Saturday, December 29, 2007

Mungowitz...

The Mungowitz "Best of '07"

My own contribution, to match Angus's. My top five of 2007 list.

1. Angus. Since he came on the blog the number of hits, and the number of links has more than doubled. More important, the quality and interest of the posts, by any objective standard, has improved markedly. Angus carried me to tenure as a coauthor, and now is doing so as a blog partner.

2. The PUBLIC CHOICE special issue on blogging. The editors were actually Henry Farrell of Crooked Timber, and Dan Drezner of the eponymous blog. But I really felt like I learned a lot from the special issue (I am Associate Editor of PUBLIC CHOICE, if it matters, for the world outside Europe). And my own paper, at the end, raises some questions that are really interesting. I don't know the answers. But asking was fun.

3. Watching my sons play baseball. Kevin, the older, is aging out of city league, and may not play again in any kind of organized fashion. But in summer league for 18 year olds, in his last game, he was starting pitcher against the league's best team. (Previous game against them, we got smoked!) He lasted five innings, and gave up just one run through four. They nicked him for two more runs in the fifth. It was a hot, exhausting day. He only had two strikeouts, but he kept getting them to pop up, and every time they hit a shot it was right at someone. And, we were ahead, 7-3, partly because Kevin had two long doubles and a sharp single, with 3 RBI and 2 runs scored, on his own. Our team brought in our "closer," a walk-em/strike-em out kind of pitcher. He walked the bases loaded, and gave up two runs in the sixth, before ending the uprising. Basically same thing in the 7th, bases loaded on walks and one error, two outs, and a full count on the batter. The runners are off with the pitch. The batter hit a silo shot, incredibly high, and our pitcher called everybody off and caught it himself, lunging for it and just snagging it. Afterward, getting some Mexican food, Kevin and I just sat together and looked out the window. The best feeling. Probably his last game ever. And I was there to share it.

And, I have written about Brian's terrific game, in the semifinals of the city tournament for 15-16 year olds. (Brian will have another year in that league!). Next game didn't work out, but what a game.

Finally on this topic, I also told you about this remarkable game. Very memorable.

4. Another trip to Utah, at Park City, at THE LODGES, in June. With my good friends, Pat Lynch and Randy Simmons. One of the best sessions ever. Terrific sessions, hiking, good food, and new friends. We read some very interesting stuff on early American economics, and got to argue with Peter Onuf. What could be better? Thank, Liberty Fund, for a great week!

5. My wife still has had no return of the cancer that was the center of our worries in 2004. She looks great, and is able to do almost everything as before. She does get tired a little more easily than five years ago, but considering everything, it's all good.

Happy New Year!

Mike Huckabee: Sophist, Racist, Liar

Apparently unhinged by hate-monger Tom Tancredo's endorsement of Flip-Flop Romney, TGI Friday's spokes-bigot Huckabee has been breaking new ground in his race to secure the Torture Party's nomination (John McCain honorably excepted).

He has been arguing that the death of Benazir Bhutto underscores the need for us to build a fence along our Mexican border. That's sophistry.

The one thing that most Mexican immigrants actually have in common with Pakistanis? Darker skin than Preacher Mike's. That's racism.

Huckabee claimed that Pakistanis are the most numerous illegal immigrants to the US "except those (nationalities) immediately south of the border." According to the department of homeland security, that's lying.

I fear for our republic, people, if this is what we're coming to.

Angus's Best of 2007

This is a totally personal list of the 5 best things that happened to me in 2007:

1. My trip with Mrs. Angus to Tanzania and Rwanda. Just an incredible time seeing amazing wildlife, learning about their behaviors, meeting and talking with local people and interacting with other tourists.

2. The performance of my students, Shu Lin and Haichun Ye. Despite each having me as their advisor, they have multiple publications (including a forthcoming piece in the Journal of Monetary Economics) and an overflowing interview dance card for the AEA meetings. Students like them are what makes my job fun.

3. My own research. I had two articles published this year, one other accepted for publication, and three others got revise and resubmits. I am especially happy with my article with Mrs. Angus in the Journal of Development Economics.

4. Learning more about Bayesian statistics and MCMC (Markov Chain Monte Carlo). I sat in on two courses at Duke two years ago on my sabbatical, and after now teaching it a second time here at OU, I feel like I really have made some progress understanding it (sorry to all my students in the class last year, lol).

