KPC Job Fair!

There are at least two kinds of jobs. One kind is where the wage is posted and known and if you are offered the job, it's take it or leave it at the posted wage. Another kind is where the wage is not explicitly posted and the prospective employee may be able to bargain with the employer over the wage. There are at least two kinds of workers. One kind is unemployed and looking for work. Another kind already has a job but is looking for something better.

Well, curiosity got the better of Bob Hall and Allen Krueger (H&K, ungated paper is here) so they went out and surveyed (probably the NSF paid a firm to have the survey done) around 1400 job acceptors to see what were the relative frequencies of the different types described above in the US labor force.

H&K found in both cases the split is fairly even. Between 22% and 54% (depending on the stringency of the definition of "knowing") knew in advance what the wage would be and that it was take it or leave it. Also, around 40% of the job acceptors reported that they could have stayed in their current jobs when they took a new one. They also find that taking a posted wage job is strongly negatively correlated with education.

With a brand new PhD in hand I thought my initial job at George Mason would be a bargaining type situation. HA. Here are a list of the things I asked for and was denied: more money, a course off, summer money, a computer (this was back in 1984), moving expenses. Once I got there, Jim Bennett found money for me to get a computer, and a couple years later Bob Tollison arrived at the Public Choice Center and hooked me up with generous summer money, but at the time I was stunned. After all I'm Scottish. We are the second greatest bargainers in the world (I have to give the honor of #1 to Moroccans)! I must have improved or made myself a more valuable commodity because ensuing jobs did involve bargaining and counter-offers.

However, one big difference was that in the GMU case I was unemployed when "bargaining" with them and in later cases I could have stayed at the job I eventually left.

Sticky Prices vs. Sticky Information: A False Dichotomy?

A new NBER working paper by Coibon and Gorodnichenko (C&G, ungated version here) suggests that the two approaches may be complements rather than subsitutes. The paper assumes that firms can follow one of 4 pricing schemes, a basic sticky price (Calvo) set up, a sticky information (Mankiw & Reis) regime, a full information flexible price regime and a rule of thumb regime. C&G then estimate the fraction of firms in these four regimes in the context of a more or less straightforward New Keynesian DSGE model.

C&G find that a combo of sticky price and sticky information firms in roughly equal proportions is best for matching the population moments they use to estimate their model. Rule of thumb and full information firms are estimated to be a small and not very important fraction of total firms.

This is a very cool paper. But that's not all on this front.

In a paper forthcoming in the Review of Economic Studies (ungated version here) Dupor, Kitamura, and Tsuruga consider a model where all firms face both a sticky price and sticky information scenario. They compare this dual stickiness model to both a pure sticky price and a pure sticky information model and find that data prefer the dual model. They also argue that the dual model fits the data better than a hybrid model that contains some sticky price and some rule of thumb firms.

It's like Reese's Cups people, you don't have to choose between peanut butter and chocolate!

David Foster Wallace dies

Incredibly sad news that one of Mrs. Angus and I's favorite writers has taken his own life at age 46.
"Infinite Jest" would be on my list of the top 5 novels of the 1990s and his essays, especially "A Supposedly Fun Thing I'll Never Do Again" about the cruise ship experience and "Up, Simba" about the John McCain campaign of 2000 are superb. This is a tragic turn of events.

Teaching to the test

Bad economics makes good editorials

Like in today's WSJ where we are told "Divided Government is Best for the Market" and treated to a lovely exercise in torturing the data. It turns out that, since 1948, the stock market has done better under Democratic presidents (15.6%) than Republican ones (11.1%). Now this number really means nothing. First, we'd like to know real, inflation adjusted returns, not nominal returns. Second, and most important, we need to control for other relevant factors. Despite the best efforts of the MSM, we do not live in a unicausal world; politics is not the unique cause of all outcomes.

However, the editorial writer has a unique approach to attacking the problem:

"But it's not so simple... First, not all Democrats act like Democrats, and not all Republicans act like Republicans. John F. Kennedy, for example, was an enthusiastic supply-side tax cutter, and George H.W. Bush raised taxes. Bill Clinton promoted free trade, and Richard Nixon imposed wage and price controls.

If you assign those four presidents to the opposite party based on that -- make the two Democrats into Republicans and the two Republicans into Democrats -- the numbers completely reverse. Now stocks average 14.7% under Republicans and only 10.5% under Democrats.

In fact, it turns out that if you do just one single switch -- if you make Richard Nixon into a Democrat -- it's enough to reverse the numbers."

Awesome!! When all else fails, massage the data!

People, no matter how you slice them, these numbers can't at all be taken as evidence about what market performance would be in the future under different Presidents or about how the market would have faired if George McGovern would have beaten Nixon because they don't take into account any of the other massively important factors that affect market performance. Give a couple of examples, would there have been no oil shocks in the 70s if Nixon were not President? Would the tech boom not have happened if Clinton were not president?

Of course our beloved editorial writer is a sophisticated guy and does bring in another factor later in the article: Congress!!!

"If the electorate were really smart, it would elect a Democratic president and a Republican Congress. Under that deal, stocks have averaged a 20.2% total return"

Again, awesome. That combo in this sample is the last 6 years of Clinton. So the tech boom happened because of a Democratic prez and a Republican congress. Elect that combo again and presto, another boom. It's just that simple eh?

Why oh why oh why oh why does the WSJ publish trash like this? And why oh why oh why would anyone put a single penny into the hands of Trend Macrolytics LLC?

News Flash: Sarah Palin is not a woman!

At least according to Heather Malik:

Palin was not a sure choice, not even for the stolidly Republican ladies branch of Citizens for a Tackier America. No, she isn't even female really. She's a type, and she comes in male form too.

and Wendy Doniger agrees:

Her greatest hypocrisy is in her pretense that she is a woman. The Republican party's cynical calculation that because she has a womb and makes lots and lots of babies (and drives them to school! wow!) she speaks for the women of America, and will capture their hearts and their votes, has driven thousands of real women to take to their computers in outrage. She does not speak for women; she has no sympathy for the problems of other women, particularly working class women.

Holy Crap people, is this a great country or what? McCain surges ahead in the polls based on his choice of a trans-gendered running mate?

It is just so awesome and fun for me to watch how our liberal chattering class has gone completely insane over Sarah Palin.

Hat tip to Betsy Newmark!

Foreign Aid: Fail

Here are Easterly and Pfutze in a recent (Spring 2008) article in the Journal of Economic Perspectives:

"Our findings on aid best practice tend to confirm a number of long-standing
complaints about foreign aid, notwithstanding the aid agencies’ perpetual claims
that they are fixing past problems. The aid effort is remarkably splintered into many
small efforts across all dimensions—number of donors giving aid, number of
countries receiving aid from each donor, and number of sectors in which each
donor operates. A lot of aid still goes to corrupt and autocratic countries and to
countries other than those with the lowest incomes. Aid tying, the use of food
aid-in-kind, and the heavy use of technical assistance persist in many aid agencies,
despite decades of complaints about these channels being ineffective. In addition,
some agencies have remarkably high overhead costs. The broad pattern that
emerges from our evidence is that development banks tend to be closest to best
practices for aid, the UN agencies perform worst along each dimension, and the
bilaterals are spread out all along in between. Explaining why each of these patterns
persists over time raises an interesting agenda for research in political economy.
The aid business now spends $100 billion dollars a year of money each year,
seeking to help the world’s poorest people. It is a sad reflection on the aid
establishment that knowing where the money goes is still so difficult and that the
picture available from partial knowledge remains so disturbing."

