Bob Lucas on the fiscal multiplier

"Question: On the one extreme, we have models by people like Mark Zandi at Moody's who say that the fiscal multiplier for the spending initiatives we're discussing are on the order of 1.5. On the other hand, we have people like Robert Barro at Harvard who say there's zero or negative. How would you go about applying the Lucas critique to these types of models to sort of educate us in how we should think about the validity of these models?

LUCAS: Do I need the Lucas critique for -- I'm with Barro is the short answer. (Laughter.) The Moody's model that Christina Romer -- here's what I think happened. It's her first day on the job and somebody says, you've got to come up with a solution to this -- in defense of this fiscal stimulus, which no one told her what it was going to be, and have it by Monday morning.

So she scrambled and came up with these multipliers and now they're kind of -- I don't know. So I don't think anyone really believes. These models have never been discussed or debated in a way that that say -- Ellen McGrattan was talking about the way economists use models this morning. These are kind of schlock economics.

Maybe there is some multiplier out there that we could measure well but that's not what that paper does. I think it's a very naked rationalization for policies that were already, you know, decided on for other reasons. I don't -- I'd like to talk about the Lucas critique but I don't -- I don't think we can -- (chuckles) -- deal with that issue. "


LOL, I wonder if Christy R. got the license plate of that bus as it ran over her. The whole transcript of Lucas' talk is here.

India fact of the day

"The basic marriage rule in Hindu society is that no individual is permitted to marry outside the sub-caste or jati. Social mobility will be severely restricted by this rule because individuals are forced to match within a very narrow pool. Social mobility, as measured by inter-caste marriage, continues to be low in rural India despite the economic changes within and across castes that have taken place over the past decades. Recent surveys in rural and urban India that the authors have conducted indicate that among 25-40 year olds, out-marriage was 7.6% in Mumbai in 2001, 6.2% in South Indian tea plantations in 2003, and 5.8% for the rural Indian population in 16 major states of India in 1999."

This from a fascinating new NBER working paper by Munshi & Rosenzweig.

Fujimori verdict due today

These folks have already made up their minds!

UPDATE!!!!! And they were right in as much as Fujimori was indeed convicted:

"A special tribunal convicted former Peruvian President Alberto Fujimori of murder and kidnapping on Tuesday for death squad activities during his 10-year rule during the 1990s.

"This court declares that all four charges have been proven behind all reasonable doubt," presiding judge Cesar San Martin told a hushed courtroom.

There was no question, he said, that the 70-year-old Fujimori authorized the creation of a military death squad that killed some 50 people.

Fujimori apparently anticipated a guilty verdict. He sat alone taking notes as the verdict was read after a 15-month televised trial.

He faces a maximum of 30 years in prison and the court was expected to issue a sentence later Tuesday after a full reading of the sentence.

Fujimori is the first democratically elected former president to be tried for rights violations in his own country. His lawyers have said he would appeal the verdict."

Oh My God: They Killed Kuttner

YOU BASTARDS!!!

The Epitome of Spurtability?

WWAD?

Clark Kellogg just said that UNC is the "Epitome of Spurtability."

What would Angus do?

He would sing this, I think, and make Pluto go out into the hallway.

A weak mind is easily confused

1. Virtually all press reports are calling BHO's visit to Turkey his "first trip to a Muslim country". Is that true? Isn't Turkey a secular democracy, at least in theory? Wouldn't Attaturk be spinning in his grave if he could hear this?


2. If the state of Oklahoma is so homophobic, why does OU have a "Gaylord College"? Heck we even have an organization called the "Gaylord Ambassadors"!


3. Why are grown men trying to play baseball when it's cold and snowy? It was 37 in Cincinnati, 42 in St. Louis and the White Sox home opener was postponed due to snow.

Dear Wacko:

So I got the following email spam, from an address in Zaire:

The saluation, "Dear Wacko", is probably accurate in my case. But I doubt that it is effective for the purpose the spammer has in mind.

Dear Wacko, From Mr. Williams Johnson,Consultant/Agen

Nettie Lee The Undersigned, Mr. Ernest Ansah, Managing Director of Doncan Gold Company Ltd, licensed small scale mining company, with head office in Accra, Ghana, licensed under company code 1963 (Act 179) of the Republic of Ghana. We confirm with full corporate responsibility and legal authority do hereby make this Full Corporate Offer attesting that we have 500 Kilograms of alluvial Gold particles, and we do have the legal authority to sell same as hereinafter reflected, under penalty of perjury our ability to supply the said product. (Alluvial Gold Dust and Bars).
PRODUCT:Gold Dust/Bars QUANTITY: 300/500kg
PURITY: 99.95% or better ASSAY: Final assay to be made by Buyer's choice of refinery,
LOCATION: Ghana West Africa INSPECTION: Ghana West Africa
PACKING: Export Package Boxes/Bars SELLING PRICE: USD$18,500.00/kg Negotiable
PAYMENT: EURO or USD by SWIFT Wire Transfer

The horror that is Mary Fallin

"For what purpose does the gentlelady from Oklahoma rise?"

"Mr. Speaker, I rise to make an ass of myself"

"The gentlelady is recognized for 5 minutes"

I recently posted about the amazingly ignorant response of many US Representatives about the notion of the dollar being replaced as the major reserve currency in the world. They responded with a resolution calling for a constitutional amendment that would disallow a foreign currency replacing the dollar as LEGAL TENDER in the USA. Oooops!

Anyway Mary Fallin is a co-sponsor of this resolution. It isn't the first weird, nut-jobby deal she's co-sponsored either . Remember Ron Paul's "issue" of how NAFTA was going to create a superhighway across the USA from Mexico to Canada? She co-sponsored the resolution Rep. Virgil Goode introduced against that clear and present danger to the body politic back in 07.

According to ace political blogger Brendan Nyhan, only 12 representatives share the dubious distinction of co-sponsoring both of these gems of legislation and our Mary is one of them. We are so proud!

Here is the full hall of shame:

Michelle Bachmann (R-MN)
Spencer Bachus (R-AL)
Roscoe Bartlett (R-MD)
Paul Broun (R-GA)
John Culberson (R-TX)
Mary Fallin (R-OK)
Virginia Foxx (R-NC)
Trent Franks (R-AZ)
Phil Gingrey (R-GA)
Darrell Issa (R-CA)
Walter Jones (R-NC)
Thaddeus McCotter (R-MI)
Ron Paul (R-TX)
Zach Wamp (R-TN)

People, can this be real?? Zach Wamp?? Thaddeus McCotter??? Roscoe Bartlett?? Is this the US Congress or the Dukes of Hazard??

