Kids Prefer Cheese
Credibly promising to be irresponsible...since 2004!
Tuesday, June 08, 2010
Self-Identified Leftists Don't HAVE to be Dumb
Economic illiteracy is not destiny, it's a choice. KPC friend D-Klein has some data.
Me, I'm reminded of LvM:
Scarcely anyone interests himself in social problems without being led to do so by the desire to see reforms enacted. In almost all cases, before anyone begins to study the science, he has already decided on definite reforms that he wants to put through. Only a few have the strength to accept the knowledge that these reforms are impracticable and to draw all the inferences from it. Most men endure the sacrifice of the intellect more easily than the sacrifice of their daydreams. They cannot bear that their utopias should run aground on the unalterable necessities of human existence. What they yearn for is another reality different from the one given in this world. They long for the "leap of humanity out of the realm of necessity and into the realm of freedom." They wish to be free of a universe of whose order they do not approve.
So, it's a conscious choice to decide that the basic laws of economics should be amended. Lefties want to feel good about regulating housing prices. The fact that rent control actually HURTS the poor...well, that's inconvenient, and they just prefer to put their fingers in their ears and sing folk songs from the 1960s, and congratulate themselves on their INTENTIONS, not the actual impacts of the laws they advocate.
If you want to help the poor, but know that your dumb laws actually hurt the poor, you just pretend that the laws aren't really dumb.
Labels: economic policy
Papers to Read
How to reduce unemployment: A new policy proposal
Journal of Monetary Economics, forthcoming
Abstract: This paper uses a model with a continuum of equilibrium steady state unemployment rates to explore the effectiveness of fiscal policy. The existence of multiple steady state equilibria is explained by the presence of search and recruiting costs. I use the model to explain the current financial crisis as a shift to a high unemployment equilibrium, induced by the self-fulfilling beliefs of market participants about asset prices. I ask two questions. 1) Can fiscal policy help us out of the crisis? 2) Is there an alternative to fiscal policy that is less costly and more effective? The answer to both questions is yes.
Estimating the Firm’s Labor Supply Curve in a “New Monopsony” Framework:
Schoolteachers in Missouri
Michael Ransom & David Sims
Journal of Labor Economics, April 2010, Pages 331-355
Abstract: In the context of certain dynamic models, it is possible to infer the elasticity of labor supply to the firm from the elasticity of the quit rate with respect to the wage. Using this property, we estimate the average labor supply elasticity to public school districts in Missouri. We leverage the plausibly exogenous variation in prenegotiated district salary schedules to instrument for actual salary. These estimates imply a labor supply elasticity of about 3.7, suggesting that school districts possess significant market power. The presence of monopsony power in this teacher labor market may be partially explained by its institutional features.
The Micro-geography of Tax Avoidance: Evidence from Littered Cigarette Packs
American Economic Journal: Economic Policy, May 2010, Pages 61–84
Abstract: The large tax differentials between Chicago and neighboring jurisdictions provide an incentive for cigarette tax avoidance. Data from a random sample of cigarette packs littered in Chicago reveals a startling degree of tax avoidance: three-quarters did not display a Chicago tax stamp. Also, the $2.68 difference between the tax in Chicago and surrounding counties decreases the probability of a local stamp by almost 60 percent, and a one mile increase in distance to the lower-tax state border increases the probability a pack of a local stamp by about one percent. These results are consistent with the predictions of economic theory.
Build America Bonds
Andrew Ang, Vineer Bhansali & Yuhang Xing
NBER Working Paper, May 2010
Abstract: Build America Bonds (BABs) are a new form of municipal financing introduced in 2009. Investors in BAB municipal bonds receive interest payments that are taxable, but issuers receive a subsidy from the U.S. Treasury. The BAB
program has succeeded in lowering the cost of funding for state and local governments with BAB issuers obtaining finance 54 basis points lower, on average, compared to issuing regular municipal bonds. For institutional investors, BAB issue yields are 116 basis points higher than comparable Treasuries and 88 basis points higher than comparable highly rated corporate bonds. For individual investors, BABs represent poor deals compared to regular municipal bonds. Thus, on average the Federal government subsidy disadvantages individual U.S. taxpayers, who are the main holders of municipal bonds, and benefits new entrants in the municipal bond market.
Public Provision of Private Goods and Nondistortionary Marginal Tax Rates
Sören Blomquist, Vidar Christiansen & Luca Micheletto
American Economic Journal: Economic Policy, May 2010, Pages 1–27
Abstract: Using an optimal taxation model combined with a previously neglected scheme of public provision of private goods, we show that there is an efficiency
gain if public provision of selected goods replaces market purchases and that efficiency requires marginal income tax rates to be higher than if the goods were purchased in the market. Part of the marginal tax serves the same role as a market price and conveys information about a real social cost of working more hours. It might be that economies with higher marginal tax rates have less severe distortions than economies with lower marginal tax rates.
Will Governments Fix What Markets Cannot? Overconfidence and the Demand for
Patrick Warren & Daniel Wood
Clemson University Working Paper, May 2010
Abstract: Market forces will sometimes "fix" consumer biases through competition that improves the welfare of biased consumers, and sometimes will not. Likewise, government regulation will sometimes fix consumer biases by making exploitative transactions difficult, and sometimes will not. We show that in the case of markets for goods with add-ons (Gabaix and Laibson, 2006) the instances where markets or government will fix biases (in our model, consumer overconfidence about add-on services such as overdraft fees) are correlated. In the same cases where markets are inefficient due to the prevalence of biased consumers, voters will not demand efficiency-enhancing regulations. This is because consumer biases have two effects: they produce deadweight losses, and they redistribute from biased consumers to
less-biased consumers. These distributional consequences can both prevent equilibrium competition by firms from enhancing efficiency and prevent equilibrium policy choices by citizens from regulating away inefficient trade.
”Unfunded liabilities” and uncertain fiscal financing
Troy Davig, Eric Leeper & Todd Walker
Journal of Monetary Economics, forthcoming
Abstract: A rational expectations framework is developed to study the consequences of alternative means to resolve the “unfunded liabilities” problem — unsustainable exponential growth in federal Social Security, Medicare, and Medicaid spending with no plan to finance it. Resolution requires specifying a probability distribution for how and when monetary and fiscal policies will change as the economy evolves through the 21st century. Beliefs based on that distribution determine the existence of and the nature of equilibrium. We consider policies that in expectation combine reaching a fiscal limit, some distorting taxation, modest inflation, and some reneging
on the government's promised transfers. In the equilibrium, inflation-targeting monetary policy cannot successfully anchor expected inflation. Expectational effects are always present, but need not have large impacts on inflation and interest rates in the short and medium runs.