The UN World Food Program (which tied for last in the Easterly-Pfutze rankings) has responded and E-P have responded to them. While both are interesting and worth reading, I would be remiss in my duties if I didn't point out two of the most entertaining statements in the UN's response letter:

1. "WFP does not decide where to provide assistance"

Really? They just open the doors and see who shows up to cart off the food?? Or they spin a roulette wheel with country names on it?

2. "The world consumes more than it produces"

Yikes! I know that it's been reported that some North Koreans eat grass and leaves, but I don't think the statement can be true, can it? Are we eating the production of future generations?

Is fewer people really a good thing?

This morning, Lebron James' attempt to justify his lifestyle got me to thinking about people. We often hear that the world has too many people, but to many highly trained economists (he he he), population growth is the key to economic growth.

First generation endogenous growth models (eg. Romer JPE 1990) had the implication that long run growth in income per capita was proportional to the number of researchers in the ideas sector. In this case long run growth was possible with a fixed population and policies that increased the number of researchers had growth effects.

However, Charles Jones (QJE 1995) showed that, over the last 40 years, the number of researchers had grown dramatically while growth rates were largely unchanged, so economists modified the Romer model to reduce the productivity of workers in the ideas sector. In this endogenous growth without scale effects (or semi-endogenous growth) model, long run growth in income per capita is proportional to population growth.

From this point of view, Sarah Palin has it right and Tyler (and me and Mrs. Angus) have it exactly wrong! It would be better to take pro-environment steps that did not work to reduce population growth.

Parents: don't let your kids go to business school!!

Another "Reason" not to vote Libertarian

From Reason magazine online that is, a story showing the LP's VP choice to be a complete ass.

An excerpt (note that Wayne Allyn Root is the LP VP candidate):

Matt Welch: So tell us what we should know about Barack Obama that we don't?

Wayne Allyn Root: I think the most dangerous thing you should know about Barack Obama is that I don't know a single person at Columbia that knows him, and they all know me. I don't have a classmate who ever knew Barack Obama at Columbia. Ever!

Welch: Yeah, but you were like selling, you know, Amway in college or something, weren't you?

Root: Is that what you think of me! And the best damned Amway salesman ever!

Welch: No, I'm sure that you were an outgoing young man, I'm just guessing.

Root: I am! That's my point. Where was Obama? He wasn't an outgoing young man, no one ever heard of him.

Tim Cavanaugh: Maybe he was a late bloomer.

Root: Maybe. Or maybe he was involved in some sort of black radical politics.

Welch: Ooooooooooh.

Root: Maybe he was too busy smoking pot in his dorm room to ever show up for class. I don't know what he was doing!

Welch: Wait, you weren't smoking pot in your dorm room?

Root: No, I wasn't. I wasn't. But I don't hold that against anybody, but I wasn't.... Nobody recalls him. I'm not exaggerating, I'm not kidding.

Welch: Were you the exact same class?

Root: Class of '83 political science, pre-law Columbia University. You don't get more exact than that. Never met him in my life, don't know anyone who ever met him. At the class reunion, our 20th reunion five years ago, 20th reunion, who was asked to be the speaker of the class? Me. No one ever heard of Barack! Who was he, and five years ago, nobody even knew who he was.

Holy Crap people, read the whole thing because it gets weirder and uglier from here. It's a shame, especially in this election where the major party choices are big government or big government that the LP is running such a weak ticket.

Ya know, I was just thinking "Hey, we need more government" and looky!!

Holy Crap people, the only thing dumber than this article are the fawning responses here and here.

I think the whole left wing blogosphere has totally lost it. Palin has crushed them! I'm serious.

Check out this prime example.

Competing Free Advice for Libertarians!

First from notorious Canadian Alex T at Marginal Revolution: Why Libertarians Should Vote for Obama. An excerpt:

First, war. War is the antithesis of the libertarian philosophy of consent, voluntarism and trade. With every war in American history Leviathan has grown larger and our liberties have withered. War is the health of the state. And now, fulfilling the dreams of Big Brother, we are in a perpetual war.

A country cannot long combine unlimited government abroad and limited government at home. The Republican party has become the party of war and thus the party of unlimited government.

With war has come FEAR, magnified many times over by the governing party. Fear is pulling Americans into the arms of the state. If only we were better at resisting. Alas, we Americans say that we love liberty but we are fair-weather lovers. Liberty will flourish only with peace.

Have libertarians gained on other margins in the past eight years? Not at all. Under the Republicans we have been sailing due South-West on the Nolan Chart – fewer civil liberties and more government, including the largest new government program in a generation, the Medicare prescription drug plan, and the biggest nationalization since the Great Depression. Tax cuts, the summum bonum of Republican economic policy, are a sham. The only way to cut taxes is to cut spending and that has not happened.

However, here is the wonderful Vin Suprynowicz with a slightly different point of view:

I'm considering voting for a major party's presidential ticket this year, for the first time in decades. As a matter of fact, it would mark the first time I've voted the top of the ticket for this particular party in my life.

I've met the presidential nominee. He's got character. He's also a likeable guy -- most politicians share that asset -- though he's clearly a creature of the Senate, where respect for freedom and limited government are laughed at, deemed a handicap in "making the deal."

Over the past year, though, he's run a come-from-behind Cinderella campaign that could become the stuff of legend. And then last week, he did something that made our enemies afraid.

That made me take notice.

Mind you, there's a good moral case to be made for not voting. By participating in the election, you tacitly acknowledge the winner has the right to do all the awful, unconstitutional, morally wrong things they now do in our names.

I still vote largely because the "Libertarian" button is available. This year, though, the Libertarian Party has nominated Fearless Drug Warrior Bob Barr, a man who has opposed medical marijuana initiatives, opposed needle exchanges, a man who zealously locked up for years those seeking to peacefully medicate themselves or help others to do so, shoving them into small cages.

The only two things these posts seem to agree on is that Libertarians should not vote for Barr (Alex implicitly and Vin quite explicitly)!! Now where have I heard that before?

How not to make an argument

The inimitable Mary Anastasia O'Grady (Latin American (LA) columnist for the WSJ) shows us exactly how as she argues for McCain over Obama by positing that the Smoot Hawley Tariff of 1930 caused the spread of import substitution policies in Latin American in the 1950s. Really, I am not making this up. See for yourselves:

Of the two U.S. presidential candidates, one promises to expand international trading opportunities for American producers and consumers. The other pledges to raise the barriers that Americans already face in global commerce.

For Latin America, this is the single most important policy issue in the campaign. If Republican candidate John McCain wins, he says he will lead the Western Hemisphere toward freer trade. Conversely, Democratic candidate Barack Obama has promised that he will craft a U.S. trade policy of greater protectionism against our Latin neighbors. The former agenda will advance regional economic integration, the latter will further Latin American isolation.

Anyone who has read 20th-century history knows the seriousness of this policy divide. The last time Washington adopted a protectionist stance toward our southern neighbors was in 1930, when Congress passed the Smoot-Hawley tariffs. It took more than 50 years to even begin to climb out of that hole.