Remembering Gordon Tullock

I got an email from Pete Boettke asking me for a contribution to a "booklet of fond remembrances" that he is putting together to honor Gordon. Here is my remembrance:

I first met Gordon when, as a new PhD candidate, I went on a job interview at GMU (it helps the story to remember that this was 1984, pre-Google, y’all!). I began my seminar with a discussion of why my topic was interesting/important, and then moved to a literature review. When I finished the review, Gordon raised his hand and asked “Is that it?” I replied that while I had all of my own work yet to talk about, that, yes, that was it for the lit review. To which Gordon said, “Well then we may as well stop the seminar right now because you don’t even know the literature in your own field. You are completely ignoring the most important paper”. Yikes!! About a million thoughts race through my mind and I decide to go humble and see what happens, so I say that I’m very sorry for the omission, and would he please give me the citation to the paper so that I could find it and incorporate it into my work. Gordon’s answer was this: “The paper is in my desk drawer, it was submitted to Public Choice last week”. To which I replied “Man, I am so dumb, of course any good literature review should start in Gordon’s drawers.” I got the job, and Gordon was always a strong (though sarcastic) supporter of me and my work.

Saturday poetry corner

I know we're gonna meet someday in the crumbled financial institutions of this land
There will be tables and chairs
Pony rides and dancing bears
There'll even be a band
'cause listen after the fall there'll be no more countries
No currencies at all
We're gonna live on our wits
Throw away survival kits
Trade butterfly knives for adderal
And that's not all
Woah!
There will be snacks, there will
There will be snacks!

--Andrew Bird, 2005

She blinded me with science....

Best April fool's blogpost of the year!

It's right here people, and it's comedy gold.

Ward Churchill "wins"

The ex CU Professor "won" his wrongful dismissal case against the University, which after deciding they couldn't directly fire him because of his 9/11 "little Eichmanns" essay, fired him later on some various academic misconduct charges they dug up.

I put won in quotes because Ward was awarded $1 in damages.

Ward said that he didn't ask for money and was happy, but his attorney had asked the jury to send a message via a monetary judgment against the University.

There is another hearing coming to see if Churchill will get his job back.

Is this a great country, or what?

Bling: yer doin' it wrong

at least if you're a devil/vampire cat:

New Keynesian Macro in graphs!

In honor our our current posterboy (Larry Meyer), I am happy to blog about a new NBER working paper by Pierpaolo Benigno titled "New Keynesian Economics: An AS-AD View".

Sadly I can't find an ungated version, so I will quote at length from the introduction:

This work presents a simple New-Keynesian model illustrated by Aggregate Demand (AD) and Aggregate Supply (AS) graphical analysis. In its simplicity, the framework features most of the main characteristics emphasized in the recent literature. The AD and AS equations are derived from an intertemporal model of optimizing behavior by households and firms respectively.

The AD equation is derived from households’ decisions on intertemporal consumption allocation. A standard Euler equation links consumption growth to the real interest rate, implying a negative correlation between prices and consumption. A rise in the current price level increases the real interest rate and induces consumers to postpone consumption. Current consumption falls.

The AS equation derives from the pricing decisions of optimizing firms. In the
long run, prices are totally flexible and output depends only on real structural factors. The equation is vertical. In the short run, however, a fraction of firms keep prices fixed at a predetermined level, implying a positive relationship between other firms’ prices, which are not constrained, and marginal costs, proxied by the output gap. The AS equation is a positively sloped price-output function.

As in Keynesian theory, the model posits some degree of short-run nominal rigidity. Nominal rigidity can be explained by the fact that price setters have some monopoly power, so that they incur only second-order costs when they do not change their prices. In the long run, the model maintains the classical dichotomy between the determination of nominal and real variables, with a vertical AS equation.

The analysis is consistent with the modern central banking practice of targeting
short-term nominal interest rates, not money supply aggregates. The mechanism of transmission of interest rate movements to consumption and output stems from the intertemporal behavior of the consumers. By moving the nominal interest rate, monetary policy affects the real interest rate, hence consumption-saving decisions.

This simple framework allows us to analyze the impact of productivity or mark-up disturbances on economic activity and to study alternative monetary and fiscal policies. In particular, we can analyze how monetary policy should respond to various shocks. That is, a microfounded model yields a natural objective function that monetary policy could follow in its stabilization role, namely the utility of consumers. This objective is well approximated by a quadratic loss function in which policymakers are penalized, with certain weights, by deviating from a price-stability target and at the same time by the fluctuations of output around the efficient level. In the AS-AD graphical plot, optimal policy simplifies to just an additional curve (labelled IT for “Inflation Targeting”)

seems pretty cool. Here is an interesting tidbit given our current policy debates:

The impact of the fiscal multipliers on output and the output gap can be quantified showing that a short-run increase in public spending has a multiplier less than one on output and a much smaller multiplier on the output gap.

Uh-oh!

Reason #37 to abolish the IMF

Because then we wouldn't have to put up with this foolishness:

"Irrational Exuberance in the Housing Market: Were Evangelicals left behind?" is a 30 page official IMF working paper vetted and approved for distribution by the IMF bureaucracy.

It's just so awesome:

The recent housing bust has reignited interest in psychological theories of speculative excess (Shiller, 2007). I investigate this issue by identifying a segment of the U.S. population— evangelical protestants—that may be less prone to speculative motives, and uncover a significant negative relationship between their population share and house price volatility. Evangelicals’ focus on Biblical prophecy could account for this difference, since it may enable them to interpret otherwise negative events as containing positive news, dampening the response of house prices to shocks. I provide evidence for this channel using a popular

internet measure of “prophetic activity” and a 9/11 event study.

Look, I know college professors write weird papers; I once wrote a piece (with Bob Tollison) titled "Arbitrage in a Basketball Economy"! But we were trying to make an economic point, namely that managerial tenure was tied to performance in the NBA, so probably it was in the "real world" as well. We used the NBA because we thought it was possible to measure managerial performance there (by how shots were allocated).

What is the possible policy implication of this study? That we needed a lot more evangelicals in Las Vegas and Miami and Phoenix? That we should all learn how to speak in tongues? To me the obvious policy implication is that we should ABOLISH THE IMF!!!


Hat tip to LeBron!

Conficker worm victim #1

Just when you think they've hit bottom

our friends in the government come up with something even worse.

Here representing the latest in scary cluelessness is Rep Michelle Bachman (R, Minn), who after hearing talk about the dollar being replaced as an international reserve currency by SDR's, has introduced a resolution in the House to "bar the dollar from being replaced by any foreign currency."

I am NOT making this up! It's from her own website:

“Yesterday, during a Financial Services Committee hearing, I asked Secretary Geithner if he would denounce efforts to move towards a global currency and he answered unequivocally that he would," said Bachmann. "And President Obama gave the nation the same assurances. But just a day later, Secretary Geithner has left the option on the table. I want to know which it is. The American people deserve to know."

Asked today about a currency proposal from China at a Council on Foreign Relations event, Secretary Geithner stated he was open to supporting it. Despite attempts to clarify his remarks later in the day, the unguarded initial response calls into question his true intentions.

Thank you Rep. Bachman. I will sleep more soundly tonight knowing you are on the alert to protect America.

Hat tip to Jon Dingel.

Who's your daddy?

This is an awesome song/video. Hat tip to Sepia Mutiny.

