Paul Volcker is not a magic bullet

He has an editorial in the NY Times outlining his views on financial reform which is totally eviscerated here by Yves Smith.

People, Tall Paul is 82 freakin' years old. Sure he created an awesome recession back in the 80s and is a member of the Trilateral Commission, but he's been out of government since 1987 and, as Smith demonstrates, is pretty out of the loop on current events.

Let's give him a break, let him relax on the beach under a couple of umbrellas, and maybe try to get some non-octogenarian input into financial reform.

Snow Time Like the Present

Two photos out the back "picher window" this morning. 5+" of new snow...




































(UPDATE: The YYM points out that if you look carefully at the second picture, at the center left, under the tree house, you will see our dog Tanzi taking a dump. Nice. I'm not a very good photographer. Or, maybe I'm a GREAT photographer.)

The Capitalist Peace

You hear a lot of crap about "democratic peace." "Capitalist peace" is more like it, as others have said.

"Trade networks and the Kantian peace," (working paper version)
Han Dorussen & Hugh Ward, Journal of Peace Research, January 2010, Pages 29-42

Abstract: Classical-liberal arguments about the pacifying effects of international trade are revisited, and it is argued that they consistently refer to the ability of trade to provide ‘connections’ between people and to create a perceived ‘global community’. Dependency and openness are commonly used to test for any pacifying effects of trade in the current literature, but these measures fail to capture some of the classical liberals’ key insights. Several network measures are introduced in order to give natural expression to and to develop the classical-liberal view that trade linkages reduce interstate conflict. These measures applied to trade flows are incorporated in the Russett & Oneal triangulating-peace model. The main results are that trade networks are indeed pacifying in that both direct and indirect trade linkages matter, and as the global trade network has become more dense over time, the importance of indirect links by way of specific third countries has declined, and the general embeddedness of state dyads in the trade network has become more relevant. These findings suggest that the period since World War II has seen progressive realization of the classical-liberal ideal of a security community of trading states.

Background.... More.... The Final Word.

Idiots.

(Nod to Kevin L)

I am not alone

KPC readers know that I cannot abide Novak Djokovic, the Serbian clown. Apparently it's not just me. Here is the beginning of Jo-Willie Tsonga's press conference after he beat Djokovic in the Aussie open quarters:

THE MODERATOR: Questions, please.

Q. Novak talked about his problems. He had some problems during the match. When did you first notice that he was having problems?

JO‑WILFRIED TSONGA: Five years ago


Ummm, oh snap??? Jo Willie, you have a new fan even though Federer beat you down in the semis 3,2 and 3 in 88 minutes.

That's a mighty good number

The initial estimate of 4th quarter GDP growth is 5.7% (this is an annualized rate), a welcome improvement from the 3rd quarter's anemic 2.2%. It is not thrilling that a big chunk came from "inventory investment" (stuff produced that wasn't sold), but business investment grew almost 3% after falling almost 6% in the third quarter. Export growth continues to be very robust, growing at an 18.1% annualized rate in the 4th quarter, which is only a slight improvement over the 3rd quarter's strong 17.8%.

A couple quarters like that (assuming the number survives revisions), and unemployment will definitely start coming down.

  

post-regional politics

Y'know, when I read the erudite and witty posts of my esteemed co-blogger Mungowitz, I sometimes even forget, for a minute or two, that he's from Florida!

Carter Wrenn Dishes

I understand that Bev Perdue claimed she was looking at ways to cut the budget.

And I understand that the News and Observer, ever credulous (that's the BEST interpretation...), reported it as fact.

But....allowing the state to make only no-bid contracts so that it can channel money directly to friends and cronies...wouldn't that be a place you would think of cutting, if you were serious? Why is it that the News and Observer only tries to go after the corruption of ex-governors? Why not question this horrible mess while they are still in office?

Look, even Mickey Michaux is surprised.

It's just them and Stephon, them and Stephon

Starbury has arrived and set up shop in Taiyuan, China.  But for how long I wonder? Forgive me for being cynical about his chances, but here are some things to consider:

"Wang Jianguang, a spokesman for Zhongyu, said the team has hired an interpreter for Mr. Marbury to help with his adjustment, but the team expects Mr. Marbury to be at all of its twice-a-day practices, which start at 9 a.m., six days a week."

"Taiyuan is the capital of China's northern Shanxi province and the center of China's coal-mining industry. The whole city is covered in a thin layer of coal dust, including Zhongyu's Binhe Sports Stadium, which seats about 4,500 people. It has less than a fourth the capacity of New York's Madison Square Garden where Mr. Marbury played from 2004 to 2008. Courtside seats in the arena, which run about $1,464 a season, are a collection of worn red sofas and lounge chairs."

"The Binhe Stadium looks like an abandoned building in the daytime while the team is practicing, its gates held closed with bicycle locks." \

"Taiyuan is markedly less tourist-friendly, internationalized and cosmopolitan than bustling cities such as Beijing and Shanghai. It's hard to find a bank ATM that will accept foreign credit cards."

Add the facts on the ground to the fact that Starbury is Starbury, and, well, I guess the upside for him is that there are only 17 games left in the league's regular season.

What is the over/under on how many games he lasts? Does it depend on how many shoes he's selling?

Here is my best memory of Steph:

 

The Importance of Religion

Why Religion’s Burdens Are Light: From Religiosity to Implicit Self-Regulation

Sander Koole, Michael McCullough, Julius Kuhl & Peter Roelofsma
Personality and Social Psychology Review, February 2010, Pages 95-107

Abstract: To maintain religious standards, individuals must frequently endure aversive or forsake pleasurable experiences. Yet religious individuals on average display higher levels of emotional well-being compared to nonreligious individuals. The present article seeks to resolve this paradox by suggesting that many forms of religion may facilitate a self-regulatory mode that is flexible, efficient, and largely unconscious. In this implicit mode of self-regulation, religious individuals may be able to strive for high standards and simultaneously maintain high emotional well-being. A review of the empirical literature confirmed that religious stimuli and practices foster implicit self-regulation, particularly among individuals who fully internalized their religion’s standards. The present work suggests that some seemingly irrational aspects of religion may have important psychological benefits by promoting implicit self-regulation.

(Nod to Kevin L)

In our increasingly secular society, I think public commitment to environmentalism have taken the place of traditional religion, and likely have some of the same psychological benefits. The idea that "recycling is cheaper, no matter how much it costs," is clearly a religious claim, not a practical one....And you can see the religious fervor in the reactions, when someone points this out! (Check the comments, smell the incense)

We Get Letters!

We get letters. This from a stalwart reader and commenter, who shall remain anonymous....