This is so weird. Clearly it didn't take the US 50 years to begin to recover from the depression. Nor did it take Latin America that long. Most big Latin American countries were doing great, growing rapidly and showing some catch-up to the USA in the late 1960s and the 1970s until the 1980s debt crisis smashed them up pretty good.

Many economists blame Smoot-Hawley for the depths of the U.S. depression. But Latin Americans have suffered even more over a longer period. Their leaders chose to retaliate at the time with their own protectionist tariffs, but the damage didn't end there.

And, I think it is fair to say that many economists DON'T!! Also, on average over the region, the depression hit LA much more lightly than it hit the US, which is not what you'd gather from the above sentences.

In his 1995 book "Crisis and Reform in Latin America," UCLA professor Sebastian Edwards writes that though there was a brief period of liberalization in Argentina, Brazil and Chile in the late 1930s, it didn't last long. Adverse conditions brought about by World War II prompted the region's policy makers to restore tariffs, in the hope that protectionism would stimulate economic development.

"By the late 1940s and early 1950s," writes Mr. Edwards, "protectionist policies based on import substitution were well entrenched and constituted, by far, the dominant perspective." The U.N.'s Economic Commission on Latin American and the Caribbean, he adds, provided the "intellectual underpinning for the protectionist position."

Awesome, so O'Grady does decide to cite one source for her "thesis" and the source completely contradicts her. As I read Edwards, Smoot Hawley had nothing to do with high tariffs in LA and Import Substitution, which was a fashionable position among development economists of the 1950s, gave intellectual cover to protectionist governments around LA.

Why oh why oh why can't we have a better LA press corp?

Having had my fill of mockery, let's consider whether a McCain administration would promote trade with LA more than an Obama one. They might want to, but it would be almost impossible given the expected Democratic majorities in both Houses of Congress. Ironically, the best chance of getting deals done (even though those deals might be weird and crappy) would be with the Obama people negotiating a deal that the Pelosis of the world could live with (again, I shudder to think what such a deal would look like).

Take it to the bridge, throw it overboard / See if it can swim back up to the shore

Mrs. Angus & I saw Squeeze's reunion tour stop at the House of Blues in Dallas Saturday night.

I am of two minds about what transpired.

On the one hand, they have a ton of good songs and played them for over 90 minutes with enthusiasm and a minimum of chatter. It was great to see them and hear their catalog.

On the other hand, they seemed more prepared to play Texas stadium than a small hall. The bass and drums were mixed way way up, and overall the band's sound had a hard brittle edge. This is not the fault of HOB, we saw the Breeders there and while it was way loud, the sound was clean and clear and textured. It's not the fault of my ears either; I've seen Sonic Youth and My Bloody Valentine and can appreciate brutal distortion as it's own art form.

The other somewhat disturbing element of the show is that the original members seemed to have instructed their current keyboardist to impersonate Jools Holland (at least his clothing style and physical mannerisms). That was very jarring indeed.

I think those boys need some tube amps!

And that's a mighty long airplane ride....

I'm heading for Perth, Australia. After that, I hope to post more. I certainly can't post much LESS. Thanks to Angus, for, as always, carrying me.

I leave RDU today, SUNDAY, at 1:30 pm. I arrive (travelling through JFK, LAX, and Sydney) in Perth at (gulp) 1 pm on TUESDAY.

On the other hand, I am going to stay here, in Fremantle (just south of Perth). Nice.

Oh, but on the third hand....I'm going to be at this conference, sharing my views on recycling. I believe that I am the tethered goat.

Back Saturday night, September 20. Back to the world of the living after the election on Nov. 4.

N&O

Nice article and other material in Raleigh N&O today.

For more.....

Mungowitz for Governator!

Change we can believe in!

APSA debates abolishing American Politics (and not a moment too soon):

"Spurred by discussion of how the discipline should respond to globalization, the APSA has been talking about whether the way the discipline organizes itself — with a prime position for American politics — makes sense any more.The precise number of subfields within political science is itself the subject of debate. Most people would include American politics, comparative politics, political theory and international relations. Some would add methodologies or area studies or various other topics, but American politics always makes the list. Should it? What would new organizations for the field look like? While the discussion of this issue Thursday at a panel of the political science association’s annual meeting didn’t find a consensus, there was agreement that the current structure has real flaws.

Scholars who called for the abolition of American politics as a subfield were not arguing that scholars shouldn’t study American politics, which may have been reassuring to audience members, most of whom identified by a show of hands as Americanists. But they said that using the United States as an organizational structure, in isolation from the rest of the world, is producing flawed ideas.

Mary Hawkesworth, a political scientist at Rutgers University, said that when the United States is studied in isolation, “certain things get masked.” The “notion of American exceptionalism,” she said, produces “a social amnesia.” For example, she said that that the violence and corruption of the American revolutionaries receives little emphasis, so when students are exposed to the violence of other revolutions, they see no connection to the American revolution and have little tolerance for those other revolutions. Similarly, she said that slavery is taught only as “an aberration in the United States rather than as part of a racist feudalism” imported from Europe.

American politics scholars, she said, largely embrace a view of their work as “non-ideological and moderate,” limiting the critique they may offer of American society. And the current organization of political science, she said, isn’t producing the kinds of understanding that the public needs. Where was political science in predicting the reunification of Germany or the rebound of Russia? she asked. A more global perspective might make the discipline more aware and useful, she said."

So Mary wants to do away with American politics because its practitioners don't emphasize enough how much America sucks? Is this a great country or what?

Whither De-coupling?

One the one hand the global economy seems more integrated than ever, but on the other, it is claimed that the BRICs are growing right through rich country cycles, so what is up with the de-coupling hypothesis?

A new paper by Kose Otruk & Prasad addresses this question empirically using a large dataset of over 100 countries from 1960-2005. They divide the countries into Industrial, Emerging, & Other and use Bayesian methods (Gibbs sampling with data augmentation) to estimate a dynamic factor model of what shocks drive cycles in these countries. When comparing the 1960-84 period with 1985-2005, they find that the global factor has declined in importance in all three groups, while the group factor has become more important in the Industrial and Emerging groups.

So globally, decoupling but within two of the three regions, increased syncronization while in the dreaded "Other" group (developing but not emerging!) idiosyncratic factors have become more important.

Very nice paper, but it seems to me that Tolstoy should get a shout out in the acknowledgements! After all, he said it first.

A Scott a Swiss and a Spaniard walk into a bar....

....actually it's into the semi-finals of the US Open as Andy (the best looking man in all Scottish history) Murray, Roger (this is my 18th straight grand slam semifinal) Federer, and Rafa (soy el maximo) Nadal wait to see whether it will be Serbo-punk Novak Djokovic or Andy Roddick joining them there.

The Open has been fantastic so far this year. New faces, tough matches, and last night Venus and Serena put on a ferocious display. I think Rafa vs. Murray will be a competitive and entertaining match and of course I am rooting for Roddick tonight.

Be afraid. Be very afraid.

How 'bout we let Chairman Clay break it down for ya in his own words?

“We think the logo is classic in its style. We think it's powerful in its design. We think it evokes energy. We think the word Thunder is displayed with simplicity and dignity. And the colors represent much about Oklahoma.

“Our primary color blue is the color of our state flag. This is very much an Oklahoma organization. The sunset is red and orange. Not too red. Not too orange. And the beautiful sun is reflected by yellow.”

very very afraid.

