The King is Dead. Long Live the Queen

I'm not chair any more in....

...wait for it....

less than two minutes....

NOW!

Good luck, Karen!

We are really lucky to have a person like Karen Remmer to take over as chair. Not only will she do way better than I did (a pretty low standard...), I think she is going to make a huge difference for Duke.

The Embarrassing 2nd Amendment.

Had a nice glass of wine last night, and re-read one of my favorite essays, by one of my most favoritest lefties....Sandy Levinson, of the UT-Austin Law School.

Here is the essay: The Embarrassing 2nd Amendment.

Sandy (whom I got to know down at UT-Austin when I was there) is honest. He does not like the 2nd Amendment. But he believes in the rule of law, and so feels obliged to point out two things.

First, the words in the 2nd Amendment have meaning. They appear to mean that there is an individual right to keep and bear arms. Subject to regulation, not an absolute right, all that's true. BUT. SOME. INDIVIDUAL. RIGHT.

Second, we can't pick and choose which amendments to enforce. If the Bill of Rights is important, if the Constitution cannot be violated, then we have to enforce all of it. If you don't like the 2nd Amendment, then amend the Constitution.

I enjoyed re-reading the piece, as I said, given the events of this week. I particularly liked these passages:

To put it mildly, the Second Amendment is not at the forefront of constitutional discussion, at least as registered in what the academy regards as the venues for such discussion — law reviews, casebooks, and other scholarly legal publications. As Professor Larue has recently written, "the second amendment is not taken seriously by most scholars."

...I cannot help but suspect that the best explanation for the absence of the Second Amendment from the legal consciousness of the elite bar, including that component found in the legal academy, is derived from a mixture of sheer opposition to the idea of private ownership of guns and the perhaps subconscious fear that altogether plausible, perhaps even "winning," interpretations of the Second Amendment would present real hurdles to those of us supporting prohibitory regulation. Thus the title of this essay — The Embarrassing Second Amendment — for I want to suggest that the Amendment may be profoundly embarrassing to many who both support such regulation and view themselves as committed to zealous adherence to the Bill of Rights (such as most members of the ACLU). Indeed, one sometimes discovers members of the NRA who are equally committed members of the ACLU, differing with the latter only on the issue of the Second Amendment but otherwise genuinely sharing the libertarian viewpoint of the ACLU.

Give Sandy credit: that is an honest portrayal of the problem. He at least realized that he should be embarrassed. And he was.

For two decades, I have been given at best a condescending hearing when I have claimed that the 2nd Amendment clearly confers at least a limited individual right to bear arms. And since these same super-silly-ass folks also claim to believe the Constitution says what the Supreme Court says it says....well, I love America.

Kelo Goes to NYC

Columbia Univ gets to steal a bunch of land, and doesn't have to pay retail for it. I know the New York motto is "NEVER pay retail", but....YIKES!

Ilya says what needs to be said, and links what needs to be linked.

Don't know how I missed this.

there ain't a horse that can't be rode

and people, here (thanks to KPC friend Shawn) is the perfect rider for yesterday's tiger-bike:

Don't forget to click the pic for an even better look at the gbike Mr. Leopard is riding!

11 hours and 45 minutes

Less than 12 hours now.

700 minutes.

42,000 seconds.

And then I will chair no more forever. It's been ten years. Bad for me. Worse for my department.

There is some 18 year old Scotch waiting to help me celebrate tonight at midnight. If I can stay up that long.

Terrorist Attack Averted, News Cur Criticized

Al-Qaeda Calls Off Attack On Nation's Capitol To Spare Life Of 'Twilight' Author

Mr. Putin! Tear down that wall

I'd Like to feed the children/Find a cure for disease

Rebuild the cities/and Plant a lot of trees

I'd like to help the sick/Build factories

Give money to students/hospitals and galleries

But, I'm afraid of the Russians/I can't sleep at night

So afraid of the Russians/Afraid we've got to fight

I'd like to go to space/Clean up rivers and lakes

Put everyone to work/ whatever it takes

But, I'm afraid of the Russians/I can't sleep at night

So afraid of the Russians/Afraid we've got to fight

They've got ships at sea/They've got missiles in the air

Tanks on the border of Europe/and spies everywhere/

--Made for TV

Rationality and Sex

Men are often accused of thinking with their winky, and behaving badly. Apparently women "think" with their.... well, other parts, also. The brain is overrated.

Reproduction expediting: Sexual motivations, fantasies, and the ticking biological clock

Judith Easton, Jaime Confer, Cari Goetz & David Buss
Personality and Individual Differences, forthcoming

Abstract: Beginning in their late twenties, women face the unique adaptive problem of declining fertility eventually terminating at menopause. We hypothesize women have evolved a reproduction expediting psychological adaptation designed to capitalize on their remaining fertility. The present study tested predictions based on this hypothesis—these women will experience increased sexual motivations and sexual behaviors compared to women not facing a similar fertility decline. Results from college and community samples (N = 827) indicated women with declining fertility think more about sex, have more frequent and intense sexual fantasies, are more willing to engage in sexual intercourse, and report actually engaging in sexual intercourse more frequently than women of other age groups. These findings suggest women’s “biological clock” may function to shift psychological motivations and actual behaviors to facilitate utilizing remaining fertility.

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

The effect of a woman's incidental tactile contact on men's later behavior

Nicolas Guéguen
Social Behavior and Personality, Winter 2010, Pages 257-266

Abstract: Previous research has indicated that a light tactile contact is associated with a positive response towards the person who is touching. The effect of touch on courtship was investigated in this experiment, which was conducted in a field setting. A female confederate either slightly touched or did not touch a man in a bar when asking him for some help. It was found that men who were touched showed more interest toward the female confederate than when no touch occurred. It was also found that touch was associated with stronger courtship intentions by men. The importance of women's nonverbal patterns in the courtship context and the trend of men to misinterpret women's intent are proposed to explain these results.

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

I only have eyes for you: Ovulation redirects attention (but not memory) to
attractive men

Uriah Anderson, Elaine Perea, Vaughn Becker, Joshua Ackerman, Jenessa
Shapiro, Steven Neuberg & Douglas Kenrick
Journal of Experimental Social Psychology, forthcoming

Abstract: A number of studies have found a disjunction between women’s attention to, and memory for, handsome men. Although women pay initial attention to handsome men, they do not remember those men later. The present study examines how ovulation might differentially affect these attentional and memory processes. We found that women near ovulation increased their visual attention to attractive men. However, this increased visual attention did not translate into better memory. Discussion focuses on possible explanations, in the context of an emerging body of findings on disjunctions between attention to, and memory for, other people.