Change you can believe in

This morning the White House announced the creation of a new day, Obamaday, slated to fall between Saturday and Sunday. Initially the day will be funded by borrowing the hour between 3:00 and 4:00 am from the other 7 days of the week. President O assured Americans that it will seem like a full 24 hour day because he had instructed all media outlets to exclusively run interviews with, and feature stories about Larry Summers and Timmy Geithner.

Top Gear: Ford Festiva

It just gets better and better. Watch the video until the end, and be rewarded.

If you are male, that is. If you are a woman, you'll likely ask, "WTF is wrong with men?"

(Nod to Anonyman)

Bad news for the environment

I guess it really isn't new news but I just saw the following chart:



What is especially depressing is that Brazil and Peru have a lot more rainforest than do the other three countries.

I am not a climate scientist, but I wonder why doing something about this problem (e.g. paying Brazil and Peru to protect more rainforest) wouldn't be a good idea?

Hat tip to Otto!

World's Greatest Deliberative Body

Chuck Grassley plays the dozens on Kent Conrad:

Mr. Grassley: I’d like to suggest to the chairman that he might want to support this because, you remember, you asked me two years ago not to take a vote on it and you said if we did take a vote on it you might not get your budget resolution adopted. So I did not ask for a vote on it and you said it was a very statesmanlike thing for me to do at that particular time and so I would hope that you would return the favor.

Mr. Conrad: You know, I used to like you. Let me just say: Oh, you are good.

Mr. Grassley: Well, your wife said the same thing.

Note to Grassley: dude, did you have a colonoscopy earlier in the day or what?

Great 8, Horror of 4: Mungodamus is Mungodumbass

So, I nailed all 8 of the round of 8.

And got gerschnockled in the final four.

My only surviving Final Fourist is UNC, who I have picked
to win against 'Nova, and then to beat the winner of the other side
of the bracket.

If UNC wins out, I do have a chance for glory.

Problem is that the Duke pool has LOTS of folks who picked UNC to go all the way (money more important than spirit) (not that we bet anything. That would be wrong).

Props to Aaron King. He believed in Michigan State all this time, and they came through. Aaaron is at 99.9 percentile. Wow.

Which reminds me, how do you keep a Michigan State cheerleader from drinking too much at the celebration for the final four? It's easy, just close the toilet seat.

Rug Burns in the Oval Office

No, this is not a Clinton joke.

An artist (Justine Lai) did a series of painting depicting her being filibustered by various U.S. Presidents. If you click on this link, you will see her explanation, NOT the work. If you want to click on the works from there....well, as Tofe says, what is seen on the internet cannot easily be unseen.

I'm not sure what this is about. On the other, she made me look, and wonder, and so that is likely a win for her.

Choctaw Poker

Oklahoma is known for (besides me and Mrs. Angus) oil & gas, pig farming, self-storage, churches, and Indian Casinos. The one closest to our house is called Riverwind. It's actually Chickasaw, not Choctaw, but....

Anyway, they run two "big" poker tournaments a year. The "Big Slick" was last November. I won a seat into that tourney by winning a single table satellite and then finished 11th out of 186 entrants for a decent payday.

The other big tourney is called the "Storm". I just won a seat into that this afternoon via placing in the top 20% of a mega-satellite (where the buy in is 20% of the buy in to the big tourney and last 20% of the field left standing wins a seat). The Storm is May 9th. Come by and sweat me if you feel like it!

How many non sequiturs does it take to make an NY Times op-ed?

This many!

Shiller's piece is a masterwork of phone-it-in non sequiturs.

He start with 3 paragraphs about a guy who wrote a book "predicting" the second world war. Then comes a short paragraph that allegedly explains social psychology:

Rather than depending exclusively on quantitative analysis, this method relies on a “theory of mind” — defined by cognitive scientists as humans’ innate ability, evolved over millions of years, to judge others’ changing thinking, their understandings, their intentions, their pretenses. It is a judgment faculty, quite different from our quantitative faculties.

Got that? Good.

Then we are treated to 8 paragraphs about how Larry Summers wrote a paper in 1989 that predicted our current financial calamities.

Then comes the all important link up:

How did he write a story 20 years ago that sounds so much like what we are experiencing now? It seems that he was looking at factors of human psychology, much as Mr. Steel did.

LOL to the Z, people. Well played Bob. Except that nothing Shiller says in 8 paragraphs about Summers' paper mentions psychology. I guess Bob did notice this problem because he provides the link himself in the next paragraph:

Ultimately, the record bubbles in the stock market after 1994 and the housing market after 2000 were responsible for the crisis we are in now. And these bubbles were in turn driven by a view of the world born of complacency about crises, driven by views about the real source of economic wealth, the efficiency of markets and the importance of speculation in our lives. It was these mental processes that pushed the economy beyond its limits, and that had to be understood to see the reasons for the crisis.


Then after proving that social (or is it human?) psychology is an awesome predictive tool comes the obligatory rapid backpedaling away from your conclusion:

Of course, forecasts based on a theory of mind are subject to egregious error. They cannot accurately predict the future. But the uncomfortable truth has to be that such forecasts need to be respected alongside econometric forecasts, which cannot reliably predict the future, either.

And the take home lesson of this piece?

The greatest risk is that appropriate stimulus will be derailed by doubters who still do not appreciate the true condition of our economy.

Wow! Where did THAT come from? Kudos, sir.

Have pity on Ben Bernanke

He's just not getting paid, people. His salary is $191,000. By way of contrast, J. C. Trichet, head of the European Central Bank makes almost $500,000. The head of the Swiss Central Bank makes over $700,000 for pete's sake.

But the most amazing case is that of Hong Kong. The head of their "Central Bank" is Joseph Yam and he makes $1.3 million, about 7 times as much as Helicopter Ben.

People, Hong Kong IS PEGGED TO THE U.S. DOLLAR!!!

Bernanke is literally doing Yam's job while Yam rakes in a cool million plus per annum. I bet he doesn't even give Ben a taste.

Talk about outsourcing!

I got these figures here. Hat tip to Mark Perry.

Saturday poetry corner

I recently became aware of a song that gives a real slice of life view of living in Oklahoma. It's called "Choctaw Bingo" and it's written by James McMurtry:

lyrics are here. You can hear it here.

Hat tip to Norman M.

Let it never be said

In the comments of the previous post, I was accused of being less than forthcoming with photos from our trip to Madagascar last summer. So, I have put up four (count 'em, four!) public galleries on Picassa (247 total photos) of the trip.

They are available here, and here is a teaser:




Yes, we saw a Yeti!!! (actually it's a Decken's sifaka)

enjoy!

ps. if anyone is interested, I can do the same for our 2007 trip to Rwanda and Tanzania.

Nature; WTF edition

People, some kangaroos live in trees! and they are freakin' cute!



here's another shot:



when I showed these to Mrs. Angus she said "we have GOT to go to New Guinea!"

My Bracket vs. that of Baracket Obama

I have now risen to the 95%. The Duke loss, and the Missouri win, have me in pretty
good shape.

I would like to point out the comment from my previous post:

Anonymous said...

I wish I could imagine a universe where Mizzou can beat Memphis.