I don't get it

Suppose I was running for office and had a kid. Suppose I supported de-criminalization / legalization of drugs. Suppose during the campaign the kid dies of an overdose.

Three things would be true.

1. My support for the policy didn't kill my kid. Lots of people die of overdoses while we continue to wage "war" on drugs.

2. My kid dying doesn't make my policy position wrong. It might be wrong (I don't think it is), but my kid dying has nothing to do with the cost-benefit analysis or the morality of the position.

3. My kid dying + my policy position doesn't automatically make me a hypocrite.

Right?

Right?

Right?

So I have to ask, WTF is going on in this country???

Andy Roddick joins the Angus Anti-Djokovic Club

Andy, congrats on making the quarters at the US Open and welcome to my club.

Here is a chunk of Andy's postmatch interview after beating Fernando Gonzalez:

Q. With the way he plays and his style, does it almost mandate that it's going to be a grind? Because it's not easy to knock Djokovic out of points early, even if you're playing well.

ANDY RODDICK: Oh, sure. You're going to have to go to work. He goes to work pretty much every point, and, my service game, he's going to put returns in, he puts guys in pressure. It seems like a lot of times there'd be breaks back and forth with him. You know going in that you're going to have to go to work.

Q. When asked about his injuries today, mentioning the right ankle as opposed to the left ankle, the other day ‑‑

ANDY RODDICK: Isn't it both of them? And a back and a hip?

Q. And when he said there are too many to count.

ANDY RODDICK: And a cramp.

Q. Do you get the sense right now that he is...

ANDY RODDICK: Bird flu.

Q. Lot of things. Beijing hangover.

ANDY RODDICK: Yeah.

Q. He's got pretty long list of illness.

ANDY RODDICK: Anthrax. SARS. Common cough and cold.

Q. Got a lot of things going on with him.

ANDY RODDICK: Sure.

Q. Do you think he's bluffing?

ANDY RODDICK: No, I mean, I'm sure ‑‑

Q. The way you're saying it, almost means you feel like...

ANDY RODDICK: No, if it's there, it's there. There's just a lot. You know, he's either quick to call a trainer or he's the most courageous guy of all time. I think it's up for you guys to decide.

Sweet!! Andy you can be secretary-treasurer for sure.

If the numbers don't go your way, make up some new ones

Ah the IMF. You remember them, right, policy reforms, Washington consensus, adjustment lending? You know, all that stuff that didn't work? Well not so fast says a new IMF working paper entitled "The Myth of Post Reform Income Stagnation: Evidence from Brazil and Mexico".

Here's the abstract:

Economic policies are often judged by a handful of statistics, some of which may be biased during periods of change. We estimate the income growth implied by the evolution of food demand and durable good ownership in post-reform Brazil and Mexico, and find that changes in consumption patterns are inconsistent with official estimates of near stagnant incomes. That is attributed to biases in the price deflator. The estimated unmeasured income gains are higher for poorer households, implying marked reductions in “real” inequality. These findings challenge the conventional wisdom that post-reform income growth was low and did not benefit the poor.


Ha!! and again I say, Ha!!

"What do you mean our policies don't work? What about the 'estimated unmeasured income gains'? Dude, we RULE! Poor people love us."

Aaargh. Olivier, you got a lot of work to do!

Wow! Argentina pays up.

In what I think can be fairly described as a surprise move, the Fernandez government announced that it will use foreign reserves held by the Central Bank (of which Argentina has around $47 billion) to pay off its $6.7 billion debt to the Paris Club countries, which has been in default since 2002.

"I have signed a decree today instructing the economy minister to use available central bank reserves to pay off the Paris Club debt," Fernandez said in a live televised speech, met with a standing ovation from industrial-sector executives.

This is the same method that Fernandez's husband, the ex-president Kirchner used to pay off Argentina's debt to the IMF a couple years ago.

Argentina is in the strange position of still belonging to the IMF but refusing to undergo the annual IMF reviews that generally are done for all members whether they are in a loan program or not.

Monetary Policy and Schrödinger's Cat

Barry Eichengreen warns us that there is more to evaluating and conducting policy than picking the correct historical analogy:

"One of the chief ways financial market participants make sense of events is by drawing parallels with the past. The subprime crisis, when it first erupted, was widely perceived as the most dangerous financial crisis since the 1930s. The implication was that it was critical to avoid the policy mistakes that transformed that earlier crisis into a macroeconomic disaster. Specifically, it was important to avoid an excessively tight monetary policy.

Now, with inflation surging, the popular parallel is not the deflationary 1930s but the stagflationary 1970s. Again the implication is that it is important for policymakers to avoid past mistakes. This time, however, past mistakes means a monetary policy that allows inflation expectations to become unanchored.

In fact both analogies are misleading, precisely because market participants and policy makers are aware of this history. Their awareness means that financial history never repeats itself in the same way. Biochemists can replicate their experiments because molecules do not learn. Central bankers lack this luxury."

I like this piece because Barry agrees with me that the Fed did a very good thing (acted as a generous lender of last resort) along with a possibly bad thing (cut rates sharply):

"The Fed’s mistake was cutting interest rates so dramatically when it expanded its credit facilities. Better would have been to lend freely at a penalty rate, a la Bagehot. Higher interest rates which made its emergency credit more costly would have meant better targeted lending and less inflation."

Yes!!

All Hail Marty Fish

The 26 year old Fish, who I've always thought of as tennis' equivalent of "the dude" from the Big Lebowski (the Fish abides!) is in his first ever grand slam quarter final after beating James Blake and Gael Monfils. He now faces Rafael Nadal, but at least it is on a hardcourt where Nadal is not quite so invincible (thought Rafa won the US open series this summer and the Olympic singles gold medal on hard courts).

Fish apparently has really changed his attitude though. In his post match interview after beating Monfils he said:

"Yeah. I mean, this is the biggest tournament of the year, no doubt. It obviously can be argued from a bunch of players at Wimbledon, and this is ‑‑ these are the two biggest ones, are the two favorites that they would like to win most. I think it's no secret, you know, and I said out there on the court, I mean, I desperately wanted to play well and desperately wanted to do well, and this is certainly sweet for sure."

Wow, I can't see Jeff Bridges coming out and admitting something like that. Go Fish!

The resurgent LP

No not the Libertarian Party (sorry Mungowitz), but rather the Licorice Pizza. You know, the 12" long playing vinyl record. It's true! It's in the NY Times. We actually have two turntables at Chez Angus (much to the consternation of Mrs. Angus). Music just sounds more musical on LP over CD, and as the article documents, there is a lot of music coming out on vinyl from new releases by alternative bands to major labels re-releasing chunks of their catalogs on vinyl.

Here's what a couple of 21 year old college boys say in the article about LP listening:

“The process of taking the record off the shelf, pulling it out of the sleeve, putting the needle on the record, makes for a much more intense and personal connection with the music because it’s more effort,” said R. J. Crowder-Schaefer

“I have a ton of music on iTunes,” Mr. (Scott) Karoly said, “but with that music I get A.D.D. really quick. With my LPs, it’s like reading a book as opposed to clicking through articles on Yahoo. When you put on a record,” he added, “it’s an event.”

If you'd like to get on this bandwagon, here is a sweet looking TT to consider (note that you'll still need to buy and install a tonearm:

Whoopsidaisy!

Just a small problem.

How, in the name of freakin' GPS, could this happen?