5. Blogging. Seriously. Tyler had been telling me I should blog, and after I did a week's guest blogging on Marginal Revolution, I was sad when it was over. Then Mungowitz invited me to tag team up, and the rest is history. Blogging definitely keeps you on your toes.

Friday, December 28, 2007

Op-Ed: Grades for the Dems' First "Semester" in Power

An Op-Ed in the Durham-Herald today, by your man M.

For first term, Democrats get two 'Cs' and an incomplete


By Mike Munger : Guest columnist
The Herald-Sun
Dec 28, 2007

The Democrats have had a full grading period back in control of Congress. Unfortunately, they didn't take a full course load, backing off on lots of legislation. In fact, the Dems are playing this as if they can just sit tight and win the presidency, and gain seats in the Senate. They are like those smug kids who try to keep their GPAs by ducking all the hard courses.

But the new majority hasn't pressed the president on a schedule for leaving Iraq, for reducing the deficit, or solving problems in the finance and housing sectors. Time for some grades on what was done.

Tactics: C-

House Speaker Nancy Pelosi caused raised eyebrows with two things she did in her first days in office. Day one, she took "impeach Bush!" off the table. Then she backed sleazy insider John Murtha for Majority Leader over loyal and effective Steny Hoyer. When Hoyer won anyway, there was audible snickering at Pelosi's leadership abilities.

Harry Reid, Senate Majority Leader, announced in May that he, "and most Democrats," believed the war in Iraq was already lost. That's a lot different from, "we can't win." Don't these people have writers on their staffs? Later, in June, Reid staked his reputation on an immigration reform bill that not only didn't pass, but got held up as a sign of how out of touch Dems are with border issues.

The point is that neither leader can enforce discipline, or inspire confidence. A gentleman's C, for coming to class but never really participating.

Foreign Policy: Incomplete

The Dems didn't even show up for the final test! No real attempt to press for a timetable for withdrawal, and no effort to tighten the purse strings on the administration. Maybe they were trying to avoid the toxic charge, "you don't support the troops." Still, they signed up for the group project on "end the war" and then just stopped attending class.

Pelosi, in particular, misplaced her foreign policy syllabus. Her remarkably naive view of Israeli-Syrian negotiations was embarrassing. Pelosi's pressing on the "Armenian genocide" issue infuriated Turkey at a time when the U.S. needs Turkey for a dozen strategic reasons. Even the relatively liberal U.S. State Department had an answer for the tin-eared Pelosi straight out of Ring Lardner: "'Shut up,' he explained."

Domestic Policy: C+

The Dems have formed a circle ... and started kicking each other. In the Senate, the filibuster/veto threat has proved so potent that Reid doesn't even schedule debates. Instead, he cuts out the offending passages in advance, placating Republicans but infuriating Democrats. Rep. Charles Rangel diagnosed Senate Dems as showing signs of "Stockholm Syndrome," where prisoners develop a crush on their captors.

The Dems' only available strategy would have been to pass the bills they had promised to voters, and then use the media to advertise their plight when the president vetoes the bill. Instead, Bush's (very real) veto threat has ended class discussion completely. The Senate's timidity has robbed the Dems of a forum for showcasing noble losses. Pelosi has actually done some things here: the House has passed bills on energy policy, renewable energy, the Iraq war, the housing and subprime mortgage debacle, and middle-income tax cuts, which would have been offset by tax increases on the wealthy. But the Senate has consistently gutted these bills, or ignored them, without forcing the president to carry out the veto threat. The result is that House passage of the measures gets no attention from the media, and no attention from the Democratic base.

It's time for the Christmas break, and I have to get these grades turned in. We'll see how the Dems do in their sophomore year. But with all the presidential rush activities going on, I bet they get distracted again.

Michael Munger is chair of the Political Science Department at Duke University and a Libertarian Party candidate for governor.

© 2007 by The Durham Herald Company. All rights reserved.

Thursday, December 27, 2007

Why Don't Libertarians favor American Interventionism on Principle?

Question: Who has done more for liberty than anyone in the last 100 years?

Answer: The Pentagon!

Seriously. American military intervention has been an incredible boon to global liberty. We fought and defeated the Axis powers in WWII, bringing liberty back to conquered Western Europe and giving it to Japan and Germany as well. We helped ensure that liberty would thrive via the Marshall Plan. We fought in the Korean War and have seen from that great natural experiment how valuable our intervention was. Indirectly via the cold war, we contributed to the demise of the Soviet Union and the spread of liberty in Eastern Europe. OK, Vietnam didn't turn out well, but the comparison to Korea shows that maybe we should have tried harder?? Iraq has not gone well either, but it's not over till the fat lady sings right?