(Nod to Kevin L)
Travel is Educational
Mark McGwire: Great American
From Angry Alex:
Elicited a chuckle from Mark McGwire today. I thanked him for all the heat he took regarding steroids. When Congress is focusing on steroids in baseball they aren't trying to pass things like Obamacare. I thanked him for taking one for the average American.
Labels: We get letters
Monday, June 07, 2010
For immediate release: OU gets a new supercomputer
Papers to Read
Global effects of fiscal stimulus during the crisis
Charles Freedman, Michael Kumhof, Douglas Laxton, Dirk Muir & Susanna Mursula
Journal of Monetary Economics, forthcoming
Abstract: The IMF's Global Integrated Monetary and Fiscal Model is used to compute short-run multipliers of fiscal stimulus measures and long-run crowding-out effects of higher debt. Multipliers of two-year stimulus range from 0.2 to 2.2 depending on the fiscal instrument, the extent of monetary accommodation and the presence of a financial accelerator mechanism. A permanent 10 percentage point increase in the U.S. debt to GDP ratio raises the U.S. tax burden and world real interest rates in the long run, thereby reducing U.S. and rest of the world output by 0.3 to 0.6 percent and 0.2 to 0.3 percent, respectively.
Social Welfare Expenditures in the United States and the Nordic Countries: 1900-2003
NBER Working Paper, May 2010
Abstract: The extent of social expenditures in the U.S. and the Nordic Countries is compared in the early 1900s and again in the early 2000s. The common view that America spends much less on social welfare than the Nordic countries does not survive closer inspection when we consider the differences in the structures of social expenditures. The standard comparison examines gross social expenditures. After adjustments for direct and indirect taxes paid, the net social expenditures in the Nordic countries are much closer to American levels. Inclusion of mandatory and private social expenditures raises the American share of GDP devoted to social expenditures to rank among the middle of the Nordic countries. Per capita net public social expenditures in the U.S. rank behind only Sweden. Add in the private spending, and per capita spending in the U.S. is higher than in all of the Nordic countries. Finally, I document the enormous diversity across time and place in public social expenditures in the U.S. in the early 1900s and circa 1990.
(Tyler has already discussed this one a bit...)
Capitalism and freedom?
Economic Systems, March 2010, Pages 91-104
Abstract: This essay tests Milton Friedman's conjecture that capitalism is a necessary condition for political freedom. For the decade around 2000 indices of the degree of capitalism and the degree of political freedom are highly correlated and provide plausibility for Friedman's conjecture. In looking at changes over time in the nineteenth century, however, the analysis refutes Friedman's conjecture. These apparently contradictory results are reconciled by showing that both capitalism and freedom are related to such variables as the educational level of the population so that, although not causally tied, they are correlated in a cross-national comparison.
Is H.A. Simon a theoretician of decentralized planning? A comparison with
F.A. Hayek on planning, market, and organizations
Constitutional Political Economy, June 2010, Pages 145-170
Abstract: Herbert A. Simon acknowledged Friedrich A. Hayek as a founder of the notion of bounded rationality; yet Simon considered Hayek’s perspective incomplete, and, more in general, their views on market mechanisms, planning, and organization exhibit considerable differences. The comparison between these authors sheds light on Simon’s interpretation of planning, which emerges within his theory of organization (and not in traditional debates on socialism). Contrary to Hayek, he maintained that planning, in specific circumstances, is more advantageous than the market; and in both administration and organization, it involves a decentralized structure based on near independent sub-units. Decentralization of decisions also appears in social planning, which evolves through continuous interactions among
planners (i.e., agents and institutions), and it is a process connoted by the absence of “fixed goals”. Finally, Simon defined modern economies more in terms of “organizational economies” than in those of “market economies” and this highlights a further difference with respect to the Austrian economist. This leads to analysis of the nature of organizations as hierarchical and “near-decomposable” structures, which refers to Simon’s theory of complexity and gives an epistemological explanation to the relation between centralization and decentralization.
Saturday, June 05, 2010
C'mon Jackie Chan
Friday, June 04, 2010
here be monsters
It is really freakin' hot here in Angusland. Dry too. Luckily for us, our local newpaper has decided to publish water conservation tips.
"When you give your pet fresh water, don't throw the old water down the drain. Use it to water your trees or shrubs."
With Cochlear Implants, Little Jonathan hears his mama
Who's on first?
The "heard on the street" section of today's WSJ reports that Greek tourism workers had scheduled a press conference to announce a strike, but realized at the last minute that the Greek journalists were already on strike and thus unlikely to attend the conference, prompting its postponement until such time that the journalists might be available.
These aren't the droids you're looking for...
Thursday, June 03, 2010
Bill Lumaye Show
Did Bill Lumaye show, 4-5 pm on Thursdays as always.
Talked about LLRW decision (which I used to work on, with Dennis Coates...especially these papers from long ago...
Coates, D., and M. Munger, Strategizing in Small Group Decision Making: Host State Identification in the Southeast Compact, Public Choice, vol. 82 (1995), pp. 1-16.
Coates, D., V. Heid, and M. Munger, Not Equitable, Not Efficient: U.S. Policy on Low-Level Radioactive Waste Disposal, Journal of Policy Analysis and Management, vol. 13 (1994), pp. 526-541.
Interesting that the Sup Ct finally decided that the NC could keep the $80 million they stole.
But then we talked about....of course, Armond Galaraga. Callers leaned toward "leave it be," and Dutch Boy wrote an email to the same effect. Dutch Boy said:
For the record: keep the bad call from last night, painful as it is. I hate even the instant replay on the homers.
I don't know. I agree about the bad call being uncorrectable. But the home runs thing is easy to fix, and doesn't take long.
Wednesday, June 02, 2010
My man, Joe Ramiro Garcia has taken things up a notch with his latest exhibition. He is going all Edward Hopper on me! Mrs. A and I have 4 of his earlier paintings. This is perhaps my favorite of those four:
Tuesday, June 01, 2010
Duke 2, Indiana 0
NCAA title games....
State of Indiana 0
I'm just sayin'.
Lean on your Staff
A little piece on working with staff, in the CHE.
I was NOT good at this, at the beginning. And I'm still not, let's be honest. It's hard to do well.
This cartoon is all too accurate, I'm afraid...
