Saturday, January 12, 2008

Bilious Bainbridge

S. Bainbridge is well-known as (to quote his own website), the author of "one of the most widely read political and legal weblogs on the Internet."

So I suppose I should be flattered. He looks down from his Olympian heights to discuss my little "Boss Doesn't Wear Bunny Slippers" article, a light and airy confection no one could possibly mistake for an academic article.

He dismisses it as containing "nothing new." This is a rather remarkable claim. I can add some other things. It is not written in Russian! It is not a secret code leading to pirate treasure! (Garrr!)

I could go on. But why? No one THOUGHT the piece was written in Russian, or contains a secret code. And no one thought it contained anything new. It is clearly an exposition, and a simplistic one, of Coase's 1937 paper. It is "published," if you can call it that, on a web site that contains a monthly essay that is to be used for (WAIT FOR IT!) teaching basic principles to high school students, and others with no background in economics.

The good Bainbridge suggests that readers should read, instead, a piece written by...the good Bainbridge!

And, he is quite right that his article is earlier, deeper, wider-ranging, and more insightful than mine. But two thing struck me, in this regard.

1. There is nothing new in his paper, either. The theory of the firm, developed
between the 1930s and early 1970s, completely anticipates everything he says. (He is correct, let me emphasize, that his piece is much more interesting in the connections it makes. But it is NOT new.)

2. My article was "published" on a web site dedicated to illustrating basic principles. His article, written in 1997, was published....NOT! What sort of person castigates someone else for failing to cite a ten year old, UNPUBLISHED working paper? Answer: S. Bainbridge!

Now, to be fair, our Bainbridge is clearly reacting with annoyance to the (in his view) overly enthusiastic review from THE ECONOMIST. He is not primarily interested in my piece at all, and it is disingenuous of me to interpret his remarks the way I have above. He just wants FREE EXCHANGE to cite HIM, instead of me.

But why be fair?

The Democrats of January

Dem's Delegate Count, Jan. 12

Clinton 183
Obama 78
Edwards 52
Richardson 19
Kucinich 1
Biden 0
Dodd 0
Gravel 0

Required for Nomination: 2,025

This week: Michigan! 156 delegates. Clinton running "unopposed" in Michigan. But if at least X>=15% of Michigan Dems vote "uncommitted", then the state party must send X % uncommitted delegates to the national convention. So, the question will be whether Hillary can get more than 85% running against no opposition except "not Hillary!". Well, and Kucinich. He's on the ballot, technically. But a vote for Kucinich is, in effect, a vote for Hillary, since that will reduce the "uncommitted" total. Interesting.

IF, that is, IF the Dems choose to seat the Michigan delegation at all. Playing chicken, with high stakes. The Mich Dem party brain trust is sure that the DNC will seat the delegates, in spite of the transgression of party rules. And they may be right. If the Mich Dems are seated, that will be 100 delegates or more for Hillary.

Clinton will win Nevada (Jan 19) easily, in spite of the recent endorsement of the Culinary Workers for Obama. The reason is that Edwards has also locked up a lot of union votes, and the split of the anti-Clinton sentiment will give Hilldo the plurality. Plus, her phone bank machine is just better organized than the others. Nevada is a caucus state, but the machine still matters.

Then, the first actual primary this year (not counting NH, and I don't) will be held in SC, on January 26. 54 delegates. Obama does fine in the polls, but two words: "Bradley Effect." Plus, Breck Girl Edwards shows well in SC, and will cost Obama the victory. Clinton, the telephones, the Bradley Effect: Clinton "surprises" everyone who isn't paying attention by pulling 35% of the vote in SC, and winning a plurality of delegates.

So, by the end of this month Clinton has more than 400 delegates, and all the people who knew she was dead will have the same certainty that she is inevitable. "Eastasia has always been our enemy," CNN will say. Often wrong, never in doubt.

The mechanics of the campaign matter. Polls are nonsense.