Get an email to pick up my new and improved ID for which I was fingerprinted and photographed 6 weeks ago. Email says to go online and schedule a day/place/time to pick it up. Show up at designated gubmint building, go to security, they call the ID office to ask if they should let me in.

ID office says my ID is not ready. I ask why the email says it is in fact ready to be picked up, and the official website let me make an appointment, if it is not actually ready.

They tell me they have no control over what the email says or the on-line system, and I should have remembered that they told me that 6 weeks ago when I went in for the fingerprinting. Therefore it is my fault and maybe it will be ready by next week, but I can't call and check and will only know when I show up to pick it up.

Your tax $ at work.

Now, this person works at an actual government agency, one you have heard of, one that has a budget in the billions. Wow.

Markets in everything: Weight-loss cutlery edition

What if your fork was a dumbbell? What if your knife was too? How cool would that be? I guess just about this cool:

They weight 1.5 lbs each and are real enough to have the LA Times write about them.

visit exotic Oklahoma

One of the highlights our our trip last summer to the Pantanal in Brazil was seeing tons of kingfishers (my favorite type of bird). Here is an example:




I have been extremely surprised by seeing and hearing a similar bird on our morning walks in Normotopia. I've been telling Mrs. Angus, "hey that bird looks, sounds and flys like a kingfisher, I wonder what it is"? Turns out WE GOTZ KINGFISHERS IN OKLAHOMIE!! Like this one:


Awesome!

And, while I am pretty sure we don't have jaguars here, we do apparently have mountain lions!

Sweet home Oklahomie, people!

Markets in everything: Celebrity smells edition

Headline Magic! News on Great Tits....

So, here's the headline:
"Flashier Great Tits Produce Stronger Sperm!" Now, I expect that's right, on the merits.

But it turns out that the article is about how bright and colorful chests, on birds called "Great Tits," are a sign of fitness.

Excerpt:
The birds' vibrant plumage appears to act like a flashing billboard, broadcasting the males' reproductive superiority to females eager to produce offspring.

The advertisement likely finds an appreciative audience in female great tits, since snagging a male with high-quality sperm isn't exactly a lark.

That's in part because free radicals threaten sperm cells in many animals, including humans. Created by cells when stressed by pollution and other factors, free radicals are groups of oxygen-activated atoms that can damage sperm cells, weakening their swimming ability. (Learn how DNA works.)

Many animals' bodies produce antioxidants that fight free radicals—including male great tits. The birds have an antioxidant called carotenoid that not only defends against free radicals but also gives their breast feathers a yellow hue.

ATSRTWT

Now, it will not be news to avid birders that there are many types of tits. I have to admit that I have never seen, and frankly would not WANT to see, the "bearded tit." I'm pretty open minded, but... One has to draw the line somewhere.

(Nod to Taren S-K, who has a highly refined sense of the absurd)

How Could This Possibly Be Funny? Or, Worse, Serious?

1. What kind of idiot could think that this was going to be funny?

TSA Agent plants white powder in bag....

Next: Hilarious pranksters plant bomb in ladies underwear! "I got punk'd! I got punk'd!" laughs victim.

2. This guy, Lt Gov of South Carolina, appears to believe that no humans should have an "ample food supply." You can see the point, I suppose, if you are a naive Malthusian, but his point would also appear to apply to charity soup kitchens and homeless missions. I'm a Libertarian, but even I donate money to homeless shelters and charities. As long as it's voluntary, those organizations do good work and I support them.

(Nod to Anonyman)

KPC: Your Hip Hop Headquarters!

The video. I humbly present the video: Fear the Boom & Bust.....



LAGNIAPPE: Here is an actual picture (really) of Russ Roberts with Ke$ha.

One size fits all

We pretty much all know that the real answer to questions of the sort "why does X occur"? is "to get the girl".

You know what I mean right? "why do birds grow elaborate feathers?", "why do rams butt heads at 30 mph?" Why do boys play football?", "why do bloggers blog?".


Now, LeBron informs us that this simple, powerful answer also applies to explaining our current global imbalances, viz:

Q: Why do the Chinese save so much?

A: To get the girl!

Life in America just keeps getting better

First our overlords decided to let us eat jamón ibérico, and now, in even a bigger culinary coup, HAGGIS IS AGAIN LEGAL IN THE USA!!!!

From the Guardian:

Smuggled and bootlegged, it has been the cause of transatlantic tensions for more than two decades. But after 21 years in exile, the haggis is to be allowed back into the United States.

The "great chieftan o' the puddin-race" was one of earliest casualties of the BSE crisis of the 1980s-90s, banned on health grounds by the US authorities in 1989 because they feared its main ingredient ‑ minced sheep offal ‑ could prove lethal.

Some refined foodies might insist it always has been and always will be: in the words of Robert Burns, in his Ode to a Haggis, looking "down wi' sneering, scornfu' view on sic a dinner". But now, as millions of Scots around the world prepare to celebrate Burns's legacy tonight with an elaborate, whisky-fuelled pageant to a boiled bag of sheep innards, oatmeal, suet and pepper, its reputation has been restored, on health grounds at least.

Some notes on the above quote:

1. they banned sheep guts due to concerns about mad cow? WTF?

2. "great chieftan o the puddin' race"? Robert Burns, who ranks right behind Andy Murray but ahead of Robert the Bruce as the second greatest Scottsman ever.

3. In actuality, ALL meals in Scotland are "whisky-fuelled pageants"! However, speaking from experience, copious amounts of whisky would be a huge help in getting down a plateful of haggis.

hat tip to Felix the Fish

Los Partidos del Te

Boy, once you get in the old Rolodex...

Article in El Mercurio, Santiago, Chile. Excerpt:

...el republicano terminó por quedarse con el estado que perteneció a Kennedy por 47 años, y el Tea Party se anotaba su primera victoria política.

"Para nosotros no se trata tanto del apoyo a Scott Brown, sino sobre la idea de que si colaboramos en masa podemos ganar cualquier asiento (parlamentario) en el país", dijo Eric Odom, del America Liberty Alliance, otra institución bajo el paraguas del Tea Party.

Y es que así funciona el movimiento: es descentralizado, se organiza espontáneamente, y carece de un manifiesto claro. Hasta el momento no se consideran parte del Partido Republicano.

"Sería un error pensar que son una fuerza capaz de dar un apoyo continuo. No son un partido, son una masa acéfala que puede ser peligrosa incluso para quienes la abrazan", dijo a "El Mercurio" Michael Munger, director del departamento de Ciencias Políticas de la Universidad de Duke.