But I wrote down the things I now know would make me, or anyone, a little better at figuring out how to work with a staff in an academic department.
Not the Onion: MILFs get pounded
When enough is enough
I am not a big fan of the "must get 50% of the vote to avoid a runoff" electoral system in Presidential Democracies.
Consider the current case of Colombia:
Santos got 46.5% and his nearest challenger, Mockus, got around 21.5%.
Where I come from, people, that's an ass-whoopin'.
There's no need for the time and expense of another round of voting.
Couldn't you make the runoff conditional?
Like if one candidate gets 40% or more and more than twice as many votes as the second place finisher, then no second round will be held?
Shouldn't Mockus just back down now and accept that, in the words of Mo Udall, "the voters have spoken, those bastards!"
Whats wrong with just letting the highest vote getter win, regardless of their absolute percentage, like the USA and Mexico?
Lib Nat Conv: Back Now
Whoa. The LP National Convention was pretty darned tiring. Didn't help that we had to drive Raleigh to St Louis to Raleigh. That's 1,700 miles for the round trip.
But we got to see some great stuff. I enjoyed giving the main banquet speech (Neil Boortz out, Munger in! Strange...), and Dr. Mary Ruwart did a terrific job raising big $$ for ballot access.
We elected a new LNC.
And, of course, Starchild was in the house. This outfit, I thought was a tour de force. (Picture from Mike S., who is the one wearing the blue sirt, and no top hat).
I feel I have to explain about Starchild. He is beloved, and rightly so. Sure, the way he dresses is a bit over top / under the bottom / whatever you want to say. But he is amazingly charismatic, gentle, and serious. His message is of real brother / sisterhood, and that you have to look past the outside, whether it's skin color or feather boas (or, as in the picture above, a big black bow tied like a present over a black silk thong) to see the real person. If that is not the core of libertarianism I don't know what is. Starchild is the best, seriously. (And the ladies in our delegation were pretty vocal in their admiration of Starchild's hard work at the gym, and were glad that he was willing to share it publicly. Some things are complex, and some are simple. Starchild is mostly pretty simple, in the best possible way...)
Labels: Libertarian Party
Elderly prof ISO a sexy E-reader
People, I need help. usually when I travel I pack a boatload of books that brutally weigh me down. For example, on our trip to Brazil last summer, Mrs. Angus and I brought 12 books.
So I guess that makes me a candidate for an e-reader.
But, the marketplace is pretty confusing to me. Kindle? Kindle DX? iPad? Kindle for iPad? Nook?
Can you guys break it down for me and help me out?
Are there extra costs beyond the machine and the book downloads, like data transfer costs / contracts? How much worse is the iPad screen for reading than the Kindle's? What is battery life like? How rugged are these products?
Monday, May 31, 2010
Half a loaf
Been listening to the debut album by Surfer Blood called "Astro Coast".
Sunday, May 30, 2010
Catch me at the border, I got visas in my name
Extensive profile of M.I.A. in the NY Times Sunday Magazine. This one is a bit better than the ridiculous puff piece on the National a couple weeks ago. Word is that Maya A. didn't like this piece one little bit.
What the Hex?
A diet that works: Stop eating and run 15 miles a day
I was going to make fun of Fitty Cent.
But what he did was actually really cool, and impressive. Psychotic, but for a fat man like me, who is always "trying" to lose weight...generally by eating bagels and imagining that I am excercising....well, major props to Fitty.
Saturday, May 29, 2010
Libertarian National Convention
Neanderbill and I joined the NC state delegation to the Libertarian National Convention.
Here is a brief video of our arrival at the bar last night, greeting our fellow Libertarian Party members.
[Ponda Baba gives Neanderbill a rough shove and starts yelling at NB in an alien language which NB doesn't understand]
Dr. Evazan: [explaining] He doesn't like you.
Dr. Evazan: [grabbing NB] *I* don't like you either. You just watch yourself. We're wanted men. I have petitioned for ballot access in twelve states.
NB: I'll be careful.
Dr. Evazan: You'll be de-credentialed!
Obi-Wan: [intervening] This gigantic one's not worth the effort. Now, let me get you something.
[Dr. Evazan shoves NB across the room and pulls out a quorum call]
Bartender: No quorum calls! No quorum calls!
[Obi-Wan pulls out his microphone, severing Ponda Baba's eardrum with a point of parliamentary inquiry]
Okay, no, seriously, here are some pix. Here is the view from the floor of the big screens up front. And here is David Nolan (yes, the chart guy, and founder of the LP) making a point. Oh, and don't forget StarChild. StarChild is the best.
Labels: Libertarian Party
Obituary for Neo-Conservativism
Wow! News and Observer comes through...
Inappropriate Anger Pays Dividends
If inappropriate anger explains success, that may be a big part of why Angus and I rule the world.
Cultural Variance in the Interpersonal Effects of Anger in Negotiations
Hajo Adam, Aiwa Shirako & William Maddux
Psychological Science, forthcoming
Abstract: The current research is the first investigation of how the effects of expressing discrete emotions in negotiations vary across cultures. In a hypothetical negotiation scenario (Study 1) and a computer-mediated negotiation simulation (Study 2), expressing anger (relative to not expressing anger) elicited larger concessions from European American negotiators, but smaller concessions from Asian and Asian American negotiators. A third study provided evidence that this effect is due to different cultural norms about the appropriateness of anger expressions in negotiations: When we explicitly manipulated anger expressions to be appropriate, Asian and Asian American negotiators made larger concessions to the angry opponent, and their concessions were as large as was typical for European American negotiators; when we explicitly manipulated anger expressions to be inappropriate, European American negotiators made smaller concessions to the angry opponent, and their concessions were as small as was typical for Asian and Asian American negotiators. Implications for current understanding of culture, emotions, and negotiations are discussed.
(nod to Kevin L)
Labels: articles to read
Friday, May 28, 2010
The Causal Impact of Media in Financial Markets
Joseph Engelberg & Christopher Parsons
University of North Carolina Working Paper, October 2009
It is challenging to disentangle the causal impact of media reporting from the impact of the information being reported. We solve this problem by comparing the behaviors of investors with access to different media coverage of the same information event. First, we use zip codes to identify 19 mutually exclusive trading regions, corresponding to 19 large U.S. cities and local newspapers (e.g., the Houston Chronicle). For all earnings announcements of S&P 500 Index firms, we find that local media coverage strongly predicts local trading, after controlling for characteristics of the earnings surprise, firm, local investors, and reporting newspaper(s). Reverse causation does not explain our findings. The local coverage-local trading effect: 1) holds for firms unlikely to be of local interest (e.g., remotely located, sparsely held by local investors) and 2) disappears entirely during extreme weather events, which leaves media content unchanged, but disrupts transmission to investors. The evidence supports the idea that media -- apart from the information they transmit -- affect investor behavior.