Then: Feb 5. Anything can happen. But remember that just because a bunch of media folks saw Obama, and got little tiny woodies just thinking about how cool it is to see a candidate in person, IT DOESN'T MATTER. On Super Tuesday, 22 states will put 1,700 delegates up for grabs. Pretty much NONE of those voters will ever have heard Obama speak in person. A few, but not that many, will have paid much attention to the debates or speeches on TV. Most will have seen the ads on TV. Most of them will get phone calls from the Clinton campaign, and nothing from the Obama campaign, because his campaign exists only in the minds of the media.

And when it comes right down to it, a plurality in most states will vote for Hillary. The media love for Obama will backfire. What most of the folks in the media mean by "democracy" is "Do what I think, because I am WAY smarter than you."

Finally: Sure, this may all be wishful thinking. Because this blog will be SO MUCH FUN if Hilldo is Prez. Hillary.....mmmmm....blogging about Hillary.

Caturday??

Friday, January 11, 2008

Oh Mama, can this really be the end.....

....to get stuck with the Sonics when the Hornets are free again??

As King noted on SCSU, the Hornets have agreed on a ransom amount for their eventual escape from New Orleans. We'd LOVE to have them back, CP3 and Tyson and Peja; heck we'll even take Byron Scott if he promises not to make any more commercials for Cox Communications! Basically the Hornets can go free if they fail to average 14,000+ in attendance over the next two years. They are currently averaging around 11,000. They averaged around 17,000 here in OKC.

However, because Clay Bennett has already filed relocation papers for the Sonics to come to OKC (despite their longish remaining lease in Seattle) we can't get the Hornets back! So sick.

Hornets: 23-12, Sonics: 9-26. Plus, Kevin Durant is learning some bad habits, leading the team by far in minutes and shots while shooting 40% from the field (30% for 3s), only getting 4.4 boards per game and averaging more turnovers than assists (3 to 2). Ouch.

The ultimate bad beat situation is the Sonics come here and then the Hornets relocate to Seattle!! It could happen, people.

LOL, Mrs. Angus looking over my shoulder informs me that the actual ultimate bad beat is that no one comes to OKC. I guess she hasn't factored in us buying Sonic tickets and me driving her crazy complaining about Kevin Durant's shot selection for the forseeable future!!

Thursday, January 10, 2008

Um....Is Their Biggest Model Called "The Bodacious"?

So, there is this Indian car company. It makes Tatas.

In fact, the company is betting that the key to prosperity
is having very small Tatas, because then everybody can get their
hands on ... one.

A game? Come up with ad slogans:

"Get your hands on our Tatas!"

"The Tata Bodacious: Our high beams are ALWAYS on."

Try it. It's fun!

Relax Ben: Gisele Still takes greenbacks!

The Fed breathed a huge sigh of relief today upon finding out that the dollar is much stronger than previously thought. Specifically, that Super-Models still accept it for payment.

Bundchen said: "The story of the euro is a lie," she told the Brazilian newspaper O Globo in comments published Wednesday. "I work with many international companies, I earn salaries in different currencies, that's all."




What's Hot in Economics

The Facebook for Economists, aka REPEC, has released its list of the most cited papers in the last five years (by papers posted at REPEC). And what a lovely list it is. People, it's all Macro and Econometrics!

Look at the top 5:

Christiano Eichenbaum & Evans: A DSGE Macro paper
Im, Peseran & Shin: Applied Econometrics, Panel unit root tests
Obstfeld & Rogoff: Puzzles of International Macro
Bils & Klenow: the importance of Sticky prices
Anderson & Van Winkoop: the gravity model of trade

Throughout the whole list, there's very little theory, very little IO, very little Public.

Tyler says it's because micro is fragmented and macro has a common core.

I think it's because empirical macro is what the great majority of economists are actually interested in and work on. The internet lets economists from non-top schools and developing countries post their work, and once one gets past the sweet icing layer of top-ranked schools, theory is just not very interesting or important to people residing down in the cake.