Pretty funny they landed at Duke, though, instead of UNC. Hee....

Hamlet 2

Very fine entertainment.

Take the old Kevin Bacon movie, "Footloose."

And have it rewritten by Hunter S. Thompson, in order to adapt it to 2008. Just a little disturbing, yet somehow heartwarming.

What's he got that I don't got?

Besides Mrs Angus and I, a third important person arrived at OU in 1999: Robert LeRoy Stoops. This week the three of us enter our 10th seasons here in Norman. So far though, the OKC newspaper has only seen fit to run a massive retrospective on one of us.

I've published 16 articles, garnered a few hundred citations and directed some dissertations.

Under Stoops-onomics, "the athletic budget has grown by average of $5.2 million a year and has turned a profit in every year. In 2007-08, the budget was at a record $69.4 million. Football brought in $30.5 million in direct revenues, mostly from ticket sales, while contributing only $15.2 million in expenses..... Since Stoops' arrival, (annual) advertising and sponsorship revenues have increased from $700,000 to $7 million. Licensing and trademark revenues have gone from $300,000 to $3.2 million."

Wow, no wonder he's the one getting the $3,000,000 bonus for staying 10 years.

Hat Tip to Skip Sauer

This Friday on FOX!!

8:00 pm Eastern, 7:00 Central

And then she goes and spoils it all.....

.....by taking bags of money from Mugabe.

Kirsty Coventry the Zimbabwean super-swimmer and erstwhile Auburn Tiger showed the true spirit of the Olympics when she appeared in public and on national TV with the country wrecking thug Bobby Mugabe and accepted a briefcase with $100,000 US dollars from him.



That's just about perfect.

McCain passes the ABR test

thats Anybody But Romney!!

Readers will know that I was pulling for Condi, but at least its not Mitt.

The Sabbatical from Hell

Daniel Hamermesh is an eminent scholar and a great guy. But holy crap people he's on the Sabbatical from Hell. He's in Bonn Germany for 5 months. Here's his bathroom/laundry room:



When that arrangement gives him a headache he can buy some aspirin for around $3 APIECE!

Plus he's in Bonn. Got to be the worst city in Europe. Geez, we could fix him up here in Norman with a huge house and cheap pills no problem. Next time Dan!

Crazy things I told my class today

"Macroeconomists aren't very bright. It took us almost 40 years to realize the Solow model was about income differences rather than growth rate differences and almost the same amount of time to realize that the lack of absolute convergence was not evidence against the model."

Agree? Disagree? Think I should have my tenure stripped and be put out on the street?

Separate Can Never Be Equal

Let us begin with following poll result, just to establish the baseline. This is from Public Policy Polling, January 2008, just before the Debate televised by WRAL here in Raleigh.

Pat McCrory 18
Fred Smith 16
Bill Graham 13
Bob Orr 8
Elbie Powers 2

Did Bob Orr get invited to the Debate, on January 17? Yes, he did. Polling at 8%.

Now, the email that WRAL sends out, generically, to anyone who asks why I am not included in the Debate coming up:
Dear [NAME] -
Thank you for your feedback regarding the candidates participating in our gubernatorial Debate on September 9. At WRAL, we believe that issues are at the heart of our political process and we give careful consideration to all of our election coverage. Our threshold for inclusion in the debate is that a candidate should have 10% support among likely voters in a WRAL News poll or another poll conducted by an independent entity. Currently, Mr. Munger, the Libertarian candidate, does not meet that threshold and therefore, will not participate in the debate.

However, Mr. Munger will be invited to participate in other platforms which will give his views and positions exposure. He currently has a candidate profile on WRAL.com and he will be invited to record an issue-message for voters to view on demand on our website. Other coverage will be afforded as we draw closer to Election Day.
Best regards,
Leesa Moore Craigie
WRAL News

Now, the press release that went out as my response:


RALEIGH (Aug. 28) -- WRAL TV's exclusion of the Libertarian candidate for governor from their September 9 debate amounts to a "separate but equal" policy, said Dr. Mike Munger, Libertarian candidate for governor.

The station has refused to include Dr. Munger in the debate, citing their policy of only including candidates who poll at least 10 percent.

Further, on January 17 the station sponsored a gubernatorial primary debate in which one candidate, Robert Orr, was then polling at less than 10 percent.

"So, the policy is applied arbitrarily and is simply something concocted to restrict voter access to information," charged Dr. Munger.

WRAL did invite Dr. Munger to tape a half-hour interview, which they said might be made available on their web site, as a substitute for full participation in the televised debate.

In reply to the e-mail invitation from Ms. Leesa M. Craigie, WRAL operations manager, Dr. Munger cited a 1950 civil rights case, Sweatt v. Painter. Heman Sweatt, an African-American, applied to the University of Texas Law School, but was told a "separate accommodation" would be made for him.

"This was one room, over a pool hall, with some law books," said Dr. Munger. "The State of Texas cared so much about keeping blacks out of their school that they swore, under oath, that this one-room law school was just as good as the main UT Law School, one of the best in the nation."

Sweatt rejected the alternative. "There is now a gym named after him on the UT campus," Dr. Munger noted.

"You seem to think that you are doing me a favor by offering me the equivalent of one room over a pool hall, when by any standard my application for participation in the debate deserves your full consideration," Munger wrote to Craigie.

As a media company that affects to care about the public good, WRAL should not make decisions that clearly protect the entrenched interests of the political duopoly that controls this state, said Munger. "More than 100,000 North Carolinians signed petitions to ensure that they got to exercise a real choice in November. But you are denying it to them."

Dr. Munger has testified before the U.S. Senate, been the President of an international academic society, and director of the master of public administration program at UNC-Chapel Hill. He has been chair of political science department at Duke University for nearly a decade.

"I'll not be bought off by your insulting 'one-room-over-a-pool hall' offer," he said. "I am a qualified candidate. I should be in the debate."

UPDATE: Apparently one version of this release contained an error, saying that there were THREE candidates below 10%. Mea culpa. There was only one. I don't see how that makes much difference, but that has been the amusingly Jesuitical response from Jesse Helms' old TV home, WRAL.

Whine Economists?

No, the wine economists. Meetings are probably more fun....

Olivier Blanchard on the state of Macro

In a new NBER working paper, after 25 pages of making nice, Olivier gets down to business:

"A macroeconomic article today often follows strict, haiku-like, rules: It
starts from a general equilibrium structure, in which individuals maximize the
expected present value of utility, firms maximize their value, and markets clear.
Then, it introduces a twist, be it an imperfection or the closing of a particular set
of markets, and works out the general equilibrium implications. It then performs
a numerical simulation, based on calibration, showing that the model performs
well. It ends with a welfare assessment."

He suggests three ways to improve:

1. Go back to partial equilibrium models.

2. Have independent validation for any new twist being inserted in the DSGE model

3. I have to quote here because it's pretty weird: "the re-legalization of shortcuts and of simple models. "

I am fully on board with #2 as but #1 and #3 are strange at best.

I would replace his #1 and #3 with "estimate, don't calibrate" and "lay off the welfare stuff because in the real world agent are heterogeneous and welfare evaluations are intractable".

Let me guess: An exception will be made in THIS case

Interesting story from national LP....

Barr Only Presidential Candidate on Texas Ballot

Republicans, Democrats miss deadline to file presidential candidates in Texas


Atlanta, GA - Bob Barr is slated to be the only presidential candidate on the ballot in Texas after Republicans and Democrats missed the Aug. 26 deadline to file in the state.