So why do Libertarians care only about the liberty of Americans? Libertarians are OK with military force to defend liberty within our borders right? What is so special about those borders?

Before you write me off as a hata, let me show you my score on the World's Smallest Political Quiz:



The red dot is me. I didn't get 100 on economic issues because I only answered "maybe" to "replace government welfare with private charity" and to "cut taxes and government spending by 50% or more" I'd prefer to gradually reduce government welfare and see what happens and cut taxes and spending incrementally and see what happens starting say with a 15% cut. But according to the quiz, I'm a staunch Libertarian. So what's my major malfunction? Why is liberty do be defended in one location but not another?

So I took Ezra Klein's advice.....

.... and read the transcript of Ron Paul's appearance on "Meet the Press". Here is a nugget:

MR. RUSSERT: Under President Paul, if North Korea invaded South Korea, would we respond?

REP. PAUL: I don't--why should we unless the Congress declared war? I mean, why are we there? Could--South Korea, they're begging and pleading to unify their country, and we get in their way. They want to build bridges and go back and forth. Vietnam, we left under the worst of circumstances. The country is unified. They have become Westernized. We trade with them. Their president comes here. And Korea, we stayed there and look at the mess. I mean, the problem still exists, and it's drained trillion dollars over these last, you know, 50 years. So stop--we can't afford it anymore. We're going bankrupt. All empires end because the countries go bankrupt, and the, and the currency crashes. That's what happening. And we need to come out of this sensibly rather than waiting for a financial crisis.

Hmmmm. Are the people of South Vietnam really better off for our leaving than the people of South Korea are for our staying? I mean you can say it's wrong to be involved at all. You can take a position of non-intervention as a given, but Paul is making a cost benefit argument here and saying that the benefits are negative.

Well let's consult our friend the Penn World Tables. In 2003 (the last year with data for all three entities), we find the following figures for per capita income. Vietnam: $2560, South Korea: $17,595, North Korea: $1428 (these numbers are adjusted for deviations from PPP and the variable I use is called RGDPL). So South Korea is 7 times richer than Vietnam and we have the natural experiment of what happened to North Korea. I think you can argue that if we'd left Korea the same way we left Vietnam (during the war), Korea today would look like Vietnam at best. Conversely, if we'd stayed in Vietnam, South Vietnam today quite likely would look like South Korea.

Now you can say, we've been in South Korea long enough, time for them to stand on their own two feet (and with a more than 10x greater wealth than the North, clearly they should). Or you could say despite the amazing success of our policy with South Korea it wasn't worth the cost. But you can't really say what Paul is saying. It doesn't make sense.

Also, I don't think you can say "we can't afford it" and "we're going bankrupt". It's just not true. It's just not even close to true.

I think Ron Paul should stick to "these are my principles, my ideology," and not try some whacked out instrumental arguments for his positions.

Bhutto Shot Dead

Early reports were that she had escaped.

Maybe not?

Pakistan is scary.

Wednesday, December 26, 2007

When Great Economists go Wrong. A tale in 2 parts

I want to say right up front, before we get going that Dani Rodrik and Greg Mankiw are excellent economists with records far better than mine will ever be. I have learned a lot from them and respect them and their work.

Yet, each has, I think, made a mistake recently. Dani in his "the NY Times doesn't get it on Trade" post on his blog, and Greg in his NY Times column on fighting recessions.

First Rodrik. Dani is not a fan of expanding or even perhaps maintaining the current world trade regime. When the Times indirectly editorialized in its favor, he responded with:

"Here's what's wrong with this argument:

1. It automatically equates any desire to reconsider trade agreements and take a breather on new agreements as "protectionist."

2. It fails to recognize the ways in which technology and globalization interact to contribute to unequalizing trends in incomes, taking refuge in the defensive statement that "There is scant evidence that trade has played a big role in holding down typical workers’ wages."

3. It follows up this statement with "There is abundant evidence that it has contributed substantially to America’s overall economic growth," ignoring what every student of trade learns, which is that large gains from trade are possible only if there are also large amounts of income redistribution."

Ever so humbly, here is what I think is wrong with Dani's argument. First and most easily, it IS overwhelmingly likely politically that reconsidering existing agreements will turn out to create more protectionism. Secondly, Rodrik gives the impression that there is a single trade theory that has not been convincingly rejected by the data that one can use to provide reliable answers to policy questions. I am pretty sure this is not true. As to "what every student of trade learns", I would have to say they learn that we have no reliable theory that has not had its brains beat out by the data. Thus the theoretical "impossibility theorem" Rodrik sets up is not produced from a well functioning model and we are not required at all to accept it (see here for more on this point).