This dude says the work in the list is not impressive: "Are these the future classics? Are these the papers that will lead to Nobel Prize? I do not see anything that really strikes me. The only marginal candidate I see is Anderson and van Wincoop's "Gravity with Gravitas." Is there really nothing groundbreaking written nowadays?"

I disagree. Christiano et. al is a seminal paper that set the terms of current debate in DSGE macro modelling. Smets and Wouters paper is groundbreaking in using MCMC methods to estimate DSGE models (along with the work of Frank Schorfheide). Reinhart and Rogoff along with Levy-Yeyati and Sturzenegger have changed how we view and measure exchange rate regimes with their distinction between defacto and dejure regimes. Bai and Perron's paper on multiple structural breaks has opened up a whole new way to look at and model macro time series data.

There is some excellent economics being done these days indeed.




Just got this email:

Your shipment Sir/ Madam, Christmas/New year Shipment Bonanza Sir/ Madam Due to the ongoing swift Christmas funfair all charges as regards to the delivering of your ATM/Check have been suspended, which includes any clearance charges and insurance coverage. You have been issued a part payment valued at US$860,000.00 (Eight Hundred and Sixty Thousand United States Dollars). All you are required to do now is to pay for the delivery of your parcel to one of office local offices in West African Countries (Nigeria) via Courier Services which is just $175. You are advised to contact - Mr. Patrick Sullivan at email: "engr_sullivan1@login.cz" for the courier fee payment and delivery update. This is organized by British Government in support of US and Nigerian Government. Thanks Mr. John William Adams British International Monetary Regulations London

Now, when I was young, the Nigerian email scammers had a little class, made a little effort. People took pride in their work. A good Nigerian spam scam was worth reading.

This thing, this piece of crap, this quatsch...what the hell? These kids today.

Fairy Tales

Wednesday, January 09, 2008

The Best Sentences I've Read Today

From an unlikely source, Maureen Dowd at the NYT:


"Her argument against Obama now boils down to an argument against idealism, which is probably the lowest and most unlikely point to which any Clinton could sink. The people from Hope are arguing against hope."



She's Ba-ack!


Wow, sorry for the premature obituary. Hillary made up an alleged 10 point deficit by decisively winning the votes of women (by 13 percentage points, which she failed to do in Iowa), and by McCain's siphoning off some of the independent vote from Obama. In retrospect, this second phenomenon should have been predictable, sorry I got carried away. It does seem like curtains now for John Edwards though, doesn't it?

Tuesday, January 08, 2008

Another Dookie Steps in it

Golf Channel anchor says young golfers should 'lynch Tiger Woods'


Should I mention that she was a political science major? Probably not.

For Fiscal Stimulus

My friend and colleague Alex argues against a "fiscal stimulus" for the economy. I respectfully conditionally disagree on starve the beast grounds. I am hoping for tax cuts or at least the permanentization of existing "cuts". Not temporary or targeted cuts, just cuts. Not sayin' they'll have their intended short run business cycle effects, just sayin' I like cuts whatever the reason.

Separated at Birth??


Two conflicting articles on the McCain - Obama connection.

First Jacob Weisberg at Slate emphasizes their similarities.

Then David Brooks at the NYT says, not so fast.

Weisberg: For all their obvious stylistic, ideological, and generational differences, both are anti-politicians whose fundamental argument is that our system is broken in ways that only they are capable of fixing. When McCain and Obama proclaim the need for "change" in Washington, it is neither meaningless rhetoric nor a fancy way of saying throw the bums out. They are both focused on addressing flaws in the political process—the power of special interests, unproductive hyperpartisanship, and the habits of reality-avoidance that afflict both sides.


Brooks: The central issue in this election is the crisis of leadership. Voters are reacting against partisan gridlock. Obama and McCain both offer ways to end this gridlock. Obama wants us to rise above it by rediscovering our commonalities. McCain hopes smash it with fierce honesty and independent action.