This is a little surprising to me. Though people watch shows about investing, so they must USE that stuff, even though it has no (and can't possibly have) any useful information.
(nod to Kevin L)
Darwin and the current account?
Sexual competition is a wonderful thing. Just ask any bird of paradise you happen to meet.
"Large savings and current account surpluses by China and other countries are said to be a contributor to the global current account imbalances and possibly to the recent global financial crisis. This paper proposes a theory of excess savings based on a major, albeit insufficiently recognized by macroeconomists, transformation in many of these societies, namely, a steady increase in the surplus of men relative to women. We construct an OLG model with two sexes and a desire to marry. We show conditions under which an intensified competition in the marriage market can induce men to raise their savings rate, and produce a rise in the aggregate savings and current account surplus. This effect is economically significant if the biological desire to have a partner of the opposite sex is strong. A calibration of the model suggests that this factor could generate economically significant current account responses, or more than 1/2 of the actual current account imbalances observed in the data"
So there you have it people, rampant heterosexuality helped cause the crisis.
Thursday, May 27, 2010
How not to be a professional athlete
Here is a great "your doin' it wrong" from alleged American tennis pro Sam Querry:
Q. So do you feel like going in you're not in the frame of mind, or does it happen right in the middle of the fight?
SAM QUERREY: I think it happens in the middle. I think if you ask my coach, David, he might say otherwise. When I lost that second set tiebreaker and got broken in the first game, I was done. I wanted to be off the court.
I started thinking about leaving and pulling out of the doubles and how much I wanted to go home, how much I wasn't enjoying.
You're never gonna win a match if you're just being negative. I'm only hurting myself.
Q. Isn't that the definition of a professional, that you don't despair so fully as the match progresses, that you somehow control your feelings?
You know, I just need to be better than today, in this case, it was Robby. It's someone different every week. But I don't want to be fighting myself out there and also fighting the opponent.
Q. Yet, Sam, you've had some good results on clay. You won Belgrade, won Houston. Are you fighting sort of a Jeckyll/Hyde part of yourself here?
That's where I just have not been playing well. You know, I just need to mentally get it together in my head. I need to enjoy myself out there. I need to enjoy playing. You know, if a guy has a breakpoint against me, I should know, Hey, I've got one of the biggest serves out there. Let's see you win this point off me.
But like I said, I just tank some points.
Machine Trading Good?
At a minimum, not bad.
The problem is that many people think stuff they don't understand must be bad. Of course, they still watch their plasma tv. Somehow, not understanding THAT must be okay.
Does Algorithmic Trading Improve Liquidity?
Terrence Hendershott, Charles Jones & Albert Menkveld
Journal of Finance, forthcoming
Abstract: Algorithmic trading has sharply increased over the past decade. Does it improve market quality, and should it be encouraged? We provide the first analysis of this question. The NYSE automated quote dissemination in 2003, and we use this change in market structure that increases algorithmic trading as an exogenous instrument to measure the causal effect of algorithmic trading on liquidity. For large stocks in particular, algorithmic trading narrows spreads, reduces adverse selection, and reduces trade-related price discovery. The findings indicate that algorithmic trading improves liquidity and enhances the informativeness of quotes.
(Nod to Kevin L)
Wednesday, May 26, 2010
When did Diego Maradona join Van Halen?
Is he the new new lead singer or something?
I was carried to Ohio in a swarm of bees
Whenever a favorite band of mine makes a move to a more "upscale" record label, I get scared.
Don't Say "Bless You!" in Chapel Hill
Tuesday, May 25, 2010
You have to enforce the law
Idiot Conservatives on Parade
The last two weeks has brought an avalanche, a deluge, a... well, a lot, of embarrassment for conservatives in terms of public relations. IF they were capable of embarrassment, or self-reflection, or introspection.
One bozo stole large sections of BHO's 2004 convention speech.
Another "family values" candidate, who values families so much that he has TWO of them, was selected by the GOP to run for the House.
The biggest idiot of all, IMHO, a pretty extreme family values guy, who actually hired his long-time mistress to (I'm not making this up) help film a video about the importance of family values. Don't want her to feel left out, right?
Earlier in the month, this fool was caught with a "RentBoy." Now, it's certainly all right with me if somebody wants to pay for sex. And it's true that the RentBoy looks quite hot. But you can't persecute gays with a Torquemada-like fervor, and THEN get caught with "Lucien". As Jon Stewart pointed out, RentBoy didn't even help with the luggage! It's hard to shock the Miami papers, but...
Jon Stewart does some fine television. Rekers story just after 7:30...
Anyway, the most important "family value" ought to be to respect other peoples' choices about their family, and to stop trying to RUN EVERYONE ELSE'S LIVES.
You right wing family values people: shut up, if you can't even keep your OWN families according to your own (admittedly puritanical) standards.
(Nod to Anonyman, who amazingly sent me every one of the above stories)
UPDATE: Another snippet (again from Anonyman) on the GOP right here in NC. The GOP is actually trying to repudiate this candidate, even if it means they lose the seat. Here is the guy's web site....Here's a picture, from Salon. It may have been photoshopped, but I think he may be looking at us... or not.
I'm Feeling Moody
Nice. Very nice. From Blue Matter:
Markets play a simple yet crucial role: they price (or 'rate') assets, so as to ensure societal resources are allocated efficiently.
Markets do this better than any other institution yet devised because people need to put their money where their mouth is; it is not enough to say 'I think Greece will default' - if you are going to have an influence on the price, you have to be willing to take the risk of losing money if your opinion turns out to be wrong, and you would only do that if you have confidence in your information and analysis. That way, the price of different assets, including sovereign debt, is determined by the people with the best information (or, as is the case when it comes to extremely deep and liquid markets such as sovereign debt, the best ability to process the information that is freely available to all).
So, it is a serious perversion of this basic principle when the credit ratings agencies spend 60,000 dollars a year (that's the annual wage of a junior analyst) on analyzing Greek debt while investing exactly $0 on it, yet the effect they have on the price of that debt is equivalent to their controlling billions in funds. What the hell does it mean to 'rate debt'? Isn't this what the market is supposed to be doing by setting the price?