¿Qué unió entonces a Brown y al Tea Party? El mismo descontento que ha hecho a este último impulsar a miles de ciudadanos a protestar en los últimos meses contra la administración Obama. Decirle que "no" a Washington y a los demócratas, y representar el enojo contra el sistema político contra el plan de salud, los paquetes de estímulo y el desempleo.

ATSRTWT

(I'd translate, but my Spanish is terrible. And, hopefully, Mr. Autodidakto will do the honors...again)

Dance Dance Revolution

Yikes!

Reelin' in the grants: The things that pass for research, I don't understand.

Looking for Gender: Gender Roles and Behaviors Among Online Gamers

Dmitri Williams, Mia Consalvo, Scott Caplan & Nick Yee
Journal of Communication, December 2009, Pages 700-725

Abstract: Several hypotheses regarding the importance of gender and relationships were tested by combining a large survey dataset with unobtrusive behavioral data from 1 year of play. Consistent with expectations, males played for achievement-oriented reasons and were more aggressive, especially within romantic relationships where both partners played. Female players in such relationships had higher general happiness than their male counterparts. Contrary to stereotypes and current hypotheses, it was the female players who played the most. Female players were also healthier than male players or females in the general population. The findings have implications for gender theory and communication-oriented methods in games and online research—most notably for the use of self-reported time spent, which was systematically incorrect and different by gender.

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

Get Back into that Kitchen, Woman: Management Conferences and the Making of the Female Professional Worker

Jackie Ford & Nancy Harding
Gender, Work & Organization, forthcoming

Abstract: Conferences are a little studied aspect of working lives. In this article we explore how management conferences contribute to the continuing imbalance of power between men and women in management. We analyse data gathered from a reflexive ethnographic study of a management conference. We show that women arrive at conferences as knowing subjects, able easily to occupy the subject position of conference participant, but they are then subjected to processes of infantilization and seduction. They are made to feel scared and are given the order, as were their mothers and grandmothers: get back to the kitchen. We avoid using a theoretical explanation for these findings, preferring to offer them without much explanation, for we favour instead a political approach, and we use the findings as a way of making a call to arms to change the ways in which conferences are hostile to women.

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

Fast-girls, babes and the invisible girls. Gender relations in snowboarding

Mari Kristin Sisjord
Sport in Society, December 2009, Pages 1299-1316

Abstract: The purpose of this essay is to examine gender relations in snowboarding through conceptions and experiences articulated by female participants. The main objective is to focus on relations between female and male snowboarders as well as relations between different groups of females. The empirical investigation was conducted in conjunction with a workshop organized by the Norwegian Snowboard Federation. Methods employed were participant observation and personal interviews. The results reveal male domination in different snowboarding contexts during practice and competition. Moreover, the analysis revealed different femininities among the female snowboarders, characterized within the subculture as the Babes, Fast-girls, and the Invisible Girls. The results are discussed in relation to perspectives on subculture and Bourdieu's conceptions of field, capital and masculine domination.

So if you select for females who play a lot of video game, they play a lot of video games.

And the second paper: Really? Isn't that from the Onion, instead of a journal? I LOVE that paper. "We avoid using a theoretical explanation..." Yes, that is correct. But, "They are made to feel scared and are given the order, as were their mothers and grandmothers: get back to the kitchen." That's a paraphrase, right? In my experience, woman are allowed to sit with the boys during the actual conference proceedings. And if someone told the new chair of my department, Karen Remmer, to go back to the kitchen, that person would need to visit the Emergency Room, stat.

Finally, the third paper: "The results reveal male domination in different snowboarding contexts during practice and competition." It's snowboarding. Women are fine at playing video games; no reason they can't be better than men. But men are likely to be better at purely physical sports, Billy Jean King aside. Roger Federer v. Serena Williams: anyone want to bet on Serena? Finally, as for "the invisible girls," they had better be careful on the mountain. Make them wear an orange reflective vest or something. Some boy is going to run smack into them, if they are invisible, and then some researcher is going to write that down as a "male dominance behavior."

(Nod to Kevin L)

Conan's Exit Interview, and a Ken Burns Special...

Markets in everything: Omnisexual Valentine's Bison edition

Yes people, America's favorite mascot, Rumble T. Bison (the T stands for The) is available to service your valentine.

Here, let me quote from the solicitation:

Each visit includes a basket full of romantic items, music, and quality time with Rumble.... It doesn’t matter if your Valentine is a man, woman, or child; Rumble will make this Valentine’s one to remember. Call Rumble’s “loveline” for more info.

By the way, it's $249, and that includes tax!

Here's a teaser; a little bison-cake for y'all:

GuhDAY! Russians Hack Up Aborigines from Oz

So, here's the story:

Oksana Domnina and Maxim Shabalin, the favorites for ice-dancing gold in Vancouver, wowed the crowds with their routine at the European Championships. They sit in the lead after their original dance, a tribute to Australian Aborigines.

Except, Aboriginal leaders don't see it as a tribute. They don't really see how it has anything to do with their culture at all.

"They have got the whole thing wrong," said Stephen Page, artistic director of the respected indigenous group, the Bangarra Dance Company. Page said there were no traditional movements in the routine, the music sounded more like it came from India or Africa than Aboriginal Australia and the body paint looked like "a three-year-old child had drawn it on"... "Probably the elders in the bush would be laughing because they would be saying, 'Look how stupid these fellas are,' " he said.
ATSRTWT


Okay, I think that last sentence is probably right. But that would also be the reaction of the elders in the bush to all of the OTHER ice dancing costumes also. It is certainly MY reaction.

And here's the thing. It is ICE dancing. The idea of authentic Aussie aboroginal ice dancing is a little hard to imagine. The only ice in all of Oz is at the MacDonalds, and they won't give you any. These pictures here? Don't believe it. They are photo-shopped.

(Nod to Anonyman, who would look good in those costumes)

Judge Made Law

The Trouble with Cases

Frederick Schauer & Richard Zeckhauser
Harvard Working Paper, August 2009

Abstract: For several decades now a debate has raged about policy-making by litigation. Spurred by the way in which tobacco, environmental, and other litigation has functioned as an alternative form of regulation, the debate asks whether policy-making or regulation by litigation is more or less socially desirable than more traditional policy-making by ex ante rule-making by legislatures or administrative agencies. In this paper we step into this debate, but not to come down on one side or another, all things considered. Rather, we seek to show that any form of regulation that is dominated by high-salience particular cases is highly likely to make necessarily general policy on the basis of unwarranted assumptions about the
typic ality of one or a few high-salience cases or events. Two cornerstone concepts of behavioral decision – the availability heuristic and related problems of representativeness – explain this bias. This problem is virtually inevitable in regulation by litigation, yet it is commonly found as well in ex ante rule-making, because such rule-making increasingly takes place in the wake of, and dominated by, particularly notorious and often unrepresentative outlier events. In weighing the net advantages of regulation by ex ante rule-making against those of regulation by litigation, society must recognize that any regulatory form is less effective insofar as it is unable to transcend the distorting effect of high-salience
unrepresentative examples.