This is the general election matchup I'd like to see. Well I guess Kucinich v. Paul would be my favorite, but of the feasible ones, this is my pick. Anyone agree?

Monday, January 07, 2008

Bosses Don't Wear Bunny Slippers

New essay on EconLib.

You like, you not like. Let me know!

Sure, the Food is bad, but at least the Portions are large

So say the Romers regarding the economic expertise of FOMC members:

"Twice a year, the FOMC makes forecasts of major macroeconomic variables.
FOMC members have access to the staff forecasts when they prepare their forecasts, and they have roughly a two-week data advantage over the staff. We find, however, that the optimal combination of the FOMC and staff forecasts in predicting inflation and unemployment puts a weight of essentially zero on the FOMC forecast and essentially one on the staff forecast: the FOMC appears to have no value added in forecasting. The results for predicting real growth are less clear-cut. We also find statistical and narrative evidence that differences between the FOMC and staff forecasts help predict monetary policy shocks, suggesting that policymakers act in part on the basis of their apparently useless information."

Wow. and they presented this at the AEAs at a session chaired by Fed vice-chair Kohn. Kudos to them!

Update: Kevin Hassett provides some thoughts about FOMC expertise here.

Trainwreck

I feel sorry for Hillary Clinton. There, I said it. I feel better. Whatever you may think of her, man she is catching it real real hard these days.

She has waited so long and put up with so much. She stuck with her serial philanderer husband. She endured 8 years of getting the stinkeye from Tim Groseclose. She played the quintessential junior senator, keeping her mouth largely shut and her nose to the wheel. She watched Gore and Kerry blunderingly lose to the Shrub. Now was her time. She had all the elites on her side, all the money, Bill seemed on board and under control. She was the "presumptive nominee" with the proverbial "air of inevitability".

Now as we approach the first actual primary, she is on her last legs. She came in 3rd in the Caucii of the Hawkeye and trails by 10 points in New Hampshire with 1 day to go.

Where did it go? And how did it go? Barak Obama, to me is, so far, more of a metaphor than a real person. His message is totally what he is not and the claim that what he is not will allow him to change / improve the world. Amazing. But it's working.

Maybe we can talk more about Senator Obama soon, but for now, I feel Hill's pain. It's gotta be frustrating as hell for her, and there is little she can do. Attacks now sound shrill and desperate. Sour grapes and all. But she seems to be standing in front of a speeding freight train.

Am I wrong? does she have a chance? Will Edward's people go over to her and not Obama? If that were to happen will it be too late? Is it really curtains for the Clinton Dynasty?

Sunday, January 06, 2008

Can you help me....please?

The Nanny is here to help.

No, really, he is.

And this book tells you all about it!

(Nod to Tommy the Wannabe Brit)

Man-Crush Alert!!

From the no longer to be taken seriously Ezra Klein:

Obama's finest speeches do not excite. They do not inform. They don't even really inspire. They elevate. They enmesh you in a grander moment, as if history has stopped flowing passively by, and, just for an instant, contracted around you, made you aware of its presence, and your role in it. He is not the Word made flesh, but the triumph of word over flesh, over color, over despair. The other great leaders I've heard guide us towards a better politics, but Obama is, at his best, able to call us back to our highest selves, to the place where America exists as a glittering ideal, and where we, its honored inhabitants, seem capable of achieving it, and thus of sharing in its meaning and transcendence.


To be fair, Ezra has a poor basis for making judgements about orators, shown here by his list of greatest hits:

Howard Dean challenging the Democratic Party to rediscover courage and return to principle.

Bill Clinton speak(ing) of a place called Hope

John Edwards bravely channel(ing) the populism that American politics so often suppresses.

I especially like the part about how brave Edwards is, and how Dean and Edwards are/were "great leaders".