I think there IS an answer to the question: the "skin" a ratings agency has in the game is its repuation. Underwriters' Laboratories, or Consumer Reports, can only survive if their ratings carry information. Information is a complex good, but if one person has information it is hard to sell without revealing the information. Imagine:
A: Is your advice on which blender to buy good?
B: Yes, I have excellent private information about blenders. I have tested hundreds of them.
A: Okay, prove it, before I buy.
B: All right, buy XXX and YYY, because of [reveals private information about blenders]
A: That's stupid! I'm not paying! [OR} Great info, thanks! I'm not paying!
Either way, not paying for a straight up transfer of information. So you get specialized firms, which can (a) charge subscriptions and (b) develop a reputation as a depreciable capital asset, a hostage against lying.
This only works because information about a blender, a car, or a movie, is not really very valuable. So a ratings agency can make sense by obtaining the information and selling it for a small price, like a subscription to CONSUMER REPORTS magazine, where they could never sell it piece rate.
But information on a bond? Or on the likelihood of default on Greek sovereign debt? Why would we think that a rating agency would tell us more than the price of the asset, in elite level financial markets? Good one, datacharmer!
Labels: financial puzzles
Crime Rates Fall
Violent crime fell significantly last year in cities across the U.S., according to preliminary federal statistics, challenging the widely held belief that recessions drive up crime rates. The incidence of violent crimes such as murder, rape and aggravated assault was down 5.5% from 2008, and 6.9% in big cities. It fell 2.4% in long-troubled Detroit and plunged 16.6% in Phoenix, despite a perception of rising crime that has fueled an immigration backlash. The early figures, from the Federal Bureau of Investigation, indicate a third straight year of decreases, along with a sharply accelerating rate of decline. WSJ, Evan Perez.
bu...bu...but that can't be right? We all KNOW that crime rates are rising sharply, because of all those dirty immigrants.
Right? Wait, "Evan PEREZ." He's one of them eel-eagle immy-grants, right? So the story is made up.
Whoops. Guess not. Even an Anglo like "Charlie Savage" is writing this story, for the Times.
Darn it. That whole "immigrants are dirty criminals" was such a good story, too. Until the inconvenient facts got in the way.
Some facts: Markets like predictability, Politicians like chaos
Interesting and useful article, on world investment climate.
1. Markets like predictability. What tax system is best? Whatever one we have, if we keep it and are sure it won't change. What exchange rate is best? The current one, whatever it is. And so on.
2. Politicians crave chaos. What tax system is best? The one I am "reforming" to achieve. What exchange rate is best? I can't tell you, because central bank data are secret, but you'll see. What new policies will help the economy, save the poor, and improve health care? Just TRY to guess what I'm thinking now! Uncertainty is the preferred habitat of politicians and speculators. The politicians are the predators, and the speculators are carrion birds and hyenas that follow the predators around. Amazingly, after investment is destroyed, the politicians actually have the eggs to blame the speculators. Impressive, that the lion would blame the hyena, just because the hyena happens to be seen chewing on the deer the lion killed.
In a stable system, politicians are almost irrelevant. No one is afraid, things are getting better, and there is lots of investment. In an unstable system, we all hang on every word from our "leaders."
The Great Depression was caused by bad monetary policy, and an over activist response by Hoover. (Yep, I said Hoover. Look it up. He pressured the Fed to cut money supply, and worked behind the scenes to raise prices and force financial enterprises to "capitalize" losses. The "do nothing" description is a myth.)
Then Roosevelt, a political genius, realized that the chaos Hoover had created could be used to the advantage of the Democrats and their crony capitalist allies. So Roosevelt consciously choose taxes, pricing regulations, and make-work projects that would create a continuing crisis. (Read Amity Shlaes' fantastic book, THE FORGOTTEN MAN, for a detailed historical account).
The only reason we got out of the Great Depression was that anticipation of WWII made Roosevelt realize that chaos was bad for production and investment. And in a war, everybody listens to politicians anyway, so he was able to end the artificial domestic crisis in favor of a real international crisis. Roosevelt clearly called off the dogs in 1939 and 1940, as you can see from memos telling investors and manufacturers in plain language that they were now free to invest and make things without fear of government attacks.
Like Roosevelt, President Obama is a man of excellent political instincts and zero understanding of markets and the causes of prosperity. We are entering another stage of artificial continuing crisis, and it could last for years. Higher business taxes, a transactions tax, new regulations of finance, new federal ownership of manufacturing in automobiles, steel, and other industries. Anything to make investment returns less predictable, and preserve the power of the government.
You can pay me now, AND you can pay me later
States borrowing off the books? It appears so.
Most states have to run a balanced budget, by state constitution or by statute. But these "emergency" loans from Uncle Barack never have to appear on the state budget. Here is the list of states and borrowings:
Alabama $ 283 million
Arkansas 330 million
California 6.9 billion
Colorado 253 million
Connecticut 498 million
Delaware 12 million
Florida 1.6 billion
Georgia 416 million
Idaho 202 million
Illinois 2.2 billion
Indiana 1.7 billion
Kansas 88 million
Kentucky 795 million
Maryland 133 million
Mass. 387 million
Michigan 3.9 billion
Minnesota 477 million
Missouri 722 million
Nevada 397 million
New Jersey 1.7 billion
New York 3.2 billion
N.C. 2.1 billion
Ohio 2.3 billion
Penn. 3.0 billion
R.I. 225 million
S.C. 886 million
S.D. 24 million
Tennessee 21 million
Texas 1.0 billion
Vermont 33 million
Virginia 346 million
Virgin Islands 13 million
Wisconsin 1.4 billion
Total $37.8 billion
For North Carolina, that's about $210 per person in borrowing. Not very much, perhaps. But that's an additional $400 per person who is actually working and paying federal income taxes. And this is DEBT, not new taxes. How in the world can anyone think that borrowing on the credit of the US, and giving the money to the states, is a good idea? You hear this a lot: "Our state taxpayers can't afford this, so we are going to seek Federal money." IT'S ALL THE SAME MONEY. If you take money from my federal taxes, and give it back to me as a state benefit, there is no net benefit, and nothing of value is created.
But if you BORROW on Federal credit, and give the money to the states, it appears to be free money. Politicians can claim credit for it, and it won't have to be repaid until later. This is exactly the strategy that has worked so well in Greece, for example.
To be fair, this new off-the-books state borrowing appears to be something else: In the long run, this debt will take money from some people, in some states, who are dumb enough still to have jobs. And give that money to other people, in other states, who have figured out that it's cheaper to get free money than to try to earn a living by having a job.
(nod to Doug C, and the Economic Policy Journal)
Get a Job!
Get a job and keep it! High school employment and adult wealth accumulation
Matthew Painter, Research in Social Stratification and Mobility, June 2010, Pages 233-249
Abstract: Wealth inequality receives substantial scholarly attention, but mounting evidence suggests that childhood and adolescent traits and experiences contribute to financial disparities in the United States. This study examines the relationship between adolescent labor force participation and adult wealth accumulation. I argue that employed high school students gain practical life skills, abilities, and knowledge from work experience and business exposure that shape investment decisions and affect overall net worth. I use the National Longitudinal Survey of Youth, 1979 cohort, to empirically explore this idea. This study extends the wealth literature by
identifying adolescent employment as an important mechanism that improves adult net worth and financial well-being.
Plausible, but it may confuse cause and effect. If you get a job in high school, you are likely a bit more ambitious. Those jobs are NOT fun (not even if you are "Welder / Union Steward Angus"), and anyone who sticks it out is pretty tough, and willing to work hard.
Still, it is likely to staying with a job teaches you to be more hard-working, also.
(Nod to Kevin L)
Monday, May 24, 2010
Barter and Exchange Leads to Trucks
P-Krug Gets Schooled
Tyler comes up really, really big here.
I particularly like point #3, both parts A and B. To paraphrase:
A. Offshore drilling WAS regulated. Why isn't the failure an indictment of regulation?
B. The standard public choice critique is certainly not that markets are perfect. It is that government agencies are subject to problems of information acquisition, capture by industry, and desire for increased revenue. I have almost never heard a libertarian say that markets perform perfectly. The core of the free market position is that government agencies can be counted on to perform less well than P-Krug imagines.
In short, you can't criticize the model of perfect competition unless you are also willing to abandon the model of perfect government.
As usual, and as has been argued here before, LvM said it best:
Scarcely anyone interests himself in social problems without being led to do so by the desire to see reforms enacted. In almost all cases, before anyone begins to study the science, he has already decided on definite reforms that he wants to put through. Only a few have the strength to accept the knowledge that these reforms are impracticable and to draw all the inferences from it. Most men endure the sacrifice of the intellect more easily than the sacrifice of their daydreams. They cannot bear that their utopias should run aground on the unalterable necessities of human existence. What they yearn for is another reality different from the one given in this world...They wish to be free of a universe of whose order they do not approve.
(Ludwig von Mises, Epistemological Problems of Economics)
P-Krug is a smart guy. But he has been whoring his intellect in service of his daydreams for a decade now.
UPDATE: I have to add this, from a comment by David--
Krugman's first foray into this was to argue that the oil spill was proof that liability didn't work. In other words, we have a disaster in a heavily-regulated industry with liability caps, and we conclude from that that liability doesn't work.
UPDATE: Related post.... Nicely done, sir. Thanks for the tip in comments.
Underwear, and Rowing
Went to the regatta in Tampa, for the YYM's rowing team.
I should note that the Mungowi have a custom. When we travel, the LMM brings three large suitcases, but forgets something, something important. Famously, when we were travelling to Fundman's wedding, with Neanderbill she forgot (wait for it) HER DRESS. So we were flopping about like fish, searching malls. That story has been told, before.
This time? Underwear. She didn't bring any underwear. (I'm playing this straight, not going to any of the obvious places I might go.)
(And I should note that the lovely Ms. Angus likewise once arrived in NC without undies (except the ones she was WEARING, I hasten to add.) So the Angii and I went to a Kohl's or something, and there in the ladies underwear aisle, a place I had not been before, we saw a very heavily veiled and robed Muslim woman, completely covered, shopping. She was shopping for some amazingly racy thongs and lacy little nothings. Holding up those little g-string looking undies to the light, while she was totally hooded in heavy black cloth. Strange. Anyway, Ms. Angus got some sensible American made-in-Mexico underwear, and we were off.)
So I had to find a Tar-shay, or something like that, and buy the LMM some undergarments. I did find a Target, and this time in the ladies undies aisle there were two elderly women, Brits from their accents, arguing fiercely about whether the double panels in the enormous granny style, come-up-to-your-neck, panties would "control spotting." EEEEWWWWWW! They were loud, and pulling back and forth and holding up the crotch panels to the light. (This, ladies, is why men don't like to buy that sort of stuff. One elderly Brit-women-arguing-about-spotting wipes out at least five Muslim-woman-holding-up-thongs experiences.)
Anyway, all is well, and the LMM no longer has to travel commando. (Or "true Scotsman"). But as soon as we get to the regatta site, we see ....this! Nice!
The regatta site is huge, and crowded. It looked like this, for more than a mile, solid.
Hard to see the actual races, out on the lake. But the YYM rows in a 4-boat, like this one:
Back at the airport, spirits were high. The YYM was dressed all in black, with sunglasses. He's in the middle.
One of our boats, the lightweight 2 men, made it to Nationals, by coming in 2nd in the finals and winning a silver medal. (Our team is Triangle Rowing Club, btw). Yay! Very exciting.
Sunday, May 23, 2010
YYM at the beach....
If you haven't seen the YYM for a while, that's him on the right.
NC Beaches.... nice.
Labels: people and places
Turn out the lights, the party's over
In my younger days, I tried to publish a paper entitled "How Dead is the Solow Model?"
Saturday, May 22, 2010
Tell us how you really feel
Jazz guitarist Pat Metheny really doesn't like Kenny G and really really likes the late Louis Armstrong. So when Kenny overdubbed his music on top of Pops, Pat went mental:
The whole essay is well worth reading (find it here).
Hey Mungo, I like Pat's style. Can we get him to guest blog some this summer?
Amazing, But Not Surprising
2008 Election Analysis
Insiders, Outsiders, and Voters in the 2008 U.S. Presidential Election
Melvin Hinich, Daron Shaw & Taofang Huang
Presidential Studies Quarterly, June 2010, Pages 264-285
Abstract: In 2008, both Barack Obama and John McCain repeatedly talked about "reform" and "change" on the campaign trail, presumably believing that voters would respond to a president who could challenge the established way of doing business. The authors gauge the significance of "reform" politics in 2008 through two analyses. First, they estimate a two-dimensional issue space, paying particular attention to the possibility of a reform /establishment dimension. Second, they consider whether voters (1) preferred reform candidates, and (2) saw Obama or McCain as credible reform candidates. The data indicate the existence of a reform-establishment dimension. However, neither Obama nor McCain effectively convinced voters that they were reformers.
Did Bush Voters Cause Obama's Victory?
Arthur Lupia, PS: Political Science & Politics, April 2010, Pages 239-241
Abstract: In the 2008 election, Barack Obama's campaign brought many new voters to the polls. Were these new voters necessary for Obama's victory? In this study, I find that they were not. The basis of this finding is an examination of decisions made by people who voted for George W. Bush in 2004. I show that Bush voters' decisions not to vote or to support Obama were a sufficient condition for Obama's victory.
(Nod to Kevin L)
Labels: articles to read
Self-fulfilling prophecies or How to make it in America
"THIBODAUX, La. – A man who told police that God told him to walk the streets naked to save his soul has been arrested. Thibodaux police responded to an obscenity complaint around 2 a.m. Thursday and found Shafiq Mohamed walking nude down the street. When approached, Mohamed reportedly told officers that "America raped him" and added God told him to walk the streets naked to save his soul.
Mohamed was taken into custody and charged with obscenity. He was booked into the Lafourche Parish Detention Center where he awaited bail.
Friday, May 21, 2010
Nice post on Libertarian views of income distribution from my friend Will W, with some riffs from D. Friedman and R. Frank.
The Catholic Church in Latin America
Great essay by one of my favorites, Alma Guillermoprieto.
"A great achiever and close associate of John Paul II, Maciel was also a bigamist, pederast, dope fiend, and plagiarist."
Labels: a change is gonna come
Thank you Jebus!
People, Doug "master of the obvious" Collins is going to coach the 76ers. While that in and of itself is neither here nor there, it does however mean that HE WILL NO LONGER BE BROADCASTING GAMES ON TNT.
Thursday, May 20, 2010
Not From the Onion
GM Lies, Fiscal Sanity Dies
John P. has a nice post on GM, and George Will. GoodONya, John! The best part is the YouTube on the GM "loan repayment." But I don't want to steal; you have to go to JP's page to see it.
But when are you going to send me that clip with my ACTUAL LINE, so I can post it?
"Where to, Lord Keynes?" You keep promising, you big tease, and then NOTH! ING!
I now believe in re-incarnation....
Wednesday, May 19, 2010
Just when you think it's safe to come out of the closet
Just another band from San Jose
Photos of Five Worst Airline Meals
If only I lived in Bridgeport Nebraska....
....then my non-voting might matter!
BRIDGEPORT, Neb. – A deck of cards and a bit of luck helped decide who will likely be the next sheriff of Morrill County.
The nine of hearts Milo Cardenas drew Monday beat Travis Petersen's six of spades, giving Cardenas the Republican nomination for sheriff. Since no Democrats ran for sheriff, Cardenas, the police chief in Bridgeport, is likely to win in November's election.
"I knew it was going to be close, but I didn't expect to be this close," Cardenas said.
The two men agreed to cut a deck of cards after Monday's re-count confirmed that both finished at the top of a four-man race with 379 votes after balloting ended last Tuesday. State law requires tied elections to be settled by a game of chance.
Two points about the Morrill County Clerk, people.
(1) "unfortunately, Nebraska law is very clear"?? WTF? given that people wanted to "do a lot of things", I think it's very fortunate that the law was clear.
(2) Ms. Brandt also seems to have a very low bar for defining "making a difference"! Were these two Republican candidates for Morrill County Sheriff really so different from each other?
Tuesday, May 18, 2010
New Colombian Presidente Mockus, Mock You, Too
An interesting guy. Excerpt:
Perhaps Mockus is best known for his stunts. Attempting to crackdown on traffic law violations, he hired an army of mimes to stand on street corners and publicly humiliate bad drivers. It worked brilliantly. He also created his super hero alter-ego, "Super Citizen" (complete with spandex and cape), to talk to citizens about civic responsibility. This definitely drew more listeners than a mayoral speech. And then there was his most infamous move of all: In an attempt to get the attention of a tuned-out college age audience, he pulled down his trousers and mooned them. Needles to say -- the ploy worked.
Needles, indeed. Some questions:
1. What's with all the mooning, all of a sudden? Sheesh.
2. When I hear "broken window," I think of Bastiat. But most people apparently think of Giuliani. Which is the dominant metaphor?
England Lets 3rd Party Debate; Why Don't We?
The LMM and I disagree about something.
She loves hummingbirds. We have several little hummingbird drinking stations set up, hanging from metal hooks.
There is this one squirrel who has mastered the technology of hanging onto the feeder, tipping it, and then furiously drinking the contents, emptying the container onto himself, his mouth, and the ground, in about two minutes.
The LMM keeps letting the dogs out, and going out herself, to "scare off" the squirrel. But the squirrel comes right back, of course.
My solution: Squirrel dies of a gunshot wound.
Look: (1) There is only one (now fat) squirrel who is doing this. The others try, but the thing tips if they try to drink from the top. No other squirrel has mastered the "hang, tip, and quaff" technique.
(2) we have a .22 with a scope. I can fire those little tiny 20 grain "Colibri"** shells, which have a range of about 100 meters. (The standard .22 LR shell is 40 grains, and these Colibri actually have NO powder, other than the primer)
(3) I can fire downward, with grass as the background, so there is no danger of ricochet, not that these little bullets would go anywhere.
Yes, one should be very careful firing Colibris from a long gun. Not enough power to eject the casing, and in fact the bullet may not leave the barrel, so you really, really have to check after every shot. But they are quite accurate. And at a range of 10 meters, they will kill a squirrel.
All right readers: Who is right?
**Plus, "Colibri" means "Hummingbird" in French (also Spanish, and, oddly, Rumanian). How perfect is that? The fat squirrel gets taken out by a little lead hummingbird!
The Grand Game! Physician Salary Edition
Can we play The Grand Game? Can we? This is just a short version, because all we have is the abstract of the paper. (Yes, you are welcome to use a library subscription to get the actual paper. I am sure there are other delights there, also).
But for now....what is the most amazingly nonsensical claim? That's the Grand Game, folks....
Can We Close The Income And Wealth Gap Between Specialists And Primary Care Physicians?
Bryan Vaughn, Steven DeVrieze, Shelby Reed & Kevin Schulman
Health Affairs, May 2010, Pages 933-940
Abstract: Over their lifetimes, primary care physicians earn lower incomes-and accumulate considerably less wealth-than their specialist counterparts. This gap influences medical students, who are choosing careers in primary care in declining numbers. We estimated career wealth accumulation across specialists, primary care physicians, physician assistants, business school graduates, and college graduates. We then compared specialists, represented by cardiologists, to primary care physicians in four scenarios. The wealth gap is substantial; narrowing it would require substantial reductions in specialists' practice income or increases in primary care physicians' practice income, or both, of more than $100,000 a year. Current proposals for increasing primary care physician supply would do little to lessen these differences.
I'll go first!
1. Why would you WANT to have equal salaries across primary care and all specialties? Why in the world would that be any kind of important policy goal, given all the other problems we have in health care?
2. Given that one might one might have such a goal (I don't, but...), why in the name of Hippocrates would you consider reducing the income of specialists? Yes, you might encourage competition, for its many benefits, one of which might be a reduction in monopoly rents for specialists. But just going in and messing with prices, as a stand-alone goal... amazing.
(Nod to Kevin L, for the article)
Munger Sign on Private Property!
An email I received this morning:
I have an unauthorized sign advertising Mr Munger posted on private property. It is a vacant parcel #500-04-371 in Yavapai County. I appreciate the immediate removal of the sign and an explanation why it was placed without permission.
My response, in the form of a letter--
Dear PERSON: I'm pretty sure you are writing from Arizona. At least, there is a Yavapai County in AZ, but there is not one in North Carolina.
Yet you have contacted the MIKE Munger for Governor campaign, in North Carolina.
May I propose that you contact instead the JOHN Munger for Governor campaign, in Arizona.
I thought about saying that I would appreciate an explanation on why would you would send unsolicited spam to a professor in North Carolina, but people make mistakes. That may be the reason that there is a sign on your property, also.
In any case, it's not my sign.
Monday, May 17, 2010
Rally Driver Crashes After Being Mooned
A Bizarre Paper, But With An Important Point
Private-Payer Profits Can Induce Negative Medicare Margins
Jeffrey Stensland, Zachary Gaumer & Mark Miller
Health Affairs, May 2010, Pages 1045-1051
Abstract: A common assumption is that hospitals have little control over their costs and must charge high rates to private health insurers when Medicare rates are lower than hospital costs. We present evidence that contradicts that common assumption. Hospitals with strong market power and higher private-payer and other revenues appear to have less pressure to constrain their costs. Thus, these hospitals have higher costs per unit of service, which can lead to losses on Medicare patients. Hospitals under more financial pressure-with less market share and less ability to charge higher private rates-often constrain costs and can generate profits on Medicare patients.
Good lord. The problem is not "profits," but rather that costs are increasing without bound. The point is that in the absence of any kind of competition, the very idea of "cost" is poorly defined. Every step along the line can charge higher prices, because the costs are passed on. You can call that profit if you want, but it's really just a transfer based on the monopoly protections afforded to health care by government restrictions on advertising, and the creation of insuperable entry barriers.
Two things you should read, if you think the article above makes sense (hint: it doesn't)
1. My little piece on insurance, at REASON
2. Nick G's cool piece on eye surgery, at ReasonTV
Cost can come down in a hurry, with competition. But the Obamacare program will, if anything, make the problem worse by focusing on insurance and bureaucratic price-fixing. In any case, blaming "profits" is the sort of idiocy you learn in public health schools, where as far as I can tell they would save time if they could just lobotomizing students. A lobotomy and an MPH are only distinguished by the size of the scar they leave; the effects are identical.
(Nod to KL for the article)
Funny sentences about the Euro Crisis
One is funny on purpose and one is funny - yikes!
"Beware of Greeks burning thrifts"
--Mary Anastasia O'Grady in today's WSJ.
“The situation was already starting to get worse on Thursday afternoon and throughout Friday of the week before last, a number of markets were no longer functioning correctly."
--Feckless ECB president J. C. Trichet as quoted by Tyler this morning.
Mary O's is astoundingly clever. I apparently have underrated her.
J.C.'s is funnier but scarier. He sees not lending to broke-ass governments = not functioning correctly.
They Probably Can't Jump, EIther
What is a "Sentence"?
I don't understand this. It may well make sense, but there are no details yet.
The Supreme Court ruled Monday the federal government has the power to indefinitely keep some sex offenders behind bars after they have served their sentences, if officials determine those inmates may prove "sexually dangerous" in the future.
"The federal government, as custodian of its prisoners, has the constitutional power to act in order to protect nearby (and other) communities from the danger such prisoners may pose," Justice Stephen Breyer wrote for the 7-2 majority
UPDATE: If this means that there is a normal hearing, going toward a criminal insanity commitment, then okay. But....if the guy is certifiably insane, how could it be that he could be tried, and sentenced in the first place? I still don't understand.
UPDATE II: Roger Pilon clarifies....
Monday Flashback: 2004 White Sox Game
Our regular Monday feature: one of my favorite posts from the distant past, on Monday. This week, the description of a visit to U.S. Cellular Field, home of those beloved Pale Hose.
The best part really was where the guy ran out on the field, and took his beer with him. When the fat security guys finally caught him, they just straight up beat the hell out of him; don't need no stinkin taser!
Labels: el beisbol
What's in a name?
The social science that studies the production, distribution, and consumption of goods and services.
The dismal science
The mechanics of utility and self interest.
A study of mankind in the ordinary business of life
Economics is a science which studies human behavior as a relationship between ends and scarce means which have alternative uses.
The study of how the forces of supply and demand allocate scarce resources
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
Chairity: Thursday at 7 a.m.
Thursday at 7 am: The "Countdown for Chairity" clock will go under 1,000 hours. Baby, oh baby, oh baby.
Labels: countdown of chairity
Sunday, May 16, 2010
This just in: the 22nd amendment does NOT apply to Haiti
Leave it to Slick Willie to find a loophole and get back in the saddle:
The majority of members on the CIRH are foreign. The criterion for becoming a foreign voting member is that the institution has contributed at least $100 million during two consecutive years, or has cancelled at least $200 million in debt. Others who have given less may share a seat. The Organization of American States and non-governmental organizations working in Haiti do not have a vote.
The CIRH is headed by U.N. Special Envoy Bill Clinton and Prime Minister Jean-Max Bellerive. The only accountability or oversight measure is veto power by Préval. Few expect him to employ his veto option, both because his record is not one of challenging the international aid apparatus, and because of possible repercussions, in terms of the dollar flow, by the CIRH."