderbilt: 162.4
John Jacob Astor: 1o2.1
Stephen Girard: 95.6
Richard Mellon: 82.3
A.T. Stewart: 80.8
Fredrick Weyerhauser: 72.2
Marshall Field: 60.1
Sam Walton: 58.6
Jay Gould: 58.2
Henry Ford: 54.3
Bill Gates: 53.0
Andrew Mellon: 50.5
Warren Buffett: 46.0

Of these 15, 3 were born in the 1700s (Vanderbilt, Astor, Girard), 9 in the 1800s and 3 in the 1900s (Walton, Buffett, Gates). The biggest time gap between mogul births is 55 years (from 1863 (Ford) to 1918 (Walton)).

Most of these names are quite familiar, but I'd never heard tell of Girard or Stewart.

Stewart was apparently the original Sam Walton: Stewart knew that the key to success was not where the store was placed, but rather where “to obtain wholesale trade to undersell competitors.”

Girard was a banker and political gadfly.

hat tip to Tyler

Who's better, Who's best?

In individual sports, we are currently blessed with seeing the two greatest players in the history of their sports performing at their best. They transcend their own sport rivals so greatly, that the best point of comparison for one is the other, even though the sports are very different. I have previously opined that of the two Tiger's body of work was more impressive, but after this summer and meaning no disrespect to Tiger, I have to reverse myself and give the KPC endorsement for GOAT to Roger Federer.

In 2007, Tiger Woods won 7 times, including one major (the PGA). He won just over $10,000,000 in prize money. He won the inagural FEDEX cup playoff and its $10,000,000 annuity first prize. He was tied for second at two other majors, the Masters and the US Open. He has won 13 majors and is closing in on Jack Nicklaus' record. Woods has won 5 of the last 12 majors and also has 3 second place finishes in that stretch.

In 2007, Roger Federer won 6 times, including 3 of the 4 majors and he lost in the final of the other major, the French Open). He won just over $7,000,000 in prize money. He won the US Open Series which when combined with his win at the US Open gave him a $1,000,000 cash bonus. He has won 12 majors and is closing in on Pete Sampras' record. Federer has won 6 of the last 8 majors and lost in the finals of the other two. Going a bit further back, he has won 11 of the last 16 slams contested in Tennis.

Fed is one crazy Spaniard away from having won back to back grand slams! He has won the US Open 4 straight years and Wimbledon 5 straight years. As great as Tiger is, his best streaks are won back to back Masters in 2001-02, back to back US Opens in 2005-06, and back to back PGAs in 2006-07. He did win 4 slams in a row in 2000-2001.


Everyone knows about Tiger, he's an American and golf is a lot more popular than tennis. But Federer is even more transcendent, at least right now.

What's bred in the bone

Central Banker turned annoying gadfly Alan Greenspan had a well deserved reputation for talking without actually saying anything, especially when testifying before Congress. Apparently this was a lifelong skill as evidenced by this 1957 letter to the Editor of the NY Times defending his mentor's book Atlas Shrugged against a negative review:

Atlas Shrugged is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should. Mr. Hicks (the reviewer) suspiciously wonders "about a person who sustains such a mood through the writing of 1168 pages and some 14 years of work." This reader wonders about a person who finds unrelenting justice personally disturbing.


Holy Crap! I really hope he was trying not to actually say anything there, because if he was trying to say something, what he says is pretty freakin' scary.

Heresthetics in Action!

When Mungowitz and I were little lads in grad school, the late great William Riker was a frequent visitor to Wash U. Riker coined the term heresthetics to refer to the art of changing political outcomes without changing people's underlying preferences. One way he claimed this could be done was by introducing a new policy dimension into the debate, which is pretty much exactly what the Anti-Evo movement in Bolivia has been able to do.

I don't know how much they read Riker, but somehow by starting a seemingly frivolous campaign to have the capital moved back to Sucre from Morales stronghold La Paz, the anti-Morales folks have effectively stymied Evo's bid to re-write Bolivia's constitution in a way that improved indigenous rights and also allowed Evo to remain in office for the forseeable future!! The million strong Evo "street team" is reduced to demanding that the capital stay in La Paz rather than demanding restitution for centuries of abuse at the hands of the Santa Cruz elite.

Somewhere, wearing a deafeningly loud sport jacket, Bill Riker is looking on and smiling.

Chicks and ducks and geese better scurry.....

As you may have gathered by now, I live in Norman OK. Besides OU football and Native American Gaming, there isn't much going on 'round here.

My neighborhood, which features a wooden bridge (pictured on the left) and a big barn, is actually a tourist attraction. People come to have their photos taken on/by the bridge in their prom dresses/wedding dresses/glamor-shot gowns/mullets etc. (really!).

Often the photo taker has backed well out into the road and you gotta decide whether to swerve/stop/or thin the gene pool. Mrs. Angus and I have become inured to all these shenanigans, or so we thought until yesterday when we happened upon a big boned lass in cowboy gear posing on the bridge with her sheep!!! (Really!) Mrs. Angus took in the scene, turned to me and said "that was the prettiest sheep I've ever seen. I'd get my picture taken with it". (I swear that I am not making any of this up)

Charter Schools In LA

Our good friend Hispanic Pundit gives some interesting cuatro uno uno on charter schools in Los Angeles.

The empire strikes back.....

Greenspan Acknowledges He Failed to See Early on the Risks of 'Subprime' Mortgages

When he was at the helm, Greenspan maintained there was little the Fed -- which also oversees the safety and soundness of banks -- could do about the subprime situation. One of the Fed's governors, however, had raised a red flag about questionable lending practices.

"Well, it was nothing to look into particularly because we knew there was a number of such practices going on, but it's very difficult for banking regulators to deal with that," Greenspan said in the interview.

Some blamed Greenspan's interest rate policies for feeding the housing frenzy. Sales had hit record highs and house prices galloped from 2001 to 2005. Then the market fell into a deep slump.

The Greenspan Fed from early 2001 to the summer of 2003 had slashed interest rates to their lowest level in decades. It was done to rescue the economy from the blows of the bursting of the stock market bubble, the 2001 recession, the terror attacks and a wave of accounting scandals that shook Wall Street.

Critics say the Fed kept rates too low for too long, encouraging a Wild West mentality in housing.

Greenspan, however, defended the institution's actions.

"They are mistaken," he said of the critics. "It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low," he said.

Bear with me folks while I make a couple of observations.

1. As I recently pointed out, the fed funds rate was too low according to the Taylor Rule in 2004 and 2005 as well as in 2001-2003. Even though the Fed was raising rates in 04/05, economic conditions were calling for larger and faster rate increases.

2. We have GOT TO STOP ALLOWING/EXPECTING THE FED TO MICRO MANAGE THE ECONOMY!!! "It was our job to unfreeze the American banking system if we wanted the economy to function". In 2001-2003? Are you freaking kidding me?

The Fed needs to target either the price level or inflation and forget all this unfreezing and bubble popping and fine tuning nonsense. Central Bankers: get over yourselves. Yer doin' it wrong!