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

Timing of Sexual Maturation and Women's Evaluation of Men

Stefan Belles, Wilfried Kunde & Roland Neumann
Personality and Social Psychology Bulletin, May 2010, Pages 703-714

Abstract: Many antecedents and consequences of an accelerated sexual maturation are associated with negative experiences with the opposite sex. Here we show a connection between menarcheal age, a salient sign of female sexual maturation, and the implicit attitude toward men in later adulthood. In Study 1, earlier age at first menstruation was associated with automatic negative evaluations of male faces but not female ones. Study 2 revealed a relationship between early age of menarche and an implicit association between the concepts male and danger. In Study 3, the earlier the menarche, the larger was the estimated egocentric distance of virtual male voices and the shorter the estimated distance of female voices. These results, obtained about a decade after onset of menstruation, suggest that apparently subtle differences in the onset of sexual maturation may have long-lasting implications for intersexual relationships.


(Nod to Kevin L)

Carnivores Tired of Getting Dissed

The "why else would people keep pigs?" line was the theme of one of my podcasts with Russ Roberts. Is it really better for ALL cows if NONE of them had ever lived? 'Cause nobody would keep them as pets.

(Nod to Angry Alex)

Supremes Decline Hearing for RNC v. FEC

The Supreme Court decides not to hear RNC v. FEC.

Leaving us in the bizarre situation that corporations have more political speech rights than parties. Regardless of how you view Cit Untd, that is strange.

G-bike gets pwnd!

I long for the days of Mungowitz in Germany, riding his inimitable, self decorated Gbike.

However, I think I've found a bike that tops it:


(click the pic for a larger and more glorious image)

Kartik Artheya

Kartik Artheya makes a reasonable point, perhaps.

"Economics is hard. Really hard. You just won't believe how vastly hugely mindboggingly hard it is. I mean you may think doing the Sunday Times crossword is difficult, but that's just peanuts to economics. And because it is so hard, people shouldn’t blithely go shooting their mouths off about it, and pretending like it’s so easy. In fact, we would all be better off if we just ignored these clowns.”

(Note: no link, because it was taken down. I heard about this from that cutie Will Wilkinson)
(UPDATE: Here is a link. Thanks, Angus!)

Though, to be fair to Angus and me, we rarely say what government or anyone else SHOULD do. Neither of us believes we really know that, and we are most skeptical of people who say they do know.

What we generally say is that what IS BEING DONE is pretty darned dumb. Kartik A is saying that what is BEING SAID is pretty darned dumb, too.

World Cup: Referees Shouldn't Be Part of the Game

La copa mundial... Some things to concede at the outset.

--Ghana p'wned the U.S. No way the U.S. could have won that game.
--If El Tri falls in a forest, and no one plays defense, does anybody hear it?
--England....Jeez, England was terrible. Not as bad as Les Bleus, or Il Azzurri, but bad.
--Brazil beat the bejeesus out of Chile. Sad. But not close.

Having said that, wtf?
--The referees? No golden balls, more like a golden shower, right on the games.
--The faking? These weenies make the Celtics' Paul Pierce look stoic and undemonstrative. Why in the world are there not more yellow cards for diving?
--Vuvuzelas. Really? Why?

I can see why futbol is so big in Europe and Latin America. Largely arbitrary, controlled by officials who are in no way accountable to anyone, yet who are remarkably incompetent and indifferent. Everyone constantly pretends to be a victim, and rolls around on the ground crying until they get a subsidy they don't deserve. And then they waste the free kick, just giving up the ball. And then they run around in random patterns, hoping that someone will get lucky and do some actual work, so we can all celebrate.

Wait, I need to update. Soccer is the perfect sport for Europe, Latin America, and the U.S. Congress.

UPDATE: Tommy the Brit posted this on his FB page. And got the following comment, from a fellow Brit:

I can see why "football" is so big in America - the black guys do all the work, the white guys have all the power, obesity is an advantage, and there are commercial breaks every five minutes...

We are Clean!

After a thorough investigation, the Munger 2008 Gov campaign can breathe a sigh of relief. There were no additional unreported donations of private jet rides to the campaign, the candidate, or its staff.

Partly because there were no donations of private jet rides.
Partly because there were no private jet rides.
Partly because there were no airplane rides. We used the thing called "the car."

Bev Perdue, the people's choice, had 42 unreported private plane rides donated to the campaign, as part of the $19 million she spent for a job that pays $130k. Pat McCrory spent less than half that.

Makes me wistful. Maybe someday I'll get someone to donate a trip in the air, so I can report it. Maybe something like this:

Soccer Shennanigans

If you think the 2010 FIBA world cup is whacky, you haven't seen anything! Check out this story about the 1994 Shell Caribbean Cup:

There was an unusual match between Barbados and Grenada.

Grenada went into the match with a superior goal difference, meaning that Barbados needed to win by two goals to progress to the finals. The trouble was caused by two things. First, unlike most group stages in football competitions, the organizers had deemed that all games must have a winner. All games drawn over 90 minutes would go to sudden death extra time. Secondly and most importantly, there was an unusual rule which stated that in the event of a game going to sudden death extra time the goal would count double, meaning that the winner would be awarded a two goal victory.

Barbados was leading 2-0 until the 83rd minute, when Grenada scored, making it 2-1. Approaching the dying moments, the Barbadians realized they had no chance of scoring past Grenada's mass defense, so they deliberately scored an own goal to tie the game at 2-2. This would send the game into extra time and give them another half hour to break down the defense. The Grenadians realized what was happening and attempted to score an own goal as well, which would put Barbados back in front by one goal and would eliminate Barbados from the competition.

However, the Barbados players started defending their opposition's goal to prevent them from doing this, and during the game's last five minutes, the fans were treated to the incredible sight of Grenada trying to score in either goal. Barbados also defended both ends of the pitch, and held off Grenada for the final five minutes, sending the game into extra time. In extra time, Barbados notched the game-winner, and, according to the rules, was awarded a 4-2 victory, which put them through to the next round.

Here's a video summary:

Monopoly is Over-rated

When I was at the FTC, early in the Reagan administration, we had a test for whether an industry was a monopoly:

1. Rank the firms in the industry by size, from largest to smallest.
2. Now count the number of firms.
3. If the number is bigger than 1 it is NOT a monopoly.

Here is a slightly more sophisticated approach, but pretty much the same idea. Monopoly simply does not exist, outside of government action and a (very) few extraction industries such as diamonds.

SC Strikes Down Chicago Handgun Ban!

Yay! Supreme Court strikes down handgun ban. CNN reports it. BizWeek version.

The 2nd Amendment is finally incorporated, and with a strong personal liberty component. Guns are NOT for hunting. They are for personal protection, if the person chooses to purchase one and use it responsibly.

Russ Robert on FvH

Russ comes up big with the Hayek piece in WSJ. Do read it.

Oh! The Things That We Will Do!

A happy day. I had not seen this before.

An entire blog devoted to the intellectual hi-jinks of one P. Krugman, Nobel Laureate and PhD in economics. Here you go!

The cool thing about the title, "Krugman in Wonderland," is that it echoes the famous "Durham in Wonderland," which chronicled the lies and fabrications of the New York Times news staff, sports staff (take Selena Roberts, please), and editorial page, as well as the criminals who run the police force of Durham, regarding the Duke Lacrosse Hoax. Nice.

(Nod to L. Smith for the assist)

BP Spills Coffee

BP tries to handle coffee spill.

I like how the only woman is the only one who tries to do anything.

(Nod to G. Mankiw, via MJE)

My man BobLee has some thoughts about Raleigh's mayor.

What Mayor Meeker said: Members of the Wake County school board "are not from this area and do not share our values..."

(source)

Let me translate that for you: "Y'all Yankees git yer sorry, carpet-baggin' racist asses back on I-85, headed north, and don't even stop to pee 'til you hit South Hill"

The cool thing is that Mayor Meeker.... is... NOT... FROM... NORTH CAROLINA, and went to school in Connecticut. As we native southerners say, "Bless his heart."

As Bob Lee points out, Mayor Meeker's own WIFE is on that very school board that does not share "our" values.

People on the left only believe in democracy as long as the majority agrees with them. As soon as the majority shows a mind of its own, it's time to bring out the guns.

No Kid Can Resist a Mud Puddle

Smartass?

Wow, Joe B gets mad as easy as Bob Ethridge does.

The authoritarian streak among "progressives" is remarkable.

Still, it is easy to see why Joe Biden and the Obama admin generally have no sympathy for the tax burden on small businesses.

1. They themselves have never run anything, or had any job other than in "public service," where pretty much everything is done FOR you, not TO you.

2. They don't actually PAY taxes, as we found out in confirmation hearings over and over again. Taxes are for the little people, not for the titans of government.

(Nod to Angry Alex)

don't let our youth go to waste

Ah, France, where reality is optional. Thanks for this:

The front lines of the latest French protest against raising the retirement age revealed a remarkable sight: Not the slightest wrinkle, not a single gray hair.
Brandishing "Save our Pensions!" banners, students who haven't even entered the job market yet are already worried about what happens when they leave it.
Welcome to France, where workers' rights are so deeply entwined into the culture that even teenagers are unsettled about plans to raise the retirement age from 60 to 62, which is still among the lowest in Europe. The reform protest brought nearly a million people out into the streets across the country Thursday.

and here is the belle of the ball:

Despite the protest's colored balloons and jovial atmosphere, Julie Mandelbaum, a 23-year-old geopolitics student from the prestigious Institut de Sciences Politiques, was not in a party mood.
Four years ago, she erected barricades in front of several French universities to stop a contentious work contract that would have made it easier for companies to hire — and fire — young workers. The government then abandoned the proposal.

Mandelbaum says the government should tax high wage-earners and banks instead to ensure there is enough money for pensions when she retires.

"Don't let the government squander away our pension!" she bellowed into her microphone, leading the march for France's main student union UNEF.

The wrong Weigel

Wake me up when the interweb blogging heads start discussing THIS Weigel:

How to succeed in soccer, or where's Vlade Divac when you really need him.

Consider this the equivalent of a 2,000 word essay:

Welcome to America: Ghana's B%tch

Once again the USA gave up an early goal, but this time they just couldn't overcome it. People, did you know that (a) the only goals Ghana scored in group play came on penalty kicks?, (b) Ghana's best player never played at all? (c) Ghana also knocked the USA out of the World Cup the last time.

This piece puts the blame right where it belongs.

I am not upset though (not yet anyway), my team is Mexico!

Not the Onion

As far as I can tell this is serious, though of course it is not real.

The more you read, the better it gets. Smart. Incisive. Safe and Secure. Nice.
Here is their "What is IARPA?" page...

(Nod to Kevin L., who is smart and incisive, but not safe)

Interview with Iraqi Newsweekly GULAN

An "interview" with the Iraqi/Kurd newsweekly GULAN, and Ferhad M. Hassan, editor in chief. His questions in italics, my answers in Roman....The subject is the transition to democracy in Iraq and Kurdistan.

1- In the transitional stage, everything in the society is facing changes. So, we would like to ask you, how do you define post dictatorship transitional stage and what are the necessary steps required to be taken?

We have learned a lot about the problem of transition. The hardest problem is to reform the legal system, to ensure that judges, police, and public officials are fair in enforcing the law, and that the law applies equally to everyone.

Until this happens, the political transition cannot be fully effective, or complete. So the problem of the transitional stage is that the voters do not yet fully trust the government, or the police. And so they may not be willing to pay their taxes without close scrutiny. But that means that the government cannot pay the police, and judges, and so the system is always on the verge of running out of money.

Many scholars and professors in the U.S. have concluded that having a strong system of honest judges must come BEFORE a strong democracy.

2- As many experts think that transitional stage is not an easy step and takes many years. Is there any measurement to determine the end of the transitional stage?

In the U.S., it took a full decade, from 1791 through 1801. Even then, there were lots of problems. The key factor in proving the transition is complete is when an opposition party is able to run against the governing group, and win in a fair election. And then the defeated governing party hands over power voluntarily. Elections are "peaceful revolutions," where the outside group defeats the ruling group, and takes over the government, without war or bloodshed.

So, two things have to happen: 1. A free and fair election where the ruling party loses, and 2. A peaceful transition of power, accepted by all people (including the Army) as being legitimate.

3- The most important element in the transitional stage for building democracy is the political parties. Especially the countries which have been under dictatorship. So, the political parties to a certain extend are revolutionary not democratic. So, once the political parties need to be democratized first, how can they produce democracy?

Parties ARE revolutionary, yes. But democracy ensure peaceful revolutions. That is what elections are: peaceful revolutions. And parties are crucial for this. Imagine that there was to be a soccer match between "11 guys" and "Another 11 guys." No one cares about watching that. But if the "Party I Love" is going against the "Party I Don't Like", then I will go to the soccer match, or I will turn out for the election.

Experts on democracy nearly universally say that democracy is impossible without parties. Only parties can create a sense of connection with voters, and create a repuation that keeps government accountable, for success or failure.

4- Developing and implementation of economy market is another aspect of the transitional stage. But, many experts think that, transition from central economy to independent economy may result in corruption. So, how to avoid and prevent corruption in the transitional stage?

Again, the problem is fair judges and police. Also, having a market economy creates a middle class, a countervailing power that helps keep government accountable.

The problem faced by Iraq is that it has great oil wealth, and this wealth is a temptation for corruption. The oil wealth of the country means that politicians are tempted to promise cheap gas, and low taxes. Corruption results when people can make more money from misusing public office than they can from using private enterprise honestly. If a man starts a restaurant, he makes money by providing good food at low prices. If a man becomes a corrupt policeman, he makes money by stealing from drivers at checkpoints and by threatening people. Corruption is MUCH more likely in a planned economy, because people pay bribes to the center for favorable treatment.

5- Another important aspect of the transitional stage is the role of free mass media and intellectuals of the society. So, how far free mass media and intellectuals can play an effective role in the transitional stage?

The media and intellectuals must try to do two things. 1. Educate the public on the process of transition, and warn that it may take ten years, and 2. Report on corrupt practices, and violations of the law, even when it embarrasses the government. The problem is that the media cannot be truly "free" until it can carry out this function without fear of government reprisal and repression. This is the key to transition: when a newspaper or television person can write or say something critical of the government without fear. If there is fear, then the media, or intellectuals, cannot carry out their function. Even uncertainty about government response can have a "chilling effect," causing media and intellectuals to censor themselves.

6- Religion and politicization of religion is another aspect for building of obstacles in the transitional stage. So, how far the Islamic political parties are reasons for the backward situations in the eastern and Islamic societies?

The problem is not religion, the problem is religious intolerance. There are many "Islams" and many kinds of believers. An insistence that each citizen can live as he chooses is the guarantee of religious freedom for all.

So, the problem is not Islam, but rather demagogues and authoritarian leaders who try to use Islam as a way to get power over other people. This can only happen if voters allow it. Voters have to vote for leaders who vow to protect the freedom to practice Islam, not leaders who say they will impose one particular narrow view of Islam on everyone.

7- How success in the transitional stage is evaluated? And, what are the conditions that should be taking into consideration in deciding whether transitional stage is passed or not?

If people trust their police, and trust that judges will treat them fairly, and pay their taxes voluntarily, then democracy has begun.

If in addition the ruling party loses an election, and hands over power peacefully, then the transition is complete.

P-Krug: Neither Liar nor Quack

P-Krug is likely neither a liar nor a quack. So what gives?

Two examples of quotes: Is P-Krug confused? No. And he's not dumb. He must just think WE are dumb. And the people who read him, and quote him, ARE dumb.

Bailouts

1. Workouts, Not Bailouts - New York Times, Aug 17, 2007 Many on Wall Street are clamoring for a bailout -- for Fannie Mae or the Federal Reserve or someone to step in and buy mortgage-backed securities from troubled hedge funds. But that would be like having the taxpayers bail out Enron or WorldCom when they went bust -- it would be saving bad actors from the consequences of their misdeeds... Say no to bailouts - but let's help borrowers work things out.

2. Is saving our Fannie enough? - Seattle Times, Sep 9, 2008 The just-announced federal takeover of Fannie Mae and Freddie Mac, the giant mortgage lenders, was certainly the right thing to do - and it was done fairly well, too... So Fannie and Freddie had to be rescued...

Deficits and interest rates

1. Deficits and interest rates - New York Times, Aug 14, 2009 It turns out that there's a strong correlation between budget deficits and interest rates - namely, when deficits are high, interest rates are low ... On reflection, it's obvious why...

2. A fiscal train wreck - New York Times, Mar 11, 2003 But we're looking at a fiscal crisis that will drive interest rates sky-high. A leading economist recently summed up one reason why: ''When the government reduces saving by running a budget deficit, the interest rate rises.''

There is a lot more where this came from.

(nod to Mel H)

Brown Bailout

I have no brief for Fed Exp, particularly. But this is clever.

UPDATE: And THIS is cleverer. Thanks to Christian, in comments.

Angus's guide to yesterday's movies

I just couldn't bring myself to go to Iron Man II or Karate Kid II or Toy Story III (yes I am oddly snobby about some things), but here are a couple movies I just saw that I really liked:

1. Looking for Eric. Sad, disfunctional postman/dad gets life and love advice from Eric Cantona. This is a Ken Loach film and I really liked it from beginning to end. The scenes of the postmen hanging out together are fantastic and Cantona is fantastic too.

2. Youth in Revolt. I couldn't convince Mrs. Angus to see this in the theatre, but I did convince her to watch it on pay per view at home. I've been a big Michael Cera fan since Arrested Development, though I fear he'll be playing oddball kids when he's 60 years old! Fred Willard absolutely KILLS in this movie.

Senator Clint Webb

(Nod to Radley Balko, via Angry Alex)

Interview with Sara Burrows

Did an interview yesterday, sitting in my beach chair under my umbrella, taking a break from reading, and talking to the lovely Sara Burrows.

And here today it is published on-line for the world to see. I think this whole internet thing is going to catch on.

Excerpt:

States have to maintain balanced budgets, according to their constitutions, while the federal government can run a deficit for as long as it likes. So when states spend too much they have no choice but to raise taxes or ask for federal funding, Munger explained. Since raising taxes is not popular, federal bailouts offer state politicians an escape from being held accountable.

But federal bailouts lead to federal deficits, Munger said, and deficits are nothing more than future federal taxes.

“There’s this fiction that there are two different taxpayers — the state taxpayer and the federal taxpayer. There are not. We’re all both,” Munger said.

People who think they are receiving some sort of gift from the federal government are being deceived, he added. All they are incurring is a different form of taxation.

If voters really thought it was worth spending an average of $1 billion more per state than they are taking in to rescue teachers, police, and firefighters, they would agree to an immediate increase in state taxes in a referendum. State elected officials know higher taxes are not popular, so they use a roundabout method to secure the funds.

Summer Reading

Here at the beach, been reading some. Gone old school, and new school.

Old school:

Minnesota Rag: Corruption, Yellow Journalism, and the Case That Saved Freedom of the Press, by Fred Friendly. A terrific 1st Amendment story, though quite an old book, about Jay Near and the "Saturday Press" in Minneapolis.

The Making of the Popes 1978, Andrew Greeley. Amazing story of the year where there were two papal elections. The politics and the description of the social choice rules, and the corruption of the Vatican, rotten to the core....fine summer reading.

The Gift of the Jews, Thomas Cahill. A retelling of the Pentateuch story, with implications for the founding of the West. I had not thought of this before, and it is quite interesting. And well written.

Newer:

Reflections on the Revolution in Europe: Immigration, Islam, and the West, Christopher Caldwell. Disturbing. Suggested to me by Dutch Boy*, on his return from 10 years living in the Netherlands.

Driving Like Crazy: Thirty Years of Vehicular Hell-bending, PJ O'Rourke. Needs no explanation.

The Age of Turbulence: Adventures in a New World, Alan Greenspan. In which AG covers the George Thorogood song, "It Wasn't Me."

Blink, The Power of Thinking Without Thinking, Malcolm Gladwell. A challenge for rational choice people, but likely a help in the long run. Better models are always better at predicting and explaining behavior.

*I may have to get a new pseudonym for Dutch Boy. It turns out that "Dutch Boy" is a derisive nickname that some lesbian women use to refer to hetero men who like to hang out with them. I believe the reference comes from The Wild Party, the 1975 movie with Racquel Welch. As the piano player started out, "The little Dutch boy taught a lesson that I like..." (If you cannot figure out why the name fits, you are not a real KPC reader.)

Our New #2 Export: Law Suits

Notice how when there were giant problems in the Gulf of Mexico, our President sent a team of crack ... lawyers? Not engineers, not people who do things, but people who sue people. (...are the luckiest people...in the world!)

Well, our number 1 export today, by FAR, is debt. We make debt in Washington, and we sell it overseas. Surprisingly, we can sell it at a pretty high price*, because American debt is better quality than other sovereign debt, especially those snivelling Europeans. Their debt is low quality, and when you take it out of the box it's all coated with Greece. Yuck.

But it appears that our new second largest exports, if this Congress has its way, will be law suits. Got this note from SL:

Has anybody been paying attention to this delightful little treasure - The Foreign Manufacturers Legal Accountability Act?

It would require foreign manufacturers and producers that import products into the United States to designate a registered agent who is authorized to accept service of process here in the United States. It also imposes new burdens on importers - all importers.

It is being queued up in House Energy and Commerce and, on the Senate side, as part of tax extenders.

Marianne Rowden from AAEI had a good analysis of this bill when she testified on it last week in Energy and Commerce

I wonder if the massive export of lawsuits that this legislation will unleash will ultimately count toward the doubling of exports envisioned under the NEI?

Well, yes, I bet it does. And if you combine our exports of debt and our exports of lawsuits, I surmise that will be ALL of our increased exports. Our entire corps** of government officials at this point is composed of people who have never made anything except good grades in law school.

*Thanks to Angus for the correction. I had said "low price," when I meant low yield, which of course implies a HIGH price from the perspective of the purchaser.
**pronounced "core" not "corpse"

groundhog day, grasscourt style

Tomorrow, for the third day in a row, Jon Isner will wake up in the morning knowing that he has to play a tennis match against some French guy named Mahut.

Really.

Tuesday, they played 4 sets until the match was suspended by darkness at 9:00 pm London time with the score being 2 sets apiece.

Today, they played the 5th set (which at Wimbledon cannot end in a tiebreaker).

For over 7 hours.

Until play was suspended by darkness at 9:00 pm London time.

With the score being tied at 59 games apiece.

Tomorrow they will get up and do it again (amen).

Theoretically, this could go on forever.

People, the winner would be normally scheduled to play his next match already tomorrow.

Not sure how that will play out, but this is epic.

And it could actually go on forever. There are no other provisions in the rules beyond that a 5th set is played until someone wins 6 games or more and has a margin of 2 games.

Hater's Guide to Futbol

I am not a hater, actually (though I do hate vuvuzelas).

But this is pretty funny.

(Nod to Angry Alex, who doesn't hate anything, really. But he fakes it really, really well)

Animal Tricks

So Anonyman can't leave things alone, and had to top my animal stories from yesterday.

And, to be fair, he DID. The story of Sticky, now.

The backstory of Sticky.

Sticky removes arrow from own neck, despite lacking hands.

Anonyman: You win, bud.

Does the "zero bound" imply that inflation targets should be raised? Part II

A new (and recommended) NBER working paper (ungated version can be downloaded from here (it's the first entry under "working papers") by Olivier Coibion, Yuriy Gorodnichenko, and Johannes F. Wieland says no.

"We study the effects of positive steady-state inflation in New Keynesian models subject to the zero bound on interest rates. We derive the utility-based welfare loss function taking into account the effects of positive steady-state inflation and show that steady-state inflation affects welfare through three distinct channels: steady-state effects, the magnitude of the coefficients in the utility-function approximation, and the dynamics of the model. We solve for the optimal level of inflation in the model and find that, for plausible calibrations, the optimal inflation rate is low, less than two percent, even after considering a variety of extensions, including price indexation, endogenous price stickiness, capital formation, model-uncertainty, and downward nominal wage rigidities. In our models, price level targeting delivers large welfare gains and a very low optimal inflation rate consistent with price stability."

So basically, they almost agree with Uribe & Schmitt- Grohe, who argue that the optimal inflation rate is zero or negative.

Phosphorescent incandescent

People, do you know Phosphorescent (aka Matthew Houck)?

Amazing. Reminds me a bit of vintage Will Oldham, but not really.

Gorgeous, involving, and highly highly recommended.

Here are three videos. The first is the studio version of perhaps my favorite song of theirs, "Mermaid Parade". The second in a live solo version of the same song. The third is another great song "A Picture of our Torn up Praise".

Local Newspapers...

As I noted two days ago, it is fun to read the local newspaper at the beach.

Today, in the want-ads:

LOST: Boxer, 10 mo. old female, answers to "No-No." Needs medication. Call (number)

Now, yes, that's sad. But if you have to call your dog by screaming "NO! NO!" it is likely that (a) the dog will need medication, and (b) it will run away.

Two spots down, in the want-ads:

LOST: Fluffy female cat, black and gray striped, has 1 eye. Answers to "Roxy." Call (number)

Um... It's a CAT. It doesn't answer to anything. Cats only answer to reverse psychology: when you want them to go away, they come bug you. Perhaps if you go out and yell "NO! NO!" then old Roxy will come to you.

scorekeeping fail

Peter Orzag is leaving the Obama administration, stepping down as budget director.

Here is the money quote from the Times that inspired the title of this post:

A longtime scholar of health policy economics, Mr. Orszag also helped devise and sell the president’s signature initiative overhauling the health insurance system. He privately has told associates that having worked on two budgets, a stimulus plan and the health care law, it is time to leave while he is ahead.

I guess this could be accurate if by "ahead" he means "ahead of the angry crowds with pitchforks".

Public Choice: Use it, live it

I just wish Public Choice did not teach us so much about the world.

But it does.

Nod to Gamebill

Just So You See What I'm Dealin' With Here

The LMM comes out of our bedroom at the beach condo, wearing the gauzy little things that women wear in summer. She sidles up to me, and I catch a hint of sultry perfume.

She puts her arms around me, and says, "I was thinkin'."

Me: "Really? Thinking what?

LMM: "We might get really crazy tonight."

Me: (speechless, amazed, etc.)

LMM: "Yeah, I was thinking we could lock the doors, have a few beers...."

Me: (!!!!!YEAH? YEAH?!!!! still can't speak)

LMM: "And then we could have some more beers, and then get totally kinky, and NOT RECYCLE THE BEER BOTTLES!"

Sigh. She was just messing with me. I am, in spite of my complaints about the system, pretty serious about recycling.

viva la reconquista!

From USA Today:

A new kind of Mexican immigrant is making it big in the USA: huge Mexican corporations that are snapping up U.S. brand names, opening U.S. factories and investing millions of pesos north of the border.

From Thomas' English Muffins to Borden milk, Saks Fifth Avenue department stores to The New York Times newspaper, Mexican investors have taken advantage of low interest rates and depressed prices during the economic downturn to expand their holdings in el norte.

People, Grupo Bimbo (aqui hay Bimbo) owns Entenmann's!

How are those Spanish lessons coming?

The Culture that is Japan / Markets in everything

People, meet the latest Japanese import to cause a stir in the States. He's Paro, the therapy robot.

From today's WSJ:

Five years ago, a Japanese robot manufacturer introduced Paro to the world. Built to resemble a baby harp seal—with a plush coat of antibacterial fur—Paro was hailed in Japan as a pioneer among socially interactive robots, one that would help lift the spirits of millions of elderly adults.

It never quite caught on. "It doesn't do much other than utter weird sounds like 'heeee' or 'huuuu,'" says Tomoko Iimura, whose adult day-care center in Tsukuba City keeps its Paro in a closet.

Now Paro has come to American shores, appearing in a handful of nursing homes and causing a stir in a way that fake seal pups rarely do.

Nursing-home workers and academics who study human-robot interaction are trying to figure out whether the $6,000 seal, cleared last fall by U.S. regulators as a Class 2 medical device (a category that includes powered wheelchairs) represents a disturbing turn in our treatment of the elderly or the best caregiving gadget since the Clapper.

The Journal article debates the ethics of using Paro, which I am not sure I understand.

I just love the weirdness of it.

Are baby seals often kept as pets in Japan?

The article also says that most sales in Japan have been to private citizens living in buildings that don't allow pets. For %6,000? Wow!

Someone hasn't been paying attention

and that someone is Nobel Laureate Paul Krugman:

Spend now, while the economy remains depressed; save later, once it has recovered. How hard is that to understand?

Very hard, if the current state of political debate is any indication. All around the world, politicians seem determined to do the reverse. They’re eager to shortchange the economy when it needs help, even as they balk at dealing with long-run budget problems......So America has a long-run budget problem. Dealing with this problem will require, first and foremost, a real effort to bring health costs under control — without that, nothing will work.

Look, I clearly don't have a Nobel Prize or a gig at the Times, but I do remember the last year of history! The government put together a near 1 trillion dollar "stimulus" package and passed a comprehensive health reform bill.

That did happen, didn't it? Or am I just somehow plugged into the Matrix and missing the truth?

The government has enacted a big stimulus package, bailed out GM, extended unemployment benefits and the Fed has undertaken extraordinary expansionary measures. To me, this hardly qualifies as "eager to shortchange the economy".

A disinterested spectator could look at the evidence and easily conclude that old school macro policy didn't work rather than arrive at PK's conclusion which is apparently that it hasn't been tried!

It just seems to be an article of faith with Krugman, DeLong and others, some kind of twisted syllogism:

"Fiscal policy can always bring the economy to full employment. The economy is not at full employment, therefore fiscal policy has not been sufficiently applied."

On the long-run part of the equation, Krugman points, with apparently no sense of irony, to out of control health costs as the killer problem.

Wow. Just wow.

Krugman should be an anarchist at this point, shouldn't he?

He says we need currently need stimulus and health care cost control. Hey Paul, the government has spent most of the last year working on those two issues with apparently no results.

Paul, either your model is wrong or the government is totally incompetent (or both?)

Undercover Operation: Strippers Take Clothes Off!

The LMM and I are at Wrightsville Beach, for the week.

One of the pleasures of being here is reading the local newspaper.

Here is a truly wonderful story: After a six-month (!!) undercover sting operation, the men of Charlottes's finest have concluded that strippers take. their. clothes. off.

Thank goodness we have a police force, to protect us from dangerous naked women. I think Mr. Fall has it right, below:

Chris Fall, owner of the Paper Doll Lounge on Wilkinson Boulevard, said the women from his club denied that they removed all of their clothing.

Fall is upset about the charges, saying the investigation is a waste of taxpayer money, particularly in tight financial times.

"The government, they're bad on money and they're coming after us," Fall said. "Paying (agents) to go to strip clubs... and have a good time."

He said the arrests have hurt his business: "Why run all the business off? You're supposed to be helping businesses, not hurting businesses."

The clubs could face disciplinary action by the state ABC commission, which controls licensing for businesses that sell alcohol.

So the cops told some undercover guys to spend six months going to strip clubs, buying drinks and tucking $20s into g-strings (you have to fit in, if you are undercover). And the result is that six young women are going to go to jail, for the crime of sharing.

Yes, I understand the police don't write the laws, and they have to enforce all the laws. But surely there are other priorities in Charlotte....

Words of wisdom!

1. Will Wilkinson on Bryan Caplan's crusade to "replentish the earth":

If Bryan really thinks rising education, wealth, and gender equality have somehow made us worse at evaluating the costs and benefits of children, he probably ought to turn in his economist card.

2. Tyler Cowen on the stimulus addicts:

I believe the "zero bound" is perhaps the single largest "red herring" in the economics profession today.

Manute Bol: RIP

People, Manute Bol has died at the age of 47. In my earlier life (pre Mrs. A), Tyler and I were Bullets season ticket holders during the Manute era. We got to see this:

Yes, seven feet seven inches and five feet three inches on the court at the same time. Bill Veck had nothing on Abe Pollin.

On the court, Manute was a shooting guard trapped in overly tall body. His favorite thing in basketball clearly was taking three pointers (something that his coach, Wes Unseld, didn't think very highly of), though he was also a prolific shot blocker.

Off the court, Manute did not have an easy life either before or after basketball. The Washington post has an excellent story on him here.

Capla-con indeed

Bryan Caplan makes a valiant, but well short of convincing, case for having more kids in today's WSJ.

He gives three basic reasons why people should have more kids:

1. In happiness research, the big negative hit comes from having one child. Once you've passed that, the extra unhappiness from having more is fairly small.

2. Parents have little to no influence on how their children turn out, so you can relax, not bother to read to your extra kids or make costly "investments" on their behalf.

3. The more kids you have, the more grandkids you might get and everyone knows grandkids are *awesome*!

NB: I am not making any of this up!

America

From the LMM:

So much less humidity. Sunny, slight cool breeze. Sitting on the porch drinking tea, listening to birds, watching hummingbird.

Last night a firetruck stopped by to drop something of to the subdivision president. Little boy (5) next to our house runs out yelling, fire truck, fire truck! The young volunteer firemen see this, pull down the street with the sirens on, lights flashing, stop in front of the little boys house, one gets out and hands the kid a (plastic) fireman's hat. SOOO cute.

Think sweet thoughts today. You'll feel better.

Mungowitz uber alles

Pete Boettke gives us a report from the front lines on the awesomeness that is my co-blogger:


"Then after dinner and discussion groups (I led a discussion of Hayek's "Individualism: True and False"), Mike Munger gave perhaps the best lecture on public choice for this sort of audience I have ever heard. I didn't meet Mike at IHS in the 1980s, but I did get tremendous help from in the early 1980s; Mike had just finished his PhD, I was co-authoring a paper with Bob Tollison on the Voluntary Restraint Agreement with Japan, and Mike was working at the FTC, he knew about this issue, and both Bob and Kevin Grier told me to contact him, and he provided me with some data, and some studies from the Center for the Study of American Business at Wash U related to this topic, etc. as I started my research under Bob's direction. Anyway, Mike summarized his introduction to public choice with five problems: (1) Information Problems; (2) Problem of Democratic Coherence; (3) The Problem of the Constitutional Paradox; (4) The Collective Action Problem; and (5) The Rent Seeking Problem.

Munger's discussion of the problem of democratic coherence was perhaps the best presentation of the central problem that I have ever seen in 20 plus years of hearing various individuals go over voting paradoxes, etc. In fact, I would probably rank Munger among the best teachers of economics and political economy I have ever seen at work."

Free Trade: The Great Prosperity Machine

Tom Palmer is not just cute. He's smart. (But he's also cute, I'm just sayin')

Maradona!

Diego takes a licking but keeps on ticking:

A couple of days ago Pele was quoted in the Brazilian press as suggesting that Argentina's appointment of Maradona was a mistake and that the former superstar only took the job because he needed the money.

"I'm not surprised, Pele should go back to the museum," was Maradona's retort before he also took a pop at former France star Platini, who a few months ago had insinuated that Maradona was a great player but not a great coach.

"As for Platini, I'm not surprised because I always had a distant relationship with him, we would just say hi and goodbye.

"But we know what the French are like and Platini is French, he believes he's better than the rest of us."

Personally I think he took the job for the fancy toilets and massive salad bar, but it cannot be denied that Argentina has won its first two games, including an absolute drubbing of South Korea this morning and is looking like a team to be reckoned with down the road.

Laguna San Ignacio

This video was taken and edited by Mrs. Angus during our trip to Baja to see the gray whales last March. I had to lobby her heavily to agree to let me post it, because the footage is often shaky, due to (a) the movement of the boat and (b) the excitement level of the videographer. It is almost 4 minutes long and the most spectacular footage is at the end.

Enjoy!

Do NOT jaywalk in Seattle

Especially if you are female and African-American!

Check this video of the buzz-cut white cop winding up and punching a girl in the face!

Of course the cop union says the action was "justified".

WTF????

Libertarianism 101: a remedial course

Republicans are not necessarily Libertarians.

In particular, Bush was not a Libertarian.

He spent recklessly, engaged in chicanery to promote useless and costly wars, trampled all over civil liberties, cut protectionist deals with the steel industry and others, and screwed up big time on immigration.

As far as I know, Libertarianism is not primarily defined as a dogmatic belief in total deregulation (at least I hope it is not).

Libertarians tend to believe that victimless crimes are not actually crimes, that national borders should be much more open than they currently are, that foreign military operations are rarely justified, and that people have a right to privacy.

The idea that government screws things up is more an idea from Public Choice than from Libertarianism. Even if the government was awesome at fighting wars, Libertarians would oppose it. I think most Libertarians are *happy* that the government is not particularly good at what it does.

To me, Libertarianism is a philosophical argument against a lot of government interventions, and Public Choice is an instrumental argument against a lot of government interventions.

In case you are wondering what set me off, check here.

te estan buscando, Matador

"The bull charged and matador Christian Hernandez took off — across the ring, over the wall and into controversy.

The admittedly terrified torero was arrested after Sunday's botched bullfight at the Plaza Mexico, apparently for breach of contract, local media reported Monday. He was released after paying a fine.

"There are some things you must be aware of about yourself," the 22-year-old Mexican matador said in a television interview. "I didn't have the ability, I didn't have the balls, this is not my thing."
In a sight rarely seen in the bravado world of bullfighting, Hernandez made a spin with his red cape at the charging bull, then ran across the ring and leapt headlong over the wall to safety, dropping his cape in the process. The crowd hooted in derision.

Several months ago, another bull grievously gored Hernandez in the leg.

Officials did briefly convince Hernandez to return to the ring on Sunday, where he put his hands over his head and pointed upward before he made a second exit, shaking his head.

He later said he would retire from bullfighting."

If Only....

If only they had listened to me. Means-tested school vouchers had the #1 place on my education platform. And they WORK, and they don't cost much.

Competitive Effects of Means-Tested School Vouchers

David Figlio & Cassandra Hart
NBER Working Paper, June 2010

Abstract: We study the effects of private school competition on public school students’ test scores in the wake of Florida’s Corporate Tax Credit Scholarship program, now known as the Florida Tax Credit Scholarship Program, which offered scholarships to eligible low-income students to attend private schools. Specifically, we examine whether students in schools that were exposed to a more competitive private school landscape saw greater improvements in their test scores after the introduction of the scholarship program, than did students in schools that faced less competition. The degree of competition is characterized by several geocoded variables that capture students’ ease of access to private schools, and the variety of nearby private school options open to students. We find that greater degrees of competition are associated with greater improvements in students’ test scores following the introduction of the program; these findings are robust to the different variables we use to define competition. These findings are not an artifact of pre-policy trends; the degree of competition from nearby private schools matters only after the announcement of the new program, which makes nearby private competitors more affordable for eligible students. We also test for several moderating factors, and find that schools that we would expect to be most sensitive to competitive pressure see larger improvements in their test scores as a result of increased competition.

(Nod to Kevin L)

Now they finally have something to fight about

From today's NYT:

The United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself, according to senior American government officials.The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

People, this could make the Dutch disease and blood diamonds look like kid's stuff, no? We have already seen all the years of violence, all the corruption and now there is actually something valuable in play. Kudos to the NYT reporter for recognizing this:

Instead of bringing peace, the newfound mineral wealth could lead the Taliban to battle even more fiercely to regain control of the country.

The corruption that is already rampant in the Karzai government could also be amplified by the new wealth, particularly if a handful of well-connected oligarchs, some with personal ties to the president, gain control of the resources. Just last year, Afghanistan’s minister of mines was accused by American officials of accepting a $30 million bribe to award China the rights to develop its copper mine. The minister has since been replaced.

Endless fights could erupt between the central government in Kabul and provincial and tribal leaders in mineral-rich districts.

Not to mention how it will affect the US and our willingness to keep soldiers fighting and dying there.

Goat Spears Weiner

Anonyman just liked the headline. So I'll post the story.

Anthony Weiner has been very busy lately.

Here's Mr. Weiner in a "point your finger and open your mouth contest" (he came in second, because his finger pointing was limp).

So wrong in so many ways

People, what's the creepiest part of this photo?

The pic is from here and the site is highly recommended.

Hat tip to Andy Roddick!

Misallocation and Productivity

I just read two interesting papers that highlight how market distortions like labor market regulations or capital subsidies can affect both actual productivity in a country and also our attempts to measure productivity in a country.

First is Hseih & Klenow's MISALLOCATION AND MANUFACTURING TFP
IN CHINA AND INDIA (QJE 2009, ungated version here). They use firm level data and estimate that if resources were allocated across sectors in China and India the same way they are in the USA, that manufacturing productivity could rise 40% or more!

No word on how eliminating distortions in the USA would raise our productivity though.

Second is a new NBER paper (ungated version here) by Fernald & Neiman entitled Growth Accounting with Misallocation: Or, Doing Less with More in Singapore. They set up a model which shows how having a sector of the economy that has preferential access to resources and earns a pure profit can cause different techniques for measuring productivity growth (i.e. using quantities vs. prices) can produced answers that disagree with each other and fail to capture actual productivty growth.

Interestingly, their case study of Singapore shows that the subsidized sector of the economy their had negative productivity growth even more severe than that estimated by Young in his classic piece.

When life gives you lemons....

Flash vs. Superman

Mungo and I have been friends for a long time. We even competed against each other in Track & Field in high school. Here's a shot of one of our photo finishes:

by the way, I still have those shorts!

Onions

President O sure has 'em!

Consider this. His administration is now demanding that BP pay the salaries of oil workers who are not working because of the Administration's moratorium on deep water drilling!

Really.

You guys remember that classic, close the barn door after the cows are all gone moratorium, right? The one that was "peer reviewed" by a panel of experts?

Ooops. Turns out the moratorium was added to what the experts reviewed ex-post and the experts do not agree with even having a moratorium.

So I guess this all works out, at least on the "two wrongs make a right" theory of justice.

Tyler Cowen is a jelly doughnut

KPC friend Tyler Cowen informs us that he is now somehow living in Berlin with "only five CDs, a Kindle, and a few paperbacks"

5 CDs for Berlin, eh? That's tough. Here is what I hope he has:

Can: Tago Mago

Cluster: Cluster 71

The Notwist: Shrink

Velvet Underground: White Heat / White Light

Lounge Lizards: Voice of Chunk

Now I have to say that I've never been to Berlin, but if I did go, and didn't bring my iPod or anything, I'd be very, very happy to have these 5 CDs. They just fit my image of the place.

Regulation Competition

Trust and technology: The social foundations of aviation regulation

John Downer
British Journal of Sociology, March 2010, Pages 83-106

Abstract: This paper looks at the dilemmas posed by 'expertise' in high-technology regulation by examining the US Federal Aviation Administration's (FAA) 'type-certification' process, through which they evaluate new designs of civil aircraft. It observes that the FAA delegates a large amount of this work to the manufacturers themselves, and discusses why they do this by invoking arguments from the sociology of science and technology. It suggests that – contrary to popular portrayal – regulators of high technologies face an inevitable epistemic barrier when making technological assessments, which forces them to delegate technical questions to people with more tacit knowledge, and hence to 'regulate' at a distance by evaluating 'trust' rather than 'technology'. It then unravels some of the implications of this and its relation to our theories of regulation and 'regulatory capture'.

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

Valuing Incremental Highway Capacity in a Network

Allen Klaiber & Kerry Smith
NBER Working Paper, May 2010

Abstract: The importance of increments to an existing highway system depends upon their contributions to the accessibility provided by the existing network. Nearly 40 years ago, Mohring [1965] suggested this logic for planning optimal highway investment programs. He argued it could be implemented by measuring the quasi-rents generated by specific additions to an existing roadway system. This paper uses a unique set of additions to a loop roadway in metropolitan Phoenix, together with detailed records of housing sales over the past decade, to meet this need. We find that estimated increases in capitalized housing values due to four segments added during this period range from 73 to over 273 million dollars per mile of the roadway addition.

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

Consumption tax competition among governments: Evidence from the United
States

Jan Jacobs, Jenny Ligthart & Hendrik Vrijburg
International Tax and Public Finance, June 2010, Pages 271-294

Abstract: The paper contributes to a small but growing literature that estimates tax reaction functions of governments competing with other governments. We analyze consumption tax competition between US states, employing a panel of state-level data for 1977–2003. More specifically, we study the impact of a state’s spatial characteristics (i.e., its size, geographic position, and border length) on the strategic interaction with its neighbors. For this purpose, we calculate for each state an average effective consumption tax rate, which covers both sales and excise taxes. In addition, we pay attention to dynamics by including lagged dependent variables in the tax reaction function. We find overwhelming evidence for strategic interaction among state governments, but only partial support for the effect of spatial characteristics on tax setting. Tax competition seems to have lessened in
the 1990s compared to the early 1980s.

(Nod to Kevin L)

Dirty Pool

Smart pup doesn't want to go into dirty pool

Call Dan Klein!

This is an easy problem to fix, actually.

Just ask Dan Klein.

Soon, I'll be back in Santiago,riding them buses. July 10 - July 28.

College Silliness: Report from the Front

RL writes:

Pre-midterm, an ESL student came to me this morning with some questions about some terms she was unsure about.

One was filibuster. She was confused about the definition she found on the internet.

She showed it to me: noun, a male candidate that completely overwhelmes [sic] and defeats his female opponent in the political areana [sic]

I was (understandably, I hope) confused. Then I noticed above the text she had written fillybuster. A harmless typo? Not if you type that into Google. First hit is from "addictionary.com"

Sure enough, according to that website, the definition of fillybuster is
"noun, a male candidate that completely overwhelms and defeats his female opponent in the political arena."

I think I set her straight and showed her what turns up if she spells the word correctly. Perhaps it would have been better if she used wikipedia! On Wikipedia, the definition is clear and correct!

Inflation targeters: yer doing it wrong!

Recent experience has led some people to argue that central bank inflation targets should be raised above their 2% levels in order to better accommodate the problems of monetary policy at the zero interest bound.

Not so fast, say Uribe and Schmitt-Grohe in their new NBER Working Paper, "The Optimal Rate of Inflation" (ungated version available here)

The central goal of this chapter is to investigate the extent to which the observed magnitudes of inflation targets are consistent with the optimal rate of inflation predicted by leading theories of monetary nonneutrality. We find that consistently those theories imply that the optimal rate of inflation ranges from minus the real rate of interest to numbers insignificantly above zero. Our findings suggest that the empirical regularity regarding the size of inflation targets cannot be reconciled with the optimal long-run inflation rates predicted by existing theories. In this sense, the observed inflation objectives of central banks pose a puzzle for monetary theory.

And then there's this:

Furthermore, we argue that the zero bound on nominal interest rates does not represent an impediment for setting inflation targets near or below zero.

A paper on this topic by these authors would obviously be self recommending except that I have read it and am actively recommending it.

Winning ugly

People, is Brad Gilbert somehow coaching both teams in the NBA finals? Aside from the Lakers' performance in game 1, this has been an ugly, tedious series so far.

Last night, Kobe notched 29 points on 29 shots (Can you say "Allan Iverson"? I knew that you could)! The interior passing and moving without the ball that the Lakers showed so well in game 1 continued to be completely absent in game 3. LA had a total of 13 assists for the entire game.

The Cs main scorers, Ray Allen and Paul Pierce were a combined 5-25!

From the three point line the two teams collectively shot 6-33!

The foul parade slowed down slightly with "only" 47 personals assessed.

I can't believe I am saying this, as I am a HUGE NBA fan, but I am probably going to boycott the rest of this series.

Wake me up when the Nets sign Phil Jackson and LeBron!

Seatbelt Ad: Persuasion, not coercion

Sweet, and pretty. Also, advocating persuasion rather than coercion in using seatbelts.

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.