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

Judicial Duty and the Supreme Court’s Cult of Celebrity

Craig Lerner & Nelson Lund
George Washington Law Review, forthcoming

Abstract: Judging from recent confirmation hearings, there is now a consensus that
Supreme Court Justices should be humble servants of the law, highly respectful toward precedent and without personal agendas of any kind. Few informed observers expect this to happen. After describing some of the institutional factors that operate to discourage adherence to the traditional ideal of judicial duty, this article proposes four statutory reforms that could help the Justices stick a little closer to the promises they are expected to make, and do make, at their confirmation hearings. First, Congress should require that all Supreme Court opinions, including concurrences and dissents, be issued anonymously. This should lead to fewer self-indulgent separate opinions, more coherent and judicious majority opinions, and more reason for future Justices to treat the resulting precedents respectfully. Second, Congress should require the Court to hear at least one case certified from a circuit court (or one diversity case) for every federal question case they choose from their discretionary docket. This would reduce the temptation to assemble a docket consisting largely of interesting or high-profile cases, and encourage the Justices to grapple with more of the important but unglamorous issues vexing the lower courts. Third, Congress should forbid law clerks to draft judicial opinions, and move them to the office of the Court’s Librarian, where they would do legal research for the Court rather than for individual Justices. Truly humble and old-fashioned judges should study the precedents themselves, discuss the law with their colleagues (rather than with their handpicked votaries), and write their own opinions. Fourth, Congress should require Justices to serve part of their time on lower federal courts, as they did for the first century of the republic’s existence. Restoring “circuit riding” would give the Justices some on-going experience with playing the role of a modest judge whose decisions are subject to appellate review and who is often required to interpret and apply muddled Supreme Court opinions. If serving as a Supreme Court Justice were to become a full-time, non-delegable job with fewer opportunities for personal aggrandizement, the Justices would behave more like judges than legal celebrities, Presidents would have more incentive to appoint genuinely able people, and fewer Justices would insist on staying in the saddle past the time when they can even mount the horse.

(Nod to Kevin L)

Not hard to explain....

Efficient Regulation, Andrei Shleifer
NBER Working Paper, January 2010

Abstract: Regulation of economic activity is ubiquitous around the world, yet standard theories predict it should be rather uncommon. I argue that the ubiquity of regulation is explained not so much by the failure of markets, or by asymmetric information, as by the failure of courts to solve contract and tort disputes cheaply, predictably, and impartially. The approach accounts for the ubiquity of regulation, for its growth over time, as well as for the fact that contracts themselves are heavily regulated. It also makes predictions, both across activities and across jurisdictions, for the efficiency of regulation and litigation as strategies of enforcing efficient conduct.

Actually, it's easy to explain. Regulation makes it possible for felons like Andrei Shleifer to steal millions. There, that puzzle is solved!

(Nod to Kevin L)

Yes, There IS Such a Thing as Left-Wing Authoritarianism

Paul Krugman reveals just how far he has gone in a totalitarian direction. Angus and I have long believed P-Kroog has sold out, but I at least have had the sense that there is some underlying part of his brain that still perceives some part of reality.

I am no longer sure. P-Kroog apparently believes that Obama does not, in fact, have enough midi-chlorians, and so (I'm not making this up) wrote a post called "He Wasn't The One We've Been Waiting For." Yes, he did. Russ Roberts gives the appropriate response, a combination of confused surprise and dispositive counterarguments. Will W also is incredulous, and rightly.

And he also wrote this unbelievable op-ed. I really thought that this was from the Onion at first. As my man Don B put it:

Polls show that health-care ‘reform’ of the sort the Senate passed is now overwhelmingly unpopular. Indeed, as Scott Brown’s victory makes clear, it’s unpopular even in Massachusetts – perhaps the most ‘Progressive’ state in the union. And the President and members of the House obviously believe these polls, otherwise they wouldn’t have so quickly run away from the Senate bill.

For Mr. Krugman nevertheless to insist that “the nation is waiting” for final legislative approval of this ‘reform’ reveals that Mr. Krugman’s arrogance has reached such Brobdingnagian proportions that he mistakes his own desires for those of the American public.

So, to Mr. Overwater: There IS such a thing as left-wing authoritarianism.

Irish University System Does Something Smart!

Irish university system aboishes the center! Let a thousand flowers bloom. And save a lot of money, at the same time you get rid of central bureaucracy.

The objection of the center:

"We produce all their degree parchments and also run awards competitions, from the undergraduate to the postdoctoral level," she said. Those awards allow the university to promote comparability of standards and reward academic excellence as a central unit. The university also supports academic publishing and gives grants to individual scholars, she said.

We produce all their degree parchments?

(At this point, Angus sticks his right fist in the air, sticks his thumb out between his ring and long fingers, wiggles his thumb, and yells, "ARRRRRRRRRR!")

(Nod to Tommy the Brit)

Glen Beck is Afraid

Wow, Glen Beck is pretty much all upset about Scott Brown. "A dead intern...."? Really? That's pretty extreme.

My wife, the good LMM, has expressed....let's call it "admiration," since this is a family blog, for Scott Brown and his photo. Fine with me: doesn't matter where you get your appetite, as long as you eat at home.

(Nod to Anonyman, who also has a yummy "treasure trail." Or, that's what I hear)

Poll Cats

Interesting horse race from HotAirPundit, on who were the real poll cats and who stunk.

Blue Mass Group had Coakley +8? Even Kos played it straighter than that, calling it a toss-up. What did Blue Mass Group do, talk to everybody's mom? That's not a very random selection algorithm.

And Zogby...really?....what the heck?

(Nod to the NCM)

A Little Happy, A Little Sad

Watching this made me miss Storchbier, and Eva and Sebastian, and Frau Uhlich, and Herr Kauffmann, and Martin, and Hajo, and der Geist, and lots of people.



In Franconia, where I was, it would be Fastnacht; in Western Germany (esp. Koln) it would Karneval; and in the rest of Bavaria and Austria, Fasching. In any case, as Stephen rightly says: Prosit!

El Mercurio

Bill Galston and I fuss at each other about Prez Obama, in El Mercurio, newspaper of Chile's capital, Santiago.