Now to Greg. In his column pleading to keep politicians out of the recession fighting business and letting the Fed do the job he says,

"In creating the Fed, Congress wisely made it a technocratic institution free of many of the political pressures that accompany other policy decisions in Washington. Subsequent experience in the United States and abroad confirms that more independent central banks lead to better economic outcomes. That’s why, in recent years, many nations have passed reforms to insulate central banks from politics."

Now I could beef about the "free of political pressures" part, but that would be tooting my own horn, so let me focus on the part about how "Subsequent experience in the United States and abroad confirms that more independent central banks lead to better economic outcomes."

First for the US, there is no before and after so we can't judge anything in that manner. Indeed most studies on the effect of Central Bank Independence use cross country, cross-sectional regressions, and the results, as Adam Posen has so cleverly shown, are far from supporting Mankiw's assertation. There is no empirical consensus on the question of the effects of CBI.

So, my complaint in both cases is about taking things that aren't necessarily so and using them to make political or policy points that don't necessarily follow. Even though I do admit that I actually agree with both Rodrik's and Mankiw's main arguments in their essays, I am not comfortable with the way they support them.

update: Rodrik link is mended. thanks to commentors for the heads up.

Monday, December 24, 2007

Wow I guess Venezuela really IS a rich country....

....as apparently no Venezuelan travels abroad with less than $800,000 in their luggage. On the heels of Guido Wilson in Argentina, now Venezuelan national Luis Klein has been apprehended in Boliva with 800 large in his bag "after a Venezuelan air force C-130 cargo plane took off without him when residents opposed to Venezuela's influence in Bolivia began throwing rocks at the aircraft."

What happened next you ask?

community activist Mario Aguilera said Klein then boarded a van headed for Guayadamerín, a town on the border with Brazil. But he was intercepted by protesters who noticed his uniform and followed him from the airport.

''The people wanted to lynch the Venezuelan when he was trying to escape in a van, but we took him to the police and we handed him over,'' Aguilera told El Nuevo Herald in a telephone interview.

''We cannot permit that this government is at the service of Don Hugo Chávez, and give them the green light to come in and disrespect our national dignity,'' he added.

I am definitely going to be on the lookout for Venezuelans with suitcases here in Norman, and I advise all of you to do the same in your home towns!

Hair Harvest: Part III (The Finale)

Well it's ____-cuttin' time. As in hair.

Raquel takes the pigtails and severs them. All those months, gone in seconds.

















Here are the hanks of hair, four of them, ready to go into the mailer.










I look a lot different. A little gray, in fact. The hair was still brown / blonde, down to the temples. But gray now.

A Law for everything??

In today's miniscule WSJ, there is a fun article about how pre-holiday sales are finally legal in Euroland, though allegedly such a foreign concept that retailers use the English word "Sale" to advertise them.

The article contains the following nugget: "Germans tend to adhere to structures and rhythms that don't change," says Rolf Pangels, managing director of the retail federation BaG in Berlin. "And they tend to want a law for everything. An American wouldn't understand all the laws we have here."

Sadly, I am not so sure how true this is anymore. More and more Americans seem to want "a law for everything" as well. The strange phenomenon of turning to government to fix problems it created is growing all the time.

Oh, yeah, and Merry Christmas!

Sunday, December 23, 2007

New Tax on iPods

Canada proposes new taxes on iPods.

Story here.

Now, that's not the dumbest thing I have heard today. THIS is the dumbest thing
I have heard today. (Or maybe the best, I can't decide. The kid did a minute by minute blog of his "liberal arts" class. Which, to be fair, was a disaster. But the kids didn't start until the 8th class, and then quit after 13 classes, just quit).

An argument for NOT allowing students to have laptops in class. Or, maybe Canada should tax laptops, also. Even though the tax poses no penalty at the margin for the behavior apparently being deterred....

(Nod to RL)

Hair Harvest: Part II (The Pigtails)

Time for part II of the hair harvest bit.

If you missed part I, it's here.

Anyway, the ironing process is fairly lengthy. And it requires this:

























The next thing is the forming of the fateful pigtails, which is the hair that
will be donated.
























It's a nice look. Just imagine me with these pigtails, and a nice little cheerleader outfit. I could give Giuliani a run for his money, yes?