3:29 PM

It's not that hard to imagine, actually. Suppose that Mizzou scores 102,
and Memphis scores 91. Suppose Mizzou, a pressing team, has an easy time with the Memphis press. Suppose that this happened.

Mizzou over Memphis was actually quite a common pick. To say that you can't imagine a #3 winning over a #2 is a sign that you are bona fide moron. The game wasn't close. The match-ups were such that MANY people thought Mizzou was a good upset pick.

{Inappropriate screed, by me, deleted. My wife assures me I was irrational, and still on aneshesia from my early morning (8-9 am) medical procedure (yes, colonoscopy). So my apologies. The commenter was atually expressing HOPE that Mizzou would win, and I was too stupid to recognize that. Aaargh. How embarrassing.}

My bracket.

Bracket o' the Prez.

Lost in a sea of scarves

Check it out people: twin sons of different mothers:

My hometown gets reamed on the interwebs

Around here, people like to brag about how CNN/Money listed Norman as America's 6th best small city.

Judging from this post, though the folks at "Gridskipper: The Worldwide Travel Blog" were not consulted when forming those rankings.

Also you can check the extremely un-family friendly comments to see the friendly laid back spirit for which Oklahoma is so justly reknown.

Mr. Hazlitt....He right

Wow. Was Henry Hazlitt blessed with the gift of foresight? Nope. Just economic logic. This from 1946 (from KPC friend and ubermensch Mark Perry)

Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment. (my emphasis)

~From Chapter VI "Credit Diverts Production" in Henry Hazlitt's "Economics in One Lesson," first published in 1946

(That would be 1946. 63 years ago. Not bad. Now go out and vote for those CDBG Down Payment Assistance Programs, you do gooders! You are harming the very people you seem to believe you are helping!)

Helicopter Ben is doing the job

At least compared to the response of the Bank of Japan after their housing bubble burst. Check out this recent article on the subject which contains the following:

"The following graph compares the cumulative growth in the broad money supply of both Japan and the US for the first 14 months after the starts of their respective post-credit crash recessions (April 1992 for Japan and December 2007 for the US):



The difference is quite dramatic. 14 months after Japan's recession began, the Japanese money supply had cumulatively grown by less than 1%. Here in the US, 14 months after the start of our recession, the money supply has already increase by almost 11%."

Go Ben...get busy... pump it up...it's your birthday.....grow M2 like it's your birthday.....

Hat tip to Tim Iacono.

Jake deSantis quits on the NYT Op Ed Page

Pretty impressive resignation letter.

Duke Chautauqua Series

bromance

Hat tip to Mark Thoma's daughter.

The button down mind of BHO

Q: Mr. President, are you — thank you. Thank you, Mr. President. Are you reconsidering your plan to cut the interest rate deduction for mortgages and for charities? And do you regret having proposed that in the first place?

OBAMA: No, I think it's — I think it's the right thing to do, where we've got to make some difficult choices. Here's what we did with respect to tax policy.

What we said was that, over the last decade, the average worker, the average family have seen their wages and incomes flat. Even in times where supposedly we were in the middle of an economic boom, as a practical matter, their incomes didn't go up. And so, well, we said, Let's give them a tax cut. Let's give them some relief, some help, 95 percent of American families.

Now, for the top 5 percent, they're the ones who typically saw huge gains in their income. I, I fall in that category. And what we've said is, for those folks, let's not renew the Bush tax cuts, so let's go back to the rates that existed back in, during the Clinton era, when wealthy people were still wealthy and doing just fine, and let's look at the, the level at which people can itemize their deductions.

And what we've said is: Let's go back to the rate that existed under Ronald Reagan. People are still going to be able to make charitable contributions. It just means, if you give $100 and you're in this tax bracket, at a certain point, instead of being able to write off 36 percent or 39 percent, you're writing off 28 percent.

Now, if it's really a charitable contribution, I'm assuming that that shouldn't be the determining factor as to whether you're giving that $100 to the homeless shelter down the street.

And so this provision would affect about 1 percent of the American people. They would still get deductions. It's just that they wouldn't be able to write off 39 percent.

In that sense, what it would do is it would equalize. When I give $100, I'd get the same amount of deduction as when some, a bus driver who's making $50,000 a year, or $40,000 a year, gives that same $100. Right now, he gets 28 percent, he gets to write off 28 percent. I get to write off 39 percent. I don't think that's fair.

So I think this was a good idea. I think it is a realistic way for us to raise some revenue from people who've benefited enormously over the last several years.

It's not going to cripple them. They'll still be well-to-do. And, you know, ultimately, if we're going to tackle the serious problems that we've got, then, in some cases, those who are more fortunate are going to have to pay a little bit more.

My favorite parts? First, I love the extremely high bar BHO has set for his policies: "It's not going to cripple them", so what in the world could the fuss be about?

I also like his command of economics: "If it's really a charitable contribution", then the tax treatment really isn't important to the process.

Finally I really like the asymmetric application of fairness. He compares a rich guy to a bus driver making $50,000 and says it's not fair that the rich guy gets a bigger deduction for the same contribution. He seems however to have no problem with the fact that the bus driver is paying less in taxes both overall and as a percentage of his income.

Look people, I know politicians will pretty much say anything to justify what they want to do, I am just a bit surprised at how much of a hack our beloved Obama has become in such a short time.

The availability heuristic....

Psychology Today:

We use the availability heuristic to estimate the frequency of specific events. For example, how often are people killed by mass murderers? Because higher frequency events are more likely to occur at any given moment, we also use the availability heuristic to estimate the probability that events will occur. For example, what is the probability that I will be killed by a mass murderer tomorrow?

We are especially reliant upon the availability heuristic when we do not have solid evidence from which to base our estimates. For example, what is the probability that the next plane you fly on will crash? The true probability of any particular plane crashing depends on a huge number of factors, most of which you're not aware of and/or don't have reliable data on. What type of plane is it? What time of day is the flight? What is the weather like? What is the safety history of this particular plane? When was the last time the plane was examined for problems? Who did the examination and how thorough was it? Who is flying the plane? How much sleep did they get last night? How old are they? Are they taking any medications? You get the idea.

The chances are excellent that you do not have access to all or even most of the information needed to make accurate estimates for just about anything. Indeed, you probably have little or no data from which to base your estimate. Well, that's not exactly true. In fact, there is one piece that evidence that you always have access to: your memory. Specifically, how easily can you recall previous incidents of the event in question? The easier time we have recalling prior incidents, the greater probability the event has of occurring -- at least as far as our minds are concerned. In a nutshell, this is the availability heuristic.

[...]

Although there are many problems associated with the availability heuristic, perhaps the most concerning one is that it often leads people to lose sight of life's real dangers. Psychologist Gerd Gigerenzer, for example, conducted a fascinating study that showed in the months following September 11, 2001, Americans were less likely to travel by air and more likely to instead travel by car. While it is understandable why Americans would have been fearful of air travel following the incredibly high profile attacks on New York and Washington, the unfortunate result is that Americans died on the highways at alarming rates following 9/11. This is because highway travel is far more dangerous than air travel. More than 40,000 Americans are killed every year on America's roads. Fewer than 1,000 people die in airplane accidents, and even fewer people are killed aboard commercial airlines.