El problema es que hasta ahora los intentos de reforma y la implementación de planes económicos han dado malos resultados políticos: los congresistas han perdido respaldo en sus distritos y la popularidad de Obama ha caído significativamente.

Michael Munger, profesor de la Universidad de Duke, sostiene que los demócratas interpretaron mal el mandato con el que llegaron al gobierno. El voto por Obama fue para el político carismático y no para todo su programa, asegura.

La mayor desilusión ha sido para sus seguidores. "Por años, él hizo campaña asegurando que reduciría la polarización política", comentó a "El Mercurio" William Galston, analista de la Brookings Institution. Pero durante su gestión la brecha entre los partidos ha crecido, dijo Galston, y se ha visto poco del bipartidismo prometido.

For some reason, it tickles me to think of Bill Galston as an "analista." I'm just sayin'.

Book 'Em, Danno!

Oh, so now it's "Who has the bigger bookshelf?", is it. It's not the size of your books, it's how you USE them, or something like that. Anyway, let's do this. Side wall....

















The back alcove....






















Finally, the window wall. And, yes, the fridge has beer in it, some fine hefeweisse and a couple of local micro-brews.


And, let me share this: in grad school, Angus and I shared an office. The office had four desks, but because I was "elected" Prez of the Grad Student Association, I assigned offices, and I felt like the two of us in an office for four would mean we would be more comfortable.

Angus at one point attempted a coup, by ballot stuffing. But I Chavezed all down his leg, by declaring the election to be void, and announcing I would be President for life. Since that meant he got to keep the office, Angus converted to being a Mungista again.

Anyway, I remember one day I came back from the bookstore, with about 10 or 12 new Poli Sci books. Angus went through them, increasingly incredulous. "Stupid...stupid....REALLY stupid (A Gary Jacobson book, I think)...stupid...." Not one of the books impressed him as worth having.

Angus didn't realize that political scientologists don't actually READ these books. We just use them as an excuse for ending conversations: "It was here somewhere...let me look for it and get back to you...I know I JUST saw it...." With all the books I have, I almost never have to talk to anyone.

I may be an ingrate, but I am NOT illiterate!

Wow, I am taking a beating in the comments. BR points out that I don't seem to have any books in my office and Mungo mashes me in the forehead with a driver, Mrs. Woods style, for not having invited him to visit Soonertopia. I have no defense against the latter but against the former I can say that I do indeed have books in my office. Here is a picture to prove it:



They are mainly on Macro/growth, econometrics & bayesian statistics, and political economy, with some finance and international econ thrown in.

Maybe some day I will be able to post a picture of Mungo riding the Sooner Schooner!

Liberty Wins! Liberty Wins!

That's my Harry Caray imitation.

The Supreme Court comes through. Stupid freakin' campaign finance law! Yay! Here's the ruling. I can't believe our side actually WON for once.

"My" amicus brief in the case, if you are interested....(Allison wrote it; I just signed it).

UPDATE: For you half-wits commenting (i.e., everyone who disagrees with me), check this!

Left and Right agree: soak the "rich"

Tyler reports on health care contingency plans from the right and left sides of the blogosphere and they have one thing in common; the rich should pay.

M. McArdle:   "eliminate the tax-deductibility of health insurance benefits for people making more than $150K a year in household income, $100K for singles."

E. Klein:  "Revenue comes from a surtax on the wealthy."

Yikes!!!!

How about increasing the supply of medical providers? How about allowing insurance companies to compete for clients across state lines? How about eliminating the tax-deductibility of health insurance benefits for ALL people? How about experimenting more with the Mayo clinic type model which is not (in my understanding anyway) a fee for service model? How about encouraging people to exercise more, eat better and stay healthy? How about tort reform?

Of course the best thing would be to somehow reduce the hysteria about access to health care. Most health care doesn't actually work, and our society wastes billions of dollars annually on the health care game. How about a subsidized national pool for catastrophic coverage insurance and the rest is up to you?

It is a very disturbing trend to see individual groups getting singled out for benefits or tax hits. Unions getting exempted from the "cadillac tax", big banks singled out to repay the TARP money that went to GM and Chrysler, the rich to pay for increased health care coverage, Nebraska getting exempted from having to pay for expansion of Medicaid in the state.  I don't think we can expect good results from continuing this method of getting agreements or financing expenditure in the long run.

Edwards: She Said That....I am the One! But The Kid Is Not My Son!

Wait. Yes, it is.

You have to like the "my mistress is such a slut she slept with everyone on my campaign" defense that Edwards tried at first. I'm sure Ms. Hunter liked that a lot.

On the "here's my office!" meme....

From the door....






















Cute Hayek painting, and my view of a roof...



















Best part: The Gothic window, facing southest, looking out over the main quad! Lots of the exterior shots of Dawson's Creek, the old TV show, were shot looking up at this window. It was supposed to be "Worthington University" on the show....

Looking back, looking forward: Obama more popular than his policies

Article in the mighty Durham Herald Sun, about what Obama accomplished.

As the article notes, my claim is that both sides have misinterpreted recent events. Even Scott Brown's election....NOT a Republican resurgence. Just people pissed off at incumbents.

The Most Unpopular Person We Have Polled Anywhere, at Any Time

That would be....John Edwards.

(Nod to Anonyman, who was ALWAYS one of the popular kids)

Rockin' the Canadian Tuxedo!

A quiz on economics

It's a short quiz.

Do you think that cruise ships should continue to dock at Haiti's Labadee peninsula, so that passengers can "frolic" and "buy trinkets"?

To me, the answer is obviously "yes," if the passengers don't mind. It's possible passengers don't WANT to go, but if that is what is advertised, and passengers buy a ticket, I say "go."

Because the alternative is to say, "Haiti is devestated. Let's boycott Haiti, to make sure the economic damage is as great as possible. Let's deny local workers the only chance they have to make some money, so as to make our rich white American selves feel moral."

But I expect that most people disagree with me. Right?

(Nod to Anonyman)

The Pin up boy takes it down

They are calling the Mass. special Senate election for Scott Brown!

Unbelievable! Yale has App State Envy

People if you enjoyed this, then you gotta watch the video below (I know it's long but at least give it 'til the singing starts):

Hat tip to Ken Tremendous.

  

Will Obama be the "Haiti President"?

Tyler Cowen says yes and predicts that over 1,000,000 Haitians will be living in (I assume he means US run) "refugee camps for the foreseeable future". He closes with the line that "everyone in Haiti is looking to president Obama".

I know that Tyler has a deep and special relationship with Haiti. He introduced me and Mrs. Angus to the work of Antoine Oleyant and Edouard Duval-Carrie. But I personally do not foresee the US getting involved in a huge long term way in Haiti.