"Unless the state of Texas violates their own election laws, Congressman Barr will be the only presidential candidate on the ballot," says Russell Verney, campaign manager for the Barr Campaign and the former campaign manager for Ross Perot. "Texas law makes no exceptions for missing deadlines."

The Texas Secretary of State Web site shows only Bob Barr as the official candidate for president in Texas.

"We know all about deadlines," says Verney. "We are up against them constantly in our fight to get on the ballot across the nation. When we miss deadlines, we get no second chances. This is a great example of how unreasonable deadlines chill democracy."

"Republicans and Democrats make certain that third party candidates are held to ballot access laws, no matter how absurd or unreasonable," says Verney. "Therefore, Republicans and Democrats should be held to the same standards."

Ezra's Unabated Man Crush

Wow, first there was this and now (via Lebron James) there is this:

"What the GOP realized was that Obama did come across different than the average American, but not so much because he was black as because he was effortless. The very set of supercharged talents and qualities that allowed Obama to levitate past the boundaries of race and class make him different than those who haven't rocketed upward on the strength of their intelligence and charisma and charm."

Holy Crap!!

People like this make it so hard to like Barack. Yea, he's alright, but he's not all that and a bag of chips. He's a freakin' politician. Get over it and grow up.

Classroom Chaos, or Angus at the motor pool

Tuesday was the first day of classes for Mrs. Angus and I. Usually I get assigned one of the two classrooms in our building, and if I don't I just commandeer the conference room for my class. This year though, our conference room is being "renovated" which so far has consisted of taking down the blackboard and white board and removing the chairs, thus rendering the room unusable. Ouch. So when I checked to see where I was scheduled to teach and saw it was the Armory, I was confused and somewhat worried.

When I arrived on the scene, holy crap! It was crazier than I'd expected. It really was an Armory (I'd never seen or heard tell of this building before in my 9 years as a Sooner)!! The double wide doors were wide open, people in fatigues were running around outside, there was a motor pool of Khaki vehicles in the back of the first floor. The classrooms were upstairs and the first thing I noticed was the lack of air conditioning (it was around 93 here yesterday). The second thing I noticed was that it was 11:57 and my room was still in use (the previous class should have ended at 11:45). So I stepped into the room. Immediately some desert storm looking dude behind a lectern barked out "Stand down a minute mister!!".

Wow.

I cracked up laughing and backed out of the room, and called our department administrator. She got me an alternative room in the library that was closer to my office by around 50%, air conditioned, and empty! When all my students had arrived on the scene and we started to emigrate to the library it was 1:10 and the desert storm dude was still going strong in my erstwhile classroom.

So big ups to Tami K for saving the day and a warning to all terrorists: if you plan to invade OU, we're ready for you!!

got to keep a strong Pope hand!

big ups to punditkitchen commentater CGS for this post's title

By George I think he's got it!!

For those of you suffering from Olympic withdrawal pains, noted sportsman Fidel Castro provides us with a probably prescient preview of the 2012 London games:

"There will be European chauvinism, judge corruption, buying of brawn and brains, unpayable costs and a strong dose of racism,"

here is the original text in case you think I'm translating badly:

Allí habrá chovinismo europeo, corrupción arbitral, compra de músculos y cerebros, costo impagable y una fuerte dosis de racismo.


Can I get an Amen?

(an article in English, including Fidel defending the Cuban athlete who kicked a referee in the face is here)

Hat tip to Boz

KPC exclusive: Biden's acceptance speech

As bloggers continue to erode the feeble MSM, KPC is proud to exclusively disclose this advance copy of Joe Biden's speech accepting the VEEP nod:


"Thank you very much. I am so pleased to be on a ticket with the first mainstream African-American who is articulate and bright and clean and a nice-looking guy. But you know I started thinking as I was coming over here, why is it that Joe Biden is the first in his family ever to be nominated as VEEP? Is it because our fathers and mothers were not bright? Is it because I'm the first Biden in a thousand generations to get a college and a graduate degree that I was smarter than the rest? Actually it kind of is, because I am brilliant. In fact, I'd be delighted to sit down and compare my IQ to yours. I think I have a much higher IQ than you do. I'd like to take this opportunity to invite my running mate to come to Delaware and campaign with me. He'll need to be careful though because in Delaware, the largest growth in population is Indian-Americans moving from India. You cannot go to a 7-Eleven or a Dunkin' Donuts unless you have a slight Indian accent. I'm not joking. By the way, what do you guys think about my running mate? Is he ready? I think he can be ready but right now, I don't believe he is. The presidency is not something that lends itself to on-the-job training.
Come to think of it, our opponent is much more ready. You know what? I would be honored to run with or against John McCain, because I think the country would be better off. In conclusion, I promise to leave no judge un-Borked, no policy space un-Czared, and to continue to promote my brilliant idea to partition Iraq. Always remember, Joe's right, Joe's right, Joe's right. After all, I didn't graduate in the top half of my law school class for nothing!




(sources for italicized material here, here, and here)

They did the job

Fallacies within Fallacies

My former student (he took classes with me, I wasn't his adviser or anything) Steve Horowitz has a post over at The Austrian Economists that says in part:

"What is the fallacy of fact and fallacy of theory that the reasonably well-informed layperson believes about economics that are most in need of correction? That is, which ones do the most damage? Here's are my nominees: For "Fallacy of Fact": that the economic well-being of the average American is on the decline. For "Fallacy of Theory": that consumption (rather than savings/investment) is the source of economic growth. Both of these are utterly wrong"

Well I am basically sympathetic Steve, but I have to say that there is a fallacy in your second fallacy, viz. the fallacy that investment is the key to growth.

The whole point of the neoclassical growth model (NGM) is/was that investment is NOT the key to growth, but rather that technological progress is the key to growth. That's what got Bobby S. his prize. You have to be an AK guy (or gal) to think investment drives growth, and after Chad Jones showed for a number of countries that investment rates have risen a lot while growth rates have not, there aren't many AK folks still around.

Now, Mrs. Angus and I are on record as being extremely skeptical over the overall efficacy of the NGM, but the insight that investment does not drive growth is one thing that I think it does get right.

All Hail Jamaica!

Last night Mrs. Angus and I were out to dinner at a friend's house. Our lovely hostess (originally from Hong Kong) expressed concern about what country would "win the Olympics". Specifically she was looking for the best metric with which to argue that China had "won".

I immediately nominated Jamaica as the winner based on either total medals or gold medals per capita (hmmm, I may not get invited back there again eh?)!

Turns out that was exactly right as you can see here. Jamaica also "wins" based on gold medals or total medals per $ of GNP as well. I believe that all 11 of Jamaica's medals came in track and field (as bobsledding is a winter olympic sport).

That is truly an incredible achievement.

That's one small misstep for Obama, but one giant leap for gridlock.

He did it. Despite earlier KPC incredulity. BHO picked the airheaded creepy plagiarist. Wow. All I can say is Obama must REALLY REALLY HATE Hillary.

Can you feel the gridlock train a'rolling people?

Now millions of parents can tell their kids, "don't cheat in school honey or you might wind up being vice president!"

