The Culture that is Korea: Economies of scope in the Korean banking industry

In the R.O.K., banks will pay you a higher interest rate on your deposits, the more weight you lose!

Really:

SEOUL (Reuters) – Park Keun-jun is determined to fulfill two resolutions this year: bulk up his bank account but slim down himself.

Enter South Korean banks, with plans to help with both.

"I'd like to bet my money on a bank's savings plan if the bank gives credits to me for not giving up on my New Year's resolutions," said Park, a 32-year-old car designer.

Hana Bank, the banking arm of Hana Financial Group, sells an installment savings product called "S-Line," a Korean word that means an hourglass figure -- just one reflection of the current Korean obsession with being slim and in shape.

The more calories a customer burns, the higher interest rate the bank gives. If a customer loses more than five percent of their weight within a year, or holds a gym membership, the bank grants special rates...For Park, who wants to save money for several years but fears burning a hole in his wallet by following his fitness resolution since many gym memberships in Seoul are expensive, such banks' plans give him guarded hope.

Now I am waiting for the gyms to retaliate by letting you use more or better equipment as you progressively dis-intermediate your funds.

Markets in Everything: Principles texts for under $250

I guess NGM didn't get the memo that his taxes were NOT going up, because he's charging $238.95 for the new edition of his principles text.

Amazon is offering it to me at 20% off plus free shipping! A mere $191.16.

The comparable edition of LeBron and Alex's book is "only" $168.95, which Amazon is willing to give me for $132.03, a 22% discount.

So at the Amazon prices, Lebron & Alex are 31% cheaper, but still pretty steep.

The previous edition of Mankiw's text did have a Kindle edition for $149, no word about whether the new edition will or if so, at what price. Surprisingly, LeBron and Alex do not have a Kindle edition (at least that I could find).

These days, given that you could make yourself a pretty good free principles text just by downloading relevant Wikipedia entries, I don't see how these rents can be sustained over the long run (I am aware that not all or perhaps not even a majority of the rents are going to the authors).

How Crazy?

How crazy is too crazy?

I myself think that Duke's "fans" are excessive. Having the noise be intimidating is fine. But the physical presence and the reaching out is a distraction.

They can say what they want. But that doesn't make it right.

Profs Gone Wild

Cornell prof goes nuts when kid yawns...


The remix...


The analysis...


(Nod to Sarah Straw)

Ron Paul Kicked Out of Popular Front for the Liberation of Judea....Splitters!

This is so unbelievable,

YAF kicks out Ron Paul.

In the same story we learn that YAL is the "group of the future." Made me think of this...



In fact, for "real" conservatives, the relationship with Ron Paul was like the Sam Goldwyn bon mot: "I never liked you, and I always will!"

(Nod to Anonyman)

Quien anda lo mas despistado?

People, who is the most clueless, the NY Times or the WaPo?

Let's start with the Times, which has produced this gem:

Obama Budget Pivots From Stimulus to Deficit Cuts

WASHINGTON – President Obama, pivoting at midterm from costly economic stimulus measures to deficit reduction, on Monday released a fiscal year 2012 budget that projects an annual deficit of more than $1 trillion before government shortfalls decline to “sustainable” levels for the rest of the decade.

There is just not enough koolaid in the world to wash this kind of crap down. Obama is not pivoting from the stimulus; he's freezing spending at the stimulus levels. Plus his PLANNED deficit for 2011 is $1.65 Trillion and for 2012 it's $1.1 Trillion. After that, it's not clear he'll even BE IN OFFICE. It's incredibly brave of him to shrink the deficit in 2021!!

Not to be outdone, the WaPo fires back with this:

Obama administration studies recent revolutions for lessons applicable in Egypt

As the Obama administration works to shepherd the Egypt uprising toward a democratic government, it is drawing on the experiences of a half-dozen other nations whose revolutions have been the focus of internal White House study in recent weeks.

Oh yeah, I'm feeling all Psalmy up in here...

Obama is my shepherd, I am so screwed. He maketh me lie down with the Israelis, He leadeth me back to Camp David, He restoreth my subsidies. Yea though I walk through the valley of the Muslim Brotherhood, I shall fear no Islam, for Obama is with me.....

Journalists, please!

A horse is a horse...

...of course of course, but sometimes it turns out to be a Trojan horse. Like the stimulus bill.

Timely, targeted, and temporary?

We can debate the first two Ts, but the third one turns out to be false. The stimulus spending levels now apparently are permanent. I for one am shocked. President O has unveiled his "pain" budget of a mere $3.73 trillion, freezing spending in some areas at their 2010 levels.

Gee, thanks!

Of course even this bogus freeze does not apply to our President's favorite toys: choo-choos and windmills (and electric cars too!).

Did somehow progressive pundits and politicians just not get fun stuff to play with when they were kids? Is this nutty obsession just due their receiving Amy Chua parenting?

Yes, unemployment is still very high, people are still suffering. But we have already spent trillions and trillions with little to nothing to show for it!

Telegram for Dr. Obama: The leeches are not helping the patient!

The New Kirkpatrick Doctrine

The Myth of Mutant Ideologies...

in the Durham Herald, by this correspondent.

Why didn't Fubarak resign sooner?

Two competing views.

First, this story says he was out of touch, isolated, surrounded by yes-men and advised by his genius son that he could still ride things out and stay in power.

Second, this story says he was buying time while he feverishly stashed his billions of wealth in untraceable places.

I guess both could have elements of the truth, but my money is on #2.

Gerry Gaus and David Schimdtz

Some pix of my good friends from Arizona, Gerry Gaus and David Schmidtz, two of the best philosophers around.

A picture of them hanging out, casually. (Gerry is the one with the long hair, btw.)

And another picture, all cleaned up and ready to step out.

Turn the Car OFF!

And take away the license. Hurry.

They are who we thought they were

In a fascinating new NBER working paper (ungated version here), Bertrand, Bombardini, & Trebbi try to sort out whether it's expertise or connections that make lobbyists valuable. Here's the bottom line (the extra emphasis is mine, not theirs):

"A pure issue expertise view of lobbying does not fit the data well. Instead, maintaining connections to politicians appears central to what lobbyists do. In particular, we find that whom lobbyists are connected to (through political campaign donations) directly affects what they work on. More importantly, lobbyists appear to systematically switch issues as the politicians they were previously connected to switch committee assignments, hence following people they know rather than sticking to issues. We also find evidence that lobbyists that have issue expertise earn a premium, but we uncover that such a premium for lobbyists that have connections to many politicians and Members of Congress is considerably larger."

Somehow, those results reminded me of this:

AS I

Atlas Shrugged Part I. In theaters April 15. That's not long.

It could be really, really terrible, you know.

Behind The Music: The Pretense

An underground version of "Behind the Music."

Way, way behind. Or, perhaps in front, or a little off to the side with a small table and an ottoman.


UPDATE! The Pretense video has gone feral! That's like going viral, but with a lot fewer views.

separated at birth?

Supposedly, Fubarak's nickname is "the laughing cow". I don't quite see it but hey, here you go:

Excellent Sarcasm

Here at KPC, we love some timely, cutting sarcasm.

And this is a tasty slice.

Worth reading the whole thing, though it is large.

I have myself thought about price-gouging a bit. Print. / Podcast.

Finally!

Fubarak is out! For realz this time. Awesome!

P-Kroog Hat Trick!

What a great op-ed, a P-Kroog trifecta.

First, and entirely gratuitously, he calls all conservatives racists. Later, he says Republicans want to return to slavery (the "ante-bellum period" is clearly code). This is a total non sequitur, even by P-Kroog standards.

Second, he poops all over KPC-friend "Guido" DiLorenzo!

Finally, it's worth pointing out that the title, presumably ironic, is "Lincoln, Inflationist." Um, Paulie baby, annual inflation from 1862-1866 was 20%+. Yes, in the North. South was a basket case. But North had huge inflation, too, because of (wait for it!) paper money.

Lincoln WAS an inflationist. Sure, there was a war, maybe there were good reasons. But making fun of the idea that inflation even existed under Lincoln is a little silly.

Most entertaining. People used to say that Doonesbury should be moved to the editorial page. Perhaps. But by that logic P-Kroog's columns should be moved to the comics.

Republican Soul

So, perhaps David Lightman was trying to protect me.

I had said that these first few votes in the House are a battle for the soul of the Republican Party. And that's what David quoted, for the McClatchy chain (likely in a paper near you!). Then I switched and said, "No! Say, 'a battle to see if the Republican Party HAS a soul!'" David laughed and said he'd go with the first version. But I'm not so sure. The vote on the Patriot Act was interesting.

This post at Monkey Cage, make a reasonable point, based on this graph:
(By all means ATSRTWT!)
That point is that Tea Party-endorsed candidates are no more likely than "regular" Repubs to have voted no on Patriot Act extension.

In fact, if you look at proportions of the Tea Party Caucus in the House, there are 52. Of those, 44 voted to reauthorize Patriot Act. That's the number those 'Cagers should have quoted, instead of just the proportion. 8 votes! So Tea Party didn't affect PROPORTIONS.

So what is the story? First, the Tea Party affected partisan proportions, back in November. The Republicans have a majority because of Tea Party mobilization. Sure, a lot of members don't caucus. But without the Tea Party, no Republican majority and we aren't having this conversation.

Second, the new House leadership can't count. Why put this to a vote? Don't get me wrong, I'm glad. This humiliation may well embolden those "libertarian- leaning" Republicans to join with the Dems on some other bills, and block the agenda of the bright orange Republican leadership. The story is that a few Republicans bucked the leadership and voted no.

There is a battle for the soul of the Republican Party. The Tea Party affected the election by helping the Repubs get a majority. So the story on Pat Act was, and is, that the majority is fractious. Sure, perhaps not Tea Party vs. Establishment, but Big Gov thugs against Small Gov protesters, with Partido de Te folks on both sides of that divide. And the Small Gov folks won one battle in what is going to be a long war.

there is no stagnation

(Clic the pic for a more glorious image)

Taken from here, the blog of cartoonist extraordinaire Jason!

What does Egypt mean for China?

Two interesting essays, one by Barry Eichengreen, the other by Dani Rodrik. Both recommended.

The bottom line of both is that China's leaders should now be even less certain that economic progress will be sufficient to keep them in power.

Fubarak gets hosed?

Wow, people. According to the AP:

President Hosni Mubarak will meet the demands of protesters, military and ruling party officials said Thursday in the strongest indication yet that Egypt's longtime president may be about to give up power.

The military's supreme council was meeting Thursday, without the commander in chief Mubarak, and announced on state TV its "support of the legitimate demands of the people." A spokesman said the council was in permanent session "to explore "what measures and arrangements could be made to safeguard the nation, its achievements and the ambitions of its great people."

And then comes the money quote:

Gen. Hassan al-Roueini, military commander for the Cairo area, told thousands of protesters in central Tahrir Square, "All your demands will be met today."

UNC v. Duke--Two Ties Day

Annual picture in front of K-ville sign. Note neckwear: I have ties to both schools!

Here is the tent city of K-ville. Doesn't smell good at this point.


Background on K-ville.

K-ville rules for this year. Just in case "You've never been to K-ville! But you've been to Oklahoma! For they tell me it has snowed there...but I really don't remember."

He Lied and Said He was a ... Lobbyist

Rep. Lee is married, and 46. And a Congressman.

But he lied and said he was single, 39, and a lobbyist.

The woman on Craigslist was not impressed.

Reminds me of the story about the economist. Mom was coming to visit, and economist made his friends promise NOT to tell mom he was an economist. "She would be so embarrassed, so don't tell her! She thinks I play piano in a whorehouse!" You can see why saying you were a congressman was even worse. In effect, Rep. Lee said that he was an economist.

@mattyglesias says: "Not sure I understand what wrongdoing Rep Lee has committed." Dude! Being a pathetic idiot is not illegal, but it is certainly embarrassing. Congressman gots to go.

Mission Impossible Squirrel

CBL Version:


Reggae MI version:


Nod to the LMM

Vile McBride of the abused Ukulele

Six new inches of snow and I am not yet in the mood to finish my paper with Aaron (sorry dude!), so here you go.

1. I love Kurt Vile's music. Here is a video:

2. I discovered Kurt by watching Eastbound & Down, so here's a Danny McBride video (in two parts)

3. This guy is obviously talented but this is exactly how NOT to play the ukulele

What's In a Name

They may want to honor the guy, but not by naming the new Gov Center after him. The name is....infelicitious.

More, and a picture.

(Nod to the Blonde)

Good Advice for the People of Egypt

From the ever-intrepid Rafael Yglesias:

"You don't want to suffer from premature democracy. You might create the Senate."

More here, here, and here.

Different Hues, Identical Views =/= "Diversity"

Interesting that the explanation of "bias" occurs to psych-os so readily, but not so much when it comes to the obvious bias against conservatives.

Or so says John Haidt, in this speech here, nicely power pointed. Terrific talk, < 30 mins. In fact, one of the best talks I have ever seen.

And John Tierney wrote about it, and the New York Times published it. I'm pinching myself. Must be dreaming.

Some little pieces on this debate in which I have had a voice.

One

Two

Three

Four

Five


Mr. Overwater? Thoughts?

(Nod to Neanderbill)

Snow advisory

With another storm supposedly heading our way, I want to remind everyone that shoveling snow is way more dangerous than you think.

Take this case from Tulsa where a guy helps someone dig their car out of the snow and ends up shot, buried in the snow, and dead for his troubles.

People, there's no place to go anyway, just stay inside and wait for the melt-off!

Hat tip to Mungo's nemesis.

Roma Ladrona!

People, Rome has stolen the grand canal from Venice!

If it wasn't true, could Reuters report it?

A mob of his own

As protests continue, Hosni Fubarak invests in his own shock troops by announcing a 15% pay raise for all government employees.

That should help keep them out on the streets punching Anderson Cooper!

As the blogosphere turns

Jeez. This is a weird mess. First, on Saturday, the NYTimes runs an article called "The lucky break of rent stabilization", which details the ups and downs of negotiations between tenants and developers over buyouts. Then N.G. Mankiw links to it for textbook promotion under essentially the same title, "The lucky break of rent control"

Here's NG's entire text:

For those instructors teaching about the economics of rent control (Chapter 6 of my favorite textbook) or the Coase Theorem (Chapter 10), this article about buyouts of rent stabilized tenants should generate a good class discussion.

Just your typical NG book plug, right? Nothing to see here.

But then, some blogger named Buce just goes off on NG with a post called "Mankiw's luck"

Here are some excerpts:

"Honestly, I sometimes wonder why this guy (i.e. NGM) gets taken seriously, but I suppose I know: he plays into every instinct for smug self-satisfaction that you would expect among cosseted, comfortable Harvard students--and that you would want a proper education to beat out of them."

Always good to start out with some non-germane mudslinging, Buce, please go on:

"Now strictly speaking, I am no great fan of rent control: I think it often does more (social) harm than good. But "luck"? Why is rent control more a "lucky break" than being born blond, beautiful, Norwegian and blessed with great ski-jumping skills? "

Umm, neither NG nor the NY Times article that he links to say anything like "rent control is the only form of luck that the human race can get". I think we can probably agree that since rent stabilized apartments aren't means tested or anything, it actually is lucky to be able to get one. but surely there's more to your complaint than NG didn't provide an exhaustive list of lucky things that can happen to humans:

Maybe I've got other friends who, say, bought apartments in the East 60s back in the Dinkins administration when those puppies were going for $65k a pop, tops. I suppose Mankiw might want me to think that those buyers (as distinct from those renters) were operating out of pluck and foresight and deserve every penny of the appreciation that they've enjoyed. I doubt it. I suspect that most of them were hard-working strivers who wanted to live in a nice place (considering) and got, well, lucky. Does Mankiw spend a class hour trying to delegitimatize their hold on good fortune, to figuring out ways of clawing it back from them?

Wow, WTF is this about? Again neither NG or the Times article says anything pro or con about price appreciation for homeowners! This guy/gal is basically unhinged.

NG must have taken a full Austin Powers right in the middle of Buce's cornflakes at some point.

Ok you say, that's amazingly bad, but hey, it's just some creepy corner of the interwebs, only NG fanboys like me (LOL) would ever find it.

Well actually I found it because Mark Thoma the king of econ blog links decided for some inscrutable reason to link to it! Why, Mark, why? Don't hate the Playa!

All Hail Keith Gaddie

Keith is professor of political science at OU, a publishing machine, an expert in southern politics, a sought after consultant in cases involving re-districting and voting rights, and a novelist!.

People, you should fire up the Facebook and beg Keith to friend you. He has the consistently best FB posts of anyone in my vast network (of 116) friends. Here is a koan-like gem from this morning:

"Anderson Cooper is the little miniature dog in America's designer handbag."

I don't think I've written a sentence that good in my whole life!

HerHonor The Mayor

The coolest lady, the best argument for not retiring, and the special category "Best wearing of a bike helmet during an interview" awards go to...this woman:


Oh, and by the way, the city has zero debt. None. And she's 88. What did YOU do today?

Mubarak Out?

Members of leadership of Egypt's ruling party, including President Hosni Mubarak, submit resignations, state TV reports. CNN

Trick?

UPDATE: No, CNN message was cryptic, at least to me. It just said "resigned," not "resigned as head of party." HN remaining as Prez, resigning as head of party. Laughable.

Fubarak's new Cabinet: A Photo Essay

Is this anyway to WTF?

It depends. If WTF means "win the future", then no. But if it has its more traditional meaning, then yes!

People, after all the speechifying, name calling, accusations, and general boo-sheet, the Obama administration has again declined to name China a currency manipulator!

Now personally, I don't think having a fixed exchange rate is currency manipulation, nor do I understand what makes us judge and jury on these issues, but my God, these guys really really really give new meaning to the phrase "cheap talk".

Dear Feds: if you are not going to do anything about it, then please just STFU!

No Quixotes! Munger v. Google Rejected by NC Supreme Court

Damn! Munger v. Google has such a nice ring to it. But it was rejected by the NC Supreme Court.

Sure, it was actually "Munger, et al. v. State of North Carolina." But it was Google that took all that cash and built a "server farm." (That's basically an insulated warehouse with some extra HVAC, btw)

We had brought suit, and I was lead Quixote...um... lead plaintiff. (Robert Orr did all the work, of course. I was just eye candy. Or maybe BOB was Quixote, and I was Sancho Panza. That's more like it.)

But the NC Supreme Court today smashed all my dreams. Went so far as to say that the very idea of reviewing the review of the appeals decision was "improvidently granted." Oh, that hurts. Improvidently granted? "Sorry, nothing to see here folks. Just an everyday violation of the NC Constitution. Move along, citizens, move along. Because there is NO STANDING! NO STANDING."

Not Making This Up: Activist Accused of Being Too Smart

I would have thought the oppressive apparatus of the state could no longer surprise me with its never-ending creativity. But...I am surprised, by this.

The NC DOT did an engineering study of a local road widening project, and concluded that no new signals were required at two intersections. A citizen, David Cox, had the gall to disagree. He did some research, and put the research in the form of an organized argument.

The state could have responded by ignoring the request. Or the state could have pointed out the errors in the study. (I myself have no position on the merits; haven't studied it, don't know the issues).

But the state engineer instead threatened the citizen with legal action... for... being smart! They investigated, saying Cox was "practicing engineering without a license." Yes, really. The state DOT head engineer, Kevin Lacy, did not dispute the facts, the analysis, or the conclusions of the report. All he did was try to get the report dismissed because it was "engineering quality work." Read that again: the citizen made a petition to government for redress of a grievance, and the state wants to prosecute the citizen because the quality of the analysis is too high. (If the petition, redress, etc. thing sounds familiar that's because it is a right guaranteed in the 1st Amendment).

Now, the citizen had NEVER claimed to be an engineer, and had simply signed his name to the report. And he had organized the report in a way that made sense to him, presenting information that he thought was important for the question of whether the intersections needed traffic signals.

The cool thing is that the state is going to say, "We never ACTUALLY brought charges!" Just like the Mafia thugs say, "Nice restaurant. It wud be a shame if sumpin wud to happen to it, like youknowafireorsumpin, capisce?" The fact is that the state can exert an enormously chilling effect simply by suggesting that citizens should be investigated.

But the idea that a citizen can be investigated for being smart and making an effective counter-argument.... wow, I did not expect the state to be willing to be that thuggish.

Finally, I should note that this may all be self-serving for the KPC staff. Because if being really smart, persuasive, and disagreeable is a crime now...well, Angus and I should just assume the position.

Grand Game: Government Investment Edition

It's been a while, for the Grand Game. That's where I put up a link, and you bright and good-looking KPC readers look for unintentional hilarity. Today's edition: Government investment in science!

I'll go first! My favorite part is where the government shill "proves" that these are worthwhile investments....

Success is probably 10 to 20 years away, said Arun Mujamdar, director of the program, which is called the Advanced Research Projects Agency-Energy.

But the private investment is “a good sign, an endorsement of some sort,” he said. “The best thing the government can do is to catalyze investment.”

While 31 projects have not yet attracted outside help, all are continuing, according to the department. Josh Lerner, a professor at the Harvard Business School and an expert on venture capital, said he would have been surprised if most of the projects had attracted private financing quickly.

If all the projects had quickly drawn private money, it would have suggested that the projects would have happened without government intervention, Mr. Lerner said.

With a track record of six of 37 being picked up, “it’s hard not to feel it’s a reasonable indicator that they’re doing something right,” he said.

So, to cut to the chase, there are three possible outcomes:

1. These are silly wasteful boondoggles. Nonetheless, private capital might be attracted because the research is backed up with huge artificial subsidies, as is the case with ethanol. The only reason ethanol is a fuel additive is that we spend $1.50 per gallon in subsidies. Still, it's true you can "profit" in this industry, because govt policy is distorting price.

2. These are good projects, but would have been invested in by private capital, precisely because they are good projects.

3. These are good projects, but because of imperfect capital markets or basic public goods problems in research no private firm would have invested in them.

I say they are mostly #1. Sure, by dumb luck some of them would have been useful anyway, but then they are category #2.

Note the genius move of the description in the article: We know that some are not #1, because a few have attracted some private investment. And we know that the rest are not #2 because...MOST OF THEM HAVE NO PRIVATE INVESTEMENT!

He actually claims "If all the projects had quickly drawn private money, it would have suggested that the projects would have happened without government intervention."

Brilliant. The lack of private investment PROVES that the public investment is justified, and in fact foresighted and even visionary. Unfortunately, nowhere is it explained why the fact that there is no private investment doesn't imply that these are blue sky bullshit pork projects.

Now, your turn, folks!

(nod to Anonyman)

Two Catholic Jokes

Apropos of pretty much nothing, two Catholic jokes:

LEMONS
There once was a religious young woman who went to Confession. Upon entering the confessional, she said, 'Forgive me, Father, for I have sinned.'
The priest said, 'Confess your sins and be forgiven.'

The young woman said, 'Last night my boyfriend made wild passionate love to me seven times.'

The priest thought long and hard and then said, 'Squeeze seven lemons into a glass and then drink the juice.'

The young woman asked, 'Will this cleanse me of my sins?'

The priest said, 'No, but it will wipe that big grin off of your face.'


THE DOG
Muldoon lived alone in the Irish countryside with only a pet dog for company.. One day the dog died, and Muldoon went to the parish priest and asked, 'Father, me dog is dead... Could ya' be saying' a mass for the poor madadh?'

Father Patrick sniffed, 'I'm afraid not; we cannoa be havin' sairvices for animals in the chairch.... But there's a pack o' Baptists down the lane, un there's no tellin' what strange things they believe. Maybe they'll honor yer poor creature.'

Muldoon said, 'Aye, that's a good idear. I'll go right away Father. Do ya' think 5,000 punt is a big enough donation?'

Father Patrick exclaimed, 'Sweet Mahry, Mother of Chay-sus! Why din' ya tell me the blessed dog wahr Catholic?

(nod to the LMM)

Is the economy (finally) picking up steam?

I'm going to answer this question with a firm "I think so"!

The PMI manufacturing index for January came in very strong (good analysis of how strong is here).

Even though the fourth quarter growth estimate was an unspectacular 3.2%, real final sales last quarter grew by over 7%.

The stock market had its best January in over decade.

The ADP jobs report from yesterday came in at 187,000 new private, non-farm jobs.

Women Are Better

Women are better at financial planning than men.

Proof:

Dan was a single guy living at home with his father and working in the family business. When he found out he was going to inherit a fortune when his sickly father died, he decided he needed a wife with which to share his life and his new fortune.

One evening at an investment meeting he spotted the most beautiful woman he had ever seen. Her natural beauty took his breath away.'I may look like just an ordinary man,' he said to her, but in just a few years, my father will die, and I'll inherit $650 million.'

Impressed, the woman obtained his business card and three days later, she became his stepmother.

(Nod to the LMM. Unfortunately, that disproves the thesis. I married WAY better than she did)

All Hail Robert Kagan

This to me, really nails it:

"There’s no way for us to go through the long evolution of history without allowing Islamists to participate in democratic society."

“What are we going to do — support dictators for the rest of eternity because we don’t want Islamists taking their share of some political system in the Middle East? We’ve got to put our money where our mouth is."

“Obviously, Islam needs to make its peace with modernity and democracy. But the only way this is going to happen is when people speaking for Islam take part in the system."

Some Links!

I'm from your government lottery monopoly, and I'm here to be an idiot. Plus, the guy who discovered this goes all Canadian on us. Nice! (Nod to @mbellemare )

Zero tolerance laws are intolerable. (Nod to Anonyman)

Only those of us who have no interests are pure... (Nod to K-Wine)

Danny Drez drops some truth bombs... (Nod to K-Wine, who is en fuego)

Prof. Barnett, on the Vinson ruling on O-Care

A battle for the scientific soul of anthropology. Me, I suspect the forces of post-modern superstition and anti-science are too deeply entrenched. It's not like they can get jobs in English departments anymore. Those Cult Ant doofuses are stuck for the duration.

.

The Wisdom of Kobe Bean Bryant

Referring to his teammate Pau Gasol:

"Even when he was in Memphis and he was the go-to guy, he was always very nice. Very white swan. I need him to be black swan."

Not sure if this is a Nassim Taleb reference or a Darren Aranofsky reference, but well done KBB!!

serial double dippers

Ah Peru, is there anything you won't do? Fresh on the heels electing Alan Garcia (perhaps the worst ex-president who got to return to his country ever!) in 2005, comes word that the front-runner in this year's presidential election is Alejandro Toledo??

Really! I am not making this up.

The latest poll results have Toledo leading the field at 30.7%. Yes, this is the same Toledo who left office in 05 with a single digit approval rating despite solid economic growth rates.

The Peruvians are a wily bunch though. If Toledo falters (and how can he not?), they still have Keiko Fujimori, daughter of jailed ex-strongman Alberto in the race, currently polling at 20.3%, waiting in the wings.

talk like a Egyptian

Via Salon, here's a truly excellent post about how NOT to talk about events in Egypt.

My favorite faux pas: "I loved Sadat".

(Sadat WAS Mubarek with a worse hairdo)

Relatedly, Bill Easterly describes the double standard for democracy that seems to be operating.

Thomas Friedman gives us his philosophy of life

He sums it up for you at the very end and it's well worth watching the whole thing!

A Texan in Paris

The ambulatory ICU

Fantastic article in the New Yorker about applying crime mapping and policing the "hot spots" to medical care. In a lot of situations, a small fraction of the relevant population is responsible for an outsized fraction of medical costs (this is NOT including catastrophic events like organ transplants). The article outlines some currently small programs where lavishing attention and money on these "hot spots" increases the quality of care and produces better outcomes while actually saving money. It's long, but it's a fascinating article.

Note that Megan McArdle is not a believer.

Podcastation

For you podcastrians out there....part I of a four-series on grad school and finding a job.

KOSMOS--Podcast I: Munger on "Writing a Disseration and Setting a Research Agenda."

The Girl Store

Wow. Disturbing. The Girl Store.

Some comment. ("Heart rendering"? They want to boil the fat and connective tissue out of it?)
And this is just creepy.

So....good thing, bad thing?

.

Ignoring Costs and Benefits

"Even when agencies find that the cost of a given regulation does exceed the benefit, political considerations often keep the rules on the books. In 2007, Congress passed a law, named in honor of a 2-year-old child crushed as his father backed down the driveway, that effectively required the installation of rear-view video cameras in cars. The National Highway Traffic Safety Administration, charged with writing the new rules, found that the technology would save lives but — assuming a human life was worth about $6.1 million, a figure used by the agency for its calculations — that the cost would exceed the benefits by more than $1 billion. Nonetheless, the agency proposed the requirement, noting that it was responding to the will of Congress and that 'there is a special solicitude for protection of children.' Under the rule, automakers will be required to start installing cameras by 2014." [NYT]


"Long ago, cost-benefit analysis was a rallying cry for conservatives. It was brought to government by none other than Ronald Reagan, in Executive Order 12291 of 1981...Outraged liberals charged that cost-benefit analysis was a pretext to stifle regulation, and that it was arbitrary because of the difficulty of attaching dollar values to lives, environmental goods, and other regulatory benefits. Conservatives replied that cost-benefit analysis blocks bad regulations: Why would one support a regulation that produces higher costs than benefits?...The debate continued in this vein for decades, but over time, positions shifted. Some liberals came to see cost-benefit analysis as a good-government tool that promotes transparency and accountability, while some conservatives began to wonder whether it confers legitimacy on the New Deal state...[A]cademic research has shown that many of the cost-benefit analyses issued under all administrations were shoddy; in fact, there is little evidence that the introduction of cost-benefit analysis has improved the quality of regulations. The reason is that courts do not usually force agencies to comply with cost-benefit analyses, so unless the president steps in, the agency can do what it wants." [Eric Posner, TNR]

(Nod to Kevin Lewis)

If the NY Times and the New Republic both think Pres. Obama's signature reform program is balloon juice...it's probably balloon juice!

178 things you probably don't want to do

But now, in Cuba, you can now apply for a license to be allowed to do them. Here are a few of my favorites, indicating that maybe there is not a lot of production of new goods in Cuba:

6. Door-to-door knife and scissors sharpener
21. Operator of Children's Fun Wagon Pulled by Pony or Goat
22. Buyer and Seller of Records (LPs, 45's, CDs)
23. Used Book Seller
24. Builder/Seller/Installer of Radio and TV Antennas
25. Craftsman/Seller/Repairman of Wicker Furniture
36. Door-to-Door Non-Alcoholic Beverage Seller
37. Home or Street Based Seller/Preparer of Non-Alcoholic Beverages
39. Charcoal Preparer/Seller
46. Electric Motor Rewiring (wraps new wire around bobbin on burned motors)
49. Button Coverer (Wraps buttons in cloth for upholstery and cocktail dresses popular in the 50's
and 60's)
62. Spark Plug Cleaner and Tester
107. Watch Repair
108. Leather Repair
109. Jewelry Repair
110. Bedframe Repair
111. Automobile Battery Repair
112. Bicycle Repair
113. Costume Jewelry Repair
114. Fence and Walkway Repair
115. Stove/Range Repair
116. Mattress Repair
117. Small Household Goods Repair
118. Office Equipment Repair
119. Electronic Equipment Repair
120. Mechanical and Combustion Equipment Repair
121. Eyeglass Repair
122. Sewing Machine Repair
123. Saddle and Harness Repair
124. Umbrella and Parasol Repair
125. Disposable Lighter Repair and Refill
127. Doll and Toy Repair

The most amazing to me is #125: Disposable lighter repair & refill? That is no way to win the future, Fidel.

Such a deal!

I am not sure in how many other NBA cities you'd see this (from today's game vs. Heat):

When I die, I'll be Sooner dead!

Green Non-jobs

Wow. Either we have different definitions of "success," or our Prez just doesn't even care about actual facts. Check this:

WASHINGTON – In this week’s address, President Obama called Orion Energy Systems in Manitowoc, Wisconsin an example of how America can win the future by being the best place on Earth to do business. Orion was able to open with the help of small business loans and incentives that are creating demand for clean energy technologies. By sparking innovation and spurring new products and technologies, America will unleash the talent and ingenuity of American workers and businesses, which will lead to new, good jobs.

As Doug North would say, "BUHH-uht..." (he says it with two syllables, really he does). The "but" in this case is more like a "but, but, but, but...wtf?...but..."

Orion Energy is well on its way to bankruptcy. It produces no products that anyone wants to buy. It's a boondoggle. Here's a 4 year stock price chart on AMEX for you: The Obama Admin has a two part test for "succes":

1. Are you receiving money taken at gunpoint from taxpayers, and using it for some purpose that makes lefties happy? Most important, is this something that has no actual market, in the market?

2. Did you spend the money? All of it?

If you can answer "yes" to both sets of questions...you are a SUCCESS! So we'll give you more money.

Archimides is reported to have said, "Give me a large enough lever, and a fulcrum on which to place it, and I will move the whole world!"

Obama says, "Give me enough deficit-financed subsidies, and a second term, and I will employ the whole world in failing to produce products that no one wanted to buy in the first place."

Nod to the Blonde

D. Kucinich: Poster Boy for Tort Reform

Congressman Kucinich appears to be trying to prove we need tort reform.

Unless of course this is an ironic attempt to call attention to the problem of nonsensical, frivolous suits.

I think not. But here is a pic of a nonsensical, frivolous suit, worn with a pretty bad tie.

"Pharaoh out of Egypt"

This is my favorite bit out of Egypt so far:

In surreal scenes, soldiers from Mubarak's army stood by tanks covered in anti-Mubarak graffiti: "Down with Mubarak. Down with the despot. Down with the traitor. Pharaoh out of Egypt."

Asked how they could let protesters scrawl anti-Mubarak slogans on their vehicles, one soldier said: "These are written by the people, it's the views of the people."

Egypt is a military dictatorship, propped up by the United States and has been for over 50 years. The key here is not whether Mubarak stays or goes (pero, que se vaya ya!) but whether or not Egypt will cease being a military dictatorship, and I guess what that would mean for its relations with us.

I am not a scholar of the Middle East, but the people out on the streets don't seem to be Islamicists to me. They seem like they want what most people want; jobs, opportunity, a less corrupt government. I don't see reporting that they are chanting "death to Israel" or asking to have a theocracy.

In other words, while I regret the looting and loss of life, the events in Egypt seem unmitigatedly good. Perhaps the military will actually relinquish a chunk of it's power over everyday life. It happened in Brazil, Chile, & Uruguay; maybe it can happen in North Africa too.

and that's the reason I'm a Bullets fan!

Hat tip to Zach M.

From a Friend

From a friend with contacts in Egypt....

Well, the writing is on the wall it seems. I could be wrong, but appears Mubarak is done. His sons have left the country and Omar Suleiman has been sworn as the first vice president Egypt has had in 30 years. I expect an announcement of power transfer reasonably soon. Judging by the tweet streams, appears most people there believe the military has pushed Mubarak into this. Something has to happen soon, as police and internal security are abandoning posts to join in semi-organized looting. Several police stations have come under direct attack by armed protesters. The declared 4pm curfew seems to have been largely ignored, most recent reliable est I've seen is over 50k still in streets in Cairo. Cairo is 7 hrs ahead of US eastern time.

Suleiman would be a very acceptable replacement to Israel & the West. Whether he'll be acceptable to the Egyptian people is another question. He has been the director of the Egyptian General Intelligence Services (EGIS) since 1993. Prior to that he was director of military intelligence. He is considered a relatively liberal Muslim, strongly opposed to radical Islam. He was the mastermind behind the fragmentation of Islamist groups who led the uprising against the state in the 1990s. He's been a key behind the scenes player in the Israeli/Hamas/PA/Egypt/US back-and-forth, and appears to be trusted [in a relative sense] by the current Israeli govt. He's been more public in direct diplomacy between Israel and Egypt. As Egypt's intelligence chief, Suleiman has been in charge of the country's most important political security files, the ultimate insider. He is 75.

Aviation chief Ahmed Mohamed Shafik, until a few hrs ago widely considered the front runner to replace Mubarak, has been appointed Prime Minister.

NOT clear that being in Egypt means one knows more than the rest of us, of course. But there it is, for what it's worth...

She Ran Over...Herself

Her car runneth over.....

People in Washington are NUTS

(Nod to Raoul)

Good Sense

Correct me if I’m wrong, but aren’t China and Iran really far away? I realize that both pose a potential threat to American security. But don’t they also pose a threat to lots of other countries that are actually in their neighborhoods? So, if we appoint ourselves world police, and foot the bill for a correspondingly gargantuan arsenal, aren’t we suckers? You might reply that our disproportionate role in policing reflects the fact that these nations threaten the United States disproportionately. On Iran’s vitriol list, the United States ranks high. And Chinese leaders direct more coded warnings toward America than toward, say, Brazil. But this logic is circular. A big reason that some nations view us so warily is that we assume the role of global cop — or, as they see it, of global bully.

...By declaring ourselves global cop, we direct so much of the world’s lethal animus toward us that increasingly it does seem to make sense to take the lead in policing the world. So we dig ourselves into an ever deeper hole with a policy that, in a perverse and ultimately catastrophic way, renders itself ever more plausible.

... People who, like me, raise questions about the value of global military engagement are sometimes called 'isolationists.' But that term rightly applies only to people who don’t realize that there are threats to our security out there. If you perceive the threats but realize that they’re collective action problems, you realize that we do have to be involved in their solution. [Robert Wright, NYT op-ed]

(Nod to Kevin Lewis)

Nobel Peace Prize incarceration watch

1. Currently incarcerated:

LIU XIAOBO China 2010

MOHAMED ELBARADEI Egypt 2005

2. Out for now but inevitably will be re-incarcerated soon

AUNG SAN SUU KYI, Burma 1991

3. Should be thrown in the slammer ASAP and the key conveniently misplaced

HENRY A. KISSINGER, USA 1973

Death is not all it's cracked up to be

Wow! Turns out that Hamlet was wrong; death is no sure inoculation against the slings and arrows of outrageous fortune.

For example, you might get snorted up some punk's nose! (what was up with those guys, had they never seen cocaine before?)

Or maybe your body might get snatched out of the grave after 16 months and held for ransom! (would someone really pay ransom for a corpse? Even in Italy?)

Or you might be able to "enjoy" post mortem sex! (I guess it's the ultimate "break-up sex")

In Socialist Sweden, Piano Plays YOU!

Maybe Cass Sunstein can make the cap & trade bill look like a jack-in-the-box??

Congrats to Timur Kuran

Nice article in The Economist about Timur Kuran's new book.

Timur may be the single nicest economist* I have ever met. Duke is lucky to have him.

(*Yes, nicer than Angus. Sure, that's hard to believe, but I'm just sayin'...)

M-16

I had heard about this history before, but this article is just heart-breaking.

Some elaboration, and interesting comments, from '03.

Tempting to say this is a parable of government incompetence. But it's unfair to call MILITARY incompetence "government." All military procurement, everywhere, is aggressively snafu-ed and always will be.

(Nod to Mr. Overwater)

El Mercurio: Fue un discurso 'de postre'

My amiga linda Carolina gives me a chance to talk about the SOTU in El Mercurio.

And she quoted me accurately, because I did say "Fue un discurso 'de postre': dulce cuando lo estás comiendo, pero después te sientes con sueño y algo lento y te preguntas qué había en él", añadió.

That is, "It was a dessert speech: sweet while you eating it, but afterwards you feel all sleepy and sluggish, and wonder what was in it."

Putting the P back in PhD

Pelsmin sends this link. Prof tinkles on colleague's door.

Here's perP. Website not updated since 9-06. Perhaps he should note that his research interests now include canP-Completeness.

Umm, your pessimistic forecast is way too optomistic

and just plain wrong!

There's an awesome AP article this morning with the headline "Social Security Fund Now Seen To Be Empty by 2037"

People, I've got news for the AP: That sumbich is empty now!

Ahorita mismo!

Every penny of payroll tax revenue is spent to help cover current general expenditures. We can't even really say which general expenditures because money is fungible.

Payroll tax revenue is not being saved or invested.

If payroll tax revenue was really in a "lockbox", then it wouldn't count in figuring out the current deficit would it? Well it certainly is counted as general revenue when the government calculates its deficit.

Your payroll taxes do NOT fund your personal social security retirement benefits. Future social security benefits are unfunded liabilities of the federal government, payable out of future tax revenues.

Let's put the future behind us

One day later and confirmation arrives that the economic illiteracy on display at SOTU was not a just a mirage or bad dream.

Here are some money quotes from today:

The president said Wednesday that while China invested in clean energy technologies, "we fell down on the job. We weren't moving as fast as we should have."

"We're going to need to go all in. We're going to need to get serious about winning the future,"

People, this is just plain nuts!

China subsidizing investments in clean energy technology is VERY VERY GOOD for us. If they make a breakthrough, what, they won't sell the product to us? Really?

Is it surprising to anyone that Jeffrey Immelt, Obama's new "jobs czar" runs a company that makes wind turbines?

"We're going to need to get serious about winning the future" is the stupidest thing I've heard a president say since "Too many OB/GYN's aren't able to practice their love with women all across the country."

America is not going to recover its greatness by pissing money away on choo-choos and windmills.

Assorted Links

Winter: Not right for America! (Nod to the Blonde)


News coverage of Wake County school board called "too balanced." Funny, my own recollection is that S. Colbert was pretty unbalanced (as is his right, of course; far be it from me to criticize a lack of balance, especially when it is quite funny)

Hand Grenades From TSA Blog: Not the Onion (I think?) (Nod to Angry Alex)

Socialized seamen then....Obamacare now? (Nod to MAG)

Students socialize rather than study. Next: Sun rises in East!

Nice Letter

Nice letter from UCONN alum, breaking off relations.

My favorite part: the "Personal and Confidential" thing at the top. If you cut off ties, bail on your skybox, and renege on contribution pledges, then tell me why oh why would you expect them to keep the letter confidential. Here's the first page. What an asshat.

Makes me think of "LIFE OF BRIAN": You are only making things worse for yourself.

Worse? How can they get any worse? Jehovah, Jehovah, Jehovah! Now read your letter in the PAPER, pumpkin! How do ya like me NOW?

(Nod to UCONN prof friend, who will remain anonymous)

Everybody's got something to hide (except Idaho)

Here's a fun map showing one bad thing that every state is best at (clic the pic for a more glorious image):

except of course Idaho's badge of shame, "weakest government influence", sounds like a badge of honor to me!

Hat Tip to Keith G.

All Hail Rashard Mendenhall!

What better way to celebrate going to the super bowl with a rapist for a QB than enthusiastically humping him on the last play of the game?

I have been a Steelers fan since the Steel Curtain 1970s with Joe Greene, L. C. Greenwood, Jack Ham, Jack Lambert, et. al, but I am pretty conflicted about rooting for them this year.

I did really enjoy Rashard gettin' busy though!

Politician, heal thyself

Big Government has a weird, love/hate relationship with Big Pharma.

On the one hand, the FDA drags its feet and makes the drug approval process expensive and interminable, while the costs of prescription medicines were constantly targeted in the Health Insurance Extension & Expansion debates.

On the other hand, Big G is so concerned about the lack of new drugs, that they are setting up a "a billion-dollar government drug development center to help create medicines."

We are told that:

"The new effort comes as many large drug makers, unable to find enough new drugs, are paring back research. Promising discoveries in illnesses like depression and Parkinson’s that once would have led to clinical trials are instead going unexplored because companies have neither the will nor the resources to undertake the effort."

Ummm, this is willfully obtuse, even for the NY Times.

Isn't it more likely that Big Pharma is doing a cost benefit analysis and sees the costs going up and the benefits going down?

Isn't it likely that Big Government has caused a substantial part of the problem they are now looking to solve?

Of course a billion dollars is chump change in the prescription drug R&D market but never fear:

The initial financing of the government’s new drug center is relatively small....but officials hope that the prospect of finding new drugs will lure Congress into increasing the center’s financing well beyond $1 billion.

I can tell you one thing, people. I'd like to get some of whatever drugs were behind this great idea.

Women: Can't Live With 'em, Can't Live Without a Welfare State

Women Prefer Larger Governments: Growth, Structural Transformation, and
Government Size

Tiago Cavalcanti & José Tavares
Economic Inquiry, January 2011, Pages 155–171

Abstract: The increase in income per capita is accompanied, in virtually all countries, by two changes in economic structure: the increase in the share of government spending in gross domestic product (GDP), and the increase in female labor force participation. We argue that these two changes are causally related. We develop a growth model based on Galor and Weil (1996) where female participation in market activities, fertility, and government size, in addition to consumption and saving, is endogenously determined. Rising incomes lead to a rise in female labor force participation as the opportunity cost of staying at home and caring for the children increases. In our model, higher government spending decreases the cost of performing household chores, including, but not limited to, child rearing and child
care, as in Rosen (1996). We also use a wide cross-section of data for developed and developing countries and show that higher market participation by women is positively and robustly associated with government size. We then investigate the causal link between participation and government size using a novel unique data set that allows the use of the relative price of productive home appliances as an instrumental variable. We find strong evidence of a causal link between female market participation and government size. This effect is robust to the country sample, time period, and a set of controls in the spirit of Rodrik (1998).

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

Historical Trust Levels Predict the Current Size of the Welfare State

Andreas Bergh & Christian Bjørnskov
Kyklos, February 2011, Pages 1–19

Abstract: Despite the fact that large welfare states are vulnerable to free-riding,
the idea that universal welfare states lead to higher trust levels in the population has received some attention and support among political scientists recently. This paper argues that the opposite direction of causality is more plausible, i.e. that populations with higher trust levels are more prone to creating and successfully maintaining universal welfare states with high levels of taxation where publicly financed social insurance schemes. The hypothesis is tested using instrumental variable techniques to infer variations in trust levels that pre-date current welfare states, and then using the variation in historical trust levels to explain the current size and design of the welfare state, and finally comparing the explanatory power of trust to other potential explanatory factors such as left-right
ideology and economic openness. To infer variation about historical trust levels, we use three instruments, all used previously in the trust literature: the grammatical rule allowing pronoun-drop, average temperature in the coldest month and a dummy for constitutional monarchies. Using cross-sectional data for 77 countries, we show that these instruments are valid and that countries with higher historical trust levels have significantly higher public expenditure as a share of GDP and also have more
regulatory freedom. This finding is robust to controlling for several other potential explanations of welfare state size.

(Nod to Kevin Lewis)

Public Choice readings revisited

Recently, LeBron gave his reading list for Public Choice

I'd like to chip in with a Public Choice reading list for people who don't want to be bored to death!!

These three will teach you everything you need to know and keep you entertained and turning the pages. You'll learn PC by accident!

1. "Catch-22", Joseph Heller

2. "Parliament of Whores", P.J. O'Roarke

3. "Misadventures of the Most Favored Nations", Paul Blustein

On a more academic note, Olson's "Rise and Decline" just gets too much wrong to recommend it; I'd pick "Logic of Collective Action" instead, along with "An Economic Theory of Democracy", "An Economic Interpretation of the Constitution of the United States", "The Calculus of Consent" (though this book is *very* uneven), and "The Theory of Committees & Elections" (Scots wha hae and all that).

When it comes to textbooks, Mungo and the late Mel Hinich cooked up a great one with "Analytical Politics".

I think the way for people to learn about a subject is to read entertaining works that illustrate the subject in action rather than to bang their heads on encyclopedic reference works.

I learned a lot about the sub-prime crisis from reading "The Big Short" just by accident while being absorbed in a terrific story.

China Has Problems

In 1990, I interviewed for a job at A. Tuck Business School, Dartmouth College. At lunch, someone brought up the need for business schools in the U.S. to adopt Japanese methods and teaching techniques.

Ever adept at making people like me, I snorted. "Japan is a giant economic bubble," I said. "And the only way that they have growth is by implicitly taxing their consumers with protectionism and diverting private saving into public investment. We ought to look at what Japan is doing, both publicly and privately, and do the exact OPPOSITE. Their growth is fake, and their business methods are short-sighted." (To be fair, I had gotten this view from my mentor Murray Weidenbaum; it was not original)

The reaction from the Tuckwads: Crickets. Utter disbelief. Would have been much better if I had loudly farted and then said, "Middle C! I usually can't hit that note!"

Finally, the Ass. Dean said, "(ahem). Dr. Munger, that would be a rather controversial opinion in these halls. We are trying to learn more about Japanese methods. I'm not sure you are really well versed in the latest research." (He was a Brit; just imagine the condescension ladled on to these words.)

No, I didn't get the job. But here is the growth path of Japan's economy:
Hey, Dean, you mother Tucker, bite me! I hope you lost your 180 thread count bespoke button-down shirt, you idiot!

All that is prologue (and yes I have been badly wrong on a dozen things in the meantime). Anyway, here is my current view:

China's growth is fake. Not as fake as Japan's, because the China doesn't have a zombie financial sector. That's because they have ZERO financial sector, at least in the sense of being able to generate liquidity on a consistent scale. And the threat of nationalization rules out private offerings of publicly traded stock.

It is true that they are producing mountains of stuff. But what they are doing is taking all private saving and expropriating it, converting it into capital for more semi-state-owned factories.

The problem is that there are three reasons wages can go up. (Real Wages are shooting up, over much of China, by the way. Perhaps an index number problem, since an increase from near zero is a big percentage, but still.).

Wage Increase Reason 1: Production process becomes more capital intensive.
Wage Increase Reason 2: Skills and human capital of workers increase
Wage Increase Reason 3: Unions such as UAW or SEIU steal higher wages, driving employment offshore, and devestating the economy. Minimum wage laws work, too, though they mostly harm the poor and economically marginal.

Now, the US chose #3 in northern states ranging from Mass to Mich, and everything in between. And now those states look like a post-apocalyptic wasteland. So, that is a bad idea.

I had been under the impression that China was struggling along under Reason #1. But this study suggests Reason #2 is bigger than I would have thought. Interesting.

"The Contribution of Human Capital to China's Economic Growth," John Whalley & Xiliang Zhao, NBER Working Paper, December 2010

Abstract: This paper develops a human capital measure in the sense of Schultz (1960) and then reevaluates the contribution of human capital to China's economic growth. The results indicate that human capital plays a much more important role in China's economic growth than available literature suggests, 38.1% of economic growth over 1978-2008, and even higher for 1999-2008. In addition, because human capital formation accelerated following the major educational expansion increases after 1999 (college enrollment in China increased nearly fivefold between 1997 and 2007) while growth rates of GDP are little changed over the period after 1999, total factor productivity increases fall if human capital is used in growth accounting as we suggest. TFP, by our calculations, contributes 16.92% of growth between 1978 and 2008, but this contribution is -7.03% between 1999 and 2008. Negative TFP growth along with the high contribution of physical and human capital to economic growth seem to suggest that there have been decreased in the efficiency of inputs usage in China or worsened misallocation of physical and human capital in recent years. These results underscore the importance of efficient use of human capital, as well as the volume of human capital creation, in China's growth strategy. (Nod to Kevin Lewis)

The point is that China is going to run up against a captial constraint, and may (this is delightful) actually follow the Marxist predictions about industrial capitalism. Marx didn't understand capital, but neither do our Chinese friends. Unless the Chinese can get huge amounts of liquidity to feed the need for physical investment, wages from increased human capital are going to start to squeeze them really bad. And there may actually be the worker's revolt that Marx predicted for Western Europe. Except it will happen in a communist country, precisely because it is not capitalist enough to have common stock offerings.

Sticking a Fork in the National Libertarian Party

As some of you people may remember, I was scornful of the LP's choice of Bob Barr as their presidential candidate in 2008.

Now comes the delicious word that Bob (still rockin' a porn stash for the ages) is in Haiti, REPRESENTING BABY DOC DUVALIER!!

Yes that's right, the Libertarian presidential candidate is helping out a notoriously corrupt and brutal ex-dictator.

I do not think that the party will soon recover from the complete and total sellout of libertarian principles that Barr's nomination represented. This is just icing on an ugly, ugly cake.

LP members: Check out this load of crap from your candidate:

Barr "will be representing" Duvalier "in bringing his message of hope to the world," the former Republican congressman's website says.

"I also am reminded of others who have risen from the ashes," Barr told reporters Friday. "The city of Atlanta is the Phoenix city. The people of Haiti, likewise, will rise from the problems created by last year's earthquake and emerge stronger and better than before. That I know is Mr. Duvalier's deep wish and something that he knows in his heart."

1. Baby Doc was a 15 year slow motion earthquake for the people of Haiti.

2. Baby Doc can't know anything in his heart because he does not HAVE a heart

3. If one finds themselves within 10 feet of Baby Doc, the only appropriate course of action would be to try and inflict as much physical damage on him as possible as opposed to the heinous butt kissing of Bob Barr.

How to live

(clic the pic for a more glorious image)

Look out Tyler, in Zimbabwe, Zombies have voting rights!

Yesterday, in a classic blog post, when asked to choose an anti-zombie weapon, Tyler chose "the rule of law" (second choice was "anti-zombie constitutional amendment"!!!!).

Grim news for him comes today from Zimbabwe where it is reported that "nearly 1/3 of Zimbabwe's voters are already dead" (this of course explains why Mugabe is still in power after 275 years, he's a Zombie)!!

So under PR, they'd be in a coalition government controlling several ministries!

Plus, during elections, they can eat the brains of non-Zombie voters while waiting to exercise their franchise.

How's that rule of law gonna save you Tyler, when Zombies vote?

Darwin Award, Honorable Mention (No Fatalities)

They were pouring gas directly into the carburetor.

From a bucket.

As they drove.

I'm almost sure these people must be kin to me, somehow.

The woman said she and her two friends had bought gas at a Factoria gas station, but were having trouble keeping the van running. She said they didn't have a gas can, so they filled an open bucket with two gallons of gas and put it in the van.
The engine cowling -- a piece of metal that covered the engine and which was located between the two front seats of the van -- had been removed, the woman said. The passengers used a water bottle to transfer gas from the bucket directly into the carburetor in order to keep the engine running.

(Nod to the Blonde, who assures nobody in MO acts like this. Perhaps because they don't actually have cars...)

UPDATE: KPC friend Andy Rutten emails a report I had missed:
"It's very rare that a car explodes, there's got to be a reason," said Bellevue police spokeswoman Officer Carla Iafrate.
Now THAT is police work, right there.

snorkeling & photography bleg

Over spring break, Mrs. Angus and I are going to a marine sanctuary off the coast of the Dominican Republic to do this for a week (clic the pic for a more glorious image):


We are good swimmers and have snorkeled before, but here are some things I don't know anything about:

wetsuits

good quality fins and masks

underwater photography

Any advice on any of these topics would be appreciated.

BTW, we've never lived on a boat for a week before either.

how not to multi-task

Movin' on up!

One of my favorite bands, Times New Viking, have a new album coming out on Merge records in April. Here's a video for one of the songs on the album. It's much calmer and quieter than what I expected, but I still really like it:

Tweet of the day

From Andy Borowitz:

"It must be weird for Hu Jintao to meet a Nobel Peace Prize winner who's not in prison"

and I say it's alright

People, this is so freakin' bad, even for the low standards of economic analysis of the NY Times.

In a recent article bemoaning the move of a solar panel plant from Massachusetts to China resides the following paragraph:

"Beyond the issues of trade and jobs, solar power experts see broader implications. They say that after many years of relying on unstable governments in the Middle East for oil, the United States now looks likely to rely on China to tap energy from the sun."

Alex has already mocked this brilliantly ("China monopolizes the sun!!"), but I gotta say a bit more.

First, the analogy is whack. The sun is (at least not yet) in Chinese possession. The analogy would work if we'd been buying oil rigs from the middle east and are replacing that now with buying solar panels from China.

Second, autarky is BAD, people, not good. A world where we are self sufficient for everything is a world quite a bit worse than the one we currently inhabit. There is nothing inherently "wrong" with importing oil; the problem is the effect using oil has on the environment, which is unchanged by where the oil comes from.

Third, China obviously has a comparative advantage on the US in low level manufacturing. Assembling solar panels is not a natural fit for the US in the global economy.

As Mungowitz has been saying, there isn't going to be a "green jobs machine" in the US, unless we are going to *massively* subsidize each job.