One reason is our history. I don't see how we can get away running things there. Could a mission there survive if American soldiers killed Haitian people?

Another reason is politics. Haitians don't vote. I realize there are a fair number of Haitians living in the USA but they are not a powerful lobby and I don't think are likely to become one. It's not clear to me what groups would favor the US taking the lead in running and reconstructing Haiti.

Another reason is that, as Tyler himself points out, it's a no-win situation. If we do take over, we are unlikely to be successful. Obama probably does not want to "preside over the collapse of a country of more than nine million people" but, contra Tyler, I don't understand why he has to or will do so.

Reconstructing Haiti needs to go through the World Bank or the UN. Not because those institutions would do a better job, but simply because the US can't / won't / shouldn't be seen as the party that bears the responsibility for the outcome.

Where the magic happens

Spring semester starts today. For some reason I thought I'd show y'all my office. Mrs. Angus and I put $0.49 per square foot laminate floating flooring down over the ancient and foul carpeting in our building, and I built my own set of office furniture last year in our garage. Here it is (click on pics to enlarge):

 

Here's a close up of the desk:

Oh, yeah, I made a matching bookshelf too:

Now I gotta get my butt in that chair and do 5 referee reports, finish 4 papers, teach two grad classes and direct 3 dissertations!

Podcastroid, Unite!

For podcast fans: An econ version of "Pardon the Interruption."

With the indefatigable Russ Roberts as the interruption.

And as always, available on iTunes U, for use while driving or exercising. Makes a GREAT gift!

A Little Lunch at Nello's....

Russian billionaire Abramovich drops $50k for a nice lunch.

The Ward Boss writes, "Look, I had the Milanese, and the water. I'm not submitting receipts to be reimbursed for anything else...."

Good. I am not sure that the $7k+ "tip" would have made it through Duke's accounting office.

(A copy of the bill....) (Click to enlarge)
















Now, you are thinking, "3 bottle of wine? For $1,500? WOW!" But wait, check again, you missed a zero....Plus, tax is more than $3,200, and the tip is more than $7,300. Nice tip...

Come on Eileen!

Let me begin by saying that I'm not a Republican and I've never voted. What I am on record as supporting is gridlock. And I love the theatre of the absurd that our political discourse has become. 

Naturally then, I am all a-tingle in front of the surreal possibility that the Democrats could actually lose Ted Kennedy's Senate seat.

I am sure those political geniuses Reid and Pelosi have contingency plans to get their extremely popular political agenda passed if they lose their 60th vote, but I don't think they can do it without sometime taking another vote of some type and I am wondering how many rank and file legislators would reconsider their previous votes in light of current trends.

Could it be like the 1994 midterm elections a year early? A boy can dream, can't he?

Change of government in Chile

Since the end of Pinochet's dictatorship in 1990, Chilean presidential elections had been won by the left coalition group Concertación. Yesterday, Concertación lost the presidency to a candidate of the right, businessman Sebastian Piñera.  This is partly because they ran a very poor candidate in ex-president Eduardo Frei, and partly because the coalition itself is unraveling.

As far as I know, there haven't been any denunciations from the Chavez - Ortega - Morales - Correa axis as of yet, perhaps because, by their standards, Concertación is not a really a left party.

Good on ya, Rog!

Roger Federer organized a pre Aussie open exhibition to benefit Haiti. It was a big hit. Here is one video:

and there is much more here. It is very entertaining, perhaps more so than actual tournament tennis these days.

 

The OKC: where we take our processed meats VERY seriously

I am not joking:

Police say a fight over Spam led to a sledgehammer attack.

Investigators said it happened at a southwest Oklahoma City home when Howard Jones thought his roommate ate his Spam.

Officers said the men argued and then Jones hit him in the head with a sledgehammer....

Police arrested Jones on suspicion of assault.

I can only imagine what would have happened if it had been braunschweiger!

How come people named Kevin are so darn smart?

Great stuff from Kevin Murphy (source here):

(Q) What about skepticism toward the government: Isn’t that also a key part of the Chicago tradition?


(A) Sure. You have to ask why would the government get it right. You can’t just say, here’s a market failure and the government needs to step in and address it. You have to look in detail at what the government might do, and compare the relative effectiveness of the two.

This....THIS is entertainment

This is REAL music.

And performance talent.

WOW! I almost get creamed in a drug bust.

So, I walk to the service station where we have our car worked on. It's 4.2 miles, but it's pretty, and today was a nice day. So I walked to go pick up the Lincoln, which had had some battery cable work.

Here is the route I walked.

Between 3 and 5 minutes after I passed this spot, this happened. Here is the raw video footage, after the white van ran over the "stop strips."


Note how after two cops are holding him down a third cop comes and puts a knee on his neck. If the guy is not resisting, that is likely to make him try to resist, just so he can breathe.

Also, watch when the camera pulls back at the end. At least 20 cop cars. That is what I saw, though of course at earth level, when I came out of the McDonalds across the street, and saw that cop world had opened in the middle of Creedmoor Road at rush hour.

I wish I had been three minutes later. It would have been cool to see.

Against the grain

I guess I am the only person misguided enough to be against the “Federal Crisis Responsibility Fee” to be levied on the largest US banks. Besides the usual suspects, Brookings is in favor and Mankiw gives a qualified endorsement.

To me, though, it's heinous. Here's why:

1. It's supposed to be for TARP recovery, yet remember, money is fungible, these revenues can't /won't be earmarked. It just goes into the giant slush fund.

2. Basic tax incidence theory tells us that a significant part of this tax on banks will be passed on to their customers, presumably the very people the administration is trying to placate with the fee to begin with.

However, let us grant the idea that banks got a TARP gift so it's only fair they repay it. Well,

3. Many big banks have already repaid their TARP funds

4. Some banks were strong-armed into taking TARP funds that they didn't want in order not to stigmatize the banks that did need them.

5. Over 50 billion of TARP money went to automakers GM and Chrysler and this money won't be paid back. This is I believe the biggest chunk of TARP funds that won't be recovered. Why should big banks pick up that bill?

6. In the larger picture, this ex-post targeting of very narrow groups, whether punitively as in this case, or positively as occurred in the health bill negotiations, is a disturbing trend in the current administration's method of operation.

7. Finally, this is mere window dressing when compared to what needs to be done with our banking sector. Leverage needs to be limited. Some enlightened form of Glass-Steagall needs to be re-instated. Credit default swaps should trade on exchanges. We need real reform in this sector not a populist, window dressing, revenue grab.