Get in line! (and don't forget to pack a lunch)

I got your pathway to citizenship right here!



hat tip to Greg Weeks

Making the Beast with Two Backs....John Edwards and A Duke Girl

Ya gotta love Wonkette:

DID JOHN EDWARDS HAVE MORE SEX WITH LADIES?: Intrepid blog reporter Choire Sicha hears that a New York Times Metro reporter is digging into “a story about John Edwards and a Duke graduate.” We are Ethical and don’t want to spread scurrilous rumors, but maybe John Edwards has been fucking a Duke graduate? Maybe John Edwards has been fucking seven Duke graduates and had like 20 babies with each of them, who knows, there must be more information out there.

On the "Radar":
"NYT Hot On Story Of John Edwards And The Mysterious Duke Graduate: New York Times reporter Serge Kovaleski is on a story. Serge, you'll remember, is the reporter who brought us the tale of Ashley Alexandra Dupré, the young working lady who consorted with former New York governor Eliot Spitzer. What's Serge up to? It looks slightly out of his normal range of Metro and local politics stories (although he does at times go national). All we know is it's a story about John Edwards and a Duke graduate—and right now he's combing the New York Times newsroom for Duke graduates to speak with. (We guess Times employees aren't sortable on Facebook by college group!)
Personal to Serge: There's Stephen Labaton, class of '86—but we think you're looking for perhaps a more recent graduate? Oh gosh, we hope this is a nice story about how John Edwards was kindly to a college student with like tuition and helpful advice and stuff."

Why does the description have to be "a Duke graduate"? Why not, "A woman who would sleep with a lying, effeminate male skank who is cheating on his loyal dying-with-cancer wife"? As Tina Turner might ask, "What's Duke Got Ta Do With It?"

(Nod to KL)

Mayor Pat's Turn

Several readers sent emails saying they thought I shouldn't pick on the LG, after I told a joke.

Well...perhaps I shouldn't ONLY pick on the LG. For the Mayor of Charlotte, with its aggressive corporate subsidies, and astronomically expensive light rail....here's to you!

First, from Sir Ernest Benn, who I believe must have had Pat McCrory specifically in mind: 'Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy'. I was just in Charlotte, and this is EXACTLY how people described the mayor.

Then, Alexis de Tocqueville: "On my arrival in the United States I was struck by the degree of ability among the governed and the lack of it among the governing."

It's really true. Charlotte is such a vibrant, exciting place. So many interesting people. But....well, you know.

Markets in Everything: Canadian Style

This one is for Alex T!

"Canadians who may have become tired of being passed over as porn stars will have a new, home-grown outlet to showcase their erotic talents. Federal regulators have granted Alberta-based Real Productions approval to launch a new digital pornography channel, which promises to serve up at least 50 percent domestic content."


and here's the money quote:

"I think as Canadians there is a bit of a tiredness in seeing all American stuff," Shaun Donnelly, president of Real Productions, said during an interview on Friday.

"There is always that thrill for something that is local and you get the sense that these are people you can meet at the supermarket."

Yikes!! I don't know about where y'all live, but there's no one in my supermarket I want to see nekkid!

Olympics Roundup

1. The IOC finally wakes up to the (pygmy) elephant in the room.

2. Is it the yams? Why are Jamaicans so fast?

3. It's Thursday night and I'm all doped up like a Norwegian show horse.

4. And finally KPC wants to know: Who ya got people, Bolt or Phelps?

Gabriel, it's not too late to re-consider that PhD in Economics!!

Turns out, we are pure evil:

"Here we are, in full planetary emergency, a time when we need new young graduates with a realistic understanding of what is wrong with the world, with skills that will help humanity chart a new course. And what do economics departments aspire to churn out? Individuals trained to not recognize symptoms of impending collapse, trained to ignore appalling inequality, trained to celebrate profligate waste, trained to be closed-minded and unwilling to engage with different disciplines."

hat tip to Lebron James

Happiness is a wet puppy

with apologies to the Beatles (or was it Chairman Mao), here are some of the highlights of Pluto's Santa Fe vacation. These shots are from the Cochiti recreation area right by Tent Rocks.

A Joke That Didn't Make Air....

So, I was driving over to do the radio show this morning, the "Shadow Debate," where I got to answer Bev and Pat after the fact, on a radio show that people actually listen to (mp3 of hour long radio show here).

And I came up with a joke. My good friend RT Beckwith claims I am "best known" for my comical send-ups of my hapless opponents. ("Yes, it's true....This man has no no hap."*)

But I chickened out, and didn't use the joke. Seemed a bit abrasive, for a candidate on a radio show. A blog....that's different. It's not serious. Here's the joke:

George Bush claims that he looked into the eyes of Vladdy Putin, and saw his soul.

Now there's a rumor that George Bush looked into Bev Perdue's EAR. You know what he saw?

Daylight.

Major props to Brad and Britt. I hope it was good radio. Neanderbill liked it....how can that be bad?

(*If you said, "Ghostbusters," you win)

Would Obama really pick Biden??

According to Intrade, he's the favorite. Admittedly, no one knows their way around warm spit like Joe, but I just don't see how Obama can pick him. Obama is politics 2.0, Joe is plagiarism 101. Obama is cool, Joe is a creep.

Is Obama so succeptible to flattery (Biden famous called him "the first mainstream African-American who is articulate and bright and clean and a nice-looking guy")?

Wasn't Biden in favor of partitioning Iraq?

I really hope Obama goes this way (gridlock, gridlock, rah, rah, rah), but I don't think so. He's not that dumb.

Immigrants Should be Able to Go to Community Colleges

The article (gated, free registration)

Excerpt:

Residents should be citizens

By Michael C. Munger : Guest columnist
The Herald-Sun
Aug 20, 2008

I think immigrants should be able to attend community colleges. But then maybe that's because I myself am an immigrant.

Well, not really. I should say I come from a family of immigrants. My ancestors had the surname "Mancgere," or "merchant" in Anglo-Saxon. They moved from County Surrey, England, and settled in the Guilford Colony, near New Haven, Connecticut. Nicholas Munger apparently owned land there beginning in 1651.

I wonder if Nick had trouble sending his kids to community college. You see, old granddad (times 11) Nick never filled out the paperwork required to become a citizen. It seems that he landed at New Haven, left the ship, and went to visit some friends. He met a girl, they got married, and settled down on a portion of her dad's land. Nicholas was a citizen simply because he was a resident of the state of Connecticut. There was no difference.

Nicholas Munger's children, John and Samuel (I'm from the Samuel side) were both U.S. citizens by virtue of birth. But they didn't fill out any paperwork, either. If they went to school, there's no record of it. I imagine they had some rudimentary schooling, though. Nobody asked to see their green card.

"Citizen" is an arbitrary legal status. It gives me the willies to think of "citizen" as a construct that stands in for real identity. Was Nicholas an American? Once he moved here and started paying taxes, yes he was. And if he had brought a child with him, that child would have been a citizen, too. You didn't have to be born here. You just had to want to live here.

Our immigration policy today could not be more different. We make it nearly impossible for people to become Americans legally. We punish people who try to become residents. And then we deny long-time residents the benefits that we give to citizens for free.

Citizenship is a status given, or withheld, by federal law and regulation. But all of the benefits of state residence, including in-state status for schools from kindergarten through graduate school, are based on being able to establish you live here. I just dropped my son Kevin, a 12 generation American Mancgere, at UNC-Chapel Hill. ... We had to show our residence address, demonstrate that we paid taxes in North Carolina, and show our utility bills. Those things proved our residence in the state. Those things qualified my son, and they should qualify anyone's son or daughter, for the benefits the state provides.