And they wrote it all down as the Progress of Man*

Hi, I'm Angus and I am an audio luddite. I make my own amps upstairs in my "project room".
I own and use an old Tektronix oscilloscope to help test out my designs. I build my own
speakers in the garage. My CD player uses vacuum tubes (FWIW, this is all true).
But I can't realistically run my own recording studio and progress and philistines are
ruining my music. Everyone uses IPODs. Most everyone puts compressed MP3s
(or some other compressed format) on them and listens through piece of crap earbuds.
This is so popular that recording engineers are starting to optimize recordings for being
heard in this manner.

HOLY PINK FLOYD! SAY IT AIN'T SO!

It's so. supposedly some recording artists want to hear the producers mixes of their tracks on an
ipod before deciding if it sounds good enough.

Here are some quotes from industry pros "courtesy" of the ever gated WSJ:

"Right now, when you are done recording a track, the first thing the

band does is to load it onto an iPod and give it a listen," said Alan Douches, who has worked with Fleetwood Mac and others.

"Years ago, we might have checked the sound of a track on a Walkman, but no one believed that was the best it could sound. Today, young artists think MP3s are a high-quality medium and the iPod is state-of-the-art sound."

For example, says veteran Los Angeles studio owner Skip Saylor, high frequencies that might seem splendid on a CD might not sound as good as an MP3 file and so will get taken out of the mix. "The result might make you happy on an MP3, but it wouldn't make you happy on a CD," he says. "Am I glad I am doing this? No. But it's the real world and so you make adjustments."

As a result, contemporary pop music has a characteristic sound, says veteran L.A. engineer Jack Joseph Puig, whose credits include the Rolling Stones and Eric Clapton. "Ten years ago, music was warmer; it was rich and thick, with more tones and more 'real power.' But newer records are more brittle and bright. They have what I call 'implied power.' It's all done with delays and reverbs and compression to fool your brain."

I'm not totally crazy, I gotz an IPOD. But I download to it in apple's uncompressed (lossless) format.
Sure it holds fewer songs that way, but I still have a few hundred on there with room for more.

The difference in sound is astounding. Please don't make me have to build a recording studio
in the back yard.

Stand up for real music today!


* John Prine: Paradise

Durham Bulls Game

Last home game of the season last night at the DBAP. For some reason, not many people come to the "Governor's Cup" games, even though it is the World Series for the International League of AAA baseball.

So, we got excellent seats, fifth row behind the visitors on-deck circle.

Bulls won, 5-1, behind a dominant pitching performance by Jeff Neimann.

Some highlights, at least from my perspective:

1. In the "sumo" contest, where two people put on fat suits and wrestle, one guy falls down. The other grabs the downed guy's sumo diaper, yanks it up, and runs forward. This has the simultaneous effects of giving downed boy an excellent wedgie, and run his face through the grass for nearly three feet. Best sumo ever.
(YouTube video of a different, but also enjoyable, sumo contest)

2. A very fine brawl. Unusual in AAA. But Bulls pitcher Neimann (6'9", 260 lbs!) threw (uncorked, I think I have to say) a 94 mph sailer that went about six inches BEHIND Richmond batter Doug Clark's head. It was also at least 18" ABOVE Clark's head, to be fair, but Clark got (as KPC friend Jim Bouton put it) the "red ass." Clark started fussing at Neimann, waving his bat, fuming. Clark is 6'2", 210, not small, but I don't think anyone really wants to fight Neimann. He is monstrous. Two pitches later, Clark hits a single just past the first baseman, and pitcher Neimann moves toward first in case Bankston (1st baseman) made the play. Clark starts fussing again, pushes are exchanged, both benches clear, there is some vigorous debating and genealogy questions ("YOUR mama was so....) are raised.

Order is restored. But then Richmond coach, Brundage, gets into it with the third base ump. Brundage gives it the full Lou Pinella (Lou is the original red ass, of course). They are yelling and moving around each other. I say, "come on, let's play!" My son turns to me, aghast. "Are you kidding? This is great!" And, of course, it was.

3. A towering fly ball was hit. I mean, it was above the lights, you could barely see it. And then it starts coming down...pretty much right at our seats! We all stand, hoping (not really) to get a chance to catch this ball (it had to be smoking on atmospheric reentry). It lands about four seats to our left, down one row. As my eye followed it, I saw this little morality play:
a. young woman, bent over forward, in her seat, yelling, hiding her head.
b. young man, gamely standing over her, hands over her back, to protect her.
c. young man, seeing that ball is coming RIGHT AT THEM, ducks his own head, and runs across two other people to get to the aisle. Just bails, a total morale break.
d. ball lands about 8 inches to left of young woman.
e. young man returns to seat, laughing.
f. young woman stares at him, gives him a pretty solid straight right to the chest. "You wimp!"

Other fans start the "Aaaaaaahhhhh-lice" cheer. Young man no longer laughing. Young woman pretty much stared straight ahead, arms folded, for the next two innings.

4. Best part of the night for me: A confirmation that the younger generation is getting the information needed about the classics, the REAL classics. I notice (it's 9:30 pm) that my younger son is wearing sunglasses. I mention this. My sons, in unison, say: "It's 106 miles to Chicago, we got a full tank of gas, half a pack of cigarettes, it's dark and we are wearing sunglasses. HIT IT!" Brought tears to my eyes. Who says that today's youth aren't learning the canon?


(YouTube of Durham Bulls 2007 Fan Appreciation Video) What a guy....makes ya cry....UNT I did.

For the 1,000th Post: Prez Pong

Usetabe, you had to go to Stuckey's for really horrible, schlocky stuff.

Now, it's on the internet. But will future generations see it? It's not made out of plastic any more, it's...virtual!

For example, this is as bad as anything Stuckey's sells. But will it last? An excellent bit of Americana, schlock, and history all in one. The various "begin!"s and the music....excellent.

(1,000th post on this blog. Whodathought!)

Too Insure Promptness

Why tip? Why not tip?

I was fascinated to read that "In Iceland, tipping in a restaurant is considered an insult." Is the norm, "I give you sullen, indifferent service as a matter of choice. Do not try to bully me with offers of riches, American pig! I cannot be bought. Here is your cold dinner. I'll be back in half an hour with your silverware."

Well, in the union shop I used to work at, working AT ALL was considered an insult. You could get beaten up (I was threatened by two guys with shovels) for working at more than a snail's pace.

Presumably, the cost of labor is the same total, regardless of whether the hourly wage is lowered in anticipation of tips, or if there is no tipping and hourly wages are higher.

Of course, that's not true empirically. The recent decision of American, and other airlines, to charge $2 per bag is KILLING the skycaps out front of the terminal. Their wages have not increased, but tips have dried up almost completely.

So, a question for all you life-arrangers out there: should tipping be outlawed? Required? Or is the current system, where discretion of the customer at the end improves service throughout, the best?

Consider this.

Or, this. Craig Newmark says, "that uncertainty—that freedom to exercise discretion, to leave as little or as much as you wish—is why tipping has flourished as a social institution. (In the same spirit, Americans prefer giving charity privately rather than through their government.) Diners—eighty per cent of whom say that they prefer tipping to a set service charge—like the power that the ability to tip gives them. Waiters like tipping because it gives them the chance to distinguish themselves from the crowd and to score an occasional windfall. Tipping, curiously, has gone from being the antithesis of individualism to its apotheosis." Or is it, as a commenter on Craig's post notes, really just a tax issue?

Freedom? Freedom! Freedom....

Ms. Kay Hymowitz delivers certain opinions regarding libertarianism.