Upstairs, Downstairs

Downright Sexy: Verticality, Implicit Power, and Perceived Physical Attractiveness

Brian Meier & Sarah Dionne, Social Cognition, December 2009, Pages 883-892

Abstract: Grounded theory proposes that abstract concepts (e.g., power) are represented by perceptions of vertical space (e.g., up is powerful; down is powerless). We used this theory to examine predictions made by evolutionary psychologists who suggest that desirable males are those who have status and resources (i.e., powerful) while desirable females are those who are youthful and faithful (i.e., powerless). Using vertical position as an implicit cue for power, we found that male participants rated pictures of females as more attractive when their images were presented near the bottom of a computer screen, whereas female participants rated pictures of males as more attractive when their images were presented near the top of a computer screen. Our results support the evolutionary theory of attraction and reveal the social-judgment consequences of grounded theories of cognition.

(Nod to Kevin L)

Interesting: Fed Making Money, But May Need to Have Fire Sale

Interesting article.

The Fed is making huge "profits," and depositing them with the Treasury.

Now, in order to support the financial sector and stop deflation, the Fed bought up huge quantities of debt, spending down its account at the Treasury.

It is making lots of money on some of that debt, which turns out to have been pretty solid.

On the other hand, lots of that debt is still pretty low in value, because of uncertainty. More than $1.5 trillion of that debt is private, or quasi-private (it's not t-bills!), in the sense that it is made up of mortgage-backed securities or collateralized debt obligations, or else bonds issued directly by the mortgage giants.

Here's the thing: if inflation cranks up, the Fed is going to have to unload a buttload of debt, really fast. The only way to sell that much debt, and take excess cash out of the economy, is to sell at fire sale prices.

So, if there is inflation, the Fed is going to take truly ginormous capital losses on the debt it will have to sell. But this is exactly Bernanke's plan, the one he is so sure will work to prevent inflation. Big Ben's talk at the AEA meetings made much of this policy. But who in the world is going to buy CDOs in this market?

The lagniappe: Lots of the CDOs are based on fixed interest rate mortgages. If there is inflation, the capital value of those gets hammered. All the rest are based on ARMs of some kind. And for those the PAYMENTS skyrocket with nominal interest rates, and defaults go up, and AGAIN the CDOs' capital value takes it right up the ol' gazoch, with a red hot poker.

This is not really a good policy.

(Nod to the Ward Boss)

The Pot Calling the Kettle Whack

Glen Beck v. Sarah Palin: Who is the bigger whack job? "All of them"? Yikes!


(Nod to Anonyman)

Nutty Buddy--Redux!

(I wrote about the "El Jefe" Nutty Buddy four years ago...)

(Nod to Josh H)

(SUPER UPDATE: I missed this the first time I saw it! Fantastic idiocy. Right at the six minute mark (5:59) in the video, the moron says that a baseball hits unprotected juevos with 2,400 pounds of force. Not clear what the units are...per square inch? Kinetic energy? But, okay, call it 2,400 pounds of force. THEN the moron says that the Nutty Buddy reduces this to 110 pounds of force. Let's suppose that's right. THE MORON CONTINUES: "That's a 2000% reduction in force!" Really? 2000% reduction? Impressive. Actually, going from 2,400 down to 110 is a 95% percent reduction in force, dude. Any decrease more than 100% means that those juevos are exploding outward and exerting force on the baseball. Ouchie!)

What sets the great ones apart is their attention to detail

Case in point:

CARACAS, Venezuela – President Hugo Chavez says there's too much capitalism on Venezuelan TV. So he's urging producers to start making films and TV shows that stress socialist values.

Chavez says producers should be making "socialist soap operas."
He said Sunday he recently visited Cuba "and they have soaps there. But they're not capitalist soap operas."

.... Chavez-allied producers made a 2004 soap opera called "Love Inside the Barrio" that emphasized socialist values but failed to draw many viewers.

Come on Venezolanos, show some initiative. He can't be expected to do EVERYTHING!!

 

Grade Inflation: Bad

Less grade inflation ==> more effort by students. Less "happiness," perhaps, but more effort and more learning.

Real Costs of Nominal Grade Inflation? New Evidence from Student Course
Evaluations

Philip Babcock, Economic Inquiry, forthcoming

Abstract: College grade point averages in the United States rose substantially between the 1960s and the 2000s. Over the same period, study time declined by almost
a half. This paper uses a 12-quarter panel of course evaluations from the University of California, San Diego to discern whether a link between grades and effort investment holds up in a micro setting. Results indicate that average study time would be about 50% lower in a class in which the average expected grade was an "A" than in the same course taught by the same instructor in which students expected a "C." Simultaneity suggests estimates are biased toward 0. Findings do not appear to be driven primarily by the individual student's expected grade, but by the average expected grade of others in the class. Class-specific characteristics that generate low expected grades appear to produce higher effort choices — evidence that
nominal changes in grades may lead to real changes in effort investment.

(Nod to Kevin L)

Surprise Kitty!

Painfully cute....

Funky days are back again

People, Cornershop is back! Sweet! Here is a video from their new album (available for sale at cornershop.com) 

Durant is the man in OKC

Great article in SI.com about how Kevin Durant has turned from a defensively liability to a defensive assest and how with him on board, the Thunder are winning with defense.

Thunder are third in the Western Conference in defensive efficiency and third in the entire Association in field goal percentage allowed, while they are actuall giving up fewer points per possession with Durant on the floor vs. him off the floor, which was not true in his first two years in the league.

Thunder v. Spurs tonight. Should be fun.

Hot Grandma N.E. Prostitute

Wow. The cops messed up.

Perhaps the cops should have to stay after school, and write 1,000 times: "Woman in tight clothing walking down street does NOT EQUAL prostitute."

(Nod to Anonyman, would never had to pay for it)

Just so you know

Source is here.

Poll Cats: Congressional Repubs hammered by 75%

For those who think that the Republicans are ascendant.....

The point is that not liking the Dems does NOT imply liking RINOs.

The Rasmussen poll. 75%? Wow.

(Nod to Angry Alex)

Harvard Takes One in the Shorts

Ouch. I think that this is going to leave a mark.

Good Thing I'm Already Married!

'Letting fatties roam the site is a direct threat to our business model and the very concept for which BeautifulPeople.com was founded.'

No to fatties!

(Nod to Anonyman, who could stand to lose 5 pounds)

Murdering the Data

These guys got in touch with their inner Grier. Turns out if you poke a fork at the wall around econometric studies of death penalty deterrence, then roaches come pouring out.

Estimating the Impact of the Death Penalty on Murder

John Donohue & Justin Wolfers, American Law and Economics Review, forthcoming

Abstract: This paper reviews the econometric issues in efforts to estimate the impact of the death penalty on murder, focusing on six recent studies published since 2003. We highlight the large number of choices that must be made when specifying the various panel data models that have been used to address this question. There is little clarity about the knowledge potential murderers have concerning the risk of execution: are they influenced by the passage of a death penalty statute, the number of executions in a state, the proportion of murders in a state that leads to an execution, and details about the limited types of murders that are potentially susceptible to a sentence of death? If an execution rate is a viable proxy, should it be calculated using the ratio of last year's executions to last year's murders, last year's executions to the murders a number of years earlier, or some other values? We illustrate how sensitive various estimates are to these choices. Importantly, the most up-to-date OLS panel data studies generate no evidence of a deterrent effect, while three 2SLS studies purport to find such evidence. The 2SLS studies, none of which shows results that are robust to clustering their standard errors, are unconvincing because they all use a problematic structure based on poorly measured and theoretically inappropriate pseudo-probabilities that are designed to capture the key deterrence elements of a state's death penalty regime, and because their instruments are of dubious validity. We also discuss the appropriateness of the implicit assumption of the 2SLS studies that OLS estimates of the impact of the death penalty would be biased against a finding of deterrence.

(Nod to Kevin L)

Europe: you guys know it's not a single country, right?

The latest debate in the blogosphere revolves around comparing the economic performance of the US relative to Europe. This is problematic, as people are not using a common metric or any real data analysis. Krugman has claimed that any superior US performance in growth is only due to increased population. 

Lets take a look at some actual numbers, shall we? These are from the total economy database started by Angus Maddison, and taken over by Groningen University and the Conference Board. I am using the Table for GDP per capita in 1990 US$ (converted at Geary Khamis PPPs).

In 1980, where this debate seems to start, we can see that all the European countries I've chosen were considerably poorer than the US except for Switzerland.

Below I list Per Capita GDP as a % of US Per Capita GDP for selected European countries in 1980 and 2008:


Austria   74.06    76.72
Denmark   81.96    78.82
France   81.31    72.91
Greece   48.29    52.33
Ireland   45.97    90.70
Italy   70.78    63.70
Neth    79.15    78.83
Norway   81.15    93.01
Portugal   43.30    46.07
Spain   49.53    55.62
Sweden   80.40    78.81
Switz   101.0    79.56
UK   69.61    76.47
Germany             66.34 (2008 only)

As one can see, the European experience is quite varied. Greece, Portugal and Spain have done a little bit better than the US over the period but are still extremely poor in comparison at roughly half of US per capita GDP in 2008. 

France and Italy have done notably worse than the US over the period and are at less than 75% of US per capita income. 

Austria, Denmark, the Netherlands and Sweden have basically performed about the same as the US over the period and remain at roughly 80% of US per capita income. 

Norway has done quite a bit better than the US over the period and is now above 90% of US per capita income. Ireland has done even better, going from around 50% of US income levels to 90% of the US over this period. The UK has also done better than the US in per capita growth but still has only reached about 3/4s of the US level of per-capita income. 

Germany at re-unification (1989) was at 69% of US levels and has fallen to 66% by 2008.

So, it's very misleading to talk about growth or wealth levels in "Europe" as if one number captured the European experience. Italy and France appear to be from different worlds than Norway and Ireland!

It is also not correct that US growth has been higher only due to population growth. Many European countries, including large ones like France, Germany and Italy have seen their per-capita incomes fall relative to the US since 1980.

And, while it is true that many European countries have had very similar per capita growth as the US since 1980, these countries generally are quite a bit poorer than the US by this metric at least and thus perhaps should not be too proud of only matching our growth rates (you know, convergence and all that). 

I hate to bring up neoclassical growth theory, but in the steady state of that model, all countries should grow at the same rate (in per capita terms). Differences in institutions or policies only result in permanent differences in income levels in the standard model. 

Finally, big ups to Ireland and Norway for their amazing economic performance over this 1980 - 2008 time period. Ireland I know, changed their economic institutions over this period, but I don't really know anything about Norway (well, they do have oil, right?)

Why No "Credit" for BHO?

My good friend, Jennifer Merolla, chair of Claremont Grad School's Politics and Policy Department, has a piece in the HuffinPuff Post. Interesting...

Throughout most of his presidency, public support for George W. Bush increased in conjunction with the terror threat level. Conventional wisdom tells us that the public rallies behind the sitting president when its national security is perceivably threatened. Yet, following the recent Christmas Day bombing attempt, approval ratings for President Barack Obama have remained fairly flat. Is this lukewarm response to our current president symptomatic of public apathy toward terrorism?

Hugo Cracks Down on Inflation

Hugo cracks down on inflation.....by beating up people who raise prices.

Very clever. He can bankrupt the middle class in six months.

WHY he would want to do that is hard to say. But it is an effective policy, if that is the goal.

The Venezuelan devaluation

The Bolivar has been pegged at 2.15 to the dollar for about 5 years. Over those 5 years, Venezuelan inflation has ranged from 15 - 30 percent per year while US inflation ranged from 0 to 5 percent per year. That is to say, unless the Bolivar was massively overvalued when pegged in early 2005, it has become way overvalued. Yesterday, President Chavez ordered the devaluation of the Bolivar to 4.3 per dollar (2.6 per dollar for some specific imported goods).

Chavez did a pretty good job of explaining the Venezuelan situation as one of a country suffering from the Dutch disease. It heavily exports a primary commodity, which supposedly causes currency appreciation and hurts manufacturing. He emphasized that the country needed to overcome this problem and produce stuff, not just pump stuff out of the ground. Here is a relevant fragment from his TV show:

The devaluation is good policy for sure. I am not crazy about the tiers and controls, and opposition leaders in the country say Chavez will use the increased local currency revenues from oil exports to boost domestic spending in advance of elections, but it is the correct move for the country at this time (and should have been done much sooner). Fixing the nominal exchange rate to a country whose inflation rate you are unwilling to match is a recipe for economic disaster that we have seen cooked up over and over again in Latin America.  Venezuela is getting out before the disaster hits, at least this time.

Rush Can't Play Tom Sawyer?

Art Carden makes a nice comparison, I think.

(This is Rush the band, not the radio personality, btw)

A post in the Chronicle

An article in the most recent Chronicle of Higher Ed.

Frequent readers will recognize the story, but I am trying to make a larger point.

A Sunday stroll in Normatopia

It was finally warm enough this morning to bring my camera when we went on the family walk.

Here is a bit of what we saw:



Ice is melting


Hawks are flying


Mr. Tooty is vigilant


but the water wheel is still iced over!