And yet, we are now rushing to deny the benefits of residence to thousands of young people who live in our state. Some have lived here for a decade or more, attending our school system and amassing an academic record that meant they earned a high school diploma. They will be working in jobs all over the state.

The children of immigrants will add, or detract, from the economic life of our state depending on whether they can acquire the skills needed to compete in the 21st century workplace. And new businesses will decide whether to locate in North Carolina, or someplace else, depending on whether we have a workforce with those same skills.

What should the standard be? What status should be required to attend community college, or college, as an in-state student? The same as for everyone else: demonstration of residence. The same as for Nicholas Munger, in 1651: live on the land, work, pay taxes, contribute to the community.

But North Carolina has decided that it will place exclusion first, and focus on arbitrary legal distinctions, rather than the welfare of its residents and the future of our economy. By barring the undocumented from getting an education, we are creating an apartheid system with fertile pickings for gang recruitment and exploitation by unscrupulous employers who thrive on ignorance. And we are telling prospective business recruits: go elsewhere. We prefer illiteracy.

Once I established that I am a resident of North Carolina, no one at Chapel Hill asked for my passport when I dropped my son off at Hinton James dormitory. And that's how it should be. Anyone who lives in North Carolina, who pays taxes here, and who accepts a stake in our economic and civic future deserves a shot at education, at the same rates as anyone else. Discriminating among state taxpayers based on where they used to live is un-American.

Where on God's green earth??

Discuss....

We'll be your huckleberries!

FYI, people!

Santa Fe discoveries

One of me and Mrs. Angus's favorite things to do in Santa Fe is stroll through the zillions of art galleries around town. While many are stereotypical and touristy, there are some genuinely interesting artists showing their work and some excellent galleries. One local (by way of Mallorca) artist that we both liked very much is Richard Campiglio. Here is one example:



He puts plaster on panels and then paints on that. Most pieces are small and ornately framed. Kind of Michelangelo meets R. Crumb. Here's another:

What's the number for 911?

In yesterday's WSJ, Ethan Penner ("a pioneer in real estate finance" according to the Journal (wouldn't that make him well over 100 years old??)) says the following:

To understand exactly what is happening, one needs to properly understand what occurred in the late stages of the prior cycle. Interest rates had been driven to historical lows in the U.S. and throughout the world. The cause of this can be debated. However, it is clear that economic globalization, with the migration of jobs to low-wage nations, had a profound impact on inflation, and thus on interest rates.

Uh, earth to Penner! Phone call for Mr. Penner. Irving Fisher on line 3!

Ignoring the issue of how globalization affects inflation, Penner is (here and throughout the article) making the basic error of confusing real and nominal returns:


The flip side of a low-interest rate environment is that it reduces the absolute level of returns that are available to investors. This has significant implications for the massive wave of baby boomers, which holds many billions of dollars in retirement savings, either through direct investment or through managed pension-fund systems.

People, repeat after me: A 10% rate with 15% inflation is not high and a 5% rate with 0% inflation is not low.

If you read the full article, Penner also seems to believe that the shape of the yield curve is time invariant!

Humor and Dreaming

Genetic and Environmental Contributions to Humor Styles: A Replication Study

Philip Vernon, Rod Martin, Julie Aitken Schermer, Lynn Cherkas & Tim Spector
Twin Research and Human Genetics, February 2008, Pages 44-47

Abstract:
One thousand and seventy three pairs of adult monozygotic (MZ) twins and 895 pairs of same sex adult dizygotic (DZ) twins from the United Kingdom (UK) completed the Humor Styles Questionnaire: a 32-item measure which assesses two positive and two negative styles of humor. MZ correlations were approximately twice as large as DZ correlations for all four humor styles, and univariate behavioral genetic model fitting indicated that individual differences in all of them can be accounted for entirely by genetic and nonshared environmental factors, with heritabilities ranging from .34 to .49. These results, while perhaps not surprising, are somewhat at odds with a previous study that we conducted in North America (Vernon et al., in press) in which genetic factors contributed significantly to individual differences in the two positive humor styles, but contributed far less to the two negative styles, variance in which was instead largely due to shared and nonshared environmental factors. We suggest that differences between North American and UK citizens in their appreciation of different kinds of humor may be responsible for the different results obtained in these two
studies.

-----------------------

Dreams are more negative than real life: Implications for the function of
dreaming

Katja Valli, Thea Strandholm, Lauri Sillanmki & Antti Revonsuo
Cognition & Emotion, August 2008, Pages 833-861

Abstract:
Dream content studies have revealed that dream experiences are negatively biased; negative dream contents are more frequent than corresponding positive dream contents. It is unclear, however, whether the bias is real or due to biased sampling, i.e., selective memory for intense negative emotions. The threat simulation theory (TST) claims that the negativity bias is real and reflects the evolved biological function of dreaming. In the present study, we tested the hypothesis of the TST that threatening events are overrepresented in dreams, i.e., more frequent and more severe in dreams than in real life. To control for biased sampling, we used as a baseline the corresponding negative events in real life rather than the corresponding
positive events in dreams. We collected dream reports (N=419) and daily event logs (N=490) from 39 university students during a two-week period, and interviewed them about real threat experiences retrievable from autobiographical memory (N=714). Threat experiences proved to be much more frequent and severe in dreams than in real life, and Current Dream Threats more closely resembled Past than Current Real Threats. We conclude that the TST's predictions hold, and that the negativity bias is real.

(Nod to KL)

0 to 175 in 6 seconds

Tom was in trouble. He forgot his wedding anniversary.

His wife was really angry. She told him "Tomorrow morning, I expect to find a gift in the driveway that goes from 0 to 175 in less then 6 Seconds AND IT BETTER BE THERE!!"

The next morning Tom got up early and left for work. When his wife woke up, she looked out the window and sure enough there was a box gift wrapped in the middle of the driveway.

Confused, the wife put on her robe and ran out to the driveway, brought the box back in the house.

She opened it and found a brand new bathroom scale.

Tom has been missing since Friday.

(Forwarded to me by lovely, slender wife)

Say What?

This morning Tyler links to an RBC article by Martin Uribe and Stephanie Schmitt-Grohe. Let me just say in advance that I know and like Martin and Stephanie and they do awesome work. However, I found the following sentence in their paper quite bewildering:

We find that anticipated shocks are the most important source of uncertainty.

To which I can only reply: ???????? Folks, only a highly trained macroeconomist could hope to parse that humdinger of a sentence.

The paper is indeed a move back toward pure RBC in that there are no nominal ridigities in the model. However, it does simply assume a host of real rigidities, including the dreaded "investment adjustment costs" on the grounds that there is "a large existing literature
showing that these frictions improve the model’s empirical fit."

Oh.

For those of you who prefer a nominal rigidity approach but like the idea of exploring the distinction between expected and unexpected shocks, there is a related paper by Northwestern grad student Joshua Davis (paper can be downloaded here) that gets different results about what shocks are important than do Uribe & Schmitt.

Solar Power for Africa?

David Wheeler, from the Center for Global Development has been excoriating his old employer, the World Bank, for living in the past and continuing to help fund coal fired energy projects. Here is a graph of the most favorable spots on Earth for solar power generation: