Saturday, April 04, 2009

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

Thursday, April 02, 2009

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!

Wednesday, April 01, 2009

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

Tuesday, March 31, 2009

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.

Monday, March 30, 2009

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?

Sunday, March 29, 2009

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.