[...]

Consider, for example, that the 2009 budget for homeland security (the folks that protect us from terrorists) will likely be about $50 billion. Don't get us wrong, we like the fact that people are trying to prevent terrorism, but even at its absolute worst, terrorists killed about 3,000 Americans in a single year. And less than 100 Americans are killed by terrorists in most years. By contrast, the budget for the National Highway Traffic Safety Administration (the folks who protect us on the road) is about $1 billion, even though more than 40,000 people will die this year on the nation's roads. In terms of dollars spent per fatality, we fund terrorism prevention at about $17,000,000/fatality (i.e., $50 billion/3,000 fatalities) and accident prevention at about $25,000/fatality (i.e., $1 billion/40,000 fatalities).

(Nod to MAG, with thanks)

Allen Craig Watch

The Allen Craig watch, in spring training for El Birdos.

Before........... AB: 20 SO: 3 BB: 4 OBP .583 SLG .750 AVG.500

One Week Later: AB: 27 SO: 4 BB: 5 OBP .531 SLG .667 AVG .444

Allen has by FAR the bast stats for anyone with at least 15 at bats.

But he got assigned to AA Springfield, where he played last year.

We could sure use another lefthanded pitcher. Jaime Garcia has an ERA approaching 6, and NOT as a starter (As Angus is fond of saying, very slowly: "OTHER....PEOPLE's..... RUNS!"). Trever Miller is nearly 36 years old. Royce Ring has given up 16 earned runs, in 6 total innings pitched. That's an ERA well over 20. The only real lefty we've got is Dennis Reyes, who is 32 years old and looks rounder than the 250 he's listed at in the stats. Still, Reyes is a veteran, a solid guy, with a WHIP of 1.5 in nearly 650 total innings pitched. His ERA last year was 2.33; glad to have you, Dennis! Stats, and a video of the chubby one in action.

Anyway, we sure could use another lefthander. A spot starter guy, but mostly to come in and shut down one lefthanded batter in a tough inning. Right now, we have a bunch of guys who just spray gas on the fire.

IF you are a political scientist....

A little dust-up over zoning over in Chapel Hill.

Mayor Kenneth Foy is on the record as opposing any development on land owned by a person who didn't contribute to his campaign.

During the dust-up at Chapel Hill City Council Meeting (just stop and think what a cluster f**k that meeting has to be...magnificent!), the following was observed by the Raleigh News and Observer reporter:

Georg Vanberg, a political science professor at UNC-Chapel Hill, called out council member Bill Strom for "looking down" and "not paying attention" as he spoke.

Vanberg accused the council of "procedural shenanigans" because Foy required speakers to wait until Ayden Court came up on the meeting agenda rather than allowing them to speak about the development during a public hearing on expanding uses of the high-density zone.

"By your vote, you made anything they said irrelevant," Vanberg said. "People are upset about [taxes], and you guys are doing your best to ruin the fiscal health of this community."

The mayor angrily countered Vanberg's "shenanigans" statement, saying the zoning change was a separate issue.

"If you're a political scientist," said Foy, "maybe you ought to inform yourself if you're going to start saying things like that."

IF? IF? Golly, Mayor Foy. I guess I was hoping you had some better rhetorical tactic than questioning someone's professional credentials. Like...a counterargument, something that addressed the claims being made.

But, since you decided to make that play, let's go to the "tale o'the tape" on "iffy" Political Scientist Georg Vanberg:


hmmm....doesn't really LOOK like a political scientist. Handsome, in good physical shape, has most of his hair....Maybe Mayor Foy is on to something!

But, no.

Dr. Georg Vanberg "is an Associate Professor and Co-Director of the Undergraduate Honors Program in the Department of Political Science at the University of North Carolina at Chapel Hill. My research focuses on comparative political institutions. I am particularly interested in constitutional and judicial politics as well as in coalition theory. I teach courses on judicial and constitutional politics, formal modeling, and research design."

That is, he got a PhD at U of Rochester, one of the foremost graduate programs in political science. He is tenured at UNC, again one of the foremost programs in political science. And his c.v. shows broad and deep interests in elections and political economy. Me, I think he is qualified to offer some judgments about a city council meeting and its procedures.

Yup, he's a political scientist all right. If it hadn't been for those meddling kids, and their darned blog, the Mayor would have gotten away with it!

Damned Voters!

Literally, according to a new NBER working paper by Robinson and Torvik (ungated version here), entitled "The Real Swing Voter's Curse".

"A central idea in political economy is that voters who are not ideologically attached to a political party, so-called ‘swing voters,’ attract policy favors and redistribution because they become the focus of electoral competition. In many parts of the world, however, politicians do not just use carrots to win elections, they also use sticks - coercion and violence. In this paper we show that expanding the ‘policy space’ to incorporate this can completely overturn the predictions of the standard model. The reason for this is simple. With all groups of voters at play, political competition does indeed lead to a chase for the support of swing voters. In equilibrium this enables such voters to extract a large amount of rent from politicians. Anticipating this, politicians have an incentive to use violence to effectively disenfranchise swing voters. Indeed, and surprisingly, we show that it can be more attractive for an incumbent to disenfranchise the swing voters than the core supporters of the opposition. Swing voters are not blessed but cursed."

After developing a model, they go on to argue that something very much like this has been going on in Zimbabwe.

To Our Health

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

Income and Health Spending: Evidence from Oil Price Shocks

Daron Acemoglu, Amy Finkelstein & Matthew Notowidigdo
NBER Working Paper, February 2009

Abstract:
Health expenditures as a share of GDP have more than tripled over the last half century. A common conjecture is that this is primarily a consequence of rising real per capita income, which more than doubled over the same period. We investigate this hypothesis empirically by instrumenting for local area income with time-series variation in global oil prices between 1970 and 1990 interacted with cross-sectional variation in the oil reserves across different areas of the Southern United States. This strategy enables us to capture both the partial equilibrium and the local general equilibrium effects of an increase in income on health expenditures. Our central estimate is an income elasticity of 0.7, with an elasticity of 1.1 as the upper end of the 95 percent confidence interval. Point estimates from alternative specifications fall on both sides of our central estimate, but are almost always less than 1. We also present evidence suggesting that there are unlikely to be substantial national or global general equilibrium effects of rising income on health spending, for example through induced innovation. Our overall reading of the evidence is that rising income is unlikely to be a major driver of the rising health share of GDP.


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

Take Two Aspirin And Tweet Me In The Morning: How Twitter, Facebook, And
Other Social Media Are Reshaping Health Care

Carleen Hawn
Health Affairs, March/April 2009, Pages 361-368

Abstract:
If you want a glimpse of what health care could look like a few years from now, consider "Hello Health," the Brooklyn-based primary care practice that is fast becoming an emblem of modern medicine. A paperless, concierge practice that eschews the limitations of insurance-based medicine, Hello Health is popular and successful, largely because of the powerful and cost-effective communication tools it employs: Web-based social media. Indeed, across the health care industry, from large hospital networks to patient support groups, new media tools like weblogs, instant messaging platforms, video chat, and social networks are reengineering the way doctors and patients interact.

UPDATE: Obama v. Munger

Well, the EPA called.

They want to declare my bracket a SUPERFUND site. Something about buying up toxic ass. (My bracket)

I take some solace in the fact that I am still beating out the Prez. (His bracket)

To his credit, he nailed 14 of the Sweet 16, which got him back some level of respectability.

And, since Baracket Obama and I have the same final four, with the exception of him picking Memphis and me picking Mizzou in the West, this could be close. I have a narrow lead, because he had such a disastrous first round.

It will come down to these games:

Memphis v. Mizzou: If Mizzou wins, I am golden. This is the single biggest factor,
since I have los tigres in the Final Four
Duke v. Villanova: If Villanova can pull this out, it will help me a bit. (No, I did not pick 'Nova to beat Duke. I picked Texas to beat Duke. I would pick the Sisters of Mercy Convent School to beat Duke, this year. I don't see them winning much. I was, I should point out, quite wrong.)

Both of us have MichStU over Kansas, that's a push.

A horse is a horse, of course, of course

Here at KPC we've been using the saga of the old lady who swallowed the fly as a parable for the government's actions in this our hour of crisis (as have some of our more tawdry imitators).

When, in the context of the AIG bonus sideshow, a commenter asked me "what the horse would be", I hazarded a guess of government pay scales for everyone.

So this has to to at least be a Shetland pony:

"The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said."

Yikes!

Markets in everything: piscine edition

Turns out you cant pay to have fish eat the dead skin on your feet, at least in some states (sorry Texas and Florida).

Yikes!!

Full story is here.

Economists gone Wild!

Check out the once serious Robert Frank in todays NY Times.

Here is the summary:

Bush deficits bad (because private citizens spent money on stuff they wanted).

Obama deficits good ('cause the government will spend the money for us).

(You may think I am distorting the article. I think this is a fair summary. Please read it and make up your own mind)

In fact, speaking of the Obama deficit Frank says "If anything, it may need to be even larger"

And here's Bob on how to pay off the accumulated debt:

"there are many ways to pay down debt without requiring painful sacrifices. A $2 tax on each gallon of gasoline, for example, would generate more than $100 billion in additional revenue a year. Europeans, who pay more than $2 a gallon in gasoline taxes, have adapted by choosing more efficient cars — and they appear no less satisfied with them."

Yikes!!!!

Careful with that axe, Eugene

People, I post this Sunday morning in praise of an overlooked Scotsman, one Eugene Kelly.

I am a big fan, starting with the Vaselines (and his contributions to the Pastels), going through Captain America and right on to Eugenius.

Here is a short list of essential Eugene:

Pastels: Sittin' Pretty

Vaselines: The Way of the Vaselines

Captain America: Flame On

Eugenius: Oomalama

Here is what the Allmusic Guide has to say about Eugene Kelly.

Feast your ears, people.

Email from a new friend.....

Hello Mr. Munger,

I hear you every now and then on 680 AM and usually just turn it off after a few seconds. Why Bill has you on I have no idea. (MY RESPONSE: LAURA, MAYBE IT'S BECAUSE I DO IT FOR FREE?)

Each time I hear news of the nation and of the state it is bad. Every since the election it gets worse and worse. Obama is dead set to ruin all this nation is
about. As for NC, we would have had a chance with McCory. NC really had a chance at getting a conservative in as govenor. Who did we GET. In my opinion we got Perdue because you were so vain as to run when you knew you would never get enough votes to WIN. So we all have to suffer because you took the votes away from McCory that would have made the outcome different. All people like you are about is themselves. This election it was so close and conservatives were so close to make a difference from all the deceit we had with Easley. The lottery money that was to be JUST FOR EDUCATION and now 88 million in going into the general fund. There is no point in listing everything. You are just like Ross Perot. Maybe that is mis. spelled. Just because you think you have the qualifications and ability doesn't mean it should override the risk that you caused us all by running for the office. Maybe you were really out to support Perdue and that's why you ruined it for the conservatives and our state. I really think you just wanted to hear yourself talk and you know because you could run for the office you did. Knowing you would not win and knowing it would cost McCory and the tax payers, but you did it anyway. Hope it cost you in some way that none of us will ever know, because you cost us all the next four years.

Laura Tucker

Dear Laura, my new BFF:

FIRST: Exit polls show that I took LOTS more votes from Perdue than Mccrory. As PPP puts it:

One other interesting finding from our analysis. We pointed out several times last fall that our data showed Michael Munger was pulling more votes from Perdue than McCrory, contrary to the conventional wisdom that Libertarians take from Republican candidates. The county where he ended up doing best? Deep blue Orange, where he pulled 5% of the vote.

I have actually talked to Pat McCrory about this, and he agrees it's true. Had I not run, Bev would have won by more. (Notice that ALL of those words were one syllable; I'm hoping you can actually understand them...). The reason is all the straight party ticket Dem voters. Pat actually won on election day, by quite a bit. But Bev won the early voters, the ones who just showed up to vote for Obama.

SECOND: Bev beat Pat by more than the TOTAL votes that I got, as you can see here.


Bev beat pat by 145,000 votes. I only got a total of 121,000 votes.

That is, if every one (EVERY. ONE.) of the people who voted for me had instead voted for Pat, he still would have lost. And the fact is that MOST of votes came from Perdue. There is no way you can seriously believe I cost Pat the election. It's not even close. No question: most of my votes came from Dems. More than 60% of my voters also voted for Obama.

I'm afraid you are overestimating my impact. To the extent that that is a compliment, I do thank you. But I'm afraid the compliment is undeserved. Still, I do appreciate your kindness in seeking me out this way. Let's talk again soon!

Mike

weekend roundup

People, I do not enjoy college basketball (mostly because the level of play is so incredibly bad), but I am mesmerized by the Mungowitz - Obama Bracket Shootout described in the post below this one.

Go Mungo!!!

While we wait to see what happens in round two, I suggest checking out a couple websites.

1. the blog of the TOTUS (teleprompter of the United States). Yes Obama's ubiquitous teleprompter now has it's own blog (hat tip to Peggy Noonan's WSJ column this morning).

2. F my life. English language spinoff of the French Vie de Merde. Sample entry:

Today, my boyfriend told me he couldn't hang out with me because he felt really sick. I went to his house anyway to surprise him with homemade soup. I walk in to his room only to find him hooking up with my sister. She can't drive, our mom drove her there.

F my life indeed.

Giant Sucking Sound

If you go over to your window....

...and open it just a little.....

...you'll hear a giant sucking sound outside.

That's my bracket.

West Virginia, Ohio State, Wake Forest, Boston College, and Clemson: I hate you all.

UPDATE: Overall, I went 22-10 in the first round. Apocalyptic, but better than Pres. "Baracket" Obama's 19-13. (The Prez's actual updated Baracket is here).

And, the damage is not bad so far. 14 of my Sweet 16 are still alive, and everyone in my Elite 8 is still good to go. (My bracket, if you want to see it)

Nonetheless....Ugh.

CBO throws BHO under BUS

From the AP wire:

WASHINGTON – Despite new estimates that say President Barack Obama's budget would generate unsustainable large deficits averaging almost $1 trillion a year, the White House insisted Friday that the flood of red ink won't swamp its costly agenda.

The Congressional Budget Office figures released Friday predict Obama's budget will produce $9.3 trillion worth of red ink over 2010-2019. That's $2.3 trillion worse than the administration predicted in its budget just last month.

Worst of all, CBO says the deficit under Obama's policies would never go below 4 percent of the size of the economy, figures that economists agree are unsustainable. By the end of the decade, the deficit would exceed 5 percent of gross domestic product, a dangerously high level.

The latest figures throw a major monkey wrench into efforts to enact Obama's budget, which promises universal health care for all and higher spending for domestic programs like education and research into renewable energy.

People, I am rooting for the money wrench.

Remembering William Mitchell

The Mayor sends an email, from an old student of William Mitchell.

He didn't like dumb questions in class. He expected you to know the basics and more of economic theory and such.

For the PS457 mentioned above, the grade that arrived on the report card just had to be wrong, so I wrote a letter to Prof. Mitchell and asked him to review it. Very shortly after I received the reply which I saved and include with the following email (scanned). It was high praise to get a B+ in his class!

I received an A- in "Interest Groups" (PS476) but a C+ in "Inequality and Public Policy" (PS472).

Many years later I worked in Hollywood at Imaginary Forces. IF did the titles for the "Band of Brothers" HBO series. I was part of that design team and wrote Prof. Mitchell and asked him for some creative consulting. He was very pleased to chime in with information on WWII troops, uniforms, gear, etc, and he sent some very cool historical items for us to work with. He said he was very sorry to say that he couldn't send his original WWII uniform to us, it was just too precious to him! It blew us all away when we realized he'd kept it all those years.

Lastly, I recall a local newspaper ad that featured Dr. Mitchell in a Mercedes-Benz ad (for a local MB dealer). It quoted him as saying he loved the best things in life, like a Mercedes--and also how women liked HIM in his Benz! The ad literally quoted him on that and it was sheer brilliance! There he was, standing tall and proud like the paratrooper he was, next to a silver Benz, saying how he loved his fast German cars and lady admirers. He may have fought the Germans, but he had no problem with their cars after the war!

What a guy--there weren't many like him and damned if students who avoided his classes didn't miss out on a helluva unique brand of political science education at U of Oregon.

Yes, that's right. If you are interested in the problem of training elite troops, take a look at a book that Bill Mitchell edited: The Making of A Paratrooper

Wow

Very nice. First cutting across conventions, and then jumping outside the conventions.

Nod to ML

Bread and Circuses

So the House has passed its 90% surtax bill and the "world's greatest deliberative body" will now take up its 70% surtax bill. No one seems too concerned about any consequences.

Like losing a constitutional challenge, or (hard as it may be to fathom) losing their last vestiges of seriousness and credibility, or actually undermining the original bailouts that they authorized.

From the WSJ (front page, not editorial page):

"In both the House and Senate bills, companies could escape the tax by repaying enough government aid. Some Wall Street firms have formally applied to repay the government ahead of schedule, and the new tax is spurring talk among others. But regulators have been leery of allowing firms to repay, in part because it could complicate efforts to promote stability in the financial system."

This post has further discussion of the counter-productivity of what is going on.

Congress had an opportunity to block pre-existing bonus payments when they passed the stimulus bill. Apparently the adminstration asked them not to and the conference committee (specifically Chis Dodd) took the language out.

Are they really going to now pass a crazy tax law like this? Wasn't the Senate created to stop legislation being enacted in response to the whims/passions of the people? And the best they can do is cut the rate to 70%? Oh, yeah and make weird pseudo death threats?

It seems like we have stopped walking and started jogging towards banana republic status.

This is just too good to be true

From the FT:

"Fannie Mae, the US mortgage financier taken over by the government in September, is planning to pay executive retention bonuses of as much as $611,000 (£428,000) this year in spite of multi-billion dollar losses at the company.

Freddie Mac also has a retention bonus scheme for its executives, but has not yet provided the details of its plans. Freddie is due to disclose the amounts to be paid to its top executives by the end of April, according to a spokesperson for the company."

So, are Fan and Fred just 100% tone deaf and askin' for a beatdown? Or are retention bonuses for employees in money losing companies that take gubmint $$ ok as long as they are the right kind of employees?

Is this a great country or what?

Perhaps I was intemperate....

The Duke Chronicle is running a series of articles this week on grade inflation.

Day 1 Day 2 Day 3 An excerpt:

Dr. Nancy Major, associate professor of radiology and evolutionary anthropology, agrees that if there are many students who merit high marks, they should be rewarded accordingly. Major, who has been teaching undergraduates since 2004, said she gives mostly A's, an occasional B and does not recall ever having given a C.

"I teach a very different kind of class," she said. "On the first day I tell everyone what's expected of them to tell them how to get a decent grade in the class. And for me a decent grade in the class is an A."

Well, I got all hepped up, and wrote a letter to the Editor of the Chronicle. Here it is:

Dear Editor:

The news is filled with outrage about AIG, and other Wall Street companies. Seems that they paid out large bonuses, to everyone. Think about it: even though these people did terrible work, and lost billions, they still get bonuses, because they worked hard, or at least they came to work.

I bet a lot of faculty tut-tutted about AIG over their morning New York Times, Starbucks, and double-fiber bran muffin. Then you went to your office and graded a midterm where the low overall grade was an A-. You poor little students. It doesn't matter that your work was appalling. You tried hard. You should still get a high grade.

On the first day of class this semester, I had a waiting list of ten for a large class. I announced in class that I would be giving real grades. "At least ten percent of you will get Cs; maybe more," I told the assembled throng. The next day, the waiting list was 11, and no one had dropped.

The fact is that if you teach a real course, with real content, you can give real grades. If you don't, then you can't. And if you don't give real grades, then you are the cause behind the new AIG mindset: I showed up. Give me my bonus.

In retrospect, I could have been more circumspect.

From the Mouths of Babes....

Kevin L sends a little note his daughter wrote, after receiving a crisp new dollar under her pillow, from the tooth fairy. An excellent question. Now let's pose the same question to Tim Geithner.

Never underestimate our government

its capacity for hypocrisy and bogosity is simply unparalleled. After all the bitching and whining and soapboxing about the outrage of the AIG bonuses, it turns out that Senator Chris Dodd (D -Conn and friend of Angelo) wrote language in the stimulus bill that specifically allows the AIG bonuses to be paid out. Here, let Politico tell it:

Sen. Chris Dodd (D-Conn.) looks like he may be facing a fresh political firestorm.

Dodd just admitted on CNN that he inserted a loophole in the stimulus legislation that allowed million-dollar bonuses to insurance giant AIG to go forward – after previously denying any involvement in writing the controversial provision. .

“We wrote the language in the bill, the deal with bonuses, golden parachutes, excessive executive compensation that was adopted unanimously by the United States Senate in the stimulus bill,” Dodd told CNN’s Wolf Blitzer this afternoon.

“But for that language, there would have been no language to deal with this at all.”

Dodd had previously said that he played no role in writing the controversial language, and was not a part of the conference committee that inserted the language in the bill. As late as today, Dodd’s spokeswoman denied the senator’s involvement.

Oh yeah, he lied about it for days before coming clean. Of course the AIG employees who served their time in order to collect their contracted payments will continue to get pilloried, while this bum will probably survive unscathed just like he did the mortgage fiasco.

People, I think we are getting close to the horse here.

misdirected outrage

I am enjoying the torrent of outrage and vituperation over the AIG bonuses. Yes there should be outrage, but not at AIG. Like Chris Rock said about Manticore: "that tiger didn't go crazy, that tiger went TIGER".

Same here. Roy got mauled because an idiot got in a cage with a tiger. We are in the situation we are in because incompetent government bureaucrats got into a deal with a tiger.

They (said bureaucrats) either didn't think to ask, "hey are you planning any inconvenient bonus payments?" or they didn't care. Geithner must go.

Many people have said if the Gov. can force the UAW to renegotiate contracts, why not the same for the AIG bonuses? Well it seems like the difference is ex-ante vs. ex-post. Ex-ante, sure, you can put any conditions you want on aid and the other party can take it or leave it. Ex-post, not so much.

Of course, in true "lady who swallowed a fly" fashion, we are going to follow this government screw up with more hasty ill-conceived government actions to "fix" the problem. Wake me up when the get to the horse.

Wednesday poetry corner (ironic edition)

The way our government (pre and post elections) is handling the current economic situation put me in mind of a song we used to sing on the long hellish bus ride to church camp in the cursed summers of my youth:

There was an old lady who swallowed a fly.
I dunno why she swallowed that fly,
Perhaps she'll die.

There was an old lady who swallowed a spider,
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly -
Perhaps she'll die.

There was an old lady who swallowed a bird;
How absurd, to swallow a bird!
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly -
Perhaps she'll die

There was an old lady who swallowed a cat.
Imagine that, she swallowed a cat.
She swallowed the cat to catch the bird ...
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly
Perhaps she'll die

There was an old lady who swallowed a dog.
What a hog! To swallow a dog!
She swallowed the dog to catch the cat...
She swallowed the cat to catch the bird ...
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly
Perhaps she'll die.

There was an old lady who swallowed a goat.
Just opened her throat and swallowed a goat!
She swallowed the goat to catch the dog ...
She swallowed the dog to catch the cat.
She swallowed the cat to catch the bird ...
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly
Perhaps she'll die.

There was an old lady who swallowed a cow.
I don't know how she swallowed a cow!
She swallowed the cow to catch the goat...
She swallowed the goat to catch the dog...
She swallowed the dog to catch the cat...
She swallowed the cat to catch the bird ...
She swallowed the bird to catch the spider
That wiggled and wiggled and tickled inside her.
She swallowed the spider to catch the fly.
But I dunno why she swallowed that fly
Perhaps she'll die.

There was an old lady who swallowed a horse -
She's dead, of course.

F**K the Pope

With all due apologies to NWA, I have been yelling this around the house most of the day and decided to get it off my chest.

The pontiff, setting off to Cameroon, says that rather than helping fight AIDS, condom use actually "increases the problem".

What else can you say to such mind boggling arrogance and stupidity?

Sound and Strong are not synonyms

Obama White House: Sound and Strong are not synonyms. That does make some sense, I suppose. But the press secretary wants us to believe they are ANTONYMS. That's a little harder to swallow.

Yes, that is really their position. Pretty remarkable. From Weekly Standard Blog.

(Nod to DM)

Reactions and Commentary from the Rifleman

Old KPC friend the Rifleman reacts to media coverage:

"I have CNN on in the background--Anderson Cooper is doing a financial crisis episode (big surprise). THe guest? Dr.Phil. WTF?"

WTF, indeed. Larry Summers has decided that he wants to be Dr. Phil, so you might as well invite the real deal.

Location Theory

Click on image for a larger version. More here.

C'mon Frenchie, get it straight

So I'm reading this post in the FT and it says:

"An example from football, provided by James Montier of Société Générale, tells the story. When a goalkeeper tries to save a penalty, he almost invariably dives either to the right or the left. He will stay in the centre only 6.3 per cent of the time.

However, the penalty taker is just as likely (28.7 per cent of the time) to blast the ball straight in front of him as to hit it to the right or left. Thus goalkeepers, to play the percentages, should stay where they are about a third of the time. They would make more saves. Why don’t they? Because it is more embarrassing to stand there and watch the ball hit the back of the net than to do something (such as dive to the right) and watch the ball hit the back of the net. The results are the same but those who tried to be active feel happier. "

So I say to myself, "I remember that my boys Levitt and Groseclose have a paper on this and that's not how I remember the story". Then I google them and find this:

"There is one big deviation that we see between what players actually do and what the theory predicts: kickers kick the ball right down the middle much less than they should. Or put another way, in practice, kicking it down the middle scores at a higher rate than kicking it either to the left or right (at least in our data set).

Why? If you kick it right down the middle and you don’t score, it is damn embarrassing. So even though the middle is a great play statistically, kickers don’t choose it very often. There are some things that are even more important than winning, like not looking like a fool."

So my question is this: is it plagiarism if you get the story wrong??

Pat Rafter and CGI perfectly summarize Lleyton Hewitt

Pillow Talk

Mrs. A: What's the name of that show again?

Me: Eastbound & Down

Mrs. A: That's a weird name, hard to remember

Me: Not if you've seen Smoky & the Bandit, "Eastbound & Down, loaded up and trucking, we're gonna do what they say can't be done" (yes I was singing this part. Pluto got up and went to lay down in the hallway).

Mrs. A: I never saw that movie. Wasn't the Bandit a chimp or something?

Me: uh, well, the Bandit was Burt Reynolds.

Mrs. A: So yes, then!

Which made me remember exactly why I'd married her lo these 14 years ago!

I offered that she might be thinking of "Every which way but loose" where Clint Eastwood drove around with Clyde the orangutan, but she said she was thinking of a TV show, then I came up with "BJ and the Bear" but I couldn't remember whether it had an ape or a monkey or even which title character was the simian.

Just Plain Strange

This is just plain strange. That's all I've got. No commentary.

N. Gregory breaks it down for us

Mankiw in the NY Times gives 4 things he learned from reading Team Obama's budget proposal. Here they are in brief:

1. "They are economic optimists."

2. "They like to spend."

3. "They are serious about climate change."

4. "They are deficit doves."

It's actually #3 that scares me.

Separated at Birth: Hoops edition

Check it out right here!!

KPC's choice for NEA head

I Guess I'm Not a Republican

I guess I am (still) not a Republican.

The surprising thing is that Michael Steele may not be a Republican. Who knew?