Two excerpts:
More than perhaps any other American political group, libertarians have suffered the blows of caricature. For many people, the term evokes an image of a scraggly misfit living in the woods with his gun collection, a few marijuana plants, some dogeared Ayn Rand titles, and a battered pickup truck plastered with bumper stickers reading "Taxes = Theft" and "FDR Was A Pinko."

The stereotype is not entirely unfair. Even some of those who proudly call themselves libertarians recognize that their philosophy of personal freedom and minimal government can be a powerful magnet for the unhinged. Nor has recent political history done much to rehabilitate libertarianism's image as an outlier.

and

Libertarians come in many flavors, of course, but they share certain enthusiasms beyond free-market economics. They are often great consumers of science fiction, with an avid interest in space travel. And they have an almost unlimited enthusiasm for biotechnology, especially for advances that might allow us to manipulate our natures and extend our lives. Taken together, these elements constitute what might be called the libertarian dream--the dream of shaping your own meaning, liberated from family, from the past, from tradition, from biology, and perhaps even from the earth itself.

Such utopian ambitions are difficult to satisfy or even contain in the mundane world of American politics. For some time to come, they are likely to make libertarianism the natural home of assorted cranks and crazies, and thus to continue to provide fodder for its at least partly deserved caricature.

Angus and I are both libertarians, after a fashion. But our views have roots rather different from those described in the books Ms. Hymowitz reviews.

We don't trust people.

We actually pretty much don't even LIKE other people, with a few temporary exceptions. (This includes each other, but I have to admit he has cause. He has CAUSE, I'm sayin'.)

Both of us worked in the private sector. Angus ended up being a union steward (yes, he did!), just because he wouldn't back down to the dickhead foreman on the welding crew. (Yes, imagine that: Angus with a blow torch. And this was before he achieved his current, heavily muscled physique!).

And I...well, I worked a bunch of different places, and have little love for the hierarchy and repression of the industrial workplace.

Most jobs suck. Most corporations are rapacious, and most foremen are dickheads.

But you can leave a job. You can't leave a city / county / state / nation, at least not without paying your "fair share" of taxes. ("What do I owe you?" "Well, what have you got?")

Angus and I aren't utopian libertarians. (And I think the Bishop is with us on this). Things can be really bad in the private sector. But they are rarely SO bad that attempted meddling by bed-wetting, tree-hugging do gooders can't make things much, much worse.

So, Kay Hymowitz is wrong. We are not trying to be liberated "from the earth itself." We would be satisfied just to be sure we are free from Kay Hymowitz.

(Nod to C-Greg)

This is the mess that the Fed hath made....

.....let us rejoice and ask them to fix it??

One big reason why we are in the mess we are in today is that the Fed kept short term interest rates too low for too long compared to the benchmark that many policymakers pay homage to, namely the Taylor Rule.

The classic version of the Taylor Rule takes the inflation target to be 2%, the long term real interest rate to be 2% and calls for raising rates when inflation is above 2% and when output is above potential. From 2001 through 2005 the Taylor Rule called for an average Fed Funds rate of 4.92% (I used actual inflation not core inflation and measured potential output using the Hodrick Prescott filter to generate these numbers), while the actual rate averaged 2.9%. The graph below shows the quarter to quarter details.


So during Greenspan's last five years, the Fed Funds rate was on average two full percentage points below the benchmark, and the benchmark takes economic conditions into account!!!

Ironically, everyone is clamoring for the same organization to rescue them using the same tactic that helped to create the original problem: lowering rates.

A Utilitarian Rationale for "Social Insurance"?

My good friend Price Fishback has an interesting paper:

Striking at the Roots of Crime: The Impact of Social Welfare Spending on
Crime During the Great Depression

Ryan Johnson, Shawn Kantor & Price Fishback
NBER Working Paper, January 2007
(slightly older, free version)

Abstract:
The Great Depression of the 1930s led to dire circumstances for a large
share of American households. Contemporaries worried that a number of these
households would commit property crimes in their efforts to survive the hard
times. The Roosevelt administration suggested that their unprecedented and
massive relief efforts struck at the roots of crime by providing subsistence
income to needy families. After constructing a panel data set for 83 large
American cities for the years 1930 through 1940, we estimated the impact of
relief spending by all levels of government on crime rates. The analysis
suggests that relief spending during the 1930s lowered property crime in a
statistically and economically significant way. A lower bound ordinary least
squares estimate suggests that a 10 percent increase in per capita relief
spending during the Great Depression lowered property crime rates by close
to 1 percent. After controlling for potential endogeneity using an
instrumental variables approach, the estimates suggest that a 10 percent
increase in per capita relief spending lowered crime rates by roughly 5.6 to
10 percent at the margin. More generally, our results indicate that social
insurance, which tends to be understudied in economic analyses of crime,
should be more explicitly and more carefully incorporated into the analysis
of temporal and spatial variations in criminal activity.

(Nod to KL, who would still commit crimes no matter HOW much the government offered to pay him. It's the thrill, you see)

Terrorism: yer doin' it Wrong!

Islamic militants claim foiled attack This from the AP not the Onion, I promise!

BERLIN - An Islamic militant group designated as a terror organization by the U.S. claimed responsibility for foiled bombings that targeted the American air base at Ramstein, as well as U.S. and Uzbek consulates in Germany, the government said Tuesday.

The Interior Ministry, which is responsible for police and internal security, said the Islamic Jihad Union made the announcement on the Internet and that government computer experts viewed it as genuine. Three men were arrested Tuesday on suspicion of planning massive bombings against U.S. and other facilities in Germany.

"In an Internet appearance, the Islamic Jihad Union has taken responsibility for the foiled attacks in Germany and addresses the arrests of Sept. 4, 2007," the ministry statement said. "The attacks planned according to this for the end of 2007 were directed against the U.S. air base at Ramstein as well as U.S. and Uzbek consular facilities in Germany."

Uh, hi, we're the Islamic Jihad Union. Y'know those dudes that got arrested in Germany, the ones who didn't hurt anyone or blow up anything. The ones who didn't notice when the cops swapped out their explosive materials for dirt? Yeah, that was us. Ready to give up your wicked western ways NOW? No? Dam! Kthxybai!

All bad news, All the time

US exports are at an all time high and grew 2.7% last month. It was robust export growth that largely caused the recent upward revision of the second quarter GDP number. This is good economic news, but it gets buried in trade deficit hysteria.

Even though the headline is "Trade Deficit Declines Slightly" the story goes negative real fast. We are told by an "expert" that the number will probably be revised upward, we are told our "deficit with China" is at its "second all time highest" level, and we are treated to expert analysis by thug-o-conomist James Hoffa:

"Americans realize that our bloated trade deficit erodes our standard of living," said Teamsters President James Hoffa, whose union is leading a fight to overturn a Bush administration decision last week that opens up the nation's southern border to Mexican trucks.

With a little Mexico bashing thrown in, por gusto.

The 9th paragraph mentions the export record and the 11th paragraph points out its economic importance but again in the most negative way possible:

The boom in exports is helping cushion the U.S. economy from the adverse effects of the worst downturn in housing in 16 years and a serious credit crunch stemming from growing losses in subprime mortgages. Without continued export gains, some analysts worry that the country could be pushed into a recession.

If exports are so important to our economic growth (and they are), wouldn't it seem like a bad time to start up new protectionist measure and invite backlash/reciprocity?

Citizen Self-Arrest Form

An alert, but anonymous, reader sends in a delightful revelation!

The University of Oklahoma (The Angusian crib!) has a helpful website designed to make it easier for people to get to know police on the "beat." I have always thought "beat cops" was redundant, but that is their metaphor.

Still talking may not be enough: What if you need actually to ARREST yourself? As the site notes, it would save tax dollars.

Well, the OU information people are up to the job: Here is your citizen's self-arrest form. Ideally, you would put on handcuffs, on yourself, and wait for a big sweaty campus policeman to come "beat" you with a nightstick. In New Orleans, that will cost you an extra $100, but in Norman, you can get it for FREE.

That is one progressive place!

(Also, check this picture of the "chief": note the halo effect, a kind of medieval saint thing).














(Yes, I understand this may precipitate attacks on Durham. But these days, that is almost too easy)

More BANG, No Buck

The "Band Automatic Name Generator" (click here, then reload the page to get different names) is rather amusing.

In a few minutes, I got:

1. Splashing Regulators (with WHAT? Ick.)
2. Adequate Hot Buttered Parson (Larry Craig's band)
3. Replacing Data (not John's band. Repeat: NOT John's band. Right, Steve?)
4. Florida Chaos (Al Gore's band)
5. Green Constant (The LVMI Band. Though, just "The Rothbards" is a pretty good band name)

Guitar Hiro!

A new air guitar champ is crowned.

The story gives an enigmatic reference to another contestant, tho:

The talent on display was variable at best. The surprise of the qualifying round was Oulu native Hilkka "Gore Kitty" Suvanto, who has twice before scored the lowest points ever in that round but now achieved a perfect six from many of the judges.

"Gore Kitty"? From the lowest points total ever to perfect 6's? In AIR GUITAR? Does it matter that the contest had Finnish judges? I think a scandal lurks.

I had to know more. And, more I found, here. Gore Kitty is Finnish. I don't know why, but that kills me. A Finnish air guitar hero.

You might as well....JUMP!

Action bias among elite soccer goalkeepers: The case of penalty kicks

Michael Bar-Eli, Ofer Azar, Ilana Ritov, Yael Keidar-Levin & Galit Schein
Journal of Economic Psychology, forthcoming

Abstract:
In soccer penalty kicks, goalkeepers choose their action before they can
clearly observe the kick direction. An analysis of 286 penalty kicks in top
leagues and championships worldwide shows that given the probability
distribution of kick direction, the optimal strategy for goalkeepers is to
stay in the goal's center. Goalkeepers, however, almost always jump right or
left. We propose the following explanation for this behavior: because the
norm is to jump, norm theory (Kahneman, D., & Miller, D. T. (1986). Norm
theory: Comparing reality to its alternatives. Psychological Review, 93,
136-153.) implies that a goal scored yields worse feelings for the
goalkeeper following inaction (staying in the center) than following action
(jumping), leading to a bias for action. The omission bias, a bias in favor
of inaction, is reversed here because the norm here is reversed - to act
rather than to choose inaction. The claim that jumping is the norm is
supported by a second study, a survey conducted with 32 top professional
goalkeepers. The seemingly biased decision making is particularly striking
since the goalkeepers have huge incentives to make correct decisions, and it
is a decision they encounter frequently. Finally, we discuss several
implications of the action/omission bias for economics and management.

Disturbing. You hire a new CEO, or a new Dean for that matter, and they have to....go out and change something! Doesn't matter if it works pretty well already, the "goal" (soccer joke) is take action. That way, no one can say, "You didn't even do anything!"

The problem is that many times nothing is the best thing to do. Just stand there in the center, and try to reach out and block things that come right at you.

(Nod to KL, who is on a roll)

Costly Signals, and the Paradox of Rationality: Smiles Edition

Marc Mehu, Karl Grammer & Robin Dunbar
Evolution and Human Behavior, forthcoming

Abstract:
One of the proposed functions of human smiling is to advertise cooperative
dispositions and thereby increase the likelihood that a social partner would
invest resources in a relationship. In particular, smiles involving an
emotional component would be honest signals of altruistic dispositions
because they are not easy to produce voluntarily. In this study, 60 people
were covertly filmed while interacting with a friend in two conditions:
control and sharing. Smiles were classified into Duchenne (spontaneous) and
non-Duchenne smiles. Participants also completed a series of questionnaires,
including the Altruism Scale and a self-report questionnaire of emotional
state. Interestingly, Duchenne smiles were displayed at higher rates in the
sharing situation as opposed to the control situation, whereas non-Duchenne
smiles were unaffected by the type of interaction. Furthermore, Duchenne
smiles in the sharing interaction were positively affected by a measure of
altruism. Self-reported emotional states did not vary between conditions and
were poorly related to smiling. This study shows that the Duchenne smile is
relevant to situations that involve the sharing of material resources
because it would reliably advertise altruistic intentions. The Duchenne
smile could therefore be an important signal in the formation and
maintenance of cooperative relationships.

A number of people have claimed that the reason humans got big brains was the advantages conferred in terms of detecting dissembling.

So....a big fake smile does you no good.

But a big real smile means you are altruistic, and (paradoxically) people are more willing to give YOU stuff.

That means you should learn how to smile in a way people can't detect as fake.

But that means that other people want to be able to detect tiny cues, and body language, that mean you are faking.

Angus and I solve this problem by never smiling. Nobody can call US fakers.
Grrrrrr......

(Nod to KL, who never fakes it, either)

You Aren't Going to the BIG House....

...You are going to the GREEN house! An article on Norway's innovative "World's First Ecological Prison." Read the article, and I'll share some thoughts in a moment.....

Prisons probably aren't the first buildings that spring to mind when you think about green design and architecture. Yet one small island in Norway is set to change that perception with the recent introduction of the "world's first ecological prison" — a facility powered by solar energy that will put its inmates to work coordinating daily operations, such as recycling and food production, and learning their part to protect the environment.

Norwegian authorities hope to thus instill a sense of responsibility in their inmates and to better prepare them for an eco-conscious life once they leave the prison. The facility, which is located on Bastoey Island (about 46 mi south of Oslo), houses 115 inmates. Justice Minister Knut Storberget explained that "from a social and economic perspective, this is cheapest for society," adding that it only made sense for a prison already renowned for its pleasant living conditions — resembling a summer camp more than a conventional prison with activities like tennis, horse riding and swimming — to go that extra step to rehabilitate its inmates.

Running costs at the Bastoey facility are lower than at most traditional prisons — which often require more officers to supervise the inmates. The prison produces its own high-quality organic food with the help of grants from several environmental organizations, and it is surrounded by beaches and verdant fields. Its solar panels cut its electricity needs by close to 70%.

The inmates have few complaints: "We are given full freedom within a limited area," said Erik, a hobby carpenter who helped put up the solar panels. Another inmate stated that, "This is like a holiday camp compared to a closed facility." It hardly even seems like a prison to us anymore.

All right. Here goes. (AHEM).

1. ARE YOU FREAKIN' KIDDIN' ME? Tennis, horseback riding, and swimming? Beaches and verdant fields?
2. Getting grants from environmental organziations does NOT cut costs. It simply transfers costs from taxpayers to morons. I approve, mind you (think of the harm those bed-wetters could have done with those grants!), but let's not imagine that this is a solution for reducing costs at NC or OK.
3. Solar panels? SOLAR PANELS? Do you see a problem with that? Norway doesn't need air conditioning, for the most part. (weather data for Norway). So, when the sun is up for 15 or more hours a day, in the summer.....no HVAC is used. In Norway, in the winter, it is COLD. COLD and DARK. cold AND dark. Do you see where I am going with this? Solar panels? I choked when I read it.

If you cherry pick the best behaved inmates, put them in a resort area without charging yourself the opportunity cost of the real estate, or the capital costs of the incredibly expensive solar panels, and then take some of your operating costs out of grants given to you by dim bulbs (probably flourescent!), then: Yes, it will appear you are running a low cost prison. Now please shut up.

To Be A Football Hero.....

"To the consternation of local leftists, Berkeley, the campus and the
community alike, is in the grip of pigskin fever...Instead of smelly hippies
and fulminating Marxists, images of celebrating frat boys, cute and sexy
cheerleaders, and heroic athletes dominate media mentions of Berkeley."
[Lifson, American Thinker]

(nod to KL)

Talkin' Weed with the NY Times

According to the NY Times, a plant called jatropha is being hailed by scientists and policy makers as a potentially ideal source of biofuel, a plant that can grow in marginal soil or beside food crops, that does not require a lot of fertilizer and yields many times as much biofuel per acre planted as corn and many other potential biofuels.

As luck would have it, this plant is already being massively grown in Mali, one of the poorest nations on earth, on marginal quality land. And a Dutch entrepreneur, Hugo Verkuijl, has started a company with the backing of investors and assistance from the Dutch government, to produce biodiesel from jatropha seeds.

Mr. Verkuijl, 39, an economist who has worked for nonprofit groups, is part of a new breed of entrepreneurs who are marrying the traditional aims of aid groups working in Africa with a capitalist ethos they hope will bring longevity to their efforts.

“An aid project will live or die by its funders,” Mr. Verkuijl said, but “a business has momentum and a motive to keep going, even if its founders move on.”

Well said and well done Mr. Verkuijl, kudos to you. Sounds like a great project

However gentle readers, this being in the NY Times, you must be waiting for the other shoe to drop and here it goes:

Even if jatropha proves a success in Mali, it is still not without risks. If farmers come to see it as more valuable than food crops, they could cripple the country’s food production.

This is why I blog, people, this is the good stuff. What in the world could Lydia Polgreen mean by the above quote? If jatropha is less valuable than food crops, then the farmers won't drop food crops. If jatropha is only more valuable than food crops with some kind of production subsidy then there may be temporary trouble when/if the subsidy stops.

But in general Lydia, if farmers can earn more by planting jatropha than subsistence farming, BY ALL MEANS THEY SHOULD DO SO!! They will get this stuff economists call "money" and they can use it in "trade" to acquire food, clothes, subscriptions to the Times, you name it. If the jatropha is indeed more valuable they can buy all the crops they would have grown and have money left over.

But maybe, just to be sure, we should have the government of Mali, or better yet the UN set quotas for the production of all crops and commodities in Mali.

A Modest Proposal for a new KPC Logo:

Lets get rrrready to rrrrumble!!!

In this corner, Dani Rodrik, Harvard University:

"call me naive, but I also think that Mugabe would not have pursued his policies for this long if he had a better grasp of debt dynamics."

His opponent tonight, Anil Hira: Simon Fraser University:

"This article examines more carefully the oft-made hypotheses that (1) "technocrats" or politicians with an economics background are increasingly common and (2) that this "improvement" in qualifications will lead to improvements in economic policy....Using statistical analysis, the article finds that we cannot conclude that leadership training in economics leads to better economic outcomes."


So I ask you ladies and gentlemen, who ya got??

The best sentence I read today:

"The Fed will cushion the slowdown once weaker growth numbers appear, but there isn't much is can or should do to prevent the permanent unwinding of securities tied to undocumented-income, negative-amortization, 100%-loan-to-value mortgages rated triple-A by irresponsible rating agencies and sold to unsuspecting investors."

That was John Makin in today's WSJ.

That was so good I think I'll let John provide the punchline too:

"Perhaps the price we pay for that kind of collective stupidity is a recession."

Okies gotz Libarries too!

Today is International Literacy Day , according to UNESCO, and this year's slogan is: “Literacy, key to good health and well-being” (pretty snappy, although basically wrong, no?)

And over at MR, Tyler has declared it "Library Appreciation Day"


Here in Norman, it's "beat the 'canes day" but OU's original library building does have some very pretty parts:

Enforcement and Law-Breaking

An article of recent vintage:

"Investigating the impact of extended bar closing times on police stops for
DUI", Leana Allen Bouffard, Lindsey Ellen Bergeron & Jeffrey Bouffard
Journal of Criminal Justice (forthcoming)

Abstract:
Researchers have often studied whether changes in the availability of
alcohol impact associated problem behaviors like drunk driving. In July of
2003, the state of Minnesota approved legislation to extend by one hour the
closing time for eating and social establishments that serve alcohol. This
study utilized a time-series model to examine the impact of the extended
closing time on the number of police stops for DUI in one jurisdiction in
Minnesota. While results of the time-series indicated that there was a
significant increase in the number of police stops for DUI following this
legislative change, incident-specific analyses suggested that this increase
might have been largely a result of increased proactive responses by local
police. Implications and suggestions for future research are discussed.

Reminds of "Crime on the Court." Should adding another referee in basketball cause more, or fewer, fouls to be called?

Catching up is hard to do

Or so say Blonigen and Ma (NBER paper, access restricted) in a very interesting new paper:

Recent literature has documented the high level of sophistication of Chinese exports for a country at its general level of development. An important question is whether this is simply driven by the foreign firms in China of whether Chinese firms are also gaining greater sophistication from this foreign presence. The answer to this question has significant implications for China's long-term growth potential.

We explore the extent to which Chinese firms are gaining sophistication relative to foreign firms present in China using detailed Chinese export data that separatelyl reports exports from foreign and Chinese enterprises. The general patterns over our time period, 1997-2005 run exactly counter to what one would expect if Chinese firms were catching up - foreign firms' share of exports by product category and foreign unit values relative to Chinese unit values are increasing over time, not decreasing. We see these patterns despite the fact the FDI into China as a percent of GDP has not increased since before our sample.

Say it ain't So!

This story hit me like pee in the old cornflakes. The Duke Lacrosse story almost has a kinda sorta happy ending. Nifong is disbarred, doing time (ok, one day a la Paris and Nicole) and the players pretty much did get their reputations back. They are widely seen as innocent victims; heroes of a cautionary tale of political correctness and jumping to conclusions.

But then they go and spoil it all by saying something stupid like "I want 30 million" (my apologies to C. Carson Parks, please don't sue me).

Yes after settling Nifong's hash, our heroes turn to slightly deeper pockets, the City of Durham, demanding the creation of an ombudsman's office (sounds good), other "reforms", (ok) oh yeah and $10 million each (DOH!). If they don't get it directly, they are going to sue for it.

Maybe the city can bring back Iron Mike and prosecute the boys for extortion!

Does the Government really own everything?

Is my net income just a "tax expenditure" that a forbearant omnipotent government allows me to foolishly waste on my own tawdry desires?

It seems that many people would answer that question with a resounding yes!

In a long article on the costs of philanthropy Stephanie Strom writes:

The rich are giving more to charity than ever, but people like Mr. Broad are not the only ones footing the bill for such generosity. For every three dollars they give away, the federal government typically gives up a dollar or more in tax revenue, because of the charitable tax deduction and by not collecting estate taxes.

Strom says there is a growing debate over what philanthropy is achieving at a time when the wealthiest Americans control a rising share of the national income and, because of sharp cuts in personal taxes, give up less to government.

Then there is this pretty amazing statement:

A common perception of philanthropy is that one of its central purposes is to alleviate the suffering of society’s least fortunate and therefore promote greater equality, taking some of the burden off government. In exchange, the United States is one of a handful of countries to allow givers a tax deduction. In essence, the public is letting private individuals decide how to allocate money on their behalf.

So to summarize so far: (a) Philanthropy = lowering inequality, (b) too many rich people don't do the kind of philanthropy other people would like to force them to do, (c) all money belongs to the government, (d) rich people don't pay much in taxes, and (e) if we changed the tax system people would act exactly the same way, estates would continue to be the same size and the government would get a ton of new money that it would use effectively to reduce inequality so lets get a move on!

Is this a great country or what?

Goldbug Variations

Megan McArdle and Tyler Cowen play some chin music for the gold bugs here and here.

I remember discussing with Tyler back in the day the idea that if money was only needed for a few "loose change" type of transactions (everything else being digital), would the velocity of money rise so high that the quarters would burn your hand when you grabbed them. I'm pretty sure they would.

It always surprises me that people attack so vehemently one of the very very few things our government has done reasonably well.

Development: Yer doin' it Wrong!

The Congo is BIG, and not known for its highway system, so many rely on the railways set up by the Belgians to extract resources in the colonial era.

But there are problems as documented here.

During an eight-day, 530-mile train journey across southeastern Congo, there were two derailments, several dozen delays, one electricity failure and an ever increasing number of people and goods packed into crammed, stinking hallways, compartments and bathrooms.

The problems are legion. Of 80 locomotives, only 15 are operational. Only 2,262 miles of railway are being used, while 9,358 need repairs. Some tracks are 80 years old, so warped and bent that the trains literally bounce along, losing and loosening parts that must be fixed or remade at each stop.

and then there's this:

The railway employs over 13,000 people, but the last time paychecks were sent out was in May, and that was payment for the spring of 2005. So many employees do not go to work, and bribes are widespread.

“Sometimes it’s difficult to resist temptations,” said Agustín, the police chief at the Kamina station, who gave only his first name. “I do bad things.”

“I haven’t been paid in 29 months,” he added. “How am I supposed to send my children to school?”

What about the IFIs, you ask?

The World Bank has begun a program to manage the trains in a public-private partnership, but it hinges on a new, and unlikely, transparency from S.N.C.C.

“It is very difficult to get things going,” said a World Bank official prohibited from speaking on the record.

Oh. Well don't strain yourselves or anything.

Paitence really IS a virtue...

The origins of monetary income inequality: Patience, human capital, and
division of labor

Victoria Reyes-García, Ricardo Godoy, Tomas Huanca, William Leonard, Thomas
McDade, Susan Tanner & Vincent Vadez
Evolution and Human Behavior, January 2007, Pages 37-47

Abstract:
We present an explanation about the origins of monetary income inequality
when an economically self-sufficient society opens to a market economy. The
chain of associations runs from patience, to the accumulation of different
forms of human capital, to self-selection into different occupations, and to
the division of labor, which contributes to monetary income inequality. In a
self-sufficient society, patience is exogenously determined and people rely
on folk knowledge as the only form of human capital. With the establishment
of schools, patient and impatient people sort themselves out by the type of
human capital they begin to accumulate. Impatient people do not acquire folk
knowledge because return to schooling takes many years to bear fruit.
Schooling opens opportunities in occupations outside the village, whereas
folk knowledge enhances employment opportunities that draw on farming or
foraging. Self-selection into different occupations with different earnings
potential spawns monetary income inequality. To test the explanation, we
draw on data from a foraging–farming society in the Bolivian Amazon, the
Tsimane'. We collected data during four consecutive quarters in 1999–2000
and a follow-up interview (2004). Data came from 151 adults (age, 16 years
or more) from all households (n=48) in two villages with different levels of
market exposure. During 1999–2000, impatience was associated with (a)
greater folk knowledge and fewer years of schooling, (b) lower likelihood of
working in wage labor, and (c) greater likelihood of working in rural
subsistence occupations. People who had been patient in 1999–2000 had
greater wage earnings and more modern physical assets in 2004.

Is patience a virtue? Or is it just luck of the draw in preferences, a low discount rate, so you value future consumption?

And, interesting that they invoke division of labor. Adam Smith pointed out how little, in fact, people differ at the outset. It is the development of specialized skills, through division of labor, that create the big difference. As Smith says:

The difference of natural talents in different men is, in reality, much less than we are aware of; and the very different genius which appears to distinguish men of different professions, when grown up to maturity, is not upon many occasions so much the cause, as the effect of the division of labour.*46 The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature, as from habit, custom, and education.

46: [This is apparently directed against Harris, Money and Coins, pt. i., § 11, and is in accordance with the view of Hume, who asks readers to 'consider how nearly equal all men are in their bodily force, and even in their mental powers and faculties, ere cultivated by education'.—'Of the Original Contract,' in Essays, Moral and Political, 1748, p. 291.] (WoN, I.2.4)

(Nod to KL, who isn't patient at ALL)

Bill Murray Explains: Golf Cart, and 7-11 in Stockholm

Bill spills.

Migration Policy: A Good SWF Kick?

Optimal Migration: A World Perspective

Jess Benhabib & Boyan Jovanovic
NBER Working Paper, January 2007

Abstract:
We ask what level of migration would maximize world welfare. We find that skill-neutral policies are never optimal. An egalitarian welfare function induces a policy that entails moving mainly unskilled immigrants into the rich countries, whereas a welfare function skewed highly towards the rich countries induces an optimal policy that entails a brain-drain from the poor countries. For intermediate welfare functions that moderately favor the rich however, it is optimal to have no migration at all.

I am always interested in the perspective in these sorts of hive-mentality collectivist metrics of "optimality." They don't care about what individuals want, and they would prefer to control people and move them around like chess pieces. Or, in this case, make people stay in the little squares where they happened to be born.

(Nod to KL, who wonders, "Why We Can't All Just Get Along?")

Three Suitcases, Zero Dresses: Guest Blogger Ms. Mungowitz

A guest post....from my wife. Yes, this really happened.

I added some editing, and obiter dicta. But this is her story, so I'll let her tell it.


Went to Fundman's wedding in Chicago. (Editor's note: For my view, see here) Nice big Italian-style wedding with open bar. (Editor's note: It's also Irish style; my wife is from Rhode Island...EVERYBODY's Italian) So we decided to fly up and back overnight and leave boys alone for first time. We were a little worried about what the older younger Munger would do, given that he had done this the week before.

So, plan was flight to leave at 9:20 a.m NC time, gets in 10:20 am Chicago time. Direct flight. Rent a car. Go to hotel, about 20 min away. Get dressed up, refresh... wedding is at 2:00 and about 30 min from hotel. Should be no problem. Easy in fact. Well, pride goeth before a train wreck.

Since you can't carry on liquids, such as shampoo, toothpaste, perfume, etc. Have to check a bag. But even though direct flight, I wanted to make sure I had the necessary things to change into, dress, hairpiece (updo, thank God for that) shoes, purse, wrap. (Editor's note: It is terrifying to witness the full array of feminine battle equipment, laid out for packing. I ran screaming from the room)

What actually happened? We wake up Sat. am early. Get call from airlines, flight delayed 40 min. Go back to bed for 20 min. Get up, have tea, shower, finish packing. Had most done night before. (Ed: Three suitcases! One night, three suitcases!)

A friend of Michael's (Ed: Neanderbill!) is traveling with us. Get to airport. No problems. On the runway getting ready to take off, I start to doze off and all of a sudden I get this image in my head. My dress still hanging on closet door. I told Michael, I think I forgot my dress. He said, no you didn’t. (Ed: she forgets NOTHING. She never forgets). Get to Chicago, check luggage, no dress. That's right, I had forgotten my dress!!!! I didn't even have a nice pair of pants to wear, brought jeans. (Ed: It was only one night. Makes sense not to bring other clothes. Still hard to know what was in the three suitcases, though)

Figured I'd stay at hotel. Michael and Neanderbill could go to wedding, and maybe I could find something in between wedding and reception, which didn't start until 5:00.

Get to Chicago. Called hotel, they told me there was a big mall 10 minutes from hotel. Sounds good. Michael is Hertz Gold member, car rental should be ready, no paperwork.

Nope, not ready. Person in front of us taking sweet time deciding whether to upgrade or not. (Ed: she exaggerates not. The guy was actually saying out loud, "Do I want the SUV, or the minivan? $20....SUV...minivan?" I wanted to beat him). Another 20 precious minutes lost.

On way to hotel. Railroad crossing. Longest and slowest train ever. Another 10-15 minutes lost. (If car had been ready, would not have hit the train crossing). (Ed: Neanderbill pointed out this nonlinearity: "Gosh, if we hadn't gotten held up at Hertz, we would have missed this train, too!" The train was going slow enough you could safely have crawled under it, between the wheels, without getting hit. I suggested Neanderbill might want to try that, just to see).

Get to hotel. It's about 12:15 now. (Ed: Remember, wedding is at 2 pm, and we don't know exactly where it is). Nice receptionist wrote out directions to mall while we went up and got freshened up. Had jeans on, sneakers, pearl necklace and earrings (pearl bracelet broke when getting dressed) and my hairpiece, again so thankful I had that (and I had originally thought I would have time to hair done at the hotel, huh) Michael all dressed up in suit. Carried empty backpack so I could put in clothes and took the shoes, purse, wrap.

Get to mall. Have about 30 min to find a dress. Mall is huge. Tried Lord & Taylor. Ran in, told clerk situation. Showed me all kinds of dresses, just not me. Some awful ugly, can't believe people wear them. Did find one I kind of liked, black lace like. Clerk was nice enough to point out price, $585.00. I didn't pay that much for my wedding dress (although that was 21 years ago!) (Ed: JEEZE! I didn't even know this. Dodged a bullet there...)

Decided to try another store. Nordstrom. Again told clerk story. Found a couple to try on. Had been looking for something in a solid color, simple, but shapely. Most good colors gone, they have out fall colors, boring. Found a sleeveless dress, black and I didn't really want to wear black to a wedding. But it had taffeta and the bottom was like a ballerina dress. Shirred waist, very flattering. At first, did not go with the bra I had. Did not have time to find new bra. Took bra off. (Ed: !!)

Thankfully, everything fit ok, nothing showing. Through clothes in my bag (still had on old white sneakers, with tall white socks), walked out of dressing room, asked clerk if I could pay for it and walk out in it. She snipped off price tag. Couple of women looking, complimented the dress and my hair (told them it was piece). One of them said I looked like a ballerina. But they asked about my shoes, told them I had them in the car. Then ran to jewelry section and bought faux pearl bracelet. Again, snipped off tag and wore out.

Running out in mall in black dress and sneakers, trying to find way out. Michael and friend were at a restaurant having a drink (non alcoholic so far). Finally found them. Have about 45 min. Church is supposed to be about 30 min. Missed exit. (Ed: we were using wrong directions. My fault. But I blame Neanderbill). Went out of way and had to do U turn. Get to the church 5 minutes before wedding.

Very nice ceremony. Go back to hotel and nap. To reception. Many compliments on dress. Told story.

Interesting, gender-specific reactions to story. Nearly all men thought I had deliberately left dress behind so I could buy a new one.

They are crazy. No one wants to have to find a dress in 30 min. No women thought that.

But dress was great for the swing dances. We danced the night away. Had floor to ourselves sometimes. Now I have new favorite store. Nordstroms. Been looking on line at all kinds of pretty dresses, may get out to South Point next weekend. (Ed: AAAAARGH! SHOOT ME! Though, I have to admit, an outstanding dress. She looked incredible.)

She Blinded me with Science!

Jessica Alba that is. Or did she?

According to the Telegraph, a survey decided and then Cambridge scientists proved that Jessica has the most sexy walk

Its apparently all about the .7 waist/hip ratio which lets her shake it in a way more elfin stars cannot!! Hmmm..... ok.

However, not so fast says Ben Goldacre at Bad Science: apparently the survey was done internally at the PR firm pushing the story and Jessica actually finished 7th out of 10! Plus the Cambridge professor (who was paid around $1000) claims the following:


I suggested that as a bit of fun and nonsense, but no more, that they could say something like the following:

“I have studied how 10 celebrities have ranked for “sexiness of walk” in
relation to their bust-waist-hip measurements. (Angelina) Jolie’s measurements at 36-27-36 mean she has the biggest waist surveyed, and a waist-hip ratio
(WHR) of 0.75. Scientists have repeatedly discovered that WHR is a
significant factor in judging female attractiveness. See, for example,

news.bbc.co.uk/1/hi/health/6444851.stm

Women with a WHR near 0.7 are invariably rated as most attractive.
However, it’s probably ‘the way she moves’ which attracts, not just shape.
Angelina’s slightly larger waist may give her the torso strength with
which to produce a better angular swing and bounce to the hips than
minuscule stars such as Eva Longoria and Kylie Minogue can achieve with
32-21-33 and a WHR of only 0.64.”

He mentions Angelina Jolie because she actually came in first in the survey.

Man oh man, how do you get on the list for gigs like this?

This just in from the department of Doh!!

Rock stars more likely to die prematurely

Yes, the Centre for Public Health at Liverpool John Moores University has been busy pushing back the frontiers of science.

The paper clearly describes a population of rock and pop stars who are at a disproportionate risk of alcohol and drug related deaths," said Mark Bellis, lead author of the study.


Which leads us to ask: How in the world is Keith Richards still walking around soiling our planet?

Look Ma, no batteries

The electric car of the future may well not have batteries but instead a super-duper ultra version of the humble capacitor. Austin Texas based EEStor has patented ''technologies for replacement of electrochemical batteries,'' meaning a motorist could plug in a car for five minutes and drive 500 miles...without gasoline.

In the vacuum tube audio world I frequent, people argue about the sound of different types of capacitors (which tends to drive engineers crazy). Hmmm...... I wonder what one of these babies would do in my homemade amp.

We'll probably never know because GM will buy the technology and bury it, right?

dubya's gettin' 'er done!

or "Look out Iran!"

In 2002 Dubya told us about the axis of evil. Iraq, Iran, and North Korea. Iraq is now off the list (things may not be any less evil there, but I'm sure they are off), and the big news this weekend is that North Korea has agreed to provide a full declaration of all of their nuclear programs and will disable their nuclear programs by the end of this year, 2007.

For their part the North Koreans say the US has agreed to take them off the list. Now maybe this is a "wily Filipino" situation, but it does seem that they lived up (finally) to their promise to shut down the Yongbyon reactor and maybe they are really pulling a Libya here.

That just leaves the Islamic Republic of Iran and 16 more months of Dubya. Who can bet against him?

Viva Le Bron!!

It's "mission accomplished" for USA basketball in Vegas. All opponents smoked, the Olympic berth secured and only a meaningless rematch with already trounced Argentina left tonight.

The big three, LeBron, Kobe, and Carmelo did the job, but LeBron was first among equals.

From the stats department:

LeBron shot 76.5% from the field, 57.7 on his treys (15 for 26), while averaging 16.7 points in 21 minutes per game. He also led the team in assists (with 44 to JKidd's 42) and was second in steals (with 15 to Kobe's 16).

Kidd only took 10 shots but did have the 42 assists (to only five turnovers).
Kobe shot well (56%) and was the steals leader, 'Melo shot well (62.8%) and did nuttin' else (as his is custom).

KPC favorite from his turnaround year with the late lamented OKC Hornets Tyson Chandler made the most of his limited playing time (rebounding and blocking shots). I think he may well make the Olympic roster.

Weekend Roundup

As we head into that most ironic of American holidays (Thanksgiving being #2), KPC presents for your perusal the weekend roundup:

1. Tyler Cowen takes off his rose colored glasses and comes to his senses.

In his own words: "What does it really mean if some part of your brain lights up? Who really knows?" The idea that seeing what parts of your brain react to stimulii somehow explains what is actually going on is one of the dumbest ideas ever and economics has not proven immune to this so far useless practice. Kudos, Tyler for seeing the light.


2. Lee Kuan Yew explains the resource curse.

In his own words: “Supposing we had oil and gas, do you think I could get the people to do this?” Mr. Lee said. “No. If I had oil and gas, I’d have a different people, with different motivations and expectations.

“It’s because we don’t have oil and gas and they know that we don’t have, and they know that this progress comes from their efforts,” he said. “So please do it and do it well.”

3. Zambia loves chess!

25 year old Amon Simutowe, who learned to play from reading magazines and became national champ at 14 and international master at 16, is poised to become the first black grandmaster from Sub-Saharan africa. Amon went to UT-Dallas on a chess scholarship and is said to win by "grinding his opponents down". Is there any other way to win?

4. Who needs Raymond Carver when you have the Chadron Record Police Beat?

Examples: Caller from the 100 block of North Morehead Street requested to speak to animal control because caller felt that someone was coming into his yard and cutting the hair on his dogs. Dispatch advised caller to set up video surveillance on his house. Caller said he planned on it.

and: Caller on the 900 block of Parry Drive advised a squirrel has climbed down her chimney and is now in the fireplace looking at her through the glass door, chirping at her. (hat tip to Dan Barry at the NYT)

Three birds with one Stone

In a great post, Marc Hodak manages to take down the silliness of our financial press, the triviality of Dubya's plan to help borrowers and the perils of investing your ever falling dollar in a managed stock fund with high fees. Kudos to you, Sir. Well done.

my favorite line? after quoting one of the "experts" quoted in the financial press, Squire Hodak sez: Dear readers, you should know that this speaker hasn't said a g**d**n thing. The only sentence here that isn't fluff is the one contending that the Fed will correct the market--and that one is flat out wrong.

Andy Roddick is more like me than I thought

Ok people insert your favorite loser joke here and then go on to read the posting!!

6'-9" John Isner who only got into the Open on a wildcard has won two rounds and now faces Roger Federer this afternoon. There is an incredible, yankee-jingo buzz about Isner's chances in this match and as the legendary "future of american tennis".

When asked about the matchup, Roddick summarized it succintly and accurately:

"Isner's going to be very tall," he said, "and Roger's going to be very good."

snap!

South Korea is more like the US than I thought

They even have prominent resume fakers!

Of all the recent revelations of résumé fraud here, the one involving a prominent Buddhist monk was perhaps the most shocking to a nation that values academic credentials almost as much as it does honesty.

The monk, the Venerable Jigwang, had transformed a temple in an affluent district of Seoul from a struggling collection of seven souls in 1984 to more than 250,000 members today, partly on the basis of his prestigious degree from Seoul National University, the country’s top academic institution.

“People swarmed in because they heard that a monk who had gone to a distinguished university was teaching the scriptures in English,” the Venerable Jigwang said at a confessional news conference on Aug. 18. “I think that the Seoul National University title more or less helped in propagation.”

Alas, he had no such title, and in that he was not alone.

After a news agency reported in July that an important art historian had faked her credentials, a nationwide wave of allegations and confessions followed that has so far swept up a movie director, a renowned architect, the head of a performing arts center, a popular comic book writer, a celebrity chef, actors and actresses, a former TV news anchor and now the Venerable Jigwang.

South Korea has been shaken as one prominent person after another has been exposed as having exaggerated, or fabricated, academic accomplishments.

The exposés have prompted prosecutors, the police, the Education Ministry and regional education authorities to announce plans to combat academic record fraud. Legislators have introduced a bill calling for a verification system.

I would like to take this opportunity to state once more for the record that, despite all appearances, and the University's claims to the contrary notwithstanding, Mungowitz and I really truly did graduate from Wash U.!!!

The King James Version

The FIBA tournament of the Americas is almost over out in Vegas. Team USA is undefeated so far, having routed all opponents and seems in good shape to qualify for the 08 Olympics. Yeah, that's how far the mighty have fallen, we have to qual-e-fy to even get into the Olympics now, como si fueramos Lichtenstein!

Anyway, much credit has been given Jerry Colangelo for rescuing USA Basketball by ensuring continuity and choosing a well balanced team with "role players". I disagree. In terms of continuity, there are only 3-4 players on this roster that were also on the roster for the previous world championship team, and while there are role players on the roster (Micheal Redd?), they pretty much stink.

Team USA is LeBron James, Kobe Bryant, and Carmelo Anthony. Maybe Coach K should get some credit for getting them to share the ball, but those three should get the credit (or blame) for what is going down in Vegas and what will happen in Beijing.

Wednesday night vs. Uruguay Lebron scored 26 points on 11-11 shooting in 14 minutes of pt. Game over. As of last night's game vs. Argentina (USA won 91-76), James was shooting an "almost comical 79.7 percent (47-of-59). He is 14-of-20 from 3-point range, a 70 percent mark that also leads the event."

Kobe scored 27 against Argentina and Carmelo had been the scoring leader before these last two games.

This is the same old superstar driven Team USA (thank goodness). Credit should go to three young superstars who have decided to cooperate for a common goal and not to old white guys in suits!